EXHIBIT 99.2
PROJECT SUMMARY
o Form a new company which combines Duke Energy Corporation's Midstream Gas
Business (Field Services) and Phillips Petroleum Corporation's Midstream
Gas Business (GPM)
o The new company will secure debt financing and distribute $1.2 B to each of
Duke and Phillips
o An IPO will be undertaken, assuming favorable market conditions, to pay
down debt
OVERVIEW OF PROPOSED STRUCTURE
RELATIVE ECONOMICS:
DUKE: 61.1%
PHILLIPS: 38.9%
[CHART SHOWING MOVEMENT OF STOCK AND PROCEEDS OF DEBT OFFERING
AMONG THE PARTIES]
KEY STRATEGIC DRIVERS
o GPM assets are complementary with DEFS Mid-Continent and West Texas / New
Mexico assets
o GPM percent of proceeds (POP) contracts help balance DEFS short gas
position
o Provides near-term critical mass for attractive IPO with new corporation
recognized as clear leader in industry
DUKE ENERGY FIELD SERVICES
[MAP SHOWING DEFS PIPELINES, PLANTS AND OPERATING AREAS]
DEFS AND GPM
[MAP SHOWING COMBINED DEFS AND GPM PIPELINES, PLANTS AND OPERATING AREAS]
1998 TOP NGL PRODUCERS
COMPANY MBbls/d
DEFS 208
GPM 169
Dynegy Liquids 123
Shell/Tejas NGL 111
Amoco 108
Conoco 102
PG&E Texas 95
Texaco 80
Williams Midstream 74
Arco/Vastar 68
Exxon 65
COMPARATIVE STATISTICS
GPM DEFS COMBINED
------ -------- --------
EBITDA ($MM) (3rd Qtr) $84 $99 $183
Gathering Vols (Bcf/d) 1.8 1.5 3.3
Processing Vols (Bcf/d) 1.3 3.6 4.9
NGL Production (MBbls/d) (1) 170 225 395
Gas Plants (2) 16 (15) 64 (52) 80 (67)
Frac Capacity (MBbls/d) 0 178 178
Pipeline Miles 29,000 28,000 57,000
No. of Employees 1,100 1,600 2,700
(1) As of September, 1999
(2) # of facilities operated in parenthesis
ENERGY COMMODITIES
DEFS
Long NGL's 103,314 Bbls/day
Short Gas 151,589 MMBtus/day
GPM
Long NGL's 56,009 Bbls/day
Long Gas 133,642 MMBtus/day
COMBINED
Long NGL's 159,323 Bbls/day
Short Gas 17,947 MMBtus/day
COMMODITY PRICE SENSITIVITY
DEFS
1(cent)/gal change +/- $ 15.0 MM
10(cent)/MMBtu change +/- $ <5.0>MM
GPM
1(cent)/gal change +/- $ 8.6 MM
10(cent)/MMBtu change +/- $ 4.9 MM
COMBINED
1(cent)/gal change +/- $ 23.6 MM
10(cent)/MMBtu change +/- $ <0.1>MM
IMPLEMENTATION
o FTC
- File after holidays
o Financial
- $2.4B debt
o Social Issues
- Officers and employees to be determined
- Headquarters will be Denver, Colorado
o Governance
- Pre IPO Board of Directors
o 3 Duke and 2 Phillips nominees
- Post IPO Board of Directors
o 5 Duke and 2 outside Duke nominees
o 3 Phillips and 1 outside Phillips nominee
- Supermajority items
NATURAL GAS CONSUMPTION FORECAST
CURRENT US MARKET PROFILE
Industrial 39%
Residential 23%
Commercial 15%
Elect. Gen. 14%
According to PIRA, electric generation is expected to provide 75% of this
growth.
[GRAPH SHOWING PLOT POINTS AS FOLLOWS:]
YEAR TCF/YEAR
---- --------
1999 22
2005 25
2010 28
2015 30
2020 32
OVERALL STRATEGY
o View of the industry
- Gas consumption will increase
- Producers will rise to the occasion
- Consolidations will continue to occur
o Our strategy
- Expand in growth areas
- Optimize existing assets
- Participate in consolidation
TRANSACTION KEY ATTRIBUTES
o Merged companies are in the same business, have the same core
competencies, and possess the same focus
o Combines a large operationally focused company with the fastest growing
company in the industry
o Creates a clear market leader
o Results in a self-funding business entity with significant resources
o IPO is attractive
- Trendsetting
- Significant size
MEETING OUR CORPORATE OBJECTIVES
o Creates the major, top-tier player in the growing NGL industry
o Moves Duke Energy's 2000 EPS growth to the top of our target range -
$4.00
o Allows for more efficient use of capital
- Acquisitions and expansions self-funded at DEFS
- Reduces requirements for new Duke Energy equity
o IPO offers investors a pure play for valuation of the gathering and
processing business
o Demonstrates validity of strategy to create shareholder value out of
the consolidation of the midstream business