Below is a summary of KMI’s expectations for 2018:
KMI’s expectations assume average annual prices for West Texas Intermediate (WTI) crude oil and Henry Hub natural gas of US$56.50 per barrel and US$3.00 per MMBtu, respectively, consistent with forward pricing during the budget process. The vast majority of cash generated by KMI is fee-based and therefore is not directly exposed to commodity prices. The primary area where KMI has commodity price sensitivity is in its CO2 segment, where KMI hedges the majority of its next 12 months of oil production to minimise this sensitivity. For 2018, the company estimates that every US$1/bbl change in the average WTI crude oil price impacts DCF flow by approximately US$9 million and each US$0.10 per MMBtu change in the price of natural gas impacts DCF by approximately US$1 million.
