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The Bison Pipeline Project

The Bison Pipeline Project. • Open Season planned for 2 nd Quarter of 2004 • Proposed Interconnects -Deadhorse (Bighorn, Fort Union) -MIGC, Thunder Creek • Deliveries into Northern Border at CS 6 • MAOP @ 1435 lbs • 275 to 300 Pipeline Miles • Negotiated Rate: 25 cents

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The Bison Pipeline Project

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  1. The Bison Pipeline Project • • Open Season planned for 2nd Quarter of 2004 • • Proposed Interconnects • -Deadhorse (Bighorn, Fort Union) • -MIGC, Thunder Creek • • Deliveries into Northern Border at CS 6 • • MAOP @ 1435 lbs • • 275 to 300 Pipeline Miles • • Negotiated Rate: 25 cents • • Recourse Rate: 29 cents • • In-Service – November, 2006 Bear Paw Big Horn Northern Border NBPL Compressor Stations Fort Union Bison

  2. Powder River Basin Outlook • We believe the PRB can reach sustainable production levels of 1.5 to 2.0 Bcfd assuming normalized netbacks and annual connected new wells in the 2,000 range • Bison can meet near and long-term needs of the Powder River Basin • - Less than 2 Bcfd, a 24” Bison system is required • - Greater than 2 Bcfd, a 30” Bison system is required

  3. Netbacks to Powder River BasinFrom Market Centers January 2004 Vent. vs. Greens Cheyenne Chicago $5.00 Cheyenne $4.80 $4.76 $4.68 $4.67 $4.60 $4.47 $4.00 NBPL/Ventura $3.00 ANR/Greensburg NGPL/Greensburg $2.00 NBPL/Chicago $1.00 Adv/Chicago $0.00

  4. Bison Project Overview Strategic Advantages for Wyoming PRB • Provide an economical rational netback by building an interstate pipeline to the heart of the Basin • Provides the best netback versus alternate projects and existing outlets • Leverages Northern Border markets that are highly correlated to NYMEX • Leverages Northern Border existing infrastructure of available capacity and the optionality of economic expandability • Northeastern route provides market & pricing diversification to southern routes and balances the PRB pipeline grid • Minimal impact on market prices due to displacement

  5. Summary • PRB has not met expectations • Federal Permitting Process • Regulatory Uncertainty • Still Bullish on the Powder • 39 Tcf technically recoverable • Est. 39,000 more wells to be drilled • We believe the PRB can reach sustainable production levels of 1.5 to 2.0 Bcfd • Open Season is planned in the 2nd Quarter in 2004

  6. Bison Contacts • Dick Shepherd 402-492-7431 • richard.shepherd@nborder.com

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