of natural gas futures contracts per MMBtu was $3.24, $4.55 and $5.87 as of December 31, 2011, 2010 and
2009, respectively. The twelve-month average price per gallon for NGLs was $1.39, $1.10 and $0.80 as of
December 31, 2011, 2010 and 2009, respectively, and the price of crude oil per barrel was $95.12, $79.53 and
$61.81 as of December 31, 2011, 2010 and 2009, respectively. Crude oil and natural gas liquids prices continue
to be volatile, but have generally remained at favorable levels, while natural gas prices have declined
substantially. Natural gas drilling activity levels vary by geographic area, but in general, drilling remains robust
in areas with liquids rich gas. Drilling remains depressed in certain areas with dry gas where low natural gas
prices currently do not support the economics of drilling.
Furthermore, a sustained decline in commodity prices could result in a decrease in exploration and
development activities in the fields served by our gathering and pipeline transportation systems and our natural
gas treating and processing plants, and our NGL and natural gas storage assets, which could lead to reduced
utilization of these assets. During periods of natural gas price decline or if the price of NGLs and crude oil
declines, the level of drilling activity could decrease. When combined with a reduction of cash flow resulting
from lower commodity prices, a reduction in our producers’ borrowing base under reserve-based credit
facilities and lack of availability of debt or equity financing for our producers may result in a significant
reduction in our producers’ spending for natural gas drilling activity, which could result in lower volumes being
transported on our pipeline systems. Other factors that impact production decisions include the ability of
producers to obtain necessary drilling and other governmental permits and regulatory changes. Because of these
factors, even if new natural gas reserves are discovered in areas served by our assets, producers may choose not
to develop those reserves. If we are not able to obtain new supplies of natural gas to replace the declines
resulting from reductions in drilling activity, throughput on our pipelines and the utilization rates of our
treating, processing and storage facilities would decline, which could have a material adverse effect on our
business, results of operations, financial position and cash flows and our ability to make cash distributions.
The cash flow from our Natural Gas Services segment is affected by natural gas, NGL and condensate
prices.
Our Natural Gas Services segment is affected by the level of natural gas, NGL and condensate prices.
NGL and condensate prices generally fluctuate on a basis that relates to fluctuations in crude oil prices. In the
past, the prices of natural gas and crude oil have been volatile, and we expect this volatility to continue. The
markets and prices for natural gas, NGLs, condensate and crude oil depend upon factors beyond our control and
may not always have a close relationship. These factors include supply of and demand for these commodities,
which fluctuate with changes in market and economic conditions and other factors, including:
• the impact of weather, including abnormally mild winter or summer weather that cause lower energy
usage for heating or cooling purposes, respectively, or extreme weather that may disrupt our operations
or related upstream or downstream operations;
• the level of domestic and offshore production;
• a general downturn in economic conditions, including demand for NGLs;
• the availability of natural gas, NGLs and crude oil and the demand in the U.S. and globally for these
commodities;
• actions taken by foreign oil and gas producing nations;
• the availability of local, intrastate and interstate transportation systems;
• the availability and marketing of competitive fuels;
• the extent of governmental regulation and taxation.
Our primary natural gas gathering and processing arrangements that expose us to commodity price risk are
our percent-of-proceeds arrangements. Under percent-of-proceeds arrangements, we generally purchase natural
gas from producers for an agreed percentage of the proceeds from the sale of residue gas and/or NGLs resulting
from our processing activities, and then sell the resulting residue gas and NGLs at market prices. Under these
types of arrangements, our revenues and our cash flows increase or decrease, whichever is applicable, as the
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