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2 DISCLAIMER Forward Looking Statements ALL RIGHTS ARE RESERVED REPSOL YPF, S.A Repsol YPF, S.A. Repsol is the exclusive owner of this document. No part of this document may be reproduced (including photocopying), stored, duplicated, copied, distributed or introduced into a retrieval system of any nature or transmitted in any form or by any means without the prior written permission of Repsol. This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of the Spanish Securities Market Law (Law 24/1988, of July 28, as amended and restated) and its implementing regulations. In addition, this document does not constitute an offer of purchase, sale or exchange, or a request for an offer of purchase, sale or exchange of securities in any other jurisdiction. Some of the resources mentioned in this document do not constitute proved reserves and will be recognized as such when they comply with the formal conditions required by the U. S. Securities and Exchange Commission. This document contains statements that Repsol believes constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of These forward-looking statements may include statements regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends affecting Repsol s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volume and reserves, as well as Repsol s plans, expectations or objectives with respect to capital expenditures, business, strategy, geographic concentration, costs savings, investments and dividend payout policies. These forward-looking statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices, refining and marketing margins and exchange rates. These statements are not guarantees of future performance, prices, margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be beyond Repsol s control or may be difficult to predict. Repsol s future financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volumes, reserves, capital expenditures, costs savings, investments and dividend payout policies, as well as future economic and other conditions, such as future crude oil and other prices, refining margins and exchange rates, could differ materially from those expressed or implied in any such forward-looking statements. Important factors that could cause such differences include, but are not limited to, oil, gas and other price fluctuations, supply and demand levels, currency fluctuations, exploration, drilling and production results, changes in reserves estimates, success in partnering with third parties, loss of market share, industry competition, environmental risks, physical risks, the risks of doing business in developing countries, legislative, tax, legal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, wars and acts of terrorism, natural disasters, project delays or advancements and lack of approvals, as well as those factors described in the filings made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores in Spain, the Comisión Nacional de Valores in Argentina, and the Securities and Exchange Commission in the United States and with all the supervisory authorities of the markets where the securities issued by Repsol and/or its affiliates are admitted to trading. In light of the foregoing, the forward-looking statements included in this document may not occur. Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected performance, conditions or events expressed or implied therein will not be realized. The information contained in the document has not been verified nor revised by the External Accountant Auditors of Repsol. 2

3 DISCUSSION TOPICS 2015/16 Winter Overview Repsol s 2015/16 Winter Performance Backfeed Gas Supply/Demand Balance Imported LNG vs. Pipeline Expansions Global Dynamics of LNG Repsol s Winter Gas Supply Service Conclusions 3

4 REPSOL ENERGY NORTH AMERICA Northeast U.S. / Maritimes Canada Natural Gas Assets Producer Services Corridor Resources McCully Field Marcellus Production ~500,000 Dth/d Brunswick Pipeline 850 MDth/d of capacity Producer Services EnCana Deep Panuke (Summer 2013 start-up) M&NP U.S. 730 MDth/d of capacity Canaport LNG 1.0 Bcfd capacity ~10 Bcf storage Producer Services ExxonMobil Sable Island Gas Production Pipeline Capacity LNG Regasification Gas Supply 4

5 2015/16 WINTER OVERVIEW Significantly Warmer than 2014/15 Winter Warmer Temperatures & Lower Gas Prices Average Boston Temp., o F Nov Dec Jan Feb Mar $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $ 11/1/ /1/2015 1/1/2016 2/1/2016 3/1/2016 Historical Average 2013/ / /16 ISO New England Reliability Program AGT GDA AGT Index 5

6 REPSOL S WINTER PERFORMANCE Lower Volumes in 2015/16 Due to Warm Weather Bcf 21 Bcf 12 Bcf Total Winter Volume 600 Daily Volume, MDth Bcf 25 Bcf Bcf / / / / / /16 Canaport Deep Panuke Daily Average (MDth/d) Peak (MDth/d) 6

7 PNGTS AND M&NP SUPPLY/DEMAND BALANCE Excess Supply for AGT/TGP on High Demand Days 1,400,000 Excess gas from PNGTS/M&NP serves AGT and TGP markets during critical periods of high demand. 1,200,000 1,000,000 Daily Gas Volume, Dth 800, , , ,000 Sable Corridor Deep Panuke PNGTS (East Hereford) Canaport PNGTS & M&NP Markets Source: Ventyx and Repsol proprietary data 7

8 Capacity Utilization on TGP and AGT Back-feed Supply vs. Pipeline Expansions Backfeed gas supply sources can serve peak gas demand that exceeds the existing West to East pipeline capacity. Tennessee Algonquin 3,000,000 Daily Gas Volume, Dth 2,500,000 2,000,000 1,500,000 1,000, ,000 Residential/Industrial West to East Capacity NED Phase I Power Generation Backfeed Gas Supply NED PowerServe Residential/Industrial Power Generation West to East Capacity Backfeed Gas Supply AIM Atlantic Bridge Access Northeast 8

9 TRANSPORTATION CAPACITY ECONOMICS $8.00 The average AGT to TETCO M3 basis after November 2018 is $0.88/Dth, which is less than the cost of new pipeline capacity (assumed to be the Atlantic Bridge recourse rate of $1.83/Dth). $7.00 $6.00 Gas Price, $/Dth $5.00 $4.00 $3.00 $2.00 $1.00 $ Note: Price forecasts reflect the addition of the contracted expansions (AIM and Atlantic Bridge) on AGT. AGT TETCO M3 Imputed Gas Cost (TETCO M3 + Capacity Cost) Source: Platts 9

10 THE RELIABILITY PREMIUM FOR PEAK MARKETS The reliability premium is the premium that a market would pay for 365-day FT capacity to access cheaper Marcellus gas supply to supply short-term (30 or 60 days) peak demand. $40.00 $35.00 Daily Gas Volume, Dth $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $ 30-Day Service 60-Day Service 30 day Equiv. Trans. Cost 30 day (Jan) TETCO M3 30 day (Jan) AGT 60 day Equiv. Trans. Cost 60 day (Jan/Feb) AGT 60 day (Jan/Feb) TETCO M3 TETCO M3 (Marketview Platts quotes) was used as the indicative Marcellus price. The total transportation cost (365-day FT) that was used for Marcellus to the AGT market was $1.83/Dth, which is the Atlantic Bridge recourse rate. 30-day and 60-day base-load services can be provided to the market using imported LNG. 10

11 WORLDWIDE LNG DEMAND AND CAPACITY 70 The current demand/capacity gap of ~5 Bcfd is expected to double to ~10 Bcfd by 2025, which will dampen LNG price increases during that period LNG Volume, Bcfd Worldwide LNG Demand Worldwide Liquefaction Capacity Source: IHS 11

12 WORLDWIDE LNG PRICE FORECAST $16.00 The long-term LNG price forecast indicates that both Atlantic and Pacific basin LNG will be much more cost effective for serving peak-day demand than new year-round long-term pipeline capacity into New England. $14.00 $12.00 LNG Price, $/Dth $10.00 $8.00 $6.00 $4.00 $2.00 $ Japan South Korea Taiwan United Kingdom Germany Spain Source: IHS January 2016 Price Forecast 12

13 LNG Impact on Wholesale Electricity Markets Canaport LNG Yielded Significant Reduction Since Canaport LNG commenced operations in June 2009, the wholesale electricity market value has declined significantly. Average = $8.3 billion Source: ISO New England s 2016 Regional Electricity Outlook 13

14 REPSOL S WINTER PEAKING SERVICE Mitigates Gas Supply Risk During Peak Demand Periods During the contract term, the counter-party has a call option for gas supply from Repsol. The call option includes a maximum daily quantity ( MDQ ) limit as well as an aggregate quantity limitation ( AQL ) on the total volume that the counter-party can purchase during the term of the contract. The call option includes a demand charge / commodity charge price structure that is based on anticipated market prices and volatility for gas in the region. The delivery points for the gas would be mutually agreed by the parties. Multi-month winter base-load service can also be provided with appropriate modifications to the pricing structure. 14

15 REPSOL S WINTER PEAKING SERVICE Multiple Benefits to New England & Maritimes CA LNG Supply Availability The well-documented worldwide LNG supply glut will make New England an attractive destination for LNG cargoes for the foreseeable future. Immediate Service Availability (Facilities are already in place.) No facility siting risk No project execution risk No permitting risk No cost overrun risk Definitive Capacity Costs Capacity contracts are in place and fees are fixed. Flexible Contract Term While long-term (>5 years) contracts are not required, they are available under various structures that provide competitive solutions. Reliability Peaking service is a firm natural gas delivery obligation. Repsol has never failed to meet a firm natural gas delivery obligation. 15

16 FINAL THOUGHTS Effective utilization of existing natural gas infrastructure (LNG storage/regas and pipelines) to serve short-term winter peak gas demand, coupled with infrastructure additions for long-term baseload market growth, is the most responsible and economic solution for gas supply reliability in New England. Given the recent decline in worldwide LNG prices coupled with the abundant new LNG supply sources that will come on line in the next few years, LNG will remain a competitive and reliable gas supply source for New England and Maritimes Canada. Repsol has successfully provided winter peak gas supply services to the New England market for several years now, and it is poised to provide multi-year peaking services in lieu of expensive long-term (15+ year) pipeline expansions. 16