NuStar Closes on Accretive Acquisition That Further Expands Its Presence in Eagle Ford Shale Play

  NuStar Closes on Accretive Acquisition That Further Expands Its Presence in
  Eagle Ford Shale Play

      NuStar completes purchase of South Texas crude assets from TexStar

Business Wire

SAN ANTONIO -- December 14, 2012

NuStar Energy L.P. (NYSE: NS) today announced that it has closed on the
purchase of crude oil pipeline, gathering and storage assets in the Eagle Ford
Shale region from TexStar Midstream Services LP for approximately $325
million. The company is also acquiring natural gas liquids (NGL) assets from
TexStar that are also in the Eagle Ford Shale region for approximately $100
million, and that acquisition is expected to close in the first quarter of
2013, subject to certain closing conditions.

The closing of the TexStar acquisition comes on the heels of NuStar’s
announcement that the company plans to sell its San Antonio refinery, and
another announcement that it has entered into a long-term pipeline and
terminal services agreement with ConocoPhillips that will allow expansion of
NuStar’s South Texas Crude Oil Pipeline System. All of these transactions are
part of NuStar’s announced strategic redirection away from the margin-based
refining and marketing business in order to further grow its fee-based
pipeline and storage operations through internal growth projects and
acquisitions.

“The TexStar acquisition and related projects make NuStar one of the top
logistics players in the Eagle Ford Shale region. The crude oil assets we are
purchasing from TexStar will be integrated with our existing pipeline and
storage system in South Texas, and this will further integrate NuStar with
producers and marketers of Eagle Ford Shale crude oil,” said Curt Anastasio,
president and CEO of NuStar. It will also provide Eagle Ford crude producers
with greater ability to move production to Corpus Christi, where they will
have access to NuStar’s Corpus Christi storage and dock space that can be
utilized for shipments to other markets.

“It is important to note that these crude oil assets should begin generating
cash flow immediately, and NuStar takes on no commodity or margin risk as a
result of this transaction or the NGL asset transaction,” Anastasio added.

Crude Oil Assets

The crude asset acquisition includes a crude pipeline system that spans from
LaSalle County and Frio County to Live Oak County. The system has the capacity
to transport 100,000 barrels per day (BPD) of crude oil and consists of
approximately 140 miles of crude transmission and gathering lines. NuStar is
also acquiring five storage terminals located along the pipeline system that
have a combined capacity of 643,400 barrels. They include TexStar’s Gardendale
terminal in LaSalle County, its Highway 85 terminal in Frio County, its
Highway 97 and Highway 16 terminals in McMullen County, and its Oakville
terminal in Live Oak County. The TexStar system was connected to NuStar’s
recently constructed 600,000-barrel Oakville storage terminal and the crude is
transported to NuStar’s 1.6-million-barrel Corpus Christi North Beach storage
terminal via its existing 16-inch pipeline.

Anastasio noted that the system is currently transporting approximately 70,000
BPD, and that its 100,000-BPD capacity should be reached by mid-2013.
Approximately 90 percent of the throughput on this system is secured by
long-term, take-or-pay commitments and acreage dedications from Eagle Ford
producers and marketers.

NuStar expects to spend $65 to $85 million over the next 18 to 24 months (with
the majority being spent in 2013) to integrate and complete crude gathering
and terminal assets, and projected EBITDA from the assets is expected to range
between $10 and $30 million in 2013, between $45 and $65 million in 2014, and
between $50 and $70 million in 2015 and beyond when the assets are completed
and fully integrated.

Anastasio noted that approximately $330 million of growth capital will be
required to complete NGL projects after that acquisition closes, and estimated
EBITDA generated from the NGL assets should be in the $40 to $60 million range
in 2014, and in the $70 to $90 million range in 2015 and beyond upon
completion of the NGL asset projects.

“As we’ve said, this transaction has the potential to significantly transform
NuStar’s earnings potential for the foreseeable future, and there are many
more exciting opportunities before us,” said Anastasio.

About NuStar Energy

NuStar Energy L.P., a publicly traded master limited partnership based in San
Antonio, is one of the largest independent liquids terminal and pipeline
operators in the nation. NuStar currently has 8,433 miles of pipeline; 82
terminal and storage facilities that store and distribute crude oil, refined
products and specialty liquids; a fuels refinery with a throughput capacity of
14,500 barrels per day; and 50% ownership in two asphalt refineries with a
combined throughput capacity of 104,000 barrels per day. The Partnership’s
combined system has approximately 94 million barrels of storage capacity, and
NuStar has operations in the United States, Canada, Mexico, the Netherlands,
including St. Eustatius in the Caribbean, the United Kingdom and Turkey. For
more information, visit NuStar Energy L.P.'s Web site at www.nustarenergy.com.

About TexStar

TexStar is a full service midstream company focused on providing a full suite
of midstream services to producers in South Texas. TexStar’s goal is to
provide the highest netback possible to producers for gas and natural gas
liquids by providing low cost gathering, treating, compression and processing
as well as access to multiple product outlets. TexStar’s gas assets include
over 500 miles of low pressure sour gas gathering systems located primarily in
Frio and LaSalle counties, an acid gas treater and injection well ultimately
capable of processing more than 250 MMCfd of inlet gas, a high pressure rich
gas system consisting of over 130 miles of 24" and 16" inlet trunk lines and
over 40 miles of 20” residue take away. Both the high pressure rich gas line
and the residue take away line are currently co-owned through a joint venture
with TEAK Midstream, LLC. Additionally, TexStar is currently constructing a
cryogenic processing plant designed for 250 MMcfd of inlet gas capacity with
estimated ethane recoveries in excess of 90%, which should be operational in
April 2013. TexStar is headquartered in San Antonio, TX and is a portfolio
company of funds managed by EIG Global Energy Partners and HM Capital
Partners, LP. More information can be found at TexStar’s website
www.TexStarMS.com.

Within the text of this release, we make reference to certain non-GAAP
financial measures, which should not be considered as alternatives to GAAP
measures. Reconciliations of these non-GAAP financial measures to the most
directly comparable financial measure calculated in accordance with GAAP are
included on our website at www.nustarenergy.com within the Investors tab.

Contact:

Media:
NuStar Energy L.P.
Mary Rose Brown, 210-918-2314
maryrose.brown@nustarenergy.com
or
TexStar Midstream Services LP
Bruce Kates, 866-768-7794
Bruce.Kates@TexStarMS.com
or
Investors:
NuStar Energy L.P.
Chris Russell, 210-918-3057
chris.russell@nustarenergy.com