Crestwood Midstream Partners LP Acquires Remaining Interest in

Crestwood Midstream Partners LP Acquires Remaining Interest in
Marcellus Shale Joint Venture for $258 Million 
HOUSTON, TX -- (Marketwire) -- 01/08/13 --  Crestwood Midstream
Partners LP (NYSE: CMLP) ("Crestwood") announced today that it has
purchased the remaining 65% interest in Crestwood Marcellus Midstream
LLC ("CMM") from Crestwood Holdings Partners LLC ("Crestwood
Holdings") for $258 million. The transaction is expected to be 7-8%
accretive to Crestwood's 2013 distributable cash flow on a fully
diluted basis and was funded with $129 million of cash drawn on
Crestwood's existing revolving credit facility and approximately 6.2
million new Crestwood Class D units ("Class D Units") issued to
Crestwood Holdings. As a part of the consideration received for the
transaction, Crestwood Holdings is maintaining its 2% general partner
interest in Crestwood. Crestwood does not expect any additional
capital markets activity related to this transaction. 
Prior to the transaction, Crestwood Holdings, which is controlled by
First Reserve Corporation, owned 100% of Crestwood's general partner
("Crestwood GP") and approximately 42% of Crestwood's outstanding
limited partner units. After the transaction, Crestwood Holdings owns
approximately 47% of Crestwood's outstanding limited partner units
taking into account the new Class D Units. The Class D Units,
substantially similar to Crestwood's existing Class C Units, allow
for the payment of quarterly distributions in cash or through the
issuance of additional Class D Units at the discretion of Crestwood.
The Class D Units will begin receiving distributions with the first
quarter 2013 distribution, payable in the second quarter 2013, and
will maintain the pay-in-kind feature until they convert to common
units on a one-for-one basis on March 1, 2014. Crestwood Holdings
plans to use the cash portion of the purchase price to reduce debt,
which will provide Crestwood Holdings incremental flexibility to
continue its support of future Crestwood growth through incremental
capital investment. 
The $258 million purchase price reflects an enterprise value of $525
million for 100% of CMM, including net CMM debt of approximately $130
million, and implies a transaction value of approximately 8.9 times
estimated CMM 2013 earnings before interest, taxes, depreciation and
amortization ("EBITDA"), which is consistent with comparable
transactions in the midstream sector. The transaction was unanimously
approved by the Crestwood GP Conflicts Committee, comprised entirely
of independent directors, which retained Robert W. Baird & Co.
Incorporated as its independent financial advisor to assist in
evaluating the transaction and to render a fairness opinion.
Additionally, the Conflicts Committee engaged the law firm of Akin
Gump Strauss Hauer & Feld LLP to serve as its legal counsel.  
"This acquisition is the first drop down transaction for Crestwood
Holdings which shows the benefit of First Reserve's long term support
and substantially increases Crestwood's exposure to the rich gas area
of the Marcellus Shale region," stated Robert G. Phillips, President
and Chief Executive Officer of Crestwood's general partner. "When we
acquired the Antero Resources Appalachian Corporation ('Antero')
Marcellus Shale midstream assets in March 2012 for $382 million, we
structured the CMM joint venture to allow Crestwood to acquire an
interest in an early stage, high-growth Marcellus Shale gathering
business without significant stress on Crestwood's balance sheet. The
Antero acquisition has exceeded our expectations with total gathering
volumes increasing from approximately 200 million cubic feet per day
('MMcf/d') in early 2012 to almost 400 MMcf/d at the end of 2012, and
we expect this significant volume growth to continue in 2013 based on
the latest development plans from Antero. The recently completed $95
million Enerven compression acquisition added an additional component
to our 2013 growth plans and supported the rationale to accelerate
the drop down of Crestwood Holdings' interest in CMM into Crestwood.
By retaining the Class D Units and materially increasing its
ownership stake in the Partnership, Crestwood Holdings has shown its
continued commitment to support and participate in the long term
growth of Crestwood," concluded Phillips.  
Crestwood's 2013 Marcellus Shale Outlook 
With the completion of this transaction, Crestwood now owns 100% of
CMM's natural gas gathering, compression and dehydration business
located largely in the rich gas window of the southwestern core of
the Marcellus Shale play. The assets consist of approximately 40
miles of low pressure gathering pipeline and 43,000 horsepower of
compression assets in Harrison and Doddridge Counties, West Virginia,
supported by long term, 100% fixed-fee contracts with Antero covering
approximately 136,000 net acres (the "Eastern Area of Dedication")
with seven year minimum volume guarantees and the rights to acquire
additional Antero midstream assets on adjacent acreage (the "Western
Area"). Antero is currently running twelve rigs on its West Virginia
acreage and continues its aggressive development of properties
dedicated to Crestwood and in surrounding areas.  
At year-end 2012, spot volumes on Crestwood's Marcellus Shale
gathering systems were approximately 400 MMcf/d and are expected to
exceed 500 MMcf/d by the end of 2013 with the connection of
approximately 60 to 70 new wells. Based upon Antero's current 2013
drilling and development plan in the Eastern Area of Dedication,
Crestwood expects to expand its low pressure gathering systems with
an additional 18 miles of pipeline. In addition to the four
compressor stations acquired from Enerven, which are expected to add
approximately $11 million to $12 million of EBITDA in 2013, Crestwood
also expects to add at least two new compressor stations in the
Eastern Area of Dedication by year end 2013. Crestwood currently
expects the capital expenditures for this development to be in the
range of $70 million to $80 million, and Crestwood intends to
primarily utilize CMM's $200 million revolving credit facility, which
will remain in effect post-transaction and is non-recourse to
Crestwood, to finance these organic growth capital expenditures.  
Additionally, Crestwood is in early discussions with Antero regarding
the accelerated development of midstream infrastructure in the
Western Area including the addition of incremental compressor
stations that would materially increase total Marcellus Shale
gathering capacity by year end 2013. The potential for continued
infrastructure development in the Western Area illustrates the
strength of Crestwood's relationship with Antero and the long term
organic growth potential for Crestwood's Marcellus Shale position.  
Additional Information and Conference Call 
Crestwood will post additional materials related to the acquisition
on the Investor Relations section of our website at and will host a conference call for investors and
analysts on Tuesday, January 8, 2013, beginning at 3:30 p.m. Central
Time to review details of the acquisition. Interested parties may
participate by joining the conference call at 800-946-0742 and
entering passcode 7276047. The conference call will also be webcast
live and can be accessed through the Investor Relations section of
our website. A replay will be available for 30 days following the
conference call by dialing 888-203-1112 and entering the replay
passcode 7276047. 
About Crestwood Midstream Partners LP 
Houston, Texas based Crestwood is a growth-oriented, midstream master
limited partnership which owns and operates predominately fee-based
gathering, processing, treating and compression assets servicing
natural gas producers in the Barnett Shale in north Texas, the
Fayetteville Shale in northwest Arkansas, the Granite Wash in the
Texas Panhandle, the Marcellus Shale in northern West Virginia, the
emerging Avalon Shale trend in southeastern New Mexico, and the
Haynesville/Bossier Shale in western Louisiana. For more information
about Crestwood, visit  
Forward-Looking Statements 
The statements in this news release regarding future events,
occurrences, circumstances, activities, performance, outcomes and
results are forward-looking statements. Although these statements
reflect the current views, assumptions and expectations of
Crestwood's management, the matters addressed herein are subject to
numerous risks and uncertainties which could cause actual activities,
performance, outcomes and results to differ materially from those
indicated. Such forward-looking statements include, but are not
limited to, statements about the future financial and operating
results, objectives, expectations and intentions and other statements
that are not historical facts. Factors that could result in such
differences or otherwise materially affect Crestwood's financial
condition, results of operations and cash flows including, without
limitation, changes in general economic conditions; fluctuations in
oil, natural gas and NGL prices; the extent and success of drilling
efforts, as well as the extent and quality of natural gas volumes
produced within proximity of our assets; failure or delays by our
customers in achieving expected production in their natural gas
projects; competitive conditions in our industry and their impact on
our ability to connect natural gas supplies to our gathering and
processing assets or systems; actions or inactions taken or
non-performance by third parties, including suppliers, contractors,
operators, processors, transporters and customers; our ability to
consummate acquisitions, successfully integrate the acquired
businesses, realize any cost savings and other synergies from any
acquisition; changes in the availability and cost of capital;
operating hazards, natural disasters, weather-related delays,
casualty losses and other matters beyond our control; timely receipt
of necessary government approvals and permits, our ability to control
the costs of construction, including costs of materials, labor and
right-of-way and other factors that may impact our ability to
complete projects within budget and on schedule; the effects of
existing and future laws and governmental regulations, including
environmental and climate change requirements; the effects of
existing and future litigation; and risks related to our substantial
indebtedness, as well as other factors disclosed in Crestwood's
filings with the U.S. Securities and Exchange Commission. You should
read our filings with the U.S. Securities and Exchange Commission,
including our Annual Report on Form 10-K for the year ended December
31, 2011, and our most recent Quarterly Reports and Current Reports
for a more extensive list of factors that could affect results.  
Investor Contact:
Mark Stockard
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