Crestwood And Inergy To Merge Forming $7 Billion Midstream Energy Partnership

Crestwood And Inergy To Merge Forming $7 Billion Midstream Energy Partnership

Creates an Integrated Mid-Cap MLP Linking Fundamental Energy Supply with
Fundamental Energy Demand Across the Midstream Value Chain

Companies to Host Conference Call at 8:30 AM ET Today

PR Newswire

HOUSTON and KANSAS CITY, Mo., May 6, 2013

HOUSTON and KANSAS CITY, Mo., May 6, 2013 /PRNewswire/ --Crestwood Midstream
Partners LP (NYSE: CMLP) ("Crestwood Midstream") and Crestwood Holdings LLC
("Crestwood Holdings") (collectively, "Crestwood") and Inergy, L.P.
(NYSE:NRGY) ("Inergy L.P.") and Inergy Midstream, L.P. (NYSE:NRGM) ("Inergy
Midstream") (collectively, "Inergy") today announced the signing of definitive
agreements to create a fully integrated midstream partnership with a total
enterprise value of approximately $7 billion.

The combination of Crestwood and Inergy creates a diverse platform of
midstream assets providing broad-ranging services in the premier shale plays
in North America including the Marcellus Shale, Bakken Shale, Eagle Ford
Shale, Permian Basin, Powder River Basin Niobrara Shale, Utica Shale, Barnett
Shale, Fayetteville Shale, Granite Wash, Haynesville Shale and Monterey Shale.
The complementary services offered by Crestwood and Inergy create attractive
operational and financial synergies. In addition, enhanced scale and
diversification provide further financial flexibility to position the combined
partnership to be a formidable competitor for major greenfield development and
acquisition opportunities across the midstream value chain. Further, the
combination of a significant portfolio of long-term, fee-based contracts with
high-quality customers, coupled with a sizable backlog of organic capital
opportunities across multiple geographies, provides meaningful visibility to
long-term growth.

Under the terms of the definitive transaction agreements, which have been
approved by the boards of directors and independent committees of Crestwood
and Inergy, the combination will be implemented through a series of
transactions, which will result in Crestwood Holdings acquiring the general
partner, and thus control, of Inergy L.P. Crestwood's Chairman, President and
Chief Executive Officer, Robert G. Phillips, will lead Inergy L.P. following
completion of the transactions, and will serve as Chairman, President and
Chief Executive Officer of the combined company. Until all of the
transactions have closed, Crestwood Midstream and Inergy Midstream will
continue to operate as separate, independent companies.

The terms of the agreements are as follows: Crestwood Holdings will acquire
the general partner of Inergy L.P. and will contribute the general partner and
incentive distribution rights of Crestwood Midstream to Inergy L.P. in
exchange for Inergy L.P. common units. Separately, Crestwood Midstream will
be merged with a subsidiary of Inergy Midstream. In the merger, Crestwood
Midstream unitholders will receive 1.070 common units of Inergy Midstream for
each unit of Crestwood Midstream they own, representing a 5% premium to the
20-day volume weighted average price ("VWAP") of Crestwood Midstream's common
units. Additionally, all Crestwood Midstream public unitholders other than
Crestwood Holdings will receive a one-time cash payment at closing of the
merger of approximately $35 million in the aggregate, or $1.03 per unit, $25
million of which will be payable by Inergy Midstream and approximately $10
million of which will be payable by Crestwood Holdings. Inergy Midstream and
Inergy L.P. will continue to be listed on the NYSE under the ticker symbols
NRGM and NRGY, respectively.

"We view this transaction as a merger of equals through which we are creating
a larger, more diversified operating platform that will be highly attractive
to investors, customers, creditors and employees," said Robert G. Phillips,
Chairman, President and CEO of Crestwood. "Crestwood operates a first-class
portfolio of shale-focused midstream assets, but our operational capabilities
and services to our customers currently end at the tailgate of the processing
plant. With this combination, we will truly begin to experience the power of
the value chain growth strategy by offering our customers a more comprehensive
and competitive suite of services that enables us to capture incremental fee
opportunities that expand margins and maximize returns on investment."

"This combination with Crestwood represents Inergy's ongoing and exciting
transformation into a pure-play midstream service provider and is accretive to
Inergy L.P. and Inergy Midstream unitholders on a per unit basis," said John
J. Sherman, Chairman and Chief Executive Officer of Inergy. "Both of our
companies are focused on capitalizing on the rapidly developing U.S. shale
plays, and we have been evaluating a number of opportunities to expand our
services to gain access to incremental hydrocarbon supply. Crestwood's
reputation and strong competitive position in the gathering and processing, or
supply side of the business, greatly complements what we do on the demand side
of the business.We believe bringing the two partnerships together through a
merger of equals creates a powerful combination that will drive significant
value."

Strategic Highlights

  oIncreased size, scale and diversity: Together, Crestwood and Inergy have a
    unique and diverse set of midstream assets and services with visible
    long-term growth potential and clear operating and financial synergies.
    The pro forma enterprise is expected to generate approximately $450
    million of 2013 estimated EBITDA and to have a total enterprise value of
    greater than $7 billion, including both Inergy L.P. and Inergy
    Midstream.By building scale, the combined partnership expects to have
    increased access to capital and an improved cost of capital that better
    positions the partnership to secure and execute on sizable and accretive
    organic development and acquisition opportunities.
  oComplementary growth strategies: Both companies are focused on
    capitalizing on the unprecedented midstream growth opportunity resulting
    from the upstream development of North American shale plays. The combined
    partnership will have one of the top shale portfolios in the industry with
    an established position or an active development project in every premier
    shale play in the U.S.
  oFurther expands the value chain linking fundamental supply to fundamental
    demand: By combining services and asset positions, Crestwood and Inergy
    will be able to leverage each other's strong customer relationships on
    both ends of the value chain. Crestwood provides extensive relationships
    and existing contracts with the top shale producers and Inergy provides
    extensive relationships with ultimate end-users including LDCs, refiners,
    petrochemicals, marketers and producers.
  oGreater cash flow stability and visibility: Through its expanded customer
    base and service offering, no single customer would account for more than
    20% of the combined partnership's current revenues. Furthermore,
    approximately 84% of the consolidated partnership's expected 2013 gross
    margin is under fixed-fee contracts, 51% of which is under firm,
    take-or-pay style contracts with no volumetric or commodity risk.
  oEnhanced credit profile: The combined partnership is anticipated to
    receive a credit rating in line with the current Inergy corporate family
    rating. With a strong pro forma balance sheet, significant contracted cash
    flows and strong ability to continue de-leveraging, achieving investment
    grade status to further drive cost of capital synergies continues to be a
    key objective of the partnership.
  oDelivers significant revenue and cost synergies: The combined partnership
    is positioned to realize significant commercial and operating synergies
    given the complementary nature of the business segments, the intent to
    further expand across the value chain through future development
    opportunities and incremental acquisitions and consolidation. In addition,
    Crestwood and Inergy expect to fully realize financial synergies of
    approximately $15 to $20 million on an annual run rate within the next 24
    months. Savings are expected to be realized through the alignment of
    assets to maximize efficiencies and overhead consolidation as well as
    significant cost of capital savings.
  oExperienced, dedicated employee base, leadership, and sponsorship: The
    combination brings together two world-class organizational staffs,
    including a combined senior management team with a significant track
    record of value creation at some of the industry's largest organizations
    including Enterprise Products Partners, El Paso Corporation, Kinder Morgan
    and Williams.
  oStrong sponsorship with continued alignment of interests to drive
    unitholder value: Through its continued ownership of Crestwood Holdings,
    First Reserve, who, with management, owns 100% of Crestwood Holdings and
    who is Crestwood Midstream's largest unitholder (owning approximately 43%
    of its outstanding limited partner interests), continues to demonstrate
    its commitment to the ongoing growth of the partnership. In addition to
    First Reserve's substantial investment capital, having raised $23 billion
    since inception, its significant industry relationships and broad
    portfolio of energy assets facilitate new business opportunities.
    Examples include Crestwood's current contracts with Sabine Oil and Gas,
    Mountaineer Keystone and RKI Exploration and Inergy's current contracts
    with PBF Energy.

Transaction Details
The combination of Inergy and Crestwood will be effected through a series of
transactions.In the first transaction, which is expected to close in
mid-June, Crestwood Holdings will acquire the general partner of Inergy L.P.
for $80 million in cash.Prior to the closing of this transaction, Inergy L.P.
will distribute to its unitholders all of the 56.4 million common units that
it owns in Inergy Midstream. The closing of Crestwood Holdings' acquisition
of the general partner of Inergy L.P. is conditioned upon Inergy L.P.'s
special distribution of its Inergy Midstream common units to Inergy L.P.
unitholders. Upon closing of this transaction, Crestwood Holdings will own
the general partner, and thus control, of Inergy L.P.

In the second transaction, which is cross-conditioned with the transaction
above and is expected to close simultaneous with the transaction above,
Crestwood Holdings will contribute to Inergy L.P. 100% of its interest in
Crestwood Gas Services GP LLC, the general partner of Crestwood Midstream that
also owns 100% of the incentive distribution rights of Crestwood Midstream, in
exchange for 35.1 million common units and 4.4 million subordinated units of
Inergy L.P. Crestwood Holdings has also entered into an agreement that
provides that, subject to the closing of the second transaction, Crestwood
Holdings will have the option to contribute to Inergy L.P. 7.1 million of the
Inergy Midstream common units it receives in the merger described below (or in
the event the merger agreement is terminated, 6.7 million Crestwood Midstream
Units) in exchange for 14.3 million common units of Inergy L.P., which if
exercised would result in it owning approximately 29% of the total common
units of Inergy L.P. outstanding.

In the final transaction, which is expected to close in the third calendar
quarter of 2013, Crestwood Midstream will be merged into a subsidiary of
Inergy Midstream.In the merger, Crestwood Midstream unitholders will receive
1.070 units of Inergy Midstream for each unit of Crestwood Midstream they own,
representing a 5% premium to the 20-day VWAP of Crestwood Midstream's units.
Additionally, all Crestwood Midstream public unitholders other than Crestwood
Holdings will receive a one-time cash payment at closing of approximately $35
million in the aggregate, or $1.03 per unit, $25 million of which will be
payable by Inergy Midstream and approximately $10 million of which will be
payable by Crestwood Holdings. The total consideration received by the
Crestwood Midstream public unitholders other than Crestwood Holdings
represents a 14% premium relative to Crestwood Midstream's closing price on
Friday, May 3, 2013. The merger is conditioned on the approval of the holders
of a majority of the limited partner interests of Crestwood Midstream.
Crestwood Holdings has agreed to vote its limited partner interests in favor
of the transaction. The merger is also conditioned on the closing of the first
and second transactions described above, but the first and second transactions
are not conditioned on the closing of the merger.

Upon closing of the merger, and assuming the election by Crestwood Holdings of
its right to contribute Inergy Midstream units to Inergy L.P., ownership of
Inergy Midstream L.P. is expected to be as follows:

  oCurrent Crestwood Midstream public unitholders other than Crestwood
    Holdings will own approximately 24.4%;
  oCrestwood Holdings and its affiliates will own approximately 13.7%;
  oCurrent Inergy Midstream public unitholders will own approximately 19.4%;
  oCurrent Inergy L.P. public unitholders will own approximately 29.9%;
  oInergy L.P. will own approximately 4.7%; and
  oCurrent management of Inergy will own approximately 7.9%.

Upon closing of the merger, and assuming the election by Crestwood Holdings of
its right to contribute Inergy Midstream units to Inergy L.P., ownership of
Inergy L.P. is expected to be as follows:

  oCurrent Inergy L.P. public unitholders will own approximately 56.4%;
  oCrestwood Holdings and its affiliates will own approximately 29.0%; and
  oCurrent management of Inergy will own approximately 14.6%.

Together, Crestwood Holdings, Crestwood management and Inergy management teams
are expected to hold units of the combined company valued in excess of $1.5
billion, highlighting the management team's close alignment of interests with
fellow unitholders.

Headquarters and Management
The name of the combined company will be decided as the companies move closer
to finalizing the transaction.Following the close of the transaction, the
combined partnership will be headquartered in Houston, Texas with executive
offices in Kansas City, Missouri and Fort Worth, Texas.

Robert G. Phillips will act as Chairman, President and Chief Executive Officer
of the combined company. The executive management team, which is expected to
include senior executives from both companies, will be announced upon
completion of the merger. The combined companies' newly constituted Boards of
Directors will include representatives from both Crestwood and Inergy. Upon
closing, Inergy Chairman and CEO, John J. Sherman and President, R. Brooks
Sherman, Jr., will step down from day-to-day management roles at the new
partnership; however, both John J. Sherman and R. Brooks Sherman have elected
to maintain 100% of their meaningful personal investment in the pro forma
partnership.Additionally, John J. Sherman will continue to serve as a
director on both the board of Inergy L.P. as well as the board of Inergy
Midstream.

Advisors
Citigroup Global Markets Inc. acted as exclusive financial advisor to
Crestwood, and Simpson Thacher & Bartlett LLP and Akin Gump Strauss Hauer &
Feld LLP acted as legal counsel to Crestwood. Evercore Partners served as
exclusive financial advisor to the Conflicts Committee of the Crestwood
Midstream Board of Directors, and Morris, Nichols, Arsht & Tunnell LLP served
as legal counsel to the Conflicts Committee of the Crestwood Midstream Board
of Directors. Greenhill & Co. served as lead financial advisor and Jefferies
LLC served as co-financial advisor and sole technical advisor for Inergy L.P.
and Inergy Midstream. Vinson & Elkins LLP acted as legal counsel to Inergy
L.P. and Inergy Midstream. SunTrust Robinson Humphrey, Inc. acted as
financial advisor to a committee of independent directors of the Inergy L.P.
Board of Directors, and Richards, Layton & Finger, P.A. served as legal
counsel to the committee. Tudor Pickering Holt & Co. served as financial
advisor to a committee of independent directors of the Inergy Midstream Board
of Directors, and Potter Anderson & Corroon LLP served as legal counsel to the
committee.

Conference Call and Webcast
Crestwood and Inergy will host a conference call on Monday, May 6, 2013, at
8:30 a.m. Eastern Time to discuss the transaction. Prepared remarks by
Crestwood Chairman, President and Chief Executive Officer Robert G. Phillips
and Inergy L.P. Chairman and Chief Executive Officer John J. Sherman, will be
followed by a question and answer session.

Investors and analysts are invited to participate in the call by dialing (866)
610-1072, or (973) 935-2840 for international calls using Conference ID:
68638063. Interested parties may also listen over the Internet on the
companies' investor relations pages at www.crestwoodlp.com or
www.inergylp.com.

A replay of the call will be available on the companies' websites or by phone
until 11:30 a.m. Eastern Time on May 13, 2013. The number for the replay is
(800) 585-8367, or (404) 537-3406 for international calls using Conference ID:
68638063.

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 Marcellus Shale in northern West
Virginia, the Fayetteville Shale in northwest Arkansas, the Granite Wash in
the Texas Panhandle, the Avalon Shale/Bone Spring in southeastern New Mexico
and the Haynesville/Bossier Shale in western Louisiana. For more information
about Crestwood, visit www.crestwoodlp.com.

About Inergy, L.P.
Inergy, L.P., headquartered in Kansas City, Missouri, is a publicly traded
master limited partnership. Inergy's operations include a natural gas storage
business in Texas and an NGL supply logistics, transportation, and marketing
business that serves customers in the United States and Canada. Through its
general partner interest and majority equity ownership interest in Inergy
Midstream, L.P., Inergy is also engaged in the development and operation of
natural gas, NGL and crude oil storage, transportation, and logistics
businesses in the Northeast region of the United States and in North Dakota.
For more information about Inergy, L.P., visit www.inergylp.com.

About Inergy Midstream, L.P.
Inergy Midstream, L.P., headquartered in Kansas City, Missouri, is a publicly
traded master limited partnership engaged in the development and operation of
natural gas, NGL and crude oil storage, transportation, and logistics
businesses in the Northeast region of the United States and in North Dakota.
For more information about Inergy Midstream, L.P., visit
www.inergylp.com/midstream.

Additional Information and Where to Find It

This press release contains information about the proposed merger involving
Crestwood and Inergy Midstream. In connection with the proposed merger, Inergy
Midstream will file with the SEC a registration statement on Form S-4 that
will include a proxy statement/prospectus for the unitholders of Crestwood.
Crestwood will mail the final proxy statement/prospectus to its unitholders.
INVESTORS AND UNITHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND
OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
CRESTWOOD, INERGY MIDSTREAM, THE PROPOSED MERGER AND RELATED MATTERS.
Investors and unitholders will be able to obtain free copies of the proxy
statement/prospectus and other documents filed with the SEC by Inergy
Midstream and Crestwood through the website maintained by the SEC at
www.sec.gov. In addition, investors and unitholders will be able to obtain
free copies of documents filed by Crestwood with the SEC from Crestwood's
website, www.crestwoodlp.com, under the heading "SEC Filings" in the "Investor
Relations" tab and free copies of documents filed by Inergy Midstream with the
SEC from Inergy Midstream's website, www.inergylp.com, under the heading "SEC
Filings" in the Inergy Midstream, L.P. "Investor Relations" tab.

Participants in the Solicitation

Crestwood, Inergy Midstream, Inergy, L.P. and their respective general
partner's directors and executive officers may be deemed to be participants in
the solicitation of proxies from the unitholders of Crestwood in respect of
the proposed merger transaction. Information regarding the persons who may,
under the rules of the SEC, be deemed participants in the solicitation of the
unitholders of Crestwood in connection with the proposed transaction,
including a description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement/prospectus
when it is filed with the SEC. Information regarding Crestwood's directors
and executive officers is contained in Crestwood's Annual Report on Form 10-K
for the year ended December 31, 2012, which is filed with the SEC.
Information regarding Inergy's directors and executive officers is contained
in Inergy Midstream's Annual Report on Form 10-K for the year ended September
30, 2012, which is filed with the SEC. Information regarding Inergy's
directors and executive officers is contained in Inergy, L.P.'s Annual Report
on Form 10-K for the year ended September 30, 2012, which is filed with the
SEC. Free copies of these documents may be obtained from the sources
described above.

Forward Looking Statements

The statements in this communication 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 and Inergy'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 or Inergy's financial
condition, results of operations and cash flows include, without limitation,
failure to satisfy closing conditions with respect to the merger; the risks
that the Crestwood and Inergy businesses will not be integrated successfully
or may take longer than anticipated; the possibility that expected synergies
will not be realized, or will not be realized within the expected timeframe;
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 and Inergy's filings with the U.S. Securities and Exchange
Commission. You should read Crestwood's and Inergy's filings with the U.S.
Securities and Exchange Commission, including their Annual Report on Form 10-K
for the year ended December 31, 2012, and September 30, 2012, respectively,
and their most recent Quarterly Reports and Current Reports for a more
extensive list of factors that could affect results. Neither Crestwood nor
Inergy assumes any obligation to update these forward-looking statements.

CONTACTS

Crestwood
Mark Stockard
832-519-2207
mstockard@crestwoodlp.com

or

Joele Frank, Wilkinson Brimmer Katcher
Andy Brimmer / Michael Freitag / Jed Repko
212-355-4449

Inergy
Vince Grisell
816-842-8181
investorrelations@inergyservices.com.

SOURCE Crestwood Midstream Partners LP

Website: http://www.crestwoodlp.com
Website: http://www.inergylp.com