Crestwood Midstream Partners Announces Agreement to Acquire Interest in Niobrara Shale Gas Gathering and Processing Joint

   Crestwood Midstream Partners Announces Agreement to Acquire Interest in
          Niobrara Shale Gas Gathering and Processing Joint Venture

Early-stage entry into the emerging Powder River Basin rich natural gas, NGL
and crude oil play further expands the value chain opportunity

Substantial Niobrara Shale midstream infrastructure development underpinned by
long-term cost of service agreements

PR Newswire

HOUSTON, June 24, 2013

HOUSTON, June 24, 2013 /PRNewswire/ --Crestwood Midstream Partners LP (NYSE:
CMLP) ("Crestwood" or the "Partnership") today announced that its subsidiary,
Crestwood Niobrara LLC ("Crestwood Niobrara"), has entered into an agreement
to acquire a 50% interest in Jackalope Gas Gathering Services, L.L.C.
("Jackalope") from RKI Exploration & Production, LLC ("RKI") for approximately
$108 million. RKI is a privately-owned, independent exploration and production
company focused in the Powder River, Permian and Denver-Julesberg Basins in
which First Reserve owns a significant minority ownership position. First
Reserve is a premier energy-focused private equity firm that is also
Crestwood's indirect general partner and largest common unit holder. The
Jackalope gathering and processing system ("Jackalope System"), located in
Converse County, Wyoming, provides Crestwood with an early-stage entrance into
the emerging Powder River Basin Niobrara Shale play and positions Crestwood
for significant future infrastructure development opportunities across the
rich gas and crude oil midstream value chain. The acquisition is expected to
close during the third quarter of 2013, subject to customary regulatory
approvals.

The other 50% interest in Jackalope is owned by Access Midstream Partners,
L.P. ("Access"), which acquired its interest in Jackalope in December 2012
from Chesapeake Energy Corporation ("Chesapeake"). As a part of this
transaction, Access will continue to provide field operations and construction
management for Jackalope and Crestwood will assume the commercial development
role for the joint venture.

Chesapeake and RKI have collectively accumulated the largest acreage block in
the Powder River Basin play, spanning over 750,000 acres, and are aggressively
developing the acreage under a joint development agreement. The Jackalope
System is being developed to gather and process rich natural gas produced from
a 311,000 acre area of dedication in Converse County where RKI and Chesapeake
have focused the majority of their drilling activity to date. The Jackalope
System is currently composed of approximately 100 miles of gathering pipelines
and 9,400 horsepower of compression equipment with near-term plans to install
a new gas processing facility and continued expansion of the gas gathering
system. The existing assets and future development are supported by a 20-year
gathering and processing agreement with Chesapeake and RKI under which
Jackalope receives cost-of-service based fees with annual redeterminations
that provide for an attractive rate of return on invested capital.

"As we announced last year, Crestwood has been focusing its development
efforts on rich gas plays such as the Powder River Basin Niobrara Shale,"
stated Robert G. Phillips, Chairman, President and Chief Executive Officer of
Crestwood's general partner. "This transaction is an important next step in
the development of that strategy and positions Crestwood in a growing play
with an experienced midstream partner supported by a long-term contract and
large acreage dedication being developed by very capable shale producers.

"The Jackalope System, while in its early build-out stage, provides
significant visibility to cash flow growth as midstream infrastructure is
expanded to support Chesapeake and RKI's aggressive development plans. With
approximately 10 drilling rigs currently running in the area, a 20-year
cost-of-service midstream contract, and more than 1,000 estimated drilling
locations in the current acreage dedication, we believe this investment has
the potential to be another great, high-growth shale play like our Marcellus
position."

Phillips continued, "We are also pleased to partner with Access on this
important development project. Access' long operating experience with
Chesapeake, combined with Crestwood's business development resources, will
allow Jackalope to capitalize on future rich gas gathering and processing
development opportunities throughout the emerging Powder River Basin play.

"In addition, the Jackalope platform provides additional opportunities for
Crestwood to extend its value chain services to include NGL and crude oil
storage, blending, truck and rail terminaling, transportation and marketing.
It also further highlights the merits of Crestwood's recently announced
combination with Inergy, L.P. and Inergy Midstream, L.P., which specialize in
these value chain midstream services." 

In connection with the acquisition and expected future infrastructure
development, GE Energy Financial Services has agreed to fund, subject to
additional approvals, 75% of the acquisition and future capital contributions
for Crestwood Niobrara's 50% interest in Jackalope, up to $150 million in
preferred equity. The remaining contribution for Crestwood Niobrara's interest
will be funded with available borrowing capacity under Crestwood's revolving
credit facility. No additional capital markets activity will be required by
Crestwood in connection with this acquisition.

Additionally, because of First Reserve's investment in both RKI and Crestwood,
the transaction was evaluated by and unanimously approved by the Conflicts
Committee of Crestwood's general partner, which is composed entirely of
independent directors. In connection with the Conflicts Committee's review,
Robert W. Baird & Co. Incorporated was engaged as its independent financial
advisor and rendered a fairness opinion. The law firm of Morris, Nichols,
Arsht & Tunnell LLP served as legal counsel to the Conflicts Committee for the
transaction. 

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 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.

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 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, 2012, and our most recent Quarterly Reports and Current
Reports for a more extensive list of factors that could affect results.

Investor Contact:
Mark Stockard
832-519-2207
mstockard@crestwoodlp.com

SOURCE Crestwood Midstream Partners LP

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