American Midstream Announces Agreement to Acquire Natural Gas Gathering System in the Prolific Eagle Ford Shale for

  American Midstream Announces Agreement to AcquireNatural Gas Gathering
  System in the Prolific Eagle Ford Shale for Approximately $100 Million

                  Partnership Provides Updated 2014 Guidance

Business Wire

DENVER -- January 22, 2014

American Midstream Partners, LP (NYSE: AMID) today announced the execution of
an agreement to purchase an approximate 120-mile natural gas gathering and
redelivery system located in the oil window of the Eagle Ford shale. In
December 2013, an affiliate of American Midstream's general partner entered
into a purchase and sale agreement with a subsidiary of Penn Virginia
Corporation (NYSE: PVA) to acquire the gathering and redelivery system.
American Midstream will effect the closing of the transaction by acquiring 100
percent of the equity of the affiliate of its general partner that previously
entered into the purchase and sale agreement with Penn Virginia. Upon closing
the acquisition with Penn Virginia, American Midstream will also enter into a
long-term, fee-based gathering agreement, whereby Penn Virginia will dedicate
for 25 years all current and future natural gas production from the areas
served by the system. The system is located in Gonzales and Lavaca counties,
Texas, in close proximity to the previously announced full-well-stream
gathering system currently under development by an affiliate of American
Midstream’s general partner. American Midstream expects the acquired system to
generate approximately $8 million of EBITDA in 2014, and will be acquired for
an aggregate purchase price of $100 million, subject to certain purchase price
adjustments to account for capital expenditures incurred by Penn Virginia
during the fourth quarter of 2013 and through the acquisition closing date.
The acquisition is expected to be accretive to American Midstream’s expected
distribution level for 2014, and creates a competitive position in a strategic
shale play with fee-based contracts that are not directly subject to commodity
price volatility.

Construction and operation of the Penn Virginia system began in 2011 and the
system currently has operating capacity of approximately 90 million cubic feet
per day (MMcf/d). The system is currently flowing more than 40 MMcf/d between
sales volumes and gas lift, with a significant ramp in volumes expected
throughout 2014 and thereafter. Production gathered by the system is
compressed and delivered to a third-party for processing or redelivered to
Penn Virginia for gas lift. Penn Virginia is operating six to seven rigs on
the system with nearly 900 remaining drilling locations in the acreage
dedicated to American Midstream, and volumes are expected to triple from
current operating levels by mid 2015.

American Midstream anticipates investing between $60 million and $70 million
over the next five years, including the capital expenditures associated with
the purchase price adjustment, to expand the system to accommodate Penn
Virginia’s drilling program, and anticipates EBITDA will increase over the
same period of time to approximately $25 million in 2018.

“We are excited to be working with Penn Virginia in the prolific oily window
of the Eagle Ford shale,” stated Steve Bergstrom, Executive Chairman,
President and Chief Executive Officer. “The gathering system is located in an
area of the Eagle Ford that is a primary investment focus for Penn Virginia.
As such, we believe there are opportunities for significant midstream
infrastructure growth, which we expect will lower the acquisition multiple by
several hundred basis points over the next several years. Moreover, the
long-term, fee-based gathering agreement increases our percentage of fee-based
gross margin to more than 70 percent on a pro-forma, run-rate basis. When
combined with the system that our general partner is developing in Gonzales
County and stated it intends to drop down to American Midstream, we are
developing a sizable midstream presence in the Eagle Ford.”

“The Penn Virginia acquisition is expected to be accretive on a distributable
cash flow per unit basis and provide access to significant organic growth
opportunities, including oil gathering and water treating, disposal, and
distribution,” continued Mr. Bergstrom. “Due to the increase in adjusted
EBITDA and distributable cash flow that we expect from the Penn Virginia
acquisition, management intends to recommend to the board of directors an
increase in the quarterly distribution of approximately two percent beginning
with the distribution for the third quarter 2014, in addition to our intent to
recommend to the board an approximate two percent increase for the first
quarter 2014 distribution associated with the recently closed Blackwater
acquisition. Looking forward, we believe the Penn Virginia acquisition
reflects our ongoing commitment to drive long-term, sustainable growth at
American Midstream.”

The transaction is expected to close in January 2014, and the closing is
subject to financing and other customary closing conditions.

Updated 2014 Adjusted EBITDA, DCF and Capital Expenditure Forecast

American Midstream updated its 2014 forecast to account for the acquisition of
the Penn Virginia gathering system. 2014 Adjusted EBITDA is now forecasted in
a range of $41 million to $44 million and distributable cash flow, or DCF, is
forecasted in a range of $21 million to $24 million. Growth capital
expenditures in 2014, which exclude maintenance capital, are forecasted to be
in a range of $55 million to $60 million, of which approximately $30 million
is associated with the Penn Virginia system.

About American Midstream Partners, LP

Denver-based American Midstream Partners is a growth-oriented limited
partnership formed to own, operate, develop and acquire a diversified
portfolio of midstream energy assets. The Partnership provides midstream
services in the Gulf Coast and Southeast regions of the United States. For
more information about American Midstream Partners, visit
www.AmericanMidstream.com.

Forward Looking Statements

This press release includes forward-looking statements. These statements
relate to, among other things, projections of a potential acquisition,
operational volumetrics and improvements, growth projects, cash flows,
expected Adjusted EBITDA, DCF and capital expenditures and an expected
recommendation to increase distribution levels. We have used the words
"anticipate,” "believe," "could," "estimate," "expect," "intend," "may,"
"plan," "predict," "project," "should," "will," "potential," and similar terms
and phrases to identify forward-looking statements in this press release.
Although we believe the assumptions upon which these forward-looking
statements are based are reasonable, any of these assumptions could prove to
be inaccurate and the forward-looking statements based on these assumptions
could be incorrect. Our operations involve risks and uncertainties, many of
which are outside our control, and any one of which, or a combination of
which, could materially affect our results of operations and whether the
forward-looking statements ultimately prove to be correct. Actual results and
trends in the future may differ materially from those suggested or implied by
the forward-looking statements depending on a variety of factors, which are
described in greater detail in our filings with the SEC. The closing of the
Penn Virginia acquisition is subject to conditions beyond our control. Please
see our Risk Factor disclosures included in our Annual Report on Form 10-K for
the year ended December 31, 2012 filed on April 16, 2013 and our Quarterly
Report on Form 10-Q for the quarter ended September 30, 2013 filed on November
13, 2013. All future written and oral forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their
entirety by the previous statements. We undertake no obligation to update any
information contained herein or to publicly release the results of any
revisions to any forward-looking statements that may be made to reflect events
or circumstances that occur, or that we become aware of, after the date of
this press release.

Non-GAAP Financial Measures

This press release includes forecasted non-GAAP financial measures, including
“Adjusted EBITDA” and “Distributable Cash Flow.” The GAAP measure most
directly comparable to adjusted EBITDA and Distributable Cash Flow is net
income (loss).

Adjusted EBITDA is calculated as net income (loss) attributable to the
partnership plus interest expense, depreciation expense, certain non-cash
charges such as non-cash equity compensation, unrealized losses on commodity
derivative contracts and selected charges that are unusual or non-recurring
including debt issuance costs, transaction costs, and losses on the impairment
of property, plant and equipment, less interest income, unrealized gains on
commodity derivative contracts, construction, operating and maintenance
agreement (COMA) income, amortization of commodity put purchase costs and
selected gains that are unusual or nonrecurring such as the benefit of our
other post-employment benefit plan (OPEB), gains on the sale of assets, and
gains on the involuntary conversion of property, plant and equipment.

Distributable cash flow is calculated as Adjusted EBITDA plus interest income,
less cash paid for interest expense, normalized maintenance capital
expenditures, and dividends related to the Series A convertible preferred
units.

This press release also contains the non-GAAP financial measure “EBITDA”
related to the acquisition of the Penn Virginia gathering system. The GAAP
measure most directly comparable to EBITDA is net income (loss). The estimated
2014 EBITDA of $8 million related to the Penn Virginia gathering system is
based on forecasted volume throughput on the gathering system, gathering and
compression fees as stated in the Construction and Field Gathering Agreement
that American Midstream will execute with Penn Virginia upon closing the
acquisition, and estimated costs required to operate the gathering system.

Contact:

American Midstream Partners, LP
Kyle Quackenbush, 720-457-6070
Director of Finance
 
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