SOURCE: Crestwood Midstream Partners LP

Crestwood Midstream Partners LP

November 01, 2011 12:42 ET

Crestwood Midstream Partners Completes Acquisition of Haynesville/Bossier Shale Midstream Assets

HOUSTON, TX--(Marketwire - Nov 1, 2011) - Crestwood Midstream Partners LP (NYSE: CMLP) ("Crestwood") announced today it has completed the previously announced acquisition of Tristate Sabine, LLC ("Tristate") from affiliates of Energy Spectrum Capital, Zwolle Pipeline, LLC and the Tristate management. Crestwood paid $65 million at closing which was funded with available capacity under Crestwood's revolving credit facility. An additional $8 million deferred purchase payment will be paid on November 1, 2012, subject to customary post-closing adjustments.

The acquired assets include approximately 61 miles of high-pressure natural gas gathering pipelines and carbon dioxide treating facilities located in Sabine Parish, Louisiana (the "Sabine System"). The Sabine System provides gathering and treating services for Haynesville and Middle Bossier Shale production from the Toledo Bend South field area for redelivery to Gulf South Pipeline and Tennessee Gas Pipeline. Crestwood is also acquiring gathering and treating contracts on the Sabine System which dedicate approximately 20,000 acres under long-term, fixed-fee arrangements. System capacity is currently being expanded to 100 million cubic feet per day ("MMcf/d") for gathering and 80 MMcf/d for treating. The expansion is expected to be completed during the fourth quarter of 2011, with the final remaining cost to be largely funded from working capital acquired with the acquisition. Following the expansion, gathering volumes are expected to be approximately 60 to 70 MMcf/d.

"We are pleased to complete this acquisition which expands Crestwood into another large scale, world class shale play," stated Robert G. Phillips, President and Chief Executive Officer of Crestwood's general partner. "The Sabine System covers a highly productive core area of the Haynesville/Bossier shale play and provides producers with access to premium priced markets on the Gulf South and Tennessee Gas systems. The acreage dedicated to the Sabine System has produced some classic Haynesville/Bossier wells with large expected ultimate recoveries and high initial production rates over the past two years. Many of these wells have been choked back due to system capacity constraints which are being resolved with the current 12-inch expansion project. Additionally, recently drilled wells are being added to the system in the fourth quarter 2011, third party systems have indicated more volumes are available for delivery and new producers continue to explore acreage in the proximity of the Sabine System."

Phillips commented further, "This transaction was very affordable for Crestwood with an attractive purchase price, it's immediately accretive to distributable cash flow and we are financing the transaction from current cash flow and our revolving credit facility. With approximately $195 million of unused capacity following the Tristate acquisition, Crestwood has added another great shale play to our portfolio and we have ample liquidity to fund our current 2012 capital growth plans. This is another example of the opportunities in the market to execute Crestwood's pure play, shale play growth strategy."

Crestwood has filed additional materials related to the Tristate acquisition on the Investor Relations section of our website at www.crestwoodlp.com.

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 Arkansas, the Haynesville/Bossier Shale in Louisiana, the Granite Wash area in the Texas Panhandle and the Avalon Shale area of Southeastern New Mexico. For more information about Crestwood LP, visit www.crestwoodlp.com.

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 natural gas prices; failure or delays by our customers in achieving expected production in their natural gas projects; competitive conditions in our industry; 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 acquired businesses and realize any cost savings and other synergies from any acquisition; fluctuations in the value of certain of our assets and liabilities; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; construction costs or capital expenditures exceeding estimated or budgeted amounts; 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 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, 2010, our subsequently filed Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, for a more extensive list of factors that could affect results. The forward-looking statements included in this news release are made only as of the date hereof and we undertake no obligation to publicly update or revise any of these forward-looking statements to reflect new information, future events or circumstances except to the extent required by law.

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