Crestwood Midstream Partners Provides Third Quarter 2014 Operational Update and Schedules Earnings Release Date

HOUSTON--(BUSINESS WIRE)--Crestwood Midstream Partners LP (NYSE: CMLP) (“Crestwood Midstream”) announced today selected operational highlights for the third quarter 2014 with comparisons to second quarter 2014 where appropriate. Operational and financial estimates in this announcement are based on preliminary data and are subject to further verification through the normal accounting close process. Additionally, Crestwood Midstream and Crestwood Equity Partners (NYSE: CEQP) (“Crestwood Equity”) announced that they expect to report third quarter 2014 results on November 5, 2014. Crestwood Equity owns the general partner interest, including the incentive distribution rights and an approximate 4% limited partner interest of Crestwood Midstream.

Third Quarter 2014 Highlights

• Third quarter 2014 average natural gas gathering volumes up 5% with September monthly volumes averaging approximately 1.3 billion cubic feet per day (“Bcf/d”)
  • Marcellus gas gathering system average volumes up 10% to approximately 650 million cubic feet per day (“MMcf/d”) in the third quarter
  • PRB Niobrara gas gathering system average volumes up 36% in the third quarter; Bucking Horse gas processing plant expected to be commissioned in November 2014
• Third quarter 2014 average crude oil volumes up 7% with September monthly volumes averaging approximately 260,000 barrels per day (“Bbls/d”) including Arrow gathering, COLT Hub, COLT Connector and Bakken crude trucking volumes
  • Bakken Arrow crude gathering system hits peak daily rate of 70,000 Bbls/d in September 2014
  • Bakken COLT Hub to complete loading of 1,000th unit train in October 2014; release and departure rail track expansion to be completed in fourth quarter 2014
• Crestwood Midstream announces non-binding open season for 1 Bcf/d MARC II Pipeline serving the Marcellus dry gas region in northern Pennsylvania

Natural Gas Update

• Marcellus Gathering System – Crestwood Midstream’s largest natural gas gathering system gathered a peak day total of approximately 700 MMcf/d during the third quarter, reflecting continued drilling and well completion activities by Antero Resources (“Antero”) and the completion of several pipeline and compression projects by Crestwood Midstream in the third quarter. Crestwood Midstream completed Phase 1 of the Banner compressor station on August 22, 2014 and completed the Banner Phase 2 in early October increasing overall system gathering and compression capacity to approximately 875 MMcf/d. Antero continues to run approximately 2-3 drilling rigs and completion units and had approximately 26 drilled but uncompleted wells at the end of the third quarter on acreage dedicated to Crestwood Midstream’s gathering system.
• PRB Niobrara Gathering and Processing – The Jackalope gathering system (owned by our 50%/50% joint venture with Access Midstream) gathered record rich gas volumes of 73 MMcf/d on September 30, 2014 reflecting continued development by Chesapeake Energy (“CHK”) and RKI Exploration & Production. These producers currently have 4 rigs running on dedicated acreage and approximately 36 wells drilled and waiting on connection to the Jackalope system as of late September. The joint venture continues to remain on schedule to commission and place into service the 120 MMcf/d Bucking Horse natural gas processing plant in November 2014. Based on recent CHK announcements, we expect a substantial increase in drilling activity from 4 rigs to between 7 – 9 rigs which we expect will lead to significant volume growth in 2015 and beyond on the Jackalope system.
• Barnett Gathering and Processing – Volumes across all of Crestwood Midstream’s Barnett Shale assets remained relatively flat during the third quarter 2014 with average quarterly gathering volumes of approximately 420 MMcf/d. Volumes gathered for Quicksilver Resources (“KWK”), Tokyo Gas and Eni S.p.A. (“Eni”) averaged approximately 320 MMcf/d during the quarter, a 2% decrease from the prior quarter. The decrease was largely attributable to the temporary shut-in of volumes during third quarter completion activities on newly drilled wells. KWK continues to operate a drilling rig and a workover rig on our Alliance gathering system. Based on KWK’s sale to Eni of a 27.5% interest in the Alliance area in 2009 and the sale of 25% of its remaining interest in each of the Cowtown, Lake Arlington, and Alliance areas to Tokyo Gas in 2013, Crestwood Midstream’s net monthly revenue exposure to KWK’s interest is approximately $6 million. Crestwood Midstream continues to closely monitor KWK’s situation, and KWK is current on all payments due to Crestwood Midstream to date.

Crude Oil Update

• Bakken Arrow Gathering System – Arrow producers continue to aggressively drill and complete wells on the Arrow gathering system and are currently running 8 rigs on our dedicated acreage. Crude oil and natural gas gathering volumes reached a daily record 70,000 Bbls/d and 49 MMcf/d, respectively, in late September. Third quarter average volumes on both systems are expected to be up more than 15% and 35%, respectively, over the second quarter. Based on current producer activity, Crestwood Midstream expects to connect 22 wells in the fourth quarter compared to 23 wells connected in the third quarter, totaling 90 wells connected in 2014. Based on current producer estimates, determined from planned producer aid-in-construction payments for new well connects, which are subject to change, Crestwood Midstream expects to connect approximately 125 wells in 2015.
• Bakken COLT Hub – The COLT crude-by-rail (“CBR”) loading facility is expected to load its 1,000^th unit train in late October 2014. As the leading CBR facility by volume in the Bakken, COLT continues to provide premier services for refiners on both the East and West Coasts. Crestwood Midstream expects to complete its release and departure track expansion in November, which will provide COLT customers the flexibility to schedule and load an additional unit train per day. COLT’s third quarter rail loadings averaged approximately 117,000 Bbls/d, a 5% increase over the second quarter 2014. COLT continues to renew and extend original anchor shipper CBR loading contracts under favorable terms. At present, COLT customers have committed to take-or-pay contracts totaling 149,000 Bbls/d for loading services. As a result, the recent decrease in global crude oil prices and the narrowing of the spread between WTI and Brent crude prices is not expected to impact COLT’s financial results.

Marcellus Dry Gas MARC II Pipeline Open Season

• On October 1, 2014, a subsidiary of Crestwood Midstream announced a non-binding open season to determine customer support for the proposed MARC II Pipeline, a greenfield pipeline project designed to transport Marcellus dry gas to northeastern demand markets. The MARC II Pipeline would provide up to 1 Bcf/d of firm transportation capacity from existing and future receipt points on our MARC I and North-South pipelines to a planned interconnect with the recently announced PennEast Pipeline System in Luzerne County, PA. Transportation and storage throughput on our Northeast transportation and storage assets (which includes the MARC I and North-South pipeline systems and the Stagecoach storage facility) averaged approximately 1.7 Bcf/d in the third quarter 2014, and are currently being expanded to access total Marcellus dry gas supplies of approximately 3.3 Bcf/d. Subject to sufficient customer commitments and FERC approval, the MARC II Pipeline would be placed into service in late 2017.

Earnings Conference Call

Crestwood Midstream and Crestwood Equity each plan to report financial results for the third quarter 2014 on Wednesday, November 5, 2014, before the New York Stock Exchange opens for trading. Following the announcement, management will host a joint conference call for investors and analysts at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) that day to discuss the operating and financial results. The call will be broadcast live over the internet. Investors may participate either by phone or audio webcast.

By Phone:	Dial 877-407-8293 at least 10 minutes before the call and ask for the Crestwood Earnings Call.
By Webcast:	Connect to the webcast via the “Presentations” page of Crestwood’s Investor Relations website at www.crestwoodlp.com. Please log in at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call for 90 days.

About Crestwood Midstream Partners LP

Houston, Texas, based Crestwood Midstream (NYSE: CMLP) is a master limited partnership that owns and operates midstream businesses in multiple unconventional shale resource plays across the United States. Crestwood Midstream is engaged in the gathering, processing, treating, compression, storage and transportation of natural gas; storage, transportation and terminalling of NGLs; and gathering, storage, terminalling and marketing of crude oil.

About Crestwood Equity Partners LP

Houston, Texas, based Crestwood Equity (NYSE: CEQP) is a master limited partnership that owns the general partner interest, including the incentive distribution rights and an approximate 4% limited partner interest of Crestwood Midstream. In addition, Crestwood Equity’s operations include a natural gas storage business in Texas and an NGL supply and logistics business that serves customers in the United States and Canada.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements include, but are not limited Crestwood Midstream’s expectation that the Bucking Horse gas processing plant will be commissioned in November 2014; the third release and departure track at the COLT Hub will be completed in the fourth quarter 2014; substantial increases in drilling activities and volumes in 2015 and beyond on Jackalope system; and third quarter volume expectations and fourth quarter rig counts on the Arrow gathering system. Crestwood Midstream believes that its expectations and forecasts are based on reasonable assumptions. No assurance, however, can be given that such expectations and forecasts will prove to have been correct. A number of factors could cause actual results to differ materially from the expectations and forecasts, anticipated results or other forward-looking information expressed in this press release, including risks and uncertainties regarding future results, capital expenditures, liquidity and financial market conditions, insufficient cash from operations, adverse market conditions, the extent and success of customer drilling efforts, construction delays, and governmental regulations. For a more complete list of these risk factors, please read Crestwood Midstream's filings with the SEC, which are available on Crestwood Midstream's Investor Relations website at www.crestwoodlp.com or on the SEC's website at www.sec.gov.