December 5, 2016 • Volume 09, No. 16 MidstreamNews Serving the marketplace with news, analysis and business opportunities

Sunoco Logistics acquires Energy Transfer Partners for $51B Tesoro buys Western Refining Deal merges two of Energy Transfer Equity’s MLPs into one unit in deal worth $6.4 billion Energy Transfer Equity’s two major midstream MLPs will merge in a $51 billion Tesoro Corp. struck a $6.4 billion deal that will simplify the ETE network and provide a more financially stable platform for deal to acquire Western Refining (WNR) long-term growth, but also significantly reduce distributions for most unitholders in the that will diversify Tesoro’s geographic new entity. Much smaller but more financially stable Sunoco Logistics Partners (SXL) logistics, refining and will officially acquire Energy Transfer Partners (ETP), although the marketing footprint. Tesoro, combined company will which operates along the West operate under the latter SXL to give ETP unitholders 1.5 units Coast and in the Rockies and Bakken, is per ETP unit at $39.29 each. name and the latter’s management. Under gaining a refining and logistics presence in the deal’s terms, SXL will issue 1.5 common units for each ETP common unit, or an equity West Texas and northwestern New Mexico. value of $21.3 billion at the implied price of $39.29 per unit based on the closing price of The deal adds 685 miles of crude gathering SXL prior to the announcement. SXL will assume ETP’s $29.7 billion in outstanding debt. Although the offer implied a 10% premium to ETP’s unit price at the deal Gains 685 miles of crude gathering in Delaware, San Juan basins. announcement, that premium was quickly eroded as the unit prices of SXL and ETP plunged. Continues On Pg 10 in those areas. It also adds three refineries Kinder Morgan, Enbridge oil sands pipelines receive OK to Tesoro’s portfolio for 10 total with capacity of more than 1.1 MMbo/d. PM Trudeau says Trans Mountain and Line 3 in Canada’s best interest Tesoro will acquire WNR at $37.30 Canada has given two companies the green light to expand existing pipelines per WNR share, representing an equity that would provide vital additional capacity out of Alberta’s oil sands as current value of $4.1 billion based on Tesoro’s infrastructure nears capacity. Citing growing oil sands production, Prime Nov. 16 closing of $85.74. The deal Minister Justin Trudeau signed includes assumption of $1.7 billion off on Kinder Morgan’s Projects’ combined capacity will rise from 690,000 bo/d to 1.65 MMbo/d. net debt and the $605 million value of Trans Mountain expansion and a non-controlling interest in Western Enbridge’s Line 3 replacement program. Combined, the projects will increase from Refining Logistics. Continues On Pg 8 their current capacity of 690,000 bo/d to 1.65 MMbo/d. Trudeau said his decision on the two projects was in the best interest of Canada. DEALS FOR SALE Kinder Morgan’s Trans Mountain expansion is especially important, as it would open up markets other than the US for Alberta’s oil sands producers. Canada WEST TEXAS CO2 SALE PACKAGE currently exports less than 1% of its oil to other markets, according to the Canadian 405-Active Producers. 50,000+ Gross Ac. Association of Petroleum Producers. Continues On Pg 4 SACROC FIELD PP Canyon Reef Formation Tallgrass starts Rockies Express; 800 MMcf/d online by YE16 97% OPERATED WI; 83% NRI Current Net Production: ~28,000 BOED Tallgrass Energy Partners was approved to begin service on part of its Zone Three Gas Plant Production: ~30 MMCFD ~28,000 capacity enhancement project for the Rockies Express pipeline (REX), and the 800 Total 3P Reserves: 184.4 MBOE BOED MMcf/d project is on track to be fully online by year’s end. Tallgrass has worked for Original Oil In Place: ~2,800 MMBO nearly two years on the project to boost capacity out of Ohio into Midwestern markets. CONTACT AGENT FOR MORE INFO PP 2505G The 1,698-mile REX pipeline is the only route linking Appalachia and the Rockies. The Zone Three project REEVES CO., TX PROPERTY addresses the bidirectional portion 800 MMcf/d in additional capacity online by YE16. ~4,100-Net Acres. of the line between central Illinois and SOUTHERN DELAWARE BASIN PP Monroe County in eastern Ohio. The project will add 800 MMcf/d in capacity to that Horizontal Drilling. portion and is intended to address existing west-to-east transportation commitments as 2nd & 3rd Bone Spring, Wolfcamp A, B & C 143 Horizontal Locations Identified. ~1,000 well as new demand for east-to-west transportation capacity. Tallgrass is building three Avg ~86-99% OPERATED WI AVAILABLE BOED compressor stations and adding horsepower at two existing stations. Net Production: ~1,000 BOED FERC gave the go-ahead in late November to start operations at the new AGENT WANTS OFFERS DEC 19, 2016 Columbus compressor station in Pickaway County, Ohio; the new St. Paul station PP 1937DV in Decatur County, Indiana; and the expansion of the Chandlersville station in PLS tracks thousands of deals for Muskingum County, Ohio. Continues On Pg 4 sale at www.plsx.com/listings

All Standard Disclaimers & Seller Rights Apply. MidstreamNews 2 December 5, 2016 Inventories Pipelines PennEast pipeline FEIS Change in Lower 48 Natural Gas Storage delayed to February 200 The final environmental impact 150 2015 statement for PennEast pipeline has been 5 Yr Range 100 delayed from Dec. 16 to Feb. 17 by FERC. The federal agency has asked PennEast’s 50 owners—AGL Resources, 0 5 Yr Avg NJR Pipeline Company, -50 2016 PSEG Power, SJI Midstream, Spectra Energy Partners -100 Gas stores declined 50 Bcf to end and UGI Energy Services—for 46 new -150 Nov. 25 at 3.995 Tcf. The largest drivers of the decline were the East and datasets and 34 corrections to the pipeline -200 Midwest, which each reduced stores application. Notably, FERC said the route -250 by 23 Bcf. Storage is 24 Bcf higher than maps are outdated, incorrect and incomplete. this time last year and 235 Bcf above -300 FERC also instituted a new 30- the five-year average. day public comment period for its draft -350 y environmental impact study because some ug eb Jul Jan Jun Oct Apr F Sep Dec Mar Nov A Ma route changes were proposed after the Source: OTC Global Holdings Market Data and EIA initial period closed. PennEast will install 118 miles of 36-in. pipeline from Luzerne County, Pennsylvania, to Williams’ Current US Petroleum Stocks by Type (MMbbl) Transco interconnect in Mercer County, For Weeks Ending New Jersey. The project includes one new compressor. Net 11/25/16 11/18/16 Change 11/27/15 Westcoast Energy’s High Pine Crude Oil (Excluding SPR) 488.1 489 -0.90 457.2 expansion may be delayed Motor Gasoline 226.1 224.0 2.10 216.9 Westcoast Energy’s High Pine Distillate Fuel Oil* 154.2 149.2 5.00 144.4 pipeline expansion may be delayed nine All Other Oils 472.8 478.5 -5.70 458.4 months unless the company can complete clearing-related work on the Crude Oil in SPR 695.1 695.1 0.00 695.1 South Loop before Jan. 15. Total 2,036.3 2,035.9 0.40 1,972.0 No activity in the Southern *Distillate fuel oil stocks located in the “Northeast Heating Oil Reserve” are not included. Caribou area is allowed between that Note: Data may not add to total due to independent rounding. date and July 15. Westcoast, which does Source: EIA Weekly Petroleum Status Report business as Spectra Energy Transmission, asked the NEB to begin the clearing work Current Natural Gas Stocks by Region (Bcf) Nov. 15 in advance of construction after % % Diff. July 15. The NEB also has yet to approve Net Change From 5-Yr the company’s preliminary Caribou Habitat 11/25/16 11/18/16 Change 11/25/15 YOY Avg. Restoration Plan. East Region 912 935 -23 924 -1.3 0.8% Clearing-related work must be done Midwest Region 1,130 1,153 -23 1,114 1.4 6.3% before Jan. 15. Mountain 258 259 -1 212 21.7 25.2% The High Pine project will add two Pacific 328 328 0 377 -13.0 -9.9% 42-in. loops along the existing system in northeast British Columbia. The first is South Central 1,367 1,370 -3 1,345 1.6 8.7% 6 miles near Wonowon, and the second Total Lower 48 3,995 4,045 -50 3,972 0.6 6.3% is 18 miles south of Dinosaur Lake. The Source: Energy Information Administration: Form EIA 912, “Weekly Underground Natural Gas project includes new compression and Storage Report” and the Historical Weekly Storage Estimates Database. Row and column sums upgrades to the compressor station. The may not equal totals due to independent rounding. expansion will add 240 MMcfe/d.

Find more on the midstream sector at www.plsx.com To learn more about PLS, call 713-650-1212 Volume 09, No. 16 3 Infrastructure Transformative M&A, Pipelines pipeline OKs top news Obama administration halts Dakota Access construction This issue of PLS’ MidstreamNews, Dakota Access owners Energy Transfer Partners and Sunoco Logistics Partners features two big, transformative M&A say they remain committed to completing the pipeline according to plan—without transactions. Energy Transfer Equity rerouting it around Lake Oahe in North Dakota. On Dec. 4, the US Army Corps of merged its two largest midstream Engineers denied the pipeline the easement it needs to build the project underneath that MLPs, Sunoco Logistics body of water, saying “a more robust analysis of alternatives can be done and should IN THIS Partners and Energy ISSUE be done” before the easement is granted. Transfer Partners, in Assistant secretary for civil works Jo-Ellen Darcy called for allowing all a $51 billion deal and Tesoro Corp. parties to review and respond to previously confidential documents used for expanded its refining and logistics route evaluations. She added that an originally considered but discarded crossing 10 footprint with the $6.4 billion buy of miles north Bismarck would be reconsidered. Western Refining (pg 1). The companies called the decision purely political, reaffirming that they have The Sunoco/ETP combination played by the rules. “The Army Corps confirmed this again today when it stated its represents a strategic shift for the Energy ‘policy decision’ does ‘not alter the Army’s position that the Corps’ prior reviews and Transfer family after its previous attempt actions have comported with legal requirements,’” they said. to grow its natural gas network through the acquisition of Williams fell apart. The Ohio Utica takeaway to grow 6.85 Bcf/d by the end of 2018 new merger, which creates the second- Utica takeaway capacity is set to grow nearly 70% by the end of 2018 as four new largest MLP, offers capital and operational pipeline projects are scheduled to come online in the next couple of years. The four efficiencies and future growth through projects, which are in various stages of the FERC approval process, will add 6.85 Bcf/d integration of natural gas, liquids, and in capacity out of the Ohio region. Current takeaway capacity is around 10 Bcf/d. Pipeline growth will relieve producers crude operations, especially in the Permian pinched by low costs. and Appalachian regions. For Tesoro, The capacity increase will relieve area producers, who have been pinched by lower gas prices as a result of pipeline Canadian pipelines approved to add projects lagging behind the pace of production. Energy Transfer’s 3.25 Bcf/d Rover nearly 1 MMbo capacity. pipeline is closest to realization after having received a final environmental impact WNR offers higher geographic refining statement. The new 711-mile pipeline will run from southeast Ohio to Livingston and marketing diversity, increased access County, Michigan. This project will be Rover is largest with 711 miles of new co-located with Columbia Pipeline to advantaged crude, and midstream entry line, 3.25 Bcf/d capacity. in the Delaware and San Juan basins. Group’s Leach Xpress project, which Turning to projects, two major will add 1.5 Bcf/d of capacity over 160 miles along CPG’s existing system in Canadian oil sands pipelines received southeast Ohio and the West Virginia panhandle in 2017. The Rayne Xpress project PM Justin Trudeau’s blessing, Kinder will augment Leach, adding 0.6 Bcf/d in takeaway capacity from that system in Morgan’s Trans Mountain and Kentucky to Gulf Coast markets. Finally, Nexus pipeline, which is owned by Enbridge’s Line 3 (pg 1). The projects Spectra and DTE, will take 1.5 Bcf/d from the Utica to the Dawn Hub in Ontario. will add a combined 960,000 bo/d of critical capacity out of Alberta, where Stakeholder Midstream plans Permian crude system CAPP expects current pipeline capacity to Stakeholder Midstream is planning to build a crude gathering and trunkline be exceeded next year. system to serve wells producing from the San Andres formation in the Delaware Basin. On the negative side, the PM The system will be built in Yoakum County, Texas, and Lea County, New Mexico, and permanently shelved the stalled Northern will provide transport to multiple takeaway pipelines near Denver City, Texas. Daniel Gateway pipeline across northwestern BC Craig, VP of business development, said the company will commence construction in and imposed a promised oil tanker ban on January with operations beginning in May. Stakeholder has launched a binding open season for the San Andres crude-gathering the northwest Pacific coast. TransCanada System will gather crude produced system that will run through Jan. 4. also retracted its discounted toll offer on from San Andres in Delaware Basin. its natural gas mainline because it didn’t The crude project is only the first generate sufficient producer commitments. phase of this development opportunity, CEO Rob Liddell said. “This project establishes In the US, takeaway capacity from Stakeholder as the leading crude-by-pipe gatherer in the play with expansion the Utica shale will grow by 6.85 Bcf/d capabilities not only in Yoakum and Lea counties, but also into Cochran, Andrews and by YE18 (pg 3) with the start of four Gaines counties. In addition to crude gathering, we also have made significant progress new pipelines. These volumes are in in designing a comprehensive natural gas gathering, treating and processing solution.” addition to Tallgrass’ REX line capacity Interested shippers can contact Phillip Zamzow at 210-444-9664. San Antonio-based increase (pg 1). Stakeholder Midstream started up in 2015, backed by EnCap Flatrock Midstream. For general inquiries, email [email protected] Access PLS’ MidstreamNews archive for previous midstream news MidstreamNews 4 December 5, 2016 Pipelines Project Updates Kinder Morgan, Enbridge oil sands pipes Continued From Pg 1 Tidewater executes on $60- RBC commodities strategist Michael Tran called the project a game-changer, and 65 million in capital projects Auspice Capital Advisors founder Tim Pickering told Bloomberg, “getting oil to Tidewater Midstream is progressing tidewater is critical for this country. Right now, it’s just ridiculous. We are selling oil at on $60-65 million worth of projects that such a great discount because we have one buyer for our oil.” are expected to generate a combined $15- Proposed three years ago, the Trans Mountain project will twin an existing 16 million in EBITDA. The projects are in 62-year-old pipeline from Strathcona County, Alberta, near Edmonton to the company’s three core operating areas: Burnaby, British Columbia, on the coast. The expansion will increase system capacity Deep Basin, Montney and Edmonton. from 300,000 bo/d to 890,000 bo/d. Kinder Morgan has contracts in place for 708,000 In the Brazeau River complex bo/d of firm transport capacity. Construction should begin in September 2017 with of Alberta’s Deep Basin, Tidewater service following in late 2019. At $5 billion, the Trans Mountain expansion represents will soon begin construction on a nearly 40% of Kinder Morgan’s backlog. Kinder Morgan Canada President Ian 10,000 bbl/d fractionation facility. The facility Anderson called it “a defining moment for will cost $25-27 million and is expected our project and Canada’s energy industry.” Analysts agree Trans Mountain is game-changer for producers. to generate $6-7 million in annualized Enbridge’s Line 3 replacement program EBITDA after it is commissioned in 2Q17. is the largest project in company history. The $5.5 billion project will replace 1,031 miles of Also in this area, the company just acquired existing 34-in. pipeline from Hardisty, Alberta, to Superior, Wisconsin, with 36-in. pipeline 50% WI in 93 miles of gas-gathering to nearly double capacity to 760,000 bbl/d. The line is expected to be in service in 2019. pipeline connected to the complex along Oil sands output is expected to increase 5% in 2017 to top 4 MMbo/d with another with associated storage reservoirs. Overall 850,000 bo/d expected to be added by 2021, according to CAPP. Canada’s pipeline in the Deep Basin complex, Tidewater has network is roughly at capacity now, moving 3.98 MMbo/d this year. Eric Peterson, built a network of 15 gas-processing plants research chief at ARB Midstream, told Bloomberg, “It will take a lot of these pipes and 1,864 miles of pipeline. to catch new production that is coming online. If these pipes were not approved, a lot of barrels would get stranded.” Four projects will combine to generate One of those pipes won’t be Enbridge’s Northern Gateway, however. As he $15-16 million in EBITDA. approved Trans Mountain and Line 3, Trudeau In the Montney, the company has killed the proposed new pipeline that would January 15, 2015 • Volume 06, No. 01 CanadianCapital started construction on the first phase of a Serving the marketplace with news, analysis and business opportunities have moved 525,000 bo/d and 193,000 bbl/d of Canadian Natural Resources cuts capex by $2.4 billion Eagle Energy Trust becomes project that will connect to TransCanada Oil sands player Canadian Natural Resources is the latest producer to revisit its a Canadian asset holder capital spending plan for 2015, cutting it back by $2.4 billion to $6.2 billion. That’s Eagle Energy Trust unitholders down 30% from the $8.6 billion budget it laid out in November 2014 and about half have approved a special resolution to the $12 billion it expected to spend in 2014. The bulk of the reductions amend the investment restrictions in condensate from Alberta to Kitimat, BC. The move will come via reduced drilling and related facility capital for its North Eagle's trust indenture, enabling and Alliance infrastructure and include America and International conventional CanadianCapitalWill defer $470 million in spending Nov.it to invest in energy 30 assets operations. The company will also defer at Kirby North Phase 1 project. in Canada. Eagle had been $470 million in spending at its Kirby previously been limited to investing North Phase 1 in situ oil sands project, cutting spending by 82% to $105 million from on non-Canadian assets—the company was largely expected. Enbridge said in September its previous forecast of $575 million. The reduced budget wasn’t a complete surprise; currently has production of 1,900 boepd related gas storage. This $6 million project when it released the original budget the company warned that it was prepared to cut from properties in Texas and Oklahoma. $2.0 billion from that if conditions warranted. CNRL said the reduced spending would The changes won’t have any impact RBC’sallow it to continue itsMcKay: dividend unchanged. Pipelines key to CFO Corey Bieber told the Globe and Mail he did not know when spending at To be taxed at rate other E&P firms pay, not at prior 34% on distributions. it wouldn’t appeal a decision to overturn the Kirby North might be restored. Continues On Pg 6 is expected to generate $2 million in Crescent Point banking on service cost & efficiency savings on its US operations or the taxes on keepHalf of oil hedged money at US$90/bbl for 2015 flowing.distributions from those operations; the Although Crescent Point Energy is setting its capital budget for 2015 about 28% company’s Canadian investments will be lower than 2014, the company expects the slimmed down budget to deliver 9% YOY structured so that its Canadian operations project’s approval. will be taxed in the same manner as other production growth to 152,500 boepd. The company set its budget for the year at $1.45 annualized EBITDA beginning in 1Q17. million, down 28% from the $2.0 billion Canadian energy companies. forecast for 2014. Viewfield Bakken & Shaunavon plays Eagle wasted no time taking advantage to get nearly half of spending. The budget assumes an of the change, signing a deal with Spyglass initial 10% reduction in service costs. Crescent Point expects to see even Resources Corp. to buy a 50% non-op greater cost reductions if low prices persist. The company is looking at ways to improve interest in producing properties under An FID on Phase 2 is anticipated soon. its operational efficiency and is working on a number of drilling and completion waterflood in the Dixonville Montney C oil technologies that could cut costs even further. pool in north central Alberta, paying $100 “When prices fell dramatically in 2008 to 2009, we were able to realize a 30% million. The acquisition adds 1,250 boepd reduction in our Bakken drilling and completions costs,” said CEO Scott Saxberg. of low-decline production. Cont’s On Pg 10 “We'll be workingContinued hard with our service providers and fully expect From to see rates come Pg 1 Tallgrass starts Rockies Express by YE16 FEATURED DEALS The remaining two projects in the down even more than they already have.” Continues On Pg 8 ALBERTA PROPERTIES SALE Producers banking on service company savings 5-Non-Core Properties As producers scale back their capital spending plans in the wake of falling oil CENTRAL & WESTERN ALBERTA PP Once fully operational, the project will bring flowsprices, to many are looking2.6 to the service sectorBcf/d to help them prop up theirfrom bottom lines. Abee, Highvale, Kakut,1.8 Majeau & Morinville Bcf/d. program are in the Edmonton area. The Crescent Point Energy is already factoring a 10% reduction in service costs into its Up to 100% OPERATED WI FOR SALE 5.7 Net Production: ~400 BOED (82% Gas) MMCFED 2015 budget and will be pushing for more if prices remain low. Others are expected Avg Net Operating Income: ~$189,166/Mo to approach their capital Half of producers expect drilling CALL AGENT FOR MORE INFO budgets with the same mindset. PP 14403DV & completion costs to fall 10% in 2015. Current east-to-west flows on the 1,698-mile pipeline averagedAccording to a survey con- 1.8 Bcf/d during Q3, company will relocate and restart an ducted by Barclays, capital spending in the US and Canada is expected to fall by as CANADIAN JOINT VENTURE much as 30% from last year to $138.1 billion. In turn, about half of producers expect 1-Prospect. 43,000-Acres. 67-Sq Miles. MAGDALEN BASIN. GULF OF ST LAWRENCE DV drilling and completion costs to fall 10% in 2015, including in areas such as pressure 80-km West of SW Tip of Newfoundland. pumping, drilling fluids and directional drilling. And while producers may see the Water Depth 470 m. Drill Depth 2,500 m. service savings as a slight respite from the decline in oil prices, the news is doubly >1,000 km 2D Defines FourWay Closure. MAGDALEN idled deep-cut turbo expander with 40 and west-to-east flows averaged 1.3 Bcf/d. 100% OPERATED WI; JOINT VENTURE disheartening for those service providers. Not only are they seeing declines in their Total Resource Potential: 5.0 BBO or -- own businesses, they’re being asked to take less for the services they do provide. - 7.0 TCF Carboniferous Clastic Targets. Service companies are already feeling the impact. Continues On Pg 13 CALL AGENT FOR UPDATE In its Q3 release, Tallgrass said the Zone Three enhancement’sDV 15009 800 MMcf/d capacity. This project will cost MMcf/d is now sold out for 15 years. CEO David Dehaemers told investors $12-15 million and generate $3 million on the company’s Q3 call there may be upside with respect to additional in EBITDA. The $17 million Acheson capacity out of Ohio. “We’re able to do things with REX where perhaps it gives us project involves the recently acquired $11 more than the design capacity. So we’re always looking to optimize our assets, and we million sour-gas processing facility and feel real good about our opportunities there.” construction of an associated operated COO William Molers expanded on Dehaemers’ statement by adding, “We design rail facility for $6 million. Acheson can things based on cubic feet of gas and we self-capacity based on dekatherms. So in an process 33 MMcf/d and has an associated appropriate world, you have a 1,000 Btu gas and you build something to move 1 Mcf of 155 miles of related pipeline. gas and you have equivalent. So in our world today because of the Btus that are coming into REX are higher than a 1,000 Btu of big content, you can get additional dekatherms CanadianaCquirer through that facility. And so there is some prop that we have horsepower, availability Serving the marketplace with news, analysis and business opportunities Talisman to be acquired by Spain’s Repsol for $15 billion Canadian upstream M&A Marking the first multi-billion-dollar foreign acquisition of a Canadian oil and gas activity quadruples in 2014 and some thought that we have some Btu growth and that’s what that’s coming from.” company since 2012, Spain’sCanadianAcquirer Repsol agreed to buy Talisman Energy for $15.2 billion Nov.Repsol’s 28$15.2 billion Talisman (US$13.0 billion). The price consists of $9.33/share in cash plus Talisman’s $5.4 billion buy caps a busy 2014 in the Canadian debt. The companies were able to strike the deal after months of on-again, off- oilpatch with $46.0 billion in upstream again negotiations largely because falling oil prices cut the value of Talisman’s deals—roughly quadrupling 2013’s $11.8 REX is 75% owned by TEP and privately held affiliate Tallgrass Development stock in half in less than five months. Nonetheless this is the largest deal seen billion. Of the in Canada since China’s CNOOC paid previous six years, Biggest deal in Canada since CNOOC Tidewater$18.1 billion for Nexen in 2012. buys Brazeau River gathering bought Nexen for $18 billion in 2012. only 2012 had a higher tally at $54.7 and 25% by Phillips 66. That year saw two other Canadian billion and that included CNOOC’s producers bought up by foreign firms: Progress Energy Resources by Malaysia’s $18.1 billion acquisition of Nexen. By &state-owned storage Petronas for $6.0 forbillion and Celtic$15MM. Exploration by ExxonMobil for $3.1 deal count, activity declined 15% YOY billion. Following the CNOOC deal, Ottawa enacted new limits on oil sands ownership to 269 transactions in 2014 from 319 in by overseas state-owned companies. These rules have had a chilling effect on foreign investment over the past two years but do not affect Talisman, whose assets in Canada Driven by dividend-plus-growth firms, return of foreign buyers & royalty appetite. target conventional oil and gas or shale rather than oil sands. Continues On Pg 12 Woodside enters shale patch with Kitimat buy from Apache 2013 although deals with disclosed values Find more on the midstream sector at www.plsx.com ToExecuting learn on a promise mademore to investors backabout in July, Apache PLS, agreed to sell callactually rose713-650-1212 slightly to 213 from 191. its interests in the Kitimat gas venture in British Columbia and Wheatstone project This Canadian M&A analysis includes off Australia to Woodside Petroleum for $4.34 billion (US$3.75 billion). While the Repsol/Talisman because Talisman is a Australian project is a natural fit for Woodside’s offshore and LNG operational expertise, flagship Calgary company with a large Kitimat is uncharted territory—its first domestic asset base, despite the fact that Acquires 320,000 net acres with 15 Tcf it operates globally and produces more venture into onshore shale gas. of 2C gas in Horn River & Liard Basins. Woodside is getting 50% oil and gas from the US and Indonesia WI in the proposed ~1.3 Bcfd Kitimat LNG plant (10 million tonnes per than it does at home. However, even annum), 460-km Pacific Trail Pipeline and 322,000 net acres (644,000 gross) of shale excluding this transaction Canada gas assets in British Columbia’s Liard and Horn racked up $30.9 billion in 2014 deals, up River Basins. The acreage will provide an estimated more than 160% YOY. Cont'd On Pg 11 15 Tcf of net 2C resources. The entire project is InternationalDeals Dec. 18 owned in a JV with Chevron, which will operate the FEATURED DEALS pipeline and LNG plant while Woodside takes over US$3.75 billion deal also includes the shale acreage from Apache. Continues On Pg 4 Wheatstone in Australia. EAST ALBERTA PROPERTY 10-Wells. 2,048-Gross/Net Acres. WAINWRIGHT FIELD. T45. Veresen & KKR nab Montney midstream for $600 million EDGERTON VILLAGE PP Encana and Mitsubishi are selling Montney midstream assets in the Dawson area Heavy Oil Prospect With --- of northeast British Columbia for $600 million to a new 50:50 partnership formed by -- Shallow Gas Production. ~35 100% OPERATED WI AVAILABLE BOED Veresen Inc. and private equity giant KKR. Encana will receive $412 million for interests Monthly Cash Flow: ~$17,000/Month owned both directly and through its 60% stake in Cutbank Ridge Partnership (CRP), CONTACT SELLER FOR MORE INFO its JV with Mitsubishi. PP 11478 Encana takes in $412 million from Veresen Inc.-KKR sale with Mitsubishi getting the rest. venture Veresen Midstream LP will SASKATCHEWAN PROPERTIES acquire 500 km of gas gathering pipelines and 675 MMcfd of compression capacity. 9-Oil Producers; 1-SWD; >10-PUD MANOR AREA. IMMEDIATE UPSIDE PP The deal also includes the Saturn compression station currently under construction, Manor Tilston Oil Pool. which will add 200 MMcfd of compression capacity when completed. The Frobisher & Midale Oil Wells. infrastructure gathers gas production from Encana and CRP and delivers it to various 100% OPERATED WI FOR SALE ~502 processing plants including the nearby Hythe/Steeprock facilities, which Veresen Inc. Expected Future Production: 600 BOPD BOPD Manor Proved Reserves: 445 MBOE is contributing to Veresen Midstream. Manor Net Proved PV10: $23,443,000 Encana will continue to operate the assets on a contract basis, while Veresen CONTACT AGENT FOR STATUS Midstream will provide gathering and compression services to Encana and CRP under PP 13109DV a 30-year fee-for-service arrangement in a 240,000-acre AMI. Continues On Pg 6 All Standard Disclaimers & Seller Rights Apply. Volume 09, No. 16 5 Infrastructure Project Updates Developments & Trends Targa to add 265 MMcf/d to Xplorer, Intensity combine to drive SCOOP processing growth WestTX system in 2017 Quantum Energy Partners is combining two midstream portfolio companies, Surging production in the Midland Xplorer Midstream and Intensity Midstream. The former owns and operates the Basin has prompted Targa Resources to Woodford Express pipeline. Xplorer employees will join the Intensity team to drive expand its WestTX system during 2017. growth primarily in central Oklahoma’s SCOOP play. Plans to expand the system in light The company will take gas- of increased drilling are already in place. Xplorer owns a 210 First project will expand Grady cryo processing capacity to 1.075 plant by 200 MMcf/d. Bcf/d by year’s end, up from a MMcf/d cryogenic processing current 855 MMcf/d. Targa’s partner in plant in Grady County; 5,000 bbl/d of condensate stabilization capacity; WestTX—and one of its largest customers— 210 MMcf/d of amine treating capacity; 34 miles of 16/20-in. mid-pressure gathering is Pioneer Natural Resources, which trunkline in Grady and Stephens counties; 68 miles of gathering laterals; and 3,000 hp of projects 2017 production growth of 30-35%. field compression. Another 200 MMcf/d processing train The company is ramping up from 12-17 rigs. “The 200 MMcf/d expansion of the will be added later. Grady plant demonstrates Quantum’s WestTX system will have 1.075 Bcf/d long-term commitment to providing key midstream infrastructure for the producers in processing capacity by YE17. the SCOOP play,” Intensity CEO Joe Griffin said. “We are currently evaluating other The largest piece of the WestTX key projects to further grow the existing platform, including additional processing and expansion will be construction of Targa’s natural gas gathering expansions, low-pressure gathering, residue pipeline solutions sixth gas plant in Martin County, which will and crude oil and condensate gathering services.” have 200 MMcf/d in processing capacity Xplorer CEO Roger Farrell will join the Intensity board of directors as chairman. and begin operations by YE17. The Griffin and CFO Derek Gipson will continue in those

May 21, 2015 company will also restart its 45 MMcf/d roles for the combined companies. Headquarters will www.plsx.com e&P Petro Scout Benedum plant in Upton County and add be in Tulsa, Oklahoma, but the company will maintain Serving the US upstream industry with information, analysis & prospects for sale Volume 26, No. 08 Devon surges past guidance on Eagle Ford performance Hess’s Bakken costs falling, Completion mods push positive results across multiple plays targeting $6.0-6.5MM/well Fueled by the Eagle Ford, Devon’s oil production exceeded guidance by 12,000 Hess’s lean manufacturing approach in bo/d during Q1 at 272,000 bo/d. Based on the results, the company has increased its the Bakken is leading to higher production 20 MMcf/d in capacity to its 80 MMcf/d Xplorer’s office in Oklahoma City. The combined oil growth target from 20-25% to 25-30% (270,000 bo/d) for the full year. Q1 overall and cheaper wells. Q1 volumes averaged volumes also overshot guidance,PetroScout averaging 685,000 boe/d (60% liquids), 108,000 boe/d, up 70% YOY up 3% vs. Q4 and 22% YOY. Devon expects volumes to grow 5-10% and 6% sequentially. A total this year to an average of 667,000 boe/d. Capex was reduced by $250 million to $3.9- of 70 wells were brought 4.1 billion on an improved LOE outlook online in the play during the quarter, company will expand the Grady plant by 200 MMcf/d Eagle Ford output has risen 140% since and accretive midstream transactions. down from 96 in Q4. Well costs fell to Midkiff plant in Reagan County. The latter it took over the assets in March 2014. Since it took control of the Eagle Ford $6.8 million from $7.1 million in Q4 and position it acquired from GeoSouthern in March 2014, Devon has grown production in Jonesthe play 140% to 122,000 Energy boe/d (62% oil). In the last quarter expects alone volumes jumped 24,000 significant Bakken well costs stood at $7.1MM at YE14, already down to $6.5MM in '15. boe/d, exceeding expectations and creating a bottleneck that will prevent growth in Q2. two projects will be online in 1Q17. The with service expected in 4Q17. The site will be Devon’s Eagle Ford drilling is concentrated in the Lower Eagle Ford where the $7.5 million in 1Q14. Hess expects costs company added 79 new wells to production in Q1. Continues On Pg 4 to fall further, with 2015 wells averaging STACK/SCOOPParsley’s rookie hz drilling season delivers peer-leading growth. results $6.0-6.5 million. During Q1 Hess reduced its Bakken Parsley Energy’s well performance has continuously improved since it began rig count to 12 from 17 at the end of designed to add another 200 MMcf/d processing train. drilling horizontal wells a year and a half ago. The company has drilled 30 Wolfcamp A 2014. The company is running currently 2017 expansions build on the 200 MMcf/d or B wells thus far and, based on the 30-day data, recently introduced a type curve with eight rigs in the play and will continue estimated recoveries of 1 MMboe. In the Wolfcamp B during Q1, the 30-day with that number for the remainder of peak IP per 1,000 ft of lateral the year. D&C plans call for 178 wells improved 30% YOY to 231 Wolfcamp B rates are 75% higher than peers in Upton County. drilled, 214 completed and 213 turned to boe/d. According to COO Matt Gallagher, Buffalo plant that went into service in 2Q16. sales compared to 261, 230 and 238 last the improved performance is owed to higher stage density, more slickwater stages, year, respectively. Continues On Pg 22 increased proppant per stage and optimal placement of the lateral within the zone. Parsley’s improved wells are outperforming many of its peers in the Midland Basin. In Upton County, the company’s Wolfcamp B 24-hr IPs are 75% higher than the average FEATURED DEALS when adjusted for lateral length. The Ratliff-28-1 H Wolfcamp B well is credited with Seaport Global expects Targa’s gross REEVES CO., TX PROSPECT Activist investor urges Marathon to spinflowing the highest off reported oil rate of all horizontalsits in Upton, accordingbusinesses to IHS. In ~4,600-Net Acres. Reagan County, data suggests Parlsey’s 24-hr IPs for Wolfcamp B wells are 55% higher DELAWARE BASIN than the county average when adjusted for lateral length. Continues On Pg 21 Objectives: Wolfcamp (A,B,C) All Depths. All Rights. L Noble’s DJ Basin spud-to-rig release days fall to seven 80-Acre Down Spacing Pilots Underway. margins to increase by $100 million, or After Marathon Petroleum announced plans last month to aggressivelySubsurface Geology enhance Data Available In the DJ Basin, Noble Energy has driven spud to rig release times for 4,500-ft 100% OPERATED WI; 75% NRI WOLFCAMP laterals down to just seven days as of Q1, a 23% reduction YOY. Notably, the company Wolfcamp A Approx. IP: ~1,091 BOED drilled a 9,280-ft lateral in just seven days. Wolfcamp B/C Approx. IP: ~1,190 BOED Wolfcamp EUR’s: 300-450 MBO/Well “We’re now averaging seven days from spud-to-rig release for a standard lateral PKG UPDATED WITH NEW ACREAGE 65%, from 2016-2018 after these capacity its MLP’s value, activist investor Elliott Managementlength well, almosthas as fast as we usedcome to drill vertical wells,” said chairman,forward president L 5187DV to ask and CEO David L. Stover during a conference call. The company is drilling COLORADO DRILLING PROJECT Noble nearly drilling horizontals in the ~43,700 Net Acres. wells so quickly that it time it used to take it to drill a vertical. will end up drilling more wells than LINCOLN & KIT CARSON COUNTIES MISSISSIPPIAN / PENN TARGETS increases. Targa owns 72.8% in the JV, and Marathon to break up the firm to boost value. In an openanticipated letter, in 2015 and has taken funds thefrom the Marcellus andhedge reallocated them to Miss-Spergenfund & Penn-Cherokee. <7,500’. wroteL the DJ. Currently Noble is drilling 70% of the footage of 2014 with 40% of the rigs. Multipay Objectives. Shallow Depths. The company ended Q1 running four rigs and one completion crew in the DJ. In H2, Defined By Extensive 3-D Seismic-- MULTIPAY an additional completion crew will be added as needed. -- Geology & Geophysics Data. 100% OPERATED WI; ~80% NRI Reduced drilling times and equipment optimization has led to a 5-15% reduction 221 Active Offset Wells, 150 Offset Permits. Pioneer owns the remaining 27.2%. that Marathon should consider separating into three businesses:in costs vs. 2014. Noble foresees further the savings via lower refining service costs and possible L 4489DV business; use of slickwater, which could save $2.0 million per well. Continues On Pg 6 the midstream business of MPLX; and the Speedway convenience store chain.All Standard Disclaimers & SellerElliott Rights Apply. Building new 200 MMcf/d gas plant in revealed in late November that it owned 4% in Marathon. Midland Basin, restarting others. In response to Elliott, Marathon CEO Gary Heminger said he agreed The company also announced that upside existed to the company’s valuation but that the company that it increased its ownership in the would pursue that value with its previously announced dropdowns to MPLX. Another Versado pipeline system in southeastern activist investor, Jana Partners, has said it supports the dropdown plan, according New Mexico to 100% after buying out to Reuters. Elliott asked that Marathon expedite the plan and reveal more details as Chevron’s 37% stake. This system to what the assets would be. Marathon was vague in its announcement other than encompasses 3,450 miles of pipeline and that it would begin with a transaction to add $350 million in EBITDA to the MLP in 240 MMcf/d in processing capacity. “The 2017 and that it envisions another $1 billion in annual EBITDA through additional acquisition of the Versado interest is a dropdowns beyond next year. very good deal, based on our outlook for “We believe the recent strategic announcement exacerbated the uncertainty the system and only 100% of Versado surrounding MPLX,” Quentin Koffey, a portfolio manager at Elliott, said in the letter. increases our ability to compete and expand Heminger said Marathon has generated total further into the Delaware Basin to access shareholder return of 140% since it spun off January 7, 2015 • Volume 08, No. 01 MidstreaMNews Serving the marketplace with news, analysis and business opportunities

new territory,” CEO Joe Bob Perkins said. from Marathon Oil in 2011. Its market value is Cheniere’s Corpus Christi LNG plans coming together Midstream sector a pipeline Cheniere Energy received word that FERC had approved plans for its Corpus for stability & growth Christi LNG liquefaction facility and related infrastructure. The project will have three While oil prices plunged unabashedly 4.5 mtpa LNG trains, giving it aggregate production capacity of 13.5 mtpa. The site throughout the second half of 2014, will also include three LNG storage tanks with capacity of about 10.1 and continue their fall as the new year “We also will have increased flexibility to $23 billion, but Elliott contends that could grow Bcfe and two LNG carrier docks. Cheniere believes LNG exports gets underway, midstream MLPs that from the facilityMidstreamNews could begin in 2018. Right now, the plant is awaiting US Department operate Nov.9 under long-term fee-based of Energy approval to ship to markets not covered by US free trade agreements. contracts are a continued bright In the meantime, Cheniere and FERC approval obtained, awaiting spot for investors seeking both the Kinder Morgan Texas Pipeline, DOE nod to ship to non-FTA markets. stability that fixed, incremental connect Versado with our other integrated by $14-19 billion if the company followed its Kinder Morgan Tejas Pipeline and the income brings and the growth that needs Tennessee Gas Pipeline Co. have entered a multi-year storage and 15-year transport to occur due to booming US production. agreement to ship gas to the proposed Corpus Christi LNG plant. Under the terms Imperviousness to price swings as Forof the agreement, more Kinder Morgan will onprovide 563 MMcfdMarathon’s of transportation service well as high demand plan for services kept and 3.0 Bcf of storage capacity to serve the 1.8-Bcfd facility. The deal could also be At least nine IPOs queued up for increased to include up to 820 MMcfd of capacity if warranted. Continues On Pg 12 Permian Basin systems in the future.” recommendations. Marathon shareholders have midstream investors so far this year. Veresen & KKR will spend billions in Montney buildout toVeresen enhance Inc. and legendary investment firm value Kohlberg Kravis Roberts at & Co. MPLX.midstream investment flowing freely last formed 50:50 JV Veresen Midstream into which the partners will invest more than year, particularly in IPOs. The sector $4.2 billion (C$5.0 billion) to support production in the liquids-rich Montney gas play is expected to be on pace to perform until Dec. 15 to nominate new directors. on the Alberta-British Columbia border. Veresen Midstream’s keystone investment similarly this year, staying buoyant due will be pipeline and processing assets acquired from Encana to volumes that will flow under fee-based and its Cutbank contracts, in many cases, with the MLP's Expects 1.2 Bcfd processing capacity Continues On Pg 14 Ridge Partnership JV for about $509 sponsor firm itself. & 800 miles of gathering pipes by 2018. million (C$600 million). Then, Veresen For general inquiries, email [email protected] Access PLS’ MidstreamNews archiveMidstream will forprovide compression previous and transportation services to the midstreamsellers for 30 FEATURED DEALS news years. For Encana, the transaction unlocks $412 million in value from non-core assets it could apply to drilling. For Veresen and KKR, the deal illustrates the edge non- TUSCALOOSA DRILLING PROJECT drilling companies have in picking up solid assets while financing options for cash- ~20,000-Contiguous Gross Acres. MAJORITY IN PIKE CO., MISSISSIPPI strapped upstreamers in the era of cheap oil becoming tighter. TUSCALOOSA MARINE SHALE DV The assets are in the Dawson, BC area operated by Encana both independently and Also Tangipahoa & St. Helena Ph., LA via its Cutbank Ridge Partnership JV with Mitsubishi Corp. Continues On Pg 8 169-Drilling Locations. 80-Acre Spacing. TMS SEEKING JV PARTNERSHIP; 75% NRI PLAY DOT railcar regulations may need more time, study says Area EURs: 600-800 MBO/Well Area Also Contains High BTU Gas. A railcar industry trade group says one-third of the oil transported out of the DV 3395L Bakken by railcars could be forced onto trucks in the next four years. The Railway Supply Institute claims that there simply aren’t enough resources to retrofit all the OKLAHOMA MINERAL PACKAGE railcars that need to comply with new US Department of Transportation 28-Active; 5-Compl; 1-Permit; 1-WOC standards within two years, resulting in the idling of tens of thousands 985-NET MINERAL ACRES of cars. The DOT is expected to complete standards and compliance MISSISSIPPIAN & WOODFORD M deadlines for tank cars early this year 71 Active Permits Offsetting Position DOT says over 16,000 cars a year can CURRENT & ONGOING DEVELOPMENT after initial proposals made last July. be retrofitted, reality says 6,400-6,600. 3/16ths Royalty On Most Current Leases. “They can’t all be modified by the Net Prod: 8 BOPD, 27 MCFD, 4 BNGLD MISSISSI- deadline, and the only alternative would be to yank them out of service,” said Kevin Total Monthly Revenue: ~$58,000/Mn PPIAN Neels of the Brattle Group, which the Railway Supply Institute commissioned Woodford EUR’s: ~350 MBOE/Well for the study. Woodford EUR/Unit: 772 MBO & 4.8 BCF About 75,000 older tank cars, known as DOT-111s, fall into the category requiring Mississippian EUR’s: ~350 MBOE/Well the upgrades as they have been determined to have the least crash-resistant components. Miss Lime EUR/Unit: 1.4 MMBO & 5.6 BCF Offers Due: January 15, 2015 It was DOT-111s that crashed and exploded in Lac Megantic, Quebec in July 2013, M 2098RR killing 47 people, prompting continent-wide safety concerns. Continues On Pg 10 All Standard Disclaimers & Seller Rights Apply. MidstreamNews 6 December 5, 2016 Developments & Trends ConocoPhillips looks to sell US becomes net exporter of gas in new milestone Kenai LNG plant The United States became a net exporter of natural gas during November, ConocoPhillips is marketing its Kenai sending 7.4 Bcf/d to other countries versus the 7 Bcf/d it imported. The US hasn’t Peninsula LNG plant. Spokeswoman Amy exported more than it imported in almost 60 years, according to the EIA. Exports Burnett told Reuters that a data room for have increased more than 50% since 2010. Canada and Mexico are the two largest the sale will open in January, and that the customers, accounting for a combined 8.5% of US production in August. Mexico company’s current focus is North Slope accounted for the lion’s share of that drilling operations. with nearly 6%. US exported 7.4 Bcf/d in November The company while importing 7 Bcf/d. Winter weather could temper these has intermittently operated the plant over flows, but the trend indicates the US will take a larger slice of the global market. A the last several years. Market conditions large driver of this movement is LNG. Cheniere Energy began exporting cargoes haven’t been ripe for LNG, so the plant in February at its Sabine Pass site and is now averaging 1.5 Bcf/d. The company hasn’t exported any gas this year although was scheduled to ship nine cargoes in November, its biggest month yet with August it is operational. During 2015, the plant a close second at eight, according to Bloomberg. The US Department of Energy liquefied 20 Bcf and delivered six cargoes. expects the country will be the third-largest LNG producer in the world by 2020 after The export licensed lapsed in 2013, but Australia and Qatar. the company renewed it. Mostly selling to Japan, the plant came online in 1969 TransCanada retracts discounted toll offer on mainline and was the only US LNG exporter for Western Canada’s loss is the US’ gain after TransCanada abandoned plans 47 years until Cheniere Energy began for 42% lower tolls along its mainline from Empress, Alberta, to the Dawn Hub exporting earlier this year. in Ontario. The company retracted its offer to shippers of a long-term, fixed-price LNG toll, citing lack of necessary volumes needed to make the TC said bids fell short of volume Thailand plans for LNG needed to make plan viable. discount viable. import expansion TransCanada had been gauging shipper interest in a discounted rate of 75-82 Thailand is poised to become Canadian cents per gigajoule depending on committed volumes. The catch was increasingly dependent on LNG imports that shippers would need to agree to a for power generation. The county faces Opens door for US, which will send 10-year contract. Shippers balked at the delays in the construction 4.75 Bcf/d to Dawn. term length, so TransCanada dialed that of coal-fired power plants, back with an option to terminate at five years. The option came with a stipulation so it has revised its long- that shippers give two years notice to terminate and face an increased rate of 83 cents term LNG needs upward. The new plan to C$1.15 during those final two years. calls for importing 17.4 mtpa in 2022 and 34 mtpa in 2036, up from earlier US Midstream Market Movers—Last 30 Days Source: Bloomberg estimates of 23 mtpa. “Natural gas supplies in the Gulf of % Thailand will drop in the future,” said Company Ticker $/Share $/Share % Change 12/02/16 11/02/16 Change YOY director-general Twarath Sutabutr in a Reuters report. “Thailand needs to EnLink Midstream ENLC $18.30 $15.10 21% 11% accelerate LNG imports.” The country Crestwood Equity Prns. CEQP $22.65 $19.55 16% 39% uses gas for 70% of its power generation, Targa Resources TRGP $52.62 $45.60 15% 43% and its domestic fields are being depleted. Top 5 Top Thailand expects to import 5 mtpa in Energy Transfer Equity ETE $16.48 $14.59 13% -9% 2017, up 67% from this year. Tallgrass Energy TEGP $24.63 $22.13 11% 23% New LNG projects are expected with Martin Midstream Prns. MMLP $16.45 $18.10 -9% -30% the increased import activity. State-run Sunoco Logistics Prns. SXL $23.18 $24.97 -7% -16% PTT will increase capacity at its new import terminal, expected online in 2023, Genesis Energy GEL $33.59 $34.01 -1% -13% by 2.5 mtpa to 7.5 mtpa. The company is

Bottom 5 EQT Midstream Prns. EQM $70.37 $71.23 -1% 8% also doubling its existing plant’s capacity Energy Transfer Prns. ETP $34.38 $34.64 -1% -3% to 10 mtpa with another 1.5 mtpa planned by 2019. PTT will also consider a floating Note: Includes public, US-based companies operating in the midstream space, limited to storage and regasification unit in Myanmar >$1.00/share and market cap >$500 million. that will have 3 mtpa capacity. Find more on the midstream sector at www.plsx.com To learn more about PLS, call 713-650-1212 Volume 09, No. 16 7 Infrastructure LNG Total to operate Ivory Coast LNG project Tokyo Gas, Centrica agree to Total will lead a consortium to build an LNG project off the Ivory Coast. Cote LNG swap to reduce costs d’Ivoire-GNL will consist of a floating storage regasification unit (FSRU) in the Vridi, Abidjan, area with an initial capacity of 100 MMcf that will be expandable to Japanese gas supplier Tokyo Gas 400 MMcf. The projects includes a pipeline linking the FSRU with planned onshore and British utility Centrica have agreed power plants and with the country’s pipeline network. to swap LNG next year to reduce the The $100 million project will make transportation costs of getting Ivory Coast the first regional LNG import January 29, 2016 the resource to customers. InternatIonal Scout Serving the international upstream industry with information, analysis & prospects for sale Volume 08, No. 02 hub in West Africa. Operations are expected to Eni’s third West Hub field on stream in Angolan deepwater Who dat? Eni started up the Mpungi oil field offshore Angola in Block 15/06. Mpungi is part of Readers will notice a change in the Under the MOU, Tokyo Gas the West Hub development project, which lies 350 km northwest of Luanda, and its start- mastheads for our international products. up follows that of Sangos field in November 2014 and Cinguvu field in April 2015. With Changing the “Explorer” name to three fields now producing to the N'Goma FPSO, West Hub’s output is projected to grow “Scout” is the first step in bringing our begin in 2018. The French supermajor will own to 100,000 bo/d during 1Q16. The field was brought on stream on time and on budget. international report in step with our U.S. InternationalApproved in 2010, West Hub Scoutreports, Nov. where we have 22 will supply US-sourced LNG to Centrica, taps or will tap Block 15/06’s Start of Mpungi will bring West Hub to been publishing Regional 100,000 bo/d during 1Q16. Sangos, Cinguvu, Mpungi, Scouts for three-plus years Mpungi North and Vandumbu fields. They hold a gross 3 Bbbl (24-34° API), all in in plays like the Bakken and Eagle 34% and will partner with SOCAR (26%) and state- Lower-Middle Miocene formations that feature normal pressure and temperature ranges. Ford. The new name is also an effort to Of the oil in place, 850 MMbbl can be recovered via 21 planned wells, all producing dovetail our global E&P report with our which in turn will supply Asian-sourced to the project FPSO anchored at Sangos field. Future plans include the addition of the AnadarkoMpungi North and Vandumbu finds after start-uptests of West Hub’s sisterIvory project, East Hub. CoastMardi Gras offers the promise well that the good times will roll again. East Hub in turn aims to develop 230 MMbbl at the Cabaca Norte and Cabaca run Petroci (16%). Shell, Endeavor Energy and South East discoveries, which also lie in Block 15/06. Continues On Pg 6 acquisition of Paris-based PetroWire Premier expands Falklands potential with Isobel Deep re-drill last April, and PLS plans to integrate Twitter-like abstracts, original content LNG to the Japanese company. atOff 12,500 the Falkland Islands, Premier boe/d. Oil’s Well 12/20-2 re-drill confirmed the and research archives in the perfect Isobel Deep discovery as well as found pay in additional sandstones. Drilled to 3,014 complement to the new (wire.PetroWire. m, the well intersected oil-bearing intervals in a number of reservoir sands between Golar LNG will hold minority stakes in the project. com) and the old (traditional publishing). 2,564-2,861 m. No oil-water contact was detected by the deepened well, and Herein we are also adding new content Premier estimates that it has found gross oil pay of ~300 m. The partners like page 13, which shows additional permit Tokyo Gas has a 1.4 mtpa, 20-year will plug and abandon the well and combine these results with existing 3D data taken from PetroWire that might seismic to better estimate the size of the not be worthy of a story but interesting discovered reservoir. Re-drill extends initial 23-m gross oil column to 300 m. just the same. Continues On Pg 3 Isobel Deep lies in the North Falkland Basin in the southern part of PL 004a, just 30 km south of Premier’s FEATURED DEALS contract in place with Dominion, which Woodfibre to become Canada’s first undeveloped,LNG 400 MMbbl Sea Lionexport field in PL 032. In May 2015, exploration Well project 14/20-1 reached 2,526 m in water 400-450 m deep and intersected the top 23 m of an oil-bearing reservoir in the F3 sands. The formation’s oil is similar to Sea Lion’s CARIBBEAN LEASES 4-Key Blocks. hydrocarbons (26-29°API), but the well registered higher-than-expected pressure FOR SALE OR JV DV that resulted in borehole influx. Continues On Pg 10 OFFSHORE GAS PLAY is converting an LNG import plant at Pacific Oil & Gas has made an FID to proceed with Woodfibre LNG,2014 3-D Seismic On Blocks.making CARIBBEAN it Gas Infrastructure Nearby. ExxonMobil leads work in hot Guyanese offshore Analogous To Major Fields In Trinidad. Offshore work is on the decline most everywhere in 2016, but Guyana is OPERATED WI AVAILABLE continuing to attract interest because of ExxonMobil’s Liza-1 discovery in the Estimated Recoverable: 15+ TCF Stabroek Block. The supermajor will drill four wells there this year starting in DV 5350L Cove Point in Lusby, Maryland, into Canada’s first LNG export project. Woodfibre’s scope is 1Q16,much assisted by more than 6,000smaller sq km of 3D data recently than most of collected by CGG and Fugro. In addition to determining Liza’s SOUTH AMERICA OPPORTUNITY Massive Acreage Position. size, the campaign will target the separate Ranger prospect—an Upper Jurassic- SHALLOW ONSHORE Lower Cretaceous carbonate build-up 2-D Seismic Defined. EX with draped Lower Tertiary clastics that Drilling program will size up Liza find Offsets Prolific Basin. in the deepwater Stabroek block. could support up to 20,000 bo/d per well. Emerging Province. Low Cost. the 20 others that have been proposed in British Columbia, which likely madeAccess To Local Markets. its path EXPLORATION Exxon has been tight-lipped about how much oil Liza-1 found, saying only OPERATED WI AVAILABLE that the well intersected a 90-m pay column. However, signs indirectly point to a Operatorship To Buyer If Qualified. Tokyo Gas to buy 1.4 mtpa from Cove substantial find. The Guyanese government estimates peg the find at 700 MMbbl-1.5 $15 Oil Breakeven Projected. Bbbl, and officials have said hydrocarbons worth 12 times Guyana’s entire economy EX 1033L to approval easier. The Squamish project likely lie there. Another clue is that Exxon is reportedly fast-tracking development of Liza and is looking at a 60,000 bo/d early-production FPSO that would later be More listings at plsx.com/listings Point for 20-year term. replaced by a 150,000-200,000 bo/d offshore unit. Continues On Pg 10 will export only 2.1 mtpa, but analysts $1.6B project will export 2.1All Standardmtpa Disclaimers & Seller Rights Apply. with operations beginning in 2020. a 13 mtpa export facility. Of the four hope it is a sign of a greater trend despite ships that the company will dedicate to a weak outlook for LNG. “It tells you that somebody believes there’s a market out Cove Point transports, one or two may there,” said AltaCorp analyst Dirk Lever. Construction on Woodfibre will begin in be reallocated to Centrica to avoid costly 2017, and operation would follow in 2020. Panama Canal tolls. Analysts hope approval points to Woodfibre comes with a $1.6 billion trend for larger LNG projects. The companies have not entered a pricetag at last estimate. Larger and more binding agreement yet for the potential costly LNG export projects in the province have faced steeper challenges. Shell, for swap, which has an undetermined term example, has shelved its LNG Canada project indefinitely, and it was furthest along to length. Tokyo Gas CEO Kentaro Kimoto development of all of the BC proposals. That project will export 13 mtpa initially and told Reuters he hopes a legal binding could cost upwards of $50 billion. The province awaits a Petronas decision on Pacific agreement will be in place next year. NorthWest, which just received its last government approval in September. The $36 “Through this tie-up with Centrica, billion project would will export 12 mtpa. which is a major LNG buyer on the Atlantic market, we expect to conduct GE injects $25 million into Souki’s new LNG venture flexible LNG trading bridging both the GE Oil & Gas has invested $25 million in Charif Souki LNG startup Tellurian Atlantic and the Pacific markets and to Investments. It has an implied common stock value of $5.94 per share. CEO Meg bring greater vitality to the LNG market Gentle said her company looked forward to working with GE to design low-cost overall,” Kimoto said. liquefaction facilities at Tellurian’s proposed Driftwood LNG facility. “This investment represents Exxon’s PNG LNG flows 17% another step forward in the Tellurian designing 26 mtpa Driftwood LNG in Louisiana. over nameplate in Q3 development of Driftwood LNG, where we ExxonMobil’s two-train PNG LNG are working together with GE to design the lowest-cost liquefaction for the global market,” produced 17% above its nameplate Gentle said. “GE Oil & Gas has provided technology for LNG facilities worldwide for capacity of 6.9 mtpa over 25 years and is a pioneer in innovation and a leader in reliability.” during Q3, marking The Louisiana-based venture plans to export 26 mtpa starting in 2022. Driftwood is the highest quarterly rate since it came in the engineering design and pre-filing phase with construction expected to commence online in 2014. The output was also 10% in 2018. The project’s proposed size rivals those of Cheniere Energy at Sabine Pass over 2Q16’s production. (27 mtpa) and Corpus Christi (22.5 mtpa). Expansion of the facility is being Souki launched Tellurian shortly after his January 2, 2015 • Volume 04, No. 16 OilfieldServiceS January ouster from Cheniere with partner Martin Serving the marketplace with news, analysis and business opportunities considered but is stalled as Exxon Assessing the service sector damage Technip spies other deals Prognosticators parse impact of crude plunge on services after withdrawing CGG offer With crude now down about 50% from its summer highs and E&Ps slashing capex Technip has formally withdrawn left and right, some sense of the impact on the service sector is starting to come to light. efforts to take out fellow French seismic pursues the purchase of its PNG partner, Houston. In August, the new company merged with Fortunately, with ongoing projects unlikely to have their plugs pulled, there is still leader CGG following the rebuffing of probably a month or two of “fullOilfieldServices steam ahead, ” but some time next quarter activity an unsolicited $1.83 billion cash bid decreases should begin to be more heavily felt, and it is worthwhile to examine who for the company by is best and worst positioned, how large the damage is likely to be, and how long a Technip. The offshore trough could last. E&C leader said that PacWest sees frac demand & pricing As for fracking, Oil Search. Analysts said expansion Magellan Petroleum, which exited the enhanced down 8% next year. following CGG’s refusal, Technip PacWest Consulting recently did a deep proposed a number of alternate options dive conference call on its expectations, and the firm anticipates an 8% demand (as to a tender offer, but said these efforts Followmeasured by hp) and price GE cut next year Oil in US land. The& drop Gas’ represents a 12% planswere similarly unfruitful. with In a separate decline in the number of horizontal wells fracked, offset somewhat by the continued CGG deal dead in water; company oil recovery business as a result. The merger is shift toward more sand, stage-count and HP-intensive fracs. That said, frac stages are cited opportunism by Technip. may not move forward until 2019, with still expected to decrease 6%. Continues On Pg 8 GE guides down for oilpatch efforts in pivotal 2015 statement, CGG said that none of the new Baker Hughes stake.proposed options created value for the General Electric is positioning to weather the downcycle with stoicism while company, and The Financial Times picking up new business, and businesses, along the way. GE is calling 2015 a “pivot” reported that board members viewed the expected to close this quarter. year, as it digests the massive ~$15 billion acquisition of Alstom’s power assets production by YE23. offer as opportunistic in light of lower oil (closure in Q2), raises proceeds from non-industrial, non-core asset sales and cuts prices. Regardless, CGG asserted it was costs to mitigate the impact of cheaper oil. GE anticipates industrial profits in position to weather current difficult up 10% or more next year, but Oil & Gas segment sales & profits market conditions. Continues On Pg 12 as for oil and gas specifically, projected down 0-5% next year. while the division saw $4.9 billion in orders in Q3, it is already seeing headwinds. GE cut its growth outlook from high FEATURED DEALS single- to low double-digit growth down to mid-single digit expectations. CEO Jeff Immelt called crude pricing issues a short term industry challenge. The company now TUSCALOOSA DRILLING PROJECT ~20,000-Contiguous Gross Acres. MidstreamNews hopes to keep oil and gas profits and revenues fairly flat through cost controls, although For general inquiries, email [email protected] Access PLS’ archive for previous midstreamMAJORITY IN PIKE CO., MISSISSIPPI news acknowledging that they very well may slide as much as 5%, particularly under capex TUSCALOOSA MARINE SHALE freeze scenarios. Its exposure to the space is more geared toward production and less Also Tangipahoa & St. Helena Ph., LA DV than peers on more volatile onshore unconventionals. Continues On Pg 6 169-Drilling Locations. 80-Acre Spacing. SEEKING JV PARTNERSHIP; 75% NRI TMS 2-D Seismic Available PLAY Canadian service firms give signs of things to come Area EURs: 600-800 MBO/Well In an early indicator of where service capex budgets are headed in the Lower 48 as Leases Expiring in 2018-2019 they are announced in coming months, Canadian service firms have been announcing DV 3395L drastically reduced 2015 spending plans and newbuild construction halts in anticipation ALASKA ROYALTY ACREAGE of lower producer cash flows. Many of these firms also have US operations, for 15,930-Gross/Net Acres. even better visibility on things to come. Number one Canadian driller Precision UPPER COOK INLET BASIN Drilling cut next year’s budget KITCHEN LIGHTS UNIT (N. BLOCK) RR Precision cut its 2015 budget 44% to Miocene Tyonek & Oligocene Hemlock 44% to C$493 million from 2014’s C$885 C$493 million from 2014’s C$885 million. million and idled its new rig construction Deep Sands: 11,000-16,500 Ft. Multi Pay Intervals Present program “until we see an improved commodity price environment and rising customer ~4.45% ORRI In Leases. newbuild demand,” said CEO Kevin Neveu. The 2014 plan is also being cut slightly Offset Well Tested Over 5,000 BOPD ORRI from a prior C$908 million. Precision will complete 16 currently under construction rigs, -- From Tyonek Deep Channel Sands. 15 headed for the US and one for Kuwait, but is planning no further deliveries next year. Estimated Project Reserves: 89 MMBO 3rd Party Reserve Report Available. Precision is trimming excess fat for leaner times as well, announcing it has sold Continued Development by Furie. its US coiled tubing assets for C$44 million cash to an undisclosed buyer. As of YE13, CALL SELLER FOR DETAILS Precision’s C/T fleet consisted of eight units in the Marcellus and Bakken shales, and RR 5100 Peters & Co. believes the price tag represented replacement cost. Continues On Pg 10 All Standard Disclaimers & Seller Rights Apply. MidstreamNews 8 December 5, 2016 A&D Tesoro Logistics acquires two Tesoro buys Western Refining in $6.4B deal Continued From Pg 1 asset packages for $1.1B Under the deal’s terms, WNR shareholders can elect to receive 0.4350 shares of Tesoro Logistics has agreed to Tesoro for each WNR share they own or $37.30 in cash per share of WNR stock. The cash two acquisitions of midstream assets option is subject to proration to the extent it exceeds 10.8 million shares. The purchase totaling $1.1 billion. One deal involves price is a 22.3% premium to the volume-weighted average price over the last 30 days. oil, gas and produced-water gathering Tesoro is gaining attractive systems and processing facilities in the Permian midstream exposure Combined refiner will have capacity Williston Basin for $700 million. The to process 1.1 MMbo/d. through WNR’s ownership of second is a $400 million dropdown of the general partner and 61% of the limited partnership units in MLP Western Refining terminaling and storage assets associated Logistics. The MLP operates 685 miles of crude pipeline, including gathering assets, and with parent Tesoro Corp’s Martinez, 8.2 MMbo of active storage capacity in the burgeoning Delaware Basin as well as the San California, refinery. Juan Basin and the Bakken shale in North Dakota. These systems provide advantaged Will pay $700 million for gathering, crude to WNR’s refineries and generate third-party revenue. Tesoro said it would pursue processing system in Williston Basin. opportunities to grow both Western Refining Logistics and its own Tesoro Logistics, with a focus on the Permian Basin through acquisitions and dropdowns. Tesoro has been The Williston deal involves more pursuing the latter strategy this year (see related story in sidebar). than 650 miles of gathering pipeline and The three refineries Tesoro is gaining are: El Paso, Gallup in northwest New Mexico two facilities with combined capability and St. Paul Park in Minnesota, which have to process 170 MMcf/d and fractionate Creates multi-brand, 3,000-station a combined 205,000 bo/d capacity. The 18,700 bbl/d. The assets are in Mountrail, convenience store portfolio. first two represent a new operating area Stark, Billings and Dunn counties, North for Tesoro. El Paso can access price-advantaged Permian crude as well as Gulf Coast Dakota, and they serve operators in Sanish blendstocks. It has capacity of 131,000 bo/d and a 33,000 bbl/d fluid catalytic cracking and Proghorn fields. The sellers were unit. Three products pipelines flow out of El Paso into Arizona, New Mexico and Mexico. Whiting Oil and Gas, GBK Investments WNR also owns the Gallup refinery in New Mexico, which is the only active refinery and WBI Energy Midstream. in the Four Corners area. This refined-products plant has throughput of 25,000 bbl/d. It The dropdown includes 5.8 MMbbl produces gasoline, diesel, propane, butane and heavy fuel oils. The St. Paul Park refinery of storage for crude, feedstock and has 90,500 bbl/d cracking capacity. It can process both light Bakken crude and heavy refined product associated with Tesoro’s Canadian oil. Products include gasoline, diesel, jet fuel and asphalt. Martinez refinery and a marine terminal The deal also will create a multi-brand marketing and convenience store portfolio that can handle 35,000 bbl/d of feedstock that contains more than 3,000 retail stations operating under the ARCO, Shell, Exxon, and refined product throughput. Mobil, SuperAmerica, Giant and Tesoro brands. Tesoro said the deal will create significant $400MM dropdown from parent shareholder value as it will yield $350-425 million in operational, commercial and includes terminaling, storage in Calif. corporate synergies. The company expects to achieve this within the first two years. Total consideration was $400 million, Western Buy Will Create $350-425MM in Run Rate Synergies consisting of $360 million in cash and $40 million in common and general $ in millions 100 - 125 350 - 425 partner units to Tesoro. The equity portion "Also, our increased scale and was based on the average daily closing diversity will enable us to leverage price of the common units during the and enhance in-house technical 10 trading days prior to closing, $45.53, capabilities, which we expect 120 - 160 will result in cost efficiencies, the with 860,933 common units and 17,570 ability to drive more growth and general partner units. increased productivity," said CEO Greg Goff. This dropdown builds on another one in June in which Tesoro dropped down $444 130 - 140 million in Alaskan storage and terminaling assets to Tesoro Logistics. In support of the two most recent deals, Tesoro will waive $100 million of general partner incentive Operaonal Commercial Corporate Total distributions in 2017 and 2018, or $12.5 million per quarter. Tesoro Logistics Expect to achieve run-rate synergies of $350 to $425 million within the first two years expects $1 billion in EBITDA next year, up from $735-765 million this year. Source: Tesoro Corp. Nov. 17 Presentation via PLS docFinder www.plsx.com/finder

Find more on the midstream sector at www.plsx.com To learn more about PLS, call 713-650-1212 Volume 09, No. 16 9 Infrastructure US Midstream Earnings 3Q16 Revenue (US$MM) Net Income (US$MM) Market Cap Company Name Ticker (US$MM) 3Q16 2Q16 % Change 3Q15 3Q16 2Q16 % Change 3Q15 Enterprise Products Partners EPD $54,562 $5,920 $5,618 5% $6,308 $635 $558 14% $649 Kinder Morgan KMI $49,558 $3,330 $3,144 6% $3,707 -$188 $372 N/A $186 Spectra Energy SE $28,727 $1,075 $1,159 -7% $1,103 $195 $149 31% $174 Williams Companies WMB $23,051 $1,905 $1,736 10% $1,799 $61 -$405 N/A -$40 Williams Partners WPZ $22,346 $1,907 $1,730 10% $1,792 $326 -$90 N/A -$194 Energy Transfer Partners ETP $19,059 $5,531 $5,289 5% $6,601 $74 $370 -80% $417 Energy Transfer Equity ETE $17,830 $9,668 $9,287 4% $10,616 $209 $241 -13% $293 Magellan Midstream Partners MMP $15,774 $552 $519 6% $577 $195 $188 4% $251 Plains All Amer Pipeline PAA $13,607 $5,170 $4,950 4% $5,551 $297 $101 194% $249 Spectra Energy Partners SEP $13,266 $628 $618 2% $612 $275 $287 -4% $321 Oneok Partners OKS $11,948 $2,357 $2,134 10% $1,898 $274 $261 5% $227 MPLX MPLX $11,579 $702 $564 24% $214 $141 $19 N/A $41 Cheniere Energy Partners CQP $9,922 $331 $151 119% $68 -$82 -$100 N/A -$24 Buckeye Partners BPL $9,022 $767 $777 -1% $728 $156 $140 11% $100 Enbridge Energy Partners EEP $8,545 $1,121 $1,049 7% $1,268 -$383 $107 N/A $107 Plains GP PAGP $8,479 $5,170 $4,950 4% $5,551 $24 $42 N/A $32 Sunoco Logistics Partners SXL $7,853 $2,189 $2,268 -3% $2,407 $154 $202 N/A $56 EQT GP Holdings EQGP $6,574 $171 $172 -1% $149 $53 $51 4% $38 OGE Energy OGE $6,321 $744 $551 35% $720 $184 $72 157% $111 Enlink Midstream Partners ENLK $6,083 $1,106 $1,042 6% $1,171 $19 $5 276% -$755 EQT Midstream Partners EQM $6,007 $171 $172 -1% $149 $127 $125 1% $94 Cheniere Energy Partners CQH $5,088 $0 $0 - $0 $4 $4 -2% $5 Antero Midstream Partners AM $4,995 $150 $137 10% $82 $71 $50 41% $43 Shell Midstream Partners SHLX $4,890 $68 $71 -5% $96 $56 $64 -12% $54 Phillips 66 Partners PSXP $4,662 $111 $111 0% $72 $83 $68 23% $52 Boardwalk Pipeline Partners BWP $4,298 $303 $306 -1% $294 $47 $66 -28% $38 Genesis Energy GEL $4,122 $460 $446 3% $572 $32 $24 35% $363 DCP Midstream Partners DPM $3,974 $373 $385 -3% $465 $120 $45 167% $71 Tallgrass Energy TEGP $3,805 $152 $147 4% $138 $7 $3 104% $4 Nustar Energy NS $3,747 $441 $438 1% $494 $51 $53 -3% $65 TC Pipelines TCP $3,562 $91 $89 2% $83 $58 $54 7% $49 Tallgrass Energy Partners TEP $3,378 $152 $147 4% $138 $61 $92 -34% $43 Enlink Midstream ENLC $3,295 $1,106 $1,042 6% $1,171 $1 $1 -13% -$193 Valero Energy Partners VLP $2,722 $92 $88 5% $62 $49 $49 N/A $16 Dominion Midstream Partners DM $2,386 $85 $86 -1% $103 $24 $23 8% $18 Semgroup Corp SEMG $2,383 $328 $287 14% $397 -$7 $8 N/A $5 Enbridge Energy Management EEQ $2,045 $0 $0 - $0 $0 -$1 N/A -$278 Holly Energy Partners HEP $2,025 $93 $95 -2% $88 $35 $39 -11% $34 Columbia Pipeline Partners CPPL $1,726 $327 $313 4% $320 $3 $18 -84% $145 Summit Midstream Partners SMLP $1,618 $95 $90 6% $115 $2 -$50 N/A $24 Crestwood Equity Partners CEQP $1,547 $588 $602 -2% $631 -$3 -$43 N/A -$227 Cone Midstream Partners CNNX $1,301 $61 $58 4% $54 $24 $23 2% $20 Western Refining Logistics WNRL $1,254 $569 $579 -2% $681 $7 $18 -62% $12 Nustar Gp Holdings NSH $1,090 $0 $0 - $0 $17 $15 15% $17 Noble Midstream Partners NBLX $1,020 $48 $0 - $0 $21 $0 N/A $0 Transmontaigne Partners TLP $686 $41 $41 -1% $37 $12 $10 15% $8 Delek Logistics Partners DKL $621 $107 $112 -4% $165 $13 $19 -30% $19 Martin Midstream Partners MMLP $603 $175 $190 -8% $226 -$1 -$1 N/A $3 Green Plains Partners GPP $580 $26 $25 3% $21 $14 $14 2% $11 Sprague Resources SRLP $481 $423 $477 -11% $558 -$9 -$10 N/A $9 American Midstream Partners AMID $461 $64 $55 15% $56 $1 -$5 N/A -$5 JP Energy Partners JPEP $304 $123 $131 -6% $260 -$7 -$2 N/A -$8 Arc Logistics Partners ARCX $286 $27 $26 2% $24 $4 $4 0% $2 Blueknight Energy Partners L BKEP $251 $47 $43 8% $47 $11 -$19 N/A $14 Source: Bloomberg Note: Data includes public, US-based companies operating in the oil & gas space, limited to >$1.00/share and market cap >$200MM.

For general inquiries, email [email protected] Access PLS’ MidstreamNews archive for previous midstream news MidstreamNews 10 December 5, 2016 A&D GPM expands Midwest Sunoco acquires Energy Transfer Partners Continued From Pg 1 convenience store portfolio The reason is that ETP’s unitholders will receive SXL's current $0.71/quarter A subsidiary of convenience distribution, which is an effective 29% reduction from the current payout. ETP had been store operator GPM Investments has considering a 15-25% distribution reduction because its distribution ratio had fallen well purchased two Sun Capital Partners below 1.0X. SXL holders were concerned that its track record of 46 consecutive quarterly portfolio companies, Admiral distribution hikes would Petroleum and Lemmen Oil, which be halted by the huge Without deal, ETP would have faced the investment firm acquired in May. 15-25% distribution reduction. debt and lower cash flow Terms of the deal were not disclosed. generation it was acquiring. However, ETE’s unit price rose because it will gain direct The Michigan-based convenience chain access to SXL’s incentive distribution rights, which are now owned by ETP. contains 161 Admiral-branded and ETE argued that the long-term financial and operational benefits far outweighed the nine Lemmen-branded stores across short-term negatives. Financially, the combined company will have lower leverage, a Michigan and Indiana. higher distribution ratio, higher cash flow to cover the costs of expansion projects, and Sun Capital co-CEO Marc Leder a lower cost of capital. Commercial synergies will generate more than $200 million said his firm turned around operations at in annual cost savings by 2019. The Admiral during its brief ownership. The Combined company will operate company will have a projected distribution firm installed an experienced management 71,000 miles of pipeline. coverage ratio of 1.0X and it expects low- team that worked with Sun Capital to double-digit distribution increases as the synergies are realized and cash flow increases streamline core sales, distribution and from new projects. marketing strategies; expand services; Operationally, the combination will create a new midstream giant, with a $74.3 and implement a fuel-pricing program. billion enterprise value that makes it the second largest MLP behind Enterprise Product GPM’s network numbers more than Partners ($77.4 billion). The combined company will operate 71,000 miles of pipeline 1,000 stores in 18 states. It expanded into with throughput of 10 Bcf/d, 469,000 bbl/d the Midwest in 2015. of NGL production and 325,000 bbl/d of Move synergizes SXL’s liquids business with ETP’s gas transport. fractionation at Mont Belvieu. Castleton picks up East Texas ETE envisions several liquids-growth opportunities in Texas and Appalachia. For midstream assets in $1B deal crude growth in the Permian, ETE sees integration potential to better utilize pipeline Castleton Commodities International capacity. ETP has an idle 100,000 bo/d pipeline in the basin, and SXL has expansion has acquired an East Texas package that potential of 100,000 bo/d on its Delaware pipeline. Moreover, ETP’s gathering system includes midstream assets from subsidiaries is synergistic with SXL’s recent purchase of Vitol’s stake in the SunVit pipeline. As for of Anadarko Petroleum for more than $1 liquids growth, ETE sees SXL’s Marcus Hook as the future “Mont Belvieu of the North.” billion. The sale encompasses Anadarko’s ETP’s Revolution gas pipeline system will be able to connect to SXL’s Mariner East to Carthage field operations, totaling move additional NGLs out of Appalachia and increase product to Marcus Hook. 160,000 net acres. Details and values on the infrastructure Combination Creates Second-Largest Midstream MLP pieces of the deal aren’t known, but CCI Enterprise Value ($bn) said the field’s net output increased

$77.4 $74.3 to more than 320 MMcfe/d as of the $56.7 $53.7 transaction’s effective date. Anadarko’s $34.1 latest operations report puts field output $25.5 $25.3 $24.0 $19.8 at 240 MMcfe/d. CCI president Craig Jarchow said his company will remain EPDPF SXLSA ETPWPZ PAASEP OKSEEP SA SXL focused on “strategically growing and Equity Value Enterprise Value diversifying our upstream and midstream Credit Baa1/ Baa3/ Baa3/ Baa3/ Baa2/ Baa2/ Baa3/ Baa3/ BBB+/ BBB-/ BBB-/ BBB-/ BBB/ BBB/ BBB/ BBB/ assets, and broadening our portfolio with Rating: BBB+ BBB- BBB- BBB BBB NR NR BBB attractive opportunities that complement Q3 2016 Annualized Adjusted EBITDA ($bn) our long-term business strategy.” $5.6 $5.0 $4.8 $4.3 December 31, 2014 • Volume 25, No. 18

$1.9 $1.8 $1.8 ServingTransactions the marketplace with news, analysis and business opportunities $1.7 $1.2 Repsol strikes, snapping up Talisman for $13 billion Whiting seals buyout of Capitalizing on fallingA&D oil prices to gainTransactions a substantial upstream foothold in North Nov. Bakken peer17 Kodiak America, Repsol has struck a deal to acquire Talisman Energy for $13 billion. The There is one less publicly listed purchase price consists of $8.00/share (C$9.33/share) in cash plus the Calgary company’s Bakken producer following the closing PF SXLEPD WPZSA ETPOKS EEPPAA SEPSA SXL $4.7 billion debt. Unanimously approved by both companies’ boards, the deal will of Whiting Petroleum’s acquisition boost Repsol’s pro forma 2014 production by 76% to over 4.08 Bcfed immediately and of rival Kodiak Oil & Gas. Anadarko’ssignificantly expand its exploration portfolio.legacy The combined companyCarthage will have a presence Thefield deal created a fetchescombined in more than 50 countries with Bids $8.00/share after Talisman company with a market cap 27,000 employees. tagged a low of $3.46/share. north of $6.0 billion based on the stock Source: Sunoco Nov. 21 Presentation via PLS docFinder www.plsx.com/finder more thanCash-rich Repsol $1B. had price the day before closing. Whiting been gearing up for a strategic upstream acquisition, building up a $12 billion-plus war now has the highest Bakken/Three Forks chest this spring through the divestment of its equity in Argentine explorer YPF, a $5.0 billion settlement with Argentina over the 2012 seizure of a 51% stake in YPF, and the Creates largest producer in Bakken with Q3 output of 125,000 boepd. sale to Shell of its Latin America-focused LNG business. At the time, Repsol said it was shopping for companies or assets within the OECD with development potential, production at a pro forma 125,000 boepd scale, extra growth capacity and above 8% return on capital. Continues On Pg 12 for Q3, squeaking by long-time leader Find more on the midstream sector at www.plsx.com OxyTo in talks learn to buy private more Permian about driller Three PLS, Rivers callContinental 713-650-1212 Resource's 121,600 boepd. Cash-rich after receiving $6.0 billion in the spin-off of its California business, The deal also increased Whiting’s Occidental Petroleum is looking to supercharge its core Permian growth engine Bakken/Three Forks inventory by by pursuing privately held Three Rivers Operating Co. II LLC. Industry sources 158% to 3,460 net drilling locations contacted by PLS have estimated values in the $1.20-1.35 billion for the deal. A across 855,000 net acres. YE14 proved Bloomberg story citing an unnamed source said the companies are discussing a price reserves for the combined company total below $20,000/acre—implying a value below $1.75 billion based on Three Rivers’ 780 MMboe (83% crude, 7% NGLs), 82,000 net acres at YE13 plus 5,400 net up 29% compared to Whiting and PLS sources value deal for Riverstone- Kodiak’s YE13 sum. Cont'd On Pg 17 acres picked up this summer. backed company at $1.20-1.35 billion. Austin, Texas-based Three FEATURED DEALS Rivers II launched in August 2012 with the acquisition of 15,000 net acres and 1,900 boepd in the Midland Basin from Meritage Energy. Backed by Riverstone EAST TEXAS SALE PACKAGE Holdings, the company at YE13 touted 25,000 net acres in the Midland Basin, 22,000 12-Active Wells. 3-SWD. ~3,700 Acres. in the southern Delaware Basin and 5,000 in the Central Basin Platform representing a BUNA WEST & SILSBEE FIELDS drilling inventory exceeding 1,800 locations (average 90% WI) targeting the Wolfcamp, HARDIN & JASPER COUNTIES PP Cline and Wolfberry combo play. Continues On Pg 11 Wilcox Sands 10,000 Ft.-15,000 Ft. Additional Drilling Locations Identified 58-100% Operated WI; ~73 Lease NRI 191 Southwestern buys more Marcellus/Utica for $394 million Gross Production: 77 BOPD & 888 MCFD BOED Also closes $5.4 billion initial acquisition from Chesapeake Net Production: 44 BOPD & 530 MCFD June 2014 Cash Flow: ~$156,600/Mn Statoil is selling a 5.8% stake in its Marcellus and Utica JV assets in northern PDP PV10: $4,826,000 West Virginia and southern Pennsylvania to new partner Southwestern Energy for BIDS DUE BY JANUARY 15, 2015 $394 million and retaining ~23% WI. Having also closed its $5.4 billion purchase of PP 2351DV Chesapeake’s 67.5% WI, Southwestern’s newly acquired interests will rise to 73.3% WI, representing 443,000 net acres. KERN CO., CA PROPERTY Gets additional 30,000 net acres & The Statoil deal adds ~18,000-Contiguous Net Acres. 29 MMcfed from Statoil interest. BEER NOSE FIELD incremental October Bloemer Tight Sandstone Objective. PP net production of 29 MMcfed and 30,000 net acres targeting the Marcellus, Utica Estimated Depth: 10,000-15,000 Ft. and Upper Devonian for Southwestern. Statoil had a preferential right to buy Also Monterey, Belridge, Gibson, Oceanic, Chesapeake’s stake when that company’s deal with Southwestern was announced Santos, Tumey & Kreyenhagen Potential. 100% OPERATED WI; ~77% NRI in October, but chose not to exercise it. Including these properties and others in the TIGHT Gross Production: 36 BOPD & 57 MCFD SAND play, Statoil retains a strong Marcellus position covering ~570,000 net acres with Net Production:27 BOPD & 44 MCFD pro forma Q3 net production of 759 MMcfed. 6-Mn Avg. Net Cash Flow: ~$28,800/Mn The Statoil deal is expected to close in 1Q15 and will be financed from PP 5217DV Southwestern’s revolver. Continues On Pg 15 All Standard Disclaimers & Seller Rights Apply. Volume 09, No. 16 11 Infrastructure A&D Sunoco Logistics, Exxon enter Permian JV CONE Midstream takes full Prior to the announcement that it will merge with Energy Transfer Partners, stake in Marcellus systems Sunoco Logistics Partners and ExxonMobil formed Permian Express Partners, a pipeline joint venture that will combine crude logistics assets from both companies In its first dropdown, CONE into one entity. Midstream Partners LP will acquire Sunoco will own Sunoco will own 85% of JV, contribute an additional 25% stake in the first four pipelines. 85% and contribute its of three development companies that Permian Express 1, Permian Express 2, Permian Longview and Louisiana Access hold its Marcellus pipelines. Exxon will own 15% and bring its Longview-to-Louisiana and Pegasus midstream assets. This pipelines, Hawkins gathering system, an idle southern Oklahoma pipeline, and a terminal acquisition brings the partnership’s stake in Patoka, Illinois. Sunoco will operate all of the assets. The deal expands Exxon’s in the Anchor Systems to 100%. The refinery-supply options. seller is CONE Gathering, which is the 50:50 midstream JV of Consol Energy Capital and Noble Energy. HollyFrontier prices additional senior notes at $750 million Acquires additional 25% stake for HollyFrontier priced an offering of $750 million of its 5.875% senior notes $248 million in first dropdown. maturing April 1, 2026. These notes are being offered in addition to HollyFrontier’s Consideration was $248 million, of outstanding 5.875% senior notes due 2026 that were sold in a March public offering which the partnership paid $140 million in aggregate principal amount of $250 million. Net proceeds will go to repayment of in cash and issued 5.2 million common $350 million term loan. limited partnership units to Consol and The additional notes Noble, each of which holds 32.1% limited will be issued at a price equal to 100.098% of the principal amount thereof plus partner interest in CONE Midstream accrued interest from Oct. 1, resulting in a yield to maturity of 5.860%. Interest on Partners. The cash portion will be funded the additional notes will be payable April 1 and Oct. 1 of each year. The offering under the partnership’s $250 million was to close Nov. 21. Offering in addition to $250MM of Net proceeds will go toward revolving credit facility, which had $41 2026 notes sold in March. million drawn as of Sept. 30. prepayment of the company’s $350 million term loan and general purposes, which may include funding a portion of its Systems comprise 125-plus miles of $845 million purchase of Suncor’s Petro-Canada Lubricants business. Citigroup pipeline with 650 MMcf/d capacity. Global Markets Inc., Goldman Sachs, Merrill Lynch, Pierce, Fenner & Smith The Anchor Systems contains Incorporated, MUFG Securities Americas Inc. and TD Securities (USA) are CONE’s core assets, which consist of joint bookrunning managers. five pipeline systems at the junction of southwest Pennsylvania and northern TransCanada generates $4.5 billion through offerings West Virginia that combine for over 125 TransCanada has closed two offerings that will generate $4.5 billion in gross miles with 650 MMcf/d compression proceeds. In the first offering, an underwriters syndicate led byTD Securities, BMO capacity. The assets include the McQuay, Capital Markets and RBC Capital Markets purchased 60,225,000 common shares including full exercise of the overallotment option. The purchase price Consideration was $140MM cash, was $58.50 per share. 5.2 million common units. Proceeds will go toward Closed $3.5B common share offering, $1B preferred share offering. Majorsville and Mamont systems; repayment of the $6.9 billion bridge term the Marshall and Fallowfield coalbed loan that TransCanada used to finance the purchase of Columbia Pipeline Group methane systems; and an ethane-blending earlier this year. The Canadian pipeline giant entered into the common share offering system. This network serves operations in after it decided against monetizing its Proceeds will go toward repayment of Mexican gas assets. Westmoreland, Greene and Washington $6.9B bridge term loan. counties, Pennsylvania, and Marshall In the second offering, TransCanada County, West Virginia. issued 40 million Series 15 preferred shares, increased from an initial 20 million, for aggregate gross proceeds of $1.0 billion. Proceeds from this offering will be used

May 21, 2015 for general corporate purposes and to pay down debt. The underwriters syndicate Petro Scout www.plsx.com e&P was co-led by Scotiabank, BMO Capital Markets, CIBC Capital Markets, RBC Serving the US upstream industry with information, analysis & prospects for sale Volume 26, No. 08 Devon surges past guidance on Eagle Ford performance Hess’s Bakken costs falling, Capital Markets and TD Securities Inc. Completion mods push positivePetroScout results across multiple plays Nov.targeting 2 $6.0-6.5MM/well Fueled by the Eagle Ford, Devon’s oil production exceeded guidance by 12,000 Hess’s lean manufacturing approach in bo/d during Q1 at 272,000 bo/d. Based on the results, the company has increased its the Bakken is leading to higher production oil growth target from 20-25% to 25-30% (270,000 bo/d) for the full year. Q1 overall and cheaper wells. Q1 volumes averaged volumes also overshot guidance, averaging 685,000 boe/d (60% liquids), 108,000 boe/d, up 70% YOY Consolup 3% &vs. Q4 Noble and 22% YOY. Devon dissolve expects volumes to grow their 5-10% and 6%JV sequentially. in Athe total this year to an average of 667,000 boe/d. Capex was reduced by $250 million to $3.9- of 70 wells were brought 4.1 billion on an improved LOE outlook online in the play during the quarter, and accretive midstream transactions. Eagle Ford output has risen 140% since down from 96 in Q4. Well costs fell to Information. Transactions. Advisory. Call 713-650-1212 Marcellus. it took over the assets in March 2014. Since it took control of the Eagle Ford $6.8 million from $7.1 million in Q4 and position it acquired from GeoSouthern in March 2014, Devon has grown production in the play 140% to 122,000 boe/d (62% oil). In the last quarter alone volumes jumped 24,000 Bakken well costs stood at $7.1MM at YE14, already down to $6.5MM in '15. boe/d, exceeding expectations and creating a bottleneck that will prevent growth in Q2. Devon’s Eagle Ford drilling is concentrated in the Lower Eagle Ford where the $7.5 million in 1Q14. Hess expects costs Forcompany general added 79 new wells inquiries, to production in Q1. emailContinues [email protected] Pg 4 to fall further, with 2015 wells averaging Access PLS’ MidstreamNews archive for previous midstream news Parsley’s rookie hz drilling season delivers peer-leading results $6.0-6.5 million. During Q1 Hess reduced its Bakken Parsley Energy’s well performance has continuously improved since it began rig count to 12 from 17 at the end of drilling horizontal wells a year and a half ago. The company has drilled 30 Wolfcamp A 2014. The company is running currently or B wells thus far and, based on the 30-day data, recently introduced a type curve with eight rigs in the play and will continue estimated recoveries of 1 MMboe. In the Wolfcamp B during Q1, the 30-day with that number for the remainder of peak IP per 1,000 ft of lateral the year. D&C plans call for 178 wells improved 30% YOY to 231 Wolfcamp B rates are 75% higher than peers in Upton County. drilled, 214 completed and 213 turned to boe/d. According to COO Matt Gallagher, sales compared to 261, 230 and 238 last the improved performance is owed to higher stage density, more slickwater stages, year, respectively. Continues On Pg 22 increased proppant per stage and optimal placement of the lateral within the zone. Parsley’s improved wells are outperforming many of its peers in the Midland Basin. In Upton County, the company’s Wolfcamp B 24-hr IPs are 75% higher than the average FEATURED DEALS when adjusted for lateral length. The Ratliff-28-1 H Wolfcamp B well is credited with REEVES CO., TX PROSPECT flowing the highest reported oil rate of all horizontals in Upton, according to IHS. In ~4,600-Net Acres. Reagan County, data suggests Parlsey’s 24-hr IPs for Wolfcamp B wells are 55% higher DELAWARE BASIN than the county average when adjusted for lateral length. Continues On Pg 21 Objectives: Wolfcamp (A,B,C) All Depths. All Rights. L 80-Acre Down Spacing Pilots Underway. Noble’s DJ Basin spud-to-rig release days fall to seven Subsurface Geology Data Available In the DJ Basin, Noble Energy has driven spud to rig release times for 4,500-ft 100% OPERATED WI; 75% NRI WOLFCAMP laterals down to just seven days as of Q1, a 23% reduction YOY. Notably, the company Wolfcamp A Approx. IP: ~1,091 BOED drilled a 9,280-ft lateral in just seven days. Wolfcamp B/C Approx. IP: ~1,190 BOED Wolfcamp EUR’s: 300-450 MBO/Well “We’re now averaging seven days from spud-to-rig release for a standard lateral PKG UPDATED WITH NEW ACREAGE length well, almost as fast as we used to drill vertical wells,” said chairman, president L 5187DV and CEO David L. Stover during a conference call. The company is drilling COLORADO DRILLING PROJECT Noble nearly drilling horizontals in the ~43,700 Net Acres. wells so quickly that it time it used to take it to drill a vertical. will end up drilling more wells than LINCOLN & KIT CARSON COUNTIES MISSISSIPPIAN / PENN TARGETS anticipated in 2015 and has taken funds from the Marcellus and reallocated them to Miss-Spergen & Penn-Cherokee. <7,500’. L the DJ. Currently Noble is drilling 70% of the footage of 2014 with 40% of the rigs. Multipay Objectives. Shallow Depths. The company ended Q1 running four rigs and one completion crew in the DJ. In H2, Defined By Extensive 3-D Seismic-- MULTIPAY an additional completion crew will be added as needed. -- Geology & Geophysics Data. 100% OPERATED WI; ~80% NRI Reduced drilling times and equipment optimization has led to a 5-15% reduction 221 Active Offset Wells, 150 Offset Permits. in costs vs. 2014. Noble foresees further savings via lower service costs and possible L 4489DV use of slickwater, which could save $2.0 million per well. Continues On Pg 6 All Standard Disclaimers & Seller Rights Apply. MidstreamNews 12 December 5, 2016

Downstream Project Updates Database wire.plsx.com Americas PDVSA will access $2.2B of a $9B credit line provided by China to increase output by Nov 18 Venezuela-Sinovensa Refinery 277,000 bo/d at PDVSA-CNPC JVs in Venezuela. A $680MM overhaul will take 18 months to adjust its units to process up to 209,000 Nov 16 Aruba-San Nicolas Refinery bo/d of extra-heavy oil. The contract is expected to be awarded in coming days. Average domestic sales of 49,900 boe/d, 26% higher YOY. This growth was due to sales Nov 15 Colombia-Cartagena Refnery of diesel, jet fuel, kerosene, gasoline and petrochemical products not offered in 2015. YPFB, EBIH and the Chaco Tarijeño-Villa Montes autonomous regional government Nov 14 Bolivia-Bulo Bulo signed an MoU to identify hydrocarbon industrialization programs and projects. Guandong Zhenrong Energy Co (GDZR) has entered an MOU with BP that includes Nov 14 Curacao-Emmastad Refinery financing an upgrade of the 320,000 bo/d refinery. Europe Slovak Republic-Slovnaft MOL will invest $500MM by 2020 to upgrade the petrochemical unit to diversify Nov 15 Refinery away from fuels. Non-fuel output is expected to increase to 50%, up from 10-15%. Africa TO BEGIN YOUR TRIAL Email [email protected] to sign up for daily or weekly The 210,000 bbl/d refineries will soonabstract produce alerts aviation on your turbineregion, country kerosene, or sector. also known Nov 22 Nigeria-Port Harcourt Refinery as aviation fuel. Uganda expects to find a lead investor for the $4B refinery before the end of 2016. Nov 22 Uganda-Buseruka Refinery Sinopec has expressed an interest in developing Uganda's oil refinery. The new managing team has until 21 Dec 2016 to restart production in the 200,000 Nov 21 Morocco-Mohammedia Refinery bo/d complex in an effort to secure a buyer and a better price. Sasol's new C3 Expansion Project will increase the poplypropylene production Nov 21 South Africa-Secunda Plant capacity by 103,000 t/y and also improve its environmental impact. The plant has successfully produced polyethylene, some of which will be used in Nov 14 Egypt-Alexandria Plant Petrojet's Zohr project. Sidpec intends to export 70% of its polyethylene. Middle East PGPIC is in talks to raise $1.1B for an expansion, which includes the Veniran Apadana Nov 29 Iran-Veniran Apadana Methanol methanol project. The project aims to produce 1.65 Mt/y for export. Unit upgrades include high density naphtha recycling (25,000 bbl/d), light density naph- Nov 21 Iran-Bandar Abbas Refinery tha (21,000 bbl/d), catalyst conversion (25,000 bbl/d) and gasoil recycling (50,000 bbl/d). Bapco is holding talks with 7 or 8 export credit agencies on financing the $5B expansion. Nov 17 Bahrain-Sitra Refinery Financing could be finalized in 1H17. Ghadir Group is building the 120,000 bbl/d gas condensate refinery. The final contract is Nov 17 Iran-Shiraz Refinery estimated at $809MM and is expected to be signed in the near future. Central Asia Construction of a process condensate purification facility has been approved. The Nov 28 Russia-Omsk Refinery 100m3/hour facility will remove ammonia and sulfides. Avg daily output of vacuum gasoil treatment increased 4.7% and stable petrol produc- Nov 21 Russia-Ufa Refinery tion increased by 11.8%. The average life of the catalyst was doubled from 2 to 4 years. Asia Pacific Idemitsu Kosan will expand propane processing in 3Q17 and will increase the Nov 29 Japan-Ichihara Refinery cracker's ability to process propane as a feedstock by 3-4 times. Chennai plans to raise the capacity of its smallest refinery to 300,000 bo/d. First phase Nov 23 India-Nagapattinam Refinery will increase to 120,000 to 180,000 bo/d, next phase will increase to 300,000 bo/d. Fujian Gulei Petrochemical announces an integrated petrochemical complex at Gulei Nov 10 China-Gulei Plant Petrochemical Base, in Fujian Province, SE China. Tot investment cost is 27.8B yuan.

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Pipeline Project Updates Database wire.plsx.com Americas Peru expects to find a replacement constructor and operator for the pipeline by Nov 25 Peru-Gasoducto Sur Peruano Jan. Any new company won't liable for potential wrongdoing by Odebrecht. A $50MM pipeline will link Canacol's gas facility at Jobo to the Promigas-operat- Nov 23 Colombia-Jobo to Sincelejo ed pipeline at Sincelejo. The line transport 40 MMcf/d to customers in Cartagena. Mexico-Villa de Reyes to An undisclosed sum has been secured by Fermaca from a group of international Nov 22 Guadalajara lenders to build the 355-km CFE gas pipeline. Equion Energia’s expansion project nearly complete. Operations are to begin in Nov 15 Colombia-Ocensa 1Q17. Transport capacity will be increased by 135,000 bbl/d to 750,000 bbl/d. Europe First phase of upgrading roads and bridges in Albania is 97% done. In six months, 178 km Nov 24 Greece-Trans Adriatic Pipeline of route was cleared, 102 km of pipe was strung and 70 km of pipe was welded. The World Bank will make a financing decision on the Azerbaijani part of the project. Nov 20 Turkey-Trans Anatolian Pipeline The WB is expected to allocate $400MM to the Southern Gas Corridor CJSC. Gasum Oy will build a 150-km bidirectional gas pipeline. 80 km will be subsea linking Nov 17 Finland-Baltic Connector Paldiski (Estonia) and Inkoo (Finland) and two onshore lines to Finland and Estonia. Africa Tanzania and Zambia will either modernize the existing 1,710-km crude Tazama pipe- Nov 29 Tanzania-Tazama Pipeline line or build a parallel pipeline for gas. The NNPC's Managing Director said a 1,000-km crude pipeline from Niger to Nov 28 Niger-Niger to Nigeria Kaduna refinery would be built. The Egyptian Ministry of Environment has approved the study to build a 220-km, Nov 28 Egypt-Zohr Export Pipeline 26-in. pipeline from Zohr gas field to an onshore processing station in Port Said. Zimbabwe will study whether to increase capacity of the fuel pipeline from Beira Nov 23 Mozambique-Beira to Mutare in Mozambique to Harare in Zimbabwe and consider a second fuel pipeline. Parties discuss an early export system from Agadem Rift Basin to Kaduna refinery Nov 16 Niger-Agadem to Kaduna using trucks prior to the construction of a 800-km pipeline solution. Tullow may build a 865-km line to transport crude from Turkana to the coast. Con- Nov 10 Kenya-Kenya Export Pipeline struction would begin in 2018 and end in 2021 with 80,000-120,000 bbl/d capacity. Middle East Jordan and Iraq have confirmed plans to build an oil and gas pipeline from Iraq Nov 16 Iraq-Basra to Aqaba to Egypt to the port of Aqaba. The project will be finalized with a consortium of investors. Iran and Oman met with Shell, Total and KOGAS to discuss the project. Based on a 2013 Nov 13 Iran-Iran to Oman Pipeline deal, Iran will export 1.5 Bcf/d of gas to Oman through a Persian Gulf seabed pipeline. Central Asia Georgia-East West Main Gas GOGC is developing a 500mm 60km branch of E–W Main Gas Pipeline. An alternative Nov 24 Pipeline route passing through Abasha, Lanchkhuti, Ozurgeti and Kobuleti was selected. Gazprom plans to fast-track the project so it is completed by late 2019. That is Nov 24 Russia-Nord Stream 2 around the same time Russia’s gas transit contract with Ukraine expires. Azerbaijan-South Caucasus Azerbaijan’s Energy Ministry and EU discussed Central Asian countries joining the Nov 22 Pipeline Southern Gas Corridor. Expansion work is 50% complete. Rosneft has started trial oil shipments via a 14-km connector from the Yurubche- Nov 18 Russia-Kuyumba to Taishet no-Tokhomskoye field. TO BEGIN YOUR TRIAL Asia Pacific Email [email protected] to sign up for daily or weekly abstract alerts on your region, country or sector. China has begun laying 42-in. gas pipelines for supplying LNG to industrial Nov 23 Pakistan-Gwadar to Nawabshah estates to be developed along the China-Pakistan Economic Corridor. Bangladesh-Bakhrabad to The project to boost gas transmission from Titas field includes building 181km of Nov 21 Chittagong pipeline from Chittagong to Bakhrabad SE of Dhaka.

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ARK-LA-TEX GULF COAST PERMIAN BASIN CHEROKEE CO., TX PROJECT FAYETTE CO., TX RE-ENTRY PERMIAN BASIN ASSET SALE 7-Active Wells. 77-Vertical Wellbores. 3-Wellbores. 4,400-Acres. ~120-Producing Wells. ~25,000-Net Acres. REKLAW GAS FIELD GIDDINGS FIELD DV LOVING, PECOS & REEVES CO., TX PP RECOMPLETION POTENTIAL PP Low Risk Development Drilling Vermejo, Dimmit & Brooklaw Fields Immediate 5-Wel l Program. Primary Objs: Upper Austin Chalk 9,500’ Atoka, Fusselman, Morrow & Ellenburger Pettit, Woodbine, & Rodessa. RECOMPLETE Secondary Objs: Taylor Group Sands, AUSTIN Lower Wolfcamp & Wolfcamp B Prospects 100% OPERATED WI; 76%-78% NRI Buda & Georgetown Carbonates CHALK Dimmit & Brooklaw Fields Ready For >10 Current Production: ~325 MCFED Additional 10-20 HZ Development. -- Waterflood Development MMCFED After 5-Well Recomplete: 600-1,000 MCFD SEEKING JV PARTNER Avg 85% OPERATED WI; 68% NRI Est Proved Reserves: ~23 BCFE 5-Yr EUR: 135 MBO Per Well (Re-Entry) Net Production: 11.2 MMCFED (84% Gas) PP 8277RE NPV10: $3,500,000 Per Well CONTACT AGENT FOR UPDATE High Quality Services, Facilities & PP 2401DV STRATEGIC PIPELINE RIGHT-OF-WAY Infrastructure In Area. 65-Mile Corridor. +/- 20,750 RODS. CONTACT AGENT FOR INFO BUYERS! NO GAINES CO., TX MIDSTREAM ASSET COMMISSIONS EAST TEXAS G DV 4746RE Gathering System. Pipelines & Plants. SHELBY, RUSK, NACOGDOCHES --- CONVERSION POTENTIAL G --- & ANGELINA COUNTIES EXAS & LOUISIANA SALE PACKAGE Currently Gathering Yates Production. Exposure to Cotton Valley Development 24-Producing Wells. ~4,231-Net Acres. Assets Can Be Used for Other Horizons, Contiguous Recorded, - PROLIFIC NORTH MILTON FIELD High Pressure Gas Transmission, MIDSTREAM -- Valid Rights-of-Way STACKED PAY OPPORTUNITY PP Crude Gathering, CO2 Transmission, NGL, ~95% of ROW Contains 8 Steel -- R-O-W Wilcox Sands. 9,800-15,000 Ft. Or Water Gathering/Disposal. Pipeline, Could be Used as Conduit for Numerous Recompletion Candidates SEEKING CASH PURCHASE DEALS -- New 6-in. Pipeline Installation. -- in Wilcox L-2, L-4, L-5, L-7 & L-8 Sands Can Handle Up To 15 MMCFD Capacity. FOR SALE ROW’S Allow for New Pipeline -- Upside in Opossum & Pinehurst Fields CONTACT AGENT FOR MORE INFO -- Construction of Any Diameter Size 100% OPERATED WI; 81.2% NRI 3.3 G 1879PL Ready For New Pipeline Construction May 2016 Net Production: 3.3 MMCFED MMCFED G 1964PL Significant Reserve Potential in Untested MIDCONTINENT -- Fault Blocks and Deeper Horizons GULF COAST Total Proved Reserves: 20,625 MMCFE KIOWA CO., KS PROPERTY Net Proved PV10 Value: $18,122,000 2-Wells. 320-Total Acres. CLAY CO., MS RE-ENTRY Pinehurst Field Includes Production Facility MISSISSIPPIAN GAS TREND 1-ReEntry Well. Offers for Individual Fields Considered Drill Depth 4,600 Feet. PP MULTIPAY FIELD DV CA Required to Access Dataroom 1-Producing Well. 1-Shut In Well. GUFL COAST - MISSISSIPPI CONTACT AGENT FOR UPDATE 100% OPERATED WI; 87.5% NRI ~100 Target: 3 Potential Reservoirs RE-ENTRY PP 1891DV Gross Production: 50-100 MCFD MCFD 3 Miles From Mulcon Field WELL CONTACT SELLER FOR MORE INFO Gas Pipeline Within A Mile Of Well PERMIAN BASIN PP 3560 CONTACT SELLER FOR MORE INFO DV 4584RE CALL PLS FOR WEST TEXAS CO2 SALE PACKAGE MISS LIME NONOP PACKAGE INFO 57,000+ Gross Acres. CO2 Pipeline. 1,600-Total Wells. >1,500-Active. VAL VERDE CO., TX PROSPECT YATES, GLSAU, KATZ & TALL COTTON PP OKLAHOMA & KANSAS 3-Total Wells. 250-Acres. Residual Oil From San Andres 63,350 Net Acres (90% HBP) PP SOUTHWEST TEXAS Varying Operated WI & NRI Available Mainly Producing From Mississippian Enhanced Oil Recovery Prospect DV Current Net Production: ~14,000 BOED ~14,000 Shallow, Carbonate Oil Play Extreme Shallow Oil At 450 Ft. Total 3P Reserves: 240.9 MBO BOED Core Area West of Nemaha Ridge 1-New Discovery Well. - SOUTH Original Oil In Place: 6,000+ MMBO Attractive SWD Assets -- 2 Re-Entered Wells. TEXAS CONTACT AGENT FOR MORE INFO Varying NonOperated WI & NRI ~7,800 170-Acre Option. PP 2506G Net Production: ~7,800 BOED BOED 100% OPERATED WI; 75% NRI Forecast 2017: Net Cash Flow $28,000,000 11-14 MMBO In Place Per 640 Acres TOM GREEN & IRION CO., TX ASSETS Net Total Proved Reserves: ~36,717 MBOE CONTACT SELLER FOR MORE INFO 114-Producers. 22,000+ Net Acres. 95% of PV10 Operated by SandRidge DV 2661 PERMIAN BASIN EASTERN SHELF PP Net PDP PV10: ~$132,900,000 STACKED PAY UPSIDE 2016 3rd Party Engineering. Canyon, Cisco, San Andres & Ellenberger CLOSE PENDING Clear Fork, Wolfcamp, Strawn & Cline PP 5976PKG Increase deal >500 Vertical PUD Locations. ~860 Low Risk Development Program BOED Find more listings at www.plsx.com/listings flow & business OPERATED WI FOR SALE opportunities. Projected Dec 2016 Net Prod: 810 BOED NO COMMISSION. Average Net Cash Flow LTM: ~$500,000/Mn Subscribe to PLS! For available options, Projected Net Cash Flow: $650,000/Mn LIST TODAY! email [email protected] CONTACT AGENT FOR UPDATE To get started, email [email protected] PP 2068DV Find more listings at www.plsx.com/listings No commission! List today, call 713-650-1212 Volume 09, No. 16 15 Infrastructure Capital Howard secures $353MM for Nueva Era pipeline ■■ Enable Midstream Partners Howard Midstream Energy Partners secured $353.3 million in financing for its priced an underwritten public offering Nueva Era pipeline, which is under construction in South Texas. MUFG, Santander, of 10 million common units representing Societe Generale, Sumitomo Mitsui Banking Corporation and CaixaBank provided limited partner interests at $14 the funding. Howard and Grupo CLISA, a Mexican energy and services firm, per unit. Enable and selling formed a 50:50 JV to build the project connecting Howard’s Webb County hub unitholder Enogex Holdings to Monterrey, Nuevo León, Mexico. also have granted a 30-day overallotment The 200-mile, 36/30-in. pipeline will carry 600 MMcf/d to northern option of up to an additional 1.5 million Mexico, but the line is expandable to 900 MMcf/d. State-run Comision Federal de common units. Closing was expected Electricidad has committed to a 25-year term for 504 MMcf/d. The utility will use the Nov. 20. If the option is exercised in full, gas to fuel combined-cycle power plants in Escobedo and Huinalá. Service is expected net proceeds will be $137 million, which to begin in 2H17. Enable will use for general purposes. Enbridge Series 17 preference shares raise $750MM Citigroup and Wells Fargo Securities Enbridge closed an offering of 30 million shares of its Series 17 fixed-to-floating are joint bookrunners, and Deutsche rate cumulative redeemable preference shares on Nov. 23. The company priced the Bank Securities and JP Morgan are shares at $25 each to raise gross proceeds of $750 million. The Canada-only sale was joint lead managers. upsized 50% on strong demand. Enbridge will use proceeds to partially fund capital ■■ Plains All American Pipeline projects, reduce debt and for completed its underwritten public general corporate purposes. 5.15% pa rate good until 2022, based offering of $750 million aggregate on 414bp over 5-yr Canada bond yield. Initial yield on the Series 17 principal amount of 4.5% preference shares is 5.15% p.a. Dividends are paid quarterly at an annual rate of $1.2875 senior unsecured notes a share through March 1, 2022, then every five years at a rate equal to the sum of the then due Dec. 15, 2026, at an five-year Canadian government bond yield plus 4.14%, offering price of 99.716% with a yield January 15, 2015 • Volume 06, No. 01 with such rate never dropping below 5.15% p.a. On CanadianCapital to maturity of 4.535%. Net proceeds Serving the marketplace with news, analysis and business opportunities that 2022 date, the shares begin to be callable and on Canadian Natural Resources cuts capex by $2.4 billion Eagle Energy Trust becomes Oil sands player Canadian Natural Resources is the latest producer to revisit its a Canadian asset holder capital spending plan for 2015, cutting it back by $2.4 billion to $6.2 billion. That’s Eagle Energy Trust unitholders of $741.3 million will be used to repay down 30% from the $8.6 billion budget it laid out in November 2014 and about half have approved a special resolution to the $12 billion it expected to spend in 2014. The bulk of the reductions amend the investment restrictions in March 1 of every fifth year thereafter and convertible will come via reduced drilling and related facility capital for its North Eagle's trust indenture, enabling America and International conventional CanadianCapitalWill defer $470 million in spending it to invest in energy assets operations. The company will also defer at Kirby North Phase 1 project. in Canada. Eagle had been outstanding borrowings under its senior $470 million in spending at its Kirby previously been limited to investing North Phase 1 in situ oil sands project, cutting spending by 82% to $105 million from on non-Canadian assets—the company its previous forecast of $575 million. The reduced budget wasn’t a complete surprise; currently has production of 1,900 boepd into Series 18 cumulative redeemable preference when it released the original budget the company warned that it was prepared to cut from properties in Texas and Oklahoma. $2.0 billion from that if conditions warranted. CNRL said the reduced spending would The changes won’t have any impact allow it to continue its dividend unchanged. unsecured revolving credit facility and Read PLS’ CanadianCapitalTo be taxed at rate other E&Pfor firms CFO Corey Bieber told the Globe and Mail he did not know when spending at pay, not at prior 34% on distributions. shares following the same time frames. CIBC, RBC, Kirby North might be restored. Continues On Pg 6 Crescent Point banking on service cost & efficiency savings on its US operations or the taxes on Half of oil hedged at US$90/bbl for 2015 distributions from those operations; the Enbridge’s Q3 results.company’s Canadian investments will be commercial paper program and for Although Crescent Point Energy is setting its capital budget for 2015 about 28% lower than 2014, the company expects the slimmed down budget to deliver 9% YOY structured so that its Canadian operations production growth to 152,500 boepd. The company set its budget for the year at $1.45 will be taxed in the same manner as other TD and Scotiabank underwrote the offering. Canadian energy companies. million, down 28% from the $2.0 billion forecast for 2014. Viewfield Bakken & Shaunavon plays Eagle wasted no time taking advantage to get nearly half of spending. general partnership purposes. The budget assumes an of the change, signing a deal with Spyglass initial 10% reduction in service costs. Crescent Point expects to see even Resources Corp. to buy a 50% non-op greater cost reductions if low prices persist. The company is looking at ways to improve interest in producing properties under its operational efficiency and is working on a number of drilling and completion waterflood in the Dixonville Montney C oil technologies that could cut costs even further. pool in north central Alberta, paying $100 Downstream “When prices fell dramatically in 2008 to 2009, we were able to realize a 30% million. The acquisition adds 1,250 boepd ■■ Tallgrass Energy GP priced 9.0 of low-decline production. Cont’s On Pg 10 reduction in our Bakken drilling and completions costs,” said CEO Scott Saxberg. “We'll be working hard with our service providers and fully expect to see rates come down even more than they already have.” Continues On Pg 8 FEATURED DEALS Producers banking on service company savings ALBERTA PROPERTIES SALE million Class A shares representing 5-Non-Core Properties As producers scale back their capital spending plans in the wake of falling oil CENTRAL & WESTERN ALBERTA PP prices, many are looking to the service sector to help them prop up their bottom lines. Abee, Highvale, Kakut, Majeau & Morinville ExxonMobil to expand polyethylene capacityCrescent Point Energy is already factoring a 10%at reduction in serviceBeaumont costs into its Up to 100% OPERATED WI FOR SALE 5.7 Net Production: ~400 BOED (82% Gas) MMCFED 2015 budget and will be pushing for more if prices remain low. Others are expected Avg Net Operating Income: ~$189,166/Mo to approach their capital limited partner interests sold by funds Half of producers expect drilling CALL AGENT FOR MORE INFO budgets with the same mindset. PP 14403DV & completion costs to fall 10% in 2015. According to a survey con- ExxonMobil plans to increase production capacity atducted byits Barclays, capitalBeaumont spending in the US and Canada is expected to fall polyethyleneby as CANADIAN JOINT VENTURE much as 30% from last year to $138.1 billion. In turn, about half of producers expect 1-Prospect. 43,000-Acres. 67-Sq Miles. MAGDALEN BASIN. GULF OF ST LAWRENCE DV affiliated with Kelso & Company and drilling and completion costs to fall 10% in 2015, including in areas such as pressure 80-km West of SW Tip of Newfoundland. pumping, drilling fluids and directional drilling. And while producers may see the Water Depth 470 m. Drill Depth 2,500 m. service savings as a slight respite from the decline in oil prices, the news is doubly >1,000 km 2D Defines FourWay Closure. MAGDALEN disheartening for those service providers. Not only are they seeing declines in their 100% OPERATED WI; JOINT VENTURE plant by 65%. Construction is already underway on a new unit capable ofTotal Resourceproducing Potential: 5.0 BBO or -- own businesses, they’re being asked to take less for the services they do provide. - 7.0 TCF Carboniferous Clastic Targets. The Energy & Minerals Group at $22 Service companies are already feeling the impact. Continues On Pg 13 CALL AGENT FOR UPDATE 650,000 tonnes per year. Current polyethylene production capacity at the DV 15009Beaumont each. Underwriters have a 30-day option complex is 1 million tonnes per year. The new unit will start up in 2019. to buy another 1.35 million Class A shares. “The availability of vast new supplies of US shale gas and TEGP will not receive proceeds from the associated liquids for feedstock and energy is a significant sale, which closed Nov. 22. Goldman advantage that enables expansion to meet strong global demand growth in polyethylene,” Sachs is the sole bookrunner. said Cindy Shulman, VP of ExxonMobil’s plastics and resins business. ■■ Sanchez Production Partners The new polyethylene project will build on the supply advantages that the priced its previously announced public company’s Mont Belvieu plastics expansion has created. That project is adding offering of 6,550,802 common units at $11 two similar polyethylene units. Altogether, the projects will boost Exxon’s US each. SPP also privately placed 2,272,727 polyethylene production by 40%, or 2 mtpa, and make Texas the company’s largest units to parent Sanchez Energy polyethylene supply point. at $11 each. Underwriters have a “We’re part of the growth in an area that is primed for new business,” said Jason Duncan, 30-day option to purchase another manager of the Beaumont plant. Other recent Beaumont expansions have included adding 982,620 common units. Net proceeds will 60,000 bbl/d in refining capacity in the last year for a total of 405,000 bbl/d. This includes be used to pay for the 50% equity interest a new unit to increase ultra-low-sulfur fuel production by 40,000 bbl/d earlier this summer in the Carnero processing plant and other and 20,000 bbl/d of additional light-crude-refining capacity in summer 2015. assets from Sanchez. Citigroup, RBC, The Gulf Coast chemical projects have been mounting. In addition to Exxon’s BofA Merrill Lynch and Johnson Rice polyethylene projects, Chevron Phillips Chemical Company is adding two units of & Company are joint bookrunners. its own that will produce 500,000 tonnes of resin each year.

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Information. Transactions. Advisory. Volume 09, No. 16 17 Infrastructure International What the Analysts are Saying About Midstream ■■ A new 25-km pipeline connecting Master Limited Partnerships (ETE, ETP, SXL) Bulgaria and Romania has started A Better Bitter Pill for ETP. Reiterate ETP, ETE Outperform. With a sell-off operations in an effort by both countries yesterday of 7% each for ETP and SXL in what is effectively a value transfer to ETP to link their gas networks to neighboring debtholders, we see ETE, ETP and SXL collectively as more attractive. countries after Gazprom’s Tactically we bide our time on SXL believing that with parity trading at South Stream pipeline the 1:1.5 exchange ratio, ETP offers potential to capture any sweetened bid. was canceled. The $26.2 The elimination of the ETP balance sheet overhang and renewed takeout potential million Bulgaria-Romania bidirectional offsets 20% DCF dilution at ETE, justifying yesterday’s bounce. —Baird line has maximum capacity of 1.5 Bcm New XOM project slightly weakens global PE story in 2019-20 (XLB $48.26) per year from Bulgaria to Romania and 500 MMcm per year going the other XOM announced a new 1.4B lb PE plant at Beaumont for 2019, which adds to way. Interconnections such as these its existing project queue of a 3.3B lb ethane cracker in Mont Belvieu and a 3.3B lb allow Bulgaria to reduce dependence PE plant in Baytown near the end of 2017. In our global PE supply/demand model, on Russia, from which it buys more we have operating rates declining to 83% in 2017-18 (vs 87% in 2015) as new global than 90% of gas. It is also pursuing supply significantly exceeds demand. For example, in what’s pipelines with Greece, Serbia and currently a 235B lb market, we expect new PE capacity of 28B Turkey, according to Reuters. lbs in 2017-18 vs new demand of only 16B lbs. However, the picture brightens up ■■ Gazprom and Engineers India considerably in 2019-20 with new demand outpacing new capacity, which would have signed an MOU to possibly pursue bring op rates back into the 85-87% range. XOM’s new PE project would lower gas routes between Russia and India. these 2019-20 operating rates by 0.5%, which we view as a mild negative for PE Gazprom chairman Alexey spreads. However, we see US PE chain margin economics remaining quite attractive Miller cited growing demand on appealing feedstock costs, as we expect excess US ethane supply to drive prices for gas in India, which he says below futures in this timeframe. —Tudor, Pickering, Holt & Co. will grow threefold by 2022 and Tesoro (TSO; $85.74-Nov. 17; Buy) sixfold by 2030. The country used 56.5 TSO to acquire WNR. The deal will transform TSO into the premier refining Bcm of gas in 2015. No details were company in the Western US with over 1.1mmbd of total system capacity, with revealed other than multiple pipelines added marketing scale and exposure to two midstream MLPs with leverage to both may be built, but the MOU calls for a the Bakken and Permian Basins. WNR owns some of the best refining working group to be established. assets in the Southwest and Upper Midwest which will add significant ■■ Ophir and OneLNG have value to TSO’s system by establishing two highly strategic commercial signed an agreement to establish a corridors in the Southern California/Arizona and North Dakota/Minnesota regions. joint operating company to In addition, WNR’s retail assets will complement TSO’s existing marketing develop the Fortuna FLNG business by providing a leading regional fuel and convenience store brand that project offshore Equatorial could contribute scale for a future monetization of the business. It remains unclear Guinea. The project will employ the if TSO will at some point combine TLLP and WNRL, but the transaction gives TSO FLNG technology of Golar, which owns strategic exposure to the burgeoning buildout of Delaware Basin logistics. TSO OneLNG in a JV with Schlumberger. expects to generate annual synergies of $350-425mm to be realized within the first One LNG will own 66.2% and Ophir two years post-closing. —Tudor, Pickering, Holt & Co. will own 33.8% in the company. An Targa Resources (TRGP; $49.78-Nov. 17; Neutral; PT: $51) FID for the project is expected in 1H17. First gas would be in 1H20. Initially, Increasing Permian exposure mostly reflected in valuation. We are the FLNG is expected to produce 2.2- increasing our price target to $51 while maintaining a Neutral stance on TRGP. We 2.5 mtpa for 15-20 years, developing view the company's growing Permian exposure positively and additional accretive 2.6 Tcf of resource. projects in STACK/SCOOP are likely; however, we believe that the ■■ Petrobras has sold downstream current valuation mostly reflects growth in cash flows from these. Upside subsidiary Nansei Sekiyu to Japanese to our view could come from a potential consolidation transaction as company Taiyo Oil for $129.3 million TRGP possesses one of the most attractive asset footprints in the Permian and with closing expected in December. The US Gulf Coast presence. With aboveaverage sensitivity to commodity prices, move is a small part of the Brazilian we expect TRGP stock to have somewhat higher volatility than its midstream company’s goal to divest $34.6 billion peers. Additionally management plans to finance a majority of the capital in assets by 2018. Nansei Sekiyu spend through equity. —Seaport Global Securities operates a refinery at Okinawa, Japan, that can process 100,000 bo/d. Information. Transactions. Advisory. Call 713-650-1212 For general inquiries, email [email protected] Access PLS’ MidstreamNews archive for previous midstream news MidstreamNews 18 December 5, 2016

MIDCONTINENT MIDCONTINENT EASTERN DENTON CO., TX OVERRIDE GARVIN CO., OK SALE PACAKGE MARCELLUS PROSPECT 3-Active Wells. 3-PUD. ~688-Acres. 121-Wells. ~4,146-Total Net Acres. 15,000-Net Acres. BARNETT SHALE EOLA-ROBBERSON FIELD PP NEW MARCELLUS FAIRWAY DV Acreage Position Is Contiguous. RR Production & Pipeline. 2D Seismic Confirms Unfaulted Fairway New Drilling Upside Identified. 100% Gas Plant Ownership. Proprietary Core Labs Data. LOW RISK. SWEET SPOT OF PLAY. ORRI Expanding Gathering System Prospect Rock Qualities Analogous -- 12.5% ORRI For Sale. -- into NonOperated Acreage. >9 -- To Prolific Marcellus Producing Area. Net Cash Flow: ~$17,000/Mn 29-Drilling Locations & 12-Recompletions MMCFED 100% OPERATED WI; 80% NRI MARCELLUS Est Net PV10 Value (ORRI): ~$3,600,000 Varying OPERATED & NonOperated WI READY TO DRILL FAIRWAY RR 5620PP Net: 423 BOPD, 5.0 MMCFD & 828 NGLs Potential Reserves: 1 TCF Net Operating Income: $712,548/Month Potential EUR: 15 BCF Per Well PDP Reserves: 46 BCFE DV 4627 MCINTOSH CO., OK PRODUCTION BUYERS! NO 320-Total Acres; 1-Producing Well CONTACT AGENT FOR INFO COMMISSIONS ARKOMA BASIN - TEXANNA FIELD PP 3267G PENNSYLVANIA PROPERTY SALE Optional: 2nd Well On 640-Acres. PP 166-Producing Wells. 43,000-Total Acres. Booch Sand. 55 Ft. Thick EASTERN MULTIPLE COUNTIES PP BEHIND-PIPE POTENTIAL Shallow Operations. Selling Half Or All Of A 640 Acre Unit ARKOMA PENNSYLVANIA & OHIO PROPERTY 35,000-Acres Held By Production. EASTERN Existing Operator Can Remain (If Req’d) 1,120-Total Wells. ~211,000-Net Acres. 8,000-Minerals Acres. 100% WI Operations Available WORKING INTEREST AVAILABLE APPALACHIAN GAS BASIN PP DEALS Gross Production: 22 MCFD 1,084-Operated Wells. 36-NonOperated. Supporting Infrastructure 68-Mile Pipeline. FOR Long Lived Gas Production Varying OPERATED WI & ORRI CONTACT SELLER FOR MORE INFO SALE CONTACT SELLER FOR MORE INFO Net Projected Prod: ~6 BOPD - APPALACHIAN PP 2090 PP 4514DV -- & ~6 MMCFD 2017 Projected Cash Flow: $175,000/Mn WASHINGTON CO., PA MINERALS OKLAHOMA PROPERTY SALE 312-Miles Of Field Gathering Lines. +/-105-Net Royalty Acres. ~143-Producing Wells. ~123-NonProducing. CONTACT AGENT - POST BID STATUS CALIFORNIA & CENTERVILLE BOR. M ARKOMA BASIN PP 5981RR ROYALTY ACREAGE FOR SALE Proven Behind Pipe Zones: Atoka, Booch, PP Major Offset Producers: Rice Drilling & ROYALTY Brazil, Cromwell, Harthshorn, Panola, PENNSYLVANIA SALE PACKAGE Chevron Appalachia ACRES Spiro & Wapanucka 23-Total Wells. ~33,694-Net Acres. Pipeline Infrastructure In Area. OPERATED WI AVAILABLE ~3,660 FAYETTE & WESTMORELAND COS. CONTACT SELLER FOR MORE INFO 6-Mn Avg Gross Prod: 3,661 MCFD MCFD Wells Completed In Marcellus. PP M 3043RR 9-Mn Avg Net Income: $62,182/Month 22-Producing Wells. 1-Shut In Well. CONTACT AGENT FOR UPDATE 0.144144% Overriding Royalty In 2 Wells ROCKIES PP 5627DV 100% OPERATED WI; ~82-87.5% NRI >12,000 6-Mn Avg Gross Prod: 12,181 MCFD MCFD COLORADO PROPERTY FOR SALE NORTH TEXAS PROPERTY FOR SALE 12-Mn Avg Net Income: $181,675/Month 5-Shut-In Wells. ~150-Wells. ~80,000-Net Acres. BIDS UNDER REVIEW LA PLATA & SAN MIGUEL COUNTIES JACK, PALO PINTO & CLAY COUNTIES PP ORIGINAL OFFERS DUE JULY 28, 2016 Production Mainly From Hermosa-- PP FORT WORTH BASIN CONTACT AGENT - POST BID STATUS --Additional Zones Also Producing. Targets: Marble Falls, Barnett, Strawn, PP 3020RR Up to 11 Infill Locations. Conglomerate & Caddo Formations 2,680 NonProducing Acres Included. 450 850+ Vert & HZ Marble Falls Locations ~3,000 SOUTHERN OHIO PROJECT Various OPERATED WI & NRI MCFD ~100% OPERATED WI; ~75% NRI BOED >13,400-Gross Acres. (Contiguous) Transferring All Depth Rights. Net Production: ~3,000 BOED JACKSON, GALLIA & VINTON CO. L CONTACT SELLER FOR MORE INFO Total 3P Reserves: 215 MMBOE Utica Shale / Point Pleasant Potential PP 2519DV 400+ Miles Of Gas/Water Flow Lines & Shallower Lower Huron Shale Opportunity CALL Pipeline In Place Includes 4 Shallower Horizontal Wells WESTERN ROCKIES PROPERTIES CONTACT AGENT FOR UPDATE PLS FOR INFO 100% OPERATED WI; 87.5% NRI UTICA 31-Active Wells. 50-Shut In. PP 5626DV SEEKING OUTRIGHT SELL OR JV SHALE RIO BLANCO & GARFIELD CO., CO Gathering & Operator Owned Pipeline. UINTAH CO., UT PP ATOKA CO., OK PROSPECT Pipeline Included. Tapped Into One & -- ~49,600-Net Acres. (100% HBP) 3-Active Wells. ~15,634-Net Acres. Access to Two Major Interstate Pipelines. No Depths Limitations On Leases. MIDCONTINENT PP 5-Year Initial Lease Term w/ Renewals Producing From Shallow Mesa Verde. ~330 Big Fork & Polk Creek Production L 9828DV Mancos B & Nelsen Coal Upside. MCFD Upper Polk Creek, Lower Womble, Big OPERATED & NonOperated WI. Fork, Stanley & Novaculite Potential MIDCON Gross Production: 447 MCFD No Depth Limitations & Drilling Obligations NO COMMISSION. Net Production: 337 MCFD OPERATED WI FOR SALE Proved Net Reserves: ~19.5 BCFE AGENT WANTS OFFERS DEC 7, 2016 LIST TODAY! Proved Net PV10: ~$5,350,000 PP 1903DV To get started, email [email protected] PP 5568DV

Find more listings at www.plsx.com/listings No commission! List today, call 713-650-1212 Volume 09, No. 16 19 Infrastructure People & Companies ■■ Tallgrass Energy Partners has ROCKIES GULF OF MEXICO named Matthew Sheehy SVP and CCO. SOUTHEAST UTAH PROSPECT GULF OF MEXICO PROSPECT Sheehy has been involved in the company’s 5,400 Gross & 4,800 Net Acres ~965-Gross Acres Held By Production. transformation of REX pipeline MULTIPLE GAS ZONES DV LOUISIANA SHALLOW COSTAL WATERS DV into a bi-directional header system. Honaker Trail, U & L Ismay, Desert Creek Prolific Miocene Sands. Additional Upside in Hovenweep Shale. 2 Drilling Prospects Initially Proposed. Chemical engineer Crystal Heter Thickness Ranges 40-60 Ft. MULTIZONE Multiple Development Wells. OFFSHORE will move into VP and general manager OPERATED WI AVAILABLE 3D Seismic, Engineering & Geology Data roles for REX as part of this transition. Running Room for Possible 10,000+ Acres Up To 42.5% NonOperated WI; ~32% NRI ■■ Tesoro Corp. has elected William Direct Access to Pipeline Infrastructure Net Operating Income: $7,700 Per Month DV 5529 Est Net Reserves: 5.88 MMBO & 31.4 BCF H. Schumann III to its board of directors, CONTACT AGENT FOR MORE INFO effective Nov. 11. Schumann is retired UTAH MIDSTREAM & GAS PROPERTY DV 3984 from FMC Technologies, where he was ~40,500-Net Acres. Gathering System. EVP from 2007-2012. He spent 31 years EMERY & CARBON COUNTIES PP MULTISTATE & CROSS REGION with that company. 3-CO2 Treating Facilities. ■■ Western Refining executive Majority Of Acreage Is Held By Production ARKOMA BASIN SALE PACKAGE Multiple Economic Infill Drilling Locations ~30 163-Total Wells. 8,504-Net Acres. chairman Paul Foster and CEO Jeff Varying OPERATED WI & NRI MMCFD OKLAHOMA & ARKANSAS PP Stevens will join Tesoro’s board of Projected Net Production: 28 MMCFD CBM Units. Gathering System. directors upon the closing 2017 Projected Cash Flow: $1,333,333/Mn Varying OPERATED, NonOp & ORRI Compression: ~20,000 HP Gross Production: 14.3 MMCFD ARKOMA of the latter company’s BUYERS! NO CONTACT AGENT FOR UPDATE COMMISSIONS ~95% Of PDP Value Operated By EnerVest acquisition. Tesoro will PP 5890G Net Operating Cash Flow: $66,182/Mn remain headquartered in San Antonio, CONTACT AGENT - POST BID STATUS Texas, and CEO Greg Goff will WEST COAST PP 5640G continue in his role as will EVP and CFO Steven Sterin. COCONINO CO., AZ PROSPECT LOUISIANA OPERATIONS FOR SALE ~200,000-Total Acres. 6,120-Gross Acres. 4,932-Net Acres. CHUAR BASIN DV SHALLOW WILCOX & COTTON VALLEY ABOUT PLS Targeted Vertical Depth: 6,000+ Feet LARGE INVENTORY OF LOCATIONS Limited 2D Seismic Data Available Considerable Running Room PP MidstreamNews is published every three 75% WORKING INTEREST; 78% NRI CHUAR Avg 97.6% OPERATED WI; 86.4% NRI weeks by PLS Inc. Project Reserves: 300-600 MMBO BASIN Avg Net Production: 1.3 MMCFED ~1 PLS Midstream News covers the midstream, 10-Year Leases Acquired 2007-2011 Proj Oct 2016 Net Cash Flow: $109,000/Mn MMCFED downstream and LNG sectors with news DHC: $1,200,000; Compl: $800,000 Total Proved Reserves: 5.9 BCFE DV 4707L Total Proved PV10: $9,936,000 and analysis. Topics include gathering, CALL ORIGINAL OFFERS DUE NOV 2, 2016 PLS FOR marketing, pipelines, mergers, acquisitions CONTACT AGENT FOR UPDATE INFO and capital financing. WEST COAST PROPERTY PKG 11-Wells. PP 2852DV To obtain additional PLS product details, GAS PROPERTY drill www.plsx.com/publications. Producing Gas From Shallow Intervals. PP WANTED Significant Upside Potential. PLS Inc. OPERATED WI FOR SALE >1.5 One Riverway, Ste 2500 WANTED: TEXAS MIDSTREAM ASSETS Current Net Production: ~1.7 MMCFD MMCFD Terminals, Storage Facilities, Pipelines. Houston, Texas 77056 Net Cash Flow:~$150,000/Mn (3-Mn Avg) CONSIDERS ALL RRC DISTRICTS W 713-650-1212 (Main) (Cash Flow Is Both Wells & Gathering) Prefers Texas. Considers All Gulf Coast. 713-658-1922 (Facsimile) PP 5608DV International Group Seeking Assets. WANTED Expanding Logistics/Trading Presence. To obtain additional listing info, contact us GULF OF MEXICO Trades Oil/Gas & Petroleum Products. at 713-650-1212 or [email protected] W 5770G with the listing code. Only clients are able to GULF OF MEXICO OPPORTUNITIES receive additional information. To become a 3 Blocks. Multiple Drilling Locations. SEEKING MIDSTREAM ASSETS client call 713-650-1212. MUSTANG ISLAND STATE WATERS DV Gathering Systems & Pipelines © Copyright 2016 by PLS, Inc. Multi-Reservoir Drilling Locations. TEXAS W Drill Depths: 12,000-14,000 Ft. NONOP Eagle Ford & Permian Basin Preferred. Any means of unauthorized reproduction is Newly Acquired Leases Also Looking At Processing Plants. prohibited by federal law and imposes fines NonOperated WI Available For Sale JVs With Operators. MIDSTREAM up to $100,000 for violations. Experienced State Waters Operator BUYER CAN CLOSE QUICKLY Potential Reserves: 4.0MMBO & 200BCF W 5719G Call 713-650-1212 or go online Access to Facilities & Infrastructures www.plsx.com/listings CONTACT SELLER FOR MORE INFO DV 4908 Subscribe at plsx.com/subscribe

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