MLPA Investor Conference June 2016
Forward Looking Statements This presentation includes “forward looking statements” within the meaning of federal securities laws. All statements, other than statements of historical fact, included in this presentation are forward looking statements, including statements regarding the Partnership’s future results of operations or ability to generate income or cash flow, make acquisitions, or make distributions to unitholders. Words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “intend,” “could,” “believe,” “may” and similar expressions and statements are intended to identify forward-looking statements. Although management believes that the expectations on which such forward-looking statements are based are reasonable, neither the Partnership nor its general partner can give assurances that such expectations will prove to be correct. Forward looking statements rely on assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside of management’s ability to control or predict. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, the Partnership’s actual results may vary materially from those anticipated, estimated, projected or expected. Additional information concerning these and other factors that could impact the Partnership can be found in Part I, Item 1A, “Risk Factors” of the Partnership’s Annual Report on Form 10-K for the year ended March 31, 2016 and in the other reports it files from time to time with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this presentation, which reflect management’s opinions only as of the date hereof. Except as required by law, the Partnership undertakes no obligation to revise or publicly update any forward-looking statement. 2
NGL Energy Partners LP Overview 3
Business Overview NGL Energy Partners LP Refined Products/ Crude Logistics Water Solutions Liquids Retail Propane Renewables Blending and Wholesale Crude Oil Volumes and Water Volumes and Primary Drivers: Butane/Propane Heating Demand Motor Fuels Demand Storage Crude Oil Price Demand and Storage Benefits From: Higher and Lower Prices Higher Prices Lower Prices Lower Prices Lower Prices § NGL business model has evolved into a vertically integrated business mix that serves as a natural hedge, mitigating the impact of commodity price volatility across all segments § Size and quality of cash flows have transitioned NGL into a more traditional midstream platform § Diversified business segments with medium and long term contracts allow for steady fee-based cash flow generation in any price environment § Predominantly fee-based segments to make up a larger proportion of future total cash flow 4
Diversified Across Multiple Businesses and Producing Basins Bakken Shale Marcellus Shale Green River Basin Pinedale Anticline DJ Basin Jonah Field Niobrara Shale Wattenberg Field Mississippi Lime Granite Wash NGL Owned/Leased Assets NGL Utilized Assets Permian Basin NGL Assets NGL Rack Marketing Terminal Water Services TransMontaigne Terminal Retail Propane NGL Renewable Marketing Terminal Crude Barges and NuStar Energy Terminal Tug Boats Eagle Ford Common Carrier Propane Crude Oil Logistics Pipelines Basins NGL Crude Terminal Colonial Products Pipeline Assets and Marketing Santa Fe Products Pipeline Glass Mountain (50%) Presence Magellan Products Pipeline Grand Mesa Pipeline NuStar Products Pipeline 5
NGL Operational Assumptions Business Strategy § Transport crude oil from the well head to refiners Build a diversified § Refined Products from refiners to customers vertically integrated § Wastewater from the wellhead to treatment for disposal, recycle or discharge Energy Business § Natural Gas Liquids from processing plant to end users including retail propane customers § Projects that increase volumes, enhance our operations and generate attractive rates of return Achieve organic growth § Accretive organic growth opportunities that originate from assets we own and operate by investing in new assets § Focused on projects within crude oil logistics, NGL liquids and refined products that provide high quality fee based revenues § Build upon on our vertically integrated business Accretive growth § Scale our existing operating platforms through strategic § Enhance our geographic diversity acquisitions § Continue our successful track record of acquiring companies and assets at attractive returns Focus on long-term fee based contracts and back-to-back transactions that minimize commodity price exposure § Focus on businesses Increase cash flows that are supported by certain fee-based multi-year contracts that include acreage dedication and volume § that generates long- commitments term fee based cash flows Expand retail propane footprint where business has a high percentage of company owned tanks resulting in strong customer § retention rates § Target leverage levels that are consistent with investment grade companies Disciplined Capital § Maintain sufficient liquidity to manage existing and future capital requirements and take advantage of market opportunities Structure § Prudent distribution coverage to manage commodity cycles and fund growth opportunities 6
NGL Operational Assumptions Growth Projects and Recent Events Organic Growth § On schedule for in-service date of November 1 § Combination with Saddlehorn reduced capital requirements by approximately $200 million § NGL will own 150,000 barrels per day of capacity on undivided joint interest pipeline Grand Mesa Pipeline § Total expected capex of $800 million; Remaining capex to spend of approximately $110 million as of March 31, 2016 § Year 1 EBITDA projected to be $120 million increasing to $150 million in Year 2 § Take or Pay contracts with average term - 9 years § Gulf coast crude storage terminal facility in Houma, La § Strategic location next to major refiner Crude Terminal, LA § Total project cost $35 million with in-service date of 9/30/16 § Project multiple of approximately 4.0x § 800 acre facility capable of 8 salt dome caverns for propane and butane storage 4 caverns in operation with the 5 th cavern to be completed by mid-June providing total capacity of 5.4 MMBbls § Sawtooth NGL Caverns § Repeatable fee based business § Largest west coast liquids storage facility Strategic Transactions § April 2016 completed $200 million private placement of 10.75% Class A Convertible Preferred Units Preferred Equity / Oaktree § Created a strategic relationship to pursue future opportunities § Proceeds will be used to reduce debt and fund growth opportunities § Feb. 2016 closed the sale of our interest in TransMontaigne GP to ArcLight Capital Partners for $350 million § Retained the TMG marketing business (customer contracts, line space on Colonial and Plantation Pipelines), also entered into marketing agreement which extends NGL lease of TLP’s SE terminals TransMontaigne GP/LP Sale § April 2016 sold remaining 3.2 million common units of TLP for $112.4 million § Transactions result in no reductions to EBITDA for ongoing NGL refined products business 7
Segment Contribution Grand Mesa Update § NGL announced in November that it is combining Grand Mesa with Saddlehorn Pipeline Company, LLC ("Saddlehorn") for the construction of a 20-inch undivided joint interest pipeline from the DJ Basin to Cushing – Operating costs will be allocated to Saddlehorn (62.5%) and Grand Mesa (37.5%) based on their proportionate ownership interest and throughput once in-service – Pipeline has 340,000 bpd initial capacity with potential of 400,000 bpd of capacity, of which NGL owns 150,000 bpd capacity – NGL expects a reduction in capital expenditures of ~$200 million and a ~$2 million decrease in annual operating costs from the combination of pipeline projects – Crude oil shipments expected to begin by November 1, 2016 – The Partnership currently expects year one EBITDA to be approximately $120 million, year two EBITDA to be approximately $150 million and the average contract term on the pipeline to be approximately nine years. Grand Mesa Pipeline 8
Operating Segments 9
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