West Virginia Oil and Natural Gas Association 2017 Spring Meeting - PowerPoint PPT Presentation

West Virginia Oil and Natural Gas Association 2017 Spring Meeting Blue Racer Midstream May 16, 2017

Blue Racer Midstream, LLC. Nature of Information Presented: The following information has been prepared by Blue Racer Midstream, LLC to provide current and forward-looking information on our business and operations to members of our commercial banking syndicate. This information is derived from a variety of sources, many of which have not been independently verified by Blue Racer Midstream, LLC. This information also contains financial projections, which may vary materially from actual results in the future. Blue Racer Midstream, LLC believes such projections have been prepared based on reasonable assumptions, but makes no representation or warranty as to the accuracy or completeness of such projections, other forward looking information and information of a general economic or industry specific nature. This presentation does not constitute an offer or solicitation to sell or purchase any securities. This presentation has not been prepared with a view toward public disclosure under state or federal securities laws or otherwise and may not be reproduced, disseminated, quoted or referred to, in whole or in part, without the prior written consent of Blue Racer Midstream, LLC. Forward-Looking Statements: This presentation contains forward ‐ looking statements based on the beliefs of the company, as well as assumptions made by, and information currently available to our management team. When used in this presentation, words such as “anticipate,” “project,” “expect,” “plan,” “seek,” “goal,” “estimate,” “forecast,” “intend,” “could,” “should,” “will,” “believe,” “may,” “potential” and similar expressions and statements regarding our plans and objectives for future operations, are intended to identify forward ‐ looking statements. Although management believes that the expectations reflected in such forward ‐ looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. You should not put undue reliance on any forward ‐ looking statements, which speak only as of their dates. Forward ‐ looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expected, including insufficient cash from operations, adverse market conditions, governmental regulations, the possibility that tax or other costs or difficulties related thereto will be greater than expected, the impact of competition and other factors. All forward ‐ looking statements attributable to Caiman Energy II, LLC, Blue Racer Midstream, LLC or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained herein. Except as required by law, we do not intend to update or revise our forward ‐ looking statements, whether as a result of new information, future events or otherwise. 1

Blue Racer Midstream Expansive footprint throughout Utica and Marcellus Overview (1) Headquarters Dallas, TX Founded 2012 Employees 164 Total Assets ~$2.3B Senior Secured Credit Facility $1.0B Senior Unsecured Notes $850MM Senior Unsecured Notes Rating B3/B- Senior Unsecured Notes Price/Yield (2) $101.8 / 5.75% Strong and Supportive Sponsors 50% 50% Caiman Energy II, LLC. (3) Dominion Energy, Inc. Senior Secured Blue Racer Midstream, Blue Racer Credit Facility LLC. Finance Corp . Senior Unsecured Notes As of December 31, 2016, unless otherwise noted 1. As of April 12, 2017 2. Owned by Williams Partners, EnCap Flatrock Midstream, Oaktree Capital Management, L.P., management and certain non-institutional investors 3. 2

Blue Racer Midstream Timeline Access to Capital Markets and Supportive Sponsors Q2 2016 – Q4 2016 December 2012 August 2013 August 2013 November 2014 March 2017 Caiman & Dominion Natrium I Blue Racer closes $550MM Senior Reinvested Senior Secured form Blue Racer Processing & $800MM Senior Notes Offering ~$120MM of Credit facility Midstream, a $1.4 Fractionation Secured Credit distributions amended and July 2015 Billion Joint Complex Dropped Facility extended to March $300MM Senior Venture. Down to Blue Racer 2022 June 2014 Notes Follow-on Senior Secured Offering Credit Facility Upsized to $1.0B Ability to grow through a challenging environment 800 $120 700 $100 600 Processed Volumes [MMcf/d] $80 500 WTI [$/Bbl] 400 $60 300 $40 200 $20 100 - $0 Processed Volumes WTI 3

Safety and Operational Focus Safety Focused Culture Operational Results  Safety-first culture  Operational excellence – Consistent safety training – Maintain focus on operational efficiencies – Perform safety reviews and employee performance – Monitor KPIs monitoring – Monitor KPIs 2015: 99% 2016: 99% Run-time (1) TRIR 11.94 6.10 105% 5.00 4.50 100% 4.00 3.50 95% 3.00 2.50 90% 2.00 1.50 85% 1.00 0.50 80% 0.00 30-Day Run-time Adjusted OSHA TRIR (YTD) Target Goal = 1.46 12-Mo Rolling TRIR 1. Excludes planned outages 4

Pipeline System Overview Extensive pipeline network allows efficient and economically advantaged connectivity across rich and lean acreage  Upstream – System currently serves 20 customers – Pipelines serve lean gathering, rich gathering and condensate gathering  Midstream – Full value chain service – “ Super- system” - largest network of gathering pipeline spanning throughout the wet gas and lean Utica ► ~400 miles of pipeline from Dominion ► ~316 miles of pipeline constructed from formation through 2016  Downstream – Connectivity to multiple markets and end users maximizes producer netbacks ► Residue pipelines ► NGL pipelines ► Rail ► Barge ► Truck 5

Facilities Overview Natrium Berne  Located along the Ohio River in West Virginia  Located in Northwest Monroe County, Ohio – 450 MMcf/d of processing capacity – 420 MMcf/d of processing capacity ► Two cryogenic processing plants ► Two 210 MMcf/d cryogenic processing plants ► 123,000 Bbl/d fractionation plant (C2+) ► Site can accommodate one additional processing facility ► Site can accommodate up to four processing plants ► Condensate: 10,000 Bbl/d of onsite stabilization capacity ► Condensate: 2,500 Bbl/d of onsite stabilization ► Product takeaway facilities include pipeline, rail, truck and barge 6

Residue Markets Increased takeaway projects reduce basis differentials and increase producer netbacks  Natrium – Dominion Energy Transmission , Inc. (“DTI”) – Texas Eastern Transmission Company (“ TETCO ”) – Rockies Express Pipeline (“REX”)  Berne – TETCO  Future Pipelines to provide ~6.2 Bcf/d of new capacity by the end of 2017 – Q317: Rover (Natrium and Berne) – Q417: Leach Xpress / Mountaineer Xpress (Natrium) – Q417: NEXUS (Natrium and Berne) Includes Western System sold to DEO on December 1, 2016 1. Source: Northeast Takeaway Projects from BTU Analytics 1Q17 Northeast Gas Outlook; 7

NGL Markets Increased takeaway projects help flatten seasonal differentials and increase producer netbacks  Ethane – Connection to ATEX, Mariner East I and Mariner West via G-151 and WPZ/OVM  Propane – Connection to TEPPCO via G-150 – Connection to Mariner East II via G-150 (on ME IIs completion) – On-site rail/truck loading – On-site barge loading  Butanes – Connection to Mariner East II via G-150 (on ME IIs completion) – On-site rail loading  NGLs/Condensate – On-site rail loading – On-site barge loading – On-site truck loading 8

Business Outlook Improving Economics Healthy Half Cycle Well Returns (1) Half Cycle Well Returns 70% 60% 50% 40% [IRR] 30% 59% 50% 20% 37% 32% 28% 10% 15% 0% Condensate Western Central Eastern Core Utica Lean Condensate Western Central Eastern Core Utica Lean Commentary  At assumed pricing, producers’ margins are attractive Continue to see an increase in permit and rig activity within our footprint  Basis differentials continue to improve as access to demand centers increases Half cycle well analysis with assumed F&D, midstream, operating, and royalty expenses. Strip pricing as of 02/09/17 – WTI: 2017: $54.95, 2018: $55.82, 2019: $55.33, 2020: $55.27, 2021+: $55.49 // HHUB 2017: $3.32, 2018: $3.09, 2019: $2.89, 2020: $2.88, 2021+ $2.87. Future price 1. differentials applied Source: NYMEX – Dom. South as of 02/09/2017; BTU Analytics – Dom. South from BTU Analytics 4Q16 Northeast Gas Outlook 9

Financial Summary Increasing Processed Volumes Growing EBITDA 800 $300,000 214% CAGR 386% CAGR (1) 700 $250,000 600 $200,000 500 [MMcf/d] [$000] 400 $150,000 300 $100,000 200 $50,000 100 - $- 2013 2014 2015 2016 2013 2014 2015 2016 Scalable Capital Expenditures Focused on Leverage Reduction $800,000 6.00x ~$1.6B $700,000 5.00x spent to date 4.00x $600,000 20% Reduction 3.00x $500,000 [$000] 2.00x $400,000 1.00x $300,000 0.00x $200,000 (1.00)x $100,000 $- 2013 2014 2015 2016 Compliance Leverage Total Maximum Leverage Ratio Volumetric Commitments represent deficient volumes that are not processed 1. 10

U.S. Northeast Natural Gas Production Scenarios Northeast 45 40 Production (Bcf/d) 35 30 25 20 15 10 5 Advance Growth Cutback Contraction 0 11

Net Northeast Inflows (+) / Outflows (-) RBN Source: PointLogic Energy 12

Northeast Inflows/Outflows by Target Region RBN Source: PointLogic Energy 13