Investor Presentation Presentation Title · 2019. 11. 19. · Presentation Title Presentation...

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Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for America’s Energy Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for America’s Energy Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for America’s Energy 11/19/2019 Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for America’s Energy Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for America’s Energy Connections for America’s Energy Investor Presentation November 2019

Transcript of Investor Presentation Presentation Title · 2019. 11. 19. · Presentation Title Presentation...

Page 1: Investor Presentation Presentation Title · 2019. 11. 19. · Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for

Presentation TitlePresentation Subtitle

Crestwood Midstream Partners LP Crestwood Equity Partners LP

Connections for America’s Energy™

Presentation TitlePresentation Subtitle

Crestwood Midstream Partners LP Crestwood Equity Partners LP

Connections for America’s Energy™

Presentation TitlePresentation Subtitle

Crestwood Midstream Partners LP Crestwood Equity Partners LP

Connections for America’s Energy™

11/19/2019

Presentation TitlePresentation Subtitle

Crestwood Midstream Partners LP Crestwood Equity Partners LP

Connections for America’s Energy™

Presentation TitlePresentation Subtitle

Crestwood Midstream Partners LP Crestwood Equity Partners LP

Connections for America’s Energy™

™Connections for America’s Energy™

Investor Presentation

November 2019

Page 2: Investor Presentation Presentation Title · 2019. 11. 19. · Presentation Title Presentation Subtitle Crestwood Midstream Partners LP Crestwood Equity Partners LP Connections for

Connections for America’s Energy™

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The statements in this communication regarding future events, occurrences, circumstances, activities, performance,

outcomes and results are forward-looking statements. Although these statements reflect the current views, assumptions

and expectations of Crestwood’s management, the matters addressed herein are subject to numerous risks and

uncertainties which could cause actual activities, performance, outcomes and results to differ materially from those

indicated. Such forward-looking statements include, but are not limited to, statements about the benefits that may result

from the merger and statements about the future financial and operating results, objectives, expectations and intentions

and other statements that are not historical facts. Factors that could result in such differences or otherwise materially affect

Crestwood’s financial condition, results of operations and cash flows include, without limitation, the possibility that

expected cost reductions will not be realized, or will not be realized within the expected timeframe; fluctuations in crude oil,

natural gas and NGL prices (including, without limitation, lower commodity prices for sustained periods of time); the extent

and success of drilling efforts, as well as the extent and quality of natural gas and crude oil volumes produced within

proximity of Crestwood assets; failure or delays by customers in achieving expected production in their oil and gas

projects; competitive conditions in the industry and their impact on our ability to connect supplies to Crestwood gathering,

processing and transportation assets or systems; actions or inactions taken or non-performance by third parties, including

suppliers, contractors, operators, processors, transporters and customers; the ability of Crestwood to consummate

acquisitions, successfully integrate the acquired businesses, realize any cost savings and other synergies from any

acquisition; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays,

casualty losses and other matters beyond Crestwood’s control; timely receipt of necessary government approvals and

permits, the ability of Crestwood to control the costs of construction, including costs of materials, labor and right-of-way

and other factors that may impact Crestwood’s ability to complete projects within budget and on schedule; the effects of

existing and future laws and governmental regulations, including environmental and climate change requirements; the

effects of existing and future litigation; and risks related to the substantial indebtedness, of either company, as well as

other factors disclosed in Crestwood’s filings with the U.S. Securities and Exchange Commission. You should read filings

made by Crestwood with the U.S. Securities and Exchange Commission, including Annual Reports on Form 10-K and the

most recent Quarterly Reports and Current Reports for a more extensive list of factors that could affect results. Readers

are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as of the

date made. Crestwood does not assume any obligation to update these forward-looking statements.

Company Information

2

Forward-Looking Statements

Contact Information

Corporate Headquarters

811 Main Street

Suite 3400

Houston, TX 77002

(1) Market data as of 11/18/2019. (2) Unit count and balance sheet data as of 9/30/2019.

Crestwood Equity Partners LP

NYSE Ticker CEQP

Market Capitalization ($MM)(1,2) $2,306

Enterprise Value ($MM)(2) $5,666

Annualized Distribution $2.40

Investor Relations

[email protected]

(713) 380-3081

No IDRs

Corporate Structure

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Peer Group Leading DCF

Growth Through Self-Funded

3-year Capital Program

Connections for America’s Energy

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Key Investor Highlights 2017-2019 Capital Program Drives Free Cash Flow in 2020

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EXECUTION

UNITHOLDER ALIGNMENT

FINANCIAL DISCIPLINE

SELF-FUNDED

GROWTH

Crestwood’s 5-year plan is focused on delivering increased DCF per unit

• Well-positioned assets in low-cost basins support volume growth and enhanced margins

• Strong track record of delivering on capital expansion projects and annual guidance targets

• Best-in-class midstream operator for safety, employee relations, customer service, community and environmental responsibility

• No incentive distribution rights; simplified MLP governance structure; stable GP sponsor

• High quality, long-term management team; insiders own >30% of common LP units

• Leads the MLP-industry in commitment to ESG Sustainability initiatives

• Committed to 2020 leverage ratio below 4.0x and coverage above 1.8x

• Reduced 2020 capital investments by >70% to range of $100 million - $150 million

• Strong Y-O-Y DCF growth and Free Cash Flow allows for distribution increases and/or unit buybacks in 2020

• Continue to self-fund 2020 growth capital program through excess cash flow, available liquidity, producer reimbursements and strategic joint-ventures

• Evaluation of potential non-core asset divestitures additional upside to lower leverage targets

• Major 2017-2019 expansion projects completed in Bakken, Powder River Basin, and Delaware Basin

• ~$1 billion net capital invested to increase capacity in high growth areas driving 2020+ volume and margin growth

• >$225+ million expected incremental EBITDA contribution from ’17-’21

FREE CASH FLOW POSITIVE

• Execution of 3-year growth strategy drives free cash flow generation in 2020

• Bear Den II (Q3 2019) and Bucking Horse II (Q1 2020) processing plants drive a step-change in cash flow

• Reduced capital spending in 2020 as system capacities are aligned with current customer development programs

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Third Quarter 2019 HighlightsCrestwood Well-Positioned to Achieve 2019 and 2020 Objectives

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Strong Q3’19Financial Results

Results Highlight Value of Diversified

Platform

Major Projects Drive 2019-2020 Growth

• Q3 Adjusted EBITDA of $141MM, 39% above Q3 2018

• Robust results drive increased and tightened 2019E Adjusted EBITDA guidance of $520MM - $535MM

• Leverage and coverage ratios of 4.2x and 1.9x, respectively

Bakken

• Bear Den II plant began commercial operations in August 2019

• Increased FY 2019 well connect estimate to 120, a 20% increase from original guidance

• Substantially increased produced water and gas gathering capacity

Powder River Basin

• Expanding Bucking Horse II plant and Jackalope system

• Increased 2019 well connects lead to record gathering system volumes

Delaware Basin

• Orla I plant more competitive with improved NGL net-backs starting July 2019 which drives higher volumes; strong Q4’19 volumes expected

Crestwood has reached an inflection point in cash flow growth and is well positioned to generate positive free cash flow in 2020

• Completed expansion projects in the G&P segment allow for consistent volume growth in core growth basins

• Solid S&T contribution a result of the final step-up in SGS contract

• Outperformance in the MS&L segment drives 2019E segment EBITDA to $65MM - $75MM

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Diversified Portfolio in Multiple High-Growth Basins

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Diversified midstream portfolio with operating scale along the value chain

Bakken

Northeast Marcellus

Powder River Basin

DelawareBasin

• 2,230 miles of pipeline

• 3.5 Bcf/d gas gathering

• 1.6 Bcf/d gas transportation

• 1.2 Bcf/d gas processing plants

• 76 Bcf gas storage facilities

• 150 Mbp/d crude oil gathering

• 180 Mbp/d crude oil rail terminalling

• 294 Mbp/d NGL logistics business with rail cars and trucking units

• 4.4 MMbbls crude oil and NGL storage

Key Statistics(1)

(1) Key statistics include CEQP and JV assets expected to be in-service at 12/31/2019

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Crestwood Assets Located in Top-3 Low Cost BasinsSupport Producer Oil Growth in Current Environment

Delaware BasinPowder River BasinBakken

Crestwood’s growth capital investments building scalable franchise positions in the Bakken, Powder River Basin and Delaware Basin with attractive break-even prices

Over 60% of US onshore rigs are operating in Crestwood’s top-3 core growth areas; Crestwood has invested in all the right places!

Sources: Breakeven data per Wood MacKenzie. Rig count data per Bakers Hughes and Shale Experts as of 11/8/2019.

52 Williston rigs 26 PRB rigs 412 Permian rigs

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Balanced Portfolio; High Quality CustomersExcellent Diversity of Services, Customers and Markets

CEQP Contract Portfolio

88

Variable Rate Contracts

16%

Take-or-Pay and Fixed-Fee Contracts

84%

~84% of Crestwood 2019 EBITDA from take-or-pay and fixed-fee contracts;

Key assets protected from commodity volatility and volume declines

Long-Term Contract Profile With High Quality Customers(1)

2019 Forecasted EBITDA

(1) Not inclusive of all Crestwood customers.

Stable cash flows supported by fixed-fee contracts, top-tier customer base and balanced commodity exposure

G&P assets backed by 1.1 million acreage dedication; High quality producer mix

Top-tier NE Gas Storage & Transportation franchise; Largely investment grade

Diversified NGL Marketing, Supply & Logistics business

Gas Oil NGLs

Volumes by Commodity

EBITDA by Commodity

58% 29%

13%

44%

34%

22%

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Conservative Capital Allocation Strategy3-year Expansion Program Drives Long-term Growth

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Fits the Core Strategy?

Deliver returns above WACC?

Accretive to DCF per unit?

Maintain balance sheet strength?

Crestwood is committed to generate unitholder value through disciplined capital allocation

Crestwood will pass on any opportunity that does not check ALL four boxes!

Integrates / Optimizes footprint in core basins (Bakken, PRB, Delaware Basin

and NE Marcellus)

Project ROIC must exceed 15%

Focused on pace of asset utilization and cash on cash return generation

Long-term leverage ratio target between 3.5x to 4.0x

Value Creation Criteria for Growth Capital and Acquisitions

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Leading ESG Sustainability Strategy Sustainability Differentiates CEQP and Improves Performance

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9% reduction in

total recordable

incident rate (TRIR)

59% reduction in preventable

vehicle incident rate

(PVIR)

$1.5million

donated in 2018 to our communities

• Ensuring the safety of employees and contractors: Strong 2018 safety performance with improvements in leading and lagging indicators

• Reducing operational footprint: Focused on minimizing habitat disturbances and implementing leak detection methods to improve operational efficiencies and reduce emissions

• Building resilient relationships with communities: Worked closely with local stakeholders to understand community’s long-term needs and directed our funding to initiatives that will have a lasting benefit and support local economic development

• Report prepared in accordance with the Global Reporting Standards – Core Option

• Crestwood’s 2018 sustainability report is available at esg.crestwoodlp.com

22emergency response exercises

19,167

total training hours; 849 employees

The 2018 ESG Sustainability report enhances transparency into Crestwood’s environmental, social and governance performance and highlights our 3-year strategy as we continue to integrate sustainability into every aspect of the business

Report Highlights

For more information on Crestwood’s sustainability program: esg.crestwoodlp.com

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2.00x

2.50x

3.00x

3.50x

4.00x

4.50x

5.00x

Peer 1 CEQP Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8

1.00x

1.20x

1.40x

1.60x

1.80x

2.00x

2.20x

CEQP Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8

0%

5%

10%

15%

20%

25%

Peer 1 CEQP Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8

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Crestwood’s Strategy Drives Top-Tier Metrics Through 2020E

’18/’20 EBITDA CAGR

2020E Leverage Ratio 2020E Coverage Ratio

’18/’20 DCF per Unit CAGR

Source: Bloomberg and industry research reports.Peer Group Includes: DCP, ENBL, ETP, OKE, PAA, SMLP, TRGP, and WMB. Excludes ENLC and WES due to recent simplification transactions

Crestwood’s metrics compare favorably to predominately larger cap peer group

0%

10%

20%

30%

CEQP Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8

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Core Basin Strategies Build

Long-term Growth Platform

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$300

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2013 2014 2015 2016 2017 2018 2019E 2020E

Ca

pit

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Bakken Growth Strategy

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Crestwood actively expanding the Arrow Gathering System and Bear Den Processing Plants as producer volume growth forecasts exceed expectations

Arrow Overview

• Arrow is a three-product gathering and processing system

located primarily on the Fort Berthold Indian Reservation

• Diversified producers: WPX, XTO, EnerPlus, Bruin,

Rimrock, PetroShale, and QEP

• >8-year average contract length and Crestwood

purchases 100% of oil and gas volumes at the wellhead

• Arrow will be Crestwood’s largest driver of cash

flow growth in ’19/’20

Accretive Investments at Arrow Drive Cash Flow Growth

Arrow System Acquired for $750MM in

Q4’13

Bear Den II Processing Plant

Q3’19

Bear Den I Processing

Plant

System Expansions and Debottlenecking

CEQP invested capital at a 5.4x all-in multiple

Producer Efficiency Driving Growth

High reservoir quality supports use of early artificial lift with multi-well pad development to accelerate producer returns and drive volumes

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Arrow System Volume Growth Outlook

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Arrow volume growth driven by increased well connect forecast, strong FBIR well performance, and completed system debottlenecking

Crude Gathering Water Gathering

Gas Gathering Gas Processing

+90% +70%

+120%+400%

Arrow System Expansions

Q3 2019 Average Volumes

2019 Outlook

• Majority of debottlenecking and expansion projects complete

• New produced water gathering contract with Enerplus

− 30 MBbls/d expansion for $60MM invested between 2019 and 2020

− 4x build multiple

• Over 120 3-product well connects forecasted in 2019 (compared to 54 well connects in 2018)

• Crude oil and natural gas volumes expected to grow over 25% in 2019; produced water volumes expected to grow over 60% in 2019

• Q3’19 avg volumes (Q4’19 record to date)

− Crude oil: 109 MBbls/d (~134 MBbls/d)

− Natural gas: 95 MMcf/d (~110 MMcf/d)

− Produced water: 74 MBbls/d (~90 MBbls/d)

Debottlenecking projects near completion; Offer sub-4x build multiple economics as producers begin to ramp development activity

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Bakken – Bear Den Processing Expansion

Key Highlights

Crestwood’s Bear Den processing facility is processing 100% of Arrow’s volumes, significantly reducing flaring on the FBIR and enhancing producers’ flow assurance

• Began commercial operations in

August 2019

• Bear Den II plant expansion increases

processing capacity to 150 MMcf/d

• New cryo-plant enhances recoveries

and producer economics

• Bear Den complex will provide full-

service for 100% of Arrow gas

volumes

• $175MM growth capital in 2019

• NGL Marketing: signed anchor shipper

agreement with ONEOK Elk Creek

project with COLT NGL by rail loading

as backup

• Excellent safety performance during

construction

• Attractive total project returns of

sub-6x

Bear Den II Processing Plant

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Bakken’s Full-Service Business Model

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Crestwood’s integrated Bakken franchise offers Arrow producers full-service midstream solution to ensure flow assurance and competitive pricing out of the Basin

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1 Wellhead Services - Fully Integrated G&P System

• Expanding gathering and processing capacities to meet growing producer forecasts

• Crestwood’s #1 Arrow goal is to optimize producer netbacks!!

COLT Hub and Trucking Services

• COLT Hub offers storage and crude oil and NGL rail loading to West and East Coast markets

• Crestwood’s MS&L segment optimizes crude and NGL marketing services in the Basin

• Trucking adds value services for crude and water

Premium Downstream Connectivity

• Crestwood secured agreements to move product gathered at Arrow to premium downstream markets via DAPL (Arrow and COLT Hub), Northern Border (Arrow) and Elk Creek (Bear Den) pipelines

• Pipeline agreements scaled to support Bear Den volume growth

Dakota Access (DAPL)

Elk Creek

3

Best-in-class integrated Bakken G&P system with premium downstream connectivity fully supports Arrow producers and FBIR off-set producers; Elk Creek NGL agreement integrates Crestwood’s Bakken and Powder River Basin systems

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mu

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Powder River Basin Growth Strategy

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Overview

Crestwood is sole operator of one of the basin’s largest G&P systems; Expansions underway to support recent volume growth and future development activity

• Currently expanding Jackalope system and Bucking Horse processing plant to 345 MMcf/d capacity by Q1 2020; existing processing assets currently operating at capacity

• 358,000 acreage dedication supported by 20-year fixed-fee market based gas gathering contract

• Significant undrilled inventory of 2,780 well locations supported by multiple stacked formations

• Chesapeake 2 - 3 rigs in 2020 drives volume growth; Panther Energy expected to connect new wells in 2020

• Currently engaged with potential new third party customers for incremental gas and crude services

• High quality existing joint-venture partners in GIP, TPG and Apollo

PRB Emerging as CEQP’s 2nd Largest Growth Driver

Acquired initial 50% interest from RKI in Q3’13 for $108MM

CHK contract renegotiated to 20 yrG&P agreement with

min. rev. guarantee in Q1’17

Acquired remaining 50% interest from Williams for

$485MM in Q2’19

Bucking Horse II in-service Q1’20E

Accretive growth projects provide opportunities for 3rd party volumes

Assumes 2 rig CHK program; 5-10% upside with each additional

rig

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Powder River Basin Offers Exceptional Economics

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Crestwood’s large asset footprint and multiple stacked formations offer producers top tier economics; Offset producer activity drives upside

Recent Turner and Niobrara well results highlight the basin’s stacked pay potential; CHK’s 2 - 3 rig program drives cash flow growth in 2020

Stacked Formations Drive Activity

Source: Chesapeake Investor Presentation 11.5.2019

Overview

Jackalope System

Chesapeake

Oxy

Devon

EOG

Panther

Anschutz

Balidor

CHK’s Niobrara well

holds the highest 80-

day cuml. oil production in basin history

CHK’s Turner results are 40% greater than peers in the Powder River Basin

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Bucking Horse II and Jackalope Expansions Position Crestwood for 3rd Party G&P Dedications

Commercial Highlights

Powder River Basin gathering and processing expansions will allow Crestwood early mover advantage to attract incremental third-party volumes in the growing basin

Bucking Horse Processing Facilities

New 3rd Party Volumes Likely in 2020

• Crestwood is actively engaged in new third

party customer negotiations with offset

producers: Oxy, Devon, EOG, Anschutz

• Panther dedicated acreage being developed

for 2020 production program

• JGGS and BHII expansion projects position

CEQP for incremental 3rd party volumes in

2020

Chesapeake Energy Q3’19 Update

• New 20-yr fixed fee contract renegotiated

from legacy cost of service contract in Q1

2017

• Contract contains market based rates and

favorable dedication language to CEQP

• CHK current on all well connect

reimbursements and payables; working on

LCs and back-to-back deals for credit

assurance

• PRB acreage remains top oil producing region

for CHK and best net-backs/lowest LOE

Bucking Horse Plant II

Project Updates

• $225MM gathering, processing and compression

expansions in 2019 increase G&P capacity to 345

MMcf/d

• BH II targeted early Q1 2020 in-service; deeper

NGL plant recovery will improve CHK net-backs

• NGL and residue gas takeaway: ONEOK and WIC

drive good net-backs for CHK

• Attractive total project returns of sub-6x

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Delaware Basin Growth Strategy

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Asset MapDelaware Basin Overview

Crestwood operates a fully integrated G&P system in the heart of the Delaware Basin through 50/50 JV with First Reserve (CPJV) and JV with Shell Midstream

• Current assets include the Orla cryo-plant, Willow Lake and Nautilus gathering systems, and EPIC Y-grade pipeline interest

– Total gathering capacity of 650 MMcf/d

– Total processing capacity of 255 MMcf/d

– Total Y-grade long-haul capacity of 80 MBbls/d

• Q4 2019 update and future expansion opportunities

– ~30 new wells expected in Q4’19 by Shell, Concho, and Mewbourne

– Crude oil gathering, terminalling and condensate stabilization/blending

– Produced water gathering and disposal

Joint venture strategy with First Reserve and Shell Midstream provides alignment of interest with financial partners and customers in long-term growth strategy(1)

Over 200K dedicated acres

X 5

(1) Crestwood and First Reserve each own 50% of Willow Lake and Orla Plant and 25% of the Nautilus system; Shell Midstream owns 50% of the Nautilus system.

Orla I

Willow Lake

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Delaware Basin Full-Service NGL Solution

Crestwood’s Delaware Basin competitive advantage enhanced with EPIC NGL pipeline capacity and favorable PSA with Chevron Phillips; Provides G&P customers guaranteed NGL capacity and pricing to premium Gulf Coast markets

Orla Downstream MarketingLong-term Y-grade sales agreement with Chevron Phillips at Benedum, TX; Provides greater flow assurance and improves net-backs for Orla’s customers

NGL Pipeline Capacity CPJV acquired undivided joint ownership in Orla-to-Benedum segment of EPIC Y-grade pipeline; 80 MBbls/d capacity provides Orla customers NGL takeaway capacity to favorable Gulf Coast markets

Crestwood’s Delaware Basin footprint provides customers full midstream value chain services and flow assurance in a very competitive Basin

2 3

Fully Integrated G&P System200 MMcf/d Orla cryogenic gas processing plant placed into service in July 2018; Willow Lake and Nautilus gathering systems support high quality producers in the core of the Basin

1

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• Strategic 50/50 JV with Consolidated Edison

• FERC regulated storage and pipeline assets

located at center of prolific NE Marcellus

− Connected to 5+ Bcf/d supplies

• Majority of SGS rates/returns generated by

revenues from market-based and negotiated

rates

• Near-Term Growth: JV Cash Flow

− Stagecoach generated ~$136MM Adjusted

EBITDA in 2018 (8/8ths)

− July 2019: Cash flow distribution to CEQP

stepped up to 50% sharing ratio

• Long-Term Growth Potential:

− Northeast Pennsylvania (NEPA) in-basin

demand growth (PowerGen & Industrial)

providing opportunity for storage and

transportation services

− Evaluating incremental takeaway projects

out of the basin

− Regulatory environment continues to

stymie new projects

NE Marcellus is the most prolific US dry gas basin; Stagecoach is strategically

located to capture infrastructure expansion opportunities from NE gas demand

growth

NE Marcellus Provides Long-Term Growth Potential

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Strategic Position in NE Natural Gas MarketStagecoach Overview

Stagecoach Assets

Stagecoach Assets

− 41 Bcf storage capacity

− 3.1 Bcf/d of deliverability and

5+ Bcf/d of supply access

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8

7

Bcf/

d

NE Marcellus Gas Production Constrained in 2022+

Production – More Pipe

Production – Base Case

Production – Less Pipe

Pipeline Capacity (Base)

Pipeline Capacity (Less)

Pipeline Capacity (More)

Source: Northeast production data per BTU Analytics.

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• 10-year, fixed and POI gathering services with BlueStone

• 140,000 acreage dedication; System capacity of 925 MMcf/d

• Contract structure provides significant upside as commodity prices rebound

• Active workover program designed to eliminate system declines and modestly grow volumes; BlueStone evaluating new development and refrac opportunities

Legacy Gas Assets Provide Stable Cash Flow and Long-term Optionality

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Crestwood’s SW Marcellus and Barnett system generate over $100MM combined annually; Average system declines of 7% to 10% forecasted through 2021

Barnett System Map

Stable natural declines provide Crestwood source of low-risk cash flow; No capital required to support incremental activity

Arsenal Resources

EQT

HG Energy

EQTSWN

SW Marcellus System Map

• 20-year, fixed-fee gathering and compression services with Antero Resources

• 140,000 acreage dedication; System capacity of 875 MMcf/d

• ~275 wells are connected to Crestwood’s system; Avg. EURs

between 8–12 Bcf(1)

• 800+ liquid-rich (>1,100 BTU) drilling locations and 1,000+

dry gas drilling locations remain

SW Marcellus Highlights Barnett Highlights

(1) Source: Wood Mackenzie.

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Balance Sheet Strength and

Disciplined Capital Allocation

Connections for America’s Energy

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$0

$300

$600

$900

$1,200

2019 2020 2021 2022 2023 2024 2025 2026 2027

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Strong Balance Sheet and Liquidity

Balance Sheet Positioned for Strength Current Capitalization

Long-Term Debt Overview

($MM)

RCF

6.25% Notes 5.75%

Notes

Issue Price Yield

2023 100.6 5.8%

2025 100.7 5.5%

2027 97.1 6.1%

Crestwood is committed to maintaining a very strong balance sheet and financial flexibility; Targeting sub-4x leverage by 2020

Note: Senior note price and yield data per Bloomberg as of 11/18/2019.(1) Calculated in accordance with the amended CMLP credit agreement; LTM EBITDA adjustments include Williams 50% interest in JGGS EBITDA, PRB cash received in excess of recognized revenue, and historical operator and construction fee paid to WMB.

• Top-tier leverage position

– Q3 2019 leverage of 4.2x

– Current borrowing capacity over $675 million

– Over $1 billion of debt reduction over past 3-years

• Committed to long-term leverage <4.0x once growth projects come online

• No near-term maturities; attractive long-term capital

• Committed to funding 2019 and 2020 capital programs without accessing the public equity markets

5.625% Notes

No near-term debt maturities

Actuals Actuals Actuals$ millions 12/31/2017 12/31/2018 9/30/2019

Cash $1 $1 $1

Revolver $318 $578 $498

Senior Notes 1,200 1,200 1,800

Other Debt 8 7 2

Total Debt $1,526 $1,785 $2,299

Total Leverage Ratio 4.1x 4.3x 4.2x

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Self-Funded 2019E and 2020E Capital Programs

26(1) 2019E range of $425 million to $475 million represents growth capital net to CEQP.

• In 2020, Crestwood expects to invest $100 million - $150 million (~40% Bakken, ~40% PRB, and ~20% Delaware Basin)

• Crestwood is committed to maintaining a strong balance sheet and excess distribution coverage as it pursues organic growth projects

• Crestwood’s current capital program is fully financed with no public equity requirements to maximize project returns and DCF/unit value creation

• Growth capital in 2020 will be funded 100% by excess DCF

• Incremental financial flexibility provided by:

1) Available liquidity under revolving credit facility

2) Joint-venture partners

3) Non-core asset divestitures

2019E Growth Capital by Quarter

Highly accretive growth projects expected to generate 5x – 7x build multiples

2019E Maintenance Capital by Quarter

Crestwood has underwritten $425 million - $475 million(1) in 2019 to expand gathering and processing capacity in the Bakken, Powder River Basin and Delaware Basin

$MM

$MM

-

$25

$50

$75

$100

$125

$150

Q1:19 Q2:19 Q3:19 Q4:19

$2.0

$4.0

$6.0

$8.0

Q1:19 Q2:19 Q3:19 Q4:19

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Free Cash Flow in 2020 Drives Return of Capital

Crestwood’s MLP leading DCF per unit growth combined with reduced growth capital investments will drive free cash flow generation in 2020 and result in a meaningful return of capital to investors

MLP Leading DCF per Unit Growth

(1) Estimates based on current volume forecasts and system capacities. Growth capital does not include joint-venture consolidations or core growth basin acquisitions.

Reduced YOY Growth Capital(1)

2020 Capital Allocation Priorities

0

100

200

300

400

500

2018 2019E 2020E

$U

S M

illi

on

s

$100MM to $150MM

>70% YOY Reduction

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2018 2019E 2020E

DC

F p

er U

nit

Self-fund 100% of 2020 organic growth capital with excess DCF

Reduce leverage below 4x

Predictable annual distribution growth

Opportunistic common or preferred unit buyback program

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• Diversified midstream asset portfolio located in best oil basins

• No IDRs, simplified structure, stable GP

• Completed 3-year $1 billion net capital program to expand key assets for long term development growth in low cost basins

• 2020 leverage sub-4.0x and coverage >1.8x

• Forecasted 15-20% 3-yr DCF/Unit CAGR for 2018 - 2020

• Free cash flow positive in 2020

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Key Investment Highlights

Unrecognized Value Generated by Near-term Growth Catalysts to Further Drive Value Creation for Unitholders!!!

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Appendix

Connections for America’s Energy

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Crestwood’s Sustainability Program

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Crestwood is committed to integrating a culture of ESG throughout the organization

• Board of Directors level Sustainability Committee

• Steering Committee and Working group formed to provide internal oversight

Materiality assessment drives report content and program strategy

• 12 material ESG topics identified shape report content and strategy

• 3-year strategy shapes outline for continuous reporting enhancements and integration of sustainability into the business

At Crestwood, sustainability means operating ethically, environmentally and socially responsible; focusing on safety; respecting and supporting our communities; protecting the environment; and developing our employees

For more information on Crestwood’s sustainability program: www.crestwoodlp.com/sustainability

Crestwood’s ESG Key Stakeholders

Governance Environment Social

Corporate Governance & Business Ethics

Risk Management

Government Relations & Regulatory Compliance

Spill prevention & Control

Emergency Preparedness & Response

Environmental Compliance

Greenhouse Gas Emissions & Climate Change

Asset Integrity

Occupational Health & Safety

Employee Attraction, Development & Retention

Diversity & Inclusion

Community Relations

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Crestwood’s 3 Year Sustainability Strategy

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• Continue to demonstrate our commitment to our Safety and Operating Principles

• Deliver on our disciplined financial plan to be a must-own investment

• Drive >15% DCF per unit growth year-over-year

• Complete projects safely, on-time and on-budget

Business Strategy

Continual Improvement

Focus Areas2019 - 2021

Economic/Governance

Environment Social

Supply Chain Management

Implement an approach to

sustainability in supply chain

Environmental Stewardship

Committed to environmental stewardship

Diversity & Inclusion

Continue our commitment to diversity and

inclusion

ESG Investor Strategy & Disclosure

Continuously improve

transparency in ESG reporting

Social Investment

Harmonize our charitable giving

and create a stronger

alignment to risk management and community needs

Crestwood’s long-term sustainability strategy enhances transparency on management’s approach to identifying and mitigating key ESG risks

For more information on Crestwood’s sustainability program: www.crestwoodlp.com/sustainability

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Crestwood’s Industry Recognition

Customer Service

Community Engagement

Ranked #1 in the EnergyPoint Research Survey for Customer Satisfaction in 2015-2018

Crestwood continues to be recognized for its unwavering commitment to best in class customer service, community engagement, environmental stewardship and unitholder alignment

Unitholder Alignment

NDPC Excellence in Community Engagement Award

Top Tier ranking in Wells Fargo’s midstream investor alignment report(1)

Environmental Stewardship

Recognized by the EPA as a SmartWayPartner

Crestwood’s culture of excellence positions the partnership to be a responsible steward of capital and an attractive midstream investment

(1) Wells Fargo research report titled “The Midstream Alignment Scorecard.” Published on 4/29/2019. Ranking based on unit ownership, governance , safety metrics, structure and incentive compensation.

Customer Service

Unitholder Alignment Environmental Stewardship

Community Engagement

Customer Service

Community Engagement

Environmental Stewardship

Unitholder Alignment

Employee Relations

Employee Relations

Top Workplaces in 2018 by the Houston Chronicle

Committed to best in class operatorship

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Key ESG Performance Data

2018 2017 2016

2018 2017 2016

2018 2017 20162018 20172019E

Crestwood is committed to enhancing transparency and disclosure of our environmental, social and governance (ESG) performance. As we progress on our sustainability journey, we will continue to improve our key performance indicators in ESG areas and will be disclosing additional metrics in future sustainability reports

For more information on Crestwood’s sustainability program: www.crestwoodlp.com/sustainability

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CEQP Non-GAAP Reconciliations

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(a) EBITDA is defined as income before income taxes, plus interest and debt expense, net and depreciation, amortization and accretion expense. Adjusted EBITDA considers the adjusted earnings impact of our unconsolidated affiliates by adjusting our equity earnings or losses from our unconsolidated affiliates to reflect our proportionate share (based on the distribution percentage) of their EBITDA, excluding impairments. Adjusted EBITDA also considers the impact of certain significant items, such as unit-based compensation charges, gains or losses on long-lived assets, gains on acquisitions, third party costs incurred related to potential and completed acquisitions, certain environmental remediation costs, the change in fair value of commodity inventory-related derivative contracts, costs associated with the realignment of our Marketing, Supply and Logistics operations and Corporate operations and other transactions identified in a specific reporting period. The change in fair value of commodity inventory-related derivative contracts is considered in determining Adjusted EBITDA given that the timing of recognizing gains and losses on these derivative contracts differs from the recognition of revenue for the related underlying sale of inventory to which these derivatives relate. Changes in the fair value of other derivative contracts is not considered in determining Adjusted EBITDA given the relatively short-term nature of those derivative contracts. EBITDA and Adjusted EBITDA are not measures calculated in accordance with generally accepted accounting principles (GAAP), as they do not include deductions for items such as depreciation, amortization and accretion, interest and income taxes, which are necessary to maintain our business. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP. EBITDA and Adjusted EBITDA calculations may vary among entities, so our computation may not be comparable to measures used by other companies.(b) Cash interest expense less amortization of deferred financing costs.(c) Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing levels.(d) Distributable cash flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, the cash received from our Powder River Basin operations in excess of revenue recognized, and our proportionate share (based on the distribution percentage) of our unconsolidated affiliates' distributable cash flow. Distributable cash flow should not be considered an alternative to cash flows from operating activities or any other measure of financial performance calculated in accordance with GAAP as those items are used to measure operating performance, liquidity, or the ability to service debt obligations. We believe that distributable cash flow provides additional information for evaluating our ability to declare and pay distributions to unitholders. Distributable cash flow, as we define it, may not be comparable to distributable cash flow or similarly titled measures used by other companies.

CRESTWOOD EQUITY PARTNERS LP

Reconciliation of Non-GAAP Financial Measures

(in millions)

(unaudited)

Three Months Ended

September 30, Nine Months Ended

September 30,

2019 2018 2019 2018

EBITDA Net income (loss) $ 33.6 $ (5.2 ) $ 272.7 $ 7.4

Interest and debt expense, net 30.6 25.1 83.3 73.8

Provision for income taxes — — 0.3 0.2

Depreciation, amortization and accretion 51.5 39.2 140.6 128.8

EBITDA (a) $ 115.7 $ 59.1 $ 496.9 $ 210.2

Significant items impacting EBITDA:

Unit-based compensation charges 13.0 10.4 41.6 27.9

Loss on long-lived assets, net 0.1 3.6 2.1 27.7

Gain on acquisition — — (209.4 ) —

Earnings from unconsolidated affiliates, net (10.4 ) (15.1 ) (21.0 ) (39.5 )

Adjusted EBITDA from unconsolidated affiliates, net 20.1 25.9 53.7 69.9

Change in fair value of commodity inventory-related derivative contracts 2.1 17.1 6.9 7.0

Significant transaction and environmental related costs and other items 0.3 0.4 6.7 2.8

Adjusted EBITDA (a) $ 140.9 $ 101.4 $ 377.5 $ 306.0

Distributable Cash Flow

Adjusted EBITDA (a) $ 140.9 $ 101.4 $ 377.5 $ 306.0

Cash interest expense (b) (32.9 ) (24.7 ) (90.1 ) (71.4 )

Maintenance capital expenditures (c) (6.5 ) (5.4 ) (13.9 ) (16.7 )

Adjusted EBITDA from unconsolidated affiliates, net (20.1 ) (25.9 ) (53.7 ) (69.9 )

Distributable cash flow from unconsolidated affiliates 18.4 24.6 49.6 66.4

PRB cash received in excess of recognized revenues 6.9 — 12.9 —

Provision for income taxes — — (0.3 ) (0.2 )

Distributable cash flow attributable to CEQP 106.7 70.0 282.0 214.2

Distributions to preferred (15.0 ) (15.0 ) (45.0 ) (45.0 )

Distributions to Niobrara preferred (9.2 ) (3.3 ) (21.7 ) (9.9 )

Distributable cash flow attributable to CEQP common (d) $ 82.5 $ 51.7 $ 215.3 $ 159.3

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CEQP Non-GAAP Reconciliations

35

(a) Cash interest expense less amortization of deferred financing costs.

(b) Maintenance capital expenditures are defined as those capital expenditures which do not increase operating capacity or revenues from existing levels.

(c) Cash received from our customers of our Powder River Basin operations pursuant to certain contractual minimum revenue commitments in excess of related

revenue recognized under FASB ASC 606.

(d) Includes cash distributions to preferred unit holders and Crestwood Niobrara preferred unitholders.

(e) Distributable cash flow is defined as Adjusted EBITDA, adjusted for cash interest expense, maintenance capital expenditures, income taxes, the cash received

from our Powder River Basin operations in excess of revenue recognized, and our proportionate share of our unconsolidated affiliates' distributable cash flow.

Distributable cash flow should not be considered an alternative to cash flows from operating activities or any other measure of financial performance

calculated in accordance with generally accepted accounting principles as those items are used to measure operating performance, liquidity, or the ability to

service debt obligations. We believe that distributable cash flow provides additional information for evaluating our ability to declare and pay distributions to

unitholders. Distributable cash flow, as we define it, may not be comparable to distributable cash flow or similarly titled measures used by other companies.

CRESTWOOD EQUITY PARTNERS LP

Revised Full Year 2019 Adjusted EBITDA and Distributable Cash Flow Guidance

Reconciliation to Net Income

(in millions)

(unaudited)

Expected 2019 Range Low - High

Net income $315 - $330

Interest and debt expense, net 115 - 120

Depreciation, amortization and accretion 190 - 195

Unit-based compensation charges 50 - 55

(Gain) loss on long-lived assets and acquisitions, net (207)

Earnings from unconsolidated affiliates, net (40) - (45)

Adjusted EBITDA from unconsolidated affiliates 80 - 85

Significant transaction and environmental related costs and other items 7

Adjusted EBITDA $520 - $535

Cash interest expense (a) (125) - (130)

Maintenance capital expenditures (b) (20) - (25)

PRB cash received in excess of recognized revenues (c) 20

Adjusted EBITDA from unconsolidated affiliates (80) - (85)

Distributable cash flow from unconsolidated affiliates 74 - 79

Cash distributions to preferred unitholders (d) (91)

Distributable cash flow attributable to CEQP common unitholders (e) $295 - $310

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• Big C closing slide