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American Midstream Announces Drop Down of Trans-Union Interstate Pipeline and Commencement of Deliveries to Southern Natural Gas

11/06/2017

HOUSTON--(BUSINESS WIRE)-- American Midstream Partners, LP (NYSE: AMID) (“AMID” or “Partnership”) announced today the acquisition and closing of 100% of the equity interests in Trans-Union Interstate Pipeline, L.P. (“Trans-Union”) from affiliates of ArcLight Capital Partners, LLC (“ArcLight”), which controls the general partner of the Partnership, for a total consideration of approximately $48 million. The consideration consisted of approximately $15.5 million cash funded from borrowings under the Partnership’s revolving credit facility and the assumption of $32.5 million of non-recourse debt.

Trans-Union owns a 42-mile, 30-inch diameter high-pressure FERC-regulated natural gas interstate pipeline with 546,000 MMbtu/day of maximum capacity. Trans-Union delivers natural gas transmission from Sharon, Louisiana to customers in El Dorado, Arkansas and is anchored by 15-year take-or-pay agreements with approximately 91% of FERC regulated capacity with investment grade utilities. Trans-Union primarily delivers natural gas to the Union Power Station, owned by Entergy Arkansas, Inc., Entergy Louisiana, LLC, and Entergy New Orleans, Inc., as well as to a recently expanded fertilizer plant owned by El Dorado Chemical Company, a subsidiary of LSB Industries.

The purchase of Trans-Union is immediately accretive to Adjusted EBITDA and distributable cash flow and is complementary to AMID’s existing natural gas transmission assets within the Southeastern U.S. with proximity to AMID’s Midla system. The transaction offers additional acquisition opportunities to continue building its natural gas infrastructure assets to satisfy fast growing Southeastern U.S. demand.

This transaction is part of the Partnership’s strategic capital reallocation strategy to create asset density within its core areas. Since June 2017, AMID has effectively reallocated over $450 million in capital in seven highly accretive transactions while also improving the Partnership’s balance sheet. In conjunction with AMID’s numerous organic growth projects, the Partnership is poised for materially higher 2018 EBITDA and distributable cash flow

A conflicts committee of the board of directors of the general partner of the Partnership composed of independent directors, as well as the full board of directors of the general partner, unanimously approved the transaction. This committee was advised by Thompson & Knight LLP as to legal matters.

Southern Natural Gas Interconnect

Additionally, the Partnership announced the completion of a new pipeline connection and commencement of deliveries into its AlaTenn pipeline system with Southern Natural Gas (“SNG”) in Alabama. The new SNG interconnect allows AlaTenn to participate in movement of Northeast Marcellus natural gas supply into Southeast U.S. demand markets. The interconnect materially increases AlaTenn’s utilization via a 30% increase on AlaTenn’s contracted capacity.

“We are pleased with AMID’s ongoing growth and participation in natural gas infrastructure in the Southeast U.S. market,” stated Lynn Bourdon III, President and Chief Executive Officer of the Partnership. “The Trans-Union drop down further demonstrates AMID’s beneficial relationship with ArcLight and increases our ability to expand natural gas infrastructure density. Further, the SNG interconnect expands AlaTenn’s market connectivity and increases pipeline utilization with FERC regulated volumes. Combined, these transactions anchor the Partnership as a leading provider in the rapidly growing Southeastern U.S. natural gas transmission market.”

About American Midstream Partners, LP

American Midstream Partners, LP is a growth-oriented limited partnership formed to provide critical midstream infrastructure that links producers of natural gas, crude oil, NGLs, condensate and specialty chemicals to end-use markets. American Midstream’s assets are strategically located in some of the most prolific onshore and offshore basins in the Permian, Eagle Ford, East Texas, Bakken and Gulf Coast. American Midstream owns or has an ownership interest in approximately 4,000 miles of interstate and intrastate pipelines, as well as ownership in gas processing plants, fractionation facilities, an offshore semisubmersible floating production system with nameplate processing capacity of 100,000 Bbl/d of crude oil and 240 MMcf/d of natural gas; and terminal sites with approximately 6.7 million Bbls of storage capacity. For more information about American Midstream Partners, LP, visit www.americanmidstream.com.

About ArcLight Capital Partners, LLC

ArcLight is one of the leading private equity firms focused on energy infrastructure investments. Founded in 2001, the firm helped pioneer an asset-based private equity approach to investing in the dynamic energy sector. ArcLight has invested approximately $19 billion in over 100 transactions since inception. Based in Boston, the firm’s investment team employs a hands-on value creation strategy that utilizes its in-house technical, operational, and commercial specialists as well as the firm’s 850-person asset management affiliate. More information about ArcLight, and a complete list of ArcLight's portfolio companies, can be found at www.arclightcapital.com.

Non-GAAP Financial Measures

This press release includes financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP financial measures, including “Adjusted EBITDA.”

We define distributable cash flow as Adjusted EBITDA, less cash paid for interest expense, normalized maintenance capital expenditures, and distributions related to the Series A, Series C and Series D convertible preferred units. The GAAP financial measure most comparable to distributable cash flow is Net income (loss) attributable to the Partnership.

Forward Looking Statements

This press release includes forward-looking statements. These statements relate to, among other things, projections of 2017 financial performance, operational volumetrics and improvements, growth projects, cash flows and capital expenditures. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "potential," "line-of-sight," and similar terms and phrases to identify forward-looking statements in this press release. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and future growth involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors which are described in greater detail in our filings with the SEC. Construction of growth projects is subject to risks beyond our control including cost overruns and delays resulting from numerous factors. In addition, we face risks associated with the integration of acquired businesses, decreased liquidity, increased interest and other expenses, assumption of potential liabilities, diversion of management’s attention, and other risks associated with growth and acquisitions, if consummated. Please see our Risk Factor disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 28, 2017, and Form 10-Q for the quarter ended June 30, 2017, filed with the SEC on August 10, 2017. All future written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. The forward-looking statements herein speak as of the date of this press release. We undertake no obligation to update any information contained herein or to publicly release the results of any revisions to any forward-looking statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of this press release.

Source: American Midstream Partners, LP

American Midstream Partners, LP

Mark Buscovich, 713-815-3967

mbuscovich@americanmidstream.com

Manager of Finance