Crestwood acquiring Tristate Sabine, announces hike in quarterly distribution

HOUSTON, Texas - Crestwood Midstream Partners LP (Nasdaq: CMLP) on Oct. 18 announced a definitive agreement to acquire Tristate Sabine, LLC from affiliates of Energy Spectrum Capital, Zwolle Pipeline, LLC and Tristate management for $65 million of cash to be paid at closing and a deferred payment of approximately $8 million one year following the closing date.

Separately, Crestwood's general partner has declared its regular quarterly distribution of $0.48 per unit for the quarter ended Sept. 30. The distribution will be payable on Nov. 10 to unitholders of record on Nov. 1. The distribution represents a 14.3 percent increase over the $0.42 per unit distribution paid with respect to the third quarter of 2010. The Class C units issued in April 2011 will not receive a cash distribution, but will instead be issued additional Class C units.

In the Tristate Sabine acquisition, Crestwood will acquire entities that own and operate approximately 52 miles of high-pressure natural gas gathering pipelines located in Sabine Parish, La. The Tristate System provides gathering and treating services for Haynesville and Bossier Shale production from the Toledo Bend South field area for redelivery to Gulf South Pipeline and Tennessee Gas Pipeline.

Contracts on the Tristate System dedicate approximately 20,000 acres under long-term, fixed-fee arrangements. System capacity is currently being expanded to 100 million cubic feet per day ("MMcf/d") for gathering and 80 MMcf/d for treating. The majority of the system has been constructed since 2009.

"We are pleased to announce another acquisition which diversifies Crestwood's shale play midstream portfolio," stated Robert G. Phillips, President and Chief Executive Officer of Crestwood's general partner. "The acquisition will be immediately accretive to cash flow, adding approximately $9.0 million annually on the basis of estimated fourth quarter 2011 results. This forecast includes the completion of current pipeline projects and the connection of recently contracted wells.”