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Citi MLP Conference August 2014. This presentation includes “forward looking statements” within the meaning of federal securities laws. All statements,

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Presentation on theme: "Citi MLP Conference August 2014. This presentation includes “forward looking statements” within the meaning of federal securities laws. All statements,"— Presentation transcript:

1 Citi MLP Conference August 2014

2 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, 2014 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 Forward Looking Statements

3 H. Michael Krimbill Chief Executive Officer – NGL Atanas H. Atanasov Chief Financial Officer James J. Burke President 3 Senior Management Representatives

4 4 Section II Overview of NGL Energy Partners

5  NGL is a diversified midstream MLP that provides multiple services to producers and end-users  Transportation, storage and marketing of crude oil, NGLs and Refined Products / Renewables  Water Solutions  Vertical integration allows NGL to capture margins across the entire value chain  From crude oil wellhead to refinery  From wellhead to disposal, recycle or discharge water facility  From fractionator/refinery to propane, butane and commercial end-users  From refinery to pipeline and terminals to wholesalers / retailers  Geographic diversification  Most prolific producing regions/shale plays in the U.S.  Coast-to-coast Rail, Terminal and Retail operations  Mid Continent and Gulf Coast crude oil storage and barge assets  Mid Continent pipeline  Focused on generating stable and repeatable cash flows Overview of NGL 5 Crude Barges Water Treatment Services Railcar NGL terminal Refinery terminal NGL proprietary terminal Natural gas liquids segment NGL leased storage Assets and marketing presence Pipeline Crude oil segment Crude barge terminal NGL Retail Propane > 10 mm gallons Crude operational area Segment ContributionBusiness Description Adjusted EBITDA Growth Over Time $24 $178 $260 IPO (May 2011) 2013FY2014E Liquids Crude Logistics Water Solutions Retail Propane NGL 1,671% Increase

6 NGL Energy Partners Business Strategy  Grow at attractive multiples through:  Organic projects  Acquisitions/Mergers  Emphasis on repeatable fee-based cash flows  Conservative capital structure with low leverage consistent with investment grade rating  Leverage at 2.75x – 3.25x  Strong common unit coverage ratio –Greater than 1.5x  Target asset ownership/infrastructure to capture opportunities  Growth centered on three segments going forward (i) Crude Logistics (ii) Water Solutions and (iii) Refined Products / Renewables  Steady and predictable distribution growth to maximize partnership’s access to equity 6

7 NGL Operational Assumptions 7 Key Investment Highlights Successful Track Record of Growth  1,671% EBITDA growth from EBITDA of $24 million at IPO to $425 million Fiscal 2015  74% distribution per unit increase since IPO  Growth has been combination of organic and acquisitions (more than 30 completed since IPO) for aggregate value over $3.2 billion Diversified and Attractive Asset Base  Multiple business segments reduce cash flow volatility and provides significant opportunities for growth in multiple regions and business segments  Presence in many of the most prolific, highest rate of return crude oil producing regions in North America  Line space on Colonial and Plantation pipelines, Glass Mountain pipeline, Cushing OK storage Vertical Integration  Vertical integration allows for capture of margin across the value chain from wellhead to end-user  Emphasis on asset ownership drives ability to capitalize on multiple revenue/bolt-on opportunities Stable Cash Flows  Focus is on repeatable fee-based cash flows  Combination of fee-based, take-or-pay, acreage dedication, margin-based and cost-plus revenue contracts  Geographic diversity Strong Credit Profile and Liquidity  Conservative capital structure with low leverage (targeted leverage of 2.75X – 3.25X)  Revolver sized at $2.2 billion  Excess cash earned is reinvested in growth projects  Strong common unit coverage ratio Experienced & Incentivized Management Team  Extensive industry and MLP experience with proven record of acquiring, integrating, operating and growing successful businesses (completed and integrated over 200 acquisitions in the past 20 years)  Senior management holds significant limited partner interests and GP stake, which strengthens alignment of incentives with lenders and public unitholders

8 8 Key Growth Metrics and Performance NGL Has a Proven Track Record of Successful Growth  Since NGL's IPO in May 2011, NGL has consumated and integrated more than 30 acquisitions totaling over $3.2 billion  Distribution growth of 18% in calendar 2014 and 10% plus thereafter (1)Pro rated for a full quarter (2)$42.95 unit price as of 7/31/14 Distribution Per Unit ($) 163% Increase NGL has delivered a total return of 117% since IPO Excludes TransMontaigne (2 ) Market Cap ($mm) $3,796

9 Eagle Ford Marcellus Shale DJ Basin Pinedale Anticline Jonah Field Niobrara Shale Green River Basin Bakken Shale Wattenberg Field Mississippi Lime Granite Wash Permian Basin Crude Barges Water Services Railcar NGL terminal Refinery terminal NGL proprietary terminal Natural gas liquids segment NGL leased storage Assets and marketing presence Common carrier pipeline Crude oil segment Crude barge terminal NGL Retail Propane Crude operational area NGL proprietary crude pipeline NGL proprietary crude storage  NGL’s operations are geographically and operationally diversified  Significant presence in the most economic oil and natural gas shale plays in the country  Coast-to-coast terminals and Retail Propane locations 9 Diversified Across Multiple Businesses and Producing Basins

10 10 Section II TransMontaigne Inc. - Area of Operations

11 11 Integrated Midstream Solutions Wellhead Crude Logistics Refiner LACT Units Truck Pipeline Fractionator Storage Hub Refinery Retail Propane Refinery Diluent Petrochemical Terminal Rail Storage Pipeline Wellhead Truck Pipeline Processing Plant SWD Recycle Discharge Pipeline Storage Terminal Rail Barge NGL Liquids Water Solutions Service a stable base of customers with integrated midstream services across the value chain Refined Products / Renewables Refiner Wholesale Marketing Pipeline Storage Terminal

12 Significant Operational Diversity NGL's Core Business Lines Crude LogisticsWater SolutionsNGL LiquidsRetail Refined Products/ Renewables Description  Purchase and transport crude oil from wellhead to refinery  Own and operate storage, pipelines, terminals, barge, rail and truck logistics assets  Treatment of oil and gas wastewater  Water disposal, recycling and discharge  Innovative (patented technology)  Transport, handle, store NGLs  Own assets across value chain  Marketing / supply business allows NGL to capture opportunities with approximately 1,000 customers in 47 states  Distribute propane / distillates to residential, industrial, and commercial customers  Own assets  90% tank ownership  Purchase and transport refined products from refinery to rack  Own and operate pipelines and terminals  Marketing business with approx. 1,000 customers in 48 states Region  Mid-continent  Eagle Ford / Permian  Rockies  Gulf Coast  Canada  Anticline (WY)  DJ Basin (CO)  Eagle Ford (TX)  Permian (TX)  Coast to Coast  Midwest  New England  Pacific Northwest  Coast to Coast Cash Flow Characteristics  Fee-based pipeline, storage, terminals and assets  Margin-based logistics  Back-to-back contracts  Fee-based  Take-or-pay / acreage dedication contracts  Strong customer base  Fee-based / Cost Plus  Back-to-back contracts  Margin-based  Utility residential model  Weather-sensitive  Minimum throughput contracts  Fixed margin contract business  Back-to-back contracts Strategic Focus  Expand operations in existing areas  Grow through acquisitions  Organic projects  Grow organically  Pursue strategic acquisitions  Integrate operations and capture full value chain opportunities  Grow / expand terminals segment  Focus on West Coast expansion  Blend-ins in current footprint  Integrate operations and capture full value chain opportunities 12

13 13 Section II NGL Segments

14 14 Area of Operation  Purchases and transports crude oil for resale to a pipeline injection point, storage terminal, barge loading facility, rail facility, refinery or trade hub  Strategically deployed railcar fleet, tows, barges and trucks provide access to multiple customers and markets, allowing NGL to bring the right crude oil to the right market  Maximizes value of crude oil gathered through proprietary linear programming model  Reduces exposure to price fluctuations by using back-to-back contractual agreements  Purchase from >7,500 active lease locations representing >750 producers  Current volumes of ~230,000 bbls/day Segment Operations Crude Logistics Crude Barges Crude oil segment Crude barge terminal NGL Crude operational area NGL proprietary crude pipeline NGL proprietary crude storage

15 15 Crude Logistics Asset Overview Trucks  >300 owned trucks and >300 trailers  Additional ~100 trucks on committed lease  Moving Company first-purchased barrels and fee-based hauling for third parties  ~245Mbbls/day hauled/transported (~225Mbbls hauled for Company, ~20Mbbls for third parties) Terminals Rail Barges Pipelines  7.7 MMbbls of storage in Cushing (3.6MMbbls leased)  5 Gulf Coast terminals with aggregate capacity of ~850 Mbbls  Port of Catoosa, Oklahoma - storage services; truck and rail trans-loading to barges with access to Gulf Coast; 140Mbbls storage capacity  7 truck terminals and 50+ LACT units  North Dakota rail terminal  Additional terminals pending or under development  ~1,150 GP railcars leased or owned  Railcars provide optionality to markets via company and third-party facilities  ~30K bbls/day moved through manifest shipping and unit-train facilities  Own 8 tows, 19 barges, 20-25Mbbls per barge capacity  Lease additional 5 tows and 12 barges  Fee-based, day rate business  50% interest in Glass Mountain Pipeline; ~147MMbbls/d capacity  Ship on 18 common carrier pipelines  Utilize historical shipper space on 11 prorated pipelines

16 16 Water Treatment and Processing Industry Overview  Oil and natural gas producers preserve cash for drilling by outsourcing the disposal and treatment of oilfield produced and flowback water (“waste water”)  Water quality is measured by amount of TDS (Total Dissolved Solids) which can include salts, boron, iron, calcium, strontium, magnesium, and barium (higher TDS equals harder to treat or dirtier water)  The water quality and the geology vary by region / area and dictate the feasibility, cost of disposal and treatment systems  Distance to disposal and treatment facilities, as well as the ability to handle large volumes of water, are key concerns for E&P companies  Produced water from the well that occurs over the life of the well, and water recovered from hydraulic fracturing activities (flowback water) requires different levels of water treatment  Waste water disposal and treatment provides fee-based revenue, with additional revenue generated from hydro-carbon recovery and recycled water sales

17 17 Water Treatment and Processing Operational Model  Treatment and Disposal –Company-owned disposal facilities provide producers affordable well-disposal of wastewater generated from oil and natural gas production and drilling activities –Water treatment process separates solids and hydrocarbons from water prior to disposal –24 x 7 operations, truck bay loading/unloading –Certain facilities are pipeline connected, providing stronger customer relationship with the producers –Proprietary well maintenance programs enhance injection-rates and service lives of the wells  Recycle Operations –Provides higher quality of water treatment services where the clean water can be re-used by producers for fracking, well drilling, and completion projects –Offers producers an alternative to fresh water that minimizes the impact on aquifers, particularly in arid regions of the U.S. –Recycled ~33 million barrels (1.4 billion gallons) of water since 2008  Discharge Water –Multi-patented 14-step water treatment process –Cleans water to a better than drinking water quality –Returned over five million barrels (210 million gallons) back to New Fork River, Wyoming, a tributary of the Colorado River –Continued R&D investments to employ latest technologies in various basins

18 Water Solutions Overview  Provides services for the treatment, processing, and disposal of wastewater generated from oil and natural gas production  Generates fee-based revenue from the disposal of wastewater, the sale of recycled wastewater, and recovered hydrocarbons  Multiple treatment, disposal, and recycling facilities located across the United States  Long-term, deliver-or-pay contracts and acreage dedication contracts reduce cash flow volatility  Provides high technology solution where necessary. Has highly advanced technology and commits $2.0-$3.0 million annually on R&D  Multi-patented 14-step water treatment process that cleans water to a better than drinking water quality Area of Operation Segment Operations 18

19 AnticlineDJ BasinEagle FordPermian Overview  Treatment of oil and gas waste-water for recycling, clean water discharge, or disposal using a multi- patented process technology  Leading provider of oil and gas waste-water disposal services  Recycling plants to sell water back to producers  Expansive footprint across the Eagle Ford  Treatment of oil and gas waste-water for disposal  Growing presence in one of the most active oil plays in the world  Treatment of oil and gas waste-water for disposal Market Profile / Asset Highlights  ~1,675 wells in area  1 treatment & recycling plant  60 Mbbl/d capacity with recycling  ~23,000 wells in area  7 water disposal facilities with 11deep injection wells  120 Mbbl/d capacity  2 recycling plants with 20 Mbbl/d capacity  274 Mbbl/d disposal capacity  16 SWD wells across the play  Some of the best production economics of all oil plays  Significant drilling activity as play continues to ramp up  147 Mbbl/d disposal capacity  4 SWD wells across the play  Some of the best production economics of all oil plays  Significant drilling activity as play continues to ramp up Revenue Profile  Fixed fee per bbl  Recycled water sales  Hydrocarbon recovery  Fixed fee per bbl  Recycled water sales  Hydrocarbon recovery  Fixed fee per bbl  Hydrocarbon recovery  Fixed fee per bbl  Hydrocarbon recovery Contractual Profile  90% “Take or Pay”  Multi-year contracts  Acreage dedications  Multi-year contracts  Combination of multi-year contracts, company owned water hauling fleet and short- term arrangements  Short-term arrangements 19 Water Solutions Regional Operations

20 20 Area of Operation Liquids Overview PHILADELPHIA

21 21 Automated truck loading and unloading facilities that operate 24 hours a day 16.5MM gallons above ground storage Terminal throughput of 419MM gallons of propane projected in 2012 – proprietary terminals serving over 300 customers 10 terminals with rail loading capability 5 multi-product terminals Railcar fleet of 580 pressure cars, growing to 855 by 4Q 2013, and 210 general purpose cars Liquids  22 terminals serving over 300 customers –17 terminals with rail loading capability –13 multi-product terminals –13 pipe-connected terminals  19 million gallons of above ground storage  > 3.8 million barrels of leased underground storage  Automated truck loading and unloading facilities operating 24 hours a day  Over 900 wholesale customers in 45 states  Approximately 85,000 Bbls/d of propane sold –~50% of which goes through proprietary terminals –Includes 200 million of pre-sold propane gallons at a fixed price with a locked-in margin  Rack sales through common carrier pipeline terminals Terminals and Wholesale Supply & Marketing SegmentRailcar Segment  Transports and markets NGLs to and from refiners, gas processors, propane wholesalers, proprietary terminals, petrochemical plants, diluent markets and other merchant users of NGLs  Service offered in each of the lower 48 states and Canada  Utilizes terminal storage to take advantage of seasonal demand  Purchase-and-sale transactions are entered primarily on a back-to-back basis  Average volumes of ~50,000 Bbls/d from more than 100 customers  Majority of liquids sold are butane and propane  ~ 3,550 leased high pressure railcars; ~700 GP railcars

22 Area of Operation  Sell propane and petroleum distillates to end-users consisting of residential, agricultural, commercial and industrial customers  Geographic diversity mitigates weather risk  Less volatility from warm weather as margins increase when demand falls and vice versa  Liquids Logistics segment provides 75% of Retail Propane segment demand  Cost plus margins allow immediate pass- through of wholesale price increases  The Retail Propane business is seasonal  ~70% of retail propane volume is sold during the peak heating season from October through March  Focus on residential customers, high tank ownership and customer retention Segment Operations Retail Propane Overview 22

23  Operational focus on regions with the highest number of degree days – North East, Upper Midwest and Pacific NW  In warmer weather, gross margins temporarily expand to recoup a portion of revenues lost to volume declines  Retain and grow customer base by pricing product competitive with other regional retailers  Acquisition model assumes independent / “mom-and-pop” margins continue  Retain local brand - no change to uniforms, invoices, signs or trucks  Ownership change is seamless to customers while simultaneously saving on capital expenditures and expenses  Decisions regarding pricing, advertising, vehicles and other expenses are made at the regional and district levels  Fosters swift decision making by leadership attuned to the local or regional market  Daily price changes at supply points are communicated to local management  Efforts are made to retain employees of acquired businesses  Aides in preservation of customer relationships, safeguarding knowledge of local market dynamics, and prevents the creation of ex-employees investing in competitive propane assets ▪ History of successful acquisitions with demonstrated track record of improving profitability through operational efficiencies, not margin enhancement  Improved vehicle routing, consolidated back office functions, less expensive insurance, etc. Customer Base Retention Geographic Focus Leverage Acquisition Brand Names Empower Local Management Employee Retention Quickly Implement Operational Improvements Retail Propane What Sets Us Apart 23

24 24 Section II Refined Products / Renewables

25 25 Automated truck loading and unloading facilities that operate 24 hours a day 16.5MM gallons above ground storage Terminal throughput of 419MM gallons of propane projected in 2012 – proprietary terminals serving over 300 customers 10 terminals with rail loading capability 5 multi-product terminals Railcar fleet of 580 pressure cars, growing to 855 by 4Q 2013, and 210 general purpose cars Refined Products Refined Product - RackRefined Product - Bulk  Market refined products at the rack to wholesale resellers and end users in the spot market  188 terminals with sales in 37 states  7.35 million gallons of leased above ground storage  Automated truck loading and unloading facilities operating 24 hours a day  Approximately 500 customers  Approximately 75,000 Bbls/d of distillates and gasoline sales  Rack sales through common carrier pipeline terminals  Market refined products at the rack to contracted customers  47 terminals with sales in 11 states –3 water borne terminals in FL  Approx. 890 million gallons of above ground storage  Automated truck loading and unloading facilities operating 24 hours a day  Approximately 500 customers  Approximately 116,000 Bbls/d of distillates and gasoline sales  80% of volumes are contracted

26 26 Automated truck loading and unloading facilities that operate 24 hours a day 16.5MM gallons above ground storage Terminal throughput of 419MM gallons of propane projected in 2012 – proprietary terminals serving over 300 customers 10 terminals with rail loading capability 5 multi-product terminals Railcar fleet of 580 pressure cars, growing to 855 by 4Q 2013, and 210 general purpose cars Renewables EthanolBioDiesel  NGL generates profits thru a mix of fee based income with our TransMontaigne assets and supply chain management with our legacy Gavilon business  Legacy Gavilon Biodiesel Assets:  Caljet Terminal in Phoenix, AZ –22 rail spots –Approx. 42,000 bbl tank capacity –Exclusive marketing agreement at the terminal –Blends Biodiesel  Terminal in Deerfield, TX –2 tanks with 30,000 bbl capacity each –Break Bulk shipments into truck  TransMontaigne Biodiesel Assets:  Griffin, Ga  15,000 bbl tank capacity  Injects Biodiesel at 5% blend ratios  Port Everglades, Fl  50,000 bbl tank capacity  Blends Biodiesel with Clear ULSD at the truck rack into 2%-20% biodiesel blends  Utilizes 200 GP railcars  Sell ethanol on a back-to-back basis and transports purchased volumes to leased and customer terminals  Average volumes of 32,000 bbls/d with 275 customers in 48 states; 25% of that volume is used in proprietary blending  Fee-based marketing and logistics service  Marketing agreements with two largest customers for combined 142 MM/gal year; 25% of volumes is contracted > 2 years  Storage locations in Chicago, Houston, Mason City, IA  Utilize a fleet of 350 GP railcars Marketing Agreements Storage

27 TransMontaigne Inc. Transaction Overview  Purchased TMI from Morgan Stanley for $200 million plus inventory of $346 million  NGL received: –3,171,161 TLP Common Units –100% of TLP General Partner –130,000 bbl/d of combined shipper history on Colonial and Plantation pipelines –116,000 bbl/d of marketing agreements, 80% of volumes contracted –Projected TransMontaigne EBITDA of $35 million year 1, $55 million year 2, $70 million year 3  Opportunities –Butane Blending –Increased throughput volumes through terminals –Brownsville Terminal 27

28 28 Section II TransMontaigne Inc. - Area of Operations

29 Simplified TransMontaigne Ownership Structure 29 Public Unitholders NGL Energy Partners L.P. TransMontaigne Inc. TransMontaigne Product Services Inc. TransMontaigne GP L.L.C. Operating Subsidiaries TransMontaigne Partners L.P. 80% Interest (Limited Partner) 17% Interest (Limited Partner) 2% Interest (General Partner) 100% Interest 3% Interest (Limited Partner)

30 Conclusion and Key Takeaways  Compelling investment opportunity with attractive combination of yield and growth –Distribution growth of 18% for calendar 2014 and 10% plus thereafter –74% distribution per unit increase since IPO –NGL total return 117% since IPO  Multiple growth platforms –Brings strategic acquisitions that are accretive –Completed over $3.2 billion of acquisitions in last 3 years –Substantial organic growth projects, currently $500 million  Diverse geographic and operational footprint reduces risk  Strong credit profile and sufficient liquidity to run business and execute growth objectives  High common unit coverage provides cash to finance growth and maintain distribution growth profile  Experienced, management team with substantial equity ownership 30


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