NGL Energy Partners LP Closes Combination with Mesquite and Announces Investment from EIG and FS Energy and Power Fund

NGL Energy Partners LP (NYSE:NGL) (the "Partnership” or "NGL”) today announced the closing of its previously announced acquisition of all of the assets of Mesquite Disposals Unlimited, LLC ("Mesquite”) for a total purchase price of $892.5 million on a cash-free, debt-free basis, a portion of which will be funded in deferred payments.

"The closing of our Mesquite transaction creates the largest water disposal system in the Delaware Basin with permitted capacity exceeding two million barrels per day, but more importantly, the redundancy required by our customers,” stated Mike Krimbill, NGL’s CEO. "The combined system provides multiple transportation, disposal and recycling options throughout Lea and Eddy Counties that allows NGL to deliver on its commitments. The Mesquite family will work alongside NGL, operating these assets while expanding the business with additional facilities and contracts.”

The acquisition purchase price was funded with the following sources of capital:

• $400 million aggregate gross proceeds from privately placed equity securities sold for cash to investment funds managed by EIG Global Energy Partners ("EIG”) and FS Energy and Power Fund ("FSEP”);
• $100 million of additional NGL preferred units based on market value of an existing class, issued to certain beneficial owners of Mesquite as part of the acquisition consideration;
• $250 million gross proceeds from a new 5-year secured term loan with TD Securities (USA) LLC, as lead arranger and bookrunner, and The Toronto-Dominion Bank, New York Branch, as initial lender; and
• Any remaining funding requirements are expected to be paid from borrowings under the Partnership’s existing revolving credit facility.

"We are also excited to announce the investment in NGL by EIG,” stated Mr. Krimbill. "In conjunction with our partnership with EIG, we welcome Brian Boland to our Board of Directors. We appreciate EIG’s support in the diligence and financing of this highly strategic acquisition and look forward to working with Brian and the EIG team on new opportunities in the near future.”

Brian Boland, Managing Director and Co-head of Midstream at EIG added, "We are thrilled to be making this investment in NGL and its diversified, high-quality asset base that includes what we believe to be the preeminent, multi-basin water solutions platform in the United States. We expect the acquisition of the Mesquite assets, together with NGL’s existing footprint in the Northern Delaware basin, to provide NGL with unmatched scale and capabilities that will facilitate best-in-class execution for its customers. NGL’s system is strategically located in the core of the Delaware basin and is well-positioned to capture significant volume growth as produced water levels continue to rise alongside rapidly growing oil production. We look forward to working with the NGL team towards this next phase of growth for the Partnership and its stakeholders.”

"Thank you to EIG and to the team at TD Securities for their support in completing the financing strategy for the closing of the Mesquite transaction,” stated Trey Karlovich, NGL’s CFO. "Pro forma for Mesquite’s first year contribution, we were able to complete this financing while maintaining our 3.25x compliance leverage target and managing our cost of capital, while maintaining flexibility around our capital structure and debt maturities.”

Advisors

Barclays acted as financial advisor and placement agent for NGL. Winston & Strawn LLP acted as legal counsel to NGL on the Mesquite transaction. Hunton Andrews Kurth LLP and Paul Hastings LLP served as legal counsel to NGL on the financing transactions. Kirkland & Ellis LLP acted as legal counsel to EIG and FSEP.

Forward-Looking Statements

Certain matters contained in this Press Release include "forward-looking statements." All statements, other than statements of historical fact, included in this Press Release may constitute forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, the risk factors discussed from time to time in each of our documents and reports filed with the SEC.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this Press Release, which reflect management's opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.

About NGL Energy Partners LP

NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with four primary businesses: water solutions, crude oil logistics, NGL logistics and refined products/renewables. For further information, visit the Partnership’s website at www.nglenergypartners.com.

About EIG Global Energy Partners

EIG Global Energy Partners is a leading institutional investor to the global energy sector with $22.4 billion under management as of March 31, 2019. EIG specializes in private investments in energy and energy-related infrastructure on a global basis. During its 37-year history, EIG has committed over $30.8 billion to the energy sector through more than 345 projects or companies in 36 countries on six continents. EIG’s clients include many of the leading pension plans, insurance companies, endowments, foundations and sovereign wealth funds in the U.S., Asia and Europe. EIG is headquartered in Washington, D.C. with offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For additional information, please visit EIG Partners website at https://www.eigpartners.com/.

About FS Energy and Power Fund

FS Energy and Power Fund is a publicly registered, non-traded business development company sponsored by FS Investments and advised by FS/EIG Advisor, LLC, a joint venture of EIG and FS Investments. FSEP focuses primarily on investing in the debt and income-oriented equity securities of privately held U.S. companies in the energy and power industry. FSEP’s investment objectives are to generate current income and long-term capital appreciation. FS Investments is a leading asset manager dedicated to helping individuals, financial professionals and institutions design better portfolios. FS Investments had $23.7 billion under management as of March 31, 2019. Visit www.fsinvestments.com to learn more.

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