Vaquero Midstream Southern Delaware Basin

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1 Vaquero Midstream Southern Delaware Basin August 2016

2 Company History Founding Partners (Gary Conway, Bryant Patton, and Bill Davis) have had a long affiliation through various roles at Crosstex over the years Yorktown Energy Partners was an early backer of Crosstex and maintained a role on the Board of Crosstex even after distributing its equity in the Company As a result of the long relationships between Yorktown and the management, the first funding of Vaquero took place quickly, in August 2014 The company immediately put its focus on the Southern Delaware with the first order for long-lead time equipment placed in October 2014 Construction on Phase I of the Plant and Gathering system completed in August MMCFD initial capacity 2

3 Vaquero Strategy and Delaware Basin Dynamics Legacy midstream infrastructure in the basin was built to handle lower volume, lower (2-3) GPM legacy wells than are being developed today Result as newer wells are developed, producers ability to flow their gas can be hamstrung by inadequate capacity, but legacy dedications have impaired producers ability to solicit new service increased flaring and shut-ins Vaquero has developed and constructed a basin-wide gas gathering and processing solution Large, high-capacity gathering pipe can gather high-gpm (6-8 gpm) gas from the north and west of the basin areas where residue gas takeaway has been constrained in the past Vaquero gives the high-gor volumes from the northern and western parts of the basin access to the high-volume WAHA market with abundant optionality capacity and optionality will increase significantly with the addition of new pipes to Mexico 3

4 Phase I Construction Completed Over 50 locations dedicated to the system scheduled for completion by the end of 2017 IP rates for each anticipated to be 4-8 MMCFD More dedications expected shortly, will add processing capacity as needed, and can extend gathering line further north, west, east and south As legacy dedications to other processors expire (generally in 2018 and 2019), we expect to actively compete to secure the business 4

5 24 & 30 Lariat Pipeline Construction 5

6 SYSTEM OVERVIEW 6

7 Vaquero System Phase I Vaquero offers a high-quality, new-build system to provide higher plant recoveries, minimal downtime and lower fuel usage Construction complete on large processing system for rich gas in the Southern Delaware Basin with the initial 200 MMCFD Cryogenic plant, Amine Treating, Compression, Dehydration and Stabilization 90 Miles of 30, 24, 16 and 12 high pressure pipelines with 800 MMCFD+ of gathering capacity Tailored UOP Russell 200 MMCFD plant designed specifically for the new gas production seen in the Southern Delaware Basin 5,000 BBLS/D condensate stabilization at the plant inlet Residue gas pipeline to the Waha market will connect producers to at least 12 residue pipelines and markets, providing flow assurance and market optionality Connected to 2 NGL pipelines to the Mont Belvieu market Premium NGL Market Expandable up to 4 additional cryogenic trains (1 BCFD processing capacity) 7

8 Vaquero System Map 8

9 Caymus Site 9

10 VAQUERO CAYMUS PROCESSING 10

11 Cryogenic Unit Picture 11

12 Caymus Phase I Layout Designed with Purpose, Flexibility & Redundancy 12

Vaquero Caymus Facility Phase I 200 MMSCFD Cryogenic Unit w/ Propane Refrigeration Dual Drive Residue Compression Condensate Stabilization Bulk Treating & Dehydration

13 Vaquero Caymus Facility Phase I 200 MMSCFD Cryogenic Unit w/ Propane Refrigeration Dual Drive Residue Compression Condensate Stabilization Bulk Treating & Dehydration Electrical Substation Pistolero NGL Check Meter Slug Catcher Inlet Compression Condensate Loading Condensate Storage 30 Lariat Inlet Gas Pipeline Residue Gas Check Meter 13

14 Vaquero Reliabilities and Redundancies Plant Inlet Slug Catcher and Condensate Stabilization 15,000 Barrels of condensate storage (3 days of storage at existing stabilizer rate) 2 Truck Racks 3 Months to duplicate the current liquids handling Inlet Compression Common engine types with residue compressors creating common spares Common manufacturer for engine, frame and compressor leads to operational simplification and efficiency Critical spares stored on-site Inlet Treating and Bulk Dehydration MMCFD trains where each is able to provide sufficient volume to maintain plant efficiency for recoveries should one train not be in service Cryogenic Processing Propane Refrigeration 3 1,500 hp electric compressors where each can provide sufficient volume to maintain plant efficiency Expander Designed for the range of gas composition in Southern Delaware Spare center section stored on-site Residue Dual Drive Compressors 100% redundancy for the drivers of the residue compression 2 sources of driver power (Gas & Electric) Common gas engine, frame and compressor with inlet compression provides common operations and spares Critical spares stored on-site Spare coupling onsite 25 MW Substation On-site substation with direct connection to 138 kv transmission line Expandable to 100 MW Plans for secondary transmission line connection 14

15 Quantifying Reliability System Runtime Flaring Gas Hours per Month Down Time Lost Value to Netback $2.50/MCF $4.00/MCF 99% 1% 7 $0.03 $ % 5% 36 $0.13 $ % 10% 73 $0.25 $ % 15% 109 $0.38 $ % increase in runtime on 10 MMCFD is $1.4MM per year to the bottom line (based on $4.00/MCF) 15

16 Dedicated Power Source Facility Substation 16

17 RESIDUE MARKETS 17

18 Dual-Drive TM Residue Compression Picture 18

Products 2 Physical Interconnects Lone Star Chaparral Delivery to Mt.

19 Vaquero Tailgate Connections Residue Gas 4 Physical Interconnects for redundancy and reliability Atmos OneOk Enterprise Northern Natural Access to Waha Hub, Gulf Coast, North Texas, Midwest, and Mexico NGL Products 2 Physical Interconnects Lone Star Chaparral Delivery to Mt. Belvieu Road Runner (Mexico) *Trans Pecos Header (Mexico) *Potential direct connection to Trans-Pecos Header Flow Assurance and Premium Pricing 19

Waha Market Demand 7 9 BCFD Currently accesses

Channel and Gulf Coast LNG markets Developing

BCFD Comanche Trail Pipeline Metroplex 0.

Pipeline WAHA San Elizario 1.7 BCFD Presidio 1.

20 Waha Market Demand 7 9 BCFD Currently accesses California, Midwest, Metroplex, Houston Ship Channel and Gulf Coast LNG markets Developing Mexico markets adds 3+ BCFD Capacity Midwest 1 BCFD Comanche Trail Pipeline Metroplex 0.5 BCFD Roadrunner Pipeline * Trans Pecos Pipeline WAHA San Elizario 1.7 BCFD Presidio 1.4 BCFD Gulf Coast 1.5 BCFD Katy - LNG >0.5 BCFD Existing Demand New Demand 20

21 Vaquero Maximizes Value CDP Gathering Processing Residue Lowest Pressures Full value for Condensate High Capacity Basin Solution Best Recoveries Best Runtime Multiple Markets Premium Index Vaquero brings a sense of urgency to provide solutions, allowing producers to reliably flow their complete value chain to the best available markets. 21

22 MANAGEMENT AND CULTURE 22

Vaquero Culture Vaquero Midstream has assembled a team of strong industry professionals who have dedicated their careers to bringing products to market safely, efficiently and cost effectively.

23 Vaquero Culture Vaquero Midstream has assembled a team of strong industry professionals who have dedicated their careers to bringing products to market safely, efficiently and cost effectively. The members of the Vaquero team have served in both internal producer roles and external service provider roles, making us uniquely specialized to best serve our producer partners. Developing Willing Partnerships 23

Prior to co-founding Vaquero, Gary served as Vice President of Engineering and Operations at TEAK Midstream LLC, and was a key participant in the board s analysis and decision making.

24 Executive Management Team Gary E. Conway Principal, President and CEO Gary is one of the three founding members of Vaquero. He has more than 24 years of experience in the oil and natural gas industry and a track record of success. Prior to co-founding Vaquero, Gary served as Vice President of Engineering and Operations at TEAK Midstream LLC, and was a key participant in the board s analysis and decision making. His role involved all aspects of the engineering and operations of more than 300 miles of high and low pressure gathering systems, a grassroots 262-mile high pressure gathering pipeline, and a 200 MMSCFD processing facility with an additional 400 MMSCFD planned on the complex. Prior to his time at TEAK, Gary served as Vice President of Treating and Construction for Petrohawk/Hawk Field Services, completing the midstream assets in the Fayetteville Shale, establishing a major footprint of midstream assets in the Haynesville Shale and the initial assets for the Eagle Ford Shale. Prior to Petrohawk/Hawk Field Services, Gary was instrumental in guiding Energy Transfer into the Barnett Shale, leading the construction and operations of 500 MMSCFD Godley Cryogenic Complex. Previously, Gary was Manager of Engineering at Crosstex Energy Services in the Treating Division, where under his execution management Crosstex grew to more than 120 operating amine plants. Gary graduated in 1992 from Texas A&M University with a Bachelor of Science degree in chemical engineering. William W. Davis - Principal Bill is one of the three founding members of Vaquero Midstream. Bill co-founded Vaquero after retiring from a 13-year career with Crosstex Energy, serving 10 years as Chief Financial Officer and then three years as Chief Operating Officer. He joined Crosstex as its CFO in order to assist in leading the IPO of Crosstex Energy L.P., one of the early Master Limited Partnerships (MLP). Shortly after that IPO, he helped lead the IPO of the general partner of the MLP, Crosstex Energy, Inc., in what was the first IPO of a general partner of an MLP. Subsequently, in his role as COO, Bill coordinated the commercial, engineering, operations, and EH&S teams in the execution and subsequent operation of the Company s assets. A principal focus was the execution of the Cajun Sibon expansion, a $700 million project that significantly expanded the company s fractionation capacity in South Louisiana and connected that capacity to the liquids hub at Mont Belvieu. Prior to joining Crosstex, Bill worked for Sunshine Mining Company for 18 years as Chief Accounting Officer and then as President/Chief Financial Officer/Chief Operating Officer. Before Sunshine Mining Company, he worked for Arthur Young and Company in Houston and San Antonio. Bill graduated from Texas A&M University in 1975 with a BBA in accounting. 24

manager investing approximately $350 million, and 10 years providing value-added management extension and capital formation strategy to upstream and midstream energy companies.

25 Executive Management Team Bryant H. Patton Principal Bryant is one of the three founding members of Vaquero Midstream. He has nearly 40 years of experience in the oil and gas industry, including 20 years as a principal in two oil and gas exploration and production companies, eight years as an institutional portfolio manager investing approximately $350 million, and 10 years providing value-added management extension and capital formation strategy to upstream and midstream energy companies. Bryant has participated in hundreds of transactions and has established relationships with industry players, capital providers, investment bankers, lawyers, and third-party support professionals. In addition to his role at Vaquero, Bryant is founder and president of Brycap Investments, Inc., which helps energy companies develop strategic plans, secure capital to fund company growth, execute the strategic plan, and source and monetize assets to maximize return on investment. Companies that Brycap has assisted include TEAK Midstream, Crosstex Energy, Oakspring Energy, LLC, Vendera Resources, Abraxas Petroleum, Camden Resources, Cinco Resources, and Primexx Energy Partners. Previously, Bryant was Senior Vice President of Associated Energy Managers (AEM), managing two funds for The Common Fund and Energy Income Fund, L.P., which closed in 1996 with capital commitments of $100 million. AEM provided premium rate non-recourse financing on deals from $1 million to $41 million. Brian W. Best Executive Vice President, Business Development Brian serves as Vaquero s Executive Vice President of Business Development. Prior to joining Vaquero, Brian served as Vice President of Commercial and Business Development for J-W Midstream Company, a subsidiary of J-W Energy Company. Brian managed several aspects of the midstream and producer functions including third-party business development, pipeline commercial operations, acquisition and divestitures, new project expansions and banking and finance relationships. Brian brings a blend of engineering and finance to create value for producers. Prior to his time at J-W Energy Company, Brian spent nine years in the defense industry at Lockheed Martin in both technical and project management roles in the development of the F-16 Fighting Falcon and the F-35 Joint Strike Fighter. Brian holds a Bachelor of Science in mechanical engineering from Texas Christian University and a Masters of Business Administration from Southern Methodist University. 25

26 Vaquero Contacts HOUSTON OFFICE DALLAS OFFICE 1790 Hughes Landing Blvd 2602 McKinney Ave Suite 475 Suite 315 The Woodlands, TX Dallas, TX (281) (214) Gary E Conway CEO/Principal Gary.Conway@vaqueromidstream.com (972) William W Davis Principal Bill.Davis@vaqueromidstream.com (214) Bryant H Patton Principal Bryant.Patton@vaqueromidstream.com (214) Brian W Best EVP of Business Development Brian.Best@vaqueromidstream.com (214) Justin Bennett Business Development Justin.Bennett@vaqueromidstream.com (979) Brett Taylor Business Development Brett.Taylor@vaqueromidstream.com (972) Brian Hiett Business Development Brian.Hiett@vaqueromidstream.com (214)

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