blueknight energy

7/23/2019 Blueknight Energy

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Private and Confidential

(NASDAQ: BKEP & BKEPP)

EnerCom Oil & Gas ConferenceAugust2015

EnerCom Oil & Gas Con ference

Augus t 1718, 2015

The Smart Move in Energy


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Forward-Looking Statements

This presentation includes forward-looking statements. Statements included in this

presentation that are not historical facts (including any statements or forecasts

concerning expectations relating to BKEPs crude oil or asphalt operations and any

statements concerning plans and objectives of management for future operations or

economic performance, or assumptions related thereto) are forward-looking statements.

Such forward-looking statements are subject to various risks and uncertainties. These

risks and uncertainties include, among other things uncertainties relating to future

operations of BKEPscrude oil and asphalt businesses, uncertainties relating to market

conditions, governmental regulations and other factors discussed in BKEPs filings with

the Securities and Exchange Commission (the SEC). These documents are available

free of charge at the SECs web-site at www.sec.gov and from Investor Relations at

BKEPswebsite at www.bkep.com. If any of these risks or uncertainties materializes, or

should underlying assumptions prove incorrect, actual results or outcomes may vary

materially from those expected. BKEP undertakes no obligation to update or revise anyforward-looking statement, whether as a result of new information, future events or

otherwise.

Legal Disc laimer

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Partnership Overview

Blueknight Energy Partners, L.P. (BKEP) is a publicly traded master limitedpartnership

Headquartered in Oklahoma City, Oklahoma; established in 2007

General Partner owned equally by Vitol and Charlesbank Capital Partners

Our strategically located assets position us to be a leading provider of midstream

services in the energy industry. We provide services to our customers by focusing on

four operational areas:

Crude Oil Terminalling and Storage Services

Crude Oil Pipeline Services

Crude Oil Trucking and Producer Field Services

Asphalt Services

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Common and Preferred Units

4

Common Units Preferred UnitsMarket NASDAQ NASDAQ

Symbol BKEP BKEPP

Outstanding 32,945,556 30,158,619

Yield at 8/5/15 8.2% 8.9%

Distribution Twelfth consecutive quarterly distributionincrease to 14.25 cents

$0.715/unit annual distribution

Comment 2.2% increase over the previous quarter'sdistribution and a 7.5% increase over the

second quarter of 2014's distribution

Convertible to common units on a1-1 basis under certain conditionsbeginning on or after October 25,

2015

Market Capital/EnterpriseValue (1)

(combined for Common and Preferred Units)

$469.6MM

(1) Market value as of August 12, 2015. Enterprise value calculation utilizes balance sheet data as of June 30, 2015


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Sponso rship Overv iew

5

Worlds largest independent oil tradingcompany

Moves equivalent of over 5 millionbarrels/day of physical oil and oil products

Privately owned by principal employees

Completed 49thconsecutive year ofprofitable operations in 2014

Over 50 million barrels of storage capacityon 5 continents

Strong liquidity and equity capital

Private equity firm with over $2 billion ofcapital under management

Long history of making middle-marketinvestments, primarily in US companies

Since 1991, $2.9 billion of investments in 67companies

Proven ability to support and finance growthprojects including:

Co-founded Regency Gas Services by

buying assets from El Paso

Co-founded Southcross Energy by buyingassets from Crosstex


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Ownership

6

Blueknight Energy Partners G.P., L.L.C. (DE)

BKEP Operating Subsidiaries

Blueknight Energy Partners, L.P. (DE)

14.3% Limited

Partner Interest

14.3% Limited

Partner Interest

Blueknight GP Holding, LLC (DE)

50.0%

Ownership

Interest

50.0%

Ownership

Interest

1.8% General

Partner Interest

100.0% Indirect

Ownership Interest

100.0% OwnershipInterest

CB-Blueknight, LLC Blueknight Energy Holding, Inc.

Charlesbank Capital Partners Vitol Holding B.V.

69.6% Limited

Partner Interest

Public Unitholders


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Diversi f ied Operat ions

7

Crude Oil Terminalling and

Storage (24.5%)

6.6 million barrels ofCushing, OK storage

0.4 million barrels ofLongview, TX storage

Operate 1.0 million barrelCushing, OK terminal forTransMontaigne

Crude Oil Trucking

& Producer Field

Services (4.2%)

Approximately 250 crudetransports and service

trucks that complement the

pipeline gathering and

transportation business

Producer services include

gas gathering pipelinemaintenance and water

services.

Primary geographiclocations include Kansas,

Oklahoma, Texas and New

Mexico

Asphalt Terminal

Network (58.2%)

7.3 million barrels ofasphalt and residual

fuel oil storage

43 terminals across22 states

Largestindependently owned

asphalt terminal

network

Crude Oil Pipeline

Services (13.1%)

3 primary gathering andtransportation pipelines

Operate and own 30% ofWest Texas Pecos River

Pipeline (Advantage

Pipeline)

Total length of 900 miles 160 miles Knight Warrior

Pipeline servicing the

Eaglebine / Woodbine area;

expected completion 2Q

2016

Note: This map is deemed reliable but provided as is without any representation of accuracy, timeliness, reliability or completeness. These map documents do not

Represent a legal survey of the land and are for graphical purposes only.

Note: Percentages above represent segment share of 6 months ended 6/30/15 operating margin (excluding D&A)


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Partnersh ip Object ives and Strategy

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Deliver unit-holder value through unitprice appreciation and increasingquarterly distributions

Leverage relationships with sponsors

Be a responsible and involvedmember of the community

Provide clear and transparentcommunication with stakeholders

Grow crude transportation businessin shale production areas

Improve efficiency of truckingbusiness

Grow asphalt business primarilythrough acquisitions

Target highly selective accretiveacquisitions across all BKEPbusiness segments

Partnership Object ives Bu siness Strategy


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Asphal t Services

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Largest independently owned asphalt terminal network

7.3 million barrels of asphalt and residual fuel oil storagecapacity in 43 terminals across 22 states

Generate revenues by charging fees for the lease ofasphalt storage and processing terminals, as well as forprocessing and marketing activities

Facilities are both operated and non-operated

Minimal direct exposure to commodity prices

Many terminals include multiple loading/unloading optionsincluding truck, marine and rail capabilities

Contracts are typically long-term in nature


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Cheyenne, WY Asphal t Terminal Acqu is i t ion

Colas USA Mountain States Asphalt PlantCheyenne, WY

Plant constructed in 2003 220,000 barrels of storage 10 acres of property, plus Rail Yard Produces PMAC, Emulsions, AC Easily Expandable

Acquisition of terminal completed on May6th, 2015

Entered into a long-term lease contract withexisting Asphalt counter-party

Transaction is immediately accretive to

unitholders

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Crude Oil Term inal l ing & Storage Services

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Customer Value Creation

Provides our customers the ability to effectively manage theircrude oil inventories and add significant flexibility in theirmarketing and operating activities

Cushing Interchange

34 crude oil storage tanks with approximately 6.6 millionbarrels of storage capacity with access and connectivity to allthe terminals located within the Cushing Interchange

Capable of receiving and/or delivering 350,000 bpd of crude oil

Longview Terminal

430,000 barrels of storage capacity in Longview, Texas. Thisterminal is connected to our Longview gathering andtransportation pipeline

Third Party Terminal Operations

Operate 1.0 million barrel Cushing, OK terminal forTransMontaigne

Note: Remaining 761,000 barrels of storage capacity consists of miscellaneous storage tanks located at various points along our pipeline and gathering system


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Crude Oi l Pipel ine Services: Ok lahoma Sys tems

Mid-Continent Mainline System

500-mile gathering and transportation network that gatherswellhead crude oil at a capacity of 20,000 bpd

Transports the crude oil to our Cushing terminal, otherstorage facilities and area refiners

Newly constructed 60-mile Arbuckle pipeline commenced

operations in September 2013. Pipeline constructed as partof a long-term transportation agreement with XTO Energy,Inc., a subsidiary of Exxon Mobil Corporation

Eagle North Pipeline System

200-mile system originating in Cushing and supplyingValero's Ardmore, Oklahoma refinery with a capacity ofapproximately 20,000 bpd

100% of capacity contracted under take-or-pay agreement

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Crude Oil Pipel ine Servic es: West Texas

BKEP has 30% ownership and operates the 16

Pecos River Pipeline under a long-term serviceagreement with Advantage Pipeline, L.L.C.

Provides crude transportation from west Texas tothe Gulf Coast markets

In September 2013, commercial service beganfrom Grandfalls, Texas to the Longhorn Pipeline inCrane, TX

Phase II was completed in October 2014 andextends the pipeline an additional 29 miles to thewest to provide service for customers in Reeves,

Culberson, Pecos and Ward counties

Exploring options to add gathering systems, truckstations and further extensions of the Pecos RiverPipeline system into additional Delaware Basin /West Texas markets

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Knigh t Warr ior Pipeline

New construction, 160 mile, 16 pipeline with an initialcapacity of 100,000bpd (expandable up to 200,000bpd) andterminal system to meet infrastructure needs of producersand marketers in the developing East TexasEaglebine/Woodbine production area

Estimated $300 million of capital at an attractive EBITDA /cash flow multiple

Pipeline will be linked to Oiltanking Partners, L.P.s crude oiland product terminal on the Houston Ship Channel.

Two terminals at North Zulch, TX and Midway, TX withtruck unloading facilities capable of batching segregatedcrude from the area

Project is backed by multiple long-term shippingcommitments

Strong Eaglebine play fundamentals with multiple large &small producers.

Stations currently under construction, long lead timeequipment orders placed and right of way acquisition tobegin in the third quarter; expected in service late 2Q 2016.

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Operat ions

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Crude Oil Terminalling & Storage Services Crude Oil Pipeline Services

Crude Oil Trucking & Producer

Field ServicesAsphalt Services

24.5% 13.1%

4.2% 58.2%

Leading Midstream Company

With Four Divers i f ied

Operat ing Segments

Note: Percentages above represent segment share of 6 months ended 6/30/15 operating margin (excluding D&A)

BKEPs Diversified Portfolio

Provides Resi l ience in a Lower

Price Crude Environm ent


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Ad justed EBITDA and Distr ibu table Cash Flow

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$s in thousands

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

2013 2014 YTD 6/30/14 YTD 6/30/15

Adjusted EBITDA Distributable Cash Flow


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Fee-based Bus iness Model

BKEPs operating margin is highly fixed and includes: Cents/bbl contracts for specified volumes in the Crude oil terminalling and storage segment Minimum take or pay agreements in the Pipeline Services segment Minimum cents/ton for specified volumes or lease fees in the Asphalt Terminalling segment

Overall, more than 74.8% of overall margin is highly fixed and/or contracted

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Segment Fixed-Fee Variable-based Fee

Crude oil terminalling and storage 90.5% 9.5%

Asphalt services 94.3% 5.7%

Crude oil pipeline services 26.5% 73.5%

Crude oil trucking and producer field services 0.0% 100.0%

Percentages are based on 2014 Operating Margin


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Key Investment High l ights

Cushing Interchange: Resident player at core location for crude oil distribution and marketing

Asphalt Facilities: Geographic diversification in key domestic markets with multiple potentialcounterparties at most locations

Gathering / Transportation: 900 miles of strategically positioned gathering and transportationpipelines in Oklahoma and Texas

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Attractive Core Base

of Energy Midstream

Infrastructure

Solid and Stable

Financial Profile

Consistent profitability and earnings

Recently completed equity offering de-levers the balance sheet, facilitating future growthcapex

Adequate ability to fund current maintenance and near-term expansion capital expenditures

Minimal commodity price exposure and high quality customer base

General Partner

Sponsorship

Strong alignment with Vitol and Charlesbank Vitol and Charlesbank potential sources of growth opportunities

Access to capital through Vitol / Charlesbank Development Company

Deep and

Experienced

Management Team

Tenured management team with many years of industry experience

Proven ability to manage through cycles and generate executable growth opportunities

Significant Growth

Potential

~$300 million Knight Warrior Project underway; expected to be completed in 2016 at anattractive EBITDA / cash flow multiple

Additional organic growth and acquisition opportunities under consideration and beingevaluated. Completed Cheyenne, Wyoming asphalt terminal acquisition in May of 2015

Prudent and conservative approach to growing our business through acquisitions


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Appendix


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Private and Confidential EnerCom Oil & Gas ConferenceAugust2015 22

Reconc i l iation o f Adju sted EBITDA and Distr ibu table Cash Flow to Net Income

The following table presents a reconciliation of adjusted EBITDA to net income for the

periods shown:

Twelve Months Ended

($s in thousands) December 31,

2013 2014 2014 2015

Net income 28,035$ 27,572$ 7,512$ 9,289$

Interest expense 11,615 12,268 6,686 6,234

Unrealized gains on investments held for sale - (2,079) - (267)

Income taxes 593 469 234 198

Depreciation and amortization 24,241 26,045 12,771 13,384

Asset impairment expense 524 - - -

Non-cash equity-based compensation 2,347 2,322 1,043 1,275

Other 621 - - -Asset impairment charge included in income (loss) from discontinued ops 5,732

Adjusted EBITDA 73,708$ 66,597$ 28,246$ 30,113$

Cash proceeds from sale of investments - - - 2,346

Cash interest expense (9,644) (9,085) (4,535) (4,825)

Cash tax expense (419) (508) (513) (384)

Maintenance capital expenditures, net of reimbursable expenditures (13,472) (5,916) (2,490) (2,926)

Eagle North loan amortization (521) - - -

Distributable Cash Flow 49,652$ 51,088$ 20,708$ 24,324$

Key Credit Statistics

Leverage Ratio 3.6x 3.2x 3.8x 3.5x

Interest coverage ratio 7.8x 7.4x 8.7x 7.3x

Six months Ended

June 30,

blueknight energy

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