saddle butte acquisition - investors – noble...

For internal use only

Saddle Butte AcquisitionCreating the Premier DJ Basin Crude Gathering Portfolio

December 12, 2017


Disclaimer

This presentation contains certain “forward-looking statements” within the meaning of the federal securities law. Words such as “could”, “anticipates”, “believes”, “expects”, “intends”, “will”, “should”, “may”, “estimate” and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Midstream Partners LP’s (“the Partnership” or “Noble Midstream”) current views about future events. No assurances can be given that the forward-looking statements contained in this presentation will occur as projected, and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, the Partnership’s ability to consummate and successfully integrate the acquisition as described herein and the anticipated financing transactions in connection therewith, the ability of Noble Energy, Inc. (“NBL”) to meet its drilling and development plans, changes in general economic conditions, competitive conditions in the Partnership’s industry, actions taken by third-party operators, gatherers, processors and transporters, the demand for crude oil and natural gas gathering and processing services, the Partnership’s ability to successfully implement its business plan, the Partnership’s ability to complete internal growth projects on time and on budget, the price and availability of debt and equity financing, the availability and price of crude oil and natural gas to the consumer compared to the price of alternative and competing fuels, and other risks inherent in the Partnership’s business, including those described under “Risk Factors” and “Forward-Looking Statements” in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and in the other reports the Partnership files with the Securities and Exchange Commission. These reports are available to the public at the SEC’s web site at www.sec.gov. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Midstream does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

This presentation also discusses certain measures of financial performance that are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) that management believes are good tools for internal use and the investment community in evaluating Noble Midstream’s overall financial performance. Please see the Appendix for a discussion of the non-GAAP financial measures discussed in this presentation.

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Strategic DJ Basin Acquisition and Partnership

3

Noble Midstream has formed a joint venture with

Greenfield Midstream (backed by Encap Flatrock) to

acquire Saddle Butte Pipeline (or “SBP”) for $625mm 1

NBLX to fund 50% of transaction ($312.5mm) for 54.4% of

joint venture economics; NBLX will operate and control

the asset

NBLX expects to fund the transaction with proceeds from

a common unit issuance and borrowings under its

revolving credit facility

SBP provides crude gathering, oil storage, and terminal

blending solutions with access to all DJ Basin takeaway

outlets

PDC is key anchor customer

PDC is expected to expand acreage dedication and

extend contract term upon transaction close

Transaction is expected to be accretive to Distributable

Cash Flow Per Unit (“DCFPU”) in Year One and maintains

NBLX’s conservative leverage profile

4.4% promote improves asset returns

Enhances NBLX’s commercial opportunity set

NBLX and Greenfield Midstream to jointly provide

commercial efforts to attract further producer

dedications

Transaction Overview

1. Subject to closing and post closing adjustments. Transaction expected to close in Q1 2018, subject to regulatory approvals and certain closing conditions

2. Simplified organizational structure. Does not include all intermediary entities and subsidiaries

Joint Venture Structure 2

Black Diamond Gathering, LLC

(NewCo)

54.4% economic ownership

including promote45.6% economic

ownership

50% of purchase price

Saddle Butte Pipeline Acquired

Entities

100%

(Laramie River DevCo)

50% of purchase price


Investment Thesis

4

Expected to be Accretive to Distributable Cash Flow (“DCF”)1 per Unit in Year One

Attractive Entry Multiple with JV promote in a high-growth asset in premier liquids basin

Conservative activity assumptions; base acquisition case does not include contributions from PDC

contract amendment or any existing NBLX dedications

Expected to compress to organic build-like multiples without incremental contribution from NBLX / PDC

Extended 20% DPU growth runway

Strengthens best-in-class distribution coverage

Near and long-term financial leverage expected to remain <2.5x

Remain focused on 50% / 50% DJ Basin / Delaware Basin EBITDA mix by 2020

1. DCF is not a Generally Accepted Accounting Principles ("GAAP") measure. Definitions of these non-GAAP measures appear under “Non-GAAP Financial Measures,” in the Appendix.

Further Enhancing Financial Outlook and Growth Runway

SBP Acquisition / Black Diamond JV

Pro-Forma Noble Midstream Partners


Transaction Rationale

5

A premier oil gathering system located in the core of

the DJ Basin

Complementary to existing infrastructure

Connectivity to every downstream takeaway option

in DJ Basin 1

Existing SBP pipeline network footprint provides NBLX

meaningful capital avoidance opportunities

Significant operational synergies expected to be

realized in Year One

Total dedicated acres of ~141K from

existing customers 2

Significant undedicated acreage in

catchment area

NBLX has significant existing dedicated /

ROFR acreage within and around the

pipeline system

Strategic Asset Synergies

Scale

Combined Business Development effort from NBLX and

Greenfield

Greenfield brings experienced team with focus on

commercial success of asset

Expected to be accretive to DCFPU

in Year One

NBLX received a 4.4% ownership promote

Significant multiple compression through

time as asset matures

NBLX retains conservative leverage profile

Six existing customers, including two of the larger

acreage holders in the basin

PDC anchors existing acreage dedication and is

expected to expand and extend dedication upon closing

Focused Partners

Attractive Metrics

Blue Chip Customers

1. Subject to completion of Tallgrass’s Platteville extension

2. Includes PDC’s amended contract terms expected to be effective upon closing of the acquisition


Saddle Butte is an Integrated Crude Oil Gathering System

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Large-scale integrated gathering system located in the

core of the DJ Basin with ~160 miles of pipeline in

operation and delivery capacity of >300 MBbl/d

Early mover advantage – long term contracts supported

by top-tier producers

System was constructed in 2015

Large acreage dedications and footprint provide a

high degree of visibility into expected volume growth

Contracted under fixed fee, long-term agreements

Strategic footprint and system design that provides

maximum flexibility

Terminal blending solutions; opportunity for varying

crude gravities

Two terminal sites with current storage tank capacity

of 210 MBbl (~300 MBbl by Q1 2018 and permitted for

990 MBbl)

Downstream connectivity with every major crude

outlet

Only DJ Basin midstream service provider with ability

to deliver simultaneously to all major long-haul crude

outlets in the region – Grand Mesa, Saddlehorn,

White Cliffs and Pony Express (under construction)

Current throughput of ~55 MBbl/d

Saddle Butte Pipeline Overview Saddle Butte System Map

NBLX Existing Oil Infrastructure

SBP System

SBP Storage and Terminals


Strategic Expansion of NBLX’s Existing Asset Footprint

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Current NBLX System Pro Forma System

SBP system provides NBLX flexibility to enhance economic benefit from existing dedications

Existing SBP footprint provides NBLX >$70mm in capital savings opportunities

SBP overlaps much of NBLX planned infrastructure

Adds storage and terminal blending solution to NBLX portfolio

Improves NBLX third-party acreage mix from ~20% to ~45% of DJ Basin dedicated acres

zNBLX Existing Infrastructure

NBLX Planned Infrastructure

NBLX Dedicated / ROFR Acreage

z

NBLX Existing Infrastructure

NBLX Planned Infrastructure

NBLX Dedicated / ROFR Acreage

SBP System

SBP Dedicated Acreage

Incremental PDC Dedication


Driving Incremental Value

The acquisition further enhances a high-growth asset with a history of commercial success

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115K dedicated acres under long-term

contracts and fixed fee arrangements (before

PDC amendment)

Footprint covers 23 townships and over 500K

acres

6 contracted customers

Average of 7 dedicated rigs on system in 2017

Contract Footprint

Standalone Track Record of Success

Close proximity to ~300K NBLX dedicated

acres

Ability to strategically contribute

volumes/acreage through time

Noble Midstream

Assets In Our Hands: Incremental Value Drivers

1 1

Current throughput of ~55 MBbl/d

~150%+ growth from Q1 2017

$625mm valuation attractive and is based on

standalone asset forecast

Conservative activity growth from existing

customers

Conservative additional commercial success

No PDC contract amendment or NBL uplift

Key Metrics

Dedicated team to continue

commercialization momentum

Impressive track record of value creation

with deep DJ Basin experience

Expansion of PDC dedication footprint to

~96K acres (+24K acres versus standalone)

Brings total SBP dedications to ~141K acres

across all six customers

Extension of contract duration

Greenfield Midstream

2

2

PDC Energy Contract Amendment

Effective Upon Close

+


Third Party M&A: NBLX Playbook

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Preservation of Organic Story

Results

• December 2017 nominations of ~60 MBbl/d

Greater than 100% above April 2017 volumes (initial month following transaction close)

Greater than 33% above acquisition case

Maintains NBLX’s differentiated status on coverage, leverage and growth

Enhancing Third-Party Customer

Platform

• Core Delaware Basin asset positioned for third-party success

• Blue chip midstream partner in Plains All American

• Core DJ Basin asset adjacent to substantially all major operating areas

• Six third-party contracted customers with 141K dedicated acres

Attractive Transaction Metrics

• Acquired at near new build cost

• Immediately accretive to DCFPU

• Attractive entry multiple for high-growth asset in premier oil basin; expected to compress to organic build-like multiples without incremental contribution from NBLX / PDC

• Expected to be accretive to DCFPU in Year One

Differentiated Value Creation

Post-close contract execution:

• NBL Rosetta acreage dedication

• Plains Transportation Agreement

• NBLX ownership promote of 4.4%

• ~300K existing dedicated acres to NBLX in SBP catchment area

• Expansion of existing SBP dedication (PDC)

• Capital avoidance opportunities

M&A Strategy Focused on acquiring assets that NBLX can bring more to than the competition


Appendix

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Non-GAAP Financial Measures

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This presentation references EBITDA and Distributable Cash Flow, both of which are non-GAAP measures that maybe used periodically by management when discussing our financial results with investors and analysts.

We define EBITDA as net income before income taxes, net interest expense, depreciation and amortization. EBITDAis used as a supplemental financial measure by management and by external users of our financial statements,such as investors, industry analysts, lenders and ratings agencies to assess:

• our operating performance as compared to those of other companies in the midstream energy industry, withoutregard to financing methods, historical cost basis or capital structure;

• the ability of our assets to generate sufficient cash flow to make distributions to our partners;• our ability to incur and service debt and fund capital expenditures; and• the viability of acquisitions and other capital expenditure projects and the returns on investment of various

investment opportunities.

We define Distributable Cash Flow as EBITDA less estimated maintenance capital expenditures and cash interestpaid. Distributable Cash Flow is used by management to evaluate our overall performance. Our partnershipagreement requires us to distribute all available cash on a quarterly basis, and Distributable Cash Flow is one of thefactors used by the board of directors of our general partner to help determine the amount of available cash that isavailable to our unitholders for a given period.

We believe that the presentation of EBITDA and Distributable Cash Flow provide information useful to investors inassessing our financial condition and results of operations. The GAAP measures most directly comparable toEBITDA and Distributable Cash Flow are net income and net cash provided by operating activities. EBITDA andDistributable Cash Flow should not be considered alternatives to net income, net cash provided by (used in)operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.EBITDA and Distributable Cash Flow exclude some, but not all, items that affect net income or net cash, and thesemeasures may vary from those of other companies. As a result, EBITDA and Distributable Cash Flow may not becomparable to similarly titled measures of other companies.


NBLX Structure

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GreenRiver

San JuanRiver

Gunnison River

ColoradoRiver

LaramieRiver

TrinityRiver

BlancoRiver

ControllingInterest

Noble MidstreamServices, LLC

Public Unitholders (LP)

White Cliffs Pipeline L.L.C.

ROFR Assets:• East Pony Gas Gathering• East Pony Gas Processing• Eagle Ford Shale Midstream• Additional DJ Acreage• Additional Delaware Basin

Services

Noble EnergyNYSE: NBL

Noble MidstreamPartners LPNYSE: NBLX

Noble Midstream GP LLC50.1% Limited

Partner Interest 1

100%

100%100%100%5%25%25%40%

75% 95%

3.33% Non-OperatingMembership Interest

49.9% LimitedPartner Interest 1

100%

Non-Economic GeneralPartner Interest

AdvantageJV

1. As of 12/1/2017

60% 75%Black Diamond

JV

Non-ControllingInterest

50%54.4%


1001 Noble Energy WayHouston, TX 77070

Contact Information

Chris Hickman

VP, Investor Relations

[email protected]

281.943.1622

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