American Midstream Announces Drop-Down of Delta House Interests; Further Enhancing Deepwater Gulf of Mexico Position

October 2, 2017

Acquires additional 15.5% interest in Delta House floating production
and processing system
Delta House expected to operate near peak capacity for several years
Partnership successfully redeploys capital from sale of Propane
business
Expects to acquire additional drop-down interests in Delta House and
other assets from ArcLight

HOUSTON–(BUSINESS WIRE)–American
Midstream Partners, LP (NYSE:AMID) (“Partnership” or “AMID”)
announced today the acquisition and closing of an additional 15.5%
equity interest in Delta House, a fee-based, semi-submersible floating
production and processing system (collectively, “Delta House”), from
affiliates of ArcLight Capital Partners, LLC (“ArcLight”), which
controls the general partner of the Partnership, for total consideration
of approximately $125.4 million. Post-closing, the Partnership and
ArcLight will directly and indirectly own a 35.7% and 23.3% interest in
Delta House, respectively.

The purchase of additional Delta House interests is immediately
accretive to Adjusted EBITDA and distributable cash flow and solidifies
the Partnership’s strategy of building a deep-water super-system in the
Mississippi Canyon region in the Gulf of Mexico through a portfolio of
interconnected, complementary assets with predictable cash flow.
Tie-back inventory into Delta House, including individual wells and
prospects remains strong as anchor producers announced several
developments available for tie-in through 2018 and 2019. The Partnership
expects Delta House to operate near peak capacity for the next several
years.

As part of AMID’s growth strategy, the Partnership anticipates
ArcLight’s remaining 23.3% interest in Delta House, and other assets, to
be offered to the Partnership for future drop-downs over the coming
quarters, depending on market conditions and other factors.

A conflicts committee of the board of directors of the general partner
of the Partnership composed of independent directors, as well as the
full board of directors of the general partner, unanimously approved the
transaction. This committee was advised by Robert W. Baird & Co. as to
financial matters and Thompson & Knight LLP as to legal matters.

“We are pleased with the ongoing performance of Delta House and the
associated strong returns from this world class asset anchored by a
backlog of well tie-backs. We are committed to making investments that
create long-term value as we position AMID for sustainable growth with
the substantial support of our sponsor,” stated Lynn Bourdon, Chairman,
President and Chief Executive Officer.

Capital Optimization

The purchase of the additional Delta House interests was partially
funded with proceeds from the September 1, 2017 sale of the
Partnership’s propane marketing services business (“Propane”) and
borrowings under its senior secured revolving credit facility. The
acquisition of the Delta House interests, in addition to the
Partnership’s recent acquisitions, completes the reallocation of $170
million in cash proceeds from the sale of Propane. These steps are part
of the Partnership’s strategy of creating long-term value for all
unitholders.

In order to drive distributable cash flow growth and balance sheet
optionality, the Partnership expects to continue its strategy of
creating commercial and operational density within its core areas;
whereby the Partnership may conduct additional acquisitions or
divestitures. Due to inherent timing uncertainties of any divestiture,
2017 Adjusted EBITDA may be toward the lower-end of guidance with a
material increase in 2018 Adjusted EBITDA.

Delta House Overview

Delta House is operated by LLOG Exploration Offshore, L.L.C. and is
located within the highly prolific, deep-water Mississippi Canyon region
in the Gulf of Mexico and connects to the 1.2 Bcf/d Destin pipeline, in
which the Partnership owns a 49.7% equity interest. Delta House has
100,000 barrels of crude oil and 240 million cubic feet of natural gas
and liquids per day of processing capacity. Cash flows for Delta House
are supported by long-term volumetric-tiered fee-based tariffs with
ship-or-pay components and life-of-lease dedications with active
deep-water Gulf of Mexico producers. Delta House commenced operations in
April 2015 and currently has twelve wells online with production running
near maximum capacity.

About American Midstream Partners, LP

American Midstream Partners, LP is a growth-oriented limited partnership
formed to provide critical midstream infrastructure that links producers
of natural gas, crude oil, NGLs, condensate and specialty chemicals to
end-use markets. American Midstream’s assets are strategically located
in some of the most prolific onshore and offshore basins in the Permian,
Eagle Ford, East Texas, Bakken and Gulf Coast. American Midstream owns
or has an ownership interest in approximately 4,000 miles of interstate
and intrastate pipelines, as well as ownership in gas processing plants,
fractionation facilities, an offshore semisubmersible floating
production system with nameplate processing capacity of 100 MBbl/d of
crude oil and 240 MMcf/d of natural gas; and terminal sites with
approximately 6.7 MMBbls of storage capacity.

About ArcLight Capital Partners, LLC

ArcLight is one of the leading private equity firms focused on North
American energy infrastructure investments. Since its establishment in
2001, ArcLight has invested approximately $17 billion across multiple
energy cycles in 99 transactions. Headquartered in Boston,
Massachusetts, the firm’s investment team brings extensive energy
expertise, industry relationships, and specialized value creation
capabilities to its portfolio. More information about ArcLight, as well
as a complete list of ArcLight’ portfolio companies can be found at www.arclightcapital.com.

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