Integration Enhances Service in the Mid-Continent

An area where we see strong potential in 2017 for all three of our segments is the Mid-Continent, home to the STACK and SCOOP plays in central Oklahoma.

Lower break-even economics are driving increased producer activity in the STACK and SCOOP where we are well-positioned to meet the growing demand for midstream NGL and natural gas services with available capacity and connections to key market centers.

Our NGL system is our most extensive asset position in the Mid-Continent, gathering approximately 150,000 to 200,000 barrels per day (bpd) of NGLs in the STACK and SCOOP, with approximately 100,000 bpd of available capacity with minimal capital expenditures to meet growing demand from this region. Our integrated NGL system provides takeaway services to more than 100 plants, representing more than 90 percent of the natural gas processing plants in the area.

Increased ethane production remains an expected strong driver of future NGL volume growth in the Mid-Continent region, which is expected to benefit from increased ethane demand as new world-scale petrochemical facilities begin operations and new export facilities increase capacity utilization in the second half of 2017 and beyond.

Ethane is an important petrochemical feedstock used in the manufacturing process.

In full ethane recovery, we anticipate approximately 150,000 bpd of increased ethane production from our NGL processing plant customers across our system, resulting in approximately $200 million of potential annual earnings uplift.

Our NGL system is well-positioned to provide critical takeaway of raw NGLs out of the Mid-Continent.

In addition to our NGL services, we operate an extensive footprint of natural gas transportation pipelines and have more than 50 Bcf of natural gas storage capacity in Oklahoma. Our pipelines provide connectivity to end-use markets for more than 30 processing plants with a combined 1.9 Bcf/d of capacity.

To expand our natural gas transportation services, which produce nearly 100 percent fee-based earnings, we have been in discussions with producers and on-system markets about the potential construction of an intrastate pipeline that would run through the middle of the STACK and SCOOP. If successful in securing the necessary contractual commitments and board approvals, the company would construct the proposed 36-inch diameter pipeline, spanning approximately 200 miles and providing essential takeaway of up to 1.4 Bcf/d of natural gas via an interconnection with a market hub in southeastern Oklahoma. The proposed bi-directional pipeline and related infrastructure target anticipated completion in the third quarter 2018.

We also provide critical natural gas gathering and processing services as an operator of 700 million cubic feet per day (MMcf/d) of natural gas processing capacity in Oklahoma. We are well-positioned to meet increased customer demand with nearly 100 MMcf/d of current available capacity to process natural gas gathered from increased drilling activity on our approximately 200,000 contractually dedicated acres in the STACK.

Our integrated and extensive position in the Mid-Continent, specifically in the STACK and SCOOP, is expected to be an important driver for growing NGL and natural gas volumes and fee-based earnings in 2017 and beyond.