Blue Racer Midstream Provides Update on the Company’s Activities in Ohio’s Utica Shale

Blue Racer Midstream

DALLAS – January 27, 2014 – Blue Racer Midstream, LLC (“Blue Racer”) announced today that it has entered into long-term agreements with many of the Utica Shale’s leading natural gas producers. Blue Racer will provide comprehensive, integrated midstream services for production from liquids-rich Utica shale acreage in Monroe, Noble, Guernsey, Belmont, Harrison and Carroll counties in Ohio. Producers that have made recent dedications to Blue Racer include Eclipse Resources, Hess Corporation (NYSE: HES), CONSOL Energy, Inc. (NYSE: CNX) and PDC Energy, Inc. (NASDAQ: PDCE). These dedications build on previous commitments to Blue Racer from other prominent producers, including Chesapeake Energy Corp. (NYSE: CHK), TOTAL Gas & Power North America, Inc., Rex Energy Corporation (NASDAQ: REXX) and EnerVest. All have made long-term dedications to Blue Racer for services including natural gas gathering, compression, treating, processing and transportation; condensate handling; and the fractionation, storage, transportation and marketing of natural gas liquids.

CEO Perspective
“It’s a very exciting time in the evolution of the Utica Shale. The Utica is a complex play with tremendous potential. Utica producers face a number of challenges, and we continue to build out a very large supersystem in the Utica to assist them. Blue Racer’s integrated supersystem of midstream assets is the largest system in the Utica. We have created a footprint that provides our producer customers with maximum flexibility,” said Blue Racer’s CEO, Jack Lafield. “Our system and ongoing expansion programs are specifically designed to provide gathering, processing and fractionation services across the basin, along with interconnectivity to major residue markets and optionality for our producer’s natural gas liquids. Our assets are positioned exactly where our producers need them so that ultimately they achieve the best possible price realizations.”

Producer Perspective
“We’re very excited to be partnering with Blue Racer for gathering, processing and fractionation services on a very significant portion of our Utica Shale assets,” said Benjamin Hulburt, president and CEO of Eclipse Resources. “Eclipse Resources is planning an aggressive drilling program on our 95,000 plus net acre position in the core of the Utica Shale play, where we plan to grow our operated rig count from three rigs currently to six rigs by year-end 2014. Our recently executed agreement with Blue Racer to provide firm gathering, processing and fractionation services for the liquids-rich portion of our acreage is an integral part of our Utica Shale development strategy. The Blue Racer team members have been great partners for Eclipse Resources, and I have no doubt our two companies will benefit tremendously from our mutually beneficial relationship for many years to come.“

Gathering Infrastructure
Acreage dedications to Blue Racer are supported by the largest rich gas gathering system in the Utica. Blue Racer’s extensive network of nearly 600 miles of large-diameter gathering pipelines spans 24 counties in Ohio and West Virginia and has the current capacity to gather more than 1.5 BCF of natural gas per day. In October 2013, Blue Racer purchased a 45-mile, 24-inch pipeline from Dominion Transmission Inc. that fully interconnects Blue Racer’s gathering systems to its Berne processing facility in Monroe County, Ohio, and provides immediate access to significant well activity in the prolific southern portion of the Utica Shale. The addition of new gathering pipelines to support expansions to producer drilling programs is ongoing.

Processing & Fractionation Capacity
Blue Racer will soon complete Natrium II, a 200 million cubic feet per day (MMcfd) expansion to its Natrium Natural Gas Processing facility located in Marshall County, West Virginia. The expansion complements the original Natrium I Natural Gas Processing plant and brings the overall nameplate processing capacity at the Natrium complex to 400 MMcfd. Commissioning of the new plant is expected to occur in early March 2014. The Natrium I processing unit has recently returned to service following a temporary shutdown that occurred after a fire damaged the unit.

In addition to the expanded Natrium processing capacity, Blue Racer is continuing to build out its Berne processing complex, located in Monroe County, Ohio. The Berne site is designed to accommodate three 200 MMcfd cryogenic processing units. Blue Racer expects to commission the first 200 MMcfd processing unit at Berne by the end of the third quarter of 2014. Together, the Natrium and Berne facilities are large enough to enable Blue Racer to process 1 BCF of natural gas per day.

Current fractionation capacity at Blue Racer’s Natrium facility is 46,000 barrels per day and will accommodate the processing expansions at Natrium and the first 200 MMcfd of processed volumes at Berne. Fractionation capacity at Natrium will be expanded up to 126,000 barrels per day by March 2015, providing increased ethane recovery capabilities and accommodating the future natural gas liquids (NGLs) volume growth from the further expansion of processing capacity at Berne.  

Transportation & Takeaway
A 30-mile “Y-Grade” pipeline will carry processed liquids from the Berne complex to Blue Racer’s Natrium facility for fractionation. NGLs are currently transported from Natrium to downstream markets via rail, truck and pipeline. The addition of barging via the Ohio River is under development and will make the Natrium complex the only fractionation facility to offer barge service to Utica producers. Blue Racer’s ethane pipeline provides direct access to the Enterprise ATEX Pipeline. Additional pipeline access out of Natrium will provide connectivity to Sunoco’s Mariner East and Mariner West pipelines and Enterprise’s TEPPCO Pipeline. Blue Racer is actively pursuing interconnects to other long-haul NGL pipelines that are awaiting approval.

Blue Racer has also approved expansions of the natural gas markets accessible to the supersystem. In addition to existing interconnections with Dominion Transmission Inc. (DTI) and Dominion East Ohio (DEO), Blue Racer is establishing new pipeline interconnections with Texas Eastern Transmission (TETCO) and has approved establishing an interconnection with Rockies Express Pipeline (REX).

About Blue Racer Midstream, LLC
Formed in December 2012, Blue Racer Midstream is a joint venture between Caiman Energy II, LLC and Dominion (NYSE: D) dedicated to providing Utica Shale producers with midstream services and the ability to receive the highest value for their products. With midstream assets strategically located in the heart of the Utica Shale and a robust expansion plan in place, Blue Racer's services include natural gas gathering, compression, treating, processing and transportation; condensate handling; and the fractionation, storage, transportation and marketing of natural gas liquids.