Fourth Quarter Earnings Call February 2018 Fourth Quarter and Full Year 2017 Results 2018 Guidance Extended and Enhanced Long-Term Outlook
2 Forward Looking Statements and Non-GAAP Measures This presentation contains certain forward-looking statements within the meaning of federal securities law. Words such as anticipates, believes, expects, intends, will, should, may, estimates, and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect the Partnership s current views about future events. No assurances can be given that the forward-looking statements contained in this news release 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, customers ability to meet their 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 most recent Annual Report on Form 10-K and in other reports on we file with the Securities and Exchange Commission ( SEC ). These reports are also available from the Partnership s office or website, www.nblmidstream.com. Forwardlooking 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, management s estimates, or opinions change.
3 Fourth Quarter 2017 Highlights Gathering business drives growth in key financial metrics Strong Execution 4Q Gathering Volumes vs 3Q Oil & Gas +28% Produced Water +81% In-line or Exceeding Guidance Across Metrics DPU Growth 4.7% Increase Above 3Q 24% Increase Over 4Q16 30% Above MQD Financial Discipline 4Q Distribution Coverage Ratio 2.2x/2.4x 1 4Q Annualized Leverage 1.4x/1.9x 2 Growth Projects Delivered 2 nd Delaware CGF Online in December FWD Operational at Green in DJ Basin Recent Developments Increased 3 rd Party Exposure Black Diamond Acquisition Closed January 31, 2018 January Advantage Nominations of ~90 MBbl/d 1. DCF is a Non-GAAP measure, see definition provided in appendix; 2.2x as reported; 2.4x adjusted for December equity issuance and prior to any Black Diamond acquisition contribution 2. 1.4x prior to Black Diamond acquisition and proceeds from equity issuance; 1.9x pro-forma for Black Diamond acquisition
4 Fourth Quarter 2017 Results In-line or exceeding guidance across metrics Actuals 4Q Guidance 4Q v 1Q 2Q 3Q 4Q 31-Oct-17 3Q Oil Gathered (MBbl/d) 44 54 71 93 82-90 31% Gas Gathered (MMcf/d) 113 122 146 175 165-180 20% MBoe/d 63 74 95 122 110-120 28% PW Gathered (MBw/d) 9 13 27 49 38-48 81% FW Delivered (MBw/d) 129 184 175 135 110-150 -23% per equivalent well average (NBL wells only) (1) 217 227 203 262 29% Net Income ($MM) $35 $39 $44 $46 $43 - $47 5% Gross Adjusted EBITDA ($MM) (2) $37 $42 $48 $52 $48 - $55 8% Net Adjusted EBITDA ($MM) (2) $26 $34 $46 $48 $45 - $52 4% DCF ($MM) (2) $24 $30 $41 $43 $39 - $45 5% Distribution Coverage Ratio (2) 1.8x 1.9x 2.4x 2.2x/2.4x (3) 2.2x - 2.5x Gross Capex ($MM) $76 $84 $94 $136 $131 - $151 Net Capex ($MM) $59 $46 $59 $62 $66 - $76 Equivalent Wells Connected (1) 31 48 147 75 1. Fresh water per equivalent well. Equivalent well defined as horizontal well normalized to 4,500 ft. 2. Figures are Non-GAAP, see definition provided in appendix 3. 2.2x as reported; 2.4x adjusted for December equity issuance and prior to any Black Diamond acquisition contribution
Adding Significant Scale and Customer Diversification Advantage and Black Diamond Gathering JVs materially enhance 3 rd party business Delaware and DJ Basin Gross Oil & Gas Throughput 1 Mix Third Party Third Party 2016 100% NBL NBL 2017 64% NBL 2018E 50% NBL NBL NBL www.nblmidstream.com ~2.5 Rigs on Dedications ~340k Dedicated Acres ~310k NBL; ~30k 3 rd Party 1 Customer; 144 Equivalent Well Connects² 100% Net Adjusted EBITDA from Sponsor Portfolio Evolution: Rosetta Oil and PW Dedication (~40k acres) Greeley Crescent I Dedication to 3 rd Party (~30k acres) for Oil, PW, FWD 1. Includes oil and gas gathering and Advantage throughput 2. Defined as horizontal well normalized to 4,500 ft. ~5 Rigs on Dedications ~415k Dedicated Acres ~350k NBL; ~65k 3 rd Party ~10 Customers; 308 Equivalent Well Connects² 91% Net Adjusted EBITDA from Sponsor Portfolio Evolution: Rosetta Gas Dedication (~47k acres) Clayton Williams Oil, PW, Gas Dedication (~64k acres) Greeley Crescent II Dedication to 3 rd Party (~30k acres) for Oil, PW, FW Advantage Acquisition Laramie Start Up Gas Compression Dedication Added (~110k acres) ~17 Rigs on Dedications ~555k Dedicated Acres ~350k NBL; ~205k 3 rd Party 15+ Customers; ~700 Equivalent Well Connects² 78% Net Adjusted EBITDA from Sponsor Portfolio Evolution: Full Year of Laramie Advantage Ramp Black Diamond Acquisition (~141k acres) 5
6 Peer-Leading Distribution Growth and Financial Strength 20% distribution growth, low leverage and high coverage 3-Year Distribution CAGR 2017-2020E 2018E Distribution Coverage Ratio 30% 2.5x 2.0x 25% 1.5x 20% 1.0x 0.5x 15% 0.0x NBLX Peer B Peer A Peer D Peer C Peer E Peer F Peer G Peer H 10% 5% 0% Peer A NBLX Peer B Peer C Peer D Peer E Peer F Peer G Peer H 4.5x 4.0x 3.5x 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x 0.0x 2018E Leverage Ratio Peer H Peer G Peer D Peer F NBLX Peer B Peer A Peer E Peer C Source: NBLX represents internal forecast; Wells Fargo Midstream Monthly Outlook: January 2018 Report for peers Note: Peers Include AM, CNXM, ENLK, EQM, HESM, OMP, RMP, WES
7 2018 Goals and Objectives Growth with a focus on execution and financial strength Continue to Provide Safe and Reliable Service to Our Sponsor and Other Customers 2.4x Continue to Extend 20% Distribution per Unit Growth 4Q Distribution Coverage 1 Generate Corporate ROACE (1) Greater than 15% for 2018 20% DPU Growth 2020+ Complete Growth Projects on Time/Budget Completion of 3 Delaware CGFs Green infrastructure Black Diamond asset integration Preserving Financial Strength Positioned For Sustainable, Long Term Growth Finalize Delaware Long Haul Pipeline Option Execute Accretive Drop Down During 2018 <1x Maintain Top-Tier Coverage and Leverage 4Q Annualized Leverage 2 Brought Online 2 Major Projects 2 st Delaware Basin CGF DJ Basin Fresh Water System for Noble Energy 3 Acquisitions 2017 Advantage Pipeline JV 1 st Dropdown Saddle Butte JV Drive Additional Commercial Success Through Incremental Acreage Dedications 1. Return on average capital employed: earnings before interest and taxes divided by (average total assets average current liabilities); see definition provided in appendix
8 2018 Capital Budget Detail Growth capital focused on Blanco and Laramie DevCos Gross Capital 1 Net Capital 1 (attributable to the Partnership) Trinity 8% Colorado 4% Trinity 15% Colorado 8% Blanco 45% $485-535 MM Laramie ² 29% Blanco 34% $255-285 MM Laramie ² 37% Other Green 13% DJ Basin Green Other 6% Delaware Basin DevCo % Ownership Colorado 100% Laramie ² 100% Green 25% Blanco 40% Trinity 100% Expected 2018 Capital Investment Gathering system well connections New Wells Ranch gas offload Gathering system well connections Multiple DSU s for FWD Black Diamond capital Completion of Mustang backbone infrastructure Gathering system well connections Buildout of 3 CGFs Gathering system well connections Expansion of Advantage throughput capacity to 200 MBbl/d Compression 1. Excludes acquisition capital 2. Includes Black Diamond Gathering capital; Additional detail on Black Diamond Gathering provided on slide 14
9 Project Startups and Activity Ramp Driving 2018 Growth Consistent milestones and catalysts throughout the year 1Q 2Q 3Q Commence Mustang FWD in Late 1Q Black Diamond Close Jan 31 3 Additional Delaware CGFs Online by Mid- 2018; 1 per Month Starting in Mid-March Commence Mustang Well Connects 1500 1300 1100 900 700 500 300 100-100 Equivalent Wells Connections 1 300 250 200 ~ 700 150 308 ~60% ~40% 100 50 0 2017 2018E 1H18E 2H18E 89 Oil and Gas Gathering MBoe/d 200-235 170-200 230-270 2017 2018E 1H18E 2H18E 4Q > 250 Equivalent Well Connects Drives Strong Q4 and Momentum into 2019 17 Average USO Rig Exposure >275 Miles of Pipe Installed ~ 700 Equivalent Well Connects 1 130 120 110 100 90 80 70 60 50 40 30 20 10 0 24 Produced Water Gathering MBw/d 80-110 60-80 100-140 2017 2018E 1H18E 2H18E 200 150 100 50 0 Fresh Water Delivery MBw/d 156 130-190 120-140 140-240 2017 2018E 1H18E 2H18E 1. Defined as horizontal well normalized to 4,500 ft.
2018 Growth in Adjusted EBITDA and Distributions 2H18 growth reflects Delaware CGF and customer activity timing Net Income Guidance of $220 - $260 MM, or 46% Above 2017 45% Annual Adjusted Net EBITDA 1 Growth Anticipated at Guidance Midpoint ($215 - $235 MM) Decline in Adjusted Net EBITDA 1 from 1Q18E to 2Q18E due to development timing, lower FWD volumes and customer completion operations shift from Colorado (100% owned) to Green (25% owned) Advantage Volume Growth Drives >100% Increase in Income from Investments 20% Distribution Growth with Distribution Coverage 1 Ratio of 1.9x 2.1x 1 300 250 200 150 100 50 0 $155 www.nblmidstream.com Net Adjusted EBITDA ($MM)¹ $225-245 $215-235 $100-$110 $115-125 2017 2018E 1H18E 2H18E Base Guidance: Assumes FWD per Equivalent Well of 200 MBw² Upside Sensitivity: Assumes 4Q17 FWD per Equivalent Well of ~260 MBw² 4.5x 4.x 3.5x 3.x 2.5x 2.x 1.5x 1.x.5x.x Distribution Coverage Ratio 1,3 & DPU $1.81 $2.19 2.1x 1.9x-2.1x 2017 2018E 1. Figures are Non-GAAP, see definition provided in appendix; 2018 EBITDA estimates adjusted for $5 million in Black Diamond Gathering transaction expenses expected in 1Q18 2. Defined as horizontal well normalized to 4,500 ft. ; freshwater per equivalent well of 200 MBw and 260 MBw is for NBL wells only 3. Assumes 20% distribution growth target 2.5x 2.x 1.5x 1.x.5x.x 10
11 Extending Leading Long-Term Outlook Substantial organic growth with large existing drop-down inventory Organic No Drop Downs 2017-2020E 2018E 2019-2022E Old New New Distribution per Unit 20% 20% 20% Coverage (in all years) (1) > 1.3x 1.9 2.1x > 1.3x Leverage (in all years) < 2.5x < 2.5x < 2.0x ROACE (1, 3) NA > 15% 13 16% DCF Funding % of Capex and Distributions (4) NA ~50% 45% Extending and improving long-term distribution of acreage dedications ~6x (2) growth, coverage, and from 3 rd parties combined adjusted leverage EBITIDA¹ acquisition multiple by 2020E ~90% (cumulative) ROACE (1,3) 2018: >15% Long-Term: 13-16% Material Upside to Improved Outlook Prudent Commodity Price View: Based on $50/Bbl and $3/Mcf Price Deck vs. Current Strip Continued Business Development Success, Leveraging Asset Footprints EPIC Crude / Y-Grade Project Options and Other Long-Haul Significant and Growing Drop- Down Inventory ~90% % of distributions + capex covered by DCF¹ 2019-2022E (cumulative) in organic base plan 1. Non-GAAP measures, definition provided in appendix 2. Reflects combined Black Diamond, Advantage, and 2017 drop-down net acquisition cost divided by net EBTIDA; definition of EBITDA provided in appendix 3. Return on average capital employed: earnings before interest and taxes divided by (average total assets average current liabilities); see definition provided in appendix 4. % of distributions + capex funded by distributable cash flow
Advantage Pipeline: Rapid Integration and Value Creation Highlighting recent commercial success and the benefits of a Sponsor MLP Recent Developments 4Q17 Volumes of ~60 MBbl/d, 2x Growth Since Acquisition Close January Nominations of ~90 MBbl/d Multiple Drivers of Recent Increased Volumes Basin-wide volume ramp Recent commercial success with new shippers Constraints on competitor systems Additional Upside Opportunities Currently Being Negotiated Opportunities for additional acreage dedications and volume commitments Leverages asset footprint with minimal capital required Accelerated EBITDA 1 Multiple Compression to Less than 5.5x in 2018 2018 volumes benefit from NBL activity ramp Evaluating Growth Opportunities for Intermediate Gathering Segment in Delaware NBL Clayton Williams dedication Additional acreage dedication opportunities 120 100 80 60 40 20 Advantage Pipeline Oil Throughput (MBbl/d) 0 30 60 90 90-100 Apr-17 4Q17 Jan-18 2018E Acquisition Case ~14.0x NTM EBITDA 1 Current View ~9.0x NTM EBITDA 1,2 ~6.0x <5.5x 2018 EBITDA 1 2018 EBITDA 1 Additional upside opportunities under negotiation 1. Figures are Non-GAAP, see definition provided in appendix 2. April 1, 2017 transaction close; includes actuals for 2Q 2017 through 4Q 2017 and latest forecast for 1Q 2018 www.nblmidstream.com Attractive entry multiple as well as unique multiple compression for recent Permian midstream acquisition 12
13 Blanco Projects Update Significant 2018 growth driver 4Q Oil and Gas Gathering Volumes of ~15 MBoe/d, ~3x volumes in 3Q Full quarter of 10 wells connected into Billy Miner I December contribution from Jesse James - 11 wells currently connected 2018 Projects Drive Significant Operating Leverage Near-Term Delaware Basin CGF Projects Oil (MBbl/d) Daily Capacity Gas (MMcf/d) PW (MBw/d) Est. Online #1 Billy Miner I 15 30 30 Online #2 Jesse James 15 30 30 Online #3 Coronado * 20 30 60 1H 2018 #4 Billy Miner II 20 30 60 1H 2018 #5 Collier * 20 30 60 1H 2018 * expandable to 30 MBbl/d and 60 MMcf/d with minimal equipment additions 90 MBbl/d of Crude Oil Capacity from 5 CGFs Planned to be Operational by Mid- 2018 Applying lessons learned from Billy Miner I and Jesse James to drive down infrastructure costs Coronado and Billy Miner II construction initiated Collier site clearing and prep complete 3 1H18 CGFs remain on schedule and budget Significant Capital Efficiency Expected in 2019 Once Backbone Infrastructure is Complete Jesse James CGF
Black Diamond Gathering Strong base project returns with upside potential Acquisition of Saddle Butte Pipeline Closed on January 31 st Highly Strategic Asset Complementary to existing infrastructure Connectivity to every DJ downstream takeaway option Significant undedicated acreage in catchment area Project Return Competitive with Existing Portfolio 4.4% economic promote to NBLX $70 million in capital avoidance over 2 years Including promote, NBLX NTM² acquisition multiple of ~13.5x Expect EBITDA multiple compression to < 8.0x in 2020 without any contribution from Sponsor acreage position Significant Upside and Multiple Compression Beyond Acquisition Case PDCE acreage dedications increased by ~24k net acres at close Levering existing NBL dedications and sponsor throughput through time Joint commercial efforts underway for additional dedications Potential addition of complementary services, including storage 141k (1) net acreage dedications from 3 rd parties 6-7 total rigs operating in 2018 > 75 MBbl/d 2018E exit throughput (1) Includes PDCE Energy dedication expansion to ~96,000 net acres (2) NTM period beginning February 2018; Noble Midstream received a 4.4% ownership promote www.nblmidstream.com 14
DJ Basin Projects Update Laramie and Green drive 2018 throughput growth Greeley Crescent (Laramie DevCo): 4Q Oil Gathering Averaged ~16 MBbl/d, up ~3x vs. 3Q from Additional Well Connects Connecting of Existing Oil System into Black Diamond Storage Terminals Already Underway LARAMIE RIVER DEVCO Legacy Third-Party Acreage Dedication Third-Party Acreage (Formerly NBL) NBL Acreage Wells Ranch and East Pony (Colorado DevCo): 4Q Oil and Gas Gathering of 92 MBoe/d, 8% Above 3Q Upstream Results Continue to Outperform NBLX Expectations ~30% Oil and Gas Gathering Growth in 2017 on ~$30 million in Capital Mustang (Green DevCo): Expanded Fresh Water System Online in December 2017 www.nblmidstream.com Fresh water delivery anticipated in late 1Q18 Construction Underway on Backbone Gathering Infrastructure Gathering volumes anticipated mid-year 2018 Spec Gathering System Planned Oil Connection into Black Diamond Milton Terminal Full Infrastructure Build Out Includes ~250 Miles of Pipelines (Oil, Gas, PW and FW) Development Drilling and Row Concept in Southern Portion of Mustang Drives Highly Efficient Infrastructure Spend from the Start GUNNISON RIVER DEVCO Greely Crescent Infrastructure Design Mustang Infrastructure Design 15
16 Distribution Coverage 1 of 4Q Distribution Conservative planning for Fresh Water 4Q Gathering EBITDA 1 of $37 MM, a 19% Increase Above 3Q 1.6x Distribution Coverage Ratio 1 excluding Fresh Water Gathering EBITDA attributable to the Partnership contributing 77% of total EBITDA attributable to the Partnership as compared to 67% in 3Q Gross Fresh Water Volumes are Expected to Grow 3% in 2018 vs. 2017 2018 budget assumes fresh water per equivalent well of 200 MBw Risked customer activity ramp for 2H18 Fresh Water per Equivalent Well (NBL Wells Only) 4Q 2017 NBLX Net EBITDA and Distribution Coverage (1,2) $ in millions MBw 300 250 200 150 100 50 0 262 227 196 89 2015 2016 2017 4Q17 1.6x $37 37 x Implied Distribution Coverage of 4Q Distribution Total EBITDA Fresh Water Delivery EBITDA Gathering EBITDA 2.2x Gathering EBITDA =G2 Actual FW 48 1. Figures are Non-GAAP; see definition in Appendix 2. G&A allocated to gathering and freshwater delivery based on proportionate share of EBITDA; coverage figures reflect full net maintenance capital totals
Gross Volumes 2018 Guidance Detail 2017 2018 Estimates 1 4Q Full Year 1Q Full Year Oil Gathered (MBbl/d) 93 66 120-135 160-190 Gas Gathered (MMcf/d) 175 139 190-200 220-270 Oil and Gas Gathered (MBoe/d) 122 89 152-168 200-235 Produced Water Gathered (MBw/d) 49 24 42-50 80-110 Fresh Water Delivered (MBw/d) 135 156 130-150 130-190 Net Income 46 164 42-48 220-260 Financials ($MM) (1) Adjusted Gross EBITDA 3,4 52 179 55-61 275-315 Adjusted EBITDA 3,4 48 155 52-58 215-235 Distributable Cash Flow³ 43 138 44-50 180-195 Distribution Coverage Ratio 3,5 2.2x/2.4x 7 2.1x 2.1x - 2.4x 1.9x - 2.1x Gross Capex 6 136 390 225-250 485-535 Net Capex 6 62 225 110-125 255-285 Equivalent Wells Connected² 82 308 120-140 ~700 1. Black Diamond Gathering contribution included for period following January 31, 2018 close 2. Defined as horizontal well normalized to 4,500 ft. 3. Includes Non-GAAP measures; see definition in Appendix 4. 1Q18 and 2018 Adjusted for $3.5 MM in Black Diamond transaction expenses not capitalized 5. Estimates include forecasted DPU growth of 4.7% quarterly, or 20% annual 6. Excludes acquisition capital 7. 2.2x as reported; 2.4x adjusted for December 2017 equity offering prior to any Black Diamond acquisition contribution www.nblmidstream.com 17
DevCo www.nblmidstream.com 18 2018 Gross Volume Guidance Project start-ups in 2H 2018 driving full year growth 2017 2018 (E) 1 Oil & Gas Gathered (MBoe/d) Produced Water Gathered (MBw/d) Fresh Water Delivered (MBw/d) Oil & Gas Gathered (MBoe/d) Produced Water Gathered (MBw/d) Fresh Water Delivered (MBw/d) Colorado 78 14 84 80 90 14 17 40 60 Laramie 6 2 37 73 82 3 5 40 50 Blanco 5 8-40 50 60 79 - Green - - - 7 13 3 9 50 80 San Juan - - 35 - - - Trinity 3 - - - - - Total 89 24 156 200-235 80-110 130-190 MBbl/d MBbl/d Advantage Pipeline² 43 90-100 1. Black Diamond Gathering contribution included in Laramie DevCo for period following January 31, 2018 close 2. Excluded from total throughput due to accounting treatment as investment income; throughput average from April Dec 2017 3. Gas volumes from Trinity compression segment reflected in Blanco
19 Significant Dropdown Inventory Supplements Organic Growth Continue to target one dropdown per year from significant inventory NBL Retained Interest Current Status of Asset Acreage Blanco (Delaware Basin) 60% Operational 111,000 Green (DJ Basin Mustang IDP) 75% In Progress 75,000 Gunnison (DJ Basin Bronco IDP) 95% Undeveloped 36,000 San Juan (DJ Basin - East Pony Fresh Water) 75% Operational 44,000 Wholly Retained Assets Legacy CWEI Infrastructure Assets Operational N/A East Pony Gas Gathering East Pony Gas Processing Operational 44,000 Eagle Ford Gathering Operational 31,000 Other ROFR Services Delaware Basin Salt Water Disposal Delaware Basin Fresh Water Delivery In Progress 111,000 Crude Oil Gathering, Natural Gas Gathering and Water Services ROFR on all future acquired onshore acreage in U.S. (outside of Marcellus Shale) CWEI Oil Transmission Dedication Third-Party Business Development in DJ Basin and Delaware Basin Delaware Basin Long-Haul Pipeline Opportunities
20 Strategy Safety Continuous focus on safety culture Customer Service Customer service mentality for NBL and 3 rd parties Increase 3 rd Party Business Execute on back-yard opportunities Disciplined Financial Principals Preserve prudent long-term leverage and coverage Distribution Growth 20% distribution per unit growth rate through 2020+ Execute Dropdowns Effectively manage and optimize dropdown inventory Increase Permian Exposure 50% Permian EBITDA contribution by 2020
21 About Our Sponsor Robust NBL upstream outlook reinforces NBLX long-term objectives 4+ BBoe Net Unrisked Resources in Top Tier U.S. Unconventional Basins ~6,500 future drilling locations Robust 2018 Outlook US Onshore volumes up >20% vs. 2017 on flat capital, with growth driven primarily by the Delaware Basin Nearly 70% of 2018E total capital allocation to U.S. onshore 7.5 operated rigs throughout 2018 in the DJ and Delaware Basins U.S. Onshore Combined CAGR of 25% 2018-2020E, Led by Delaware and DJ Basin CAGR of >75% 2018-2020E in Delaware Basin CAGR of >15% 2018-2020E in DJ Basin Strong Financial Position and Flexibility Investment grade credit rating at all three rating agencies $1.5 B in cumulative excess cash flow created 2018-2020E at $50/Bbl oil ($3 B at strip)
22 Appendix
23 NBLX Asset Map: DJ Basin Black Diamond (54.4%) 1 Dedicated Acres: 141k 2 Laramie DevCo (100%) Oil Gathering Area: Greeley Crescent Dedicated Acres: 65k Laramie DevCo (100%) Oil Gathering PW Gathering FW Delivery Area: Wells Ranch Dedicated Acres: 78k Colorado DevCo (100%) Oil Gathering Gas Gathering PW Gathering FW Delivery Area: East Pony Dedicated Acres: 44k Colorado DevCo (100%) Oil Gathering San Juan DevCo (25%) FW Delivery Area: Bronco Dedicated Acres: 36k Gunnison DevCo (5%) Oil Gathering PW Gathering FW Delivery Area: Mustang Dedicated Acres: 75k Green DevCo (25%) Oil Gathering Gas Gathering PW Gathering FW Delivery 1. Acquisition closed January 31, 2018 2. Reflects expansion of PDC Energy acreage dedication to Black Diamond Gathering system
24 NBLX Asset Map: Delaware Basin Area: Delaware Basin Dedicated Acres: 111k Blanco DevCo (40%) Oil Gathering Gas Gathering PW Gathering Advantage JV (50%) NBL Dedicated Acres: 47k Trinity DevCo (100%) Oil Transmission Trinity DevCo (100%) HP Gas Compression
NBLX Structure Noble Energy NYSE: NBL 100% ROFR Assets: East Pony Gas Gathering East Pony Gas Processing Eagle Ford Shale Midstream Additional DJ Acreage Additional Delaware Basin Services 45.5% Limited Partner Interest 1 Noble Midstream Partners LP NYSE: NBLX 100% Noble Midstream GP LLC Non-Economic General Partner Interest Public Unitholders (LP) 54.5% Limited Partner Interest 1 Noble Midstream Services, LLC 3.33% Non-Operating Membership Interest White Cliffs Pipeline L.L.C. Controlling Interest 40% 25% 25% 5% 100% 100% 100% Blanco Green San Juan Gunnison Colorado Laramie Trinity Non-Controlling Interest 1. Reflects December 2017 equity issuance www.nblmidstream.com 60% 75% 2. Pro forma for Black Diamond Gathering acquisition 75% 95% 54.4% Black Diamond 2 50% Advantage JV 25
26 Non-GAAP Financial Measures This presentation includes Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE, all of which are non-gaap measures which may be used periodically by management when discussing our financial results with investors and analysts. We define Adjusted EBITDA as net income before income taxes, net interest expense, depreciation and amortization and unit-based compensation. Adjusted EBITDA is 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, without regard 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 Adjusted EBITDA less estimated maintenance capital expenditures and cash interest expense. Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all cash on a quarterly basis, and Distributable Cash Flow is one of the factors used by the board of directors of our general partner to help determine the amount of available cash that is available to our unitholders for a given period. We calculate our Distribution Coverage Ratio as Distributable Cash Flow divided by total distributions declared. The Distribution Coverage Ratio is used by management to illustrate our ability to make our distributions each quarter. We define ROACE as earnings before interest and taxes divided by (average total assets average current liabilities). ROACE is used by management to measure the efficiency of the utilization of the capital that we employ. We believe that the presentation of Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE provide information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE is Net Income. Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE exclude some, but not all, items that affect net income, and these measures may vary from those of other companies. As a result, Adjusted EBITDA, Distributable Cash Flow, Distribution Coverage Ratio and ROACE as presented herein may not be comparable to similarly titled measures of other companies. Noble Midstream does not provide guidance on the reconciling items between forecasted Net Income, forecasted Adjusted EBITDA, forecasted Distributable Cash Flow and forecasted Distribution Coverage Ratio due to the uncertainty regarding timing and estimates of these items. Noble Midstream provides a range for the forecasts of Net Income, Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio to allow for the variability in timing and uncertainty of estimates of reconciling items between forecasted Net Income, forecasted Adjusted EBITDA, forecasted Distributable Cash Flow and forecasted Distribution Coverage Ratio. Therefore, the Partnership cannot reconcile forecasted Net Income to forecasted Adjusted EBITDA, forecasted Distributable Cash Flow or forecasted Distribution Coverage Ratio without unreasonable effort. In addition to Net Income, the GAAP measure most directly comparable to Adjusted EBITDA and Distributable Cash Flow is net cash provided by operating activities. Adjusted EBITDA and Distributable Cash Flow should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Due to the forward-looking nature of net cash provided by operating activities, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, Noble Midstream is unable to present a quantitative reconciliation of the aforementioned forward-looking non-gaap financial measures to net cash provided by operating activities. Amounts excluded from these non-gaap measures in future periods could be significant.
27 Non-GAAP Reconciliation 2017 2018E $ in millions 1Q 2Q 3Q 4Q FY 1Q FY Net Income $ 35 $ 39 $ 44 $ 46 $ 164 42-48 220-260 Add: Depreciation and Amortization 2 2 4 4 13 6 35-36 Add: Interest Expense, Net of Amount Capitalized 0 0 1 1 1 1-2 13-14 Add: Income Tax Provision - - 0 (0) 0 - - Add: Unit-Based Compensation 0 0 0 0 1.2-.3 1 Add: Transaction Expenses 5 5 EBITDA $ 37 $ 42 $ 48 $ 52 $ 179 55-61 275-315 Less: EBITDA Attributable to Noncontrolling Interests 11 8 2 3 24 3 60-80 EBITDA Attributable to NBLX $ 26 $ 34 $ 46 $ 48 $ 155 52-58 215-235 Less: Maintenance Capital Expenditures & Cash Interest 3 4 5 5 17 8 35-40 DCF Attributable to NBLX $ 24 $ 30 $ 41 $ 43 $ 138 44-50 180-195 Distribution Coverage 1.8x 1.9x 2.4x 2.2x 2.1x 2.1x - 2.4x 1.9x - 2.1x
Contact Information Megan Repine Investor Relations megan.repine@nblmidstream.com 832.639.7380 1001 Noble Energy Way Houston, TX 77070