Crestwood Equity Partners (CEQP) Responds to Chesapeake Energy's (CHK) Bankruptcy Filing

Crestwood Equity Partners LP (NYSE: CEQP) (“Crestwood”) announced today that Chesapeake Energy (NYSE: CHK) (“Chesapeake”), a customer in the Powder River Basin and northeast Marcellus, has filed for protection under Chapter 11 of the U.S. bankruptcy code. Crestwood has been preparing for this event over the past few months and is well-positioned to maintain full operations to Chesapeake throughout bankruptcy proceedings. Crestwood’s gathering and processing systems are integral to Chesapeake’s operations in the Powder River Basin, as a substantial amount of its revenues are derived from the sale of natural gas and natural gas liquids (NGLs) produced from acreage dedicated to Crestwood, which is the most economic path to market.

Chesapeake is current on all outstanding invoices payable to Crestwood and additional cash flow protection is in place via letters of credit. In the Powder River Basin, Crestwood’s midstream assets are supported by a 358,000 acreage dedication by Chesapeake and a 30,000 acreage dedication by Panther Energy, as well as dedications by other producers in the basin. The Bucking Horse processing facility and the Jackalope gas gathering system are supported by a 20-year fixed fee gathering and processing agreement with Chesapeake that was restructured in the first quarter 2017 and reflects competitive market terms in-line with other midstream operators in the basin. Crestwood provides a critical service to Chesapeake with over 320 wells connected to the Jackalope system.

Following today’s announcement, Crestwood does not anticipate any changes to its ability to achieve the revised 2020 cash flow forecast and financial metrics provided on May 5, 2020.

Non-GAAP Financial Measures

Adjusted EBITDA and distributable cash flow are non-GAAP financial measures. The accompanying schedules of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or operating income or any other GAAP measure of liquidity or financial performance.

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