Rangeland Energy to Sell Rangeland Energy II, LLC to Andeavor

SUGAR LAND, Texas–(BUSINESS WIRE)–#midstream—Rangeland
Energy (“Rangeland”) today announced that the company and its
financial sponsor EnCap
Flatrock Midstream have entered into a definitive agreement to sell
Rangeland Energy II, LLC (“Rangeland II”) to Tesoro Refining & Marketing
Company LLC, a wholly owned subsidiary of Andeavor
(NYSE: ANDV) for an undisclosed amount. Rangeland II owns and operates
the RIO
System, a multipart crude oil and frac sand logistics system
originating in the heart of the Delaware Basin. The system provides
access and optionality to multiple crude oil producers and end markets
and consists of the RIO Pipeline System and the RIO Hub.

The all-cash transaction is expected to close early in the first quarter
of 2018, subject to customary regulatory approvals. Substantially all of
Rangeland II’s field employees will be invited to remain with the asset
as employees of Andeavor. The Rangeland II management team will focus on
the expansion of Rangeland Energy III, LLC (“Rangeland III”). Rangeland
III is developing the STEPS
logistics terminal in Corpus Christi and pursuing midstream
opportunities in western Canada.

STEPS is an integrated hydrocarbon logistics system that will receive
and store refined products, liquefied petroleum gas (“LPG”) and other
hydrocarbons at a new terminal hub now under construction in Corpus
Christi, Texas, and transport them to terminals primarily located in
Mexico.

RIO System Details

The RIO System is comprised of four core facilities, with additional
facilities under development. The RIO Hub rail facility is located
approximately 12 miles south of Carlsbad in Eddy County, New Mexico, and
is the Delaware Basin’s premier frac sand rail-unloading, storage and
truck-loading facility. The RIO Pipeline consists of 110 miles of
12-inch crude oil pipeline, bridging the Delaware and Midland basins
with connectivity at the State Line Terminal in Loving County, Texas,
and the Geneva and Zurich terminals in Midland, Texas. Today, the RIO
System provides shippers optionality to access the Colorado City,
Cushing, Corpus Christi and Houston markets through Midland. Planning
for additional Midland connectivity is in progress to offer even greater
optionality to shippers on the RIO System.

From Rangeland

“Rangeland II Chief Operating Officer Steve Broker and his team have
done an outstanding job of creating value by developing a scalable
system with connectivity to the Midland market center and beyond,” said
Rangeland President and CEO Chris Keene. “We look forward to continuing
to work with EnCap Flatrock Midstream as we leverage our successful
terminaling experience to develop the STEPS Terminal in Corpus Christi
and pursue exciting new business opportunities in Canada.”

From EnCap Flatrock Midstream

“This is our second successful realization with Rangeland,” said EnCap
Flatrock Midstream Managing Partner and Founder Bill Waldrip. “Chris
Keene and Steve Broker were early to recognize the midstream
opportunities in the Delaware Basin and first to market in 2014 with
what soon became RIO’s comprehensive logistics platform. Rangeland
management was early to recognize similar opportunities in the Bakken
when we first backed them a little more than eight years ago. When you
combine extraordinary vision with a team that has the ability to execute
as well as the Rangeland team does, you have a recipe for success for
our institutional investors and the Rangeland team. It’s been a great
relationship, and we look forward to working with Rangeland for many
years to come.”

Advisers

RBC Capital Markets served as the sole financial adviser to Rangeland
Energy with Managing Director, Energy Mergers & Acquisitions, Ali Akbar,
and Managing Director and Head of Midstream Group Drew Horn leading the
RBC team. Jones Day served as legal adviser to Rangeland Energy with
Partner Omar Samji in the lead role. Thompson & Knight LLP served as
legal counsel to EnCap Flatrock Midstream with Partner Sarah E. McLean
leading the firm’s legal team. McGuireWoods LLP provided legal counsel
to Andeavor, led by Partners Anthony J. Carna and Craig Culbertson.

About Rangeland Energy

Rangeland Energy is headquartered in Sugar Land, Texas, with regional
offices in Loving, New Mexico; Midland, Texas; and Calgary, Alberta.
Rangeland Energy was formed in 2009 to focus on developing, acquiring,
owning and operating midstream infrastructure for crude oil, natural
gas, natural gas liquids and other petroleum products. The company is
primarily focused on emerging shale plays across North America with an
emphasis on the Delaware Basin in West Texas, the Gulf Coast and Canada.
The Rangeland team represents more than 300 years of combined midstream
experience and is backed by equity commitments from EnCap
Flatrock Midstream. Visit www.rangelandenergy.com
for more information.

About EnCap Flatrock Midstream

EnCap Flatrock Midstream provides value-added growth capital to proven
management teams focused on midstream infrastructure opportunities
across North America. The firm was formed in 2008 by a partnership
between EnCap
Investments L.P. and Flatrock Energy Advisors. Based in San Antonio
with offices in Oklahoma City and Houston, EnCap Flatrock is led by
Managing Partners and Founders William D. Waldrip, Dennis F. Jaggi and
William R. Lemmons, Jr., Managing Partners Gregory C. King and David J.
Kurtz, and Partner Dennis McCanless. The firm manages investment
commitments of nearly $6 billion from a broad group of prestigious
institutional investors. EnCap Flatrock is currently making commitments
to new management teams from EFM Fund III, a $3 billion fund. For more
information please visit www.efmidstream.com.

Contacts

For Rangeland Energy and EnCap Flatrock Midstream:
TEN|10 Group
Casey
Nikoloric
Managing Principal
303.433.4397, x101 o
303.507.0510
m
[email protected]