A Delaware Basin Midstream Company. November 6, 2017

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Diane Bruce
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1 3Bear Energy A Delaware Basin Midstream Company November 6, 2017

2 Who is 3Bear? A History of Midstream Value Creation Bob Clark s Bear companies have a strong track record of creating value for partners and shareholders while providing strong customer service Mr. Clark, with over 30 years of experience in midstream activities across the Rockies and Texas, has owned and/or operated the following systems: Company Project Product Capacity Basin Bear Tracker Mountrail Gas Gathering System Associated Gas 25 MMcfd Williston (Bakken) Hereford Ranch Gathering and Processing Associated Gas 25 MMcfd DJ (Niobrara) Polar Gathering System Oil 50,000 BPD Williston (Bakken) Water 50,000 BPD Divide Oil Gathering System Oil 50,000 BPD Williston (Bakken) Bear Cub Madisonville Gas Plant Facility Associated Gas 70 MMcfd East Texas/Woodbine Fashing Gas Plant Facility Associated Gas 25 MMcfd + South Texas (Eagle Ford) Bear Paw Grasslands Gathering and Processing Complex Associated Gas 90 MMcfd Williston (Bakken) - Baker Processing Plant - Lignite Processing Plant - Marmarth Processing Plant Bear Paw Powder River Gathering Associated Gas 25 MMcfd + Powder River Wiggins Gathering and Processing Associated Gas 3 MMcfd DJ (Niobrara) Snyder Oil Platteville Gathering and Processing Associated Gas 30 MMcfd DJ (Niobrara) Roggen Gathering and Processing Associated Gas 25 MMcfd + DJ (Niobrara) 3Bear s team was created to handle the full scope of a producer s midstream needs The technical team has operational experience working on oil and gas gathering and processing on numerous systems within the Mid-Con, Rockies and Permian The business development team has worked with both crude gathering/marketing, as well as associated gas gathering/marketing in the Mid-Con, Rockies and Permian 2

3 The 3Bear System: A Four-Stream Solution 3Bear is constructing more than 100 miles of pipeline wellhead gathering including systems for oil, gas and water transportation, a central water treatment facility, crude terminal and a 60,000 Mcf/d cryogenic gas processing plant with treating capabilities. The 3Bear system is designed for expansion and will accommodate the rapid production growth Delaware Basin producers are experiencing. 3Bear expects the system to be operational in the first quarter of Gas Gathering and Processing Low pressure poly gathering and High pressure steel gathering >30,000 HP of field compression Wellhead Gathering 60,000 Mcf/d Cryogenic Processing Plant Treating (Amine and Nitrogen Rejection) Multiple residue outlets provide for competitive marketing opportunities Oil Gathering and Terminalling 4-6 steel pipeline with trunkline capacity sized for growth Operational Storage facility with initial plans for up to 40,000 Barrels of storage Multiple Interconnects in the Area provide producer with vast optionality Water Gathering, Disposal and Re-Distribution Poly pipeline gathering and return system sized to serve local producers drilling and producing operations Multiple 250,000 bbl impoundments with filtration Central SWDs 3

4 The 3Bear System Estimated In-Service 1Q18 Water system also under construction in southern Eddy on TX/NM State Line Eddy Lea System ~30 miles north of TX/NM State Line 4

5 The 3Bear System: Water Recycling Estimated In-Service 1Q Miles of Pipe in Central Lea Produced Water In Recycled Water Out Similar Design underway in Eddy (26S 26E) 5

6 System Sized for Instant Delivery Redelivery trunk-lines sized to limit well pad storage Return lines initially sized to deliver +20,000 barrels per day Central Impound with initial capacity of 250,000 barrels Truck Load/Unload capabilities Potential to blend with area fresh water supplies Devonian SWDs also to be drilled to support facilities Provides system outlet should drilling slow and why stack rates? 6

7 Water Scarcity: Regulation Helping Push the Drive to Recycle 7

8 Increased regulatory pressure will continue to drive development in produced water recycling Why dispose of a natural resource when it is economic to Recycle and Reuse? Recycling sources water for future drilling Producers are saving meaningful capital on their completions by utilizing produced regional and local water treatment facilities to subsidize their frack water requirements Matador estimates costs savings of ~$165,000/well by using recycled water* Using a midstream provider with an existing produced water gathering system and treating facilities can save producers upfront capital, time and reduces the overall dependence on trucks 3Bear estimates it can save ~$1.00/bbl for producers for Frac Water Ability to recycle and/or dispose under one blended fee avoids rate stacking 3Bear is one of the few Delaware midstream providers offering a three four-stream solution for wellhead production: Oil, Gas, Produced Water AND Returned Water * Matador September 2017 Investor Presentation 8

9 Contact Information Scott Spicher Shawn Radtke Linda McNamee Chief Operating Officer Chief Financial Officer VP-Business Development

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