USD Partners LP Completes Acquisition of Casper Terminal and Increases Credit Facility Borrowing Capacity

USD Partners LP (NYSE: USDP) (the “Partnership”) has completed its previously announced acquisition of the Casper, Wyoming, crude oil terminal for total consideration of $225.0 million, subject to post-closing adjustments and adjustments for working capital. The Casper terminal assets include a unit train capable rail loading terminal, 900,000 barrels of tank capacity for storage and blending operations and a pipeline connection from Spectra Energy Partners LP’s Express crude oil pipeline, currently the primary source of crude oil delivered to the terminal.

The Casper terminal is supported by take-or-pay contracts with primarily investment grade refiners and is expected to contribute approximately $26 million of Adjusted EBITDA in 2016 based on minimum contracted payments. The transaction is expected to be immediately accretive to distributable cash flow per unit.

In addition, on November 13, 2015, the Partnership amended its senior secured credit agreement to increase its borrowing capacity from $300 million to $400 million, supported by the Partnership’s existing lenders and by the addition of Goldman Sachs Bank USA to the bank group. The Partnership also reset its ability to request an additional $100 million of incremental revolving credit facility commitments, subject to receiving increased commitments from lenders or other financial institutions and satisfaction of certain conditions. All other terms and conditions of the existing agreement remained unchanged.

“We appreciate the support shown by our lender group and are happy to build on our long-term relationship with Goldman Sachs,” said Adam Altsuler, USD Partners’ Chief Financial Officer. “The increased facility size reflects the Partnership’s recent growth and will provide additional flexibility and liquidity as the Partnership continues to execute on its plans.”

About USD Partners LP

The Partnership is a fee-based, growth-oriented master limited partnership formed by US Development Group, LLC to acquire, develop and operate energy-related rail terminals and other high-quality and complementary midstream infrastructure assets and businesses. The Partnership’s assets consist primarily of: (i) a crude-by-rail origination terminal in Hardisty, Alberta, Canada, with capacity to load up to two 120-railcar unit trains per day; (ii) a unit train-capable crude-by-rail origination terminal in Casper, Wyoming, with approximately 900,000 barrels of tank capacity for storage and blending operations; and (iii) two unit train-capable ethanol destination rail terminals in San Antonio, Texas, and West Colton, California, with a combined capacity of approximately 33,000 barrels per day. In addition, the Partnership provides railcar services through the management of a railcar fleet that is committed to customers on a long-term basis.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. federal securities laws, including statements related to the expected minimum Adjusted EBITDA contribution of the Casper terminal and whether the acquisition will be accretive to distributable cash flow per unit, the Partnership’s liquidity, and the Partnership’s ability to execute on its plans. Words and phrases such as “is expected,” “is planned,” “believes,” “projects,” and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to the Partnership are based on management’s expectations, estimates and projections about the Partnership, its interests and the energy industry in general on the date this press release was issued. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include those as set forth under the heading “Risk Factors” in the Partnership’s most recent Annual Report on Form 10-K and in our subsequent filings with the Securities and Exchange Commission. The Partnership is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

We define Adjusted EBITDA as net income before depreciation and amortization, interest and other income, interest and other expense, unrealized gains and losses associated with derivative instruments, foreign currency transaction gains and losses, income taxes, non-cash expense related to our equity compensation programs, discontinued operations, adjustments related to deferred revenue associated with minimum monthly commitment fees and other items which management does not believe reflect the underlying performance of our business. Adjusted EBITDA is a non-GAAP, supplemental financial measure used by management and by external users of our financial statements, such as investors and commercial banks, to assess:

• our operating performance as compared to those of other companies in the midstream sector, 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 our ability to generate incremental cash flows from these opportunities.

We believe that the presentation of Adjusted EBITDA provides information useful to investors in assessing our financial condition and results of operations. We further believe that the presentation of Adjusted EBITDA enhances investors’ understanding of our ability to generate cash for payment of distributions and other purposes. The GAAP measures most directly comparable to Adjusted EBITDA are Net Income and Cash Flows from Operating Activities. Adjusted EBITDA should not be considered an alternative to Net Income, Cash Flows from Operating Activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA excludes some, but not all, items that affect Net Income, and these measures may vary among other companies. As a result, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Reconciliation of Estimated Minimum Contracted Adjusted EBITDA to Net Income

View source version on businesswire.com: http://www.businesswire.com/news/home/20151117006854/en/