USD Partners LP Announces Strategic Acquisition of Crude Oil Terminal in Casper, Wyoming

USD Partners LP (NYSE: USDP) (the “Partnership”) has agreed to acquire
100% of the equity interests in Casper Crude to Rail, LLC (the “Casper
terminal”) from Stonepeak Infrastructure Partners, Cogent Energy
Solutions and The Granite Peak Group for total consideration of $225.0
million, subject to closing adjustments. The purchase price includes
$208.3 million of cash and $16.7 million of limited partner units issued
to the sellers.

The Casper terminal’s principal assets include i) a unit train-capable
crude oil loading rail terminal with 100,000 barrels per day of capacity
and dual loop tracks, ii) six customer-dedicated storage tanks with
900,000 barrels of total capacity and iii) a six-mile, 24-inch diameter
pipeline with a direct connection from Spectra Energy Partners LP’s
Express crude oil pipeline, which runs from Hardisty, Alberta, to
Casper, Wyoming, and provides access to multiple grades of Canadian
crude oil. The terminal’s advantaged location supports best-in-class
access to multiple refining centers across the U.S., enhanced by onsite
storage and blending capabilities, which enables customers to ship
preferred grades of crude oil from Casper. Additionally, the terminal’s
footprint and modular design allows for the addition of a second loading
station and an additional 1.1 million barrels of storage capacity with
minimal disruption to existing operations and relatively low incremental
capital costs.

“We are pleased to announce our first acquisition since the
Partnership’s initial public offering last October. The Casper terminal
represents an attractive opportunity to deliver a highly accretive,
complementary acquisition to our unitholders and supports the
Partnership’s ability to achieve its targeted distribution growth over
the next several years,” said Dan Borgen, the Partnership’s Chief
Executive Officer. “The terminal’s high-quality customer base and
strategic location ensure competitive, sustainable market access, as
well as provide an additional platform for heavy crude oil solutions.”

The Casper terminal commenced operations in September 2014 and is
supported by take-or-pay contracts with primarily investment grade
refiners and a weighted-average remaining contract life of approximately
three years. For the full year 2016, the Casper terminal is expected to
contribute minimum contracted Adjusted EBITDA of approximately $26
million.

The Partnership intends to fund the cash portion of the purchase price
with approximately $35 million of cash on hand and approximately $173
million of senior secured credit facility borrowings. The Partnership
will issue approximately 1.7 million common units as equity
consideration based on a unit price of $9.62, the volume-weighted
average daily closing price for the Partnership’s common units for the
30 trading day period prior to October 12, 2015. The Partnership
believes the transaction will be immediately accretive to distributable
cash flow per unit upon closing, which is expected to occur in Q4 2015.

The Partnership has posted a presentation on its website with additional
information regarding the pending acquisition of the Casper terminal and
its anticipated impact on the Partnership. The presentation can be
accessed from the Partnership’s website at http://investor.usdpartners.com/events-and-presentations.

Conference Call Information

The Partnership will host a conference call and webcast to discuss the
transaction at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) on
Tuesday, October 13, 2015.

To listen live over the Internet, participants are advised to log on to
the Partnership’s website at www.usdpartners.com
and select the “Events & Presentations” sub-tab under the “Investors”
tab. To join via telephone, participants may dial (877) 266-7551
domestically or +1 (339) 368-5209 internationally, conference ID
53978955. Participants are advised to dial in at least five minutes
prior to the call.

An audio replay of the conference call will be available for thirty days
by dialing (855) 859-2056 domestically or +1 (404) 537-3406
internationally, conference ID 53978955. In addition, a replay of the
audio webcast will be available by accessing the Partnership's website
after the call is concluded.

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) an origination
crude-by-rail terminal in Hardisty, Alberta, Canada, with capacity to
load up to two 120-railcar unit trains per day and (ii) two destination
unit train-capable ethanol 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 closing of the acquisition, the ability to expand the Casper
terminal, the ability of the Partnership to achieve targeted
distribution growth, the expected minimum Adjusted EBITDA contribution
of the Casper terminal and whether the acquisition will be accretive to
distributable cash flow per unit. 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.

¹ Depreciation and provision for income taxes
estimated based on actual results from 1/1/2015 through 5/31/2015.
Interest expense estimated using a 3.75% interest rate on the portion of
the purchase price expected to be funded with additional credit facility
borrowings.

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