Form 10-Q Marlin Midstream Partner For: Sep 30

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October 30, 2014 1:05 PM EDT

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�	�	�	�	�

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington,�D.C. 20549



�	�	�	�	�

��

Form�10-Q


�	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September�30, 2014


�	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36018



�	�	�	�	�

�

Marlin Midstream Partners, LP

(Exact Name of Registrant as Specified in its Charter)�



Delaware	�	�	�	46-2627595
(State or Other Jurisdiction of Incorporation or Organization)	�	�	�	(I.R.S. Employer Identification Number)
�	�	2105 CityWest Boulevard Suite�100 Houston, Texas (832)�200-3702	�	77042
�	�	(Address of principal executive offices)	�	(Zip Code)
�	�	(832) 200-3702	�	�
(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ��No �

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (�232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes � No �

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in rule 12b-2 of the Exchange Act.



Large accelerated filer �		�	�	Accelerated filer �
�		�	�	�
Non-accelerated filer x		(Do no check if smaller reporting company)		Smaller reporting company �
�	�	�

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange

Act). Yes � No �

The registrant had the following number of units outstanding as of October�29, 2014:



Class	�	Units Outstanding
Common Units	�	8,979,248
Subordinated Units	�	8,724,545
General Partner Units	�	357,935



�	�	�	�	�

MARLIN MIDSTREAM PARTNERS, LP

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended September�30, 2014

�



�	�
PART I. FINANCIAL INFORMATION	�
Item 1. FINANCIAL STATEMENTS	�
�	�
Condensed Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 (unaudited)	4
�	�
Condensed Consolidated and Combined Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013 (unaudited)	5
�	�
Condensed Consolidated and Combined Statements of Cash Flows for the Nine Months ended September 30, 2014 and 2013 (unaudited)	6
�	�
Condensed Consolidated Statement of Partners Capital for the Nine Months Ended September 30, 2014 (unaudited)	7
�	�
Notes to the Condensed Consolidated and Combined Financial Statements (unaudited)	8
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	39
Item 4. CONTROLS AND PROCEDURES	39
PART II. OTHER INFORMATION	40
Item 1. LEGAL PROCEEDINGS	40
Item 1A. RISK FACTORS	40
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	40
Item 3. DEFAULTS UPON SENIOR SECURITIES	38
Item 4. MINE SAFETY DISCLOSURES	38
Item 5. OTHER INFORMATION	38
Item 6. EXHIBITS	40
SIGNATURES	40

�

GLOSSARY OF TERMS

The following are definitions of certain terms used in this Quarterly Report on Form 10-Q:

Bbls:�One stock tank barrel, or 42 U.S.�gallons liquid volume, used in reference to oil or other liquid hydrocarbons.

Bbls/d:�Stock tank barrel per day.

Bbls/hr:�Stock tank barrel per hour.

condensate:�A natural gas liquid with a low vapor pressure, mainly composed of propane, butane, pentane and heavier hydrocarbon fractions.

crude oil: A mixture of hydrocarbons that exists in liquid phase in underground reservoirs.

dry gas:�A natural gas primarily composed of methane and ethane where heavy hydrocarbons and water either do not exist or have been removed through processing.

end-user markets:�The ultimate users and consumers of transported energy products.

Mcf:�One thousand cubic feet.

MMBtu:�One million British Thermal Units.

MMcf:�One million cubic feet.

MMcf/d:�One million cubic feet per day.

natural gas liquids, or NGLs:�The combination of ethane, propane, normal butane, isobutane and natural gasolines that when removed from natural gas become liquid under various levels of higher pressure and lower temperature.

residue gas:�The dry gas remaining after being processed or treated.

tailgate:�Refers to the point at which processed natural gas and natural gas liquids leave a processing facility for end-user markets.

throughput:�The volume of natural gas transported or passing through a pipeline, plant, terminal or other facility during a particular period.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

MARLIN MIDSTREAM PARTNERS, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except number of units)

�(unaudited)



�	September�30, 2014		�	December�31, 2013
�	�		�	�
ASSETS	�		�	�
CURRENT ASSETS	�		�	�
Cash and cash equivalents	$	2,434	�	$	3,157
Accounts receivable	3,104		�	2,969
Accounts receivableaffiliates	3,218		�	3,632
Inventory	230		�	321
Prepaid assets	481		�	330
Other current assets	285		�	285
Total current assets	9,752		�	10,694
PROPERTY, PLANT AND EQUIPMENT, NET	164,096		�	162,548
OTHER ASSETS	686		�	900
TOTAL ASSETS	$	174,534	�	$	174,142
�	�		�	�
LIABILITIES AND PARTNERS CAPITAL	�		�	�
CURRENT LIABILITIES	�		�	�
Accounts payable	$	1,477	�	$	2,791
Accrued liabilities	2,715		�	2,131
Accounts payableaffiliates	1,935		�	1,552
Long-term incentive plan payable - affiliates	219		�	2,752
Total current liabilities	6,346		�	9,226
LONG-TERM LIABILITIES			�
Long-term incentive plan payable - affiliates	355			291
Deferred taxes	169			75
Long-term debt	11,000		�	4,000
Total liabilities	17,870		�	13,592
PARTNERS CAPITAL			�
Common units (8,979,248 and 8,724,545 issued and outstanding at September 30, 2014 and December 31, 2013, respectively)	142,182			142,587
Subordinated units (8,724,545 issued and outstanding at September 30, 2014 and December 31, 2013)	13,720			17,258
General partner units (357,935 and 356,104 issued and outstanding at September 30, 2014 and December 31, 2013, respectively)	762		�	705
Total Partners Capital	156,664		�	160,550
TOTAL LIABILITIES AND PARTNERS CAPITAL	$	174,534	�	$	174,142

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

MARLIN MIDSTREAM PARTNERS, LP

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

(in thousands, except per unit amounts)

�(unaudited)



�	Three Months Ended September 30,							�	Nine Months Ended September 30,
�	2014			�	2013			�	2014				2013
�	�							�	�			�	�
REVENUES:	�			�	�			�	�			�	�
��Natural gas, NGLs and condensate revenue	$	2,511		�	$	7,026		�	$	11,852		�	$	14,106
��Gathering, processing, transloading and other revenue	5,419			�	7,321			�	19,237			�	17,995
��Gathering, processing, transloading and other revenueaffiliates	9,289			�	4,603			�	27,394			�	4,650
Total Revenues	17,219			�	18,950			�	58,483			�	36,751
OPERATING EXPENSES:	�			�	�			�	�			�	�
��Cost of natural gas, NGLs and condensate revenue	1,136			�	5,045			�	3,722			�	7,419
��Cost of natural gas, NGLs and condensate revenueaffiliates	1,626			�	1,434			�	10,488			�	4,268
��Operation and maintenance	2,132			�	2,961			�	6,947			�	10,048
��Operation and maintenanceaffiliates	1,505			�	1,322			�	5,007			�	1,830
��General and administrative	748			�	849			�	2,467			�	2,927
��General and administrativeaffiliates	981			�	1,633			�	3,795			�	2,287
��Property tax expense	363			�	291			�	994			�	844
��Depreciation expense	2,238			�	2,058			�	6,568			�	6,093
Loss on disposal of equipment								�	60			�
Total operating expenses	10,729				15,593			�	40,048			�	35,716
Operating income	6,490				3,357			�	18,435			�	1,035
Interest expense, net of amounts capitalized	(212		)	�	(1,382		)	�	(549		)	�	(4,171		)
Loss on interest rate swap				�	(42		)	�				�	(47		)
Net income (loss) before tax	6,278			�	1,933			�	17,886			�	(3,183		)
��Income tax expense	(138		)		(11		)	�	(275		)	�	(35		)
Net income (loss)	$	6,140			$	1,922		�	$	17,611		�	$	(3,218	)
�	�			�	�			�	�			�	�
Net income (1)	$	6,140		�	$	2,785		�	$	17,611		�	�
Less:	�			�	�			�	�			�	�
��Allocation of East New Mexico Dropdown net income prior to acquisition (see Note 5)	(160		)	�				�	(160		)	�	�
��General partner interest in net income	(120		)	�	(55		)	�	(349		)	�	�
Limited partner interest in net income	$	5,860		�	$	2,730		�	$	17,102		�	�
�	�			�	�			�	�			�	�
Net income per limited partner common unit - basic	$	0.33		�	$	0.16		�	$	0.98		�	�
Net income per limited partner common unit - diluted	$	0.33		�	$	0.15		�	$	0.96		�	�
Net income per limited partner subordinated unit - basic and diluted	$	0.33		�	$	0.16		�	$	0.96		�	�
(1) Post-IPO, August 1, 2013 to September 30, 2013 for the three months ended September 30, 2013.													�

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

MARLIN MIDSTREAM PARTNERS, LP

CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)�



�	Nine Months Ended September 30,
�	2014			�	2013
�	�
CASH FLOWS FROM OPERATING ACTIVITIES:				�
Net income (loss)	$	17,611		�	$	(3,218	)
Adjustments to reconcile net loss to net cash flows provided by operating activities:				�
Loss on disposal of equipment	60
Depreciation expense	6,568			�	6,093
Amortization of deferred financing costs	214			�	1,198
Equity-based compensation	1,522				1,284
Deferred taxes	95
Unrealized loss on derivatives				�	(57		)
Changes in assets and liabilities:				�
(Increase) decrease in accounts receivable	(135		)	�	2,431
(Increase) decrease in accounts receivableaffiliates	414			�	(3,323		)
(Increase) decrease in inventory	91			�	(129		)
Increase in prepaid assets	(151		)	�	(280		)
Decrease in other assets				�	47
Increase (decrease) in accounts payable	(180		)	�	1,321
Increase in accrued liabilities	583			�	1,279
Increase (decrease) in accounts payableaffiliates	383				(5,064		)
Decrease in long-term incentive plan payable	(1,030		)
Net cash provided by operating activities	26,045			�	1,582
CASH FLOWS FROM INVESTING ACTIVITIES:				�
Purchases of property, plant and equipment	(9,052		)	�	(10,947		)
Net cash used in investing activities	(9,052		)	�	(10,947		)
CASH FLOWS FROM FINANCING ACTIVITIES:				�
Capital contributions					3,574
Issuance of general partner units	38			�
Borrowing of long-term debt	23,500			�	34,000
Repayments on long-term debt	(16,500		)	�	(152,000		)
Payment of deferred financing costs					(1,140		)
Proceeds from IPO, net of underwriting discount and other costs					125,329
Distributions	(19,224		)	�
Excess cash purchase price over historical cost of assets acquired from affiliate (Note 5)	(5,530		)	�
Net cash provided by (used in) financing activities	(17,716		)	�	9,763
NET DECREASE IN CASH AND CASH EQUIVALENTS	(723		)	�	398
CASH AND CASH EQUIVALENTSBeginning of Period	3,157			�	5,555
CASH AND CASH EQUIVALENTSEnd of Period	$	2,434		�	$	5,953
�	�			�	�
Supplemental Cash Flow Information:	�			�	�
Cash paid for interest	$	352		�	$	3,362
Accrual of Construction-in-progress and capital expenditures	$	273		�	$	1,196
Cash paid for income taxes	$	70			$	40
Issuance of common units for assets acquired from affiliate (Note5)	$	257		�	$
Net assets contributed to NuDevco Midstream Development, LLC	$				$	9,385
Intercompany accounts payable assigned to NuDevco Midstream Development, LLC	$				$	11,692

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

MARLIN MIDSTREAM PARTNERS, LP

CONDENSED CONSOLIDATED STATEMENT OF PARTNERS CAPITAL

(in thousands)

�(unaudited)



In thousands	General Partner Units			Subordinated Units			Common Units			Total
Balance at December 31, 2013	705			17,258			142,587			160,550
Issuance of common units under the Long-Term Incentive Plan							2,962			2,962
Distributions	(381		)	(9,229		)	(9,614		)	(19,224		)
Issuance of general partner units (Note5)	38									38
Issuance of common units for assets acquired from affiliate (Note5)							257			257
Excess cash purchase price over historical cost of assets acquired from affiliate (Note 5)	(109		)	(2,685		)	(2,736		)	(5,530		)
Net income	509			8,376			8,726			17,611
Balance at September 30, 2014	$	762		$	13,720		$	142,182		$	156,664

The accompanying notes are an integral part of these condensed consolidated and combined financial statements.

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(UNAUDITED)

1. ORGANIZATION AND FORMATION OF THE PARTNERSHIP

Organization

Marlin Midstream Partners, LP (the Partnership) is a midstream energy company that offers (i) natural gas gathering, compression, dehydration, treating, processing, and hydrocarbon dew-point control and transportation services to producers, marketers and third-party pipeline companies, and (ii) crude oil transloading services to Associated Energy Services, LP (AES), an affiliate of the Partnership.

The Partnership is a Delaware limited partnership, formed in April 2013 by NuDevco Partners, LLC and its affiliates (NuDevco). NuDevco, a sole member limited liability company formed on August�27, 2010 under the Texas Limited Liability Company Act (TLLCA), is an affiliate of Spark Energy Ventures, LLC (SEV), a sole member limited liability company formed on October�8, 2007 under the TLLCA, and Spark Energy, Inc. ("SEI"), a retail energy services company incorporated in the state of Delaware on April 22, 2014. NuDevco and SEV are both indirectly owned by W. Keith Maxwell III. SEV was the sole member of Marlin Midstream, LLC and its subsidiaries (Marlin Midstream), and Mr. Maxwell was the sole member of Marlin Logistics, LLC (Marlin Logistics) prior to the closing of the Partnerships initial public offering of 6,875,000 common units representing a 38.6% limited partner interest in the Partnership on July 31, 2013 (IPO). Concurrently with the closing of the IPO, the Partnership also executed a new credit facility.

In connection with the closing of the IPO, SEV contributed all of its interest in Marlin Midstream to the Partnership, and Mr.�Maxwell contributed all of his interest in Marlin Logistics to the Partnership, through a series of transfers of interest in entities all under the common control of Mr.�Maxwell in exchange for wholly owned subsidiaries of NuDevco receiving common units and all of the Partnerships subordinated units and incentive distribution rights. The contribution of entities to the Partnership is not considered a business combination accounted for under the purchase method because it was a transfer of assets and operations under common control and, accordingly, balances were transferred at their historical cost. The Partnerships historical condensed combined financial statements prior to the IPO are prepared using Marlin Midstreams and Marlin Logistics historical basis in the assets and liabilities, and include all revenues, costs, assets and liabilities attributed to these entities for the periods presented. The Partnerships financial statements subsequent to the IPO are prepared on a consolidated basis.

The Partnerships general partner, Marlin Midstream GP, LLC manages the Partnerships activities subject to the terms and conditions specified in the Partnerships partnership agreement. The Partnerships general partner is owned by NuDevco Midstream Development, LLC (NuDevco Midstream Development), an indirect wholly owned subsidiary of NuDevco. The operations of the general partner, in its capacity as general partner, are managed by its board of directors. Actions by the general partner that are made in its individual capacity will be made by NuDevco Midstream Development as the sole member of the Partnerships general partner and not by the board of directors of the general partner. The partnerships general partner will not be elected by the Partnerships unitholders and will not be subject to re-election on a regular basis in the future. The officers of the general partner will manage the day-to-day affairs of the Partnerships business.

Marlin Midstream was formed November�26, 2002 as a sole member limited liability company under the TLLCA. Marlin Midstream is a midstream energy company offering the following midstream services: natural gas gathering, compression, dehydration, treating, processing and hydrocarbon dew-point control and transportation services to producers, third-party pipeline companies and marketers.

Marlin Logistics, formerly known as FuelCo Energy, LLC, was formed August�26, 2010 as a sole member limited liability company under the TLLCA. Marlin Logistics is a crude oil logistics company that offers crude oil transloading services.

This report contains information occurring prior to the completion of the IPO, and prior to the effective dates of certain of the agreements discussed herein. Consequently, the unaudited condensed consolidated and combined financial statements and related discussion of financial condition and results of operations contained in this report for those periods prior to the initial public offering pertain to the combined businesses and assets of Marlin Midstream and Marlin Logistics.

Unless the context otherwise requires, references in this report to we, our, us, or like terms, when used in a historical context, refer to the combined businesses and assets of Marlin Midstream and Marlin Logistics, and when used in the present tense or prospectively, refer to the Partnership and its subsidiaries.

As a company with less than $1.0 billion in revenues during its last fiscal year, the Partnership qualifies as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other regulatory requirements.

Initial Public Offering of Marlin Midstream Partners, LP

On July�31, 2013, the Partnership completed the IPO of 6,875,000 common units, representing a 38.6% limited partner interest, to the public for $20.00 per common unit, less an underwriting discount of $1.20 per common unit. After the closing of the IPO, substantially all the Partnerships gross margin is generated under fee-based commercial agreements, the substantial majority of which have minimum volume commitments.

Net proceeds to the Partnership from the IPO were $125.3 million, after underwriting discount, structuring fees and other direct IPO costs. Using those proceeds, the Partnership repaid its existing credit facility of approximately $121.9 million and the outstanding revolving credit facility of approximately $10.0 million, and settled its existing interest rate swap liability of approximately $0.1 million.

At the consummation of the IPO, the amount of common, subordinated, and general partner units is summarized in the table below:



	Number of units	Limited Partner
	at July 31, 2013	Interest
Publicly held common units	6,875,000	38.6%
Common units held by NuDevco	1,849,545	10.4%
Subordinated units held by NuDevco	8,724,545	49.0%
General partner units	356,104	2.0%
��Total	17,805,194	100.0%

Our Fee-Based Commercial Agreements

Prior to the IPO, the Partnership generated revenues primarily under keep-whole and other commodity-based gathering and processing agreements with third parties and its affiliates. At the closing of the IPO, the Partnership terminated the existing commodity-based gas gathering and processing agreement with AES, assigned to AES all of the remaining keep-whole and other commodity-based gathering and processing agreements with third party customers, and entered into a new three-year fee-based gathering and processing agreement with AES with a minimum volume commitment and annual inflation adjustments.

Following the closing of the IPO, the Partnership has multiple fee-based commercial agreements in place with Anadarko Petroleum Corporation (Anadarko) and AES, substantially all of which include minimum volume commitments and annual inflation adjustments that are the source of a substantial portion of the Partnerships revenues.

2. BASIS OF PRESENTATION

The condensed consolidated and combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).

In preparing financial statements in accordance with GAAP, management makes informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. Management evaluates its estimates and related assumptions regularly, utilizing historical experience and other methods considered reasonable under the particular circumstances. Changes in facts and circumstances or additional information may result in revised estimates and actual results may differ from these estimates. Effects on the business, financial condition and results of operations resulting from revisions to estimates are recognized when the facts that give rise to the revision become known. The information furnished herein reflects all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the condensed consolidated and combined financial statements. Operating results for the three and nine months ended September�30, 2014 are not necessarily indicative of the results which may be expected for the full year or for any interim period. The condensed consolidated and combined financial statements include the accounts of the Partnership and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Certain information and note disclosures commonly included in annual financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. Accordingly, the accompanying condensed consolidated and

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

combined financial statements and notes should be read in conjunction with the Partnerships annual report on Form 10-K for the year ended December 31, 2013, as amended on March 26, 2014 and March 28, 2014 (the Annual Report). Management believes that the disclosures made are adequate to make the information not misleading.

The accompanying condensed consolidated and combined financial statements have been prepared in accordance with Regulation S-X, Article 3, General Instructions as to Financial Statements and Staff Accounting Bulletin (SAB) Topic 1-B, Allocations of Expenses and Related Disclosures in Financial Statements of Subsidiaries, Divisions or Lesser Business Components of Another Entity. Certain expenses incurred by SEV were only indirectly attributable to its ownership of Marlin Midstream prior to the IPO. As a result, certain assumptions and estimates are made in order to allocate a reasonable share of such expenses to the Partnership, so that the accompanying condensed consolidated and combined financial statements reflect substantially all costs of doing business. The allocations and related estimates and assumptions are described more fully in Note 11 (Transactions with Affiliates), which the Partnership believes are reasonable.

SEV allocated various corporate overhead expenses to the Partnership based on percentage of departmental usage, wages or headcount. These allocations are not necessarily indicative of the cost that the Partnership would have incurred had it operated as an independent stand-alone entity. As such, the condensed consolidated and combined financial statements do not fully reflect what the Partnerships financial position, results of operations and cash flows would have been had the Partnership operated as a stand-alone company during the periods presented.

At the closing of the IPO, the Partnership entered into an omnibus agreement with NuDevco and its affiliates, which addresses the management and administrative services to be provided by NuDevco to the Partnership and the corresponding fees and expense reimbursements to be paid to NuDevco in connection therewith. Under the omnibus agreement, the Partnership pays an annual fee, initially in the amount of $0.6 million, for executive management services and is allocated general and administrative and operating expenses that are directly attributable to the Partnership.

Marlin Midstream has also historically relied upon SEV and its affiliates as a participant in SEVs credit facility prior to the IPO. As a result, the historical combined financial information for the three and nine months ended September�30, 2013 is not necessarily indicative of what the Partnerships results of operations, financial position and cash flows will be in the future.

On August 1, 2014, the Partnership acquired 100% interest in the East New Mexico Transloading Facility ("East New Mexico Dropdown") from NuDevco Midstream Development. As the acquisition represented a transfer of assets under common control, the condensed consolidated and combined financial statements and related information presented herein have been recast to include the historical results of the East New Mexico Dropdown since July 2, 2014, the date the facility commenced operations. See Note 5 (Property, Plant and Equipment) for further discussion of the transaction.

Subsequent Events

Subsequent events have been evaluated through the date these financial statements are issued. Any material subsequent events that occurred prior to such date have been properly recognized or disclosed in the condensed consolidated and combined financial statements.

Net Income Per Unit

The Partnership has omitted net income per unit for all historical periods prior to the IPO because the Partnership operated under a sole member equity structure for the periods prior to the IPO, which is different than the capital structure resulting from the consummation of the IPO and, as a result, the per unit data for periods prior to the IPO would not be meaningful to investors. The net income per unit in the condensed consolidated and combined Statements of Operations for the three month period ended September 30, 2013 is based on net income of the Partnership subsequent to the closing of the IPO on July 31, 2013 through September 30, 2013, as this was the amount of net income attributable to the newly issued Partnership units. Net income related to acquisitions from affiliates under common control for periods prior to the acquisition date are allocated 100% to the general partner in determining net income per unit.

New Accounting Standards

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Partnership is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Partnership has not yet selected a transition method nor determined the effect of the standard on its ongoing financial reporting.

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. PARTNERSHIP EQUITY AND DISTRIBUTIONS

Outstanding Units

At September�30, 2014, the Partnership had outstanding common units of 8,979,248 and subordinated units of 8,724,545. NuDevco Midstream Development owns 100% of the interest in the Partnerships general partner, which owns an approximate 2% general partner interest in the Partnership, 22% of the Partnerships outstanding common units, representing an 11% interest in the Partnership, and 100% of the Partnerships outstanding subordinated units, representing a 48% interest in the Partnership. See Note 5 (Property, Plant and Equipment) for discussion of common units and general partnership interest issued on August 1, 2014 in connection with the East New Mexico Dropdown.

At December 31, 2013, the Partnership had outstanding common units of 8,724,545 and subordinated units of 8,724,545. At December 31, 2013, NuDevco Midstream Development owned 100% of the interest in the Partnerships general partner, which owns an approximate 2% general partner interest in the Partnership, 21% of the Partnership's outstanding common units, representing a 10% interest in the Partnership, and 100% of the Partnerships outstanding subordinated units, representing a 49% interest in the Partnership.

Distributable Cash and Distributions

The partnership agreement requires the Partnership to distribute all available cash, as defined in its partnership agreement, to unitholders of record, as of the applicable record date, no later than 45 days after the end of each quarter.

Available cash generally means, for any quarter, all cash and cash equivalents on hand at the end of that quarter:

"less, the amount of cash reserves established by the General Partner to:


�	provide for the proper conduct of the business (including reserves for future capital expenditures and anticipated future debt service requirements and for anticipated shortfalls on future minimum commitment payments to which prior credits may be applied);


�	comply with applicable law, any of the Partnership's debt instruments or other agreements; or

�

provide funds for distributions to unitholders and to the general partner for any one or more of the next four quarters (provided that the general partner may not establish cash reserves for distributions if the effect of the establishment of such reserves will prevent the Partnership from distributing the minimum quarterly distribution on all common units and any cumulative arrearages on such common units for the current quarter);


"	plus, if the general partner so determines, all or any portion of the cash on hand on the date of determination of available cash for the quarter resulting from working capital borrowings made subsequent to the end of such quarter.

The Partnership declared the following cash distributions to its unitholders of record for the periods presented:



In Thousands, except per-unit amounts		Total Quarterly		Total Cash		Date of
Quarter ended:		Distribution per Unit		Distribution		Distribution
September�30, 2014		$	0.365	$	6,592.5	November 4, 2014
June�30, 2014		$	0.360	$	6,469.2	August 5, 2014
March�31, 2014		$	0.355	$	6,375.1	May 6, 2014
September 30, 2013		$	0.230	$	4,095.2	November 4, 2013
June 30, 2013	(1)
March 31, 2013	(1)
(1) No distributions were declared for the quarters ended March 31, 2013 or June 30, 2013 as these periods were prior to the completion of the IPO.

General Partner Interest

The Partnerships general partner is entitled to 2% of all distributions made by the Partnership. If the Partnership issues additional units, the general partner has the right, but not the obligation, to contribute a proportionate amount of capital to the

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Partnership in order to maintain its 2% general partner interest. The 2% general partner interest, and the percentage of the Partnerships cash distributions to which the general partner is entitled from such 2% interest, will be proportionately reduced if the Partnership issues additional units in the future (other than the issuance of common units upon conversion of outstanding subordinated units or the issuance of common units upon a reset of the incentive distribution rights) and the Partnerships general partner does not contribute a proportionate amount of capital to the Partnership in order to maintain the general partner's 2% general partner interest.

Incentive Distribution Rights

NuDevco indirectly holds all of the incentive distribution rights ("IDRs") issued in the IPO. IDRs entitle NuDevco to receive an increasing percentage (13%, 23% and 48%) of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and certain target distribution levels have been achieved. The maximum distribution of 48% does not include any distributions that the Partnerships general partner or its affiliates may receive on common, subordinated or general partner units that they own.

Subordinated Units and Common Units Held by NuDevco Midstream Development

The Partnerships partnership agreement provides that, during the defined subordination period, the common units have the right to receive distributions of available cash from operating surplus each quarter in an amount equal to $0.35 per common unit before any distributions of available cash from operating surplus may be made on the subordinated units. The subordinated units are deemed subordinated because, for a defined period of time, holders of the subordinated units will not be entitled to receive any distributions until holders of the common units have received the minimum quarterly distribution plus any arrearages from prior quarters. Furthermore, no arrearages accrue or are payable on the subordinated units.

Except as described below, the subordination period began on the closing date of the IPO and extends until the first business day following the distribution of available cash in respect of any quarter beginning after September 30, 2016, that each of the following tests are met:


"	distributions of available cash from operating surplus on each of the outstanding common units, subordinated units and general partner units equaled or exceeded $1.40 (the annualized minimum quarterly distribution), for each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date;

�


"	the adjusted operating surplus generated during each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date equaled or exceeded the sum of $1.40 (the annualized minimum quarterly distribution) on all of the outstanding common units, subordinated units and general partner units during those periods on a fully diluted basis;�and


"	there are no arrearages in payment of the minimum quarterly distribution on the common units.

4. NET INCOME PER UNIT

The Partnerships net income is allocated to the general partner and the limited partners in accordance with their respective ownership percentages and, when applicable, giving effect to IDRs. Basic and diluted net income per unit is calculated by dividing the partners interest in net income by the weighted average number of units outstanding during the period.

The following table illustrates the Partnerships calculation of net income per unit for common and subordinated partner units. Net income attributable to the East New Mexico Dropdown for the period July 2, 2014 through July 31, 2014 is not allocated to the limited partners for purposes of calculating net income per limited partner unit.

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



In Thousands, except per unit data	Three Months Ended September 30, 2014			Nine Months Ended September 30, 2014			Post-IPO, August 1, 2013 to September 30, 2013
Net income	$	6,140		$	17,611		$	2,785
Less:	�			�			�
��Allocation of East New Mexico Dropdown net income prior to acquisition (see Note 5)	(160		)	(160		)
��General partner interest in net income	(120		)	(349		)	(55		)
Limited partner interest in net income	$	5,860		$	17,102		$	2,730
Net income allocable to common units	$	2,990		$	8,726		$	1,365
Net income allocable to subordinated units	2,870			8,376			$	1,365
Limited partner interest in net income	$	5,860		$	17,102		$	2,730
Net income per limited partner common unit - basic	$	0.33		$	0.98		$	0.16
Net income per limited subordinated unit - basic	$	0.33		$	0.96		$	0.16
Net income per limited partner unit - basic	$	0.33		$	0.97		$	0.16
Net income per limited partner common unit - diluted	$	0.33		$	0.96		$	0.15
Net income per limited subordinated unit - diluted	$	0.33		$	0.96		$	0.16
Net income per limited partner unit - diluted	$	0.33		$	0.96		$	0.15
Weighted average limited partner units outstanding - basic				�			�
��Common units	8,949,016			8,876,362			8,724,545
��Subordinated units	8,724,545			8,724,545			8,724,545
��Total	17,673,561			17,600,907			17,449,090
Weighted average limited partner units outstanding - diluted				�			�
��Common units	9,046,595			9,056,592			9,036,545
��Subordinated units	8,724,545			8,724,545			8,724,545
��Total	17,771,140			17,781,137			17,761,090

5. PROPERTY, PLANT AND EQUIPMENT

Net property, plant and equipment are composed of the following:



In Thousands	Estimated�Useful Lives (Years)	�	September�30, 2014			�	December�31, 2013
Gas processing plants (1)	5��40	�	$	136,239		�	$	133,859
Gathering pipelines and related equipment	5 40	�	52,542			�	47,728
Land and rights of way		�	11,786			�	11,043
Construction-in-progress		�	2,176			�	2,594
Information technology and other	2 10	�	2,065			�	1,548
Office building	15	�	306			�	306
Autos	5	�	422			�	357
Total	�	�	205,536			�	197,435
Accumulated depreciation	�	�	(41,440		)	�	(34,887		)
Property, plant and equipment, net	�	�	$	164,096		�	$	162,548

_________________________


(1)	Includes inlet and residue pipelines and connections.

The Partnerships principal midstream natural gas assets consist of two related natural gas processing facilities located in Panola County, Texas, a natural gas processing facility located in Tyler County, Texas, two natural gas gathering systems

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

connected to its Panola County processing facilities and two NGL transportation pipelines that connect its Panola County and Tyler County processing facilities to third party NGL pipelines.

The Partnership's principal crude oil logistics assets consist of three crude oil transloading facilities: (i)�its Wildcat facility located in Carbon County, Utah, where the Partnership currently operates one skid transloader and two ladder transloaders, (ii)�its Big Horn facility located in Big Horn County, Wyoming, where the Partnership currently operates one skid transloader and one ladder transloader, and (iii) its East New Mexico facility located in Sandoval County, New Mexico, where the Partnership currently operates one skid transloader, which was acquired on August 1, 2014, as discussed below.

The cost of property, plant and equipment classified as Construction-in-progress is excluded from costs being depreciated. These amounts represent property that is not yet suitable to be placed into productive service as of the respective balance sheet date.

Depreciation expense was $2.2 million and $2.1 million for the three months ended September�30, 2014 and 2013, respectively, and $6.6 million and $6.1 million for the nine months ended September�30, 2014 and 2013, respectively.

At the completion of the IPO, the Partnership transferred the Partnerships 50% interest in the CO₂ processing facility located in Monell, Wyoming to affiliates of NuDevco. As such, subsequent to the closing of the IPO, the Partnership incurred no revenues or expenses associated with the Monell facility. The Partnership was responsible for the design and construction of the Monell facility. Anadarko was designated as an operator of the Monell facility with exclusive right to operate the facility until terminated by unanimous vote of the owners. Revenue generated from, and capital expenditures and operating expenses incurred, in connection with the operation of the plant were allocated on a pro-rata basis in proportion to each owners ownership interest. The Partnership recorded its proportional cost of the Monell facility and its share of revenues and expenses in its condensed consolidated and combined financial statements, as earned and incurred prior to the closing of the IPO, respectively.

For the three and nine months ended September�30, 2013, the Partnership recorded revenues of $0.1 million and $0.1 million, respectively, and recorded expenses of $0.1 million and $0.3 million, respectively, attributable to the Monell facility in connection with the collaborative arrangement. These revenues are recorded in natural gas, NGLs and condensate revenue and the expenses are recorded in operation and maintenance in the condensed consolidated and combined Statements of Operations.

Acquisitions

On July 30, 2014, the Partnership entered into a Contribution Agreement with NuDevco Midstream Development and Marlin Midstream GP, LLC, the general partner of the Partnership, for the purchase of the East New Mexico Transloading Facility, located in Sandoval County, New Mexico, for $7.4 million. The purchase closed on August 1, 2014 and the total purchase price consisted of a $5.5 million cash payment and 89,720 Partnership common units issued to NuDevco Midstream Development, which were valued at the historical carrying value of the assets acquired of approximately $0.3 million. The assets acquired by the Partnership consist of one skid transloader and other miscellaneous equipment, which were subsequently assigned to Marlin Logistics. Additionally, the general partner of the Partnership made a capital contribution of $38,000 for the issuance of general partnership interest, to allow the general partner to maintain its 2% general partner interest in the Partnership.

The East New Mexico Dropdown represented a transaction between entities under common control. As a result, the condensed consolidated and combined financial statements and related information presented herein have been recast to include the historical results of the East New Mexico Dropdown. Net income for the facility was approximately $0.2 million for the period July 2, 2014, the date operations commenced, through July 31, 2014. In addition, the Partnership recorded the assets of the East New Mexico Dropdown acquired at their historical carrying value to NuDevco Midstream Development on the date of acquisition. Any difference between consideration given and the historical carrying value of the assets is recognized as a reduction to partners' capital on a pro-rata basis. Cash consideration up to the historical carrying value of the assets acquired is presented as an investing activity and cash consideration in excess of the historical carrying value of the assets acquired is presented as a financing activity in the condensed consolidated and combined Statements of Cash Flows.

In conjunction with the East New Mexico Dropdown, the Partnership entered into a three-year transloading services agreement with AES, effective August 1, 2014, requiring minimum monthly volume commitments for crude oil transloading services to be operated at the East New Mexico Transloading Facility.

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. LONG-TERM DEBT AND INTEREST EXPENSE

Long-term debt consists of the following:



In Thousands	�	September 30, 2014		�	December 31, 2013
Revolving credit facility	�	$	11,000	�	$	4,000
Total long-term debt	�	$	11,000	�	$	4,000

Concurrently with the closing of the Partnership's IPO, the Partnership entered into a new $50.0 million senior secured revolving credit facility, which matures on July 31, 2017. If no event of default has occurred, the Partnership has the right, subject to approval by the administrative agent and certain lenders, to increase the borrowing capacity under its revolving credit facility to up to $150.0 million. The Partnership's revolving credit facility is available to fund expansions, acquisitions and working capital requirements for our operations and general Partnership purposes.

At the Partnerships election, interest generally will be determined by reference to:


"	the Eurodollar rate plus an applicable margin between 3.0% and 3.75% per annum (based upon the prevailing senior secured leverage ratio); or


"	the alternate base rate plus an applicable margin between 2.0% and 2.75% per annum (based upon the prevailing senior secured leverage ratio). The alternate base rate is equal to the highest of Soci�t� G�n�rales prime rate, the federal funds rate plus 0.5% per annum or the reference Eurodollar rate plus 1.0%.

The revolving credit facility is secured by the capital stock of the Partnership's present and future subsidiaries, all of its and its subsidiaries present and future property and assets (real and personal), control agreements relating to its and its subsidiaries bank accounts and collateral assignments of our and our subsidiaries material construction, ownership and operation agreements, including any agreements with AES or Anadarko.

At the closing of the IPO, the Partnership borrowed $25.0 million under its revolving credit facility, a portion of which, along with the proceeds from the IPO, were used to repay approximately $131.9 million of outstanding borrowings under the previous credit facility. Immediately upon repayment, the previous credit facility was terminated. At September�30, 2014, the Partnership had $11.0 million outstanding under its revolving credit facility.

The Partnership's revolving credit facility also contains covenants that, among other things, require it to maintain specified ratios or conditions. The Partnership must maintain a consolidated senior secured leverage ratio, consisting of consolidated indebtedness under its revolving credit facility to consolidated EBITDA of not more than 4.0 to 1.0, as of the last day of each fiscal quarter. In addition, the Partnership must maintain a consolidated interest coverage ratio, consisting of its consolidated EBITDA minus capital expenditures to its consolidated interest expense, letter of credit fees and commitment fees of not less than 2.5 to 1.0, as of the last day of each fiscal quarter. As of September�30, 2014, the Partnership was in compliance with all debt covenants.

In addition, the Partnership's revolving credit facility contains affirmative covenants that are customary for credit facilities of this type. The covenants will include delivery of financial statements and other information (including any filings made with the SEC), maintenance of property and insurance, payment of taxes and obligations, material compliance with laws, inspection of property, books and records and audits, use of proceeds, payments to bank blocked accounts, notice of defaults and certain other customary matters.

Debt Maturities

Principal amounts of long-term debt under the Partnership's revolving credit facility mature on July 31, 2017.

Deferred Financing Costs

Deferred financing costs were $0.8 million and $1.0 million as of September�30, 2014 and December�31, 2013, respectively. Of these amounts, $0.3 million and $0.3 million are included in other current assets within the condensed consolidated Balance Sheets at September�30, 2014 and December�31, 2013, respectively, and $0.5 million and $0.7 million are included in other assets within the condensed consolidated Balance Sheets as of September�30, 2014 and December�31, 2013, respectively, based on the term of the related debt obligations.

Amortization of deferred financing costs was $0.1 million and $0.1 million for the three months ended September�30, 2014 and 2013, respectively, and $0.2 million and $0.4 million for the nine months ended September�30, 2014 and 2013,

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

respectively. Amortization of deferred financing costs is recorded in interest expense, net of amounts capitalized, in the condensed consolidated and combined Statements of Operations.

In conjunction with executing the revolving credit facility on July 31, 2013, the Partnership paid $1.1 million of financing costs, all of which were capitalized. Simultaneously, the Partnership expensed $0.8 million of existing unamortized deferred financing costs related to the previous credit facility, which is recorded in interest expense in the condensed consolidated and combined Statements of Operations.

Interest Expense

A reconciliation of total interest expense to interest expense, net of amounts capitalized as reported in the condensed consolidated and combined Statements of Operations for the three and nine months ended September 30, 2014 and 2013 is as follows:



In Thousands	Three Months Ended� �September 30,							�	Nine Months Ended� �September 30,
�	2014			�	2013			�	2014			�	2013
Interest expense on long-term debt	$	148		�	$	551		�	$	373			$	3,183
Interest expense from amortization of deferred financing costs	71			�	103			�	214				437
Interest expense from write-off of unamortized deferred financing costs				�	761			�				�	761
Less interest expense capitalized	(7		)	�	(33		)	�	(38		)		(210		)
Total interest expense, net of amounts capitalized	$	212		�	$	1,382		�	$	549			$	4,171

�

7. DERIVATIVE FINANCIAL INSTRUMENTS

Interest Rate Swap

On December�17, 2012, Marlin Midstream entered into a new interest rate swap (2012 Swap) in order to fix a portion of the interest rate on Marlin Midstreams amended term loan. Marlin Midstream paid a fixed rate and received a floating rate under the 2012 Swap. The maturity date of the 2012 Swap was December�17, 2014, and the notional amount of the 2012 Swap at December 31, 2012 was $62.5 million. On July 31, 2013, in connection with the Partnerships IPO, the 2012 Swap was settled for approximately $0.1 million. The Partnership had no derivative assets and liabilities as of September 30, 2014 or December 31, 2013.

Marlin Midstreams interest rate swap did not meet the criteria necessary to qualify for cash flow hedge accounting and was recorded at fair value at each reporting period with the associated unrealized gain or loss recorded in gain (loss) on interest rate swap in the condensed consolidated and combined Statements of Operations.

The following table presents the net realized and unrealized losses recognized in net income for derivative instruments not designated as hedging instruments:



In Thousands	�	�	�	�	�			�	�	�	�
Description of Derivatives	Statement of Operations Location		Three�Months�Ended September 30,					�	Nine Months Ended September 30,
�	�		2014		2013			�	2014		2013
Interest rate swap contracts	Loss on interest rate swap				(42		)	�			(47		)
Total loss recognized in income			$		$	(42	)	�	$		$	(47	)

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

FASB ASC 820, Fair Value Measurement, established a single authoritative definition of fair value when accounting rules require the use of fair value, set out a framework for measuring fair value and required additional disclosures about fair

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The standard utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:


"	Level 1Quoted prices in active markets for identical assets or liabilities.


"	Level 2Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities).


"	Level 3Significant unobservable inputs (including the Partnerships own assumptions in determining fair value).

When the Partnership is required to measure fair value, and there is not a market-observable price for the asset or liability or a market-observable price for a similar asset or liability, the Partnership utilizes the cost, income, or market valuation approach depending on the quality of information available to support managements assumptions. Financial instruments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Partnerships assessment of the significance of a particular input to the fair value requires judgment and may affect the placement of assets and liabilities within the fair value hierarchy levels.

�The Partnership had no financial instruments at September�30, 2014 or December�31, 2013. At the IPO date, the Partnership settled the outstanding interest rate swap.

The estimated fair value of accounts receivable, accounts receivable-affiliates, accounts payable, accounts payable-affiliates and accrued liabilities approximate their carrying values due to their short-term nature. The estimated fair value of the Partnerships outstanding long-term debt approximates carrying value due to the variable rate nature of the Partnerships long-term debt.

9. SEGMENT INFORMATION

The Partnerships revenues are derived from two operating segments: (i) gathering and processing and (ii) crude oil logistics. These segments are monitored separately by management for performance and are consistent with internal financial reporting. These segments have been identified based on the differing products and services, regulatory environment, and expertise required for their respective operations. Gross margin is a primary performance measure used by management. The Partnership defines gross margin as revenues less costs of revenues. Gross margin should not be considered an alternative to, or more meaningful than, operating income as determined in accordance with generally accepted accounting principles.

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following tables present financial information by segment for the three and nine months ended September�30, 2014 and September�30, 2013:



Three Months Ended September 30, 2014
	Gathering &		Crude Oil		Corporate and			Marlin Midstream
In Thousands	Processing		Logistics		Consolidation			Partners, LP
Total revenues	$	13,011	$	4,208	$			$	17,219
Cost of revenues	2,762							2,762
Gross margin	10,249		4,208					14,457
Operation and maintenance	3,029		589		19			3,637
General and administrative					1,729			1,729
Other operating expenses	2,550		51					2,601
��Operating income	4,670		3,568		(1,748		)	6,490

Interest expense, net of amounts capitalized					(212		)	(212		)
Net income before tax	4,670		3,568		(1,960		)	6,278
��Income tax expense					(138		)	(138		)
��Net income (loss)	$	4,670	$	3,568	$	(2,098	)	$	6,140



Nine Months Ended September 30, 2014
	Gathering &		Crude Oil		Corporate and			Marlin Midstream
In Thousands	Processing		Logistics		Consolidation			Partners, LP
Total revenues	$	47,403	$	11,080	$			$	58,483
Cost of revenues	14,210							14,210
Gross margin	33,193		11,080					44,273
Operation and maintenance	10,042		1,415		497			11,954
General and administrative					6,262			6,262
Other operating expenses	7,549		73					7,622
��Operating income	15,602		9,592		(6,759		)	18,435

Interest expense, net of amounts capitalized					(549		)	(549		)
��Net income before tax	15,602		9,592		(7,308		)	17,886
��Income tax expense					(275		)	(275		)
��Net income (loss)	$	15,602	$	9,592	$	(7,583	)	$	17,611

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)



Three Months Ended September 30, 2013
	Gathering &		Crude Oil		Corporate and			Marlin Midstream
In Thousands	Processing		Logistics		Consolidation			Partners, LP
Total revenues	$	16,634	$	2,316	$			$	18,950
Cost of revenues	6,479							6,479
Gross margin	10,155		2,316					12,471
Operation and maintenance	3,737		546					4,283
General and administrative					2,482			2,482
Other operating expenses	2,344		5					2,349
��Operating income	4,074		1,765		(2,482		)	3,357
�	�		�		�			�
Interest expense, net of amounts capitalized					(1,382		)	(1,382		)
Gain (loss) on interest rate swap					(42		)	(42		)
Net income before tax	4,074		1,765		(3,906		)	1,933
��Income tax expense					(11		)	(11		)
��Net income (loss)	$	4,074	$	1,765	$	(3,917	)	$	1,922



Nine Months Ended September 30, 2013
	Gathering &		Crude Oil		Corporate and			Marlin Midstream
In Thousands	Processing		Logistics		Consolidation			Partners, LP
Total revenues	$	34,435	$	2,316	$			$	36,751
Cost of revenues	11,687							11,687
Gross margin	22,748		2,316					25,064
Operation and maintenance	11,332		546					11,878
General and administrative					5,214			5,214
Other operating expenses	6,920		17					6,937
��Operating income	4,496		1,753		(5,214		)	1,035
�	�		�		�			�
Interest expense, net of amounts capitalized					(4,171		)	(4,171		)
Gain (loss) on interest rate swap					(47		)	(47		)
��Net income before tax	4,496		1,753		(9,432		)	(3,183		)
��Income tax expense					(35		)	(35		)
��Net income (loss)	$	4,496	$	1,753	$	(9,467	)	$	(3,218	)

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table presents financial information by segment at September�30, 2014 and December 31, 2013, respectively:



Balance Sheet at September 30, 2014
In Thousands	Gathering &		Crude Oil		Corporate and			Marlin Midstream
	Processing		Logistics		Consolidation			Partners, LP
Assets:
��Current assets	$	5,192	$	1,458	$	3,102		$	9,752
��Property, plant and equipment, net	163,305		791					164,096
��Other assets	163				523			686
Total Assets	$	168,660	$	2,249	$	3,625		$	174,534

Liabilities and Partners Capital
��Total current liabilities	$	2,783	$	22	$	3,541		$	6,346
��Total long-term liabilities					11,524			11,524
Total Liabilities	2,783		22		15,065			17,870
�	�		�		�			�
Partners Capital	165,877		2,227		(11,440		)	156,664

Total Liabilities and Partners Capital	$	168,660	$	2,249	$	3,625		$	174,534



Balance Sheet at December 31, 2013
In Thousands	Gathering &		Crude Oil		Corporate and			Marlin Midstream
	Processing		Logistics		Consolidation			Partners, LP
Assets:
��Current assets	$	5,727	$	1,195	$	3,772		$	10,694
��Property, plant and equipment, net	162,029		519					162,548
��Other assets	163				737			900
Total Assets	$	167,919	$	1,714	$	4,509		$	174,142

Liabilities and Partners Capital
��Total current liabilities	$	2,796	$	353	$	6,077		$	9,226
��Total long-term liabilities					4,366			4,366
Total Liabilities	2,796		353		10,443			13,592

Partners Capital	165,123		1,361		(5,934		)	160,550

Total Liabilities and Partners Capital	$	167,919	$	1,714	$	4,509		$	174,142

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10. COMMITMENTS AND CONTINGENCIES

The Partnership has reserved capacity of 3,500 barrels a day at a third-party fractionator. If the Partnership fails to deliver 95% of the reserved capacity, the Partnership is obligated to pay a fixed fee. The maximum total fixed fee that the Partnership would be obligated to pay is approximately $2.2 million per year through the end of the contract, which expires April�30, 2015. Under the three-year fee-based commercial agreement with AES, the Partnership is reimbursed for a majority of any deficiency payments accrued under the reserved capacity agreement. The Partnership recorded $0.4 million and $0.0 million of expense for the three months ended September�30, 2014 and 2013, respectively, and recorded $1.1 million and $0.4 million of expense for the nine months ended September�30, 2014 and 2013, respectively, of accrued deficiency payments for under delivery of volumes. The Partnership also received reimbursements for deficiency payments from AES of $0.2 million and $0.0 million for the three months ended September�30, 2014 and 2013, respectively, and $0.4 million and $0.0 million for the nine months ended September�30, 2014 and 2013, respectively.

From time to time, the Partnership may be involved in legal, tax, regulatory and other proceedings in the ordinary course of business. Management does not believe that the Partnership is a party to any litigation that will have a material impact on its financial condition or results of operations.

11. TRANSACTIONS WITH AFFILIATES

From time to time, the Partnership enters into transactions with affiliates that have a common owner with the Partnership in order to reduce risk, create strategic alliances and supply or receive goods and services to these affiliates. See also Note 1 for a discussion of transactions with affiliates coinciding with the closing of the IPO in July 2013.

Accounts receivable from and accounts payable to affiliates

The Partnership had receivables due from affiliates of $3.2 million and $3.6 million at September�30, 2014 and December�31, 2013, respectively. Receivables due from affiliates primarily related to the Partnership's fee-based gathering and processing agreement with a subsidiary of SEV, and its fee-based transloading services agreement with a subsidiary of SEV. Payables to affiliates were $1.9 million and $1.6 million at September�30, 2014 and December�31, 2013, respectively. Payables to affiliates primarily related to settlements under the Partnership's gathering and processing agreement with a subsidiary of SEV and reimbursement to an affiliate of NuDevco for certain general and administrative and operating costs under the omnibus agreement with NuDevco.

Revenues and cost of revenues

Prior to the IPO on July 31, 2013, the Partnership provided processing services for a subsidiary of SEV, whereby the Partnership gathered natural gas from third parties, extracted NGLs, and redelivered the processed natural gas to the subsidiary of SEV. Under certain third-party contracts, the Partnership transferred all natural gas purchased to the subsidiary of SEV at market price. The Partnership also replaced energy used in processing due to the extraction of liquids, compression and transportation of natural gas, and fuel by purchasing natural gas from a subsidiary of SEV at the same market price. The Partnership used the MMBtu volume to measure how much energy is used in processing. Cost of natural gas, NGLs and condensate revenueaffiliates included in the Partnerships results of operations for the three and nine months ended September�30, 2013 from these agreements was $0.1 million and $3.0 million, respectively.

�

Additionally, the Partnership has a gas transportation agreement with a subsidiary of SEI. The Partnership receives the higher of (i)�a minimum monthly payment or (ii)�a transportation fee per MMBtu times actual volumes delivered. The current transportation agreement was set to expire on February�28, 2013, but was extended for three additional years at a fixed rate per MMBtu without a minimum monthly payment. Included in the Partnerships results of operations for the three and nine months ended September�30, 2014 and 2013 are gathering, processing and other revenueaffiliates of less than $0.1 million related to these transactions for each period presented.

In connection with the IPO, the Partnership entered into a three-year fee-based commercial agreement with AES, requiring a minimum monthly volume commitment of 80 MMcf/d. This agreement became effective August 1, 2013. Included in the Partnerships results of operations for the three and nine months ended September 30, 2014 and 2013 are gathering, processing, transloading and other revenueaffiliates of $5.1 million and $2.3 million, and $16.3 million and $2.3 million respectively, related to this agreement. Cost of natural gas, NGLs and condensate revenueaffiliates included in the Partnerships results of operations for the three and nine months ended September 30, 2014 and 2013 were $1.6 million and $1.3 million, and $10.5 million and $1.3 million respectively, related to this agreement.

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In connection with the IPO, the Partnership entered into three-year transloading services agreements with AES, requiring minimum monthly volume commitments for crude oil transloading services. In connection with the East New Mexico Dropdown (see Note 5 "Property, Plant and Equipment"), the Partnership entered into a three-year transloading services agreement with AES, requiring minimum monthly volume commitments for crude oil transloading services. Included in the Partnerships results of operations for the three and nine months ended September 30, 2014 and 2013 are gathering, processing, transloading and other revenueaffiliates related to these agreements of $4.2 million and $2.3 million, and $11.1 million and $2.3 million, respectively.

Cost allocations

Prior to the IPO, SEV and its affiliates had paid certain expenses on behalf of the Partnership, such as insurance, professional fees, and financing fees. These expenses were reimbursed by the Partnership to SEV and its affiliates and are included in operation and maintenanceaffiliates and general and administrativeaffiliates in the condensed consolidated and combined Statements of Operations. In addition, SEV and its affiliates have allocated certain overhead costs associated with general and administrative services, including facilities, information services, human resources and other support departments to the Partnership. Where costs incurred on the Partnerships behalf could not be determined by specific identification, the costs were primarily allocated to the Partnership based on percentage of departmental usage, wages or headcount. The Partnership believes these allocations were a reasonable reflection of the utilization of services provided. However, the allocations may not fully reflect the expenses that would have been incurred had the Partnership been a stand-alone company during the periods presented.

At the closing of the IPO, the Partnership entered into an omnibus agreement with NuDevco and its affiliates which addresses the management and administrative and overhead services to be provided by NuDevco to the Partnership and the corresponding fees and expense reimbursements to be paid to NuDevco in connection therewith. Under the omnibus agreement, the Partnership pays an annual fee, initially in the amount of $0.6 million, for executive management services.

The total amount charged to the Partnership for direct reimbursement of operating and overhead cost allocations, which is recorded in operation and maintenanceaffiliates, for the three and nine months ended September�30, 2014 and 2013 was $1.5 million and $1.3 million, and $5.0 million and $1.8 million, respectively. The total amount charged to the Partnership for direct reimbursement of administrative and overhead cost allocations, which is recorded in general and administrativeaffiliates, for the three and nine months ended September�30, 2014 and 2013 was $1.0 million and $1.6 million, and $3.8 million and $2.3 million respectively.

Capital Contributions

During the nine months ended September�30, 2013, the Partnership received capital contributions of $3.6 million from its sole member, who is also the sole member of SEV and NuDevco.

12. EQUITY BASED COMPENSATION

In connection with the IPO, the board of directors of the Partnerships general partner adopted the Marlin Midstream Partners, LP 2013 Long-Term Incentive Plan ("LTIP"). Individuals who are eligible to receive awards under the LTIP include (1) employees of the Partnership and NuDevco Midstream Development and its affiliates, (2) directors of the Partnerships general partner, and (3) consultants. The LTIP provides for the grant of unit options, unit appreciation awards, restricted units, phantom units, distribution equivalent rights, unit awards, profits interest units, and other unit-based awards. The maximum number of common units issuable under the LTIP is 1,750,000.

On August 1, 2013, phantom units, with distribution equivalent rights, of 292,000 units were awarded to certain employees of NuDevco Midstream Development and its affiliates who provide direct or indirect services to the Partnership pursuant to affiliate agreements and 20,000 units were awarded to certain board members of the Partnerships general partner. All of the phantom unit awards granted to-date are considered non-employee equity based awards, issued to individuals who are not deemed to be employees of the Partnership, and are required to be remeasured at fair market value at each reporting period and amortized to compensation expense on a straight-line basis over the vesting period of the phantom units with a corresponding increase in a liability as management intends to settle the awards by allowing the recipient to choose between issuing the net amount of common units due, less common units equivalent to pay withholding taxes, due upon vesting with the Partnership paying the amount of withholding taxes due in cash or issuing the gross amounts of common units due with the recipient paying the withholding taxes. Distribution equivalent rights are accrued for each phantom unit award as the Partnership declares cash distributions and is recorded as a decrease in partners capital with a corresponding liability in

MARLIN MIDSTREAM PARTNERS, LP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

accordance with the vesting period of the underlying phantom unit, which will be settled in cash when the underlying phantom units vest.

The phantom units awarded to employees of NuDevco Midstream Development and its affiliates will vest in five equal annual installments with the first installment vesting on June 30, 2014, provided that for any individual who has attained a total of five or more years of service with NuDevco Midstream Development or its affiliates at the grant date of award the phantom unit awards fully vested on February 15, 2014. The phantom unit awards to board members of the Partnerships general partner fully vested on February 15, 2014.

For the three month periods ended September�30, 2014 and 2013, compensation expense of approximately $0.1 million and $0.9 million, respectively, was recorded in general and administrative expensesaffiliates and compensation expense of approximately $0.1 million and $0.4 million, respectively, was recorded in operation and maintenanceaffiliates in the condensed consolidated and combined Statements of Operations. For the nine month periods ended September�30, 2014 and 2013, compensation expense of approximately $1.0 million and $0.9 million, respectively, was recorded in general and administrative expensesaffiliates and compensation expense of approximately $0.5 million and $0.4 million, respectively, was recorded in operation and maintenanceaffiliates in the condensed consolidated and combined Statements of Operations.

A summary of the phantom units activity during the nine months ended September�30, 2014 is presented below:



	Number of units		Weighted Average Grant-Date Fair Value
Total Non-vested at January 1, 2014	312,000		$	20.00
��Granted
��Vested	(222,600	)	20.00
��Forfeited or canceled	(20,000	)	20.00
Total Outstanding at September 30, 2014	69,400		$	20.00

Unrecognized compensation expense associated with the unvested phantom units at September�30, 2014 was approximately $0.9 million and is recognized over a weighted average period of four years.

13. SUBSEQUENT EVENTS

On October 16, 2014, the Partnership announced that the board of directors of its general partner declared a quarterly cash distribution of $0.365 per unit, or $1.46 on an annualized basis, to unitholders of record as of October 30, 2014. The Partnership will pay the quarterly distribution to unitholders on November 4, 2014.

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated and combined financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated and combined financial statements and notes thereto and managements discussion and analysis of financial condition and results of operations as of and for the year ended December 31, 2013 and 2012 included in the Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission on February 27, 2014, as amended on March 26, 2014 and March 28, 2014 (the Annual Report on Form 10-K). Unless otherwise noted, references to we, us, our, the Partnership or Marlin Midstream Partners refers to Marlin Midstream Partners, LP and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made in this report, and may from time to time otherwise make in other public filings, press releases and discussions by management, forward-looking statements concerning our operations, economic performance and financial condition. These statements can be identified by the use of forward-looking terminology including may, will, believe, expect, anticipate, estimate, continue, or other similar words. These statements discuss future expectations, contain projections of results of operations or financial condition or include other forward-looking information. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will be realized.

These forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following risks and uncertainties:


"	the volume of natural gas we gather and process and the volume of NGLs we transport;


"	the volume of crude oil that we transload;


"	the level of production of crude oil and natural gas and the resultant market prices of crude oil, natural gas and NGLs;


"	the level of competition from other midstream natural gas companies and crude oil logistics companies in our geographic markets;


"	the level of our operating expenses;


"	regulatory action affecting the supply of, or demand for, crude oil or natural gas, the transportation rates we can charge on our pipelines, how we contract for services, our existing contracts, our operating costs or our operating flexibility;


"	capacity charges and volumetric fees that we pay for NGL fractionation services;


"	realized pricing impacts on our revenues and expenses that are directly subject to commodity price exposure;


"	the creditworthiness and performance of our customers, suppliers and contract counterparties, and any material nonpayment or non-performance by one or more of these parties;


"	damage to pipelines, facilities, plants, related equipment and surrounding properties caused by hurricanes, earthquakes, floods, fires, severe weather, explosions and other natural disasters and acts of terrorism including damage to third party pipelines or facilities upon which we rely for transportation services;


"	outages at the processing or fractionation facilities owned by us or third parties caused by mechanical failure and maintenance, construction and other similar activities;


"	leaks or accidental releases of products or other materials into the environment, whether as a result of human error or otherwise;


"	the level and timing of our expansion capital expenditures and our maintenance capital expenditures;


"	the cost of acquisitions, if any;


"	the level of our general and administrative expenses, including reimbursements to our general partner and its affiliates for services provided to us;


"	our debt service requirements and other liabilities;


"	fluctuations in our working capital needs;


"	our ability to borrow funds and access capital markets;


"	restrictions contained in our debt agreements;


"	the amount of cash reserves established by our general partner;


"	other business risks affecting our cash levels; and


"	other factors discussed below and elsewhere in Risk Factors in our Annual Report on Form 10-K and in our other public filings and press releases.

The risk factors and other factors noted throughout or incorporated by reference in this report could cause our actual results to differ materially from those contained in any forward-looking statement. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a fee-based, growth-oriented Delaware limited partnership formed to develop, own, operate and acquire midstream energy assets. We currently provide natural gas gathering, compression, dehydration, treating, processing and hydrocarbon dew-point control and transportation services, which we refer to as our midstream natural gas business, and crude oil transloading services, which we refer to as our crude oil logistics business. Our assets and operations are organized into the following two segments:

Midstream Natural Gas

Our primary midstream natural gas assets currently consist of (i)�two related natural gas processing facilities located in Panola County, Texas with an approximate design capacity of 220 MMcf/d, (ii)�a natural gas processing facility located in Tyler County, Texas with an approximate design capacity of 80 MMcf/d, (iii)�two natural gas gathering systems connected to our Panola County processing facilities that include approximately 65 miles of natural gas pipelines with an approximate design capacity of 200 MMcf/d, and (iv)�two NGL transportation pipelines with an approximate design capacity of 20,000 Bbls/d that connect our Panola County and Tyler County processing facilities to third party NGL pipelines. Our primary midstream natural gas assets are located in long-lived oil and natural gas producing regions in East Texas and gather and process NGL-rich natural gas streams associated with production primarily from the Cotton Valley Sands, Haynesville Shale, Austin Chalk and Eaglebine formations.

Crude Oil Logistics

Our crude oil logistics assets currently consist of three crude oil transloading facilities: (i)�our Wildcat facility located in Carbon County, Utah, where we currently operate one skid transloader and two ladder transloaders, (ii)�our Big Horn facility located in Big Horn County, Wyoming, where we currently operate one skid transloader and one ladder transloader, and (iii) our East New Mexico facility located in Sandoval County, New Mexico, where we currently operate one skid transloader. Our transloaders are used to unload crude oil from tanker trucks and load crude oil into railcars and temporary storage tanks. Our facilities provide transloading services for production originating from well-established crude oil producing basins, such as the Uinta and Powder River Basins, which we believe are currently underserved by our competitors. Our skid transloaders each have a transloading capacity of 475 Bbls/hr, and our ladder transloaders each have a transloading capacity of 210 Bbls/hr.

Initial Public Offering

At the closing of the IPO, we issued 2,474,545 common units and 8,724,545 subordinated units to NuDevco Midstream Development. We terminated our commodity-based gas gathering and processing agreement with AES and assigned all our remaining keep-whole and other commodity-based gathering and processing agreements with third party customers to AES. We entered into transloading services agreements with AES, each with three year terms, minimum volume commitments and annual inflation adjustments. See Note 1 (Organization and Formation of the Partnership) for further discussion.

We also transferred to affiliates of our sponsor (i) our 50% interest in a CO2 processing facility located in Monell, Wyoming, (ii) certain transloading assets and purchase commitments owned by Marlin Logistics not currently under a service contract, (iii) certain property, plant and equipment and other equipment not yet in service and (iv) certain other immaterial contracts. The total net asset value transferred to the affiliates was $9.4 million. Additionally, NuDevco assumed $11.7 million of the non-current accounts payable balance owed by Marlin Midstream to affiliates of SEV and Marlin Midstream was released from such obligation.

Our partnership agreement provides for a minimum quarterly distribution of $0.35 per unit for each whole quarter, or $1.40 per unit on an annualized basis.

FACTORS AFFECTING THE COMPARABILITY OF OPERATING RESULTS

Our future results of operations may not be comparable to our historical results of operations for the reasons described below:

Revenues

There are differences in the way we generated revenues historically and the way we generate revenues subsequent to the closing of the IPO.

Gathering and Processing Agreements

Beginning on January�1, 2012, our commercial agreements with Anadarko at our Panola County processing facilities were amended such that Anadarko began receiving the NGLs extracted on an in-kind basis. As a result, we do not sell the NGLs extracted under these amended agreements, and therefore the NGLs recovered under these amended agreements are not included in our natural gas, NGLs and condensate sales. Under our commercial agreements that do not require us to deliver NGLs to the customer in kind, including our gathering and processing agreement with AES that we entered into in connection with the closing of the IPO, we provide NGL transportation services to the customer whereby we purchase the NGLs from the customer at an index price, less fractionation and transportation fees, and simultaneously sell the NGLs to third parties at the same index price, less fractionation fees. The revenues generated by these activities are substantially offset by a corresponding cost of revenue that is recorded when we compensate the customer for its contractual share of the NGLs.


"	Following the closing of the IPO, we assigned all of our existing commodity-based gathering and processing agreements with third party customers to AES and entered into a new three-year fee-based gathering and processing agreement with AES with a minimum volume commitment of 80 Mmcf/d.

Transloading Services Agreements

Following the closing of the IPO, our crude oil logistics revenues are generated under transloading services agreements that we entered into with AES at the closing of, or subsequent to, the IPO. Under the transloading services agreements with AES, we receive a per barrel fee for crude oil transloading services, including fees in respect of shortfall payments related to AES minimum volume commitments under these agreements from time to time. Because our crude oil logistics assets did not become operational until 2013, our future results of operations will not be comparable to our historical results of operations regarding our crude oil logistics segment.

Operating and General and Administrative Expenses

With respect to our operation and maintenance expenses and general and administrative expenses, prior to the IPO, we employed all of our operational personnel and most of our general and administrative personnel directly, and incurred direct operating and general and administrative charges with respect to their compensation. In connection with the closing of the IPO, all of our personnel were transferred to affiliates of NuDevco. As a result, following the closing of the IPO, we reimburse NuDevco for the compensation of these employees on a direct or allocated basis, depending on whether those employees spend all or only a part of their time working for us. As a result of this change, the amount of our affiliate operation and maintenance expenses and affiliate general and administrative expenses will increase, and the amount of our non-affiliate operation and maintenance expenses and non-affiliate general and administrative expenses will decrease, compared to historical amounts. In addition, our general and administrative costs have increased due to the costs of operating as a publicly traded partnership.

Our historical general and administrative expenses included certain expenses allocated by affiliates of NuDevco for general corporate services, such as information technology, treasury, accounting and legal services, as well as direct expenses. These allocated expenses were charged or allocated to us based on the nature of the expenses and our proportionate share of departmental usage, wages or headcount. Following the closing of the IPO, affiliates of NuDevco have continued to charge us a combination of direct and allocated monthly general and administrative expenses related to the management and operation of our midstream natural gas and crude oil logistics businesses and charge us an annual fee, initially in the amount of $0.6 million, for executive management services.

Financing

There are differences in the way we finance our operations as compared to the way we financed our operations on a historical basis prior to the IPO. Historically, our operations were financed by cash generated from operations, equity investments by our sole member and borrowings under our previous credit facility. In connection with the closing of the IPO, we repaid the full amount of our previous credit facility, settled our related interest rate swap liability and entered into a $50.0 million senior secured revolving credit facility. We had $11.0 million outstanding under our senior secured revolving credit facility as of September�30, 2014. Based on the terms of our cash distribution policy, we expect that we will distribute to our unitholders and our general partner most of the cash generated by our operations. As a result, we expect to fund future capital expenditures primarily from external sources, including borrowings under our revolving credit facility and future issuances of equity and debt securities.

HOW WE EVALUATE OUR OPERATIONS

Our management uses a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our results of operations and profitability and include: (i)�gross margin; (ii)�volume commitments and throughput volumes (including gathering, plant, and transloader throughput); (iii)�operation and maintenance expenses; (iv)�adjusted EBITDA; and (v)�distributable cash flow.



In Thousands, except volume data		Three Months Ended September 30,				�	Nine Months Ended September 30,
	�	2014		2013		�	2014		2013
Gross margin	�	$	14,457	$	12,471	�	$	44,273	$	25,064
Gas volumes (MMcf/d) (1)		191		224		�	208
Transloading volumes (Bbls/d) (1)		21,317		18,980		�	19,768
Adjusted EBITDA	�	$	8,781	$	6,699	�	$	26,525	$	8,412
Distributable cash flow (2)		$	8,105	$	5,346	�	$	24,516
(1) Volumes reflect the minimum volume commitment under our fee-based contracts or actual throughput, whichever is greater, for the post-IPO period.
(2) We will distribute available cash within 45 days after the end of the quarter, beginning with the quarter ended September 30, 2013.

Gross Margin

Gross margin is a primary performance measure used by our management. We define gross margin as revenues less cost of revenues. Gross margin is a non-GAAP supplemental financial measure that represents our profitability with minimal exposure to commodity price fluctuations, which we believe are not significant components of our operations.

The following table presents a reconciliation of the non-GAAP financial measure of gross margin to the GAAP financial measure of operating income:



In Thousands	Three Months Ended September 30,				�	Nine Months Ended September 30,
	2014		2013		�	2014		2013
Total operating income	$	6,490	$	3,357	�	$	18,435	$	1,035
��Operation and maintenance	2,132		2,961		�	6,947		10,048
��Operation and maintenance-affiliates	1,505		1,322		�	5,007		1,830
��General and administrative	748		849		�	2,467		2,927
��General and administrative-affiliates	981		1,633		�	3,795		2,287
��Property tax expense	363		291		�	994		844
��Depreciation expense	2,238		2,058		�	6,568		6,093
��Loss on disposal of equipment						60
Gross margin	$	14,457	$	12,471	�	$	44,273	$	25,064

Volume Commitments and Throughput

We view the volumes of natural gas and crude oil committed to our midstream natural gas and crude oil logistics assets, respectively, as well as the throughput volume of natural gas and crude oil as an important factor affecting our profitability. The amount of revenues we generate primarily depends on the volumes of natural gas and crude oil committed to our midstream natural gas assets and crude oil logistics assets, respectively, our commercial agreements, the volumes of natural gas that we gather, process, treat and transport, the volumes of NGLs that we transport and sell, and the volumes of crude oil that we transload. Our success in attracting additional committed volumes of natural gas and crude oil and maintaining or increasing throughput is impacted by our ability to:


"	utilize the remaining uncommitted capacity on, or add additional capacity to, our gathering and processing systems and our transloaders;


"	capitalize on successful drilling programs by our customers on our current acreage dedications;


"	increase throughput volumes on our gathering systems by increasing connections to other pipelines or wells;


"	secure volumes from new wells drilled on non-dedicated acreage;


"	attract natural gas and crude oil volumes currently gathered, processed, treated or transloaded by our competitors; and


"	identify and execute organic expansion projects.

Adjusted EBITDA and Distributable Cash Flow

We use adjusted EBITDA to analyze our performance and define it as net income (loss) before interest expense (net of amounts capitalized) or interest income, income tax expense, depreciation expense, equity based compensation expense and any gain/loss from interest rate derivatives. Although we have not quantified distributable cash flow on a historical basis prior to the IPO, we compute and present this measure for periods subsequent to the IPO, which we define as adjusted EBITDA plus interest income, less cash paid for interest expense and maintenance capital expenditures.

Adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of our condensed consolidated and combined financial statements, such as industry analysts, investors, commercial banks and others, may use to assess:


"	the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;


"	the ability of our assets to generate earnings sufficient to support our decision to make cash distributions to our unitholders and general partner;


"	our ability to fund capital expenditures and incur and service debt;


"	our operating performance and return on capital as compared to those of other companies in the midstream energy sector, without regard to financing or capital structure;�and


"	the attractiveness of capital projects and acquisitions and the overall rates of return on alternative investment opportunities.

The following table presents a reconciliation of the non-GAAP financial measure of adjusted EBITDA to the GAAP financial measure of net income (loss):



In Thousands	Three Months Ended September 30,				�	Nine Months Ended September 30,
	2014		2013		�	2014		2013
Net income (loss)	$	6,140	$	1,922	�	$	17,611	$	(3,218	)
Interest expense, net of amounts capitalized	212		1,382		�	549		4,171
Income tax expense	138		11		�	275		35
Depreciation expense	2,238		2,058			6,568		6,093
Equity based compensation	53		1,284		�	1,522		1,284
Loss on interest rate swap			42		�			47
Adjusted EBITDA	$	8,781	$	6,699	�	$	26,525	$	8,412

The following table presents a reconciliation of the non-GAAP financial measure of distributable cash flow to the GAAP financial measure of net income:



In Thousands	Three Months Ended September 30, 2014			�	Nine Months Ended September 30, 2014			�	For the period from July 31, 2013 to September 30, 2013
Net income	$	6,140		�	$	17,611		�	$	2,785
Add:	�			�	�			�
��Interest expense, net of amounts capitalized	212			�	549			�	174
��Income tax expense	138			�	275			�	8
��Depreciation expense	2,238			�	6,568			�	1,321
��Equity based compensation	53			�	1,522			�	1,284
Adjusted EBITDA	8,781			�	26,525			�	5,572
Less:				�				�
��Maintenance capital expenditures	(230		)	�	(1,201		)	�	(133		)
��Cash interest expense	(148		)	�	(373		)	�	(85		)
��Income tax expense	(138		)	�	(275		)	�	(8		)
��Adjustment (1)	(160		)	�	(160		)	�
Distributable cash flow	$	8,105		�	$	24,516		�	$	5,346
(1) Removes the results of the East New Mexico Dropdown for the period prior to the acquisition (July 2, 2014 to July 31, 2014).

Note Regarding Non-GAAP Financial Measures

Gross margin, adjusted EBITDA and distributable cash flow are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial condition and results of operations.

The GAAP measure most directly comparable to gross margin is operating income. The GAAP measure most directly comparable to adjusted EBITDA and distributable cash flow is net income. These measures should not be considered as an alternative to operating income, net income, or any other measure of financial performance presented in accordance with GAAP. Each of these non-GAAP financial measures has important limitations as an analytical tool because it excludes some but not all items that affect net income. You should not consider these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. Additionally, because each of these non-GAAP financial measures may be defined differently by other companies in our industry, our definition of them may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2014 Compared to Three Months Ended September 30, 2013

The following table presents selected financial data for each of the three months ended September�30, 2014 and 2013.



In Thousands	Three Months Ended September 30,
	2014				2013				Change				% Change
REVENUES:
��Natural gas, NGLs and condensate revenue	$	2,511			$	7,026			$	(4,515	)		(64.3	)%
��Gathering, processing, transloading and other revenue	14,708				11,924				2,784				23.3	�%
��Total Revenues	17,219				18,950				(1,731		)		(9.1	)%
OPERATING EXPENSES:
��Cost of natural gas, NGLs and condensate revenue	2,762				6,479				(3,717		)		(57.4	)%
��Operation and maintenance	3,637				4,283				(646		)		(15.1	)%
��General and administrative	1,729				2,482				(753		)		(30.3	)%
��Property tax expense	363				291				72				24.7	�%
��Depreciation expense	2,238				2,058				180				8.7	�%
��Total operating expenses	10,729				15,593				(4,864		)		(31.2	)%
��Operating income	6,490				3,357				3,133				93.3	�%
Interest expense, net of amounts capitalized	(212		)		(1,382		)		1,170				(84.7	)%
Gain on interest rate swap					(42		)		42				(100.0	)%
Net income before tax	$	6,278			$	1,933			$	4,345			224.8	�%
�	�			�	�			�	�			�	�
Key performance metrics:								�	�			�	�
��Gross Margin (1)	$	14,457			$	12,471		�	$	1,986			15.9	�%
��Adjusted EBITDA (1)	$	8,781			$	6,699		�	$	2,082			31.1	�%
�	�			�	�			�	�			�	�
Volumes:
��Processing Facilities (MMcf/d) (2)	191				224
��Transloading Facilities (Bbls/d) (2)	21,317			�	18,980			�	�			�	�
(1) Gross Margin and Adjusted EBITDA are not financial measures presented in accordance with GAAP. For a reconciliation of Gross Margin and Adjusted EBITDA to their most directly comparable financial measures calculated and presented in accordance with GAAP, please see How We Evaluate Our Operations.
(2) Volumes reflect the minimum volume commitment under our fee-based contracts or actual throughput, whichever is greater, for the post-IPO period.

Revenues. Natural gas, NGLs and condensate revenue decreased by $4.5 million, or 64.3%, to $2.5 million for the three months ended September�30, 2014 as compared to $7.0 million for the three months ended September�30, 2013. The decrease in natural gas, NGLs and condensate revenue is primarily due to a decrease in net NGL barrels sold, most notably under short-term third-party purchase contracts. This decline attributed to an approximate decrease of $3.7 million in NGL sales for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013. The remaining decrease of approximately $0.8 million is primarily due to declining NGL prices and a decrease in condensate volumes sold. The average price of ethane decreased by 4% to $0.24 per gallon for the three months ended September�30, 2014 from $0.25 per gallon for the three months ended September�30, 2013. Similarly, the average price per gallon of iso butane, normal butane, and natural gasoline decreased by 5%, 6%, and 2%, respectively, for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013.

Gathering, processing, transloading and other revenue increased by $2.8 million, or 23.3%, to $14.7 million for the three months ended September�30, 2014 as compared to $11.9 million for the three months ended September�30, 2013, primarily from our minimum volume commitment agreements with Anadarko and AES and the escalation of prices on existing agreements. At our IPO date, we entered into a three-year fee-based gathering and processing agreement with AES with a minimum volume commitment and annual inflation adjustments. For the three months ended September�30, 2014, we recorded $5.1 million in gathering, processing, transloading and other revenue as a result of this contract, as compared to $2.3 million for the three months ended September 30, 2013.

At our IPO date, we entered into three-year transloading services agreements with AES, requiring minimum monthly volume commitments for crude oil transloading services. In connection with the East New Mexico Dropdown (see Note 5 "Property, Plant and Equipment"), the Partnership entered into a three-year transloading services agreement with AES, requiring minimum monthly volume commitments for crude oil transloading services. For the three months ended September�30, 2014, we recorded $4.2 million in gathering, processing, transloading and other revenue as a result of these contracts, as compared to $2.3 million for the three months ended September 30, 2013. These increases are net against a decrease of $1.9 million in gathering, processing, transloading and other revenue, primarily a result of decreased volumes under third-party fee-based agreements.

Cost of Revenues. Cost of revenues are derived primarily from the creation of natural gas, NGLs and condensate revenue. Total cost of natural gas, NGLs and condensate revenue decreased by $3.7 million, or 57.4%, to $2.8 million for the three months ended September�30, 2014 from $6.5 million for the three months ended September�30, 2013. The decrease is primarily due to a decline in the purchase of NGLs under short-term third-party purchase contracts, which attributed to an approximate decrease of $3.3 million in the cost of natural gas, NGLs and condensate revenue. No such purchases were made during the three months ended September�30, 2014. In addition, a decline in NGL prices and lower volumes of redelivered gas at the tailgate of our plant attributed to an approximate decrease of $0.6 million in cost of natural gas, NGLs and condensate revenue for the three months ended September�30, 2014 as compared to the three months ended September�30, 2013.

These decreases were offset by an increase of $0.2 million in cost of natural gas, NGLs and condensate revenue from affiliates, primarily related to the purchase of NGLs from AES under our gathering and processing agreement.

Operation and Maintenance Expense. Operation and maintenance expense decreased by $0.6 million, or 15.1%, to $3.6 million for the three months ended September�30, 2014 from $4.3 million for the three months ended September�30, 2013. This decrease is primarily due to a $0.3 million decrease in equity-based compensation expense for the three months ended September�30, 2014, as compared to the three months ended September�30, 2013. In addition, we incurred approximately $0.3 million less in maintenance expense for the three months ended September�30, 2014, as compared to the three months ended September�30, 2013. Operation and maintenance expenses are primarily composed of expenses related to labor, utilities and chemicals, property insurance premiums, compression costs and maintenance and repair expenses, which generally remain relatively stable across broad ranges of throughput volumes but can fluctuate from period to period depending on the mix of activities performed during the period and the timing of these expenses.

General and Administrative Expense. General and administrative expense decreased by $0.8 million, or 30.3%, to $1.7 million for the three months ended September�30, 2014 from $2.5 million for the three months ended September�30, 2013. The decrease is primarily due to a $0.8 million decrease in equity-based compensation expense for the three months ended September�30, 2014, as compared to the three months ended September�30, 2013.

Interest Expense. Interest expense, net of amounts capitalized decreased by $1.2 million, or 84.7%, to $0.2 million for the three months ended September�30, 2014 from $1.4 million for the three months ended September�30, 2013. The decrease is primarily due to expensing capitalized loan costs associated with our previous revolving credit facility of $0.8 million during the three months ended September�30, 2013. Additionally, during the three months ended September�30, 2014, our outstanding indebtedness consisted of draws under our new revolving credit facility. During the three months ended September�30, 2013, our outstanding indebtedness consisted of a term loan and revolving credit facility, with significantly higher principal amounts.

Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013

��

The following table presents selected financial data for each of the nine months ended September 30, 2014 and 2013.



In Thousands	Nine Months Ended September 30,
	2014			2013			Change			% Change
REVENUES:
��Natural gas, NGLs and condensate revenue	$	11,852		$	14,106		$	(2,254	)	(16.0	)%
��Gathering, processing, transloading and other revenue	46,631			22,645			23,986			105.9	�%
��Total Revenues	58,483			36,751			21,732			59.1	�%
OPERATING EXPENSES:
��Cost of natural gas, NGLs and condensate revenue	14,210			11,687			2,523			21.6	�%
��Operation and maintenance	11,954			11,878			76			0.6	�%
��General and administrative	6,262			5,214			1,048			20.1	�%
��Property tax expense	994			844			150			17.8	�%
��Depreciation expense	6,568			6,093			475			7.8	�%
��Loss on disposal of equipment	60						60			100.0	�%
��Total operating expenses	40,048			35,716			4,332			12.1	�%
��Operating income	18,435			1,035			17,400			1,681.2	�%
Interest expense, net of amounts capitalized	(549		)	(4,171		)	3,622			(86.8	)%
Loss on interest rate swap				(47		)	47			(100.0	)%
Net income (loss) before tax	$	17,886		$	(3,183	)	$	21,069		661.9	�%

Key performance metrics:
��Gross Margin (1)	$	44,273		$	25,064		$	19,209		76.6	�%
��Adjusted EBITDA (1)	$	26,525		$	8,412		$	18,113		215.3	�%

Volumes:
��Processing Facilities (MMcf/d) (2)	208			224
��Transloading Facilities (Bbls/d) (2)	19,768			18,980
(1) Gross Margin and Adjusted EBITDA are not financial measures presented in accordance with GAAP. For a reconciliation of Gross Margin and Adjusted EBITDA to their most directly comparable financial measures calculated and presented in accordance with GAAP, please see How We Evaluate Our Operations.
(2) Volumes reflect the minimum volume commitment under our fee-based contracts or actual throughput, whichever is greater, for the post-IPO period.

Revenues. Natural gas, NGLs and condensate revenue decreased by $2.3 million, or 16.0%, to $11.9 million for the nine months ended September�30, 2014 from $14.1 million for the nine months ended September�30, 2013. The decrease in natural gas, NGLs and condensate revenue is primarily due to a decrease in net NGL barrels sold under short-term third-party purchase contracts. This decline attributed to an approximate decrease of $3.4 million in NGL sales for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013. This decrease is offset by an increase in NGL prices. The average price of ethane increased by 12% to $0.29 per gallon for the nine months ended September�30, 2014 from $0.26 per gallon for the nine months ended September�30, 2013, and the average price of propane increased by 20% to $1.13 per gallon for the nine months ended September�30, 2014 from $0.94 per gallon for the nine months ended September�30, 2013. Increasing NGL prices attributed to an approximate $1.1 million increase in our NGL sales for the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013.

Gathering, processing and other revenue increased by $24.0 million, or 105.9%, to $46.6 million for the nine months ended September 30, 2014 as compared to $22.6 million for the nine months ended September�30, 2013, primarily from our

minimum volume commitment agreements with Anadarko and AES and the escalation of prices on existing agreements. We expect the trend of increased volumes under fee-based agreements to continue, consistent with our overall business strategy. At our IPO date, we entered into a three-year fee-based gathering and processing agreement with AES with a minimum volume commitment and annual inflation adjustments. For the nine months ended September�30, 2014, we recorded $16.3 million in gathering, processing, transloading and other revenue as a result of this contract, as compared to $2.3 million for the nine months ended September 30, 2013.

At our IPO date, we entered into three-year transloading services agreements with AES, requiring minimum monthly volume commitments for crude oil transloading services. In connection with the East New Mexico Dropdown (see Note 5 "Property, Plant and Equipment"), the Partnership entered into a three-year transloading services agreement with AES, requiring minimum monthly volume commitments for crude oil transloading services. For the nine months ended September�30, 2014, we recorded $11.1 million in gathering, processing, transloading and other revenue as a result of these contracts, as compared to $2.3 million for the nine months ended September 30, 2013. The remaining $1.2 million increase in gathering, processing, transloading and other revenue is primarily a result of increased volumes under third-party fee-based agreements.

Cost of Revenues. Cost of revenues are derived primarily from the creation of natural gas, NGLs and condensate revenue. Total cost of natural gas, NGLs and condensate revenue increased by $2.5 million, or 21.6%, to $14.2 million for the nine months ended September 30, 2014 as compared to $11.7 million for the nine months ended September�30, 2013. The increase is primarily due to the purchase of NGLs under our gathering and processing agreement with AES. During the nine months ended September�30, 2014, we purchased $10.5 million of NGLs from AES, as compared to $1.3 million purchases of NGLs from AES during the nine months ended September�30, 2013, resulting in an increase of $9.2 million in cost of natural gas, NGLs and condensate revenue.

This increase is offset by an approximate decrease of $3.3 million in cost of natural gas, NGLs, and condensate revenue, related to purchases of NGLs under short-term third-party purchase contracts during the nine months ended September�30, 2013. No such purchases were made during the nine months ended September�30, 2014.

In addition, we recorded $3.0 million of affiliate cost of revenues during the nine months ended September�30, 2013, primarily related to the purchase of natural gas from a subsidiary of SEV under certain keep-whole agreements. The volume of gas redelivered or sold at the tailgates of our processing facilities is lower than the volume received or purchased at delivery points on our gathering systems or interconnecting pipelines due to the NGLs extracted when the natural gas is processed. Prior to our IPO, we were required to make up or keep the producer whole for the condensate and NGL volumes extracted from the natural gas stream through the delivery of or payment for a thermally equivalent volume of residue gas. Under certain keep-whole agreements, we purchased natural gas from a subsidiary of SEV in order to make up or keep the producer whole for the condensate and NGL volumes extracted from the natural gas stream during processing. At the closing of our IPO, we assigned all of our keep-whole agreements to AES. The remaining decrease of approximately $0.4 million is primarily related to lower volumes of redelivered gas at the tailgate of our plant during the nine months ended September�30, 2014 as compared to the nine months ended September�30, 2013.

General and Administrative Expense. General and administrative expense increased by approximately $1.0 million, or 20.1%, to $6.3 million for the nine months ended September 30, 2014 from $5.2 million for the nine months ended September�30, 2013. The increase is primarily due to costs of being a publicly traded partnership, including board of director fees, internal control compliance costs, and other professional services fees. We incurred an increase of approximately $0.9 million in such costs for the nine months ended September�30, 2014, as compared to the nine months ended September�30, 2013. In addition, equity-based compensation expense increased by $0.1 million for the nine months ended September�30, 2014, as compared to the nine months ended September�30, 2013.

Interest Expense. Interest expense, net of amounts capitalized, decreased by approximately $3.6 million, or 86.8%, to $0.5 million for the nine months ended September 30, 2014 as compared to $4.2 million for the nine months ended September�30, 2013. The decrease is primarily due to expensing capitalized loan costs associated with our previous revolving credit facility of $0.8 million during the nine months ended September�30, 2013. Additionally, during the nine months ended September�30, 2014, our outstanding indebtedness consisted of draws under our new revolving credit facility. During the nine months ended September�30, 2013, our outstanding indebtedness consisted of a term loan and revolving credit facility, with significantly higher principal amounts.

LIQUIDITY AND CAPITAL RESOURCES

We closely manage our liquidity and capital resources. The key variables we use to manage our liquidity requirements include our discretionary operation and maintenance expense, general and administrative expense, capital expenditures, credit facility capacity and availability, working capital levels, and the level of investments required to support our growth strategies.

Historically, sources of liquidity included cash generated from operations, equity investments by our sole member and borrowings under our historical credit facility prior to the IPO.

We expect ongoing sources of liquidity to include cash generated from operations, our new revolving credit facility and issuances of additional debt and equity securities. We believe that cash generated from these sources will be sufficient to sustain operations, to finance anticipated expansion plans and growth initiatives, and to make quarterly cash distributions on all of our outstanding units at the minimum quarterly distribution rate. However, in the event our liquidity is insufficient, we may be required to limit our spending on future growth plans or other business opportunities or to rely on external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our growth.

We intend to pay a minimum quarterly distribution of $0.365 per unit per quarter, which equates to $6.6 million per quarter, or approximately $26.4 million per year. However, other than the requirement in our partnership agreement to distribute all of our available cash each quarter, we have no obligation to make quarterly cash distributions in this or any other amounts and our general partner has considerable discretion to determine the amount of our available cash each quarter.

Credit Facilities

Concurrently with the closing of our IPO, we entered into a revolving credit facility, which matures on July 31, 2017. If no event of default has occurred, we have the right, subject to approval by the administrative agent and certain lenders, to increase the borrowing capacity under the revolving credit facility to up to $150.0 million. The revolving credit facility is available to fund expansions, acquisitions and working capital requirements for our operations and general corporate purposes.

At our election, interest will be generally determined by reference to:


"	the Eurodollar rate plus an applicable margin between 3.0% and 3.75% per annum (based upon the prevailing senior secured leverage ratio); or


"	the alternate base rate plus an applicable margin between 2.0% and 2.75% per annum (based upon the prevailing senior secured leverage ratio). The alternate base rate is equal to the highest of Soci�t� G�n�rales prime rate, the federal funds rate plus 0.5% per annum or the reference Eurodollar rate plus 1.0%.

Our revolving credit facility is secured by the capital stock of our present and future subsidiaries, all of our and our subsidiaries present and future property and assets (real and personal), control agreements relating to our and our subsidiaries bank accounts and collateral assignments of our and our subsidiaries material construction, ownership and operation agreements, including any agreements with AES or Anadarko.

Our revolving credit facility also contains covenants that, among other things, require us to maintain specified ratios or conditions. We must maintain a consolidated senior secured leverage ratio, consisting of consolidated indebtedness under our new revolving credit facility to consolidated EBITDA of not more than 4.0 to 1.0, as of the last day of each fiscal quarter. In addition, we must maintain a consolidated interest coverage ratio, consisting of our consolidated EBITDA minus capital expenditures to our consolidated interest expense, letter of credit fees and commitment fees of not less than 2.5 to 1.0, as of the last day of each fiscal quarter.

Our revolving credit facility contains affirmative covenants that are customary for credit facilities of this type. Our new revolving credit facility also contains additional negative covenants that will limit our ability to, among other things, do any of the following:


"	incur certain additional indebtedness;


"	grant certain liens;


"	engage in certain asset dispositions;


"	merge or consolidate;


"	make certain payments, investments or loans;


"	enter into transactions with affiliates;


"	make certain changes in our lines of business or accounting practices, except as required by GAAP or its successor;


"	store inventory in certain locations;


"	place certain amounts of cash in accounts not subject to control agreements;


"	amend or modify certain agreements and documents;


"	incur certain capital expenditures;


"	engage in certain prohibited transactions;


"	enter into burdensome agreements; and


"	act as a transmitting utility or as a utility.

Our revolving credit facility also contains certain customary representations and warranties and events of default. Events of default include, among other things, payment defaults, breach of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments in excess of $5.0 million, certain events with respect to material contracts, actual or asserted failure of any guaranty or security document supporting our revolving credit facility to be in full force and effect and change of control. If such an event of default occurs, the lenders under our revolving credit facility would be entitled to take various actions, including the acceleration of amounts due under our revolving credit facility and all actions permitted to be taken by a secured creditor. As of September 30, 2014, we were in compliance with all covenants under our revolving credit facility.

As of September�30, 2014, we had unused capacity under our revolving credit facility of $39.0 million and outstanding borrowings of $11.0 million.

CASH FLOWS

Net cash flows provided by (used in) operating activities, investing activities and financing activities for the nine months ended September�30, 2014 and 2013 were as follows:



In Thousands	Nine Months Ended September 30,
�	2014			2013			Change
Net cash provided by (used�in):
Operating activities	$	26,045		$	1,582		$	24,463
Investing activities	$	(9,052	)	$	(10,947	)	$	1,895
Financing activities	$	(17,716	)	$	9,763		$	(27,479	)

Operating Activities. Cash flows provided by operating activities increased by $24.5 million to $26.0 million for the nine months ended September�30, 2014, as compared to $1.6 million for the nine months ended September�30, 2013. The increase is primarily due to an increase in net income discussed above under Results of Operations after excluding the effect of depreciation expense, amortization of deferred financing costs and equity-based compensation. In addition, during the nine months ended September�30, 2014, amounts owed to affiliates increased primarily from the gathering and processing agreement with AES, and amounts due from affiliates decreased. This was offset by an increase in amounts due from third-party customers.

Investing Activities. Cash flows used in investing activities increased by $1.9 million to $9.1 million for the nine months ended September�30, 2014 as compared to $10.9 million for the nine months ended September�30, 2013. Cash paid for capital expenditures during the nine months ended September�30, 2014 relates to several major construction projects, including projects to expand the services offered at, and the capacity of, our Panola County processing facilities. Cash paid for capital expenditures during the nine months ended September�30, 2013 primarily includes payments made to construct the Oak Hill Lateral, which was completed in March 2013, and install molecular mole sieves at our Panola 1 processing facility.

Financing Activities. Cash flows from financing activities in historical periods were primarily driven by borrowing under our historical credit facility and capital contributions from our sole member prior to the IPO. We used these borrowings and capital contributions to fund our working capital needs and to finance maintenance and expansion capital expenditure projects that are reflected in cash flows used in investing activities.

Cash flows used in financing activities increased by $27.5 million to $17.7 million for the nine months ended September�30, 2014, as compared to cash provided by financing activities of $9.8 million for the nine months ended September�30, 2013. The increase in cash used in financing activities in 2014 is primarily related to distributions paid to unit holders of $19.2 million and an excess cash purchase price over the historical carrying value of assets acquired of $5.5 million related to the East New Mexico Dropdown purchased from NuDevco Midstream Development. In addition, we had borrowings under our revolving credit facility of $23.5 million, repayments of $16.5 million, and an issuance of general partner units of $0.1 million. During the nine months ended September�30, 2013, we had borrowings under our new revolving credit facility of $25.0 million and our previous credit facility of $9.0 million, net against debt repayments of $16.5 million on our new revolving credit facility and $135.5 million on our previous credit facility. We also recorded net proceeds from the IPO of $125.3 million, and capital contributions of $3.6 million prior to the IPO.

CAPITAL EXPENDITURES

Our operations are capital intensive, requiring investments to expand, upgrade or enhance existing operations and to meet environmental and operational regulations. Our capital requirements have consisted of and are expected to continue to consist of maintenance capital expenditures and expansion capital expenditures. Maintenance capital expenditures are cash expenditures (including expenditures for the addition or improvement to, or the replacement of, our capital assets or for the acquisition of existing, or the construction or development of new, capital assets) made to maintain our long-term operating income or operating capacity. Expansion capital expenditures include expenditures to acquire assets and expand existing facilities that increase throughput capacity on our pipelines, processing plants and crude oil logistics assets. Although historically we did not necessarily distinguish between maintenance capital expenditures and expansion capital expenditures in the same manner that we are required to under our partnership agreement subsequent to the closing of the IPO, for the nine months ended September�30, 2014 and 2013, we incurred approximately $1.2 million and $1.6 million, respectively, for maintenance capital expenditures and incurred approximately $6.9 million and $9.7 million, respectively, for expansion capital expenditures. Subsequent to the IPO from July 31, 2013 to September 30, 2013, we incurred $0.1 million of maintenance capital expenditures.

During the nine months ended September�30, 2014, expansion capital expenditures related to projects to expand the services offered at, and the capacity of, our Panola County processing facilities.

During the nine months ended September�30, 2013, expansion capital expenditures primarily related to the construction of our Oak Hill Lateral gathering line and the installation of molecular sieves at our Panola I processing facility.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a significant current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

CONTRACTUAL OBLIGATIONS

A summary of our contractual obligations as of September�30, 2014 is as follows:



In Thousands	2014			2015			2016			Thereafter			Total
Operating services agreements (1)	$	136	�	$	530	�	$	478	�	$	1,174	�	$	2,318
Long-term debt (2)										11,000			11,000
Total	$	136		$	530		$	478		$	12,174		$	13,318


(1)	Amounts relate to minimum payments for operating services agreements having initial or remaining non-cancellable lease terms in excess of one year, primarily relating to our crude oil logistics facilities.


(2)	$11.0 million was outstanding under our revolving credit facility at September�30, 2014 (see Note 6 "Long-Term Debt and Interest Expense"). Our revolving credit facility matures on July 31, 2017.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

As of September�30, 2014, there have been no significant changes to our critical accounting policies and estimates disclosed in the Annual Report on Form 10-K.

Our significant accounting policies are described in Note�2 to our audited consolidated and combined financial statements included in our Annual Report on Form 10-K. We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America and pursuant to the rules and regulations of the SEC, which requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying footnotes. Actual results could differ from those estimates. We consider the following policies to be the most critical in understanding the judgments that are involved in preparing our financial statements and the uncertainties that could impact our financial condition and results of operations.

Our Revenue Recognition Policies and Use of Estimates for Revenues and Expenses

In general, we recognize revenue from customers when all of the following criteria are met:


"	persuasive evidence of an exchange arrangement exists;


"	delivery has occurred or services have been rendered;


"	the price is fixed or determinable; and


"	collectability is reasonably assured.

We record revenue for natural gas and NGL sales and transportation services over the period in which they are earned (i.e., either physical delivery of product has taken place or the services designated in the contract have been performed). While we make every effort to record actual volume and price data, there may be times where we need to make use of estimates for certain revenues and expenses. If the assumptions underlying our estimates prove to be substantially incorrect, it could result in material adjustments in results of operations in future periods.

Depreciation Methods and Estimated Useful Lives of Property, Plant and Equipment

We calculate depreciation expense using the straight-line method over the estimated useful lives of our property, plant and equipment. We assign asset lives based on reasonable estimates when an asset is placed into service. We periodically evaluate the estimated useful lives of our property, plant and equipment and revise our estimates when and as appropriate. Because of the expected long useful lives of the property, plant and equipment, we depreciate our property, plant and equipment over periods ranging from 5�years to 40�years. Changes in the estimated useful lives of the property, plant and equipment could have a material adverse effect on our results of operations.

Impairment of Long-Lived Assets

We review property, plant and equipment and other long-lived assets for impairment whenever events or changes in business circumstances indicate the net book values of the assets may not be recoverable. Impairment is indicated when the undiscounted cash flows estimated to be generated by those assets are less than the assets net book value. If this occurs, an impairment loss is recognized for the difference between the fair value and net book value. Factors that indicate potential impairment include: a significant decrease in the market value of the asset, operating or cash flow losses associated with the use of the asset, and a significant change in the assets physical condition or use. No impairments of long-lived assets were recorded during the periods included in these financial statements.

Contingencies

In the ordinary course of business, we may become party to lawsuits, administrative proceedings and governmental investigations, including environmental, regulatory and other matters. As of September�30, 2014, we did not have any material outstanding lawsuits, administrative proceedings or governmental investigations.

Accounting for Awards under the Long-term Incentive Plan

In connection with the IPO, the board of directors of our general partner adopted the Marlin Midstream Partners, LP 2013 Long-Term Incentive Plan (LTIP). Individuals who are eligible to receive awards under the LTIP include (1) employees of the Partnership and NuDevco Midstream Development and its affiliates, (2) directors of the Partnerships general partner, and (3) consultants. The LTIP provides for the grant of unit options, unit appreciation awards, restricted units, phantom units, distribution equivalent rights, unit awards, profits interest units, and other unit-based awards. The maximum number of common units issuable under the LTIP is 1,750,000.

On August 1, 2013, phantom units, with distribution equivalent rights, of 292,000 units were awarded to certain employees of NuDevco Midstream Development and its affiliates who provide direct or indirect services to us pursuant to affiliate agreements, and 20,000 units were awarded to certain board members of our general partner. All of the phantom unit awards granted to-date are considered non-employee equity based awards and are required to be remeasured at fair market value at each reporting period and amortized to compensation expense on a straight-line basis over the vesting period of the phantom units with a corresponding increase in a liability. We intend to settle the awards by allowing the recipient to choose between issuing the net amount of common units due, less common units equivalent to pay withholding taxes, due upon vesting with the Partnership paying the amount of withholding taxes due in cash or issuing the gross amount of common units due with the recipient paying the withholding taxes. The phantom unit awards were awarded to individuals who are not deemed to be employees of the Partnership.

Distribution equivalent rights are accrued for each phantom unit award as the Partnership declares cash distributions and are recorded as a decrease in partners capital with a corresponding liability in accordance with the vesting period of the underlying phantom unit, which will be settled in cash when the underlying phantom units vest.

NEW ACCOUNTING STANDARDS

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk

We had exposure to changes in interest rates on our indebtedness associated with our historical credit facility. We entered into an interest rate swap contract, effective December�17, 2012, with a notional amount that declined over time. The contract effectively limited our LIBOR based interest rate exposure related to the notional amount of the swap contract through December�17, 2014. At the closing of the IPO, the interest rate swap was terminated and settled for approximately $0.1 million.

We have exposure to changes in interest rates under our revolving credit facility. The credit markets have recently experienced historical lows in interest rates. As the overall economy strengthens, it is possible that monetary policy will tighten further, resulting in higher interest rates to counter possible inflation. Interest rates on floating rate credit facilities and future debt offerings could be higher than current levels, causing our financing costs to increase accordingly. For the three months ended September�30, 2014, a 10% change in the interest rate under our credit facility would have resulted in a nominal change in net income. We may use certain derivative instruments to hedge our exposure to variable interest rates in the future, but we do not currently have in place any risk management contracts.

Commodity Price Risk

With the execution of a fee-based gathering and processing agreement and multiple fee-based transloading services agreements with AES at the closing of the IPO, substantially all of our gross margin will be generated under fee-based commercial agreements, the substantial majority of which will have minimum volume commitments. We believe these commercial arrangements will promote stable cash flows and minimal direct commodity price exposure. Accordingly, we have not entered into any derivative contracts to manage our exposure to commodity price risk, and, as a result of our limited exposure to commodity price risk under our fee-based commercial agreements, we do not plan to enter into hedging arrangements to manage such risk. Natural gas and NGL prices can affect our profitability indirectly by influencing the level of drilling and production activity by our producer customers, the willingness of our non-producer customers to purchase natural gas for processing and the volumes of natural gas delivered to us for processing by all of our customers.

Counterparty and Customer Credit Risk

For the three and nine months ended September�30, 2014, AES, Anadarko and Enterprise Products Partners L.P. (Enterprise), each accounted for more than 10% of our revenues. We have gathering and processing agreements with Anadarko and an NGL sales agreement with Enterprise with terms ranging from approximately one to five years. In addition, at the closing of the IPO, we entered into a three-year fee-based gathering and processing agreement with AES at our Panola County processing facilities. Under this agreement, AES pays us a fixed fee per Mcf (subject to an annual inflation adjustment) for gathering, treating, compression and processing services and a per gallon fixed fee for NGL transportation services. As these contracts expire, we will have to renegotiate extensions or renewals with these customers or replace the existing contracts with new arrangements with other customers. If any of these customers were to default on its contracts or if we were unable to renew our contracts with them on favorable terms, we may not be able to replace such customers in a timely fashion, on favorable terms or at all. In any of these situations, our revenues and cash flows and our ability to make cash distributions to our unitholders would be materially and adversely affected.

In addition, AES is our sole customer with respect to our crude oil logistics business, and we expect to continue to derive the substantial majority of our transloading revenues from AES. At the closing of the IPO, AES contracted for 100% of the operational capacity at our Wildcat and Big Horn facilities. On August 1, 2014, AES contracted for 100% of the operational capacity at our East New Mexico facility. Such concentration subjects us to increased risk in the case of nonpayment, nonperformance or nonrenewal by AES under the transloading services agreements that we entered into with AES. Any adverse developments concerning AES could materially and adversely affect our crude oil logistics business.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Chief Executive Officer and Chief Financial Officer of the Partnerships general partner performed an evaluation of the Partnerships disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (Exchange Act). Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC and to ensure that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our general partner's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer of the Partnership's general partner have concluded that the Partnership's disclosure controls and procedures were effective as of September�30, 2014.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Partnerships internal control over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act during the third fiscal quarter of 2014 that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any legal, regulatory or administrative proceedings other than proceedings arising in the ordinary course of our business. Management believes that there are no such proceedings for which final disposition could have a material adverse effect on our financial condition, results of operations or cash flows, or for which disclosure is required by Item 103 of Regulation S-K.

Item 1A. Risk Factors

Security holders and potential investors in our securities should carefully consider the risk factors under Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2013. There has been no material change in our risk factors from those described in the Annual Report on Form 10-K. These risks are not the sole risks for investors. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. EXHIBIT INDEX

�



�		�	�	Incorporated by Reference
Exhibit Number		�	Exhibit Description	Form	Exhibit Number	Filing Date	SEC File No.
�		�	�	�	�	�	�
3.1		�	Certificate of Limited Partnership of Marlin Midstream Partners, LP.	DRS	3.1	5/3/2013	377-00170
3.2		�	First Amended and Restated Agreement of Limited Partnership of Marlin Midstream Partners, LP dated as of July 31, 2013.	8-K	3.1	7/31/2013	001-36018
3.3		�	Certificate of Formation of Marlin Midstream GP, LLC	DRS	3.3	5/3/2013	377-00170
3.4		�	First Amended and Restated Limited Liability Company Agreement of Marlin Midstream GP, LLC	10-K/A	3.4	3/26/2014	001-36018
10.1	�	�	Amendment to Gas Gathering and Processing Agreement, dated as of August 22, 2014, by and between Marlin Midstream, LLC and Associated Energy Services, LP.	8-K	10.1	8/28/2014	001-36018
10.2	�	�	Guaranty, dated as of August 1, 2014, by NuDevco Partners Holdings, LLC in favor of Marlin Midstream Partners, LP and its subsidiaries and affiliates	8-K	10.1	8/7/2014	001-36018
10.3*	�	�	Contribution Agreement, dated as of July 30, 2014, by and between Marlin Midstream Partners, LP, NuDevco Midstream Development, LLC and Marlin Midstream GP, LLC.	�	�	�	�
31.1*			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32**			Certifications pursuant to 18 U.S.C. Section 1350.
101.INS*			XBRL Instance Document.
101.SCH*			XBRL Schema Document.
101.CAL*			XBRL Calculation Document.
101.LAB*			XBRL Labels Linkbase Document.
101.PRE*			XBRL Presentation Linkbase Document.
101.DEF*			XBRL Definition Linkbase Document.
		�	�	�	�	�	�

* Filed Herewith.

**Furnished Herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



�	�	�	�	�	�
�	Marlin Midstream Partners, LP
�	By: Marlin Midstream GP, LLC,
�	��its general partner
�	�	�	�	�	�
October�30, 2014	�	�	�/s/ Amanda Bush
�	�	�	Amanda Bush
�	�	�	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Exhibit Index



�		�	�	Incorporated by Reference
Exhibit Number		�	Exhibit Description	Form	Exhibit Number	Filing Date	SEC File No.
�		�	�	�	�	�	�
3.1		�	Certificate of Limited Partnership of Marlin Midstream Partners, LP.	DRS	3.1	5/3/2013	377-00170
3.2		�	First Amended and Restated Agreement of Limited Partnership of Marlin Midstream Partners, LP dated as of July 31, 2013.	8-K	3.1	7/31/2013	001-36018
3.3		�	Certificate of Formation of Marlin Midstream GP, LLC	DRS	3.3	5/3/2013	377-00170
3.4		�	First Amended and Restated Limited Liability Company Agreement of Marlin Midstream GP, LLC	10-K/A	3.4	3/26/2014	001-36018
10.1	�	�	Amendment to Gas Gathering and Processing Agreement, dated as of August 22, 2014, by and between Marlin Midstream, LLC and Associated Energy Services, LP.	8-K	10.1	8/28/2014	001-36018
10.2	�	�	Guaranty, dated as of August 1, 2014, by NuDevco Partners Holdings, LLC in favor of Marlin Midstream Partners, LP and its subsidiaries and affiliates	8-K	10.1	8/7/2014	001-36018
10.3*	�	�	Contribution Agreement, dated as of July 30, 2014, by and between Marlin Midstream Partners, LP, NuDevco Midstream Development, LLC and Marlin Midstream GP, LLC.	�	�	�	�
31.1*			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32**			Certifications pursuant to 18 U.S.C. Section 1350.
101.INS*			XBRL Instance Document.
101.SCH*			XBRL Schema Document.
101.CAL*			XBRL Calculation Document.
101.LAB*			XBRL Labels Linkbase Document.
101.PRE*			XBRL Presentation Linkbase Document.
101.DEF*			XBRL Definition Linkbase Document.
		�	�	�	�	�	�

* Filed Herewith.

**Furnished Herewith.

Exhibit 10.3

CONTRIBUTION AGREEMENT

BY AND AMONG

NUDEVCO MIDSTREAM DEVELOPMENT, LLC

AS CONTRIBUTOR,

AND

MARLIN MIDSTREAM PARTNERS, LP

AS CONTRIBUTEE,

MARLIN MIDSTREAM GP, LLC,

IN ITS CAPACITY AS GENERAL PARTNER

July 30, 2014

Table of Contents

ARTICLE I DEFINITIONS

ARTICLE II CONTRIBUTION��


2.01	Contribution��


2.02	Transaction Taxes��


2.03	Receipts, Credit and Liabilities��


2.04	Further Assurances��


2.05	Assignments and Recording��

ARTICLE III CLOSING��


3.01	Closing��


3.02	Deliveries at the Closing��

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NMD��


4.01	Organization and Existence��


4.02	Authority and Approval��


4.03	No Conflict��


4.04	Governmental Consents��


4.05	Laws and Regulations; Litigation��


4.06	Management Projections��


4.07	Environmental��


4.08	Bankruptcy��


4.09	Assets��


4.10	Assets Other than Real Property Interests��


4.11	Title to Real Property��


4.12	Licenses; Permits��


4.13	Securities Laws��


4.14	Brokerage Arrangements��


4.15	Investment Company��


4.16	No Adverse Changes��


4.19	Knowledgeable Investor��


4.20	Taxes��

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP��


5.01	Organization and Existence��


5.02	Authority and Approval��


5.03	Brokerage Arrangements��


5.04	Newly Issued Common Units��


5.05	SEC Filings��


5.06	Delivery of Opinion��


5.07	No Conflicts��


5.08	Financial Capacity��


5.09	Knowledgeable Investor��


5.10	No Registration��


5.11	Securities Laws��

ARTICLE VI ADDITIONAL AGREEMENTS, COVENANTS, RIGHTS AND OBLIGATIONS��


6.01	Certain Changes��


6.02	Operations��


6.03	Access��


6.04	Reasonable Best Efforts��


6.05	Schedules��


6.06	Release of Liens��


6.07	Non-Compete��

ARTICLE VII CONDITIONS TO CLOSING��


7.01	Conditions to the Obligation of the Partnership��


7.02	Conditions to the Obligation of NMD��

ARTICLE VIII TERMINATION��


8.01	Events of Termination��


8.02	Effect of Termination��

ARTICLE IX INVESTIGATION; LIMITATIONS��


9.01	Independent Investigation��


9.02	Survival��

ARTICLE X INDEMNIFICATION��


10.01	Indemnification of NMD��


10.02	Indemnification of the Partnership��


10.03	Demands��


10.04	Right to Contest and Defend��


10.05	Cooperation��


10.06	Right to Participate��


10.07	Payment of Damages��


10.08	Limitations on Indemnification��


10.09	Sole Remedy��


10.10	Express Negligence Rule��

ARTICLE XI MISCELLANEOUS��


11.01	Expenses��


11.02	Notices��


11.03	Governing Law��


11.04	Public Statements��


11.05	Form of Payment��


11.06	Entire Agreement; Amendments and Waivers��


11.07	Binding Effect and Assignment��


11.08	Severability��


11.09	Interpretation��


11.10	Headings and Schedules��


11.11	Multiple Counterparts��


11.12	Action by the Partnership��


11.13	No Recourse to Non-Parties��


11.14	Construction��

SCHEDULES

Schedule 4.03 ��-��No Conflict

Schedule 4.04��-��Governmental Approval

Schedule 4.05��-��Laws and Regulations; Litigation

Schedule 4.07��-��Environmental

Schedule 4.10��-��Assets Other Than Real Property Interests

Schedule 4.11��-��Title to Real Property

Schedule 4.16��-��Adverse Changes

Schedule 4.18��-��NMD Contracts

Schedule 4.20��-��Taxes

Schedule 6.04��-��Replacement Guarantees

Schedule 6.06��-��Liens to be Released

EXHIBITS

Exhibit A��-��Description of Assets

CONTRIBUTION AGREEMENT

THIS CONTRIBUTION AGREEMENT (Agreement) is made and effective as of this 30th day of July, 2014 by and between NUDEVCO MIDSTREAM DEVELOPMENT, LLC, a Texas limited liability company (NMD), Marlin Midstream Partners, LP, a Delaware limited partnership (the Partnership), and Marlin Midstream GP, LLC, a Delaware limited liability company, in its capacity as general partner of the Partnership (the General Partner). NMD, the Partnership and the General Partner are referred to herein collectively as the Parties and individually as a Party.

WITNESSETH:

WHEREAS, pursuant to the terms and conditions of this Agreement, NMD desires to contribute to the Partnership, and the Partnership desires to accept from NMD, the Assets, as defined herein;

WHEREAS, the Conflicts Committee (the Conflicts Committee) of the Board of Directors of the General Partner, which is the sole general partner of the Partnership, has (i) received an opinion of Simmons & Company International (Simmons), the financial advisor to the Conflicts Committee, that the Consideration, as defined herein, to be paid by the Partnership for the Assets is fair to the Partnership and its common unitholders (other than the General Partner and its affiliates) from a financial point of view, (ii) found the transactions (the Transaction) contemplated by the Constituent Documents, as defined herein, to be (x) in the best interest of the Partnership, (y) fair and reasonable to the Partnership, taking into account the totality of the relationships among the parties involved and (z) on terms no less favorable to the Partnership than those generally provided to or available from unrelated third parties and (iii) recommended that the Board of Directors of the General Partner approve the Transaction; and

WHEREAS, Spark Energy Ventures, LLC, a Texas limited liability company (Spark Energy), has executed and delivered, or caused to be executed and delivered, to the Partnership the Guaranty, as defined below.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I DEFINITIONS


.	Acts shall have the meaning specified in Section 4.13(a).

.AES shall mean Associated Energy Services, LP, a Texas limited partnership.

.Agreement shall have the meaning specified in the first paragraph of this agreement, including the exhibits and schedules hereto, as amended, restated or otherwise modified from time to time.

.Assets shall mean the property, contracts, rights, interests and other assets set forth on Exhibit A.

.Assignment Agreement shall mean an Assignment Agreement substantially in the form of Exhibit C, pursuant to which NMD would assign the Assets to the Partnership (or its designee).

.Cash Consideration shall have the meaning specified in Section 2.01(i).

.Closing shall have the meaning specified in Section 3.01.

.Closing Date shall have the meaning specified in Section 3.01.

.Code shall have the meaning specified in Section 3.02(b)(i).

.Commencement Date shall mean July 1, 2014.

.Common Units shall mean common units representing limited partnership interests issued by the Partnership that are listed on NASDAQ under the ticker symbol FISH.

.Conflicts Committee shall have the meaning specified in the second Whereas clause of this Agreement.

.Consideration shall have the meaning specified in Section 2.01(a)(i).

.Constituent Documents shall mean this Agreement, the ENM-AES Transloading Agreement, the Assignment Agreement and the documents, instruments and other agreements specifically executed and delivered by the Parties pursuant hereto, including the Schedules hereto.

.Damages shall have the meaning specified in Section 10.01.

.Deductible shall have the meaning specified in Section 10.08(a).

.East New Mexico Transloading Facility shall mean that certain crude petroleum transloading facility situated in Sandoval County, New Mexico, comprised of one Skid Loader. For the purpose of this Agreement, the definition of East New Mexico Transloading Facility shall not include any ladder transloading equipment.

.ENM-AES Transloading Agreement shall mean the Transloading Services Agreement dated effective as of the Closing Date between the Operating Company and AES, substantially in the form of which is attached hereto as Exhibit B.

.Environmental Laws shall include, without limitation, (i) the Resource Conservation and Recovery Act, as amended, (ii) the Clean Air Act, as amended; (iii)�the Comprehensive Environmental Response, Compensation, and Liability Act, as amended, (CERCLA); (iv) the Federal Water Pollution Control Act, as amended; (v) the Safe Drinking Water Act, as amended; (vi) the Toxic Substances Control Act, as amended; (vii) the Emergency Planning and Community Rightto-Know Act, as amended; (viii) the National Environmental Policy Act, as amended; (ix) the Occupational Safety and Health Act, as amended; (x) the Pollution Prevention Act of 1990, as amended; (xi) the Hazardous Materials Transportation Act, as amended; (xii) any regulations promulgated under (i) through (xii); or (xiii) any other federal, state or local statutes, laws, ordinances, rules, regulations, orders, codes, decisions, injunctions or decrees that regulate or otherwise pertain to the protection of human health or the protection of the environment, including the management, control, discharge, emission, treatment, containment, handling, removal, use, generation, migration, storage, release, transportation, disposal, recycling, remediation, manufacture, processing or distribution of Hazardous Materials that are or may present a threat to public health, worker or public safety or the environment.

.Environmental Permits shall have the meaning specified in Section 4.07(a).

.Exchange Act shall mean the Securities Exchange Act of 1934, as amended.

.General Partner shall have the meaning specified in the first paragraph of this Agreement.

.GAAP shall mean generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination, consistently applied.

.Governmental Approval shall have the meaning specified in Section 4.04.

.Governmental Authorities shall have the meaning specified in Section 4.04.

.GP Cash Contribution shall have the meaning specified in Section 2.01(iv).

.Guaranty shall mean that certain Guaranty, dated January 13, 2014, made by Spark Energy in favor of the Partnership and its subsidiaries pursuant to which Spark Energy guarantees all of the obligations of AES under all contracts for the gathering and processing of gas, transloading of crude oil and the sale, transportation, purchase or exchange of natural gas, crude oil or financial derivatives and any other existing or future agreements, including without limitation, the ENM-AES Transloading Agreement as in effect on the date an executed copy thereof was previously provided to the Conflicts Committee.

.Hazardous Materials shall mean any substance, whether solid, liquid, or gaseous: (i) which is listed, defined, or regulated as a hazardous material, hazardous waste, solid waste, hazardous substance, toxic substance, pollutant, or contaminant, or otherwise classified as hazardous or toxic,

in or pursuant to any Environmental Law; or (ii) which is or contains asbestos, polychlorinated biphenyls, radon, urea formaldehyde foam insulation, explosives, or radioactive materials; or (iii) any petroleum, petroleum hydrocarbons, petroleum products, crude oil and any components, fractions, or derivatives thereof, any oil or gas exploration or production waste, and any natural gas, synthetic gas and any mixtures thereof; or (iv) which causes or poses a threat to cause contamination or nuisance on any properties, or any adjacent property or a hazard to the environment or to the health or safety of persons on or about any properties.

.Indemnification Limit shall have the meaning specified in Section 10.08(b).

.Indemnity Claim shall have the meaning specified in Section 10.03.

.Liens shall mean the security interests, liens, mortgages, pledges, charges, encumbrances and rights of others.

.Litigation shall have the meaning specified in Section 4.05.

.Material Adverse Effect shall mean (i) with respect to a relevant Person, all changes, effects, events, occurrences, conditions and/or other circumstances that, individually or in the aggregate, (x) is or would reasonably be expected to materially and adversely affect the assets, liabilities, business, results of operations or condition (financial or otherwise) or properties of such Person, taken as a whole, or (y), if applicable, is or would reasonably be expected to adversely affect such Persons ability to consummate the transactions contemplated hereby, and (ii) with respect to the Assets, all changes, effects, events, occurrences, conditions and/or other circumstances that, individually or any the aggregate, is or would reasonably be expected to materially and adversely affect the assets, liabilities, business, results of operations or condition (financial or otherwise) or properties constituting the Assets, taken as a whole; provided that in determining whether a Material Adverse Effect has occurred, changes, effects, events, conditions or other circumstances relating to (a) the industries in which the relevant Person operates or the Assets are operated, (b) United States or global economic conditions or financial markets in general, (c) the transactions contemplated by this Agreement including, without limitation, any public announcement of same, or (d) changes in law, shall not be considered to give rise to or constitute a Material Adverse Effect; provided further, however, that to be excluded under subsection (a) - (d) above, such condition may not disproportionately affect, as compared to others in such industry, the relevant Person or the Assets, or their respective rights, obligations, results of operation or condition (financial or otherwise) or properties.

.NASDAQ shall have the meaning specified in Section 2.01(iii).

.Newly Issued Common Units shall have the meaning specified in Section 2.01(i).

.NMD shall have the meaning specified in the first paragraph of this Agreement.

.NMD Contracts shall have the meaning set forth in Section 4.18(a).

.NMD Indemnified Parties shall have the meaning specified in Section 10.01.

. Notice shall have the meaning specified in Section 11.02.

.NuStar shall mean NuStar Logistics, L.P., the owner of the site at which the East New Mexico Transloading Facility is located.

.Operating Company shall mean Marlin Logistics, LLC, a Texas limited liability company, which is a wholly owned subsidiary of the Partnership.

.Operations shall mean transloading operations at the East New Mexico Transloading Facility and the revenues, costs, expenses, expenditures and obligations related to such operations.

.Outside Date shall have the meaning specified in Section 8.01(b).

.Parties and Party shall have the meanings specified in the first paragraph of this Agreement.

.Partnership shall have the meaning specified in the first paragraph of this Agreement.

.Partnership Agreement shall mean the First Amended and Restated Agreement of Partnership of the Partnership dated as of July 31, 2013, as amended, restated or otherwise modified from time to time.

.Partnership Indemnified Parties shall have the meaning specified in Section 10.02.

.Partnership Parties shall mean the Partnership, the Operating Company and each of their respective subsidiaries that is a party to any Constituent Document.

.Permitted Liens shall have the meaning specified in Section 4.10(a).

.Property shall have the meaning specified in Section 4.11(a).

.Reference Price shall have the meaning specified in Section 2.01(iii).

.Replacement Guarantees shall have the meaning specified in Section 4(a).

.Representatives shall have the meaning specified in Section 6.03.

.Rights-of-Way shall have the meaning specified in Section 4.11(b).

.SEC shall have the meaning specified in Section 5.05.

.SEC Documents shall have the meaning specified in Section 5.08.

.Securities Act shall have the meaning specified in Section 4.13(b).

.Simmons shall have the meaning specified in the second Whereas clause of this Agreement.

.Skid Loader shall mean a crude petroleum transloader situated on a skid, with a capacity of at least 475 barrels of crude oil per hour.

.Spark Energy shall have the meaning specified in the third Whereas clause of this Agreement.

.Transaction Taxes shall have the meaning specified in Section 2.02.

ARTICLE II CONTRIBUTION

.Contribution.

(a)On the terms and subject to the conditions of this Agreement, at the Closing:

(i)On the Closing Date, NMD will contribute, assign, transfer and convey to the Partnership (or its designee) the Assets in exchange for (1) a cash payment by the Partnership of $5,531,250 (the�Cash Consideration), and (2) the issuance to NMD (or its designee) of 89,720 Common Units, which number of Common Units represents $1,843,750 divided by the Reference Price determined in accordance with Section 2.01(iii) (the Newly Issued Common Units; the Newly Issued Common Units and the Cash Consideration being referred to herein collectively as the�Consideration). The Assets shall be transferred to the Partnership at the Closing free and clear of Liens (other than any Liens created by the Partnership).

(ii)Immediately thereafter, the Partnership will contribute, assign, transfer and convey the Assets to the Operating Company or another designee. To effectuate the forgoing and without the necessity of having two separate assignment and conveyance documents, one from NMD to the Partnership and then another from the Partnership to its designee, the Partnership hereby authorizes and directs NMD to transfer the Assets directly to the Partnerships designee.

(iii)For the purposes of this Agreement, Reference Price shall mean the average of the closing price of the Common Units on the NASDAQ Global Market (NASDAQ) for the twenty (20) trading day period ending two (2) trading days prior to the date hereof, as reported in Bloomberg Financial Markets, or, if not reported therein, as reported by Dow Jones. The Reference Price shall be calculated to the nearest one-hundredth of one cent.

(iv)Concurrently with the issuance of any Common Units in connection with the Consideration, (i) NMD shall cause the General Partner to contribute to the Partnership an amount in cash equal to 2/98ths of the aggregate value of the Newly Issued Common Units (approximately $37,627.55) (the�GP Cash Contribution) and the capital account of the General Partner that is maintained by the Partnership shall be increased by an amount equal to the GP Cash Contribution and (ii) the Partnership shall issue to the General Partner a number of General Partner Units (as defined in the Partnership Agreement) equal to 2/98ths of the aggregate number of Newly Issued Common Units issued by the Partnership in connection with the Transaction.

.Transaction Taxes. All sales, use, transfer, filing, recordation, registration and similar taxes and fees arising from or associated with the transaction contemplated hereunder other than taxes based on income and similar taxes (Transaction Taxes), shall be borne 50% by NMD and 50% by the Partnership. To the extent under applicable law the transferee is responsible for filing tax returns

in respect of Transaction Taxes, the Partnership shall prepare and file all such returns. The Parties shall provide such certificates and other information and otherwise cooperate to the extent reasonably required to minimize Transaction Taxes.

.Receipts, Credit and Liabilities. Upon the Closing, as between the Parties, and subject to the terms of the Constituent Documents, NMD and the Partnership (or its designee) shall be entitled to monies, proceeds, receipts, credits and similar amounts, and responsible for expenses, costs, expenditures and similar obligations and/or liabilities, arising from, related to, or otherwise attributable to the Assets related thereto (including the ownership or operation thereof) as follows:

(i)with respect to those attributable to the time period prior to the Closing Date, 100% to NMD; and

(ii)with respect to those attributable to the time period on or after the Closing Date, 100% to the Partnership (or its designee).

Promptly after receipt of any such item, NMD or the Partnership (or its designee), as applicable, shall fully disclose to, account for to, transmit to and hold harmless the other Party from such items for which such other Party is entitled to or responsible for.

.Further Assurances. After the Closing, the Parties agree to timely execute and deliver to each other all such instruments, notices, and other documents, and to do such other acts as may reasonably be necessary to carry out their respective obligations under this Agreement.

.Assignments and Recording. The Partnership at its sole cost shall promptly record the documents in the appropriate office of the state and county in which the Assets are located, if so required. The Partnership shall promptly supply NMD with a true and accurate photocopy of all such recordings, if any.

ARTICLE III CLOSING

.Closing.

Subject to the terms and conditions of this Agreement, the closing (the Closing) of the contribution of the Assets shall be held at the offices of NMD at 2105 CityWest Blvd., Suite 100, Houston, Texas 77042 at 9:00 a.m., Houston, Texas time on the third (3^rd) business day following the satisfaction or waiver of the conditions set forth in Section�7.01 and Section 7.02 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions), or such other date, place and time as may be mutually agreed upon by the Parties. The Closing Date shall mean the date on which the Closing shall occur.

.Deliveries at the Closing. At the Closing:

(a)NMD will deliver, or cause to be delivered, to the Partnership or the designee of the Partnership:

(i)a duly executed counterpart of the Assignment Agreement; and


(ii)	a duly executed counterpart of the ENM-AES Transloading Agreement.

(b)NMD will deliver, or cause to be delivered, to the General Partner and the Partnership:


(i)	a certificate (i) stating that NMD is not a foreign corporation, foreign partnership, foreign trust or foreign estate, (ii) providing its U.S. Employer Identification Number and (iii) providing its address, all pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended (the Code);


(ii)	a copy of the duly executed Transloading Agreement executed by all parties thereto;


(iii)	all consents required in connection with assignment of the Assets, including those required under any NMD Contract;


(iv)	all books and records relating to the Assets (including books of account, tax returns and supporting work papers and the like relating to the Assets) that are in possession of NMD; and


(v)	all other documents, certificates and other instruments required to be delivered, or caused to be delivered, by NMD pursuant hereto.

(c)the Partnership will deliver, or cause to be delivered, to NMD:


(i)	the Cash Consideration by wire transfer to bank accounts designated by NMD prior to the Closing Date;


(ii)	the Newly Issued Common Units;


(iii)	a counterpart of the Assignment Agreement, duly executed by the applicable Partnership Party; and


(iv)	all other documents, certificates and other instruments required to be delivered, or caused to be delivered, by the Partnership pursuant hereto.

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NMD

NMD hereby represents and warrants to the Partnership that the following representations and warranties are true and correct:

.Organization and Existence.

(a)NMD is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Texas. NMD has full limited liability company power and authority to own and hold the properties and assets it now owns and holds and to carry on its business as and where such properties are now owned or held and such business is now conducted. NMD is duly licensed or qualified to do business as a foreign limited liability company and is in good standing in the states in which the character of the properties and assets now owned or held by it or the nature of the business now conducted by it requires it to be so licensed or qualified, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto.

.Authority and Approval. NMD has the limited liability company power and authority, as the case may be, to execute and deliver this Agreement and the other Constituent Documents, to consummate the transactions contemplated hereby and thereby and to perform all the terms and conditions hereof and thereof to be performed by it. The execution and delivery by NMD of this Agreement and the other Constituent Documents, the performance by NMD of all the terms and conditions hereof and thereof to be performed by it and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all requisite limited liability company action of NMD. This Agreement has been duly executed and delivered by NMD and constitutes, and when executed and delivered the other Constituent Documents will constitute, valid and binding obligations of NMD, enforceable against it in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

.No Conflict. Except as set forth on Schedule 4.03 and, solely in the case of clause (b)(i) or (ii), for matters that, individually or in the aggregate, do not have and would not reasonably be expected to have, a Material Adverse Effect on NMD or the Assets or the Operations related thereto, this Agreement and the other Constituent Documents and the execution and delivery hereof and thereof by NMD do not, and the fulfillment and compliance with the terms and conditions hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not: (a)�conflict with any of, or require the consent of any person or entity under, the terms, conditions or provisions of the charter documents or bylaws or equivalent governing instruments of NMD; or (b)�(i)�conflict with any provision of any law or administrative regulation or any judicial, administrative or arbitration order, award, judgment, writ, injunction or decree applicable to NMD or any of the Assets; (ii)�conflict with, result in a breach of, constitute a default under (whether with notice or the lapse of time or both), or accelerate or permit the acceleration of the performance required by, or require any consent, authorization or approval under, any indenture, mortgage or lien, or any agreement, contract, commitment or instrument to which any of NMD is a party or by which it is bound or to which any property constituting any portion of the Assets is subject; (iii)�result in the creation of, or afford any person the right to obtain, any Lien on the Assets or the property or assets constituting any portion of the Assets under any such material indenture, mortgage, lien, agreement, contract, commitment or instrument; or (iv)�result in the revocation, cancellation, suspension, or material modification, individually or in the aggregate, of any Governmental Approval that is necessary or desirable for the ownership, lease or operation of its properties and other assets in the carrying on of the business of Assets as now conducted, including any Governmental Approvals under any applicable Environmental Law.

.Governmental Consents. Except as set forth on Schedule 4.04(a), and except for notice to, or consent of, Governmental Authorities related to the transfer of Environmental Permits, no consent, approval, license, permit, order, or authorization of, or registration, declaration, or filing with (each a Governmental Approval), any court or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality (collectively, Governmental Authorities) is required to be obtained or made by or with respect to NMD or the Assets in connection with:

(i)the execution, delivery, and performance of this Agreement or any other Constituent Documents to which NMD is a party or the consummation of the transactions contemplated hereby or thereby;

(ii)the enforcement against NMD of its obligations under this Agreement or the Constituent Documents to which it is a party; or

(iii)the conduct of the Operations of the Assets immediately following the Closing as was conducted prior to the Closing.

.Laws and Regulations; Litigation. Schedule 4.05 sets forth a list as of the date of this Agreement of all claims, fines, actions, suits, demands, investigations or proceedings or any arbitration or binding dispute resolution proceeding (collectively, Litigation) that are pending or, to NMDs and its affiliates knowledge, threatened against or affecting the Assets and the Operations related thereto (other than Litigation under any Environmental Law, which is the subject of Section 4.07) and that (a)�would, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto, taken as a whole, or (b)�seeks any material injunctive relief. Except as set forth in Schedule 4.05, NMD is not in violation of or in default under any law or regulation or under any order (other than Environmental Laws, which are the subject of Section 4.07) of any Governmental Authority applicable to it except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto. No Litigation is pending or, to the knowledge of NMD, threatened to which NMD is or may become a party that questions or involves the validity or enforceability of the obligations of NMD under this Agreement or the other Constituent Documents or seeks to prevent

or delay, or seeks damages in connection with, the consummation of the transactions contemplated by this Agreement, and which, in either case, has a material and adverse effect on the ability of NMD to consummate the transactions contemplated by this Agreement or any other Constituent Document. Except as set forth on Schedule 4.05, as of the date of this Agreement, there is no Litigation initiated by NMD or its affiliates related to the Assets or the Operations related thereto.

.Management Projections. The projections provided to the Partnership by NMD and/or its affiliates during the Partnerships due diligence review of the Assets and the Operations related thereto in connection with this Agreement were made in good faith and are materially consistent with the expectations of NMDs and/or its affiliates management.

.Environmental.

(a)Except as set forth in Schedule 4.07 or as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on NMD or the Assets or the Operations related thereto: (i) the Assets and the Operations related thereto are in compliance with all applicable Environmental Laws; (ii) to the knowledge of NMD, no circumstances exist with respect to the Assets and the Operations related thereto that give rise to an obligation by NMD to investigate, remediate, monitor or otherwise address the presence, onsite or offsite, of Hazardous Materials under any applicable Environmental Laws, except as is currently being performed under applicable law or permit requirements; (iii) the Assets and the Operations related thereto are not subject to any pending or, to the knowledge of NMD, threatened, claim, action, suit, investigation, inquiry or proceeding, and, to the knowledge of NMD, there is no existing state of facts or circumstances that would be reasonably likely to give rise to any of the foregoing, under any Environmental Law (including, without limitation, designation as a potentially responsible party under CERCLA or any similar local or state law); (iv) all notices, permits, permit exemptions, licenses or similar authorizations, if any, required to be obtained or filed under any Environmental Law in connection with the Assets and the Operations related thereto (the Environmental Permits) have been duly obtained or filed and are valid and currently in full force and effect; (v) there has been no release of any Hazardous Material into the environment by NMD or in connection with the Assets and the Operations related thereto, except in compliance with all applicable Environmental Laws; (vi) there has been no exposure of any person or property to any Hazardous Material in connection with the Assets and the Operations related thereto, except as would not reasonably be expected to give rise to a claim, action, suit or proceeding by or on behalf of such person or property; (vii) NMD has maintained all environmental and operating documents and records associated with the Assets and the Operations related thereto in the manner and for the time periods each Environmental Law requires. Except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto, each of the Environmental Permits is valid and in full force and effect, and no violation thereof has been experienced, noted or recorded and there are no legal proceedings pending or, to the knowledge of NMD, threatened to revoke or limit any of the Environmental Permits.

.Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending against, being contemplated by, or to NMDs knowledge, threatened against NMD.

.Assets. All of the assets, interests and other rights necessary to own the Assets and conduct the Operations related thereto in the manner being conducted or proposed to be conducted, are owned or leased by NMD and constitute a portion of the Assets, except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto. All of the Assets are described in Exhibit A.

.Assets Other than Real Property Interests.

(a)NMD has good and valid title to all Assets (other than real property, which is the subject of Section�4.11), free and clear of all Liens except (i) such as are set forth in Schedule 4.10, (ii) carriers, warehousemens, mechanics, landlords, materialmens, repairmens or other like Liens arising or incurred in the ordinary course of business relating to amounts not yet due and payable or being contested in good faith by appropriate procedures as to which adequate reserves, if any, have been established, Liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in the ordinary course of business and Liens for Taxes that are not due and payable or that may thereafter be paid without penalty, (iii) other imperfections of title or encumbrances, if any, that would not, individually or in the aggregate, materially interfere, or reasonably be expected to materially interfere, with the ordinary operation of the Assets and (iv) Liens created by the Partnership or its successors and assigns (the Liens described in clauses (i), (ii), (iii), and (iv) above are referred to herein collectively as Permitted Liens).

(b)All the Assets which constitute property, plant and equipment comprising a part of the Assets, other than any pickup trucks, has been maintained in accordance with generally accepted industry practice and are in good operating condition and repair, ordinary wear and tear excepted, and adequate for the purposes for which they are currently being (or proposed to be) used or held for use. The East New Mexico Transloading Facility commenced operations on the Commencement Date. This Section 4.10 does not relate to real property or interests in real property, such items being the subject of Section 4.11.

.Title to Real Property.

(a)Other than as set forth to the contrary on Schedule 4.11, the Assets include a valid right and interest to conduct the transloading operations on land whereupon the transloading operations are currently being conducted, which interest is sufficient for the operations of the Assets as such Operations are being conducted on the date of this Agreement (collectively, the Property), free and clear of all Liens except Permitted Liens, and except as would not, individually or in the aggregate, have, or reasonably be expected to have a Material Adverse Effect on the Assets or the Operations related thereto.

(b)Other than as set forth to the contrary on Schedule 4.11, NMD has, and the Assets include, such consents, easements, rights-of-way, permits and licenses (collectively, Rights-of-Way) as are sufficient to operate the Assets as such Assets are being conducted on the date of this Agreement, except as would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto. NMD has fulfilled and performed all its material obligations with respect to such Rights-of-Way and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Assets or the Operations related thereto.

(c)Other than as specifically set forth to the contrary on Schedule�4.11, (i) (A) there are no pending proceedings or actions to modify the zoning classification of, or to condemn or take by power of eminent domain, all or any of the Property and (B) NMD has no knowledge of any such threatened proceeding or action, which (in either case), if pursued, individually or in the aggregate, would have or would reasonably be expected to have a Material Adverse Effect on the Assets or the Operations related thereto, (ii) to the extent located in jurisdictions subject to zoning, the Property is properly zoned for the existence, occupancy and use of the Assets located on the Property, except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect on the Assets or the Operations related thereto, and (iii) none of the Assets are subject to any conditional use permits or permitted non-conforming use or permitted non-conforming structure classifications or similar permits or classifications, except as

would not, either currently or in the case of a rebuilding of or additional construction of improvements, reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Assets or the Operations related thereto.

.Licenses; Permits. NMD has, and the Assets include or will include, all material licenses, permits and authorizations (other than Environmental Permits, which are the subject of Section 4.07) that are necessary for the ownership and operation of the Assets except for those the failure of which to have would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto. NMD has complied in all material respects with all terms and conditions thereof.

.Securities Laws.

(a)NMD acknowledges that upon their issuance, a legend in substantially the following form will be associated with the Newly Issued Common Units:

THESE UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS (ACTS). THE UNITS HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE UNITS UNDER THE ACTS OR AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP THAT SUCH REGISTRATION IS NOT REQUIRED.

(b)Each of NMD and, if applicable, its designee to receive the Newly Issued Common Units is an accredited investor within the meaning of Rule�501(a) under the Securities Act of 1933, as amended (the Securities Act), and the Newly Issued Common Units to be issued to it pursuant to this Agreement are being acquired for NMDs (or its designees) own account and not with a view toward, or for sale in connection with, any distribution thereof except in compliance with applicable United States federal and state securities laws. NMD is aware that no federal or state Governmental Authority has made any finding or determination as to the fairness of an investment in the Newly Issued Common Units nor any recommendation or endorsement with respect thereto. NMD acknowledges that the issuance of the Newly Issued Common Units has not been registered under the Securities Act in reliance on an exemption therefrom.

(c)NMD has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Newly Issued Common Units and is capable of bearing the economic risks of such investment.

.Brokerage Arrangements. NMD has not entered (directly or indirectly) into any agreement with any person, firm or corporation that would obligate the Partnership to pay any commission, brokerage or finder's fee or other fee in connection with this Agreement or the transactions contemplated herein.

.Investment Company. NMD is not, nor immediately after the Closing will be, subject to regulation under the Investment Company Act of 1940, as amended.

.No Adverse Changes. Except as set forth in Schedule 4.16 and for changes in the ordinary course of business or due to matters that generally affect the economy or the industry in which NMD is engaged, since the Commencement Date there have been no changes in the Assets and the Operations related thereto, that would, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto.

.Accurate and Complete Records. The books, ledgers, financial records and other records of NMD relating to the Assets and the Operations thereof:


(a)	are in the possession of NMD;


(b)	have been, in all material respects, maintained in accordance with all applicable laws, rules and regulations and generally accepted standards of practice; and


(c)	are accurate and complete in all material respects.


.	Contracts and Commitments.


(a)	Schedule 4.18 contains a complete and accurate list of all contracts (written or oral), undertakings, commitments or agreements or other instruments (including, without limitation, intercompany contracts) (the NMD Contracts) relating to the ownership and operation of the Assets (other than Assets constituting contracts).

(b)

True copies of the written NMD Contracts, and accurate written summaries of the oral NMD Contracts have been made available to the Partnership. Except as set forth in Schedule 4.18, NMD is not, and to the NMDs knowledge no other party, is in default under, or in breach or violation of (and no event has occurred which, with notice or the lapse of time or both, would constitute a default under, or a breach or violation) any of the NMD Contracts except for defaults, breaches, violations or events which would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations thereof.

(c)

Other than NMD Contracts which have terminated or expired in accordance with their terms, each of the NMD Contracts constitutes valid, binding and enforceable obligations of NMD to the extent it is a party thereto and, to NMDs knowledge, enforceable obligations of any other party thereto, in accordance with its terms (subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered on a proceeding in equity or at law) and an implied covenant of good faith and fair dealing) and is in full force and effect, and no defenses, off-sets or counterclaims have been asserted or, to the knowledge of NMD, threatened by any party thereto, nor has NMD executed any waiver that materially waives any rights thereunder, except as set forth in Schedule 4.18.

.Knowledgeable Investor. NMD and, if applicable, its designee to receive the Newly Issued Common Units, is an experienced and knowledgeable investor. Prior to entering into this Agreement, NMD was advised by independent counsel or relied on its own expertise concerning this Agreement, the other Constituent Documents, the Partnership and its investment in the Newly Issued Common Units (except for the representations and warranties contained in the Constituent Documents) but have independently evaluated the Assets for purposes of entering into and Closing the transactions contemplated by this Agreement and the other Constituent Documents.

.Taxes

. Except as set for in Schedule 4.20, with respect to the Assets, NMD has caused to be filed all tax returns required to be filed on a timely basis (taking into account all legal extensions of due dates); (ii) all such tax returns were complete and correct; (iii) all taxes owed by NMD with respect to the Assets or which are or have become due have been timely paid in full; (iv) there are no Liens on the Assets that arose in connection with any failure (or alleged failure) to pay any tax, other than Liens for taxes not yet due and payable, attributable to the Assets; (v) there is no pending action, proceeding or, to the knowledge NMD, investigation for assessment or proposed with respect to the Assets.

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership hereby represents and warrants to NMD that the following representations and warranties are true and correct:

.Organization and Existence. The Partnership is a limited partnership validly existing and in good standing under the laws of the State of Delaware. The Operating Company is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Texas. Each Partnership Party has full partnership or company, as applicable, power and authority to own and hold the properties and assets it now owns and holds and to carry on its business as and where such properties are now owned or held and such business is now conducted. Each Partnership Party is duly licensed or qualified to do business as a foreign partnership or company, as applicable, and is in good standing in the states in which the character of the properties and assets now owned or held by it or the nature of the business now conducted by it requires it to be so licensed or qualified, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Partnership Parties.

.Authority and Approval. Each of the Partnership Parties has the partnership or company, as applicable, power and authority to execute and deliver this Agreement and the other Constituent Documents, to consummate the transactions contemplated hereby and thereby and to perform all the terms and conditions hereof and thereof to be performed by it. The execution and delivery by the Partnership Parties of this Agreement and the other Constituent Documents, the performance by the Partnership Parties of all the terms and conditions hereof and thereof to be performed by them and the consummation of the transactions contemplated hereby and thereby have been duly authorized and approved by all requisite partnership or company action of the Partnership Parties. This Agreement constitutes, and when executed the other Constituent Documents will constitute, valid and binding obligations of the Partnership Parties enforceable in accordance with their terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting enforcement of creditors rights generally and by general principles of equity (whether applied in a proceeding at law or in equity).

.Brokerage Arrangements. None of the Partnership nor any of its affiliates have entered (directly or indirectly) into any agreement with any person, firm or corporation that would obligate NMD or any of its affiliates to pay any commission, brokerage or finder's fee or other fee in connection with this Agreement or the transactions contemplated herein.

.Newly Issued Common Units. Upon issuance at the Closing, the Newly Issued Common Units will be validly issued, fully paid (to the extent required under the Partnership Agreement) and non-assessable (except as such non-assessability may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware Revised Limited Partnership Act) and free of any preemptive or similar rights. The Partnerships Common Units are listed on NASDAQ, and the Partnership has not received any notice of delisting. At the Closing, the Newly Issued Common Units will have those rights, preferences, privileges and restrictions governing common units as set forth in the Partnership Agreement. With respect to the Newly Issued Common Units, NMD shall have the same registration rights that it currently has related to its currently owned units in the Partnership as set forth in the Partnership Agreement.

.SEC Filings. Since July 31, 2013, (a) the Partnership has made all filings on Form 10-K and Form 10-Q required to be made by the Securities Act and the Exchange Act, (b) all filings (other than Form

8-K filings) by the Partnership with the Securities and Exchange Commission (the SEC), at the time filed (in the case of documents filed pursuant to the Exchange Act) or when declared effective by the SEC (in the case of registration statements filed under the Securities Act) complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act, (c) no such filing, at the time described above, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, and (d) all financial statements contained or incorporated by reference therein complied as to form when filed in all material respects with the rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP (except as may be indicated in the notes thereto), and fairly presented in all material respects the financial condition and results of operations of the Partnership at and as of the respective dates thereof and the consolidated results of its operations and changes in cash flows for the periods indicated (subject in the case of unaudited statements, to normal year-end audit adjustments).

.Delivery of Opinion. Simmons & Company, the financial advisor to the Conflicts Committee, has delivered its opinion to the Conflicts Committee that the Consideration to be paid by the Partnership for the Assets is fair to the Partnership and its common unitholders (other than the General Partner and its affiliates) from a financial point of view.

.No Conflicts. Except as set forth on Schedule 5.07 and, solely in the case of clause (b)(i) or (ii), for matters that, individually or in the aggregate, do not have and could not reasonably be expected to have, a Material Adverse Effect on the Partnership Parties and their ability to consummate the transactions contemplated herein will not: (a)�conflict with any of, or require the consent of any person or entity under, the terms, conditions or provisions of the charter documents or bylaws or equivalent governing instruments of such Partnership Party; or (b)�(i)�conflict with any provision of any law or administrative regulation or any judicial, administrative or arbitration order, award, judgment, writ, injunction or decree applicable to such Partnership Party; (ii)�conflict with, result in a breach of, constitute a default under (whether with notice or the lapse of time or both), or accelerate or permit the acceleration of the performance required by, or require any consent, authorization or approval under, any indenture, mortgage or lien, or any agreement, contract, commitment or instrument to which such Partnership Party is a party or by which it is bound or to which any property of such Partnership Party is subject; or (iii)� result in the revocation, cancellation, suspension, or material modification, individually or in the aggregate, of any Governmental Approval that is necessary or desirable for the ownership, lease or operation of its properties and other assets in the carrying on of the businesses and operations of such Partnership Party as now conducted, including any Governmental Approvals under any applicable Environmental Law.

.Financial Capacity. The Partnership Parties have the financial capacity and resources to proceed to the Closing and to meet all their obligations as set forth in this Agreement.

.Knowledgeable Investor. The Partnership, through its General Partner and the affiliates thereof, is an experienced and knowledgeable investor and an experienced operator in the oil and gas business, including transloading of crude petroleum. Prior to entering into this Agreement, the Partnership was advised by independent counsel and has relied on its own expertise, through its General Partner and the affiliates thereof, concerning this Agreement, the Assets and the value thereof (except for the representations and warranties contained in the Constituent Documents) but have independently evaluated the Assets for purposes of entering into and Closing this transaction.

.No Registration.��Assuming the accuracy of the representations and warranties of NMD contained in Section 4.13, and subject to the other terms and conditions contained in this Agreement, the issuance of the Newly Issued Common Units pursuant to this Agreement is exempt from registration

requirements of the Securities Act, and neither the Partnership nor, to the knowledge of the Partnership, any authorized representative acting on its behalf has taken or will take any action hereafter that would cause the loss of such exemption. Neither the Partnership nor any of its subsidiaries have, directly or indirectly through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) that is or will be integrated with the issuance of the Newly Issued Common Units in a manner that would require registration under the Securities Act.

.Securities Laws.

(a)

The Partnership is an accredited investor within the meaning of Rule 501(a) under the Securities Act, and, to the Partnerships knowledge and in accordance with Section 4.13(b), the Assets acquired pursuant to this Agreement is being acquired for the Partnerships (or its designees) own account and not with a view toward, or for sale in connection with, any distribution thereof except in compliance with applicable United States federal and state securities laws. The Partnership is aware that no Governmental Authority has made any finding or determination as to the fairness of an investment in the Assets, nor any recommendation or endorsement with respect thereto. The Partnership acknowledges that the acquisition of its investment in the Assets has not been registered under the Securities Act in reliance on an exemption therefrom.


(b)	The Partnership has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of, and is capable of bearing the economic risks of, its investment in the Assets.

ARTICLE VI ADDITIONAL AGREEMENTS, COVENANTS, RIGHTS AND OBLIGATIONS


.	Certain Changes

.. Except as set forth on Schedule 6.01, and subject to Section 6.03, without first obtaining the written consent of the Partnership (which consent will not be unreasonably withheld, conditioned or delayed), from the date hereof until the Closing Date, NMD covenants that it shall:


(a)	not make any material change in the conduct of the Operations relating to the Assets;


(b)	maintain and preserve the business and operation of the Assets intact;


(c)	not terminate or amend or otherwise modify in any material respect any NMD Contract;


(d)	enforce all its rights under each NMD Contract;


(e)	not sell, lease or otherwise dispose of any portion of the Assets;


(f)	not permit any portion of the Assets to become subjected to any Lien, other than Permitted Liens; or


(g)	commit or agree, whether in writing or otherwise, to do any of the foregoing.

.Operations. Other than as provided in this Agreement, NMD will:

(a)maintain the tangible assets constituting any portion of the Assets in as good working order and condition as of the date hereof, ordinary wear and tear excepted;

(b)maintain and preserve the Operations of the Assets;

(c)advise the Partnership promptly in writing of any event or proposed change that would cause a material change in any document, schedule or other information delivered pursuant to this Agreement;

(d)file on a timely basis all notices, reports or other filings necessary or required for the continuing operation of the Assets to be filed with or reported to any Governmental Authority; and

(e)file on a timely basis all complete and correct applications or other documents necessary to maintain, renew or extend any permit, variance or any other approval required by any

Governmental Authority necessary or required for the continuing operation of the Assets whether or not such approval would expire before or after the Closing Date.

.Access. NMD will afford to the Partnership and its counsel, financial advisors, auditors and other authorized representatives (Representatives) reasonable access to financial, title, tax, corporate and legal materials and operating data and information available applicable or relating to the Assets as of the date hereof and which becomes available to NMD at any time prior to the Closing Date, and will furnish to the Partnership such other information as it may reasonably request, unless any such access and disclosure would violate the terms of any agreement to which NMD is bound or any applicable law or regulation, or jeopardize the availability of any privilege. NMD will use its reasonable best efforts to secure all requisite consents for the examination by the Partnership and its Representatives of all information covered by confidentiality agreements or other confidentiality provisions and will promptly communicate to the Partnership or its Representatives the substance of any such information, whether by redacting parts thereof or otherwise, so that disclosure would not violate any such confidentiality arrangements or cause the loss of the privilege with respect thereto, and otherwise shall make all reasonable and appropriate substitute disclosure arrangements. NMD will allow the Partnership access to and consultation with the lawyers, accountants, and other professionals employed by or used by NMD for all purposes under this Agreement or any Constituent Document. Any such consultation shall occur under circumstances appropriate to maintain intact the attorney-client privilege as to privileged communications and attorney work product. Additionally, NMD will afford to the Partnership and its Representatives reasonable access to the books and records of NMD insofar as they relate to the Assets. Until the Closing Date, the confidentiality of any data or information so acquired shall be maintained by the Partnership and its Representatives. Further, NMD will afford to the Partnership and its Representatives reasonable access from the date hereof until the Closing Date, during normal business hours, to the Assets; provided that such access shall be at the sole cost, expense and risk of the Partnership.

.Reasonable Best Efforts.

(a)NMD shall and the Partnership shall (and shall cause each Partnership Party to), use their reasonable best efforts (i) to obtain all approvals and consents required by or necessary for the transactions contemplated by this Agreement, (ii) to ensure that all of the conditions to the obligations of the Partnership and NMD contained in Sections�7.01 and 7.02, respectively, are satisfied timely and (iii) to either prior to or as promptly as practicable after Closing substitute the Partnership for NMD or its affiliates as a guarantor with respect to the items set forth on Schedule�6.04 (Replacement Guarantees). The Partnership shall indemnify and hold harmless NMD and its affiliates from and against any and all Damages arising from or relating to any item set forth on Schedule�6.04 that is not either released or expired in accordance with its terms.

(b)Each of the Partnership and NMD acknowledges that certain actions may be necessary with respect to the matters and actions contemplated by this Section 6.04 such as making notifications and obtaining consents or approvals or other clearances that are material to the consummation of the transactions contemplated hereby, and each of the Partnership and NMD agree to take such action as is reasonably necessary to complete such notifications and obtain such consents or approvals or other clearances, including causing their affiliates to use such best efforts; provided, however, that nothing in this Section 6.04 or elsewhere in this Agreement shall require any Party (or its affiliates) to hold separate or make any divestiture of any asset or otherwise agree to, and no consents or approvals or other clearances shall be deemed to be obtained for purposes of this Agreement if such consent or approval or other clearance contains any restriction on their operations or other materially burdensome condition which would in any such case be material to the assets, liabilities or business of NMD, the Partnership, or any of their respective subsidiaries in order to obtain any consent or approval or other clearance required by this Agreement; provided, further, that it being

understood that such reasonable actions shall not include any requirement to offer or grant financial accommodations to any third party or to remain secondarily liable with respect to any liability.

�

.Schedules. At any time at least three (3) days prior to the scheduled Closing Date agreed to by the Parties, NMD shall have the right (and the obligation) to update or amend in any respect their disclosure of any matter set forth or permitted to be set forth in the schedules hereto, including the addition of new schedules hereto. Any such update or amendment will not diminish the Partnerships right to terminate this Agreement pursuant to Section 8.01(c) and will not be deemed to cure any breaches of representations or warranties for purposes of determining the satisfaction of the condition set forth in Section 7.01(a), and no such update or amendment will in any way diminish the right or ability of the Partnership or any other Party to bring a claim or otherwise seek recourse against NMD, under ARTICLE X INDEMNIFICATION of this Agreement or otherwise, for any breach by NMD of any representation, warranty, covenant, agreement or condition of this Agreement.

.Release of Liens. NMD shall provide to the Partnership a release of all Liens set forth on Schedule 6.06, which release shall be in a form reasonably acceptable to the Partnership.

.Non-Compete

.. Without the prior written consent of the Partnership, which consent may be withheld in the Partnerships sole and absolute discretion, NMD will not, and will cause its affiliates (other than the Partnership Parties) not to, own, finance, invest in (directly or indirectly), render services to or operate a competing crude oil transloading facility within a 25 mile radius of the East New Mexico Transloading Facility; provided, however, that NMD may own and operate any ladder transloading equipment or any storage tanks currently or in the future situated at the East New Mexico Transloading Facility. NMD acknowledges that (i) the provisions of this Section 6.07 are reasonable and necessary to protect the legitimate interests of the Partnership Parties; (ii) any violation of this Section 6.07 may result in irreparable injury to the Partnership Parties; and (iii) in the event of violation of this Section 6.07, the Partnership Parties will be entitled to seek injunctive relief in accordance with this Agreement. In the event that this Section 6.07 should ever be deemed to exceed the time, geographic, product or any other limitations permitted by law, such provisions will be deemed reformed to the maximum extent permitted by law.

ARTICLE VII CONDITIONS TO CLOSING

.Conditions to the Obligation of the Partnership. The obligation of the Partnership to proceed with the Closing contemplated hereby is subject to the satisfaction on or prior to the Closing Date of all of the following conditions, any one or more of which may be waived in writing, in whole or in part, by the Partnership:

(a)The representations and warranties of NMD made in this Agreement shall be true and correct (without giving effect to any materiality, Material Adverse Effect, monetary or similar qualifications) as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct, on and as of such earlier date) except for such breaches, violations and/or inaccuracies that would not or could not reasonably be expected to have (individually or in the aggregate) a Material Adverse Effect on the Assets or the Operations related thereto. NMD shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by NMD by the time of the Closing. NMD shall have delivered to the Partnership a certificate dated the Closing

Date and signed by an authorized officer of NMD confirming the foregoing matters set forth in this Section 7.01(a).

(b)All necessary filings with and consents of any Governmental Authority required for the consummation of the transactions contemplated in this Agreement shall have been made and obtained, and all waiting periods with respect to filings made with Governmental Authorities in contemplation of the consummation of the transactions described herein shall have expired or been terminated.

(c)All necessary consents, waivers, conditions precedent or similar transfer restrictions held by or to be granted by any third party, other than any Governmental Authority, required for the consummation of the transactions contemplated in this Agreement shall have been made and obtained, except where the failure to obtain such consents, waivers, conditions precedent or similar transfer restrictions would not, individually or in the aggregate, have, or reasonably be expected to have, a Material Adverse Effect on the Assets or the Operations related thereto.

(d)No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Authority, or other legal restraint or prohibition preventing the consummation of the transactions contemplated hereby shall be in effect.

(e)There shall be no Material Adverse Effect on the Assets or the Operations related thereto.

(f)The Guaranty shall be in full force and effect and shall cover the ENM-AES Transloading Agreement, among other agreements.

.Conditions to the Obligation of NMD. The obligation of NMD to proceed with the Closing contemplated hereby is subject to the satisfaction on or prior to the Closing Date of all of the following conditions, any one or more of which may be waived in writing, in whole or in part, by NMD:

(a)The representations and warranties of the Partnership made in this Agreement shall be true and correct, as of the date hereof and as of the time of the Closing as though made as of such time, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality or Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date) except for such breaches, violations and/or inaccuracies, that would not or could not reasonably be expected to have (individually or in the aggregate) a Material Adverse Effect on any Partnership Party or adversely affect the ability of the Partnership to consummate the transactions contemplated hereby. The Partnership shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Partnership by the time of the Closing. The Partnership shall have delivered to NMD a certificate dated the Closing Date and signed by an authorized officer of the general partner of the Partnership confirming the foregoing matters set forth in this Section 7.02(a).

ARTICLE VIII TERMINATION

.Events of Termination. This Agreement may be terminated at any time prior to the Closing Date:

(a)by mutual written consent of the Partnership and NMD;

(b)by either the Partnership or NMD in writing after September 30, 2014 (the Outside Date) if the Closing has not occurred by such date and, as of such date, the terminating Party and its affiliates are not otherwise in material default or breach of this Agreement, or have not failed or refused to close without justification hereunder;

(c)by either the Partnership or NMD in writing without prejudice to other rights and remedies which the terminating Party or its affiliates may have (provided the terminating Party and its affiliates are not otherwise in material default or breach of this Agreement, or have not failed or refused to close without justification hereunder), if such other Party or its affiliates shall have (i)� failed to perform its covenants or agreements contained herein required to be performed on or prior to the Closing Date, or (ii)� breached any of its representations or warranties contained herein; provided, however, that in the case of clause (i) or (ii), such breach was of such a degree that the other Party would have the right to refuse to close pursuant to ARTICLE VII CONDITIONS TO CLOSING if closing were to occur at such time; provided further that the defaulting Party shall have a period of ten (10) days following written notice from the non-defaulting Party to cure any breach of this Agreement, if such breach is curable;

(d)by either the Partnership or NMD in writing, without liability, if there shall be any order, writ, injunction or decree of any Governmental Authority binding on any Partnership Party or NMD, which prohibits or restrains the Partnership or NMD from consummating the transactions contemplated hereby; provided that the Partnership and NMD shall have used their reasonable best efforts to have any such order, writ, injunction or decree lifted and the same shall not have been lifted within 30 days after entry by any such Governmental Authority;

(e)by NMD if any of the conditions set forth in Section 7.02 shall have become incapable of fulfillment, and shall not have been waived by NMD; or

(f)by the Partnership if any of the conditions set forth in Section 7.01 shall have become incapable of fulfillment, and shall not have been waived by the Partnership.

.Effect of Termination. In the event of the termination of this Agreement by a Party, as provided in Section 8.01 above, this Agreement shall thereafter become void except for this Section 8.02, Section 11.01 and Section 11.03 hereof. Nothing in this Section 8.02 shall be deemed to release either Party from any liability for any willful, material breach by such Party of the terms and provisions of this Agreement or to impair the right of either Party to compel specific performance by the other Party of its obligations under this Agreement.

ARTICLE IX INVESTIGATION; LIMITATIONS

.Independent Investigation. Each of NMD and the Partnership acknowledges that in making the decision to enter into this Agreement and to consummate the transactions contemplated hereby, it has relied solely on its own independent investigation of the Assets, and upon the express written representations, warranties and covenants in the Constituent Documents. Without diminishing the scope of the express written representations, warranties and covenants of the Parties in this Agreement and without affecting or impairing its right to rely thereon, EACH SUCH PERSON ACKNOWLEDGES THAT THE OTHER PERSON HAS NOT MADE, AND THE OTHER PERSON HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THE ASSETS OR THE PARTNERSHIP, AS APPLICABLE, AND THE OPERATIONS THEREOF (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS).

.Survival.

(a)The liability of NMD for the breach of any of the representations and warranties set forth in ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NMD shall be limited to claims for which the Partnership delivers written notice to NMD on or before the date that is eighteen (18) months after the Closing Date; provided, however, that (i)�the representations and warranties set forth in Sections 4.07 and 4.11 shall be limited to claims for which the Partnership delivers written notice to NMD on or before the second anniversary date of the Closing Date, and (ii)�the representations and warranties set forth in Sections 4.01, 4.02, 4.03, 4.13, and 4.14 shall not be limited as to time other than the applicable statute of limitations.

(b)The liability of the Partnership for the breach of any of the representations and warranties of the Partnership set forth in ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP shall be limited to claims for which NMD delivers written notice to the Partnership on or before the second anniversary date of the Closing Date; provided, however, that the representations and warranties set forth in Sections 5.01, 5.02, 5.03, 5.04, 5.05, 5.06 and 5.11 shall not be limited as to time other than the applicable statute of limitations.

(c)Notwithstanding the foregoing, a representation and warranty shall not expire with respect to any claim made for a breach or inaccuracy thereof prior to the expiration date of the applicable survival period until such claim is finally resolved.

ARTICLE X INDEMNIFICATION

.Indemnification of NMD. Solely for the purpose of indemnification in this Section 10.01, the representations and warranties of the Partnership in this Agreement shall be deemed to have been made without regard to any materiality or Material Adverse Effect qualifiers. The Partnership, from and after the Closing Date, shall indemnify and hold NMD and its affiliates, directors, officers, employees, agents, representatives and insurers (collectively, the NMD Indemnified Parties) harmless from and against any and all damages (including exemplary damages and penalties), losses, deficiencies, costs, expenses, obligations, fines, expenditures, claims and liabilities, including reasonable counsel fees and reasonable expenses of investigation, defending and prosecuting litigation (collectively, the Damages), suffered by the NMD Indemnified Parties as a result of, caused by, arising out of, or in any way relating to (a) subject to Section 9.02 and Section�10.08, any breach of a representation or warranty of the Partnership in this Agreement or in any certificate delivered hereunder and (b) any breach of any agreement or covenant in this Agreement on the part of the Partnership.

.Indemnification of the Partnership. Solely for the purpose of indemnification in this Section 10.02, the representations and warranties of NMD in this Agreement shall be deemed to have been made without regard to any materiality or Material Adverse Effect qualifiers. NMD, from and after the Closing, shall indemnify and hold the Partnership and its affiliates, directors, officers, employees, agents, representatives and insurers (together with the Partnership, the Partnership Indemnified Parties) harmless from and against any and all Damages suffered by the Partnership Indemnified Parties as a result of, caused by, arising out of, or in any way relating to (a) subject to Section 9.02 and Section 10.08, any breach of a representation or warranty of NMD in this Agreement or in any certificate delivered hereunder, and (b) any breach of any agreement or covenant in this Agreement on the part of NMD under this Agreement.

.Demands. Each indemnified party hereunder agrees that promptly upon its discovery of facts giving rise to a claim for indemnity under the provisions of this Agreement, including receipt by it of notice of any demand, assertion, claim, action or proceeding, judicial or otherwise, by any third party (such third party actions being collectively referred to herein as the Indemnity Claim), with respect to any matter as to which it claims to be entitled to indemnity under the provisions of this Agreement, it will give prompt notice thereof in writing to the indemnifying party, together with a statement of such information respecting any of the foregoing as it shall have. Such notice shall include a formal demand for indemnification under this Agreement. If the indemnified party knowingly failed to notify the indemnifying party thereof in accordance with the provisions of this Agreement in sufficient time to permit the indemnifying party or its counsel to defend against such matter and to make a timely response thereto including, without limitation, any responsive motion or answer to a complaint, petition, notice or other legal, equitable or administrative process relating to the Indemnity Claim, the indemnifying partys indemnity obligation relating to such Indemnity Claim shall be limited to the extent that such knowing failure to notify the indemnifying party has actually resulted in material prejudice or damage to the indemnifying party.

.Right to Contest and Defend. The indemnifying party shall be entitled at its cost and expense to contest and defend by all appropriate legal proceedings any Indemnity Claim with respect to which it is called upon to indemnify the indemnified party under the provisions of this Agreement; provided, that notice of the intention to so contest shall be delivered by the indemnifying party to the indemnified party within 20 days from the date of receipt by the indemnifying party of notice by the indemnified party of the assertion of the Indemnity Claim. Any such contest may be conducted in the name and on behalf of the indemnifying party or the indemnified party as may be appropriate. Such contest shall be conducted and prosecuted diligently to a final conclusion or settled in accordance with this

Section 10.04 by reputable counsel employed by the indemnifying party and not reasonably objected to by the indemnified party, but the indemnified party shall have the right but not the obligation to participate in such proceedings and to be represented by counsel of its own choosing at its sole cost and expense. The indemnifying party shall have full authority to determine all action to be taken with respect thereto; provided, however, that the indemnifying party will not have the authority to subject the indemnified party to any obligation whatsoever, other than the performance of purely ministerial tasks or obligations not involving material expense. If the indemnifying party does not elect to contest any such Indemnity Claim or elects to contest such Indemnity Claim but fails diligently and promptly to prosecute or settle such claim, the indemnified party shall assume the defense of the Indemnity Claim and the indemnifying party shall be bound by the result obtained with respect thereto by the indemnified party. If the indemnifying party shall have assumed the defense of an Indemnity Claim, the indemnified party shall agree to any settlement, compromise or discharge of an Indemnity Claim that the indemnifying party may recommend and that by its terms (a) obligates the indemnifying party to pay the full amount of the liability in connection with such Indemnity Claim, (b) releases the indemnified party completely in connection with such Indemnity Claim and (c) would not otherwise adversely affect the indemnified party.

Notwithstanding the foregoing, the indemnifying party shall not be entitled to assume the defense of any Indemnity Claim (and shall be liable for the reasonable fees and expenses of counsel incurred by the indemnified party in defending such Indemnity Claim) if the Indemnity Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the indemnified party which the indemnified party reasonably determines, after conferring with its outside counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Indemnity Claim can be so separated from that for money damages, the indemnifying party shall be entitled to assume the defense of the portion relating to money damages.

.Cooperation. If requested by the indemnifying party, the indemnified party agrees to cooperate with the indemnifying party and its counsel in contesting any Indemnity Claim that the indemnifying party elects to contest or, if appropriate, in making any counterclaim against the person asserting the Indemnity Claim, or any cross-complaint against any person, and the indemnifying party will reimburse the indemnified party for any expenses incurred by it in so cooperating. At no cost or expense to the indemnified party, the indemnifying party shall cooperate with the indemnified party and its counsel in contesting any Indemnity Claim.

.Right to Participate. The indemnified party agrees to afford the indemnifying party and its counsel the opportunity to be present at, and to participate in, conferences with all persons, including Governmental Authorities, asserting any Indemnity Claim against the indemnified party or conferences with representatives of or counsel for such persons.

.Payment of Damages. The indemnification required hereunder shall be made by periodic payments of the amount thereof during the course of the investigation or defense, within ten (10) days following the date of delivery of reasonably specific bills or the date Damages are incurred and reasonable evidence thereof is delivered. In calculating any amount to be paid by an indemnifying party by reason of the provisions of this Agreement, the amount shall be reduced by an amount equal to any insurance proceeds actually received by the indemnified party related to the Damages, less any related costs and expenses, including the aggregate cost of pursuing any related insurance claims and any related chargebacks (it being agreed that no Party shall have any obligation to seek to recover any insurance proceeds and that, promptly after the realization of any insurance proceeds, the indemnified party shall reimburse the indemnifying party for such reduction in Damages for which the indemnified party was indemnified prior to the realization of reduction of such Damages).

.Limitations on Indemnification.

(a)To the extent the Partnership Indemnified Parties are entitled to indemnification for Damages pursuant to Section 10.02(a), NMD shall not be liable for such Damages unless the aggregate amount of such Damages exceeds 5% of the Consideration (the Deductible), and then only to the extent of any such excess.

(b)In addition, to the extent the Partnership Indemnified Parties are entitled to indemnification for Damages pursuant to Section 10.02(a), NMD shall not be liable for Damages that exceed, in the aggregate, 80% of the Consideration (the Indemnification Limit).

(c)Notwithstanding Sections 10.08(a) and 10.08(b) above, to the extent the Partnership Indemnified Parties are entitled to indemnification for Damages�pursuant to Section 10.02(a) (i) as it relates solely to Sections 4.01, 4.02, 4.03(a), 4.13 and 4.14 or (ii) for claims arising from actual fraud, NMD shall be fully liable for such Damages without respect to the Deductible in Section 10.08(a) and the Indemnification Limit in Section 10.08(b).

(d)To the extent the NMD Indemnified Parties are entitled to indemnification for Damages pursuant to Section 10.01(a), the Partnership shall not be liable for Damages unless the aggregate amount of such Damages exceeds, in the aggregate, the Deductible, and then only to the extent of any such excess.

(e)In addition, to the extent the NMD Indemnified Parties are entitled to indemnification for Damages pursuant to Section 10.01(a), the Partnership shall not be liable for such Damages that exceed, in the aggregate, the Indemnification Limit.

(f)Notwithstanding Sections 10.08(d) and 10.08(e) above, to the extent the NMD Indemnified Parties are entitled to indemnification for Damages pursuant to Section 10.01(a) (i) as it relates solely to Sections 5.01, 5.02, 5.03, 5.04, 5.05 and 5.06 or (ii) for claims arising from actual fraud, the Partnership shall be fully liable for such Damages without respect to the Deductible in Section 10.08(d) and the Indemnification Limit in Section 10.08(e).

.Sole Remedy. After the Closing, no Party shall have any liability to any other Party under this Agreement or the transactions contemplated hereby except as is provided in ARTICLE IX INVESTIGATION; LIMITATIONS or this ARTICLE X INDEMNIFICATION (other than claims or causes of action arising from actual fraud).

.Express Negligence Rule. THE INDEMNIFICATION AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS AGREEMENT HAVE BEEN EXPRESSLY NEGOTIATED IN EVERY DETAIL, ARE INTENDED TO BE GIVEN FULL AND LITERAL EFFECT, AND SHALL BE APPLICABLE WHETHER OR NOT THE LIABILITIES, OBLIGATIONS, CLAIMS, JUDGMENTS, LOSSES, COSTS, EXPENSES OR DAMAGES IN QUESTION WERE FORESEEABLE, ARISE OR AROSE SOLELY OR IN PART FROM THE GROSS, ACTIVE, PASSIVE OR JOINT OR CONCURRENT NEGLIGENCE, CONTRACTUAL COMPARATIVE NEGLIGENCE, STRICT LIABILITY, NO-FAULT OR OTHER FAULT OF ANY INDEMNIFIED PARTY. THE PARTNERSHIP, AND NMD ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND CONSTITUTES CONSPICUOUS NOTICE. NOTICE IN THIS CONSPICUOUS NOTICE IS NOT INTENDED TO PROVIDE OR

ALTER THE RIGHTS AND OBLIGATIONS OF THE PARTIES, ALL OF WHICH ARE SPECIFIED ELSEWHERE IN THIS AGREEMENT.

ARTICLE XI MISCELLANEOUS

.Expenses. Except as otherwise set forth herein, each Party shall pay its own expenses incident to this Agreement and all action taken in preparation for carrying this Agreement into effect.

.Notices. Any notice, request, instruction, correspondence or other document to be given hereunder by a Party to any other Party (herein collectively called Notice) shall be in writing and delivered in person or by courier service requiring acknowledgment of receipt of delivery or mailed by certified mail, postage prepaid and return receipt requested, or by facsimile, as follows:

If to NMD, addressed to:

NuDevco Midstream Development, LLC��

2105 CityWest Blvd., Suite 100��

Houston, Texas 77042��

Attention: Chief Executive Officer

Facsimile: [________]

Phone:�� (713) 977-5641��

with a copy, which will not constitute Notice, to:

NuDevco Midstream Development, LLC��

2105 CityWest Blvd., Suite 100��

Houston, Texas 77042��

Attention: Executive Vice President

& General Counsel

Facsimile: (281) 833-4815

If to the Partnership Parties, addressed to:

Marlin Midstream Partners, LP

c/o Marlin Midstream GP, LLC

2105 CityWest Blvd., Suite 100��

Houston, Texas 77042��

Attention: Chief Executive Officer

Facsimile: (832) 200-3775��

with a copy, which will not constitute Notice, to:

Marlin Midstream GP, LLC

2105 CityWest Blvd., Suite 100��

Houston, Texas 77042��

Attention: Conflicts Committee Chairman

Facsimile: [_________]

�

Notice given by personal delivery, courier service or facsimile shall be effective upon actual receipt. Notice given by mail shall be effective at the close of business on the third business day next following the day when placed in the mail, certified, with postage prepaid and return receipt requested, appropriately addressed. Any Party may change any address to which Notice is to be given to it by giving Notice as provided above of such change of address.

.Governing Law. This Agreement shall be governed and construed in accordance with the substantive laws of the State of Texas without reference to principles of conflicts of law that would result in the application of the laws of another jurisdiction.

.Public Statements. The Parties shall consult with each other and no Party shall issue any public announcement or statement with respect to the transactions contemplated hereby without the consent of the other Parties, which shall not be unreasonably withheld or delayed, unless the Party desiring to make such announcement or statement, after seeking such consent from the other Parties, obtains advice from legal counsel that a public announcement or statement is required by applicable law or stock exchange regulations.

.Form of Payment. All payments hereunder shall be made in United States dollars and, unless the Parties making and receiving such payments shall agree otherwise or the provisions hereof provide otherwise, shall be made by wire or interbank transfer of immediately available funds by 12:00�Noon Houston, Texas time on the date such payment is due to such account as the Party receiving payment may designate at least three (3) business days prior to the proposed date of payment.

.Entire Agreement; Amendments and Waivers. The Constituent Documents (a) constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof and (b) are not intended to confer upon any other person or entity any rights or remedies hereunder except as ARTICLE X INDEMNIFICATION contemplates or except as otherwise expressly provided herein. Each Party to this Agreement agrees that (i) no other Party to this Agreement (including its agents and representatives) has made any representation, warranty, covenant or agreement to or with such Party relating to this Agreement or the transactions contemplated hereby, other than those expressly set forth in this Agreement or any other Constituent Document, and (ii)�such Party has not relied upon any representation, warranty, covenant or agreement relating to this Agreement or the transactions contemplated hereby, other than those expressly set forth in this Agreement or any other Constituent Document. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by each Party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly provided.

.Binding Effect and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns; but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or otherwise, by any Party without the prior written consent of the other Parties; provided, that the Partnership may assign its right to receive the Assets to any direct or indirect subsidiary of the Partnership.

.Severability. If any provision of the Agreement is rendered or declared illegal or unenforceable by reason of any existing or subsequently enacted legislation or by decree of a court of last

resort, NMD and the Partnership shall promptly meet and negotiate substitute provisions for those rendered or declared illegal or unenforceable, but all of the remaining provisions of this Agreement shall remain in full force and effect and will not be affected or impaired in any way thereby.

.Interpretation. The Parties agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document.

.Headings and Schedules. The headings of the several Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. The Schedules referred to herein are attached hereto and incorporated herein by this reference, and unless the context expressly requires otherwise, such Schedules are incorporated in the definition of Agreement.

.Multiple Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The signatures of all of the Parties need not appear on the same counterpart, and delivery of an executed counterpart signature page by facsimile or by e-mail in portable document format PDF, is as effective as executing and delivering this Agreement in the presence of the other Parties to this Agreement. This Agreement is effective upon delivery of one executed counterpart from each Party to the other Parties.

.Action by the Partnership. With respect to any notice, consent, approval or waiver that is required to be or may be taken or given by the Partnership (i) pursuant to the terms of this Agreement on or prior to the Closing Date or (ii) pursuant to Section 2.01 and ARTICLE X INDEMNIFICATION of this Agreement after the Closing Date, such notice, consent, approval or waiver shall be taken or given by the Conflicts Committee on behalf of the Partnership.

.No Recourse to Non-Parties. For the avoidance of doubt and notwithstanding anything herein to the contrary, the provisions of this Agreement shall not give rise to any right of recourse against any officer, director, manager or affiliate of the Parties, or any of their respective affiliates, other than the Parties.

.Construction.� The word including shall mean including without limitation. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and vice versa. All references herein to Exhibits, Schedules, Articles, Sections or subdivisions thereof shall refer to the corresponding Exhibits, Schedules, Article, Section or subdivision thereof of this Agreement unless specific reference is made to such exhibits, articles, sections or subdivisions of another document or instrument. The terms herein, hereby, hereunder, hereof, hereinafter, and other equivalent words refer to this Agreement in its entirety and not solely to the particular portion of the Agreement in which such word is used.� The words shall and will are used interchangeably throughout this Agreement and shall accordingly be given the same meaning, regardless of which word is used.� Except to the extent expressly provided to the contrary, references to a Party include its permitted successors and assigns.� Except to the extent expressly provided to the contrary, references to any agreement, contract or other instrument, means such agreement, contract or other instrument as amended, restated or otherwise modified from time to time in accordance with its terms. Each certificate delivered pursuant to this Agreement shall be deemed a part hereof, and any representation, warranty or covenant herein referenced or affirmed in such certificate shall be treated as a representation, warranty or covenant given in the correlated Section hereof on the date of such certificate.� Additionally, any representation, warranty or covenant made in any such certificate shall be deemed to be made herein.� Except

as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time.

* * * * *

(Signatures on Following Page)

SIGNATURE PAGE TO CONTRIBUTION AGREEMENT

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this date hereof.

Partnership:��NMD:��

MARLIN MIDSTREAM ��NUDEVCO MIDSTREAM

PARTNERS, LP��DEVELOPMENT, LLC

By: ��Marlin Midstream GP, LLC,

its General Partner

By: /s/ Mandy Bush��By: /s/ W. Keith Maxwell III

Name: Mandy Bush��Name: W. Keith Maxwell III

Title: Vice President & CFO��Title: Chief Executive Officer

��

Schedules

Schedule 4.03 - No Conflict

None.

Schedule 4.04 - Governmental Approvals


1.	At Closing, Marlin Logistics, LLC or another designee of Marlin Midstream Partners, LP that will own the East New Mexico Transloading Facility, will need to file a Spill Prevention, Control, and Countermeasure (SPCC) Plan covering such facility.

Schedule 4.05 - Laws and Regulations; Litigation

None

Schedule 4.07 - Environmental

See Schedule 4.04.

Schedule 4.10 - Assets Other Than Real Property Interests

None

Schedule 4.11 - Title to Real Property

None

Schedule 4.16��- Adverse Changes

None

Schedule 4.18 - NMD Contracts


A.	Master Terminal Services Agreement dated June 16, 2014, among NuStar Logistics, L.P., NuStar Pipeline Operating Partnership, L.P. and NuDevco Midstream Development, LLC;


B.	Terminal Services Release dated June 16, 2014, between NuStar Logistics, L.P. and NuDevco Midstream Development, LLC;


C.	License Agreement dated June 4, 2014, between NuStar Logistics, L.P. and NuDevco Midstream Development, LLC; and


D.	Mobile Mini contract dated April 24, 2014 between Associated Energy Services, LP and Mobile Mini (Portable Office Building).

Schedule 4.20 - Taxes

None

Schedule 6.01 - Certain Changes

None

Schedule 6.04 - Replacement Guarantees

NuStar will require the Partnership to issue a Guaranty to secure the obligations of Operating Company under the NuStar Agreements in the amount of $100,000.

Schedule 6.06 - Liens to be Released

None

Exhibit A

Description OF the Assets


I.	Skid Transloader: The Property consists of (i) the following equipment, (ii) to the extent assignable, all warranties by any manufacturer with respect to such equipment and (iii) to the extent assignable, all process licenses, permits or rights applicable thereto.

SKID-TRANSLOADING SYSTEM - TRUCKS TO RAILCARS

Motor Serial # XHH150-18-326T

Motor Model # XKP326SR235

Frame Serial # ML09052012ST-001

��

MOBILE TRANSLOADER FOR CRUDE OIL��

��

Mobile Transloading Platform consisting of:��

��

*One (1) - Kory 8T - Wide 92 Running Gear System (model 6892)��

*One (1) - Structural Steel frame Unit of Tubular, and Wide Flange Steel��

*One (1) - Stair access unit @ 30 wide - Galvanized��

*One (1) - One four leg platform with stair tower for top rail car access��

*One (1) - FRT-24-5A with 8 X 8 Safety Cage��

*One (1) - Loading arm support��

*One (1) - 3 Vapor Hose��

��

Process Components Consisting of:��

��

*One (1) - Leistritz gear pump capable of 400 gpm flow rate

*Two (2) - Earth-Rite Static Grounding Systems (bottom for truck unload and top of railcar loading)

*One (1) - FMC Microload Electronic Preset Delivery System

*One (1) - 3 Mass flow Coriolis Meter from Emerson Process Management

Mechanical Components Consisting of:

*One (1) - 4 In-Line simplex strainer - carbon steel

*One (1) - Air Eliminator

*One (1) - 4 150# - raised face flanged Full port Ball Valves with Lever Operators

*One (1) - 4 150# - Wafer type Check Valve - CRANE Duo-Check

*One (1) - 4 150# - Raised Face Flanged Regular port Ball Valves w/lever operators

*One (1) - 4 150# - Raised Face General Twin Seal Double Block and Bleed Valve

*One (1) - 4 Back Pressured Control Valve

SUPPORTED BOOM

4 BOOM STYLE LOADING ARM -

*Carbon/Aluminum material(s) of construction

*V1289 Fluorocarbon GFLT seals

*Right-hand down feed spring configuration

*Spring counterbalanced operation

*84 primary X 108 secondary with 112 overall drop with aluminum cover plate

*Aluminum locking cover plate, port for level probe, 3 port for vapor recovery hose

LOADING ARM SUPPORT

Loading Arm Support

Hot Dipped Galvanized Steel Construction

36 E&H Probe with cabling - Liquiphant M FTL51

Model FTL51-4TF60/0

Nivotester - Model FTL325N-F1A1

UNSUPPORTED BOOM��

4 OPW G33F UNSUPPORTED BOOM LOADING ARM

*Aluminum/carbon steel construction

*V1289 Fluorocarbon seal material

*Spring counterbalanced operation

*54 primary X 66 secondary reach terminating in 4 Kamlok Coupler

*Horizontal inlet riser


II.	Other Tangible Assets:


A.	1989 Ford F 150, VIN No. 1FTEF14NOKPB37904


B.	One Leased 8 x 20 mobile mini office container


C.	Miscellaneous Parts and Supplies including, as of July 9, 2014, the following:



Quantity	Description
1	24oz concrete crack epoxy
10	1 quart concrete crack fill
2	Steel folding chairs
1	18 x 72 plastic folding table
1	4 x 2 reducing coupler
2	Portable storage clip boards
2	20lb pails of absorbent
1	Open top trash can
2	48mm rolls of duct tape
1	Eye wash station
2	Mag light flashlights
1	1.89l orange citrus hand cleaner
1	24 count of AAA batteries
1	Power strip
3	Fall protection kits
1	57pk #10 screws
2	� hex nuts
4	4 inch dust caps
4	4 inch dust plugs
2	2 inch dust caps
2	2 inch dust plugs
1	2 inch double male adapter
3	3 inch to 2 inch adapters
1	15 inch adjustable wrench



2	1 - 5/ 8 wrenches
2	1 - 7/16 wrenches
2	Wire cutters
1	Fluke temperature gun
2	25ft tape measures
2	Brass hammers
2	14 inch pipe wrenches
1	30 inch pipe wrench
250	UN1267 placards
3	Boxes of car seals
1	Inflatable containment
1	Inflatable plug
1	Box of assorted rags
600	Absorbent pads
1	Box of absorbent booms
2	Shovels
1	Broom
2	Rakes
2	Metal blue tank car connected flags
2	Rail car wheel chocks
2	ADS overfill alarms
4	4 inch Goodyear product hose
4	2 inch Goodyear vapor hose
12	12 inch Velcro hose safety straps
2	Hard Hats
2	H₂S monitors
2	Safety glasses
1	Fire extinguisher
24	Pairs of coated gloves
1	Dell computer monitor
1	Dell keyboard
1	Dell mouse
1	Dell laptop
1	12pk 8.5 x 11 writing pads
1	12pk ball point pens
1	25 count hanging file folders
2	Aluminum manway covers
13	Metal 5 gallon pails
1	Box of assorted manway gaskets
1	12 yard Waste Management dumpster
5	4 x 4 plastic spill pans
2	2 x 4 plastic spill pans


III.	Real Property Interests:


E.	Master Terminal Services Agreement dated June 16, 2014, among NuStar Logistics, L.P., NuStar Pipeline Operating Partnership, L.P. and NuDevco Midstream Development, LLC


F.	Terminal Services Release dated June 16, 2014, between NuStar Logistics, L.P. and NuDevco Midstream Development, LLC


G.	License Agreement dated June 4, 2014, between NuStar Logistics, L.P. and NuDevco Midstream Development, LLC


IV.	Contracts:


A.	Agreements related to real property interests (see III above)


B.	Mobile Mini contract dated April 24, 2014 between Associated Energy Services, LP and Mobile Mini (Portable Office Building)

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, W. Keith Maxwell III, certify that:


1.	I have reviewed this quarterly report on Form 10-Q (the report) of Marlin Midstream Partners, LP (the registrant);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(c)	Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and


5.	The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.



Date:	October�30, 2014	�	/s/ W. Keith Maxwell III
�	�	�	W. Keith Maxwell III
�	�	�	Chief Executive Officer
�	�	�	Marlin Midstream GP, LLC
�	�	�	(the general partner of Marlin Midstream Partners, LP)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Amanda Bush, certify that:


1.	I have reviewed this quarterly report on Form 10-Q (the report) of Marlin Midstream Partners, LP (the registrant);


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(c)	Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and


5.	The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.



Date:	October�30, 2014	�	/s/ Amanda Bush
�	�	�	Amanda Bush
�	�	�	Chief Financial Officer
�	�	�	Marlin Midstream GP, LLC
�	�	�	(the general partner of Marlin Midstream Partners, LP)

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER UNDER SECTION 906 OF THE

SARBANES OXLEY ACT OF 2002, 18 U.S.C. SECTION 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, W. Keith Maxwell III, Chief Executive Officer of Marlin Midstream GP, LLC, the general partner of Marlin Midstream Partners, LP (the Partnership), and Amanda Bush, Chief Financial Officer of Marlin Midstream GP, LLC, the general partner of the Partnership, certify, pursuant to 18 U.S.C. � 1350, as adopted pursuant to � 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	the quarterly report on Form 10-Q of the Partnership for the period ending September�30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Partnership.



Date:	October�30, 2014	�	/s/ W. Keith Maxwell III
�	�	�	W. Keith Maxwell III
�	�	�	Chief Executive Officer of Marlin Midstream GP, LLC
�	�	�	Marlin Midstream GP, LLC,
�	�	�	(the general partner of Marlin Midstream Partners, LP)
�	�	�	�
�	�	�	�
Date:	October�30, 2014	�	/s/ Amanda Bush
�	�	�	Amanda Bush
�	�	�	Chief Financial Officer of Marlin Midstream GP, LLC
�	�	�	(the general partner of Marlin Midstream Partners, LP)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate document. A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

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Form 10-Q Marlin Midstream Partner For: Sep 30

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