Enbridge Energy Partners Announces Actions to Strengthen Midcoast Energy Partners and Planning Next Drop-Down to Midcoast in 2016

HOUSTON, TX–(Marketwired – Jul 29, 2015) –  Enbridge Energy Partners, L.P. (NYSE: EEP) (“Enbridge Partners”) has entered into an amendment to the Midcoast Operating, L.P. (“Midcoast Operating”) limited partnership agreement to allow for increased allocations of distributable cash flow to Midcoast Energy Partners, L.P. (NYSE: MEP) (“Midcoast Partners”) for a period of time. These actions will enhance both MEP’s ability to deliver distribution growth through 2017 and maintain a 1.0x distribution coverage.

This amendment affects the distributions related to the quarter ended June 30, 2015 through the quarter ending December 31, 2017. If MEP has a distributable cash flow result that is less than 1.0x distribution coverage for any quarter, EEP will forgo a portion of its quarterly distribution from Midcoast Operating to help MEP achieve a 1.0x distribution coverage during that period. EEP will forgo this portion of its distribution up to the full amount of its distribution from Midcoast Operating for each such quarter, including up to a $0.005 per MEP unit quarterly distribution increase. The expected net cash impact to EEP over this period is expected to be nominal. There will be no requirement for MEP to reimburse EEP for these adjusted distributions, and any foregone distributions will be an adjustment to EEP’s capital account in MEP.

In addition, in 2016 EEP is planning to resume the drop-down strategy of transferring its remaining ownership interests in Midcoast Operating to MEP. EEP expects to present the next drop down proposal to the Board of MEP’s general partner in 2016 with economic terms designed to provide attractive accretion to MEP unitholders. To help defray MEP’s prospective funding requirements, EEP would consider receipt of MEP equity for some or all of the consideration for the next drop-down to MEP.

“MEP is strategic to EEP and these initiatives are designed to help MEP navigate through the current environment of weak commodity price fundamentals. The management team at MEP continues to make solid progress to strengthen Midcoast Operating, by pursuing meaningful cost reduction measures, divesting of non-core assets and strengthening the gas segment’s cash flow certainty. Collectively, these management and sponsor actions will position MEP to respond as market fundamentals improve. The measures being enacted and planned will provide value to EEP unitholders through improved performance in the natural gas business and lowering external financing needs of EEP by re-establishing MEP as a drop-down MLP,” said Mark A. Maki, president at EEP.

About Enbridge Energy Partners, L.P.
Enbridge Partners owns and operates a diversified portfolio of crude oil and, through its interests in Midcoast Partners, natural gas transportation systems in the United States. Its principal crude oil system is the largest pipeline transporter of growing oil production from western Canada and the North Dakota Bakken formation. The system’s deliveries to refining centers and connected carriers in the United States account for approximately 17 percent of total U.S. oil imports. Midcoast Partners’ natural gas gathering, treating, processing and transmission assets, which are principally located onshore in the active U.S. Mid-Continent and Gulf Coast areas, deliver approximately 2.2 billion cubic feet of natural gas daily. Enbridge Partners is recognized by Forbes as one of the 100 Most Trustworthy Companies in America.

About Midcoast Energy Partners, L.P.
Midcoast Partners, is a limited partnership formed by EEP to serve as EEP’s primary vehicle for owning and growing its natural gas and natural gas liquids (NGLs) midstream business in the United States. Our assets consist of a 51.6 percent controlling interest in Midcoast Operating, L.P., a Texas limited partnership that owns a network of natural gas and NGL gathering and transportation systems, natural gas processing and treating facilities and NGL fractionation facilities primarily located in Texas and Oklahoma. Midcoast Operating also owns and operates natural gas, condensate and NGL logistics and marketing assets that primarily support its gathering, processing and transportation business. Through our ownership of Midcoast Operating’s general partner, we control, manage and operate these systems. EEP owns 100 percent of Midcoast Holdings, LLC, the general partner of Midcoast Partners and holds an approximate 54 percent interest in Midcoast Partners.