10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

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

For the transition period from          to          

Commission File Number 001-31239

MARKWEST ENERGY PARTNERS, L.P.

(Exact name of registrant as specified in its charter)

Delaware	27-0005456
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1515 Arapahoe Street, Tower 1, Suite 1600, Denver, Colorado 80202-2137

(Address of principal executive offices)

Registrant’s telephone number, including area code: 303-925-9200

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 x No o

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 x No o

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer o
Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).  Yes o No x

As of July 30, 2012, the number of the registrant’s common units and Class B units outstanding were 110,693,615 and 19,954,389, respectively.

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Unaudited Condensed Consolidated Balance Sheets at June 30, 2012 and December 31, 2011	4
	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2012 and 2011	5
	Unaudited Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2012 and 2011	6
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011	7
	Unaudited Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	51
Item 4.	Controls and Procedures	53
PART II—OTHER INFORMATION		54
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 6.	Exhibits	55
SIGNATURES		56

Throughout this document we make statements that are classified as “forward-looking.” Please refer to “Forward-Looking Statements” included in Part I, Item 2 for an explanation of these types of assertions. Also, in this document, unless the context requires otherwise, references to “we,” “us,” “our,” “MarkWest Energy” or the “Partnership” are intended to mean MarkWest Energy Partners, L.P., and its consolidated subsidiaries. References to “MarkWest Hydrocarbon” or the “Corporation” are intended to mean MarkWest Hydrocarbon, Inc., a wholly-owned taxable subsidiary of the Partnership. References to the “General Partner” are intended to mean MarkWest Energy GP, L.L.C., the general partner of the Partnership.

2

Glossary of Terms

Bbl	Barrel
Bbl/d	Barrels per day
Bcf/d	Billion cubic feet per day
Btu	One British thermal unit, an energy measurement
Credit Facility	Amended and restated revolving credit agreement
DER	Distribution equivalent right
Dth/d	Dekatherms per day
EPA	Environmental Protection Agency
ERCOT	Electric Reliability Council of Texas south zone (around the clock)
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
GAAP	Accounting principles generally accepted in the United States of America
Gal	Gallon
Gal/d	Gallons per day
Mcf	One thousand cubic feet of natural gas
Mcf/d	One thousand cubic feet of natural gas per day
MMBtu	One million British thermal units, an energy measurement
MMBtu/d	One million British thermal units per day
MMcf/d	One million cubic feet of natural gas per day
Net operating margin (a non-GAAP financial measure)	Segment revenue less purchased product costs, excluding any derivative gain (loss)
NGL	Natural gas liquids, such as ethane, propane, butanes and natural gasoline
N/A	Not applicable
OTC	Over-the-Counter
SEC	Securities and Exchange Commission
SMR	Steam methane reformer, operated by a third party and located at the Javelina gas processing and fractionation facility in Corpus Christi, Texas
VIE	Variable interest entity
WTI	West Texas Intermediate

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PART I—FINANCIAL INFORMATION

Item 1.  Financial Statements

MARKWEST ENERGY PARTNERS, L.P.

Condensed Consolidated Balance Sheets

(unaudited, in thousands)

	June 30, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents ($3,168 and $2,684, respectively)	$	125,462		$	117,016
Restricted cash	25,285			26,193
Receivables, net ($1,428 and $1,569, respectively)	138,371			226,561
Inventories	22,209			41,006
Fair value of derivative instruments	28,556			8,698
Deferred income taxes	6,544			14,885
Other current assets ($69 and $169, respectively)	8,915			11,748
Total current assets	355,342			446,107
Property, plant and equipment ($187,048 and $156,808, respectively)	4,164,402			3,302,369
Less: accumulated depreciation ($18,704 and $15,551, respectively)	(520,766		)	(438,062		)
Total property, plant and equipment, net	3,643,636			2,864,307
Other long-term assets:
Investment in unconsolidated affiliate	26,695			27,853
Intangibles, net of accumulated amortization of $191,388 and $168,168, respectively	885,183			603,767
Goodwill	144,582			67,918
Deferred financing costs, net of accumulated amortization of $15,726 and $13,194, respectively	41,581			41,798
Deferred contract cost, net of accumulated amortization of $2,418 and $2,262, respectively	832			988
Fair value of derivative instruments	35,237			16,092
Other long-term assets ($102 and $102, respectively)	1,510			1,595
Total assets	$	5,134,598		$	4,070,425
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable ($292 and $96, respectively)	$	208,019		$	179,871
Accrued liabilities ($14,306 and $1,144, respectively)	231,719			171,451
Fair value of derivative instruments	30,479			90,551
Total current liabilities	470,217			441,873
Deferred income taxes	156,783			93,664
Fair value of derivative instruments	18,951			65,403
Long-term debt, net of discounts of $992 and $1,050, respectively	1,997,985			1,846,062
Other long-term liabilities ($76 and $73, respectively)	128,231			121,356
Commitments and contingencies (Note 11)
Equity:
Common units (110,694 and 94,940 common units issued and outstanding, respectively)	1,540,189			679,309
Class B units (19,954 units issued and outstanding)	752,531			752,531
Non-controlling interest in consolidated subsidiaries	69,711			70,227
Total equity	2,362,431			1,502,067
Total liabilities and equity	$	5,134,598		$	4,070,425

Asset and liability amounts in parentheses represent the portion of the consolidated balance attributable to VIEs.

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

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MARKWEST ENERGY PARTNERS, L.P.

Condensed Consolidated Statements of Operations

(unaudited, in thousands, except per unit amounts)

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Revenue:
Revenue	$	309,986		$	359,849		$	709,167		$	708,749
Derivative gain (loss)	136,067			40,590			87,352			(45,089		)
Total revenue	446,053			400,439			796,519			663,660
Operating expenses:
Purchased product costs	112,731			154,580			267,286			308,209
Derivative (gain) loss related to purchased product costs	(51,579		)	(254		)	(32,779		)	19,140
Facility expenses	48,538			40,698			97,378			80,122
Derivative (gain) loss related to facility expenses	(1,146		)	2,927			(2,892		)	(84		)
Selling, general and administrative expenses	21,879			18,580			47,103			40,292
Depreciation	42,918			37,201			84,063			71,565
Amortization of intangible assets	12,307			10,830			23,292			21,647
Loss on disposal of property, plant and equipment	1,342			2,373			2,328			4,472
Accretion of asset retirement obligations	161			290			399			377
Total operating expenses	187,151			267,225			486,178			545,740
Income from operations	258,902			133,214			310,341			117,920
Other income (expense):
Earnings (loss) from unconsolidated affiliate	551			(216		)	542			(755		)
Interest income	159			63			231			152
Interest expense	(26,762		)	(27,874		)	(56,234		)	(56,137		)
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245		)	(1,443		)	(2,515		)	(2,871		)
Loss on redemption of debt	—			—			—			(43,328		)
Miscellaneous income, net	4			169			62			131
Income before provision for income tax	231,609			103,913			252,427			15,112
Provision for income tax expense (benefit):
Current	4,809			4,089			20,150			4,145
Deferred	39,664			10,619			28,868			(3,567		)
Total provision for income tax	44,473			14,708			49,018			578
Net income	187,136			89,205			203,409			14,534
Net income attributable to non-controlling interest	(228		)	(10,708		)	(481		)	(20,066		)
Net income (loss) attributable to the Partnership	$	186,908		$	78,497		$	202,928		$	(5,532	)
Net income (loss) attributable to the Partnership’s common unitholders per common unit (Note 13):
Basic	$	1.74		$	1.03		$	1.98		$	(0.09	)
Diluted	$	1.47		$	1.03		$	1.66		$	(0.09	)
Weighted average number of outstanding common units:
Basic	106,825			75,160			101,833			74,847
Diluted	127,468			75,266			122,531			74,847
Cash distribution declared per common unit	$	0.79		$	0.67		$	1.55		$	1.32

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

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MARKWEST ENERGY PARTNERS, L.P.

Condensed Consolidated Statements of Changes in Equity

(unaudited, in thousands)

	Common Units				Class B Units			Non- controlling
	Units	Amounts			Units	Amounts		Interest			Total
December 31, 2011	94,940	$	679,309		19,954	$	752,531	$	70,227		$	1,502,067
Issuance of units in public offering, net of offering costs	15,508	852,873			—	—		—			852,873
Distributions paid	—	(155,073		)	—	—		(2,937		)	(158,010		)
Contributions from non-controlling interest	—	—			—	—		1,940			1,940
Share-based compensation activity	246	537			—	—		—			537
Excess tax benefits related to share-based compensation	—	2,207			—	—		—			2,207
Deferred income tax impact from changes in equity	—	(42,592		)	—	—		—			(42,592		)
Net income	—	202,928			—	—		481			203,409
June 30, 2012	110,694	$	1,540,189		19,954	$	752,531	$	69,711		$	2,362,431

	Common Units				Non-controlling
	Units	Amounts			Interest			Total
December 31, 2010	71,440	$	993,049		$	465,517		$	1,458,566
Issuance of units in public offering, net of offering costs	3,450	138,163			—			138,163
Distributions paid	—	(100,058		)	(34,531		)	(134,589		)
Contributions to MarkWest Liberty Midstream joint venture	—	—			24,400			24,400
Share-based compensation activity	270	2,778			—			2,778
Excess tax benefits related to share-based compensation	—	1,096			—			1,096
Net (loss) income	—	(5,532		)	20,066			14,534
June 30, 2011	75,160	$	1,029,496		$	475,452		$	1,504,948

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

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MARKWEST ENERGY PARTNERS, L.P.

Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Six months ended June 30,
	2012			2011
Cash flows from operating activities:
Net income	$	203,409		$	14,534
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	84,063			71,565
Amortization of intangible assets	23,292			21,647
Loss on redemption of debt	—			43,328
Amortization of deferred financing costs and discount	2,515			2,871
Accretion of asset retirement obligations	399			377
Amortization of deferred contract cost	156			156
Phantom unit compensation expense	8,585			8,093
Equity in (earnings) loss of unconsolidated affiliate	(542		)	755
Distributions from unconsolidated affiliate	1,700			300
Unrealized (gain) loss on derivative instruments	(145,527		)	26,265
Loss on disposal of property, plant and equipment	2,328			4,472
Deferred income taxes	28,868			(3,567		)
Changes in operating assets and liabilities, net of working capital acquired:
Receivables	90,664			(9,215		)
Inventories	18,895			(6,326		)
Other current assets	2,738			526
Accounts payable and accrued liabilities	(71,784		)	20,473
Other long-term assets	85			(384		)
Other long-term liabilities	6,593			10,494
Net cash provided by operating activities	256,437			206,364
Cash flows used in investing activities:
Restricted cash	1,003			—
Capital expenditures	(582,203		)	(234,116		)
Acquisition of business, net of cash acquired	(506,797		)	(230,728		)
Proceeds from disposal of property, plant and equipment	499			2,795
Net cash flows used in investing activities	(1,087,498		)	(462,049		)
Cash flows from financing activities:
Proceeds from public equity offerings, net	852,873			138,163
Proceeds from revolving credit facility	238,065			781,700
Payments of revolving credit facility	(86,200		)	(535,200		)
Proceeds from long-term debt	—			499,000
Payments of long-term debt	—			(437,848		)
Payments of premiums on redemption of long-term debt	—			(39,520		)
Payments for debt issuance costs, deferred financing costs and registration costs	(2,315		)	(6,747		)
Contributions from non-controlling interest	1,940			24,400
Payments of SMR liability	(1,005		)	(916		)
Cash paid for taxes related to net settlement of share-based payment awards	(8,048		)	(6,269		)
Excess tax benefits related to share-based compensation	2,207			1,096
Payment of distributions to common unitholders	(155,073		)	(100,058		)
Payment of distributions to non-controlling interest	(2,937		)	(34,531		)
Net cash flows provided by financing activities	839,507			283,270
Net increase in cash and cash equivalents	8,446			27,585
Cash and cash equivalents at beginning of year	117,016			67,450
Cash and cash equivalents at end of period	$	125,462		$	95,035

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

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MARKWEST ENERGY PARTNERS, L.P.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Basis of Presentation

MarkWest Energy Partners, L.P. was formed in 2002 as a Delaware limited partnership. The Partnership is engaged in the gathering, transportation and processing of natural gas; the transportation, fractionation, marketing and storage of NGLs; and the gathering and transportation of crude oil. The Partnership has extensive natural gas gathering, processing and transmission operations in the southwest, Gulf Coast, and northeast regions of the United States, including the Marcellus Shale, and is the largest natural gas processor and fractionator in the Appalachian region.

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC for interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Partnership’s consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011. In management’s opinion, the Partnership has made all adjustments necessary for a fair presentation of its results of operations, financial position and cash flows for the periods shown. These adjustments are of a normal recurring nature. Finally, results for the three and six months ended June 30, 2012 are not necessarily indicative of results for the full year 2012 or any other future period.

The Partnership’s unaudited condensed consolidated financial statements include all majority-owned or majority-controlled subsidiaries. In addition, MarkWest Utica EMG, L.L.C. and its subsidiaries (“MarkWest Utica EMG”), and MarkWest Pioneer, L.L.C. (“MarkWest Pioneer”), VIEs for which the Partnership has been determined to be the primary beneficiary, are included in the condensed consolidated financial statements (see Note 4). All intercompany investments, accounts and transactions have been eliminated. The Partnership’s investment in Centrahoma Processing, LLC (“Centrahoma”), in which the Partnership exercises significant influence but does not control and is not the primary beneficiary, is accounted for using the equity method.

2. Recent Accounting Pronouncements

In May 2011, the FASB amended the accounting guidance for fair value measurement and disclosure. The amendment primarily clarifies the application of the existing guidance and provides for increased disclosures, particularly related to Level 3 fair value measurements. The amended guidance is effective for the Partnership prospectively as of January 1, 2012. Except for the additional disclosures included in Note 6, the adoption of the amended guidance did not have a material effect on the Partnership’s condensed consolidated financial statements.

In December 2011, the FASB amended the accounting guidance for balance sheet offsetting for financial assets and financial liabilities. The amended guidance is intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting arrangements on a company’s financial position and provides for increased disclosures. The amended guidance is effective for the Partnership prospectively as of January 1, 2013. Except for additional disclosures related to our offsetting arrangements, the adoption of the amended guidance is not expected to have a material effect on the Partnership’s consolidated financial statements.

3. Business Combination

Keystone Acquisition

On May 29, 2012, the Partnership acquired natural gas gathering and processing assets from Keystone Midstream Services, LLC (“Keystone”) for a cash purchase price of approximately $509.6 million, subject to finalization of working capital adjustments. Keystone’s existing assets are located in Butler County, Pennsylvania and include two cryogenic gas processing plants totaling 90 MMcf/d of processing capacity, a gas gathering system and associated field compression. The acquisition is referred to as the Keystone Acquisition.

As a result of the Keystone Acquisition, the Partnership became a party to a long-term fee-based agreement to gather and process certain natural gas owned or controlled by R.E. Gas Development, L.L.C. (“Rex”), a subsidiary of Rex Energy Corporation, and Summit Discovery Resources II, L.L.C. (“Summit”), a subsidiary of Sumitomo Corporation, at the acquired facilities and in 2013 to exchange the resulting NGLs for fractionated products at facilities already owned and operated by the Partnership. Rex and Summit have dedicated an area of approximately 900 square miles to the Partnership as part of this long-term gathering and processing agreement. As a result of the Keystone Acquisition, the Partnership has expanded its position in the liquids rich Marcellus Shale area into northwest Pennsylvania.

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The Keystone Acquisition is accounted for as a business combination. The total purchase price is allocated to identifiable assets acquired and liabilities assumed based on the estimated fair values at the acquisition date. The remaining purchase price in excess of the fair value of the identifiable assets and liabilities is recorded as goodwill. The acquired assets and the related results of operations are included in the Partnership’s Liberty segment. The following table summarizes the preliminary purchase price allocation for the Keystone Acquisition (in thousands):

Assets:
Cash	$	2,837
Accounts receivable	1,756
Property, plant and equipment	136,593
Goodwill	76,664
Intangible asset	304,708
Liabilities:
Accounts payable	(12,117		)
Other short-term liabilities	(175		)
Other long-term liabilities	(632		)
Total	$	509,634

As of June 30, 2012, the purchase price for the Keystone Acquisition is $509.6 million subject to further working capital adjustments. Due to the potential changes in the purchase price and the Partnership’s continuing process to finalize the fair value estimates of the acquired assets and liabilities, the purchase price allocation is subject to further adjustment, which could impact depreciation and amortization expense.

The goodwill recognized from the Keystone Acquisition results primarily from synergies created from integrating the Keystone assets with the Partnership’s existing Marcellus Shale operations and the Partnership’s strengthened competitive position as it plans to expand its business in the newly developing liquids-rich areas of the Marcellus Shale. All of the goodwill is deductible for tax purposes.

The intangible asset consists of an identifiable contractual customer relationship with Rex and Summit. The acquired intangible asset will be amortized on a straight-line basis over the estimated customer contract useful life of approximately 19 years.

The results of operations of Keystone are included in the condensed consolidated financial statements from the acquisition date. Revenue and net income related to the Keystone are immaterial for the quarter ended June 30, 2012.

Pro forma financial results that give effect to the Keystone Acquisition are not presented as they are not material to the Partnership’s historical results.

4. Variable Interest Entities

MarkWest Utica EMG

Effective January 1, 2012, the Partnership and EMG Utica, LLC (“EMG Utica”) executed agreements to form a joint venture, MarkWest Utica EMG, to develop significant natural gas gathering, processing and NGL fractionation, transportation and marketing infrastructure in Eastern Ohio. Under the terms of the agreements, the Partnership will make an initial contribution to MarkWest Utica EMG in a nominal amount in exchange for a 60% membership interest in MarkWest Utica EMG, and EMG Utica will make an initial contribution in a nominal amount and has agreed to contribute to MarkWest Utica EMG $350 million in cash on an as needed basis (the “Initial EMG Contribution”) in exchange for a 40% membership interest in MarkWest Utica EMG. Following the funding of the Initial EMG Contribution, the Partnership has the one time right to elect that (i) EMG Utica fund, as needed, all capital required to develop projects within MarkWest Utica EMG until the earlier of December 31, 2016 or such time as EMG Utica’s total investment balance reaches $500 million (the “Minimum EMG Investment”) or (ii) the Partnership fund 60% of all capital required to develop projects within MarkWest Utica EMG until such time as EMG Utica’s total investment balance equals the Minimum EMG Investment and EMG Utica will be required to fund the remaining 40% of all such capital. Once EMG Utica has funded capital equal to the Minimum EMG Investment, or if EMG has not funded the Minimum EMG Investment by December 31, 2016, then commencing on January 1, 2017, the Partnership is required to fund, as needed, 100% of all capital required to develop projects within MarkWest Utica EMG until such time as the total investment balances of the Partnership and EMG Utica are in the ratio of 60% and 40%, respectively (such time being referred to as the “First Equalization Date”). If the First Equalization Date has not occurred by December 31, 2016, each member’s ownership interest will be adjusted to equal the proportionate share of capital that it has contributed, and allocations of profits and losses and distributions of available cash will be made in accordance with those adjusted

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membership interests. Following the First Equalization Date, the Partnership shall have the right to elect to continue to fund up to 100% of any additional capital required until such time as the investment balances of the Partnership and EMG Utica are in the ratio of 70% and 30%, respectively (such time being referred to as the “Second Equalization Date”). To the extent the Partnership does not fully exercise such right at any time prior to the Second Equalization Date, EMG Utica shall have the right, but not the obligation, to contribute such additional capital that is requested and that is not contributed by the Partnership. After the Second Equalization Date, EMG Utica shall have the right, but not the obligation, to maintain a 30% interest in MarkWest Utica EMG by funding 30% of any additional required capital.

The Partnership has determined that MarkWest Utica EMG is a VIE primarily due to the Partnership’s disproportionate economic interests as compared to its stated ownership interests and voting interests. The Partnership’s 60% ownership interest in the entity is disproportionate to its economic interest due to the timing of the capital funding requirements described above. The Partnership has concluded that it is the primary beneficiary of MarkWest Utica EMG based on its role as the operator and its right to receive benefits and absorb losses of MarkWest Utica EMG. The Partnership believes that its role as the operator along with its equity interests give it the power to direct the activities that most significantly affect the economic performance of MarkWest Utica EMG.

MarkWest Pioneer

MarkWest Pioneer is the owner and operator of the Arkoma Connector Pipeline. The Partnership and Arkoma Pipeline Partners, LLC share the equity interests in MarkWest Pioneer equally (50% and 50%). As discussed in Note 4 in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011, the Partnership determined that MarkWest Pioneer is a VIE and the Partnership is the primary beneficiary.

Financial Statement Impact of VIEs

As the primary beneficiary of MarkWest Pioneer and MarkWest Utica EMG, the Partnership consolidates the entities and recognizes non-controlling interests. As of December 31, 2011, MarkWest Pioneer was the only VIE included in the Partnership’s condensed consolidated financial statements and its assets and liabilities are disclosed parenthetically on the accompanying Condensed Consolidated Balance Sheets. The following tables show the consolidated assets and liabilities attributable to MarkWest Pioneer and MarkWest Utica EMG, excluding intercompany balances, as of June 30, 2012 (in thousands).

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	As of June 30, 2012
	MarkWest Pioneer		MarkWest Utica EMG		Total
ASSETS
Cash and cash equivalents	$	3,089	$	79	$	3,168
Receivables, net	1,428		—		1,428
Other current assets	69		—		69
Property, plant and equipment, net of accumulated depreciation of $18,696 and $8, respectively	139,246		29,098		168,344
Other long-term assets	102		—		102
Total assets	$	143,934	$	29,177	$	173,111
LIABILITIES
Accounts payable	$	42	$	250	$	292
Accrued liabilities	1,171		13,135		14,306
Other long-term liabilities	76		—		76
Total liabilities	$	1,289	$	13,385	$	14,674

The assets of the VIEs are the property of the respective entities and are not available to the Partnership for any other purpose, including as collateral for its secured debt (see Note 9 and Note 15). VIE asset balances can only be used to settle obligations of each respective VIE. The liabilities of the VIEs do not represent additional claims against the Partnership’s general assets, and the creditors or beneficial interest holders of the VIE do not have recourse to the general credit of the Partnership. The Partnership’s maximum exposure to loss as a result of its involvement with the VIEs includes its equity investment, any additional capital contribution commitments and any operating expense incurred by the subsidiary operator in excess of its compensation received for the performance of the operating services. The Partnership may temporarily fund MarkWest Utica EMG for certain projects due to the timing of the capital call process. The Partnership will receive distributions as reimbursement for any temporary funding. Other than temporary funding, the Partnership did not provide any financial support to the VIEs that it was not contractually obligated to provide during the six months ended June 30, 2012 and 2011.

The results of operations of MarkWest Utica EMG and MarkWest Pioneer are included in the Partnership’s Liberty and Southwest segments, respectively (see Note 14). The result of operations and cash flows for MarkWest Pioneer are not material to the Partnership. During the six months ended June 30, 2012, construction began for MarkWest Utica EMG assets, but operating activities have not commenced. Therefore, the results of operations and cash flows related to MarkWest Utica EMG are not material to the Partnership.

5. Derivative Financial Instruments

Commodity Derivatives

NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional factors that are beyond the Partnership’s control. The Partnership’s profitability is directly affected by prevailing commodity prices primarily as a result of processing or conditioning at its own or third-party processing plants, purchasing and selling or gathering and transporting volumes of natural gas at index-related prices and the cost of third-party transportation and fractionation services. To the extent that commodity prices influence the level of natural gas drilling by the Partnership’s producer customers, such prices also affect profitability. To protect itself financially against adverse price movements and to maintain more stable and predictable cash flows so that the Partnership can meet its cash distribution objectives, debt service and capital expenditures, the Partnership executes a strategy governed by the risk management policy approved by the General Partner’s board of directors (the “Board”). The Partnership has a committee comprised of senior management that oversees risk management activities (the “Hedge Committee”), continually monitors the risk management program and adjusts its strategy as conditions warrant. The Partnership enters into certain derivative contracts to reduce the risks associated with unfavorable changes in the prices of natural gas, NGLs and crude oil. Derivative contracts utilized are swaps and options traded on the OTC market and fixed price forward contracts. The risk management policy does not allow for trading derivative contracts.

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To mitigate its cash flow exposure to fluctuations in the price of NGLs, the Partnership has entered into derivative financial instruments relating to the future price of NGLs and crude oil. Generally the Partnership manages its NGL price risk using crude oil contracts as NGL financial markets are not as liquid and historically there has been a strong relationship between changes in NGL and crude oil prices. The pricing relationship between NGLs and crude oil, which may vary in certain periods due to various market conditions, has significantly weakened during the first half of 2012. In periods where NGL prices and crude oil prices are not consistent with the historical relationship, the Partnership incurs increased risk and additional gains or losses. The Partnership enters into NGL derivative contracts when adequate market liquidity exists and prices are satisfactory.

To mitigate its cash flow exposure to fluctuations in the price of natural gas, the Partnership primarily utilizes derivative financial instruments relating to the future price of natural gas and takes into account the partial offset of its long and short gas positions resulting from normal operating activities.

As a result of its current derivative positions, the Partnership has mitigated a portion of its expected commodity price risk through the fourth quarter of 2014. The Partnership would be exposed to additional commodity risk in certain situations such as if producers under deliver or over deliver product or when processing facilities are operated in different recovery modes. In the event the Partnership has derivative positions in excess of the product delivered or expected to be delivered, the excess derivative positions will be terminated.

The Partnership enters into derivative contracts primarily with financial institutions that are participating members of the Credit Facility (“participating bank group members”). Currently, all of the Partnership’s financial derivative positions are with participating bank group members. Management conducts a standard credit review on counterparties to derivative contracts. There are no collateral requirements for derivative contracts among the Partnership and any participating bank group members. Specifically, the Partnership is not required to post collateral when it enters into derivative contracts with participating bank group members as the participating bank group members have a collateral position in substantially all the wholly-owned assets of the Partnership. The Partnership uses standard master netting arrangements that allow for offset of positive and negative exposures.

The Partnership records derivative contracts at fair value in the Condensed Consolidated Balance Sheets and has not elected hedge accounting or the normal purchases and normal sales designation which may cause volatility in the Condensed Consolidated Statements of Operations as the Partnership recognizes in current earnings all unrealized gains and losses from the changes in fair value on derivatives.

As of June 30, 2012, the Partnership had the following outstanding commodity contracts that were entered into to manage cash flow risk associated with future sales of NGLs or future purchases of natural gas.

Derivative contracts not designated as hedging instruments	Financial Position	Notional Quantity (net)
Crude Oil (bbl)	Short	7,241,527
Natural Gas (MMBtu)	Long	11,308,002
NGLs (gal)	Short	40,771,965

Embedded Derivatives in Commodity Contracts

The Partnership has a commodity contract with a producer in the Appalachia region that creates a floor on the frac spread for gas purchases of 9,000 Dth/d. The commodity contract is a component of a broader regional arrangement that also includes a keep-whole processing agreement. This contract is accounted for as an embedded derivative and is recorded at fair value. The changes in fair value of this commodity contract are based on the difference between the contractual and index pricing and are recorded in earnings through Derivative (gain) loss related to purchased product costs. In February 2011, the Partnership executed agreements with the producer to extend the commodity contract and the related processing agreement from March 31, 2015 to December 31, 2022. As of June 30, 2012, the estimated fair value of this contract was a liability of $74.3 million and the recorded value was a liability of $20.8 million. The recorded liability does not include the inception fair value of the commodity contract related to the extended period from April 1, 2015 to December 31, 2022. In accordance with GAAP for non-option embedded derivatives, the fair value of this extended portion of the commodity contract at its inception of February 1, 2011 is deemed to be allocable to the host processing contract and therefore not recorded as a derivative liability. See the following table for a reconciliation of the liability recorded for the embedded derivative as of June 30, 2012 (in thousands):

Fair value of commodity contract	$	74,311
Inception value for period from April 1, 2015 to December 31, 2022	(53,507		)
Derivative liability as of June 30, 2012	$	20,804

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The Partnership has a commodity contract that gives it an option to fix a component of the utilities cost to an index price on electricity at its plant location in the Gulf Coast segment through the fourth quarter of 2014. Changes in the fair value of the derivative component of this contract are recorded in Derivative gain related to facility expenses. As of June 30, 2012, the estimated fair value of this contract was an asset of $10.4 million.

Financial Statement Impact of Derivative Instruments

There were no material changes to the Partnership’s policy regarding the accounting for these instruments as previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011. The fair value of the Partnership’s derivative instruments recorded on its Condensed Consolidated Balance Sheets and its Condensed Consolidated Statements of Operations is summarized below (in thousands):

	Assets				Liabilities
Derivative instruments not designated as hedging instruments and their balance sheet location	June 30, 2012		December 31, 2011		June 30, 2012			December 31, 2011
Commodity contracts(1)
Fair value of derivative instruments — current	$	28,556	$	8,698	$	(30,479	)	$	(90,551	)
Fair value of derivative instruments - long-term	35,237		16,092		(18,951		)	(65,403		)
Total	$	63,793	$	24,790	$	(49,430	)	$	(155,954	)

(1)Includes Embedded Derivatives in Commodity Contracts as discussed above.

Derivative contracts not designated as hedging instruments and the	Three months ended June 30,						Six months ended June 30,
location of gain or (loss) recognized in income	2012			2011			2012			2011
Revenue: Derivative gain (loss)
Realized gain (loss)	$	2,841		$	(12,186	)	$	(7,637	)	$	(26,577	)
Unrealized gain (loss)	133,226			52,776			94,989			(18,512		)
Total revenue: derivative gain (loss)	136,067			40,590			87,352			(45,089		)
Derivative gain (loss) related to purchased product costs
Realized loss	(7,793		)	(5,560		)	(14,867		)	(13,447		)
Unrealized gain (loss)	59,372			5,814			47,646			(5,693		)
Total derivative gain (loss) related to purchased product costs	51,579			254			32,779			(19,140		)
Derivative gain (loss) related to facility expenses
Unrealized gain (loss)	1,146			(2,927		)	2,892			84
Total gain (loss)	$	188,792		$	37,917		$	123,023		$	(64,145	)

For the three months ended June 30, 2012 and 2011, the Realized gain (loss)—revenue includes amortization of premium payments of zero and $1.1 million, respectively. For the six months ended June 30, 2012 and 2011, the Realized gain (loss)—revenue includes amortization of premium payments of zero and $2.1 million, respectively.

During the second quarter of 2012, the Partnership settled a portion of its crude oil derivative positions related to 2014 commodity price exposure prior to the contractual settlement date in order to take advantage of favorable crude oil prices at which the Partnership could settle these proxy hedges that are expected to be less effective. The Partnership plans to opportunistically enter into future NGL hedge transactions to manage the 2014 NGL price exposure. Upon early settlement, the Partnership received $8.8 million which was recorded as a realized gain in Revenue: Derivative gain (loss) in the accompanying Consolidated Statements of Operations.

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6. Fair Value

Fair value measurements and disclosures relate primarily to the Partnership’s derivative positions discussed in Note 5. The following table presents the derivative instruments carried at fair value as of June 30, 2012 and December 31, 2011 (in thousands):

As of June 30, 2012	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	22,846	$	(27,644	)
Significant unobservable inputs (Level 3)
Commodity contracts	30,538		(982		)
Embedded derivatives in commodity contracts	10,409		(20,804		)
Total carrying value in Condensed Consolidated Balance Sheet	$	63,793	$	(49,430	)

As of December 31, 2011	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	5,063	$	(79,358	)
Significant unobservable inputs (Level 3)
Commodity contracts	12,210		(15,175		)
Embedded derivatives in commodity contracts	7,517		(61,421		)
Total carrying value in Condensed Consolidated Balance Sheet	$	24,790	$	(155,954	)

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The following table provides additional information about the significant unobservable inputs used in the valuation of Level 3 instruments as of June 30, 2012. The market approach is used for valuation of all instruments.

Level 3 Instrument	Balance Sheet Classification	Unobservable Inputs	Value Range			Time Period
Commodity contracts	Assets	Forward propane prices (per gallon)	$0.84	-	$0.92	Jan. 2013 - Dec. 2014
		Forward isobutane prices (per gallon)	$1.32	-	$1.44	Jan. 2013 - Dec. 2014
		Forward normal butane prices (per gallon)	$1.22	-	$1.30	Jan. 2013 - Dec. 2014
		Forward natural gasoline prices (per gallon)	$1.75	-	$1.83	Jan. 2013 - Dec. 2014
		Crude option volatilities (%)	18.41%	-	39.55%	Jul. 2012 - Dec. 2014
	Liabilities	Forward propane prices (per gallon)	$0.87	-	$0.89	Dec. 2012 - Mar. 2013
		Crude option volatilities (%)	18.41%	-	39.55%	Jul. 2012 - Dec. 2012
Embedded derivatives in commodity contracts	Liability	Forward propane prices (per gallon)	$0.83	-	$0.92	Jul. 2012 - Dec. 2022
		Forward isobutane prices (per gallon)	$1.31	-	$1.44	Jul. 2012 - Dec. 2022
		Forward normal butane prices (per gallon)	$1.18	-	$1.30	Jul. 2012 - Dec. 2022
		Forward natural gasoline prices (per gallon)	$1.74	-	$1.83	Jul. 2012 - Dec. 2022
		Forward natural gas prices (per mmbtu)	$2.75	-	$5.79	Jul. 2012 - Dec. 2022
		Probability of renewal (1)		0%
	Asset	ERCOT Pricing (per MegaWatt Hour) (2)	$25.38	-	$94.26	Jul. 2012 - Dec. 2014

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(1)The producer counterparty to the embedded derivative has the option to renew the gas purchase agreement and the related keep-whole processing agreement for two successive five year terms after 2022. The embedded gas purchase agreement cannot be renewed without the renewal of the related keep-whole processing agreement. Due to the significant number of years until the renewal options are exercisable and the high level of uncertainty regarding the counterparty’s future business strategy, the future commodity price environment, and the future competitive environment for midstream services in the Appalachia area, management determined that a 0% probability of renewal is an appropriate assumption.

(2)The forward ERCOT prices utilized in the valuations are generally increasing over time with a seasonal spike in pricing in the summer months.

Fair Value Sensitivity Related to Unobservable Inputs

Commodity contracts (assets and liabilities) - For the Partnership’s commodity contracts, increases in forward NGL prices result in a decrease in the fair value of the derivative assets and an increase the fair value of the derivative liabilities. The forward prices for the individual NGL products generally increase or decrease in a positive correlation with one another. An increase in crude option volatilities will generally result in an increase in the fair value of the Partnership’s derivative assets and derivative liabilities in commodity contracts.

Embedded derivative in commodity contracts (liability) - The embedded derivative liability relates to the natural gas purchase agreement embedded in a keep-whole processing agreement as discussed further in Note 5. Increases (decreases) in forward NGL prices result in an increase (decrease) in the fair value of the embedded derivative liability. An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability.

Embedded derivative in commodity contracts (asset) - The embedded derivative asset relates to utilities costs discussed further in Note 5. Increases in the forward ERCOT prices, relative to natural gas prices, result in an increase in the fair value of the embedded derivative asset.

Level 3 Valuation Process

The Partnership’s Risk Management Department (the “Risk Department”) is responsible for the valuation of the Partnership’s commodity derivative contracts and embedded derivatives in commodity contracts. The Risk Department reports to the Chief Financial Officer and is responsible for the oversight of the Partnership’s commodity risk management program. The members of the Risk Department have the requisite experience, knowledge and day-to-day involvement in the energy commodity markets to ensure appropriate valuations and understand the changes in the valuations from period to period. The valuations of the commodity derivative contracts are performed by a third-party pricing service and reviewed and validated on a quarterly basis by the Risk Department by comparing the pricing and option volatilities to actual market data and/or data provided by other independent third-party pricing services. The valuations for the embedded derivatives in commodity contracts are completed by the Risk Department utilizing the market data and price curves provided by the third-party pricing service. For the embedded derivative in the keep-whole processing arrangement discussed in Note 5, the Risk Department must develop forward price curves for NGLs and natural gas for periods in which price curves are not available from third-party pricing services due to insufficient market data. As of June 30, 2012, the Risk Department utilized internally developed price curves for the period of January 2015 through December 2022 in the valuation of the embedded derivative in the keep-whole processing arrangement. In developing the pricing curves for these periods, the Risk Department maximizes its use of the latest known market data and trends as well as its understanding of the historical relationships between the forward NGL and natural gas prices and the forward market data that is available for the required period, such as crude oil pricing and natural gas pricing from other markets. However, there is very limited actual market data available to validate the Partnership’s estimated price curves. The fair value of the Partnership’s commodity derivative contracts and embedded derivatives in commodity contracts are reviewed quarterly by the Hedge Committee.

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Changes in Level 3 Fair Value Measurements

The table below includes a rollforward of the balance sheet amounts for the three and six months ended June 30, 2012 and 2011 for assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy (in thousands).

	Three months ended June 30, 2012
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(17,450	)	$	(60,804	)
Total gain (realized and unrealized) included in earnings (1)	46,290			48,109
Settlements	716			2,300
Fair value at end of period	$	29,556		$	(10,395	)
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	43,894		$	47,300

	Three months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(35,906	)	$	(50,607	)
Total gain (loss) (realized and unrealized) included in earnings (1)	10,456			(2,825		)
Settlements	3,160			3,985
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	10,206		$	(2,429	)

	Six months ended June 30, 2012
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(2,965	)	$	(53,904	)
Total loss (realized and unrealized) included in earnings (1)	34,214			37,671
Settlements	(1,693		)	5,838
Fair value at end of period	$	29,556		$	(10,395	)
The amount of total gain for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	30,304		$	36,698

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	Six months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(14,357	)	$	(34,936	)
Total loss (realized and unrealized) included in earnings (1)	(12,537		)	(22,105		)
Settlements	4,604			7,594
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	(10,578	)	$	(20,277	)

(1)Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Derivative gain (loss) related to revenue. Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs, Derivative gain (loss) related to purchased product costs, Facility expenses, and Derivative gain (loss) related to facility expenses.

7. Inventories

Inventories consist of the following (in thousands):

	June 30, 2012		December 31, 2011
NGLs	$	12,470	$	32,352
Spare parts, materials and supplies	9,739		8,654
Total inventories	$	22,209	$	41,006

8. Goodwill

Changes in goodwill for the six months ended June 30, 2012 are summarized as follows (in thousands):

	Southwest			Northeast		Liberty		Gulf Coast			Total
Gross goodwill as of December 31, 2011	$	24,324		$	62,445	$	—	$	9,854		$	96,623
Acquisition (1)	—			—		76,664		—			76,664
Gross goodwill as of June 30, 2012	24,324			62,445		76,664		9,854			173,287
Cumulative impairment (2)	(18,851		)	—		—		(9,854		)	(28,705		)
Balance as of June 30, 2012	$	5,473		$	62,445	$	76,664	$	—		$	144,582

(1)           Represents goodwill associated with the Keystone Acquisition (see Note 3).

(2)           All impairments recorded in the fourth quarter of 2008.

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9. Long-Term Debt

Debt is summarized below (in thousands):

	June 30, 2012		December 31, 2011
Credit Facility
Revolving credit facility, 4% interest, due September 2017	$	217,865	$	66,000
Senior Notes (1)
2018 Senior Notes, 8.75% interest, net of discount of $119 and $129, respectively, issued April and May 2008 and due April 2018	80,993		80,983
2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020	500,000		500,000
2021 Senior Notes, 6.5% interest, net of discount of $873 and $921, respectively, issued February and March 2011 and due August 2021	499,127		499,079
2022 Senior Notes, 6.25% interest, issued October 2011 and due June 2022	700,000		700,000
Total long-term debt	$	1,997,985	$	1,846,062

(1)The estimated aggregate fair value of the senior notes (collectively, the “Senior Notes”) was approximately $1,853.3 million and $1,880.7 million as of June 30, 2012 and December 31, 2011, respectively, based on quoted prices in an inactive market. The fair value of the Partnership’s Senior Notes is considered a Level 3 measurement.

Credit Facility

On June 29, 2012, the Partnership amended the Credit Facility to increase the borrowing capacity to $1.2 billion and retained the existing accordion option, providing for potential future increases of up to an aggregate of $250 million upon the satisfaction of certain requirements. The term of the Credit Facility was extended one year and now matures on September 7, 2017. The Partnership incurred approximately $2.5 million of deferred financing costs associated with modifications of the Credit Facility during the quarter ended June 30, 2012.

Under the provisions of the Credit Facility, the Partnership is subject to a number of restrictions and covenants. These covenants are used to calculate the available borrowing capacity on a quarterly basis. The Credit Facility is guaranteed by the Partnership’s wholly-owned subsidiaries, other than MarkWest Liberty Midstream and its subsidiaries, and collateralized by substantially all of the Partnership’s assets and those of its wholly-owned subsidiaries, other than MarkWest Liberty Midstream and its subsidiaries. As of June 30, 2012, the Partnership had approximately $217.9 million of borrowings outstanding and approximately $22.3 million of letters of credit outstanding under the Credit Facility, leaving approximately $959.8 million available for borrowing.

10. Equity

Equity Offerings

In January 2012, the Partnership issued approximately 0.7 million common units representing limited partner interests pursuant to the underwriters’ exercise of their option to purchase additional common units under the equity offering initiated in December 2011. The total net proceeds from the exercise of this option were approximately $38 million and were used to partially fund the Partnership’s ongoing capital expenditure program.

In March 2012, the Partnership completed a public offering of approximately 6.8 million newly issued common units representing limited partner interests, which includes the full exercise of the underwriters’ over-allotment option. Net proceeds after deducting underwriting fees and other third-party offering expenses were approximately $388 million and were used to partially fund the Partnership’s ongoing capital expenditure program.

In May 2012, the Partnership completed a public offering of 8.0 million newly issued common units representing limited partner interests. Net proceeds after deducting underwriting fees and other third-party offering expenses were approximately $427 million, which were used to partially fund the Keystone Acquisition.

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Distributions of Available Cash

Quarter Ended	Distribution Per Common Unit		Declaration Date	Record Date	Payment Date
June 30, 2012	$	0.80	July 26, 2012	August 6, 2012	August 14, 2012
March 31, 2012	$	0.79	April 26, 2012	May 7, 2012	May 15, 2012
December 31, 2011	$	0.76	January 26, 2012	February 6, 2012	February 14, 2012

11. Commitments and Contingencies

Legal

The Partnership is subject to a variety of risks and disputes, and is a party to various legal proceedings in the normal course of its business. The Partnership maintains insurance policies in amounts and with coverage and deductibles as it believes reasonable and prudent. However, the Partnership cannot assure that the insurance companies will promptly honor their policy obligations or that the coverage or levels of insurance will be adequate to protect the Partnership from all material expenses related to future claims for property loss or business interruption to the Partnership, or for third-party claims of personal and property damage, or that the coverages or levels of insurance it currently has will be available in the future at economical prices. While it is not possible to predict the outcome of the legal actions with certainty, management is of the opinion that appropriate provisions and accruals for potential losses associated with all legal actions have been made in the consolidated financial statements.

In the ordinary course of business, the Partnership is a party to various legal and regulatory actions. In the opinion of management, none of these actions, either individually or in the aggregate, will have a material adverse effect on the Partnership’s financial condition, liquidity or results of operations.

Contract Contingencies

Certain natural gas processing arrangements in the Partnership’s Liberty and Northeast segments require the Partnership to construct new natural gas processing plants and NGL pipelines. Some contracts contain certain fees and charges if specified construction milestones are not achieved for reasons other than force majeure. The Partnership has experienced delays in the construction of a processing facility in the Partnership’s Liberty Segment due to events that management considers force majeure including inabilities or delays in obtaining requisite permits, as well as due to extreme weather events. The requisite permits were subsequently issued several months later than expected and construction has re-commenced however those delays exacerbated construction conditions. In addition, the Partnership continued to experience extraordinary weather events in the first quarter of 2012 which have resulted in additional delays. Delay charges for delays other than due to force majeure events are $1.0 million for each month (pro-rated for partial months) that the Partnership does not achieve certain intermediate and final completion construction milestones. In addition, if delays (other than due to force majeure events) are six months or longer, the producer has the option to purchase the processing facilities and terminate the processing agreement with a substantial termination fee. The Partnership has made a force majeure claim as the delays were a direct result of permit delays and weather which are force majeure events under the applicable contract. The customer has reserved its rights to dispute the Partnership’s force majeure claim, but has not requested the payment of any delay charges. The Partnership’s management believes it has a convincing legal position and believes that its force majeure claim would be recognized as valid if contested. The Partnership has completed construction of interim compression and transportation facilities and is providing alternative processing services to mitigate the impact of these delays.

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12. Income Taxes

A reconciliation of the provision for income tax and the amount computed by applying the federal statutory rate to income (loss) before provision for income tax for the six months ended June 30, 2012 and 2011 is as follows (in thousands):

	Six months ended June 30, 2012
	Corporation			Partnership			Eliminations			Consolidated
Income before provision for income tax	$	94,600		$	155,621		$	2,206		$	252,427
Federal statutory rate	35		%	0		%	0		%
Federal income tax at statutory rate	33,110			—			—			33,110
Permanent items	16			—			—			16
State income taxes, net of federal benefit	4,259			765			—			5,024
Provision on income from Class A units (1)	10,868			—			—			10,868
Provision for income tax	$	48,253		$	765		$	—		$	49,018

	Six months ended June 30, 2011
	Corporation			Partnership			Eliminations			Consolidated
(Loss) income before provision for income tax	$	(2,541	)	$	20,951		$	(3,298	)	$	15,112
Federal statutory rate	35		%	0		%	0		%
Federal income tax at statutory rate	(889		)	—			—			(889		)
Permanent items	(5		)	—			—			(5		)
State income taxes, net of federal benefit	(72		)	107			—			35
Provision on income from Class A units (1)	1,311			—			—			1,311
Other	126			—			—			126
Provision for income tax	$	471		$	107		$	—		$	578

(1)The Corporation and the General Partner of the Partnership own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in the income or loss of the Partnership, except for items attributable to the Partnership’s ownership of or sale of shares of the Corporation’s common stock. The provision on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity.

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13. Earnings (Loss) Per Common Unit

The following table shows the computation of basic and diluted net income (loss) per common unit for the three and six months ended June 30, 2012 and 2011, and the weighted-average units used to compute basic and diluted net income (loss) per common unit (in thousands, except per unit data):

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Net income (loss) attributable to the Partnership	$	186,908	$	78,497	$	202,928	$	(5,532	)
Less: Income allocable to phantom units	1,209		719		1,391		847
Income (loss) available for common unitholders - basic	185,699		77,778		201,537		(6,379		)
Add: Income allocable to phantom units and DER expense	1,218		—		1,414		—
Income (loss) available for common unitholders - diluted	$	186,917	$	77,778	$	202,951	$	(6,379	)
Weighted average common units outstanding - basic	106,825		75,160		101,833		74,847
Potential common shares (Class B and phantom units)	20,643		106		20,698		—
Weighted average common units outstanding - diluted	127,468		75,266		122,531		74,847
Net income (loss) attributable to the Partnership’s common unitholders per common unit (1)
Basic	$	1.74	$	1.03	$	1.98	$	(0.09	)
Diluted	$	1.47	$	1.03	$	1.66	$	(0.09	)

(1)Earnings per Class B units equals zero as Class B unitholders are not entitled to receive distributions and therefore no income is allocable to Class B units under the two class method.

14. Segment Information

The Partnership prepares segment information in accordance with GAAP. Certain items below Income from operations in the accompanying Condensed Consolidated Statements of Operations, certain compensation expense, certain other non-cash items and any gains (losses) from derivative instruments are not allocated to individual segments. Management does not consider these items allocable to or controllable by any individual segment and therefore excludes these items when evaluating segment performance. Segment results are also adjusted to exclude the portion of operating income attributable to the non-controlling interests.

The tables below present the Partnership’s segment profit measure, Operating income before items not allocated to segments, for the three and six months ended June 30, 2012 and 2011 and capital expenditures for the six months ended June 30, 2012 and 2011 for the reported segments (in thousands).

Three months ended June 30, 2012:

	Southwest		Northeast		Liberty			Gulf Coast		Total
Segment revenue	$	189,162	$	42,051	$	59,477		$	20,997	$	311,687
Purchased product costs	91,792		12,921		8,018			—		112,731
Net operating margin	97,370		29,130		51,459			20,997		198,956
Facility expenses	23,034		4,932		13,647			9,607		51,220
Portion of operating income (loss) attributable to non-controlling interests	1,590		—		(113		)	—		1,477
Operating income before items not allocated to segments	$	72,746	$	24,198	$	37,925		$	11,390	$	146,259

22

Three months ended June 30, 2011:

	Southwest		Northeast		Liberty		Gulf Coast		Total
Segment revenue	$	235,575	$	53,676	$	48,337	$	24,683	$	362,271
Purchased product costs	128,988		15,702		9,890		—		154,580
Net operating margin	106,587		37,974		38,447		24,683		207,691
Facility expenses	20,855		6,929		7,269		8,312		43,365
Portion of operating income attributable to non-controlling interests	1,346		—		15,182		—		16,528
Operating income before items not allocated to segments	$	84,386	$	31,045	$	15,996	$	16,371	$	147,798

The following is a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax for the three months ended June 30, 2012 and 2011 (in thousands):

	Three months ended June 30,
	2012			2011
Total segment revenue	$	311,687		$	362,271
Derivative gain not allocated to segments	136,067			40,590
Revenue deferral adjustment (1)	(1,701		)	(2,422		)
Total revenue	$	446,053		$	400,439
Operating income before items not allocated to segments	$	146,259		$	147,798
Portion of operating income attributable to non-controlling interests	1,477			16,528
Derivative gain not allocated to segments	188,792			37,917
Revenue deferral adjustment (1)	(1,701		)	(2,422		)
Compensation expense included in facility expenses not allocated to segments	(184		)	(188		)
Facility expenses adjustments (2)	2,866			2,855
Selling, general and administrative expenses	(21,879		)	(18,580		)
Depreciation	(42,918		)	(37,201		)
Amortization of intangible assets	(12,307		)	(10,830		)
Loss on disposal of property, plant and equipment	(1,342		)	(2,373		)
Accretion of asset retirement obligations	(161		)	(290		)
Income from operations	258,902			133,214
Earnings (loss) from unconsolidated affiliate	551			(216		)
Interest income	159			63
Interest expense	(26,762		)	(27,874		)
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245		)	(1,443		)
Miscellaneous income, net	4			169
Income before provision for income tax	$	231,609		$	103,913

(1)Amount relates to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore, the impact of the revenue deferrals is excluded for segment reporting purposes. For the three months ended June 30, 2012, approximately $0.2 million

23

and $1.5 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the three months ended June 30, 2011, in comparison, approximately $0.2 million and $2.2 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Beginning in 2015, the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

(2)Facility expenses adjustments consist of the reallocation of the MarkWest Pioneer field services fee and the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Gulf Coast segment.

Six months ended June 30, 2012:

	Southwest		Northeast		Liberty			Gulf Coast		Total
Segment revenue	$	403,887	$	128,969	$	135,054		$	45,226	$	713,136
Purchased product costs	196,025		38,608		32,653			—		267,286
Net operating margin	207,862		90,361		102,401			45,226		445,850
Facility expenses	46,026		11,310		25,894			19,245		102,475
Portion of operating income (loss) attributable to non-controlling interests	3,036		—		(113		)	—		2,923
Operating income before items not allocated to segments	$	158,800	$	79,051	$	76,620		$	25,981	$	340,452
Capital expenditures	$	95,657	$	43,475	$	432,287		$	7,052	$	578,471
Capital expenditures not allocated to segments										3,732
Total capital expenditures										$	582,203

Six months ended June 30, 2011:

	Southwest		Northeast		Liberty		Gulf Coast		Total
Segment revenue	$	437,349	$	145,767	$	89,556	$	46,442	$	719,114
Purchased product costs	232,184		56,580		19,445		—		308,209
Net operating margin	205,165		89,187		70,111		46,442		410,905
Facility expenses	41,012		12,523		13,767		17,302		84,604
Portion of operating income attributable to non-controlling interests	2,518		—		27,559		—		30,077
Operating income before items not allocated to segments	$	161,635	$	76,664	$	28,785	$	29,140	$	296,224
Capital expenditures	$	51,312	$	3,370	$	176,027	$	845	$	231,554
Capital expenditures not allocated to segments									2,562
Total capital expenditures									$	234,116

24

The following is a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax for the six months ended June 30, 2012 and 2011 (in thousands):

	Six months ended June 30,
	2012			2011
Total segment revenue	$	713,136		$	719,114
Derivative gain (loss) not allocated to segments	87,352			(45,089		)
Revenue deferral adjustment (1)	(3,969		)	(10,365		)
Total revenue	$	796,519		$	663,660
Operating income before items not allocated to segments	$	340,452		$	296,224
Portion of operating income attributable to non-controlling interests	2,923			30,077
Derivative gain (loss) not allocated to segments	123,023			(64,145		)
Revenue deferral adjustment (1)	(3,969		)	(10,365		)
Compensation expense included in facility expenses not allocated to segments	(633		)	(1,228		)
Facility expenses adjustments (2)	5,730			5,710
Selling, general and administrative expenses	(47,103		)	(40,292		)
Depreciation	(84,063		)	(71,565		)
Amortization of intangible assets	(23,292		)	(21,647		)
Loss on disposal of property, plant and equipment	(2,328		)	(4,472		)
Accretion of asset retirement obligations	(399		)	(377		)
Income from operations	310,341			117,920
Earnings (loss) from unconsolidated affiliate	542			(755		)
Interest income	231			152
Interest expense	(56,234		)	(56,137		)
Amortization of deferred financing costs and discount (a component of interest expense)	(2,515		)	(2,871		)
Loss on redemption of debt	—			(43,328		)
Miscellaneous income, net	62			131
Income before provision for income tax	$	252,427		$	15,112

(1)Amount relates to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore the impact of the revenue deferrals is excluded for segment reporting purposes. For the six months ended June 30, 2012, approximately $0.4 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the six months ended June 30, 2011, approximately $6.7 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Beginning in 2015, the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

(2)Facility expenses adjustments consist of the reallocation of the MarkWest Pioneer field services fee and the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Gulf Coast segment.

25

The tables below present information about segment assets as of June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012		December 31, 2011
Southwest	$	1,698,454	$	1,701,919
Northeast	491,428		533,591
Liberty	2,147,784		1,114,654
Gulf Coast	527,147		553,043
Total segment assets	4,864,813		3,903,207
Assets not allocated to segments:
Certain cash and cash equivalents	113,529		66,212
Fair value of derivatives	63,793		24,790
Investment in unconsolidated affiliate	26,695		27,853
Other (1)	65,768		48,363
Total assets	$	5,134,598	$	4,070,425

(1)Includes corporate fixed assets, deferred financing costs, income tax receivable, receivables and other corporate assets not allocated to segments.

15. Supplemental Condensed Consolidating Financial Information

The Partnership has no operations independent of its subsidiaries. As of June 30, 2012, the Partnership’s obligations under the outstanding Senior Notes (see Note 9) were fully, jointly and severally guaranteed, by all of its wholly-owned subsidiaries other than MarkWest Liberty Midstream and its subsidiaries. The guarantees are unconditional except for certain customary circumstances in which a subsidiary would be released from the guarantee under the indentures. MarkWest Liberty Midstream, MarkWest Utica EMG and MarkWest Pioneer, together with certain of the Partnership’s other subsidiaries that do not guarantee the outstanding Senior Notes, have significant assets and operations in the aggregate. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their subsidiaries are presented in accordance with the equity method of accounting. The financial information may not necessarily be indicative of results of operations, cash flows, or financial position had the subsidiaries operated as independent entities. The operations, cash flows and financial position of the co-issuer of the Senior Notes, MarkWest Energy Finance Corporation, are minor and therefore have been included with the Parent’s financial information. Condensed consolidating financial information for the Partnership, its combined guarantor subsidiaries and combined non-guarantor subsidiaries as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011 is as follows (in thousands):

26

Condensed Consolidating Balance Sheets

	As of June 30, 2012
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	118,908	$	6,554	$	—		$	125,462
Restricted cash	—		—		25,285		—			25,285
Receivables and other current assets	5,824		137,690		32,525		—			176,039
Intercompany receivables	772,994		7,818		7,866		(788,678		)	—
Fair value of derivative instruments	—		26,883		1,673		—			28,556
Total current assets	778,818		291,299		73,903		(788,678		)	355,342
Total property, plant and equipment, net	3,811		1,926,844		1,832,027		(119,046		)	3,643,636
Other long-term assets:
Investment in unconsolidated affiliate	—		26,695		—		—			26,695
Investment in consolidated affiliates	3,294,718		1,813,342		—		(5,108,060		)	—
Intangibles, net of accumulated amortization	—		581,273		303,910		—			885,183
Fair value of derivative instruments	—		34,472		765		—			35,237
Intercompany notes receivable	219,000		—		—		(219,000		)	—
Other long-term assets	41,289		70,212		77,004		—			188,505
Total assets	$	4,337,636	$	4,744,137	$	2,287,609	$	(6,234,784	)	$	5,134,598
LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	268	$	774,338	$	14,072	$	(788,678	)	$	—
Fair value of derivative instruments	—		30,398		81		—			30,479
Other current liabilities	25,851		151,498		262,389		—			439,738
Total current liabilities	26,119		956,234		276,542		(788,678		)	470,217
Deferred income taxes	1,059		155,724		—		—			156,783
Long-term intercompany financing payable	—		196,000		125,349		(321,349		)	—
Fair value of derivative instruments	—		18,951		—		—			18,951
Long-term debt, net of discounts	1,997,985		—		—		—			1,997,985
Other long-term liabilities	3,056		122,510		2,665		—			128,231
Equity:
Common units	1,556,886		3,294,718		1,883,053		(5,194,468		)	1,540,189
Class B units	752,531		—		—		—			752,531
Non-controlling interest in consolidated subsidiaries	—		—		—		69,711			69,711
Total equity	2,309,417		3,294,718		1,883,053		(5,124,757		)	2,362,431
Total liabilities and equity	$	4,337,636	$	4,744,137	$	2,287,609	$	(6,234,784	)	$	5,134,598

27

	As of December 31, 2011
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	22	$	99,580	$	17,414	$	—		$	117,016
Restricted cash	—		—		26,193		—			26,193
Receivables and other current assets	7,097		232,010		55,098		(5		)	294,200
Intercompany receivables	19,981		40,519		22,193		(82,693		)	—
Fair value of derivative instruments	—		8,015		683		—			8,698
Total current assets	27,100		380,124		121,581		(82,698		)	446,107
Total property, plant and equipment, net	4,012		1,714,857		1,163,226		(17,788		)	2,864,307
Other long-term assets:
Investment in unconsolidated affiliate	—		27,853		—		—			27,853
Investment in consolidated affiliates	3,071,124		1,097,350		—		(4,168,474		)	—
Intangibles, net of accumulated amortization	—		603,224		543		—			603,767
Fair value of derivative instruments	—		16,092		—		—			16,092
Intercompany notes receivable	235,700		—		—		(235,700		)	—
Other long-term assets	41,492		70,434		373		—			112,299
Total assets	$	3,379,428	$	3,909,934	$	1,285,723	$	(4,504,660	)	$	4,070,425
LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	40,503	$	40,374	$	1,816	$	(82,693	)	$	—
Fair value of derivative instruments	—		90,551		—		—			90,551
Other current liabilities	38,775		219,622		92,930		(5		)	351,322
Total current liabilities	79,278		350,547		94,746		(82,698		)	441,873
Deferred income taxes	1,228		92,436		—		—			93,664
Long-term intercompany financing payable	—		212,700		23,000		(235,700		)	—
Fair value of derivative instruments	—		65,403		—		—			65,403
Long-term debt, net of discounts	1,846,062		—		—		—			1,846,062
Other long-term liabilities	3,232		117,724		400		—			121,356
Equity:
Common Units	697,097		3,071,124		1,167,577		(4,256,489		)	679,309
Class B Units	752,531		—		—		—			752,531
Non-controlling interest in consolidated subsidiaries	—		—		—		70,227			70,227
Total equity	1,449,628		3,071,124		1,167,577		(4,186,262		)	1,502,067
Total liabilities and equity	$	3,379,428	$	3,909,934	$	1,285,723	$	(4,504,660	)	$	4,070,425

28

Condensed Consolidating Statements of Operations

	Three Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	381,527		$	67,001		$	(2,475	)	$	446,053
Operating expenses:	—			—			—			—
Purchased product costs	—			53,041			8,111			—			61,152
Facility expenses	—			33,111			14,614			(333		)	47,392
Selling, general and administrative expenses	12,539			2,205			11,378			(4,243		)	21,879
Depreciation and amortization	148			40,634			15,572			(1,129		)	55,225
Other operating expenses	—			628			875			—			1,503
Total operating expenses	12,687			129,619			50,550			(5,705		)	187,151
(Loss) income from operations	(12,687		)	251,908			16,451			3,230			258,902
Earnings from consolidated affiliates	217,483			14,518			—			(232,001		)	—
Other expense, net	(20,700		)	(5,169		)	(1,705		)	281			(27,293		)
Income before provision for income tax	184,096			261,257			14,746			(228,490		)	231,609
Provision for income tax expense	699			43,774			—			—			44,473
Net income	183,397			217,483			14,746			(228,490		)	187,136
Net income attributable to non-controlling interest	—			—			—			(228		)	(228		)
Net income attributable to the Partnership	$	183,397		$	217,483		$	14,746		$	(228,718	)	$	186,908

	Three Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	348,371		$	52,068		$	—		$	400,439
Operating expenses:
Purchased product costs	—			144,403			9,923			—			154,326
Facility expenses	—			35,419			8,373			(167		)	43,625
Selling, general and administrative expenses	11,224			7,153			1,932			(1,729		)	18,580
Depreciation and amortization	181			38,008			10,011			(169		)	48,031
Other operating expenses	374			1,987			302			—			2,663
Total operating expenses	11,779			226,970			30,541			(2,065		)	267,225
(Loss) income from operations	(11,779		)	121,401			21,527			2,065			133,214
Earnings from consolidated affiliates	114,152			10,769			—			(124,921		)	—
Other expense, net	(22,071		)	(3,759		)	(50		)	(3,421		)	(29,301		)
Income before provision for income tax	80,302			128,411			21,477			(126,277		)	103,913
Provision for income tax expense	449			14,259			—			—			14,708
Net income	79,853			114,152			21,477			(126,277		)	89,205
Net income attributable to non-controlling interest	—			—			—			(10,708		)	(10,708		)
Net income attributable to the Partnership	$	79,853		$	114,152		$	21,477		$	(136,985	)	$	78,497

29

	Six Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	652,598		$	146,396		$	(2,475	)	$	796,519
Operating expenses:
Purchased product costs	—			201,642			32,865			—			234,507
Facility expenses	—			67,047			27,948			(509		)	94,486
Selling, general and administrative expenses	26,956			7,700			14,509			(2,062		)	47,103
Depreciation and amortization	312			79,927			28,483			(1,367		)	107,355
Other operating expenses	—			1,739			988			—			2,727
Total operating expenses	27,268			358,055			104,793			(3,938		)	486,178
(Loss) income from operations	(27,268		)	294,543			41,603			1,463			310,341
Earnings from consolidated affiliates	273,914			38,752			—			(312,666		)	—
Other expense, net	(44,044		)	(11,128		)	(2,370		)	(372		)	(57,914		)
Income before provision for income tax	202,602			322,167			39,233			(311,575		)	252,427
Provision for income tax expense	765			48,253			—			—			49,018
Net income	201,837			273,914			39,233			(311,575		)	203,409
Net income attributable to non-controlling interest	—			—			—			(481		)	(481		)
Net income attributable to the Partnership	$	201,837		$	273,914		$	39,233		$	(312,056	)	$	202,928

	Six Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	566,851		$	96,809		$	—		$	663,660
Operating expenses:
Purchased product costs	—			307,847			19,502			—			327,349
Facility expenses	—			64,350			16,022			(334		)	80,038
Selling, general and administrative expenses	24,078			15,371			3,969			(3,126		)	40,292
Depreciation and amortization	356			74,477			18,696			(317		)	93,212
Other operating expenses	673			3,826			350			—			4,849
Total operating expenses	25,107			465,871			58,539			(3,777		)	545,740
(Loss) income from operations	(25,107		)	100,980			38,270			3,777			117,920
Earnings from consolidated affiliates	112,919			18,144			—			(131,063		)	—
Loss on redemption of debt	(43,328		)	—			—			—			(43,328		)
Other expense, net	(46,965		)	(5,734		)	(60		)	(6,721		)	(59,480		)
(Loss) income before provision for income tax	(2,481		)	113,390			38,210			(134,007		)	15,112
Provision for income tax expense	107			471			—			—			578
Net (loss) income	(2,588		)	112,919			38,210			(134,007		)	14,534
Net income attributable to non-controlling interest	—			—			—			(20,066		)	(20,066		)
Net (loss) income attributable to the Partnership	$	(2,588	)	$	112,919		$	38,210		$	(154,073	)	$	(5,532	)

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Condensed Consolidating Statements of Cash Flows

	Six Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(77,181	)	$	211,915		$	121,980		$	(277	)	$	256,437
Cash flows from investing activities:
Restricted cash	—			—			1,003			—			1,003
Capital expenditures	(114		)	(166,926		)	(416,377		)	1,214			(582,203		)
Equity investments	(26,640		)	(843,960		)	—			870,600			—
Acquisition of business, net of cash acquired	—			—			(506,797		)	—			(506,797		)
Distributions from consolidated affiliates	36,575			53,355			—			(89,930		)	—
Collection of intercompany notes, net	16,700			—			—			(16,700		)	—
Proceeds from disposal of property, plant and equipment	—			1,713			—			(1,214		)	499
Net cash flows provided by (used in) investing activities	26,521			(955,818		)	(922,171		)	763,970			(1,087,498		)
Cash flows from financing activities:
Proceeds from public equity offerings, net	852,873			—			—			—			852,873
Proceeds from revolving credit facility	238,065			—			—			—			238,065
Payments of revolving credit facility	(86,200		)	—			—			—			(86,200		)
Payments related to intercompany financing, net	—			(16,700		)	(277		)	16,977			—
Payments for deferred financing costs	(2,315		)	—			—			—			(2,315		)
Contributions from parent and affiliates	—			26,640			843,960			(870,600		)	—
Contribution from non-controlling interest	—			—			1,940			—			1,940
Share-based payment activity	(8,048		)	2,207			—			—			(5,841		)
Payment of distributions	(155,073		)	(36,575		)	(56,292		)	89,930			(158,010		)
Payments of SMR liability	—			(1,005		)	—			—			(1,005		)
Intercompany advances, net	(788,664		)	788,664			—			—			—
Net cash flows provided by financing activities	50,638			763,231			789,331			(763,693		)	839,507
Net increase (decrease) in cash	(22		)	19,328			(10,860		)	—			8,446
Cash and cash equivalents at beginning of year	22			99,580			17,414			—			117,016
Cash and cash equivalents at end of period	$	—		$	118,908		$	6,554		$	—		$	125,462

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	Six Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(66,828	)	$	189,342		$	87,113		$	(3,263	)	$	206,364
Cash flows from investing activities:
Capital expenditures	(610		)	(58,715		)	(179,302		)	4,511			(234,116		)
Acquisitions	—			(230,728		)	—			—			(230,728		)
Equity investments	(21,556		)	(130,361		)	—			151,917			—
Distributions from consolidated affiliates	27,208			35,147			—			(62,355		)	—
Investment in intercompany notes, net	(17,450		)	—			—			17,450			—
Proceeds from disposal of property, plant and equipment	—			89			3,954			(1,248		)	2,795
Net cash flows used in investing activities	(12,408		)	(384,568		)	(175,348		)	110,275			(462,049		)
Cash flows from financing activities:
Proceeds from revolving credit facility	781,700			—			—			—			781,700
Payments of revolving credit facility	(535,200		)	—			—			—			(535,200		)
Proceeds from long-term debt	499,000			—			—			—			499,000
Payments of long-term debt	(437,848		)	—			—			—			(437,848		)
Payments of premiums on redemption of long-term debt	(39,520		)	—			—			—			(39,520		)
(Payments of) proceeds from intercompany notes, net	—			(5,550		)	23,000			(17,450		)	—
Payments for debt issuance costs, deferred financing costs and registration costs	(6,747		)	—			—			—			(6,747		)
Contributions from parent and affiliates	—			21,556			130,361			(151,917		)	—
Contributions from non-controlling interest	—			—			24,400			—			24,400
Payments of SMR liability	—			(916		)	—			—			(916		)
Proceeds from public equity offering, net	138,163			—			—			—			138,163
Share-based payment activity	(6,269		)	1,096			—			—			(5,173		)
Payment of distributions	(100,058		)	(27,208		)	(69,678		)	62,355			(134,589		)
Intercompany advances, net	(213,982		)	213,982			—			—			—
Net cash flows provided by financing activities	79,239			202,960			108,083			(107,012		)	283,270
Net increase in cash	3			7,734			19,848			—			27,585
Cash and cash equivalents at beginning of year	—			63,850			3,600			—			67,450
Cash and cash equivalents at end of period	$	3		$	71,584		$	23,448		$	—		$	95,035

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16. Supplemental Cash Flow Information

The following table provides information regarding supplemental cash flow information (in thousands):

	Six months ended June 30,
	2012		2011
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized	$	61,543	$	57,820
Cash paid for income taxes, net	18,425		514
Supplemental schedule of non-cash investing and financing activities:
Accrued property, plant and equipment	$	236,495	$	58,429
Interest capitalized on construction in progress	8,048		199
Issuance of common units for vesting of share-based payment awards	2,501		5,282

17. Subsequent Events

Effective July 2012, the Partnership amended its lease for its corporate offices in Denver, Colorado to include additional space and extend the term of the lease through 2024. The following table shows the increase in minimum future lease payments as of June 30, 2012 compared to the amount disclosed in Note 18 Commitments and Contingencies in the Form 10-K for the year ended December 31, 2011 (in thousands):

2012	$	569
2013	4,295
2014	3,995
2015	3,926
2016	4,747
2017 and thereafter	58,221
Total	$	75,753

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Management’s Discussion and Analysis (“MD&A”) contains statements that are forward-looking and should be read in conjunction with our condensed consolidated financial statements and accompanying notes included elsewhere in this report and our Annual Report on Form 10-K for the year ended December 31, 2011. Statements that are not historical facts are forward-looking statements. We use words such as “could,” “may,” “predict,” “should,” “expect,” “hope,” “continue,” “potential,” “plan,” “intend,” “anticipate,” “project,” “believe,” “estimate,” and similar expressions to identify forward-looking statements. These statements are based on current expectations, estimates, assumptions and beliefs concerning future events impacting us and therefore involve a number of risks and uncertainties. Forward-looking statements are not guarantees and actual results could differ materially from those expressed or implied in the forward-looking statements as a result of a number of factors. We do not update publicly any forward-looking statement with new information or future events. Undue reliance should not be placed on forward-looking statements as many of these factors are beyond our ability to control or predict.

Overview

We are a master limited partnership engaged in the gathering, transportation and processing of natural gas; the transportation, fractionation, marketing and storage of NGLs; and the gathering and transportation of crude oil. We have extensive natural gas gathering, processing and transmission operations in the southwest, Gulf Coast and northeast regions of the United States, including the Marcellus Shale, and are the largest natural gas processor and fractionator in the Appalachian region.

Significant Financial and Other Highlights

Significant financial and other highlights for the three months ended June 30, 2012 are listed below. Refer to Results of Operations and Liquidity and Capital Resources for further details.

·Total segment operating income before items not allocated to segments (a non-GAAP financial measure, see below) decreased approximately $1.5 million, or 1%, for the three months ended June 30, 2012 compared to the same period in 2011. The decrease is due primarily to a decline in NGL prices which was partially offset by our acquisition of M&R MWE Liberty, L.L.C.’s (“M&R”) interest in MarkWest Liberty Midstream and an approximate 20% increase in processed volumes, primarily due to our expanding operations in the Liberty and Southwest segments.

·In May 2012, we received net proceeds of approximately $427 million from a public offering of 8.0 million newly issued common units representing limited partner interests.

·In May 2012, we announced an additional 400 MMcf/d expansion of our Majorsville Complex that is supported by a long-term fee-based processing agreement with an affiliate of Chesapeake Energy Corporation. This expansion, combined with the expansion of the Majorsville Complex announced in the first quarter of 2012, consists of four, 200 MMcf/d processing plants that are expected to begin operations in 2013 and 2014 and will bring total cryogenic processing capacity at the Majorsville Complex to approximately 1.1 Bcf/d.

·In May 2012, we announced a long-term fee-based agreement with Antero Resources Appalachian Corporation (“Antero”) to install significant gathering facilities in support of Antero’s rapidly growing liquids-rich natural gas production in northern West Virginia. The new gathering system will have initial capacity to deliver more than 300 MMcf/d to our processing facilities currently under construction in Sherwood, West Virginia (“Sherwood Complex”). The first phase of the gathering system will be completed in the third quarter of 2012 in conjunction with the completion of the first processing facility at the Sherwood Complex.

·In May 2012, we completed the Keystone Acquisition for approximately $509.6 million, subject to final working capital adjustments. Keystone’s existing assets are located in Butler County, Pennsylvania and include two cryogenic gas processing plants totaling 90 million cubic feet per day of processing capacity, a gas gathering system and associated field compression. Pursuant to a long-term gathering and processing agreement, Rex and Summit have dedicated the production from approximately 900 square miles to the Partnership. The Partnership will gather and process liquids rich gas, and in 2013 exchange NGLs for fractionated products under a long-term, fee-based agreement.

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Non-GAAP Measures

In evaluating our financial performance, management utilizes the segment performance measures, segment revenues and operating income before items not allocated to segments. These financial measures are presented in Note 14 to the accompanying condensed consolidated financial statements and are considered non-GAAP financial measures when presented outside of the notes to the condensed consolidated financial statements. The use of these measures allows investors to understand how management evaluates financial performance to make operating decisions and allocate resources. See Note 14 to the accompanying condensed consolidated financial statements for the reconciliations of segment revenue and operating income before items not allocated to segments to the respective most comparable GAAP measure.

Management evaluates contract performance on the basis of net operating margin (a non-GAAP financial measure). These adjustments have been made for the purpose of enhancing the understanding by both management and investors of the underlying baseline operating performance of our contractual arrangements, which management uses to evaluate our financial performance for purposes of planning and forecasting.

The following is a reconciliation to Income (loss) from operations, the most comparable GAAP financial measure to net operating margin (in thousands):

	Three months ended June 30,						Six months ended June 30,
	2012			2011			2012			2011
Segment revenue	$	311,687		$	362,271		$	713,136		$	719,114
Purchased product costs	(112,731		)	(154,580		)	(267,286		)	(308,209		)
Net operating margin	198,956			207,691			445,850			410,905
Facility expenses	(48,538		)	(40,698		)	(97,378		)	(80,122		)
Derivative gain (loss)	188,792			37,917			123,023			(64,145		)
Revenue deferral adjustment	(1,701		)	(2,422		)	(3,969		)	(10,365		)
Selling, general and administrative expenses	(21,879		)	(18,580		)	(47,103		)	(40,292		)
Depreciation	(42,918		)	(37,201		)	(84,063		)	(71,565		)
Amortization of intangible assets	(12,307		)	(10,830		)	(23,292		)	(21,647		)
Loss on disposal of property, plant and equipment	(1,342		)	(2,373		)	(2,328		)	(4,472		)
Accretion of asset retirement obligations	(161		)	(290		)	(399		)	(377		)
Income from operations	$	258,902		$	133,214		$	310,341		$	117,920

Segment revenues, operating income before items not allocated to segments and net operating margin (collectively, the “Non-GAAP Measures”) do not have any standardized definition and therefore are unlikely to be comparable to similar measures presented by other reporting companies. Non-GAAP Measures should not be evaluated in isolation of, or as a substitute for, our financial results prepared in accordance with GAAP. Non-GAAP Measures and the underlying methodology in excluding certain revenues or charges is not necessarily an indication of the results of operations expected in the future, or that we will not, in fact, receive such revenue or incur such charges in future periods.

Our Contracts

We generate the majority of our revenue and net operating margin (a non-GAAP measure, see above for discussion and reconciliation of net operating margin) from natural gas gathering, transportation and processing; NGL transportation, fractionation, marketing and storage; and crude oil gathering and transportation. We enter into a variety of contract types. In many cases, we provide services under contracts that contain a combination of more than one of the following types of arrangements: fee-based, percent-of-proceeds, percent-of-index and keep-whole. See Item 1. Business—Our Contracts in our Annual Report on Form 10-K for the year ended December 31, 2011 for further discussion of each of these types of arrangements.

The following table does not give effect to our active commodity risk management program. For the six months ended June 30, 2012, we calculated the following approximate percentages of our segment revenue and net operating margin from the following types of contracts:

	Fee-Based		Percent-of-Proceeds (1)		Percent-of-Index (2)		Keep-Whole (3)
Segment revenue	27	%	35	%	3	%	35	%
Net operating margin (4)	44	%	25	%	0	%	31	%

(1)Includes condensate sales and other types of arrangements tied to NGL prices.

(2)Includes arrangements tied to natural gas prices.

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(3)Includes condensate sales and other types of arrangements tied to both NGL and natural gas prices.

(4)We manage our business by taking into account the partial offset of short natural gas positions by long positions primarily in our Southwest segment. The calculated percentages for the net operating margin for percent-of-proceeds, percent-of-index and keep-whole contracts reflect the partial offset of our natural gas positions.

Seasonality

Our business is affected by seasonal fluctuations in commodity prices. Sales volumes also are affected by various other factors such as fluctuating and seasonal demands for products, changes in transportation and travel patterns and variations in weather patterns from year to year. Our Northeast and Liberty segments are particularly impacted by seasonality. In our Northeast and Liberty segments, we store a portion of the propane that is produced in the summer to be sold in the winter months. To manage this seasonality, we have access to approximately 60 million gallons of propane storage capacity provided by our own storage facilities and a firm capacity arrangement with a third-party. However, the mild winter in 2011 resulted in constraints in available propane storage in the Northeast. As a result of our seasonality, we generally expect the sales volumes in our Northeast and Liberty segments to be higher in the first quarter and fourth quarter, however, the expected growth and expansion in our Liberty segment may partially counteract this seasonality impact on sales volumes.

Results of Operations

Segment Reporting

We present information in this MD&A by segment. The segment information appearing in Note 14 of the accompanying Notes to the Condensed Consolidated Financial Statements is presented on a basis consistent with our internal management reporting. We conduct our operations in the following operating segments: Southwest, Northeast, Liberty and Gulf Coast. Our assets and operations in each of these segments are described below. In addition, we include a description of our initial plan to development of our Utica operations, which is included in the Liberty segment.

Southwest

·East Texas.  We own a system that consists of natural gas gathering pipelines, centralized compressor stations, natural gas processing facility and an NGL pipeline. The East Texas system is located in Panola, Harrison and Rusk Counties and services the Carthage Field. Producing formations in Panola County consist of the Cotton Valley, Pettit, Travis Peak and Haynesville formations. For natural gas that is processed in this area, we purchase the NGLs from the producers under percent-of-proceeds arrangements, or we transport and process volumes for a fee. We expect to complete an additional 120 MMcf/d cryogenic processing plant during the first quarter of 2013, increasing total processing capacity in East Texas to 400 MMcf/d. We also plan to expand gathering capacity in East Texas by 140 MMcf/d and residue gas outlet capacities by 60 MMcf/d.

·Oklahoma.  We own a natural gas gathering system in the Woodford Shale play in the Arkoma Basin of southeast Oklahoma. The liquids-rich natural gas gathered in the Woodford system is processed through Centrahoma, our equity investment or other third-party processors. In addition, we own the Foss Lake natural gas gathering system and the Western Oklahoma natural gas processing complex, all located in Roger Mills, Beckham, Custer and Ellis Counties of western Oklahoma. The gathering portion consists of a pipeline system that is connected to natural gas wells and associated compression facilities. The majority of the gathered gas is ultimately compressed and delivered to the processing plants. We also own a gathering system in the Granite Wash formation in the Texas panhandle that is connected to our Western Oklahoma processing complex.

Through our joint venture, MarkWest Pioneer, we operate the Arkoma Connector Pipeline, a 50-mile FERC-regulated pipeline that interconnects with the Midcontinent Express Pipeline and Gulf Crossing Pipeline at Bennington, Oklahoma and is designed to provide approximately 638,000 Dth/d of Woodford Shale takeaway capacity. We completed an additional interconnect with the NGPL Pipeline in Bennington, Oklahoma in April 2012. For a complete discussion of the formation of, and accounting treatment for, MarkWest Pioneer, see Note 4 of Item 8. Financial Statement and Supplementary Data, of our Annual Report on Form 10-K for the year ended December 31, 2011.

·Other Southwest.  We own a number of natural gas gathering systems and lateral pipelines located in Texas, Louisiana and New Mexico, including the Appleby gathering system in Nacogdoches County, Texas. We gather a

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significant portion of the natural gas produced from fields adjacent to our gathering systems, including from wells targeting the Haynesville Shale. In many areas we are the primary gatherer, and in some of the areas served by our smaller systems we are the sole gatherer. Our Hobbs, New Mexico natural gas lateral pipeline is subject to regulation by FERC.

Northeast

·Kentucky and southern West Virginia.  Our Northeast segment assets include the Kenova, Boldman, Cobb, Kermit and the Langley natural gas processing plants, an NGL pipeline, and the Siloam NGL fractionation plant. We plan to complete an additional cryogenic natural gas processing plant at the Langley processing complex with a capacity of 150 MMcf/d in the fourth quarter of 2012. In addition, we have two caverns for storing propane at our Siloam facility and additional propane storage capacity under a long-term firm-capacity agreement with a third-party. Including our presence in the Marcellus Shale (see Liberty Segment below), we are the largest processor and fractionator of natural gas in the Northeast, with fully integrated processing, fractionation, storage and marketing operations.

·Michigan.  We own and operate a FERC-regulated crude oil pipeline in Michigan providing transportation service for three shippers.

Liberty

·Marcellus Shale.  We provide extensive natural gas midstream services in southwest Pennsylvania and northern West Virginia through MarkWest Liberty Midstream. With gathering capacity of 390 MMcf/d and current processing capacity of 715 MMcf/d, we are the largest processor of natural gas in the Marcellus Shale, with fully integrated gathering, processing, fractionation, storage and marketing operations that are critical to the liquids-rich gas development in the northeast United States.

The gathering, processing and fractionation facilities currently operating and under construction in our Liberty segment consist of the following:

Natural Gas Gathering

·Existing gathering system with the capacity to deliver 325 MMcf/d to our Houston, Pennsylvania processing complex (“Houston Complex”).

·Existing gathering lines acquired in the Keystone Acquisition.

·Planned gathering system with the initial capacity to deliver 300 MMcf/d to our Sherwood Complex. The first phase of the gathering system will be operational in conjunction with the completion of the first processing plant at our Sherwood Complex in the third quarter of 2012.

Natural Gas Processing

·355 MMcf/d of current cryogenic processing capacity at our Houston Complex.

·270 MMcf/d of current cryogenic processing capacity at our Majorsville, West Virginia processing complex (“Majorsville Complex”).

·90 MMcf/d of cryogenic processing capacity at our Butler County, Pennsylvania processing plants (“Bluestone Complex”), which we acquired in the Keystone Acquisition.

·800 MMcf/d expansion of our Majorsville Complex under construction that is supported by long-term agreements with Chesapeake Energy Corporation, CONSOL Energy Inc., Noble Energy Inc. and Range Resources Corporation. The Majorsville expansion includes four, 200 MMcf/d processing plants that are expected to commence operation in 2013 and 2014 and will bring our total cryogenic processing capacity at Majorsville to approximately 1.1 Bcf/d.

·320 MMcf/d cryogenic processing capacity under construction in Mobley, West Virginia (“Mobley Complex”) where 200 MMcf/d and 120 MMcf/d cryogenic plants are expected to be completed in the second half of 2012 and first quarter of 2013, respectively.

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·200 MMcf/d cryogenic processing capacity under construction at our Sherwood Complex that is expected to be completed in the third quarter of 2012 and an additional 200 MMcf/d cryogenic processing plant under construction that is expected to be completed in 2013.

·320 MMcf/d cryogenic processing capacity under construction in Butler County, Pennsylvania as part of our Keystone Acquisition, where 120 MMcf/d of capacity is expected to commence operation in the fourth quarter of 2013.

By the end of 2014, MarkWest Liberty Midstream is expected to have over 2.5 Bcf/d of cryogenic processing capacity that is supported by long-term agreements with our producer customers.

NGL Gathering, Fractionation and Market Outlets

·NGLs produced at the Majorsville Complex are delivered through an NGL pipeline (“Majorsville Pipeline”) to the Houston Complex for exchange for fractionated products. NGL pipelines connecting each of the planned processing facilities in West Virginia to the Majorsville Pipeline are under construction and will allow for NGL fractionation at the Houston Complex. Additionally, we have announced our plans to extend our NGL pipeline into northwest Pennsylvania to allow us to gather, fractionate and market NGLs produced at our Bluestone Complex and a processing facility owned by XTO Energy Inc. (“XTO”) that is expected to begin operations in late 2012.  We will provide the transportation, fractionation and marketing services to XTO pursuant to a long-term fee based agreement executed in July 2012.

·Existing fractionation facility at our Houston Complex with a design capacity of 60,000 Bbl/d.

·Existing interconnect with a key interstate pipeline providing a market outlet for the propane produced from this region.

·Existing agreements to access international markets.  Propane is currently being transported by truck to a third-party terminal near Philadelphia, Pennsylvania where it is loaded onto marine vessels and delivered to international markets.  We plan to add rail deliveries to the terminal in the next several months as rail unloading capabilities are expanded.

·Existing extension of our Majorsville Pipeline to receive NGLs produced at a third-party’s Fort Beeler processing plant. This project allows certain producers to benefit from our integrated NGL fractionation and marketing operations.

·Railcar loading facility under construction at our Houston Complex that is expected to be completed in the third quarter of 2012.

We continue to evaluate additional projects to expand our gathering, processing, fractionation, and marketing operations in the Marcellus Shale.

Ethane Recovery and Associated Market Outlets

Due to the increased production of natural gas from the liquids-rich area of the Marcellus Shale, natural gas processors must begin to recover a significant amount of ethane from the raw NGL stream to continue to meet the pipeline gas quality specifications for residue gas. We have been developing solutions that will have the capability to recover and fractionate the required ethane, be scalable to recover and fractionate additional ethane at the option of our producer customers and provide access to attractive ethane markets in North America and Europe. The primary components of our ethane recovery solution consist of the following:

·75,000 Bbl/d de-ethanization facilities under construction at our Houston Complex and Majorsville Complex that are expected to be completed by mid-2013.

·A third de-ethanization facility is planned that would increase production capacity of purity ethane to approximately 115,000 Bbl/d in 2014.

·A joint pipeline project with Sunoco Logistics, L.P. (“Sunoco”) that is currently under construction to deliver Marcellus ethane to Sarnia, Ontario, Canada markets (“Mariner West”). Mariner West will utilize

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new and existing pipelines and is anticipated to have an initial capacity to transport up to 50,000 Bbl/d of ethane by mid-2013 with the ability to expand to support higher volumes as needed. Sunoco completed an open season for Mariner West and received binding commitments from shippers that would enable the project to proceed as designed.

·An additional joint project with Sunoco is under consideration (“Mariner East”). Mariner East, a pipeline and marine project, is intended to deliver Marcellus purity ethane and purity propane to the Gulf Coast and international markets.

We continue to evaluate additional projects that would support a comprehensive ethane solution for producers in the Marcellus Shale.

Utica

Effective January 1, 2012, the Partnership and The Energy & Minerals Group (“EMG”) formed MarkWest Utica EMG, a joint venture focused on the development of significant natural gas gathering, processing and NGL fractionation, transportation and marketing infrastructure to serve producers’ drilling programs in the Utica Shale in eastern Ohio. The current Utica development plan includes two new processing complexes with total cryogenic processing capacity of 325 MMcf/d and 100,000 Bbl/d of fractionation, storage, and marketing capabilities. The fractionation facility for propane and heavier components (“Harrison Fractionation Facility”) will be jointly owned by MarkWest Utica EMG and MarkWest Liberty Midstream. The processing complexes will be in Harrison County (the “Harrison Complex”) and Noble County, and are both expected to begin the first phase of operations in late 2012 with interim mechanical refrigeration processing capacity of 105 MMcf/d. The planned cryogenic processing capacity of 325 MMcf/d is expected to be in operation by the end of 2013.

Both processing complexes are expected to be connected via an NGL gathering pipeline system to the Harrison Fractionation Facility that is expected to be operational by the fourth quarter of 2013. Creating a large network of processing complexes connected through an extensive NGL gathering system has been critical to the full development of the Marcellus, and the announced Ohio facilities represent the first major step in providing Utica Shale producers with the same benefits. Additionally, the Harrison Fractionation Facility, which would be able to market NGLs by truck, rail and pipeline, is expected to be connected to our extensive processing and NGL pipeline network in our Liberty segment and provide for the integrated operation of the two largest fractionation complexes in the Northeast United States.

On June 4, 2012, MarkWest Utica EMG announced agreements with Gulfport Energy Corporation (“Gulfport”) to provide gathering, processing, fractionation, and marketing services in the liquids-rich corridor of the Utica shale. Under the terms of the agreements, MarkWest Utica EMG will develop natural gas gathering infrastructure to provide service to Gulfport, primarily in Harrison, Guernsey, and Belmont Counties, that is expected to commence initial operations beginning in the second half of 2012. MarkWest Utica EMG will process the gas at its Harrison Complex, and is expected to provide NGL fractionation and marketing services at the Harrison Fractionation Facility when it is completed in 2013.

Gulf Coast

·Javelina.  We own and operate the Javelina processing facility, a natural gas processing facility in Corpus Christi, Texas that treats and processes off-gas from six local refineries operated by three different refinery customers. We also have a product supply agreement creating a long-term contractual obligation for the payment of processing fees in exchange for all of the product processed by the SMR that is operated by a third-party. The product received under this agreement is sold to a refinery customer pursuant to a corresponding long-term agreement.

The following summarizes the percentage of our segment revenue and net operating margin (a non-GAAP financial measure, see above) generated by our assets, by segment, for the six months ended June 30, 2012:

	Southwest		Northeast		Liberty		Gulf Coast
Segment revenue	57	%	18	%	19	%	6	%
Net operating margin	47	%	20	%	23	%	10	%

Segment Operating Results

Items below Income (loss) from operations in our Condensed Consolidated Statements of Operations, certain compensation expense, certain other non-cash items and any gains (losses) from derivative instruments are not allocated to individual business

39

segments. Management does not consider these items allocable to or controllable by any individual business segment and therefore excludes these items when evaluating segment performance. The segment results are also adjusted to exclude the portion of operating income attributable to the non-controlling interests. The tables below present financial information, as evaluated by management, for the reported segments for the three months ended June 30, 2012 and 2011 and for the six months ended June 30, 2012 and 2011. The information includes net operating margin, a non-GAAP financial measure. See above for a reconciliation of net operating margin to Income (loss) from operations, the most comparable GAAP financial measure.

Three months ended June 30, 2012 compared to three months ended June 30, 2011

Southwest

	Three months ended June 30,							%
	2012		2011		$ Change			Change
	(in thousands)
Segment revenue	$	189,162	$	235,575	$	(46,413	)	(20	)%
Purchased product costs	91,792		128,988		(37,196		)	(29	)%
Net operating margin	97,370		106,587		(9,217		)	(9	)%
Facility expenses	23,034		20,855		2,179			10	%
Portion of operating income attributable to non-controlling interests	1,590		1,346		244			18	%
Operating income before items not allocated to segments	$	72,746	$	84,386	$	(11,640	)	(14	)%

Segment Revenue.  Revenue decreased primarily due to lower NGL prices and decrease in natural gas sales volumes. The decrease was partially offset by increased NGL sales volumes, primarily due to the expansion of the Western Oklahoma processing facilities completed in the third quarter of 2011.

Purchased Product Costs. Purchased product costs decreased primarily due to a decrease in the price NGLs and a decrease in the volume of natural gas purchased.

Facility Expenses. Facility expenses increased primarily due to timing of significant repairs and maintenance activities in East Texas facilities, as well as the expansion of our processing and gathering facilities in Western Oklahoma.

Northeast

	Three months ended June 30,							%
	2012		2011		$ Change			Change
	(in thousands)
Segment revenue	$	42,051	$	53,676	$	(11,625	)	(22	)%
Purchased product costs	12,921		15,702		(2,781		)	(18	)%
Net operating margin	29,130		37,974		(8,844		)	(23	)%
Facility expenses	4,932		6,929		(1,997		)	(29	)%
Operating income before items not allocated to segments	$	24,198	$	31,045	$	(6,847	)	(22	)%

Segment Revenue.  Revenue decreased due to lower NGL prices, partially offset by an increase in NGL sales volumes. The increase in NGL sales volumes for the three months ended June 30, 2012 compared to the same period in 2011 is partly due to a key transmission pipeline feeding our processing plants, which was damaged and had limited service capacity during the first half of 2011 but that was repaired and fully operational for the entire second quarter of 2012.

Purchased Product Costs.  Purchased product costs decreased due to lower prices for natural gas that is purchased to satisfy the keep-whole arrangements in the Appalachia area, partially offset by an increase in sales volumes.

Facility Expenses.  Facility expenses decreased primarily due to a reduction in property taxes resulting from a favorable rate determination related to one of our facilities.

40

Liberty

	Three months ended June 30,								%
	2012			2011		$ Change			Change
	(in thousands)
Segment revenue	$	59,477		$	48,337	$	11,140		23	%
Purchased product costs	8,018			9,890		(1,872		)	(19	)%
Net operating margin	51,459			38,447		13,012			34	%
Facility expenses	13,647			7,269		6,378			88	%
Portion of operating (loss) income attributable to non-controlling interests	(113		)	15,182		(15,295		)	(101	)%
Operating income before items not allocated to segments	$	37,925		$	15,996	$	21,929		137	%

Segment Revenue.  Revenue increased due to ongoing expansion of the Liberty operations resulting in increased gathered, processed and fractionated volumes. Revenue increased approximately $13.0 million related to gathering, processing and fractionation fees, partially offset by approximately $2.5 million decrease related to lower NGL prices and less propane volumes sold.

Facility Expenses.  Facility expenses increased due to the ongoing expansion of the Liberty operations.

Portion of Operating Income Attributable to Non-controlling Interests.  The portion of operating income attributable to non-controlling interests for the three months ended June 30, 2011 represented the interest of M&R an affiliate of EMG, our former joint venture partner in MarkWest Liberty Midstream, in net operating income of MarkWest Liberty Midstream. As a result of our acquisition of M&R’s interest in MarkWest Liberty Midstream, no portion of its income is attributable to non-controlling interests for the three months ended June 30, 2012. The immaterial portion of loss allocable to the non-controlling interest for the three months ended June 30, 2012 relates to MarkWest Utica EMG and its subsidiaries.

Gulf Coast

	Three months ended June 30,							%
	2012		2011		$ Change			Change
	(in thousands)
Segment revenue	$	20,997	$	24,683	$	(3,686	)	(15	)%
Purchased product costs	—		—		—			N/A
Net operating margin	20,997		24,683		(3,686		)	(15	)%
Facility expenses	9,607		8,312		1,295			16	%
Operating income before items not allocated to segments	$	11,390	$	16,371	$	(4,981	)	(30	)%

Segment Revenue.  Revenue decreased primarily due to lower NGL prices.

Facility Expenses.  Facility expenses increased primarily due to plant turnaround costs in the second quarter of 2012.

41

Reconciliation of Segment Operating Income to Consolidated Income (Loss) Before Provision for Income Tax

The following table provides a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to our consolidated income (loss) before provision for income tax for the three months ended June 30, 2012 and 2011, respectively. The ensuing items listed below the Total segment revenue and Operating income lines are not allocated to business segments as management does not consider these items allocable to any individual segment.

	Three months ended June 30,									%
	2012			2011			$ Change			Change
	(in thousands)
Total segment revenue	$	311,687		$	362,271		$	(50,584	)	(14	)%
Derivative gain not allocated to segments	136,067			40,590			95,477			235	%
Revenue deferral adjustment	(1,701		)	(2,422		)	721			(30	)%
Total revenue	$	446,053		$	400,439		$	45,614		11	%
Operating income before items not allocated to segments	$	146,259		$	147,798		$	(1,539	)	(1	)%
Portion of operating income attributable to non-controlling interests	1,477			16,528			(15,051		)	(91	)%
Derivative gain not allocated to segments	188,792			37,917			150,875			398	%
Revenue deferral adjustment	(1,701		)	(2,422		)	721			(30	)%
Compensation expense included in facility expenses not allocated to segments	(184		)	(188		)	4			(2	)%
Facility expenses adjustments	2,866			2,855			11			0	%
Selling, general and administrative expenses	(21,879		)	(18,580		)	(3,299		)	18	%
Depreciation	(42,918		)	(37,201		)	(5,717		)	15	%
Amortization of intangible assets	(12,307		)	(10,830		)	(1,477		)	14	%
Loss on disposal of property, plant and equipment	(1,342		)	(2,373		)	1,031			(43	)%
Accretion of asset retirement obligations	(161		)	(290		)	129			(44	)%
Income from operations	258,902			133,214			125,688			94	%
Earnings (loss) from unconsolidated affiliate	551			(216		)	767			(355	)%
Interest income	159			63			96			152	%
Interest expense	(26,762		)	(27,874		)	1,112			(4	)%
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245		)	(1,443		)	198			(14	)%
Miscellaneous income, net	4			169			(165		)	(98	)%
Income before provision for income tax	$	231,609		$	103,913		$	127,696		123	%

Derivative Gain (Loss) Not Allocated to Segments.  Unrealized gain from the mark-to-market of our derivative instruments was $193.8 million for the three months ended June 30, 2012 compared to an unrealized gain of $55.7 million for the same period in 2011. Realized loss from the settlement of our derivative instruments was $4.9 million for the three months ended June 30, 2012 compared to $17.7 million for the same period in 2011. The total change of $150.9 million is due mainly to volatility in commodity prices.

Revenue Deferral Adjustment.  Revenue deferral adjustment relates primarily to certain contracts in which the cash consideration we receive for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as we will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore, the impact of the revenue deferrals is excluded for segment reporting purposes. For the three months ended June 30, 2012, approximately $0.2 million and $1.5 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the three months ended June 30, 2011, approximately $0.2 million and $2.2 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Based on current commodity prices, management expects the deferred revenue in subsequent periods to approximate the second quarter 2012’s amount until the beginning

42

of 2015 when the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased primarily due to higher labor, benefits, office expense and professional services necessary to support the overall growth of our operations.

Depreciation.  Depreciation increased due to additional projects completed during 2011 through the second quarter of 2012, as well as the Keystone Acquisition.

Interest Expense.  Interest expense decreased as additional expense from the increased amount of outstanding debt was more than offset by lower interest rates and an increase in capitalized interest.

Six months ended June 30, 2012 compared to six months ended June 30, 2011

Southwest

	Six months ended June,							%
	2012		2011		$ Change			Change
	(in thousands)
Segment revenue	$	403,887	$	437,349	$	(33,462	)	(8	)%
Purchased product costs	196,025		232,184		(36,159		)	(16	)%
Net operating margin	207,862		205,165		2,697			1	%
Facility expenses	46,026		41,012		5,014			12	%
Portion of operating income attributable to non-controlling interests	3,036		2,518		518			21	%
Operating income before items not allocated to segments	$	158,800	$	161,635	$	(2,835	)	(2	)%

Segment Revenue.  Revenue decreased primarily due to lower NGL prices and a decrease in natural gas sales volumes. The decrease was partially offset by an increase in NGL sales volumes, primarily due to the expansion of the Western Oklahoma processing facilities completed in the third quarter of 2011.

Purchased Product Costs. Purchased product costs decreased primarily due to lower NGL prices and a reduction in the volume of natural gas purchased.

Facility Expenses. Facility expenses increased primarily due to the expansion of our processing and gathering facilities in Western Oklahoma.

Northeast

	Six months ended June,							%
	2012		2011		$ Change			Change
	(in thousands)
Segment revenue	$	128,969	$	145,767	$	(16,798	)	(12	)%
Purchased product costs	38,608		56,580		(17,972		)	(32	)%
Net operating margin	90,361		89,187		1,174			1	%
Facility expenses	11,310		12,523		(1,213		)	(10	)%
Operating income before items not allocated to segments	$	79,051	$	76,664	$	2,387		3	%

Segment Revenue.  Revenue decreased due to lower natural gas prices, as well as a contract change related to our acquisition of the Langley processing facilities and related assets (“Langley Acquisition”) in the first quarter of 2011. Subsequent to the Langley Acquisition, we continue to market the NGLs related to natural gas processed at the Langley plant; however we are acting as an agent and therefore record revenue net of purchased product costs. Prior to the contract change we were acting as the principal. The decrease in revenue was offset by increased NGL sales volumes, which was partly due to a key transmission pipeline feeding our processing plants that was damaged and had limited service capacity during the first half of 2011 but that was repaired and fully operational for the entire first half of 2012.

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Purchased Product Costs.  Purchased product costs decreased due to the contract change related to the Langley Acquisition. In addition, purchased product costs decreased due to lower prices for natural gas that is purchased to satisfy the keep-whole arrangements in the Appalachia area, which was partially offset by an increase in sales volumes.

Facility Expenses.  Facility expenses decreased primarily due to a reduction in property taxes resulting from a favorable rate determination related to our facilities.

Liberty

	Six months ended June,								%
	2012			2011		$ Change			Change
	(in thousands)
Segment revenue	$	135,054		$	89,556	$	45,498		51	%
Purchased product costs	32,653			19,445		13,208			68	%
Net operating margin	102,401			70,111		32,290			46	%
Facility expenses	25,894			13,767		12,127			88	%
Portion of operating (loss) income attributable to non-controlling interests	(113		)	27,559		(27,672		)	(100	)%
Operating income before items not allocated to segments	$	76,620		$	28,785	$	47,835		166	%

Segment Revenue.  Revenue increased due to ongoing expansion of the Liberty operations resulting in increased gathered and fractionated volumes. Revenue increased approximately $28.1 million related to gathering, fractionation and processing fees and approximately $16.1 million related to increased NGL product sales under a percent of proceeds agreement with a producer and an increase in sales of propane from inventory purchased from producer customers.

Purchased Product Costs.  Purchased product costs increased primarily due to an increase in the volume of NGLs purchased from a producer customer and then sold.

Facility Expenses.  Facility expenses increased due to the ongoing expansion of the Liberty operations.

Portion of Operating Income Attributable to Non-controlling Interests.  The portion of operating income attributable to non-controlling interests for the six months ended June 30, 2011 represented M&R’s interest in net operating income of MarkWest Liberty Midstream. As a result of our acquisition of M&R’s interest in MarkWest Liberty Midstream, no portion of its income is attributable to non-controlling interests for the three months ended June 30, 2012. The immaterial portion of income allocable to the non-controlling interest for the three months ended June 30, 2012 relates to MarkWest Utica EMG and its subsidiaries.

Gulf Coast

	Six months ended June,							%
	2012		2011		$ Change			Change
	(in thousands)
Segment revenue	$	45,226	$	46,442	$	(1,216	)	(3	)%
Purchased product costs	—		—		—			N/A
Net operating margin	45,226		46,442		(1,216		)	(3	)%
Facility expenses	19,245		17,302		1,943			11	%
Operating income before items not allocated to segments	$	25,981	$	29,140	$	(3,159	)	(11	)%

Segment Revenue.  Revenue decreased primarily due to lower NGL prices, partially offset by an increase in volumes resulting from, increased production as scheduled refinery maintenance in 2011 did not recur in 2012.

Facility Expenses.  Facility expenses increased primarily due to plant turnaround costs incurred in the second quarter of 2012, as well as timing of other facility maintenance and repairs.

44

Reconciliation of Segment Operating Income to Consolidated Income (Loss) Before Provision for Income Tax

The following table provides a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to our consolidated income (loss) before provision for income tax for the six months ended June 30, 2012 and 2011, respectively. The ensuing items listed below the Total segment revenue and Operating income lines are not allocated to business segments as management does not consider these items allocable to any individual segment.

	Six months ended June,									%
	2012			2011			$ Change			Change
	(in thousands)
Total segment revenue	$	713,136		$	719,114		$	(5,978	)	(1	)%
Derivative gain (loss) not allocated to segments	87,352			(45,089		)	132,441			(294	)%
Revenue deferral adjustment	(3,969		)	(10,365		)	6,396			(62	)%
Total revenue	$	796,519		$	663,660		$	132,859		20	%
Operating income before items not allocated to segments	$	340,452		$	296,224		$	44,228		15	%
Portion of operating income attributable to non-controlling interests	2,923			30,077			(27,154		)	(90	)%
Derivative gain (loss) not allocated to segments	123,023			(64,145		)	187,168			(292	)%
Revenue deferral adjustment	(3,969		)	(10,365		)	6,396			(62	)%
Compensation expense included in facility expenses not allocated to segments.	(633		)	(1,228		)	595			(48	)%
Facility expenses adjustments	5,730			5,710			20			0	%
Selling, general and administrative expenses	(47,103		)	(40,292		)	(6,811		)	17	%
Depreciation	(84,063		)	(71,565		)	(12,498		)	17	%
Amortization of intangible assets	(23,292		)	(21,647		)	(1,645		)	8	%
Loss on disposal of property, plant and equipment	(2,328		)	(4,472		)	2,144			(48	)%
Accretion of asset retirement obligations	(399		)	(377		)	(22		)	6	%
Income from operations	310,341			117,920			192,421			163	%
Earnings (loss) from unconsolidated affiliate	542			(755		)	1,297			(172	)%
Interest income	231			152			79			52	%
Interest expense	(56,234		)	(56,137		)	(97		)	0	%
Amortization of deferred financing costs and discount (a component of interest expense)	(2,515		)	(2,871		)	356			(12	)%
Loss on redemption of debt	—			(43,328		)	43,328			(100	)%
Miscellaneous income, net	62			131			(69		)	(53	)%
Income before provision for income tax	$	252,427		$	15,112		$	237,315		1,570	%

Derivative Gain (Loss) Not Allocated to Segments.  Unrealized gain from the mark-to-market of our derivative instruments was $145.5 million for the six months ended June 30, 2012 compared to an unrealized loss of $24.2 million for the same period in 2011. Realized loss from the settlement of our derivative instruments was $22.5 million for the six months ended June 30, 2012 compared to $40.0 million for the same period in 2011. The total change of $187.2 million is due mainly to volatility in commodity prices.

Revenue Deferral Adjustment.  Revenue deferral adjustment relates primarily to certain contracts in which the cash consideration we receive for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as we will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore the impact of the revenue deferrals is excluded for segment reporting purposes. For the six months ended June 30, 2012, approximately $0.4 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the six months ended June 30, 2011, approximately $6.7 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Based on current commodity prices, management expects the deferred revenue in subsequent periods to approximate the second quarter 2012’s amount until the beginning

45

of 2015 when the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased primarily due to higher labor, benefits, office expense and professional services necessary to support the overall growth of our operations.

Depreciation.  Depreciation increased due to additional projects completed during 2011 through the second quarter of 2012, as well as the Keystone Acquisition.

Interest Expense.  Interest expense increased due to an increase in outstanding debt, but was partially offset by lower interest rates and increased capitalized interest.

Loss on Redemption of Debt.  The decrease in loss on redemption of debt was related to the redemption of debt which occurred in the first quarter of 2011, while no such redemptions of debt occurred during the first half of 2012.

46

Operating Data

	Three months ended June 30,		%		Six months ended June 30,		%
	2012	2011	Change		2012	2011	Change
Southwest
East Texas gathering systems throughput (Mcf/d)	440,400	428,300	3	%	425,200	427,000	(0	)%
East Texas natural gas processed (Mcf/d)	268,300	229,000	17	%	255,400	224,100	14	%
East Texas NGL sales (gallons, in thousands)	68,000	59,500	14	%	131,400	116,200	13	%
Western Oklahoma gathering system throughput (Mcf/d) (1)	252,200	223,900	13	%	257,100	215,700	19	%
Western Oklahoma natural gas processed (Mcf/d)	218,900	159,500	37	%	211,400	158,300	34	%
Western Oklahoma NGL sales (gallons, in thousands)	61,700	35,100	76	%	119,000	74,100	61	%
Southeast Oklahoma gathering systems throughput (Mcf/d)	503,300	511,700	(2	)%	502,200	504,900	(1	)%
Southeast Oklahoma natural gas processed (Mcf/d) (2)	119,600	110,200	9	%	110,700	102,000	9	%
Southeast Oklahoma NGL sales (gallons, in thousands)	41,300	32,100	29	%	74,300	61,500	21	%
Arkoma Connector Pipeline throughput (Mcf/d)	331,200	298,400	11	%	329,900	292,100	13	%
Other Southwest gathering system throughput (Mcf/d)	26,700	31,600	(16	)%	25,600	32,300	(21	)%
Northeast
Natural gas processed (Mcf/d) (3)	328,200	319,600	3	%	324,900	312,500	4	%
NGLs fractionated (Bbl/d) (4)	17,200	22,700	(24	)%	16,900	22,500	(25	)%
Keep-whole sales (gallons, in thousands)	23,700	21,100	12	%	73,300	60,900	20	%
Percent-of-proceeds sales (gallons, in thousands)	36,800	33,100	11	%	69,800	64,000	9	%
Total NGL sales (gallons, in thousands) (5)	60,500	54,200	12	%	143,100	124,900	15	%
Crude oil transported for a fee (Bbl/d)	8,300	11,500	(28	)%	9,400	10,800	(13	)%
Liberty
Natural gas processed (Mcf/d)	400,600	298,200	34	%	396,400	276,500	43	%
Gathering system throughput (Mcf/d)	367,400	232,000	58	%	337,800	214,000	58	%
NGLs fractionated (Bbl/d) (6)	19,800	8,400	136	%	19,900	7,700	158	%
NGL sales (gallons, in thousands) (7)	75,900	50,700	50	%	173,400	102,400	69	%
Gulf Coast
Refinery off-gas processed (Mcf/d)	115,800	114,600	1	%	118,000	108,700	9	%
Liquids fractionated (Bbl/d)	21,700	21,900	(1	)%	22,500	20,600	9	%
NGL sales (gallons excluding hydrogen, in thousands)	83,000	83,600	(1	)%	172,300	156,300	10	%

(1)Includes natural gas gathered in Western Oklahoma and from the Granite Wash formation in the Texas Panhandle as it is one integrated area of operations.

(2)The natural gas processing in Southeast Oklahoma is outsourced to Centrahoma, our equity investment, or third-party processors.

(3)Includes throughput from the Kenova, Cobb, Boldman and Langley processing plants. We acquired the Langley processing plant in February 2011. The volumes reported for the six months ended June 30, 2011 are the average daily rates for the days of operation.

47

(4)Amount includes zero barrels per day and 5,500 barrels per day fractionated on behalf of Liberty for the three and six months ended June 30, 2012 and 2011, respectively. Beginning in the fourth quarter of 2011, Siloam no longer fractionates NGLs on behalf of Liberty due to the operation of Liberty’s fractionation facility that began in September 2011, except during outages.

(5)Represents sales from the Siloam facilities. The total sales exclude approximately zero gallons and 20,900,000 gallons sold by the Northeast on behalf of Liberty for the three months ended June 30, 2012 and 2011, respectively and zero gallons and 41,500,000 gallons sold for the six months ended June 30, 2012 and 2011, respectively. These volumes are included as part of NGLs sold at Liberty.

(6)Amount includes all NGLs that were produced at the Liberty processing facilities and fractionated into purity products at our Liberty fractionation facility.

(7)Includes sale of all purity products fractionated at the Liberty facilities and sale of all unfractionated NGLs. Also includes the sale of purity products fractionated and sold from the Siloam facilities on behalf of Liberty.

Liquidity and Capital Resources

Our primary strategy is to expand our asset base through organic growth projects and selective third-party acquisitions that are accretive to our cash available for distribution per common unit.

Our 2012 capital plan is summarized in the table below (in millions):

							Actual
	2012 Full Year Plan						Six months ended
	Low			High			June 30, 2012
Consolidated growth capital (1)	$	1,350		$	1,800		$	572
Utica joint venture partner’s estimated share of growth capital	(250		)	(300		)	—
Partnership share of growth capital	1,100			1,500			572
Acquisition (2)	510			510			510
Partnership share of growth capital and acquisitions	$	1,610		$	2,010		$	1,082
Consolidated maintenance capital (1)	$	20		$	20		$	10

(1)Growth capital includes expenditures made to expand the existing operating capacity, to increase the efficiency of our existing assets, and to facilitate an increase in volumes within our operations. Growth capital also includes costs associated with new well connections. Growth capital excludes expenditures for third-party acquisitions and equity investments. Maintenance capital includes capital expenditures made to maintain our operating capacity and asset base.

(2)As discussed in Note 3 to the accompanying Condensed Consolidated Financial Statements, MarkWest Liberty Midstream and its wholly owned subsidiary acquired Keystone for a purchase price of approximately $509.6 million.

Our primary sources of liquidity to meet operating expenses, pay distributions to our unitholders and fund capital expenditures are cash flows generated by our operations, contributions from our MarkWest Utica EMG joint venture partner, our Credit Facility and access to both the debt and equity capital markets, public and private. We will also consider the use of alternative financing strategies such as entering into additional joint venture arrangements.

Management believes that expenditures for our currently planned capital projects will be funded with cash flows from operations, current cash balances, contributions by our joint venture partner for capital projects encompassed by MarkWest Utica EMG, our current borrowing capacity under the Credit Facility, additional long-term borrowings, and proceeds from equity or debt offerings. Our access to capital markets can be impacted by factors outside our control, including economic conditions; however, we believe that our strong cash flows and balance sheet, our Credit Facility and our credit rating will provide us with adequate access to funding given our expected cash needs. Any new borrowing cost would be affected by market conditions and long-term debt ratings assigned by independent rating agencies. As of July 30, 2012, our credit ratings were Ba2 with a Stable outlook by Moody’s Investors Service, BB with a Stable outlook by Standard & Poor’s, and BB with a Stable outlook by Fitch Ratings. Changes in our operating results, cash flows or financial position could impact the ratings assigned by the various rating agencies. Should our credit ratings be

48

adjusted downward, we may incur higher costs to borrow, which could have a material impact on our financial condition and results of operations.

Debt Financing Activities

On June 29, 2012, we amended our Credit Facility to increase the borrowing capacity to $1.2 billion and extend the maturity date by one year to September 7, 2017, providing us with the additional financial flexibility to continue to execute our growth strategy. See Note 9 of the accompanying Notes to Condensed Consolidated Financial Statements included in Item 1of this Form 10-Q for further details of our Credit Facility.

Under the provisions of the Credit Facility, we are subject to a number of restrictions and covenants. As of June 30, 2012, we were in compliance with all of our debt covenants and we expect to remain in compliance for at least the next twelve months. These covenants are used to calculate the available borrowing capacity on a quarterly basis. As of July 30, 2012, we had approximately $197.9 million of borrowings outstanding and approximately $21.6 million of letters of credit outstanding under the Credit Facility, leaving approximately $980.5 million available for borrowing.

The Credit Facility and indentures governing the Senior Notes limit our and our restricted subsidiaries’ activity and ability to incur additional indebtedness; declare or pay dividends or distributions or redeem, repurchase or retire equity interests or subordinated indebtedness; make investments; incur liens; create any consensual limitation on the ability of our restricted subsidiaries to pay dividends or distributions, make loans or transfer property to us; engage in transactions with our affiliates; sell assets, including equity interests of our subsidiaries; make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any subordinated obligation or guarantor subordination obligation (except principal and interest at maturity); and consolidate, merge or transfer assets.

The Credit Facility also limits our ability to enter into transactions with parties that require margin calls under certain derivative instruments. The Credit Facility prevents participating bank group members from requiring margin calls. As of July 30, 2012, all of our derivative positions are with participating bank group members and are not subject to margin deposit requirements. We believe this arrangement gives us additional liquidity as it allows us to enter into derivative instruments without utilizing cash for margin calls or requiring the use of letters of credit.

Equity Offerings

On January 13, 2012, we issued approximately 0.7 million units representing limited partner interests pursuant to the underwriters’ exercise of their option to purchase additional common units under the equity offering initiated in December 2011. The total net proceeds from the exercise of this option were approximately $38 million and were used to partially fund the Partnership’s ongoing capital expenditure program.

On March 16, 2012, we completed a public offering of approximately 6.8 million newly issued common units representing limited partner interests, which includes the full exercise of the underwriters’ over-allotment option. Net proceeds after deducting underwriting fees and other third-party offering expenses were approximately $388 million and were used to partially fund our ongoing capital expenditure program.

On May 14, 2012, we completed a public offering of 8.0 million newly issued common units representing limited partner interests. Net proceeds after deducting underwriting fees and other third-party offering expenses were approximately $427 million, which were used to partially fund the Keystone Acquisition.

Liquidity Risks and Uncertainties

Our ability to pay distributions to our unit holders, to fund planned capital expenditures and to make acquisitions will depend upon our future operating performance. That, in turn, will be affected by prevailing economic conditions in our industry, as well as financial, business and other factors, some of which are beyond our control.

Due to lower demand caused primarily by the recent mild winter NGL prices have declined significantly in 2012 compared to 2011 which has adversely impacted our liquidity and operating results and will continue to have an adverse impact if price declines are sustained.

Additionally, we execute a risk management strategy to mitigate our exposure to downward fluctuations in commodity prices. However, we primarily use derivative financial instruments relating to the future price of crude oil to mitigate our exposure to NGL price risk. During the first six months of 2012, the correlation between the price of NGLs and crude oil has weakened significantly and as a result, our derivative financial instruments have not been as effective in offsetting the impact of NGL price declines. If the pricing relationship between crude oil and NGLs does not return to the historical correlation or continues to weaken, our derivative financial instruments will continue to be less effective.

49

Cash Flow

The following table summarizes cash inflows (outflows) (in thousands):

	Six months ended June 30,
	2012			2011			Change
Net cash provided by operating activities	$	256,437		$	206,364		$	50,073
Net cash flows used in investing activities	(1,087,498		)	(462,049		)	(625,449		)
Net cash flows provided by financing activities	839,507			283,270			556,237

Net cash provided by operating activities increased primarily due to a $44.2 million increase in operating income, excluding derivative gains and losses, in our operating segments. The increase in cash provided by operating activities was also due to changes in working capital.

Net cash used in investing activities increased primarily due to the $506.8 million net cash spent for the Keystone Acquisition which occurred in the second quarter of 2012 and a $348.1 million increase in capital expenditures primarily related to our expansion of Liberty operations, partially offset by the $230.7 million Langley Acquisition which occurred in the first quarter of 2011.

Net cash provided by financing activities increased primarily due to a $714.7 million increase in proceeds from public equity offerings, partially offset by a $116.3 million decrease in net borrowings and a $55.0 million increase in distributions to unit holders.

Contractual Obligations

We periodically make other commitments and become subject to other contractual obligations that we believe to be routine in nature and incidental to the operation of the business. Management believes that such routine commitments and contractual obligations do not have a material impact on our business, financial condition or results of operations. As of June 30, 2012, our purchase obligations for the remainder of 2012 were $454.3 million compared to our 2012 obligations of $181.0 million as of December 31, 2011. The increase is due primarily to obligations related to the ongoing expansion in our Liberty segment. Purchase obligations represent purchase orders and contracts related to property, plant and equipment.

Effective July 2012, we amended our lease for our corporate offices in Denver, Colorado to include additional space and extend the term of the lease through 2024. The following table shows the increase in minimum future lease payments as of June 30, 2012 compared to the amount disclosed in Item 7 of the Form 10-K for the year ended December 31, 2011 (in thousands):

Payments Due by Period
Due in 2012	$	569
Due in 2013-2014	8,290
Due in 2015-2016	8,673
Thereafter	58,221
Total Obligation	$	75,753

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Estimates are used in accounting for, among other items, valuing identified intangible assets; evaluating impairments of long-lived assets, goodwill and equity investments; risk management activities and derivative financial instruments; VIEs; and acquisitions.

There have not been any material changes during the six months ended June 30, 2012 to the methodology applied by management for critical accounting policies previously disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies in our Annual Report on Form 10-K for the year ended December 31, 2011.

50

Recent Accounting Pronouncements

Refer to Note 2 of the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding recent accounting pronouncements.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Market risk includes the risk of loss arising from adverse changes in market rates and prices. We face market risk from commodity price changes and, to a lesser extent, interest rate changes and nonperformance by our customers and counterparties.

Commodity Price Risk

The information about commodity price risk for the six months ended June 30, 2012 does not differ materially from that discussed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our Annual Report on Form 10-K for the year ended December 31, 2011.

Outstanding Derivative Contracts

The following table provides information on the volume of our derivative activity for positions related to long liquids and keep-whole price risk at June 30, 2012, including the weighted average prices (“WAVG”):

WTI Crude Collars	Volumes (Bbl/d)	WAVG Floor (Per Bbl)		WAVG Cap (Per Bbl)		Fair Value (in thousands)
2012	3,340	$	78.77	$	99.77	$	1,099
2013	3,714	88.08		107.45		8,858
2014	734	95.36		114.81		3,252

WTI Crude Swaps	Volumes (Bbl/d)	WAVG Price (Per Bbl)		Fair Value (in thousands)
2012	7,273	$	86.74	$	1,082
2013	5,416	93.48		9,980
2014	965	96.59		2,980

Natural Gas Swaps	Volumes (MMBtu/d)	WAVG Price (Per MMBtu)		Fair Value (in thousands)
2012	16,493	$	4.25	$	(4,325	)
2013	1,453	4.66		(654		)

The following tables provide information on the volume of our taxable subsidiary’s commodity derivative activity for positions related to keep-whole price risk at June 30, 2012, including the WAVG:

WTI Crude Collars	Volumes (Bbl/d)	WAVG Floor (Per Bbl)		WAVG Cap (Per Bbl)		Fair Value (in thousands)
2012	1,242	$	79.53	$	103.55	$	650

WTI Crude Swaps	Volumes (Bbl/d)	WAVG Price (Per Bbl)		Fair Value (in thousands)
2012	1,751	$	87.07	$	198
2013	1,304	94.32		2,756

Natural Gas Swaps	Volumes (MMBtu/d)	WAVG Price (Per MMBtu)		Fair Value (in thousands)
2012	14,226	$	6.02	$	(8,027	)
2013	9,793	5.34		(6,174		)
2014	4,249	5.69		(2,614		)

51

Propane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2013 (Jan-Mar, Oct-Dec)	36,885	$	1.29	$	2,517
2014 (Jan-Mar, Oct-Dec)	87,837	1.25		5,455

IsoButane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2013	3,081	$	1.70	$	311
2014	3,885	1.67		412

Normal Butane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2013	8,512	$	1.61	$	1,041
2014	10,711	1.61		1,358

Natural Gasoline Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2013	5,600	$	2.26	$	861
2014	7,106	2.32		1,331

Propane Fixed Physical	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2012 (Oct-Dec)	1,413	$	1.01	$	17
2013 (Jan-Mar)	3,000	1.02		37

The following tables provide information on the volume of MarkWest Liberty Midstream’s commodity derivative activity for positions related to long liquids price risk at June 30, 2012, including the WAVG:

WTI Crude Collars	Volumes (Bbl/d)	WAVG Floor (Per Bbl)	WAVG Cap (Per Bbl)		Fair Value (in thousands)
2012	702	90	$	109.06	$	866
2013	494	92	108.67		1,573

Propane Swaps	Volumes (Gal/d)	WAVG Price (Per Gal)		Fair Value (in thousands)
2012 (Oct-Dec)	7,556	$	0.85	$	(14	)
2013 (Jan-Mar)	30,897	0.86		(68		)

Subsequent to June 30, 2012, we settled approximately 676 barrels per day of our crude oil derivative positions related to 2014 commodity price exposure prior to the contractual settlement date in order to take advantage of favorable crude oil prices at which we could settle these proxy hedges that are expected to be less effective. We plan to opportunistically enter into future NGL hedge transactions to manage the 2014 NGL price exposure. Upon early settlement, we received approximately $2.5 million.

Embedded Derivatives in Commodity Contracts

We have a commodity contract with a producer in the Appalachia region that creates a floor on the frac spread for gas purchases of 9,000 Dth/d. The commodity contract is a component of a broader regional arrangement that also includes a keep-whole processing agreement. This contract is accounted for as an embedded derivative and is recorded at fair value. The changes in fair value of this commodity contract are based on the difference between the contractual and index pricing and are recorded in earnings through Derivative gain (loss) related to purchased product costs. In February 2011, we executed agreements with the producer to extend the commodity contract and the related processing agreement from March 31, 2015 to December 31, 2022. As of June 30, 2012, the estimated fair value of this contract was a liability of $74.3 million and the recorded value was a liability of $20.8 million. The recorded liability does not include the inception fair value of the commodity contract related to the extended period from April 1, 2015 to December 31, 2022. In accordance with GAAP for non-option embedded derivatives, the fair value of this extended portion of the commodity contract at its inception on February 1, 2011 is deemed to be allocable to the host processing contract and therefore not recorded as a derivative liability. See the following table for a reconciliation of the liability recorded for the embedded derivative as of June 30, 2012 (in thousands):

52

Fair value of commodity contract	$	74,311
Inception value for period from April 1, 2015 to December 31, 2022	(53,507		)
Derivative liability as of June 30, 2012	$	20,804

We have a commodity contract that gives us an option to fix a component of the utilities cost to an index price on electricity at one of our plant locations through the fourth quarter of 2014. The value of the derivative component of this contract is marked to market through Derivative gain (loss) related to facility expenses. As of June 30, 2012, the estimated fair value of this contract was an asset of $10.4 million.

Interest Rate Risk

The information about interest rate risk for the six months ended June 30, 2012 does not differ materially from that discussed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our Annual Report on Form 10-K for the year ended December 31, 2011.

Credit Risk

The information about our credit risk for the six months ended June 30, 2012 does not differ materially from that discussed in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our Annual Report on Form 10-K for the year ended December 31, 2011.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Partnership’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the 1934 Act, as of June 30, 2012. Based on this evaluation, the Partnership’s management, including our Chief Executive Officer and Chief Financial Officer, concluded that as of June 30, 2012, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

Limitations on Controls

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Partnership have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2012 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

53

PART II—OTHER INFORMATION

Item 1.  Legal Proceedings

Refer to Note 11 of the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding legal proceedings.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011, which could materially affect our business, financial condition or future results. 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 future results. There have been no significant changes to our risk factors as set forth in our Annual Report on form 10-K for the year ended December 31, 2011, except for the additional or updated risk factors below:

Recently approved final rules regulating air emissions from natural gas processing operations could cause us to incur increased capital expenditures and operating costs, which may be significant.

On April 17, 2012, the EPA approved final rules that establish new air emission controls for natural gas and NGLs production, processing and transportation activities, including New Source Performance Standards to address emissions of sulfur dioxide and volatile organic compounds, and a separate set of emission standards to address hazardous air pollutants frequently associated with production and processing activities. Among other things, the rules establish specific requirements regarding emissions from compressors and controllers at natural gas gathering and boosting stations and processing plants together with dehydrators and storage tanks at natural gas processing plants, compressor stations and gathering and boosting stations. In addition, the rules establish new requirements for leak detection and repair of leaks at natural gas processing plants that exceed 500 parts per million in concentration. We are currently reviewing this new rule and assessing its potential impacts. Compliance with these requirements may require modifications to certain of our operations, including the installation of new equipment to control emissions from our compressors that could result in significant costs, including increased capital expenditures and operating costs, and could adversely impact our business.

Our commodity derivative activities may reduce our earnings, profitability and cash flows.

Our operations expose us to fluctuations in commodity prices. We utilize derivative financial instruments related to the future price of crude oil, natural gas and certain NGLs with the intent of reducing volatility in our cash flows due to fluctuations in commodity prices.

The extent of our commodity price exposure is related largely to the effectiveness and scope of our derivative activities. We have a policy to enter into derivative transactions related to only a portion of the volume of our expected production or fuel requirements and, as a result, we expect to continue to have some direct commodity price exposure. Our actual future production or fuel requirements may be significantly higher or lower than we estimate at the time we enter into derivative transactions for such period. If the actual amount is higher than we estimate, we will have greater commodity price exposure than we intended. If the actual amount is lower than the amount that is subject to our derivative financial instruments, we might be forced to settle all or a portion of our derivative transactions without the benefit of the cash flow from our sale or purchase of the underlying physical commodity, which could result in a substantial diminution of our liquidity. Alternatively, we may seek to amend the terms of our derivative financial instruments, including to extend the settlement date of such instruments. Additionally, because we use derivative financial instruments relating to the future price of crude oil to mitigate our exposure to NGL price risk, the volatility of our future cash flows and net income may increase if there is a change in the pricing relationship between crude oil and NGLs. As a result of these factors, our risk management activities may not be as effective as we intend in reducing the downside volatility of our cash flows and, in certain circumstances, may actually increase the volatility of our cash flows. In addition, our risk management activities are subject to the risks that a counterparty may not perform its obligation under the applicable derivative instrument, the terms of the derivative instruments are imperfect and our risk management policies and procedures are not properly followed. It is possible that the steps we take to monitor our derivative financial instruments may not detect and prevent violations of our risk management policies and procedures, particularly if deception or other intentional misconduct is involved.

54

Item 6. Exhibits

2.1*+	Agreement and Plan of Merger dated as of May 7, 2012 among Keystone Midstream Services, L.L.C., R.E. Gas Development, L.L.C., Stonehenge Energy Resources, L.P., Summit Discovery Resources II, L.L.C., MarkWest Liberty Midstream & Resources, L.L.C., MarkWest Liberty Bluestone, L.L.C. and KMS Shareholder Representative, L.L.C.
10.2(1)	Third Amendment to Amended and Restated Credit Agreement dated as of June 29, 2012, among MarkWest Energy Partners, L.P., Wells Fargo Bank, National Association, as Administrative Agent, and the other agents and lenders party thereto.
31.1*	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	The following financial information from the quarterly report on Form 10-Q of MarkWest Energy Partners, L.P. for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, (iv) Condensed Consolidated Statements of Changes in Equity, and (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text.

*Filed herewith

+Application has been made to the Securities and Exchange Commission for confidential treatment of certain provisions of these exhibits. Omitted material for which confidential treatment has been requested and has been filed separately with the Securities and Exchange Commission.

(1)Incorporated by reference to the Current Report on Form 8-K filed June 29, 2012.

55

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.

	MarkWest Energy Partners, L.P. (Registrant)
	By:	MarkWest Energy GP, L.L.C.,
		Its General Partner
Date: August 6, 2012	/s/ FRANK M. SEMPLE
	Frank M. Semple
	Chairman, President & Chief Executive Officer
	(Principal Executive Officer)
Date: August 6, 2012	/s/ NANCY K. BUESE
	Nancy K. Buese
	Senior Vice President & Chief Financial Officer
	(Principal Financial Officer)
Date: August 6, 2012	/s/ PAULA L. ROSSON
	Paula L. Rosson
	Vice President & Chief Accounting Officer
	(Principal Accounting Officer)

56

EX-2.1

Exhibit 2.1

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPERATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

EXECUTION VERSION

AGREEMENT AND PLAN OF MERGER,

dated as of May 7, 2012,

among

KEYSTONE MIDSTREAM SERVICES, LLC,

as the Company,

R.E. GAS DEVELOPMENT, LLC,

STONEHENGE ENERGY RESOURCES, L.P., and

SUMMIT DISCOVERY RESOURCES II, LLC,

as the Holders,

MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C.,

as the Parent,

MARKWEST LIBERTY BLUESTONE, L.L.C.,

as Merger Subsidiary

and

THE HOLDER REPRESENTATIVE

(as defined herein)

TABLE OF CONTENTS

	Page
ARTICLE I THE MERGER	2
SECTION 1.1. The Merger	2
SECTION 1.2. Effective Time	2
SECTION 1.3. Effects of the Merger	2
SECTION 1.4. Organizational Documents	2
SECTION 1.5. Conversion	2
ARTICLE II MERGER CONSIDERATION	3
SECTION 2.1. Merger Consideration	3
SECTION 2.2. Initial Adjustment	3
SECTION 2.3. Final Balance Sheet	4
SECTION 2.4. Post-Closing Adjustment	4
SECTION 2.5. Dispute Resolution	5
SECTION 2.6. Escrow	6
ARTICLE III CLOSING	6
SECTION 3.1. Closing	6
SECTION 3.2. Deliveries by the Company	6
SECTION 3.3. Deliveries by the Parent	7
SECTION 3.4. Filing of Certificate of Merger	8
SECTION 3.5. Proceedings at Closing	8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HOLDERS	8
SECTION 4.1. Organization; Power and Authority	8
SECTION 4.2. Authorization; Execution and Validity	8
SECTION 4.3. Absence of Conflicts	9
SECTION 4.4. Title to Membership Interests	9
SECTION 4.5. Litigation	9
SECTION 4.6. Fees	9
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY	9
SECTION 5.1. Organization; Power and Authority	9
SECTION 5.2. Authorization; Execution and Validity	10
SECTION 5.3. Absence of Conflicts	10
SECTION 5.4. Governmental Approvals	10
SECTION 5.5. Capitalization of the Company	11
SECTION 5.6. Financial Statements	11
SECTION 5.7. Indebtedness; Liabilities	11
SECTION 5.8. Absence of Certain Changes	11
SECTION 5.9. Subsidiaries; Investments	12
SECTION 5.10. Real Property	12
SECTION 5.11. Title to and Condition of Tangible Assets	13
SECTION 5.12. Material Contracts	13
SECTION 5.13. Intellectual Property	14

i

SECTION 5.14. Litigation	15
SECTION 5.15. Employee Matters	15
SECTION 5.16. Taxes	15
SECTION 5.17. Permits; Compliance with Laws	16
SECTION 5.18. Environmental Laws	17
SECTION 5.19. Insurance	18
SECTION 5.20. Fees	18
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY	18
SECTION 6.1. Organization; Power and Authority	18
SECTION 6.2. Authorizations; Execution and Validity	18
SECTION 6.3. Absence of Conflicts	18
SECTION 6.4. Governmental Approvals	19
SECTION 6.5. Litigation	19
SECTION 6.6. Sophisticated Purchaser; Access to Information	19
SECTION 6.7. Financing	20
SECTION 6.8. Third Party Reports	20
SECTION 6.9. Fees	20
ARTICLE VII COVENANTS	20
SECTION 7.1. Cooperation; Certain Consents and Approvals	20
SECTION 7.2. Conduct of Business	22
SECTION 7.3. Access to Information	24
SECTION 7.4. Certain Confidential Information	24
SECTION 7.5. Holder Access to Documents; Preservation of Books and Records	25
SECTION 7.6. Limited Representations	25
SECTION 7.7. Litigation Support and Cooperation	26
SECTION 7.8. No Solicitation of Other Bids	26
SECTION 7.9. Transition Plan	27
ARTICLE VIII TAX MATTERS	28
SECTION 8.1. Tax Returns and Reporting	28
SECTION 8.2. No Changes in Elections, etc.	28
SECTION 8.3. Tax Refunds	29
SECTION 8.4. Tax Contests	29
SECTION 8.5. Merger Consideration Allocation	30
SECTION 8.6. Tax Characterization of Transaction	30
SECTION 8.7. Transfer Taxes	30
SECTION 8.8. Cooperation; Access to Records	30
SECTION 8.9. Tax Treatment of Payments	31
ARTICLE IX CONDITIONS PRECEDENT TO PARENT’S OBLIGATIONS	31
SECTION 9.1. Accuracy of Representations and Warranties	31
SECTION 9.2. Performance of Covenants	31
SECTION 9.3. No Order	31
SECTION 9.4. HSR Clearance	32
SECTION 9.5. Closing Deliveries	32
SECTION 9.6. Third Party Consents	32
SECTION 9.7. Absence of Material Adverse Effect	32

ii

SECTION 9.8. **	32
ARTICLE X CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY	32
SECTION 10.1. Accuracy of Representations and Warranties	32
SECTION 10.2. Performance of Covenants	32
SECTION 10.3. No Order	33
SECTION 10.4. HSR Clearance	33
SECTION 10.5. Closing Deliveries	33
ARTICLE XI TERMINATION	33
SECTION 11.1. Termination of Agreement	33
SECTION 11.2. Effect of Termination	34
ARTICLE XII INDEMNIFICATION	34
SECTION 12.1. Survival of Representations and Warranties and Covenants	34
SECTION 12.2. Holders’ Indemnification Obligations	35
SECTION 12.3. Parent’s Indemnification Obligations	36
SECTION 12.4. Limitations on Indemnification	36
SECTION 12.5. Third-Party Claims	37
SECTION 12.6. Procedures	38
SECTION 12.7. Exclusive Remedy	39
SECTION 12.8. Mitigation; Insurance	39
SECTION 12.9. Indemnification Net of Tax Benefit	40
SECTION 12.10. Cooperation; Access to Documents and Information	40
ARTICLE XIII DEFINITIONS	40
SECTION 13.1. Certain Definitions	40
SECTION 13.2. Other Defined Terms	48
ARTICLE XIV GENERAL	50
SECTION 14.1. Holder Representative	50
SECTION 14.2. Amendments	52
SECTION 14.3. Waivers	52
SECTION 14.4. Notices	52
SECTION 14.5. Successors and Assigns; Parties in Interest	54
SECTION 14.6. Severability	54
SECTION 14.7. Entire Agreement	54
SECTION 14.8. Governing Law	55
SECTION 14.9. Remedies	55
SECTION 14.10. Arbitration	55
SECTION 14.11. Expenses	56
SECTION 14.12. Survival	56
SECTION 14.13. Release of Information	56
SECTION 14.14. Disclosure Schedules	56
SECTION 14.15. Certain Rules of Construction	57
SECTION 14.16. Waiver of Conflicts	57
SECTION 14.17. Counterparts	58

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AGREEMENT AND PLAN OF MERGER

This AGREEMENT AND PLAN OF MERGER, dated as of May 7, 2012 (this “Agreement”), is entered into by and among KEYSTONE MIDSTREAM SERVICES, LLC, a Delaware limited liability company (the “Company”), R.E. GAS DEVELOPMENT, LLC, a Delaware limited liability company (“Rex”), STONEHENGE ENERGY RESOURCES, L.P., a Delaware limited partnership (“Stonehenge”), and SUMMIT DISCOVERY RESOURCES II, LLC, a Delaware limited liability company (“Summit,” and together with Rex and Stonehenge, the “Holders”), MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C., a Delaware limited liability company (“Parent”), MARKWEST LIBERTY BLUESTONE, L.L.C., a Delaware limited liability company (“Merger Subsidiary”), and KMS SHAREHOLDER REPRESENTATIVE, LLC, a Delaware limited liability company, in its capacity as Holder Representative (as hereinafter defined).

WHEREAS, the Holders own all of the outstanding limited liability company interests in the Company (the “Membership Interests”);

WHEREAS, the Company is engaged in the business of gathering and processing natural gas in southwestern Pennsylvania;

WHEREAS, the Parent or one or more of its subsidiaries or affiliates are engaged in the business of gathering and processing natural gas and are familiar with the risks and benefits associated with businesses such as those conducted by the Company;

WHEREAS, the Parent has conducted a due diligence review and examination of the businesses, operations, prospects, properties, assets, liabilities, financial condition and results of operations of the Company;

WHEREAS, the Holders (i) have determined to effect the merger (the “Merger”) of the Company with and into the Merger Subsidiary, upon the terms and subject to the conditions set forth herein; and (ii) are approving as of the date hereof this Agreement and the transactions contemplated herein, including the Merger, in accordance with the Delaware Limited Liability Company Act (the “Act”) and the Limited Liability Company Agreement of the Company;

WHEREAS, the Parent owns all outstanding limited liability company interests in the Merger Subsidiary;

WHEREAS, the board of managers of Parent and MarkWest Liberty Gas Gathering, L.L.C., as the sole member of Parent, and the Parent, as the sole member of Merger Subsidiary, have approved this Agreement and have determined that it is advisable and in the best interests of Parent to effect the Merger, upon the terms and subject to the conditions set forth herein; and

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WHEREAS, capitalized terms used herein without definition have the respective meanings set forth in Article XIII;

NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I
THE MERGER

SECTION 1.1.   The Merger.  Upon the terms and subject to the conditions set forth herein, and in accordance with the Act, at the Effective Time, the Company shall be merged with and into Merger Subsidiary, and the separate existence of the Company shall thereupon cease.  Merger Subsidiary shall be the surviving entity (the “Surviving Entity”) in the Merger and shall continue its existence under the laws of the State of Delaware.  All references herein to the Company in respect of actions or omissions to occur after the Effective Time shall be deemed to refer to the Surviving Entity.

SECTION 1.2.   Effective Time.  The Merger shall be effected through the filing of a certificate of merger (the “Certificate of Merger”), in substantially the form of Exhibit A hereto, with the Secretary of State of the State of Delaware as provided in the Act.  The Merger shall be effective upon the later of (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware or (ii) at such later time as may be specified in the Certificate of Merger in accordance with applicable law (the “Effective Time”).

SECTION 1.3.   Effects of the Merger.  The Merger shall have the effects set forth in the Act.

SECTION 1.4.   Organizational Documents.  As of the Effective Time, the limited liability company agreement of the Surviving Entity (the “Surviving Entity LLC Agreement”) shall be amended and restated so that it is in the form agreed to by the parties on or prior to the date hereof.

SECTION 1.5.   Conversion.  At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Subsidiary, the Company or the Holders:

(a)           Each Holder’s Membership Interest outstanding immediately prior to the Effective Time shall be converted automatically into and shall represent the right to receive (i) cash in an amount equal to the product of (x) the Initial Merger Consideration and (y) such Holder’s Sharing Ratio and (ii) the portion of any cash amounts to be distributed in respect of such Membership Interest pursuant to Sections 2.4(a)(i) or 2.4(b)(i), if any, or the Escrow Agreement as specified in Section 14.1, and, as of the Effective Time, all such Membership Interests shall no longer be outstanding and shall automatically be canceled and retired and cease to exist; and

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(b)           All membership interests of the Merger Subsidiary outstanding immediately prior to the Effective Time shall be converted into and become the membership interests in the Surviving Entity shown as owned by the Parent in the Surviving Entity LLC Agreement (which will constitute all outstanding membership interests in the Surviving Entity as of the Effective Time).

ARTICLE II
MERGER CONSIDERATION

SECTION 2.1.   Merger Consideration.

(a)           At the Closing, the Parent shall pay to the Holders an aggregate amount in cash equal to $512,000,000 (“Base Consideration”), as such amount is increased or decreased (as the case may be) pursuant to Section 2.2(b), plus the amount of Estimated Closing Cash and minus the amount of Closing Indebtedness (the “Initial Merger Consideration”).

(b)           The final merger consideration to be paid by the Parent shall be the Initial Merger Consideration, as such amount is increased or decreased (as the case may be) to reflect the payment of the Final Adjustment Amount pursuant to Section 2.4 (the “Merger Consideration”).

SECTION 2.2.   Initial Adjustment.

(a)           No later than three (3) Business Days prior to the Closing Date, the Company shall deliver to the Parent a certificate of the Manager of the Company (or an authorized officer whose responsibilities relate to the preparation of financial statements of the Company) (the “Initial Closing Certificate”) setting forth (i) an estimated balance sheet of the Company as of the Closing Calculation Date, prepared in accordance with GAAP applied on a basis consistent with past practice and the principles used in the preparation of the Latest Balance Sheet, (ii) an estimated calculation of Net Working Capital prepared in accordance with the definition of Net Working Capital (the “Estimated Working Capital”), (iii) the estimated amount of Closing Cash (the “Estimated Closing Cash”) and (iv) the estimated amount of Closing Indebtedness.  In the event that Parent disagrees with any amounts set forth in the Initial Closing Certificate, the parties shall work together in good faith to resolve any such disputes, and any changes to the amounts set forth in the Initial Closing Certificate agreed upon in writing by the Company and the Parent shall be substituted for the amounts set forth in the Initial Closing Certificate.  If such dispute is not resolved prior to Closing, then the amounts set forth in the Initial Closing Certificate shall be binding for purposes of the Closing.

(b)           If the Estimated Working Capital is:

(i)            greater than the Target Working Capital, then an amount equal to (x) the Estimated Working Capital minus (y) the Target Working Capital will be added to the Base Consideration; and

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(ii)           less than the Target Working Capital, then an amount equal to (x) the Target Working Capital minus (y) the Estimated Working Capital will be subtracted from the Base Consideration.

SECTION 2.3.   Final Balance Sheet and Final Working Capital.  No later than 60 days after the Closing Date, the Parent shall deliver to the Holder Representative a certificate of the chief financial officer of Parent (the “Final CFO Certificate”) setting forth (i) a balance sheet of the Company as of the Closing Calculation Date (the “Final Balance Sheet”), prepared in accordance with GAAP applied on a basis consistent with past practice and the principles used in the preparation of the Latest Balance Sheet, (ii) the proposed calculation of Final Working Capital prepared in accordance with the definition of Net Working Capital and (iii) the proposed calculation of Final Closing Cash prepared in accordance with the definition of Closing Cash.  From and after the Closing Date, the Parent and the Company shall give the Holder Representative access during normal business hours to the books and records, the accounting and other appropriate personnel and the independent accountants of the Company in order to enable the Holder Representative to obtain information relating to the preparation or review of the Final Balance Sheet or the calculation of Final Working Capital or Final Closing Cash.

SECTION 2.4.   Post-Closing Adjustment.  No later than five days after a binding determination of Final Working Capital and Final Closing Cash has been made in accordance with Section 2.5:

(a)           The parties shall make the applicable payment specified below with respect to Net Working Capital:

(i)            If Final Working Capital is greater than Estimated Working Capital, the Parent shall make a payment equal to such excess in immediately available funds to such account or accounts as is designated in writing by the Holder Representative.

(ii)           If Estimated Working Capital is greater than Final Working Capital, each Holder shall make a payment in an amount equal to (x) such excess multiplied by (y) such Holder’s Sharing Ratio, in immediately available funds to such account or accounts as is designated in writing by the Parent.

(b)           The parties shall make the applicable payment specified below with respect to Closing Cash:

(i)            If Final Closing Cash is greater than Estimated Closing Cash, the Parent shall make a payment equal to such excess in immediately available funds to such account or accounts as is designated in writing by the Holder Representative.

(ii)           If Estimated Closing Cash is greater than Final Closing Cash, each Holder shall make a payment in an amount equal to (x) such excess multiplied by (y) such Holder’s Sharing Ratio, in immediately available funds to such account or accounts as is designated in writing by the Parent.

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(c)           In satisfying the payments as described above in paragraphs (a) and (b) above, all amounts due and owing shall be netted so that only one aggregate payment is made pursuant to this Section 2.4, which is referred to herein as the “Final Adjustment Amount.”  If Final Working Capital equals Estimated Working Capital and Final Closing Cash equals Estimated Closing Cash, no Final Adjustment Amount will be paid.

SECTION 2.5.   Dispute Resolution.

(a)           The Holder Representative shall be entitled to dispute the calculation of the Final Working Capital or Final Closing Cash set forth in the Final CFO Certificate if it delivers a written notice (an “Objection Notice”) to the Parent within 45 days after receipt of the Final Balance Sheet and Final CFO Certificate in which it objects to the calculation by the Parent of the Final Working Capital or Final Closing Cash (the date upon which the Holder Representative delivers an Objection Notice to the Parent being hereinafter referred to as the “Objection Date”).  The Objection Notice shall contain any changes that the Holder Representative proposes to be made to the Final CFO Certificate, to the extent such changes are reasonably determinable based on information to which the Holder Representative has been granted actual access to pursuant to Section 2.3.

(b)           If the Holder Representative delivers an Objection Notice to the Parent within the time period specified in paragraph (a) above, the Parent and the Holder Representative shall attempt in good faith to agree upon the amount of the Final Adjustment Amount during the period commencing on the Objection Date and ending 30 days thereafter (the “Negotiation Period”).

(c)           If the Parent and the Holder Representative agree in writing prior to the expiration of the Negotiation Period on the amount of the Final Adjustment Amount (whether such amount is the same as or different from the amount calculated based upon the Final CFO Certificate), the payment provided for in Section 2.4 shall be based upon the agreed upon amount.

(d)           If the Parent and the Holder Representative do not agree in writing prior to the expiration of the Negotiation Period on the amount of the Final Adjustment Amount, each party shall submit a statement containing its calculation of the items in dispute (each, an “Arbiter Objection Statement”), which shall include only those items set forth in the Objection Notice that remain in dispute following the expiration of the Negotiation Period and any such other items that the parties mutually agree in writing to include therein, to Ernst & Young Global Limited, or, if such firm declines to serve as accounting arbiter or the parties agree in writing not to engage such firm, such other firm of independent public accountants mutually agreed upon by the Parent and the Holder Representative (in either case, the “Final Arbiter”), which firm shall make a final and binding determination as to all matters in dispute relating to the calculation of the amount of the Final Adjustment Amount as promptly as practicable after its appointment.  In determining the proper amount of the Final Adjustment, the Final Arbiter shall be bound by the terms of this Section 2.5(d) and may not increase the amount of any item in dispute above the highest amount set forth in the Arbiter Objection Statements nor below the lowest amount set forth in the Arbiter Objection Statements.  The Final Arbiter shall send its written determination of Final Working Capital and Final Closing Cash to the Parent and the Holder Representative,

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together with a calculation of the Final Adjustment Amount that results from such determination, and such determination and calculation shall be binding on the parties, absent fraud or manifest error.  The fees and expenses of the Final Arbiter shall be borne equally, with one-half being paid by the Parent and one-half being paid by the Holders, severally (in proportion to their Sharing Ratios) and not jointly.  The Final Arbiter may not award damages, interest or penalties to any party with respect to any matter.

SECTION 2.6.   Escrow.  At Closing, the Parent shall deposit the Escrow Amount in an account (the “Escrow Account”) to be established by Parent and the Holder Representative with the Escrow Agent pursuant to the terms of an escrow agreement substantially in the form agreed to by the parties on or prior to the date hereof (the “Escrow Agreement”).  The Escrow Account shall be administered in accordance with the terms and provisions of the Escrow Agreement.

ARTICLE III
CLOSING

SECTION 3.1.   Closing.  Upon the terms and subject to the conditions contained herein, the closing of the Merger pursuant to this Agreement (the “Closing”) shall take place at the offices of the Company, 11400 Westmoor Circle, Westminster, Colorado, 80021 at 9:00 a.m., Westminster, Colorado time, on the earlier of (i) May 31, 2012 or (ii) 10 days after the expiration or termination of the “waiting period” or any extension thereof under the HSR Act applicable to the Merger (provided that, if the conditions to the obligations of the parties to consummate the transactions contemplated by this Agreement set forth in Articles IX and X are not satisfied or waived on such date, the Closing shall take place as soon as practicable after the satisfaction or waiver of such conditions (but in no event more than two Business Days thereafter)), or at such other time and date as the parties may agree (the “Closing Date”).

SECTION 3.2.   Deliveries by the Company.  At the Closing, the Company shall deliver, or shall cause to be delivered, to the Parent each of the following:

(a)           a payoff letter, release, and lien discharge issued by U.S. Bank, setting forth the amount of all Closing Indebtedness and evidencing the release of all Liens on the Company’s assets securing such Closing Indebtedness;

(b)           a certificate complying with Treas. Reg. § 1.1445-2(b)(2) which evidences the non-foreign status of the Company and each Holder within the meaning of such Treasury Regulation;

(c)           a certificate of the Company to the effect set forth in Sections 9.1 and 9.2, dated the Closing Date and signed on behalf of the Company by a duly authorized person;

(d)           a certificate, duly executed by the Manager of the Company, dated the Closing Date, to the effect that (i) the resolutions adopted by the Manager of the Company and each Member of the Company authorizing this Agreement and the transactions contemplated hereby, including the Merger, were duly and unanimously adopted at a meeting that was duly called and held, at which a quorum was present and acting

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throughout, or by unanimous written consent, and such resolutions remain in full force and effect, and have not been amended, rescinded or modified, and (ii) the authorized representative of the Company executing this Agreement and the other documents, agreements and instruments to be executed and delivered by the Company pursuant to this Agreement is duly authorized to execute the same;

(e)           a counterpart of the Escrow Agreement, duly executed by the Holder Representative;

(f)            a counterpart of the GPA Amendment, duly executed by the Company, Summit and Rex, with Sumitomo Corporation and Rex Energy Corporation, a Delaware corporation (for the limited purpose specifically set forth in the GPA Amendment);

(g)           the Termination and Release, duly executed by the Company and each Holder; and

(h)           a certificate from the Secretary of State of the State of Delaware with respect to the existence and good standing of the Company and each Holder.

SECTION 3.3.   Deliveries by the Parent.  At the Closing, the Parent shall deliver, or shall cause to be delivered, to the Company and the Holders or, if indicated below, to or for the account of the Holders, the Escrow Agent, or U.S. Bank, each of the following:

(a)           to the Holders, the Initial Merger Consideration, less the Escrow Amount, by wire transfer of immediately available funds to such accounts as the Holder Representative shall have specified to the Parent at least 24 hours prior to the Closing;

(b)           to the Escrow Agent, the Escrow Amount, by wire transfer of immediately available funds to such account as is specified in the Escrow Agreement;

(c)           to U.S. Bank, the amount of the Closing Indebtedness, by wire transfer of immediately available funds to such account as U.S. Bank shall have specified to the Parent at least 24 hours prior to the Closing;

(d)           the Surviving Entity LLC Agreement executed by a duly authorized officer of the Parent;

(e)           a certificate to the effect set forth in Sections 10.1 and 10.2 hereof, dated the Closing Date and signed on behalf of the Parent and Merger Subsidiary by its duly authorized officers;

(f)            certificates, duly executed by the respective authorized officer of Parent and Merger Subsidiary, dated the Closing Date, to the effect that (i) the respective resolutions adopted by the board of managers and sole member of the Parent and the sole member of Merger Subsidiary authorizing this Agreement and the transactions contemplated hereby, including the Merger, were duly adopted at meeting that was duly called and held, at which a quorum was present and acting throughout, or by unanimous written consent, and such

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resolutions remain in full force and effect, and have not been amended, rescinded or modified and (ii) the respective officers of Parent and Merger Subsidiary executing this Agreement and the other documents, agreements and instruments to be executed and delivered by Parent and Merger Subsidiary pursuant to this Agreement are duly authorized to execute the same;

(g)           a certificate from the Secretary of State of the State of Delaware with respect to the existence and good standing of the Parent and Merger Subsidiary; and

(h)           a counterpart of the Escrow Agreement, duly executed by the Parent.

SECTION 3.4.   Filing of Certificate of Merger.  In connection with the consummation of the Closing, the appropriate officers of the Merger Subsidiary shall file the Certificate of Merger with the Secretary of State of the State of Delaware to effectuate the Merger on the Closing Date.

SECTION 3.5.   Proceedings at Closing.  All proceedings to be taken and all documents to be executed and delivered by the parties at the Closing shall be deemed to have been taken and executed and delivered simultaneously, and no proceedings shall be deemed taken nor any documents executed or delivered until all have been taken, executed and delivered.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF HOLDERS

Each of the Holders, severally and not jointly, hereby represents and warrants as to itself only to the Parent and Merger Subsidiary that, on and as of the date of this Agreement, except as set forth in the Disclosure Schedule delivered to the Parent and Merger Subsidiary by such Holder (each, a “Holder Disclosure Schedule”):

SECTION 4.1.   Organization; Power and Authority.  Such Holder is a limited partnership or a limited liability company, as applicable, duly organized, validly existing and in good standing under the laws of the state of its organization.  Such Holder has all requisite limited partnership or limited liability company power and authority, as applicable, to own the Membership Interests.

SECTION 4.2.   Authorization; Execution and Validity.  Such Holder has all requisite limited partnership or limited liability company power and authority, as applicable, to execute and deliver this Agreement, perform its obligations hereunder and consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by such Holder, the performance by such Holder of its obligations hereunder and the consummation by such Holder of the transactions contemplated hereby, including the Merger, have been duly and validly authorized by all necessary limited partnership or limited liability company action, as applicable, on the part of such Holder. This Agreement has been duly and validly executed and delivered by such Holder and constitutes a valid and binding obligation of such Holder, enforceable against it in accordance with its terms, subject to the Enforceability Exceptions.

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SECTION 4.3.   Absence of Conflicts.  The execution and delivery by such Holder of this Agreement, the performance by such Holder of its obligations hereunder and the consummation by such Holder of the transactions contemplated hereby will not (i) result in any violation or breach of any provision of the Organizational Documents of such Holder, (ii) assuming that the filings and Consents referred to in Sections 5.4 are made or obtained, result in any violation of any Law or any Order applicable to such Holder or its properties or assets, (iii) result in the creation of, or impose on such Holder any obligation to create, any Lien upon the Membership Interests owned by it, or (iv) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or require any Consent under, any Contract of such Holder, except for any of the matters referred to in clauses (ii), (iii) or (iv) above which would not reasonably be expected to prevent, impede or otherwise adversely affect in any material respect the transactions contemplated by this Agreement.

SECTION 4.4.   Title to Membership Interests.  The Membership Interests owned by such Holder are owned beneficially and of record by such Holder, free and clear of any Liens, other than (i) restrictions on transfer under federal and state securities laws and (ii) restrictions set forth in the Company’s Organizational Documents.

SECTION 4.5.   Litigation.  As of the date hereof, there are no Legal Proceedings pending or, to such Holder’s knowledge, threatened against such Holder (i) that question the validity of this Agreement or any action taken or to be taken by such Holder in connection with, or which seek to enjoin or obtain monetary damages in respect of, this Agreement or the transactions contemplated hereby or (ii) that would reasonably be expected to adversely affect in any material respect the ability of such Holder to perform its obligations under and consummate the transactions contemplated by this Agreement.

SECTION 4.6.   Fees.  Such Holder has not paid or become obligated to pay any fee or commission to any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement for which the Parent or the Company will have any liability or responsibility whatsoever.

ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

The Company hereby represents and warrants to the Parent and Merger Subsidiary that, on and as of the date of this Agreement (or, to the extent a representation or warranty is made as of a specified date, as of such date), except as set forth in the Disclosure Schedule delivered by the Company to the Parent (the “Company Disclosure Schedule”):

SECTION 5.1.   Organization; Power and Authority.  The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and is qualified to transact business and is in good standing in the Commonwealth of Pennsylvania and each other jurisdiction in which such qualification is required by Law, except in the case of any such other jurisdiction where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.  The

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Company has all requisite limited liability company power and authority to own, lease and operate its assets and properties and conduct its business and operations as presently being conducted.

SECTION 5.2.   Authorization; Execution and Validity.  The Company has all requisite limited liability company power and authority to execute and deliver this Agreement and perform its obligations hereunder.  The execution and delivery of this Agreement by the Company and the performance by the Company of its obligations hereunder have been duly and validly authorized by all necessary limited liability company action on the part of the Company, subject to the filing of the Certificate of Merger as required by the Act.  This Agreement has been duly and validly executed and delivered by the Company and (to the extent it relates to actions to be taken or covenants to be performed prior to or at Closing) constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.

SECTION 5.3.   Absence of Conflicts.  The execution and delivery by the Company of this Agreement, the performance by the Company of its obligations hereunder and the consummation of the transactions contemplated hereby will not (i) result in any violation or breach of any provision of the Organizational Documents of the Company, (ii) assuming that the filings and Consents referred to in Section 5.4 below and in Sections 5.3 and 5.4 of the Company Disclosure Schedule are made or obtained, result in any violation of any Law or any Order applicable to the Company or its properties or assets, (iii) result in the creation of, or impose on the Company any obligation to create, any Lien (other than a Permitted Lien) upon any properties or assets of the Company, or (iv) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or require any Consent under, any Material Contract or Real Property Agreement, except for any of the matters referred to in clauses (ii), (iii) or (iv) above which would not reasonably be expected to be material to the business or operations of the Company or prevent, impede or otherwise adversely affect in any material respect the transactions contemplated by this Agreement.

SECTION 5.4.   Governmental Approvals.  There is no requirement applicable to the Company to obtain any Consent of, or to make or effect any declaration, filing or registration with, any Governmental Authority for the valid execution and delivery by the Company of this Agreement, the due performance by the Company of its obligations hereunder or the lawful consummation of the transactions contemplated hereby, except for (i) the filing by or on behalf of the “ultimate parent entity” of the Company of notification with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (the “DOJ”) under the HSR Act and the expiration of the applicable “waiting period” thereunder, (ii) the filing of the Certificate of Merger as required by the Act; (iii) filings with and Consents of any Governmental Authority having jurisdiction over the gathering and processing of gas as conducted by the Company that are set forth in Section 5.4 of the Company Disclosure Schedule and (iv) any other filing, consent or requirement which, if not made, obtained or satisfied would not reasonably be expected to be material to the business or operations of the Company or prevent, impede or

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otherwise adversely affect in any material respect the transactions contemplated by this Agreement.

SECTION 5.5.   Capitalization of the Company.  The Membership Interests constitute all of the issued and outstanding Equity Interests in the Company.  The limited liability company records of the Company reflect that all of the Membership Interests are owned of record by the Holders.  None of the Membership Interests were issued in violation of any preemptive rights.  There are no outstanding options, warrants, calls, rights, convertible securities or other agreements or commitments of any character pursuant to which the Company is or may be obligated to issue or sell any issued or unissued Equity Interests in the Company.

SECTION 5.6.   Financial Statements;Records.

(a)           Attached as Section 5.6 of the Company Disclosure Schedule are (i) the audited balance sheets of the Company as of December 31, 2010 and 2011, together with the related income statements of the Company for the years then ended (collectively, the “Year-End Financial Statements”), and (ii) the unaudited balance sheet of the Company as of March 31, 2012 (the “Latest Balance Sheet”), together with the related unaudited income statement of the Company for the twelve-month period then ended (the “Latest Financial Statements” and, together with the Year-End Financial Statements, the “Financial Statements”).  The Financial Statements fairly present in all material respects the financial position of the Company as of the dates indicated, and the results of operations of the Company for the periods presented, and were prepared in accordance with GAAP, subject to (i) in the case of the Latest Financial Statements, the absence of footnotes thereto and (ii) the other exceptions set forth in Section 5.6 of the Company Disclosure Schedule.

(b)           The Company has at all times maintained complete and correct records of all issuances and transfers of its Membership Interests.  At the Closing all such records will be in the possession of the Company.

SECTION 5.7.   Indebtedness; Liabilities.  As of immediately prior to the Closing, the Company will not have any Indebtedness other than the Closing Indebtedness.  The Company has no liabilities or obligations of a type required to be reflected on a balance sheet prepared in accordance with GAAP, and to the Company’s Knowledge, the Company has no other material contingent or accrued liabilities of the type required to be reflected on or described in financial statements or footnotes thereto prepared in accordance with GAAP, except in each case for liabilities or obligations (i) reflected or reserved against in the Latest Balance Sheet or described in the notes thereto, (ii) incurred by the Company in the Ordinary Course of Business after the date of the Latest Balance Sheet or (iii) described in the Company Disclosure Schedule; provided, however, that no representation or warranty is made in this Section 5.7 with respect to any liability or obligation relating to intellectual property matters, Taxes, Permits, compliance with Laws or Environmental Laws.

SECTION 5.8.   Absence of Certain Changes.  From the date of the Latest Balance Sheet until the date hereof, there has not been:

(a)           any event or occurrence which has had a Material Adverse Effect;

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(b)           any damage, destruction, loss or casualty to any properties or assets of the Company, which (after taking into account any available insurance coverage or reserves reflected in the Financial Statements) is material to the business or operations of the Company;

(c)           the transfer, lease, sale or other disposition of any material properties or assets of the Company, except in the Ordinary Course of Business;

(d)           any amendment to the Company’s Organizational Documents, except as contemplated by this Agreement;

(e)           any issuance or change in the authorized or issued Membership Interests or purchase, redemption, retirement or other acquisition by the Company of any Membership Interest;

(f)            any material change in the accounting methods used by the Company, except as required by GAAP; or

(g)           any commitment or agreement to do any of the foregoing.

SECTION 5.9.   Subsidiaries; Investments.  The Company does not have any Subsidiaries and does not own, directly or indirectly, or have voting rights with respect to, any Equity Interests in, or other securities of, any Person.

SECTION 5.10.   Real Property.

(a)           Section 5.10(a) of the Company Disclosure Schedule lists (i) all leases (each, a “Lease” and collectively, the “Leases”) under which the Company leases any Company Property and (ii) all licenses, rights of way and easements (“Rights of Way,” and together with the Leases, the “Real Property Agreements,” and each, a “Real Property Agreement”) to which the Company is a party, in each case, in effect as of the date of this Agreement.  The Company does not own any Real Property.

(b)           The Company is not in default, and to the Company’s Knowledge, no circumstances exist which, if unremedied, will (with notice or the passage of time or both) result in such default, under any Real Property Agreement, except for any such default that would not reasonably be expected to have a Material Adverse Effect.

(c)           The Real Property Agreements are in full force and effect.

(d)           To the Company’s Knowledge, no Real Property Agreement is subject to any prime, ground or master lease, or Lien which would entitle the interest holder to interfere with or disturb the Company’s rights under such Real Property Agreement while the Company is not in default under such Real Property Agreement, except (i) Permitted Liens, (ii) as expressly included in or disclosed by the terms of the Real Property Agreements, (iii) Liens granted or permitted by any Person other than the Company or its Affiliates to which such Real Property Agreement is subordinate, and (iv) platting, subdivision, zoning, building, and other similar restrictions that, in the case of this

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subclause (iv), do not arise from any violation by the Company of, or non-compliance on the part of the Company with, such restrictions.

(e)           To the Company’s Knowledge, no counterparty to any of the Real Property Agreements is in material default of any of its obligations under the applicable Real Property Agreement.

SECTION 5.11.   Title to and Condition of Tangible Assets.  The Company owns and has good and valid title to, or has valid rights to use, all material tangible personal property used by it in connection with the conduct of its business, in each case, free and clear of all Liens, other than Permitted Liens.  Except as set forth on Section 5.11 of the Company Disclosure Schedule, the material tangible assets of the Company are in an operating condition that is comparable to that of assets of similar age and use in the industry in which the Company participates, subject to ordinary wear and tear.

SECTION 5.12.   Material Contracts.  Section 5.12 of the Company Disclosure Schedule lists all of the following Contracts (other than Real Property Agreements), identified by the appropriate subcategory listed below, in effect as of the date hereof to which the Company is a party or by which its assets are bound (collectively, the “Material Contracts”):

(a)           each Contract (but excluding purchase orders) that resulted in aggregate monetary payments by the Company to a third party during the most recently completed fiscal year of the Company or that contains a commitment by the Company to make aggregate monetary payments to a third party during either fiscal year ending December 31, 2012 or December 31, 2013, in each case in an amount exceeding **; provided, however, that a Contract that would otherwise be classified as a Material Contract pursuant to this Section 5.12(a) shall not be so classified if such Contract may be terminated by the Company without penalty upon notice of not more than 45 days;

(b)           each Contract that resulted in monetary receipts by the Company during the most recently completed fiscal year of the Company or that contains a commitment by a third party to make aggregate monetary payments to the Company during either fiscal year ending December 31, 2012 or December 31, 2013, in each case in an amount exceeding **;

(c)           each Contract that provides for the incurrence of Indebtedness or the guaranty of Indebtedness of any Person by the Company;

(d)           each Contract under which a counterparty has agreed to deliver, or cause to be delivered, all gas produced from wells within a dedicated acreage area to the Company;

(e)           each Contract required for the continuous operation of the System;

(f)            each Contract that provides for the purchase, gathering, compression, processing, preparation for transportation, fractionation, metering, measurement, balancing or transporting of natural gas, natural gas liquids or other hydrocarbons;

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(g)           each Contract that restricts the Company (or, after the Closing, any of its Affiliates) from competing with any third party (including the Holders or their Affiliates) in any business;

(h)           each Contract that relates to settlement or payments to be made in respect of any actual or threatened Legal Proceeding, the performance of which will involve payment by the Company on or after the Closing Date in excess of ** or will, on or after the Closing Date, impose (or continue to impose) any injunctive or similar equitable relief on the Company’s operation of the System;

(i)            each Contract that constitutes a partnership agreement, joint venture agreement or similar agreement; and

(j)            each Contract with any Affiliate of the Company.

The Company has made available to the Parent true and complete copies of each Material Contract.  The Company is not in breach or default, in any material respect, in the performance of its duties and obligations under any Material Contract, and, to the Company’s Knowledge, no event has occurred or condition exists which, if unremedied will (with notice or the passage of time or both) result in to any such material breach or default.  Each Material Contract is legal, valid, binding, in full force and effect and enforceable against the Company, subject to the Enforceability Exceptions.  The Company has not waived in writing any of its material rights under any Material Contract.  To the Company’s Knowledge, no other Person that is a party to a Material Contract is in breach or default, in any material respect, in the performance of its duties or obligations under such Material Contract, and to the Company’s Knowledge, no event has occurred or condition exists which, if unremedied will (with notice or the passage of time or both) result in any such material breach or default.  The Company has not received any currently effective notice of the exercise of any premature termination, price redetermination, curtailment or non-renewal of any Material Contract.

SECTION 5.13.   Intellectual Property.

(a)           Section 5.13(a) of the Company Disclosure Schedule lists all registered Intellectual Property, or applications to register Intellectual Property, owned or applied for by the Company.  Each such registration and application is subsisting, in full force and effect and, to the Company’s Knowledge, valid.

(b)           Section 5.13(b) of the Company Disclosure Schedule provides a complete and accurate list of all software which the Company owns and all Contracts pursuant to which the Company has a valid right to use any software that is material to the operation of its business (excluding any “off the shelf,” shrink-wrap” or “click-through” licenses).

(c)           To the Company’s Knowledge, the Company owns or has a valid right to use all Intellectual Property that is currently used in and is material to the business of the Company, and such Intellectual Property comprises all material Intellectual Property rights necessary for the operation of the business as currently conducted.  The Company has not received any written notice, or to the Company’s Knowledge, other notice, asserting that the

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conduct of its business infringes upon or violates any Intellectual Property of any Person, except for any infringement or violation that would not reasonably be expected to have a Material Adverse Effect.  To the Company’s Knowledge, the Company is not infringing any Intellectual Property of any Person.

SECTION 5.14.   Litigation.  Section 5.14 of the Company Disclosure Schedule lists all material Legal Proceedings that are pending or, to the Company’s Knowledge, threatened against the Company.  There are no Legal Proceedings pending or, to the Company’s Knowledge, threatened against the Company (i) that question the validity of this Agreement or any action taken or to be taken by the Company in connection with, or which seek to enjoin or obtain monetary damages in respect of, this Agreement or the transactions contemplated hereby or (ii) that would reasonably be expected to adversely affect in any material respect the ability of the Company to perform its obligations under and consummate the transactions contemplated by this Agreement.  No Order has been issued or entered against the Company that continues to be in effect that materially affects the ownership or operation of the System or the Company’s other assets by the Company as currently conducted or operated.

SECTION 5.15.   Employee Matters.  The Company does not have, and has never had, any employees.  The Company has never established, maintained, contributed to or participated in any plan, program or arrangement, whether or not written, that (i) is or was an “employee benefit plan” as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended or (ii) is or was a benefit program providing for bonuses, incentive compensation, vacation pay, severance pay, insurance, equity awards, or any other perquisite to employees, officers or independent contractors.

SECTION 5.16.   Taxes.

(a)           All material Tax Returns that are or were required to be filed by or with respect to the Company, pursuant to applicable Law, have been timely filed (taking into account any applicable extensions).  The Company has paid all Taxes that are due and payable by it under applicable Law, including any Taxes shown on any such Tax Returns.

(b)           All deficiencies asserted or assessments made as a result of any examinations by any Governmental Authority with respect to any taxes payable by or asserted against the Company have been paid in full.  The Company has not given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes for which the Company may be liable. No audit or other proceeding by any Governmental Authority is pending or threatened with respect to any Taxes due from or with respect to the Company or any Tax Return filed by or with respect to the Company.

(c)           All Taxes that are or were required by Law to be withheld or collected by the Company have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Authority or other Person.

(d)           Neither the Company nor any of its Subsidiaries has been a party to a “reportable transaction” as such term is defined in Treasury Regulation Section 1.6011-

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4(b)(1) or to a transaction that is or is substantially similar to a “listed transaction,” as such term is defined in Treasury Regulation Section 1.6011-4(b)(2).

(e)           There are no Liens with respect to Taxes upon any of the assets of the Company, except for Permitted Liens.

(f)            Since its inception, the Company has at all times been properly classified as a partnership for U.S. federal income tax purposes.

(g)           There are no outstanding appeals, requests for rulings, claims for refund or credit, or subpoenas relating to Taxes of the Company.

(h)           The Company has not received any claim in writing from any tax authority in a jurisdiction in which the Company has not filed Tax Returns that it, its assets, or the business it conducts may be subject to taxation by that jurisdiction.

(i)            The Company is not a party to or currently negotiating or pursuing any rulings, closing agreements, or similar agreements between the Company and any tax authority that could reasonably be expected to materially increase the Taxes imposed on the Company for any period ending after the Closing Date.

(j)            The Company is not a party to any Tax indemnity agreement, Tax sharing, tax allocation or similar arrangement and has no obligation to indemnify or make a payment to any person in respect of any Tax for any past, current or future period.

(k)           The Company will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period ending after the Closing Date as a result of any (i) change in accounting method for any Pre-Closing Tax Period under Section 481 of the Code (or any similar provision of U.S. state, local or foreign Tax Law), (ii) written agreement with a Tax authority with regard to its Tax liability for any Pre-Closing Tax Period, (iii) installment sale or open transaction disposition made prior to the Closing Date or prior to the Closing on the Closing Date, or (iv) prepaid amount received on or prior to the Closing Date.

(l)            No Holder is a “foreign person” as defined in Section 1445 of the Code and the regulations promulgated thereunder.

SECTION 5.17.   Permits; Compliance with Laws.  The Company holds all material Permits that are required to own or operate the System as it is currently operated and holds all Permits necessary and material to the construction of such portions of the System that are currently under construction, as such portions are currently being constructed.  The Company has been in compliance in all material respects with all applicable Laws that are or were applicable to it or the ownership, construction and operation of the System.  To the Company’s Knowledge, no event has occurred which, if unremedied, will (with notice or the passage of time or both) result in a material violation by the Company of any material applicable Law within six months after the Closing Date.  The Company has not received any notice or other written communication, or to the Company’s Knowledge, any other communication, from any Governmental Authority or

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other Person alleging any actual or potential violation of, failure to comply with, or liability under, any material applicable Law.  The foregoing representations and warranties do not address Taxes or environmental matters.

SECTION 5.18.   Environmental Laws.

(a)           The Company has obtained all material Permits required under applicable Environmental Laws to operate its business as it is currently being operated.  Section 5.18(a) of the Company Disclosure Schedule contains a list of all material Permits required under applicable Environmental Laws which are held by the Company (“Environmental Permits”).

(b)           The Company has operated its facilities and conducted its business in compliance in all material respects with all applicable Environmental Laws and Environmental Permits.  To the Company’s Knowledge, no event has occurred which, if unremedied, (with notice or the passage of time or both) will result in a material violation by the Company of any material applicable Environmental Law within six months after the Closing Date.  The Company has not assumed responsibility by Contract or, to the Company’s Knowledge, by operation of Law for any Environmental Liability of any other Person that would reasonably be expected to result in a material liability to the Company.

(c)           No written notification, demand, request for information, citation, complaint or Order has been issued to or filed against the Company relating to the Company’s compliance with or liability under any Environmental Law or the suspension, revocation, or non-renewal of any Environmental Permit, except for such notifications, demands, requests, citations, complaints or Orders that have been fully and finally resolved without further liability or obligation to the Company.

(d)           To the Company’s Knowledge, no investigation or review is pending or threatened against the Company by any Governmental Authority under any applicable Environmental Law.

(e)           The Company has not generated, used, treated, stored or disposed of, or made any release of, and to the Company’s Knowledge, there has been no Release by a third party of, Hazardous Materials in a manner that would reasonably be expected to result in any material liability to the Company.

(f)            To the Company’s Knowledge, none of the Company Property or any Real Property formerly owned, operated or leased by the Company (to the extent relating to conditions present during the time of such ownership, operation, or leasing by the Company) has been designated for investigation or remediation by any Governmental Authority as a result of the actual or suspected presence or Release of Hazardous Materials.

(g)           The Company has made available to the Parent copies of all environmental reports or assessments that are in the possession or control of the Company with respect to compliance by the Company with Environmental Laws, the environmental condition of any Real Property, or the liability of the Company pursuant to Environmental Laws.

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SECTION 5.19.   Insurance.  Section 5.19 of the Company Disclosure Schedule lists the insurance policies maintained by the Company that provide coverage for the business of the Company.  The Company has made available to the Parent true and complete copies of each such policy.  All of such policies are in full force and effect and the Company is not in material default of any provision thereof nor has it received notice of cancellation or termination thereof.

SECTION 5.20.   Fees.  Other than fees owing to Evercore Partners, the Company has not paid or become obligated to pay any fee or commission to any broker, finder or intermediary in connection with the transactions contemplated hereby.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUBSIDIARY

The Parent and Merger Subsidiary hereby represent and warrant to the Holders that:

SECTION 6.1.   Organization; Power and Authority.

(a)           The Parent is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.  The Parent has all requisite power and authority to own and operate its properties and assets and conduct its business and operations as presently being conducted.

(b)           Merger Subsidiary is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware.  Merger Subsidiary has all requisite limited liability company power and authority to own and operate its properties and assets and conduct its business and operations as presently being conducted.

SECTION 6.2.   Authorizations; Execution and Validity.  Each of Parent and Merger Subsidiary has all requisite power and authority to execute and deliver this Agreement, perform its obligations hereunder and consummate the transactions contemplated hereby, including the Merger.  The execution and delivery of this Agreement by each of the Parent and Merger Subsidiary, the performance by each of them of its obligations hereunder and the consummation by each of them of the transactions contemplated hereby have been duly authorized by all necessary action on the part of each of the Parent and Merger Subsidiary.  This Agreement has been duly and validly executed and delivered by each of the Parent and Merger Subsidiary, constitutes a valid and binding obligation of each of them and is enforceable against each of them in accordance with its terms, subject to the Enforceability Exceptions.

SECTION 6.3.   Absence of Conflicts.  The execution and delivery by the Parent and Merger Subsidiary of this Agreement, the performance by each of them of its obligations hereunder and the consummation by each of them of the transactions contemplated hereby will not (i) result in any violation or breach of any provision of the Organizational Documents of the Parent or Merger Subsidiary, (ii) result in any violation of any Law or any Order applicable to the Parent or Merger Subsidiary or its properties or assets, (iii) result in a violation or breach of, or constitute (with or without due notice or

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lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or, except as set forth in Section 6.3 of the Parent Disclosure Schedule,  require any Consent under, any Contract of Parent, except for any of the matters referred to in clause (ii) or (iii) above which would not reasonably be expected to prevent, impede or otherwise adversely affect in any material respect the transactions contemplated by this Agreement.

SECTION 6.4.   Governmental Approvals.  There is no requirement applicable to the Parent or Merger Subsidiary to obtain any Consent of, or to make or effect any declaration, filing or registration with, any Governmental Authority for the valid execution and delivery by the Parent or Merger Subsidiary of this Agreement, the due performance by it of its obligations hereunder or the lawful consummation by it of the transactions contemplated hereby, except for (i) the filing by or on behalf of the Parent or Merger Subsidiary or its “ultimate parent entity” of notification with the FTC or DOJ under the HSR Act and the expiration of the applicable “waiting period” thereunder, (ii) the filing of the Certificate of Merger as required by the Act; and (iii) any other filing, consent, or requirement which, if not made, obtained or satisfied, would not reasonably be expected to prevent, impede or otherwise affect in any material respect the transactions contemplated by this Agreement.

SECTION 6.5.   Litigation.  There are no Legal Proceedings pending or, to the Parent’s knowledge, threatened against the Parent or Merger Subsidiary (i) that question the validity of this Agreement or any action taken or to be taken by the Parent or Merger Subsidiary in connection with, or which seek to enjoin or obtain monetary damages in respect of, this Agreement or the transactions contemplated hereby or (ii) that would reasonably be expect to adversely affect in any material respect the ability of the Parent or Merger Subsidiary to perform its obligations under and consummate the transactions contemplated by this Agreement.

SECTION 6.6.   Sophisticated Purchaser; Access to Information.

(a)           The Parent is an informed sophisticated entity with sufficient knowledge and experience in investment and financial matters and in the gas gathering and processing industry to be capable of evaluating the risks and merits of the acquisition of the Company.  The Parent understands that the acquisition of the Company involves a high degree of risk and it is financially able to bear such risk.

(b)           The Parent has been furnished with all documents, materials and other information that it requested relating to the Company and its business, operations, financial condition and results of operations and otherwise relevant to the acquisition of the Company, and has been afforded the opportunity to obtain any additional information and to ask all questions it deemed necessary regarding such matters, and has further received all information it considers necessary or appropriate for deciding whether to acquire the Company and has received such answers regarding any questions asked by it as it deems sufficient to make an informed decision.

(c)           Each of the Parent and Merger Subsidiary acknowledges and agrees that neither the Holders nor the Company, nor any of their respective Affiliates, Subsidiaries,

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officers or agents, or any other Person, has at any time expressly or implicitly represented, guaranteed, or warranted to the Parent or Merger Subsidiary that (i) any profit or other economic benefit will be realized by it as a result or in connection with the acquisition of the Company, (ii) any financial projections with respect to the business of the Company will prove to be true and correct or (iii) past performance or experience on the part of the Company in any way indicates the predictable results of the acquisition of the Company or the results of operations of the Surviving Entity.

(d)           The Parent acknowledges that the tax consequences of its acquisition of the Company will depend on the Parent’s particular circumstances, and neither the Holders nor the Company, nor any of their respective Affiliates, Subsidiaries, officers or agents, or any other Person, will be responsible or liable for the tax consequences to the Parent arising from its acquisition of the Company (except to the extent that there occurs a breach by the Company of its representations and warranties contained in Section 5.16 or its covenants contained in Article VIII), and the Parent will look solely to, and rely upon its own advisers with respect to the tax consequences of its acquisition of the Company.

SECTION 6.7.   Financing.  The Parent has, and will have as of the Closing Date, sufficient funds with which to pay the Merger Consideration, together with all fees and expenses incurred by or on its behalf in connection with the transactions contemplated by this Agreement.

SECTION 6.8.   Third Party Reports.  Section 6.8 of the Parent Disclosure Schedule lists all reports prepared or to be prepared prior to Closing by any consultant, professional or other third party (other than legal counsel or the financial advisors to the Parent) for or on behalf of the Parent in connection with the due diligence review of the Company.  The Parent has disclosed to the Company prior to the date of this Agreement (i) all Liens, title defects or other encumbrances and (ii) any other matters which could reasonably be expected to relate to or involve a breach of Section 5.10, in each case, as disclosed in the reports (or any updates thereto) identified in Section 6.8 of the Parent Disclosure Schedule.

SECTION 6.9.   Fees.  Neither the Parent nor Merger Subsidiary has paid or become obligated to pay any fee or commission to any broker, finder or intermediary in connection with the transactions contemplated hereby.

ARTICLE VII
COVENANTS

SECTION 7.1.   Cooperation; Certain Consents and Approvals.

(a)           From the date hereof until the Closing Date, upon the terms and subject to the conditions of this Agreement, each of the parties shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done and cooperate with each other in order to do, all things necessary, proper or advisable (subject to any applicable Laws) to consummate the Merger and the other transactions contemplated by this Agreement as promptly as practicable, including the preparation and filing of all forms, registrations and notices required to be filed to consummate the transactions contemplated

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hereby, and the taking of such actions as are necessary to obtain any requisite Consents, Orders, Permits, qualifications, exemptions, waiting period expirations or terminations or waivers from any Person or Governmental Authority.  In addition, no party shall take any action from the date hereof until the Closing Date (other than any action required to be taken under this Agreement or to which the other parties shall have granted their consent) that would reasonably be expected to materially delay the obtaining of, or result in not obtaining, any Consent, Order, Permit, qualification, exemption, waiting period expirations or terminations or waiver from any Governmental Authority or other Person required to be obtained prior to Closing.

(b)           To the extent permitted by applicable Law and subject to any limitations on access to information provided for in Section 7.3, each party shall consult with the other parties with respect to, and provide any information reasonably requested by the other parties in connection with, all material filings made with any Governmental Authority in connection with this Agreement and the transactions contemplated hereby.  If any party or any of its Affiliates receives a request for information or documentary material from any Governmental Authority with respect to this Agreement or any of the transactions contemplated hereby, then such party shall endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and, to the extent permitted by applicable Law, after consultation with the other parties, an appropriate response in compliance with such request.  Without limiting the generality of the foregoing, to the extent permitted by Law and subject to any limitations on access to information contained in Section 7.3, each party shall provide to the other (or the other’s respective advisors) upon request copies of all correspondence between such party and any Governmental Authority relating to the transactions contemplated by this Agreement; provided, that (i) neither party is obligated to share any document submitted to or received from a Governmental Authority that reflects the negotiations among the parties or the valuation of some or all of any Person’s business and (ii) neither party shall be required to provide to the other party a complete copy of the filing made by such party or its “ultimate parent entity” under the HSR Act (but only such portions of such filing as are customarily exchanged by the parties for the purposes of preparing similar filings).  The parties may, as they deem advisable and necessary, designate any competitively sensitive materials provided to the other under this Section 7.1 as “outside counsel only.”  Such materials and the information contained therein shall be given only to outside counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, or directors of the recipient without the advance written consent of the party providing such materials.  In addition, to the extent reasonably practicable and permitted by such Governmental Authority, no party shall agree to participate in any discussions, telephone calls, and meetings with a Governmental Authority regarding proceedings under or related to the HSR Act, unless it gives the other parties the opportunity to attend or participate therein.  Subject to applicable Law, the parties shall consult and cooperate with each other in advance in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, and proposals made or submitted by or on behalf of a party hereto or its “ultimate parent entity” to any Governmental Authority regarding proceedings under or related to the HSR Act.

(c)           In addition to and without limiting any of the other covenants of the parties contained in this Section 7.1, the Parent and the Company shall (i) make the filings required of them or their “ultimate parent entities” under the HSR Act in connection with the

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transactions contemplated hereby as promptly as practicable after the date of this Agreement (and in no event later than eight Business Days after the date hereof), (ii) comply, at the earliest practicable date, with any request for additional information or documentary material received by them, or any of their respective Affiliates from the FTC or the DOJ pursuant to the HSR Act or from any state attorney general or other Governmental Authority in connection with antitrust matters, (iii) cooperate with each other in connection with any filing under the HSR Act and in connection with resolving any investigation or other inquiry concerning the transactions contemplated hereby commenced by the FTC, DOJ, any state attorney general or any other Governmental Authority, (iv) use commercially reasonable efforts to resolve such objections, if any, as may be asserted with respect to the transactions contemplated hereby under any antitrust Law and (v) advise the other parties promptly of any material communication received by such party from the FTC, DOJ, any state attorney general or any other Governmental Authority regarding any of the transactions contemplated hereby, and of any understandings, undertakings or agreements (oral or written) such party proposes to make or enter into with the FTC, DOJ, any state attorney general or any other Governmental Authority in connection with the transactions contemplated hereby.  Concurrently with the filing of notifications under the HSR Act, the Parent and the Company shall each request early termination of the applicable “waiting period” under the HSR Act.  Notwithstanding the foregoing, no party hereto shall be required to take any commercially unreasonable action that substantially impairs the overall benefits realized from the consummation of the transactions contemplated by this Agreement, and in no event shall any party hereto be required, in order to resolve any objection or proceeding asserted or commenced by the FTC, DOJ, any state attorney general or any other Governmental Authority to the transactions contemplated by this Agreement, to (i) sell, hold separate or otherwise dispose of any of its or its Affiliates’ assets or businesses (or, in the case of the Parent, any assets or businesses of the Surviving Entity) or (ii) terminate any of its or its Affiliates’ existing business relationships or contractual agreements if, in the case of clause (i) or (ii) of this sentence, such party determines in good faith sole discretion that any such action would be commercially unreasonable.

SECTION 7.2.   Conduct of Business.  From the date hereof until the Closing Date, the Company shall, unless the Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed) or except as described in Section 7.2 of the Company Disclosure Schedule or as otherwise specifically contemplated by this Agreement:

(a)           operate its business only in the Ordinary Course of Business and use commercially reasonable efforts to preserve intact its relationships with third parties that are material to its business or operations;

(b)           maintain its books, accounts and records in the usual, regular and ordinary manner, on a basis consistent with prior years, and not make any material change to any of its accounting principles, except as required by GAAP;

(c)           not consummate any merger or consolidation with any Person;

(d)           not amend or modify the Company’s Organizational Documents;

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(e)           not issue or sell any of its Equity Interests nor issue or grant any options, warrants, calls, rights, convertible securities or other agreements or commitments of any character pursuant to which it would be obligated to issue or sell any of its Equity Interests;

(f)            not sell, transfer, assign, convey, abandon or otherwise dispose of any assets of the Company (including to any Holder), except (i) sales or dispositions not exceeding $25,000 individually or $75,000 in the aggregate and (ii) sales or dispositions of inventory or obsolete equipment in the Ordinary Course of Business;

(g)           not incur any Indebtedness other than Indebtedness pursuant to the Company Credit Agreement;

(h)           not hire any employees;

(i)            not enter into any Contract which, if entered into prior to the date hereof, would constitute a Material Contract or exercise any right to terminate or amend any material terms of any existing Material Contract, other than the entry into, termination or amendment of such Contracts as described in Section 7.2(i) of the Company Disclosure Schedule;

(j)            use commercially reasonable efforts to operate the business of the Company in compliance, in all material respects, with (i) all Laws applicable to the operation of the business of the Company, (ii) the material terms and conditions of the Material Contracts and Real Property Agreements, and (iii) all Permits material to the operation of the business of the Company;

(k)           not terminate or amend, and use commercially reasonable efforts not to permit to lapse (prior to its applicable expiration date), any material Permit necessary for the operation of the System as it is currently operated other than (i) such terminations or lapses of such Permits which the Company reasonably believes are no longer necessary to the conduct of the business of the Company as currently conducted and (ii) such amendments to such Permits as the Company believes are reasonably necessary for the operation of the business in the Ordinary Course of Business; provided, that the Company provides the Parent with advance written notice of any such event described in clause (i) or (ii) above;

(l)            not grant to or create for the benefit of any third party any right of first refusal or similar preferential right to purchase any asset of the Company;

(m)          not exercise any right of termination or nonrenewal of, and use commercially reasonable efforts to not permit to lapse, the insurance coverage under the policies set forth in Section 5.19 of the Company Disclosure Schedule;

(n)           not take any action to accelerate the collection of any accounts receivable of the Company or delay the payment of accounts payable of the Company inconsistent with the principles described in Section 7.2(n) of the Company Disclosure Schedule;

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(o)           use commercially reasonable efforts to resolve the matter set forth on Section 5.11 of the Company Disclosure Schedule; and

(p)           not agree to take any action or actions prohibited by any of the foregoing clauses (a) through (o);

provided, however, that this Section 7.2 shall not be construed to prohibit (i) the payment of any dividend or distribution in cash by the Company to any Holder in compliance with the Company’s Organizational Documents, (ii) any payments by the Company in respect of any obligations owing to any Holder or (iii) any other payments in the Ordinary Course of Business.

SECTION 7.3.   Access to Information.  From the date hereof until the Closing Date, the Company shall (i) make its management personnel reasonably available to the Parent and its representatives, (ii) subject to and in compliance with any obligations of confidentiality or non-disclosure provided by applicable Law or contained in any Contracts to which the Company is a party or by which it is bound, provide the Parent and its accountants, employees, attorneys and other representatives reasonable access to, and permit such Persons to review, during normal business hours and upon reasonable prior written request, its properties, books, Contracts, accounts, records and files, and (iii) provide such other information to the Parent and its representatives as they may reasonably request, in each case, which is (a) reasonably necessary to assist the Parent with integration and transition planning in connection with the transactions contemplated hereby and (b) not inconsistent with applicable Law.  Notwithstanding the foregoing, the Parent acknowledges that none of the Holders, the Company nor their respective Subsidiaries or Affiliates shall be obligated to provide to the Parent (i) any information relating to any offers or indications of interest received by the Holders, the Company or their respective Affiliates or representatives from any Person other than the Parent to acquire the Company or any of its Equity Interests, properties or assets or any communications between the Holders, the Company or their respective Affiliates or representatives on the one hand and any such other Person on the other hand relating to such offers or indications of interest or the transactions contemplated thereby (it being understood that the Holders may retain all such documents, information and communications, which shall be the sole property of the Holders at all times prior to and after the Closing), (ii) any work papers or similar materials prepared by the independent public accountants of the Company, except to the extent that such accountants agree to provide access to such work papers or similar materials upon such terms and conditions as shall be determined by such accountants in their sole discretion, and (iii) any documents or information that are protected by the attorney-client privilege or work product doctrines if the Company determines in its reasonable discretion that providing copies or access to such documents or information could give rise to a possible waiver of such privilege or doctrine.

SECTION 7.4.   Certain Confidential Information.  The Parent hereby acknowledges that in connection with the transactions contemplated by this Agreement, it and its Affiliates have received and will continue to receive certain documents and information in connection with the transactions contemplated by this Agreement.  All such materials reviewed or received, including, without limitation, materials reviewed in connection with Section 7.3, shall be deemed to be Confidential Information for the

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purposes of the Confidentiality Agreement.  The Parent acknowledges that it and its Affiliates are bound by the Confidentiality Agreement and agrees that it will not, and it will not permit any of its Affiliates, directors, officers, independent accountants, agents or other representatives to, use or disclose any Confidential Information except as permitted by such agreement.  The provisions of this Section 7.4, insofar as they relate to Confidential Information with respect to the business, operations, properties, assets, liabilities, financial condition and results of operations of the Company, shall terminate upon the Closing.  Except as provided in the immediately preceding sentence, the provisions of this Section 7.4 shall survive the Closing or any termination of this Agreement.

SECTION 7.5.   Holder Access to Documents; Preservation of Books and Records.

(a)           For a period of seven years from and after the Closing Date, (i) the Parent shall cause the Surviving Entity not to dispose of or destroy any of the books and records of the Company relating to periods prior to the Closing (“Books and Records”) without first offering to turn over possession thereof to the Holder Representative by written notice to the Holder Representative at least 90 days prior to the proposed date of such disposition or destruction; (ii) the Parent shall cause the Surviving Entity to allow the Holder Representative and its agents (at their sole expense) access to and to copy all Books and Records in connection with any future tax or accounting audit, investigation or regulatory examination or any other Legal Proceeding in which any of the Holders or their respective Affiliates is or becomes involved or for any other proper purpose related to its administrative, reporting or regulatory functions; and (iii) the Parent shall cause the Surviving Entity to make available to the Holder Representative upon written request (1) the personnel of the Surviving Entity to assist the Holder Representative in locating and obtaining any Books and Records or other documents, and (2) any personnel of the Surviving Entity whose assistance or participation is reasonably required by the Holder Representative or any of its Affiliates in anticipation of, or preparation for, existing or future audit, investigation, examination or other Legal Proceeding or any other matter referred to above in which any of the Holders or their respective Affiliates is or becomes involved.

(b)           The seven-year period referred to in Section 7.5(a) shall be extended if the Holder Representative (or its successor) advises the Parent in writing that any Legal Proceeding or investigation is pending or threatened in writing at the termination of such seven-year period, in which case such extension shall continue until any such Legal Proceeding or investigation has been dismissed or settled through judgment or otherwise resolved.

SECTION 7.6.   Limited Representations.  Each of the Parent and Merger Subsidiary expressly acknowledges and agrees that (a) no Holder has made and shall not be deemed to have made to the Parent or Merger Subsidiary any representation or warranty other than those expressly made by such Holder in Article IV and (b) the Company has not made and shall not be deemed to have made to the Parent or Merger Subsidiary any representation or warranty other than those expressly made by the Company in Article V.  Without limiting the generality of the foregoing, each the Parent and the Merger Subsidiary further acknowledges and

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agrees that none of the Holders nor the Company nor any of their respective Affiliates or representatives has made or is making any representations or warranties of any kind, express or implied or statutory, at law or equity, with respect to the Company or its actual or prospective business, operations, assets, liabilities, results of operations or financial condition other than as set forth in Articles IV and V (as applicable), including, but not limited to, any (i) express or implied warranties as to any financial projections or other forward-looking information with respect to the business of the Company or the Surviving Entity, (ii) implied warranties of merchantability and fitness for a particular purpose or (iii) express or implied warranties as to any other matter which, under applicable law, would be deemed to give rise to any express or implied warranty unless such warranties are expressly disclaimed by such Holder or the Company, and each of the Holders and the Company hereby disclaim any other representations or warranties that would otherwise be deemed to be made by themselves, their Affiliates or any of their respective officers, directors, employees, agents, financial and legal advisors or other representatives, in connection with this agreement or the transactions contemplated hereby.  The Parent further agrees not to assert any claims or take any position in any Legal Proceeding that is inconsistent with the provisions of this Section 7.6.

SECTION 7.7.   Litigation Support and Cooperation.  If and for so long as any party hereto is actively contesting or defending against any Claim or Legal Proceeding arising in connection with (i) the transactions contemplated under this Agreement or (ii) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act or transaction on or prior to the Closing Date involving the Company (other than an action brought by one party to this Agreement against another party or parties under the terms of this Agreement or in connection with the transactions contemplated hereby), each of the parties will cooperate with the contesting or defending party and its counsel in the contest or defense, make available its personnel, and provide such testimony and access to its books and records as shall be reasonably necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or defending party (unless the contesting or defending party is entitled to indemnification therefor under Article XII); provided, however, that the obligations of the parties contained in this Section 7.7 with respect to Claims or Legal Proceedings of the type described in clause (ii) above shall not apply until after the Closing unless any such Claims or Legal Proceedings would reasonably be expected to prevent, impede or otherwise affect in any material respect the transactions contemplated by this Agreement.

SECTION 7.8.   No Solicitation of Other Bids.

(a)           During the period commencing on the date hereof and ending on the earlier of the Closing Date or the date of termination of this Agreement, neither the Company nor any Holder shall, nor shall it authorize or permit any of their Affiliates or any of their representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or not binding) with any Person regarding an Acquisition Proposal.  On the date hereof, the Company and each Holder shall immediately cease and cause to be terminated, and shall promptly cause their

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Affiliates and all of their representatives to cease and cause to be terminated, all existing discussions or negotiations with any Persons conducted heretofore with respect to an Acquisition Proposal.

(b)In addition to the other obligations under this Section 7.8, the Company and each Holder shall promptly (and in any event within 48 hours after receipt thereof by such Holder or its representatives) advise Parent orally and in writing of any Acquisition Proposal received by it; provided, that, for the purposes of this Section 7.8(b), an Acquisition Proposal shall not be deemed to include inquiries, proposals or offers from any Person that would involve the issuance or acquisition of less than 5% of any class of outstanding Equity Interests of the Company.

(c)The Company and each Holder agrees that the rights and remedies for noncompliance with this Section 7.8 shall include having such provision specifically enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such breach or threatened breach could cause irreparable injury to Parent and that money damages would not provide an adequate remedy to Parent.

SECTION 7.9.    Transition Plan.

(a)Without limiting Section 7.1, during the 90-day period following the Closing Date (the “Transition Services Period”), upon Parent’s request, Stonehenge agrees to provide reasonable assistance to Parent (i) in connection with the management of the Surviving Entity’s financial and accounting books and records, including the preparation of the financial statements of the Surviving Entity (“Accounting Services”) and (ii) to transition the management functions performed by Stonehenge in respect of the operation of the Surviving Entity’s business to the Parent (“Management Services”).  Unless the Parent and Stonehenge otherwise agree in writing, (i) the Accounting Services will be ** during the Transition Services Period and (ii) the Management Services will be ** of such period.  In addition, during the Transition Services Period, Rex agrees to continue to grant to the Surviving Entity the right to rely on the Permits identified on Section 5.17(2) of the Company Disclosure Schedule on terms consistent with its past practice.

(b)In consideration of the provision of any services pursuant to this Section 7.9 the Parent shall pay to Stonehenge the fees and expenses described in Section 7.9 of the Company Disclosure Schedule.  Promptly after the end of each month following the commencement of any such services, Stonehenge shall prepare and deliver to the Parent an invoice for all such fees and expenses applicable to such month.  All amounts reflected in the invoice shall be due and payable 30 calendar days following receipt by the Parent of the invoice.

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ARTICLE VIII
TAX MATTERS

SECTION 8.1.   Tax Returns and Reporting.

(a)To the extent that any of the Tax Returns described in this paragraph (a) have not been filed by the Company prior to the Closing, the Holder Representative, at its expense, shall prepare or cause to be prepared, and timely file (taking into account any applicable extensions), all (i) U.S. federal income Tax Returns and state income Tax Returns required to be filed by the Company which are attributable to taxable periods ending on or prior to the Closing Date (including any such Tax Returns which are due after the Closing Date) and (ii) all other Tax Returns which are required to be filed by the Company, the due date of which (taking into account extensions) occurs on or before the Closing Date.  The Holder Representative shall pay all Taxes shown as due on such Tax Returns, except to the extent such Taxes were paid by the Company prior to the Closing or were reflected as a liability in Final Working Capital.

(b)The Parent shall prepare or cause to be prepared, and timely file (taking into account any applicable extensions), all Tax Returns attributable to Straddle Periods the due dates of which arise after the Closing Date (each, a “Straddle Period Tax Return”).  Not later than 30 days prior to the due date for each such Straddle Period Tax Return (including extensions thereof), the Parent shall provide, or cause to be provided, to the Holder Representative a draft of such Straddle Period Tax Return, together with the work papers and schedules utilized in its preparation for review and comment by the Holder Representative, which comments shall be duly incorporated, with the consent of the Parent (such consent not to be unreasonably withheld), in the preparation of the final copy of such Straddle Period Tax Return.  Not later than five days prior to the due date for each Straddle Period Tax Return (including extensions thereof), the Holder Representative shall pay to Parent all Taxes shown as due on each such Straddle Period Tax Return that are attributable to the portion of such Straddle Period ending on the Closing Date in accordance with the allocation method described in Section 12.2(b), except to the extent such Taxes were reflected as a liability in the Final Working Capital.  Promptly upon filing, the Parent shall deliver to the Holder Representative a copy of each Straddle Period Tax Return.  In the event that any Straddle Period Tax Return filed by the Parent does not take into account changes and comments requested by the Holder Representative, the amount of Tax owed by the Holders for the Pre-Closing Tax Period with respect to such Straddle Period Tax Return shall be determined pursuant to resolution procedures similar to those set forth in Section 2.5 of this Agreement.

(c)The Parent shall prepare and file, or cause to be prepared and filed, any and all Tax Returns required to be filed by or with respect to the Company for any taxable period beginning after the Closing Date.

SECTION 8.2.   No Changes in Elections, etc.

(a)Except as provided in Section 8.6, the Parent shall not, and it shall cause its Affiliates and the Surviving Entity not to, make or change any Tax election, amend any Tax Return or take any Tax position on any Tax Return, take any action, omit to take any action or enter into any transaction that results in any increased Tax liability or reduction of any Tax asset of the Holders or the Company in respect of any tax period or portion thereof ending on or prior to the Closing Date.

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(b)Prior to the Closing, the Company shall not, and shall not cause its Affiliates to, change any Tax election, amend any Tax Return or take any Tax position on any Tax Return that results in any increased Tax liability or reduction of any Tax asset of the Parent, the Company, or the Surviving Entity in respect of any tax period beginning after the Closing Date or any portion of any Straddle Period beginning after the Closing Date.

SECTION 8.3.   Tax Refunds.  After the Closing Date, any refund received by the Parent, any of its Affiliates, or the Company in respect of Taxes paid by the Holders or the Company in respect of any Pre-Closing Tax Period shall be paid by the recipient to the Holder Representative promptly upon receipt.

SECTION 8.4.   Tax Contests.  The Parent shall promptly notify the Holder Representative in writing of any matter which may give rise to a claim for indemnification against the Holders in respect of Taxes pursuant to Section 12.2(b) upon receiving written notice of such matter; provided, however, that failure of the Parent to give the Holder Representative notice as provided herein will not relieve the Holders of their indemnification obligations under Section 12.2 (b), except as to the extent that the Holders are materially prejudiced by the Parent’s failure to give such prompt notice.  The Holder Representative shall be entitled to manage, conduct and control any Tax audits, examinations, appeals, litigation, or other Tax proceedings relating to Tax items and issues of the Company for which the Holders are required to indemnify Parent under Section 12.2(b) (each, a “Tax Contest”), unless such Tax Contest arises in a proceeding that also involves Tax items or issues of the Parent or any of its Affiliates other than the Company or that also involves Tax items or issues of the Surviving Entity for taxable periods ending after the Closing Date, in which case the Holder Representative and the Parent shall jointly control the Tax Contest.  In any event, the Parent shall have the right to participate in, and consult with the Holder Representative regarding, any Tax Contest described in this paragraph that may affect the Surviving Entity for any periods ending after the Closing Date at the Parent’s own expense, and the Holder Representative shall keep the Parent reasonably informed of material developments in such Tax Contest and provide the Parent with copies of any written correspondence from or to the relevant Tax Authority with respect to such Tax Contest.  Any settlement or other disposition of any Tax Contest (whether administratively or after the commencement of litigation), which is controlled by the Holder Representative pursuant to this paragraph and which could reasonably be expected to increase any Taxes of the Surviving Entity in any taxable period or portion thereof ending after the Closing Date, may only be with the written consent of the Parent, which consent will not be unreasonably withheld, conditioned or delayed.  In cases where the Tax Contest is jointly controlled, neither party may settle or concede, either administratively or after the commencement of litigation, any such Tax Contest without the written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed.  In no event shall the Parent be entitled to settle or concede, either administratively or after the commencement of litigation, any Tax Contest relating to Taxes for which the Holders are required to indemnify Parent under Section 12.2(b) unless (i) the Holder Representative consents (in writing) to such settlement or concession, which consent will not be unreasonably withheld, conditioned or delayed or (ii) the Parent agrees to waive its right to be indemnified for the issue being conceded or settled.  In the event of a conflict between

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the provisions of this Section 8.4 and Article XII, the provisions of this Section 8.4 shall control.

SECTION 8.5.   Merger Consideration Allocation.  The Merger Consideration and any liabilities of the Company that for Tax purposes are treated as assumed by the Parent (collectively, the “Tax Purchase Price”) shall be allocated among the assets of the Company in such a manner as is set forth in a purchase price allocation schedule that is jointly prepared and mutually agreed to by the Holder Representative and the Parent prior to, or as soon as practicable after, the Closing Date (the “Agreed Asset Acquisition Statement”).  The Tax Purchase Price as finally determined shall be allocated in accordance with the Agreed Asset Acquisition Statement, all income Tax Returns and reports filed by the Parent and the Holder Representative shall be prepared consistently with the Agreed Asset Acquisition Statement, and no party nor any of their respective Affiliates or direct or indirect owners shall take a position on any Tax Return, or before any Governmental Authority in connection with the examination of a Tax Return or in any judicial proceeding, that is in any manner inconsistent with the Agreed Asset Acquisition Statement, except as required by applicable Law.  Notwithstanding anything herein to the contrary, in the event that the Holder Representative and the Parent are unable to mutually agree to an Agreed Asset Acquisition Statement within ninety (90) days after the Closing Date, each party shall be permitted to adopt its own positions regarding the allocation of Tax Purchase Price among the assets of the Company and neither party shall have any further obligations to the other with respect to such allocations of Tax Purchase Price.

SECTION 8.6.   Tax Characterization of Transaction.  The Parties acknowledge and agree that (i) the merger is properly characterized for U.S. federal income Tax purposes as a taxable sale of the assets of (followed by liquidating distributions of the sales proceeds by) the Company and as a purchase of assets of the Company by the Parent, and (ii) none of the Parties shall adopt positions inconsistent with such characterization or treatment in any Tax Return or Tax Contest, except to the extent there is a change in Tax law requiring a different characterization.

SECTION 8.7.   Transfer Taxes.  The Parent shall bear all sales, use, gross receipts, transfer, and similar Taxes, if any, assessed or payable in connection with the Merger pursuant to this Agreement; provided that the party legally responsible for any such Taxes shall timely remit same, and if the Holders are the legally responsible party, the Parent shall reimburse the Holder Representative for such Taxes.

SECTION 8.8.   Cooperation; Access to Records.  After the Closing Date, each of the Holder Representative and the Parent shall:

(a)assist (and cause its respective Affiliates to assist) the other party in preparing any Tax Returns which such other party is responsible for preparing and filing in accordance with Section 8.1;

(b)promptly notify the other party in writing upon receipt of notice of any pending or threatened audits or assessments relating to Taxes for which the other party may be required to pay indemnification under Article XII;

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(c)cooperate fully in preparing for and conducting any audits of, or disputes with taxing authorities regarding, any Tax Returns of the Company;

(d)make available to the other party and to any taxing authority as reasonably requested all records, documents, accounting data and other information relating to Taxes of the Company;

(e)furnish the other party with copies of all correspondence received from any taxing authority in connection with any Tax audit or information request with respect to any such taxable period for which the other party may have any liability under Section 12.2; and

(f)execute and deliver such powers of attorney and other documents as are necessary to carry out the purposes and intent of this Article VIII.

SECTION 8.9.   Tax Treatment of Payments.  All amounts payable under Sections 12.2 and 12.3 shall be treated as adjustments to the Tax Purchase Price for all Tax purposes, except and to the extent (i) any portion of one or more of such amounts is treated as interest under section 1272, 1274 or 483 of the Code or other provision of the Code and any similar provision of state and local Tax law or (ii) otherwise required under applicable tax law.

ARTICLE IX
CONDITIONS PRECEDENT TO PARENT’S OBLIGATIONS

The obligation of the Parent to consummate the Merger and the transactions contemplated hereby on the Closing Date is subject to the satisfaction (or waiver by the Parent) of the following conditions at or prior to the Closing:

SECTION 9.1.   Accuracy of Representations and Warranties.  The representations and warranties of the Holders and the Company contained in Articles IV and V shall be true and correct (disregarding all materiality and Material Adverse Effect qualifications) on and as of the Closing Date, in each case as if made on and as of the Closing Date (except for any such other representations and warranties that address matters only as of a particular date or only with respect to a specific period of time, which need only be true and correct (disregarding all materiality and Material Adverse Effect qualifications) as of such date or with respect to such period), except to the extent that the failure of any such other representations and warranties to be true and correct (disregarding all materiality and Material Adverse Effect qualifications) would not reasonably be expected to have a Material Adverse Effect.

SECTION 9.2.   Performance of Covenants.  The Holders and the Company shall have performed and complied in all material respects with the covenants and obligations contained in this Agreement required to be performed or complied with by them between the date hereof and the Closing Date.

SECTION 9.3.   No Order; Certain Legal Proceedings.  No Order shall be in effect prohibiting, enjoining or restraining the consummation of the transactions contemplated in this Agreement.  No Governmental Authority shall have commenced a

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Legal Proceeding against the Company, any Holder or the Parent seeking to enjoin or prohibit the consummation of the transactions contemplated hereby.

SECTION 9.4.   HSR Clearance.  Any “waiting period” or extension thereof applicable under the HSR Act to the transactions contemplated by this Agreement shall have expired or been terminated.

SECTION 9.5.   Closing Deliveries.  The Parent shall have received the items to be delivered by the Holders and the Company pursuant to Section 3.2.

SECTION 9.6.   Third Party Consents.  Each of the Consents set forth in Section 9.6 of the Company Disclosure Schedule that are required under the terms of the Material Contracts or Real Property Agreements described therein in order to consummate the transactions contemplated hereby (the “Material Consents”) shall have been obtained, shall be in form and substance reasonably satisfactory to the Parent and shall be in full force and effect.  Copies of the Material Consents shall have been delivered to the Parent.

SECTION 9.7.   Absence of Material Adverse Effect.  Since the date of this Agreement, there has been no Material Adverse Effect.

SECTION 9.8.   **Notwithstanding the foregoing, the Parent may not rely on the failure of any condition set forth in this Article IX to be satisfied if such failure (i) resulted from an action or inaction on the part of any of the Holders, the Company or their Affiliates requested in writing or consented to in writing by the Parent or (ii) was caused by the failure of the Parent to comply with its obligations under this Agreement.

ARTICLE X
CONDITIONS PRECEDENT TO
THE OBLIGATIONS OF THE COMPANY

The obligation of the Company to consummate the Merger and the other transactions contemplated hereby on the Closing Date is subject to the satisfaction (or waiver by the Company) of the following conditions at or prior to the Closing:

SECTION 10.1.   Accuracy of Representations and Warranties.  Each of the representations and warranties of the Parent and the Merger Subsidiary contained in Article VI shall be true and correct (disregarding all materiality qualifications) on and as of the Closing Date, in each case as if made on and as of the Closing Date (except for the representations and warranties that address matters only as of a particular date or only with respect to a specific period of time, which need only be true and correct (disregarding all materiality qualifications) as of such date or with respect to such period), except to the extent that the failure of any such representations and warranties to be true and correct (disregarding all materiality qualifications) would not reasonably be expected to prevent, impede or otherwise affect in any material respect the transactions contemplated by this Agreement.

SECTION 10.2.   Performance of Covenants.  Each of the Parent and Merger Subsidiary shall have performed and complied in all material respects with the

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covenants and obligations contained in this Agreement required herein to be performed or complied with by it between the date hereof and the Closing Date.

SECTION 10.3.   No Order; No Legal Proceedings.  No Order shall be in effect prohibiting, enjoining or restraining the consummation of the transactions contemplated in this Agreement.  No Governmental Authority shall have commenced a Legal Proceeding against the Company, any Holder or the Parent seeking to enjoin or prohibit the consummation of the transactions contemplated hereby.

SECTION 10.4.   HSR Clearance.  Any “waiting period” or extension thereof applicable under the HSR Act to the transactions contemplated by this Agreement shall have expired or been terminated.

SECTION 10.5.   Closing Deliveries.  The Company shall have received all of the items to be delivered by the Parent pursuant to Section 3.3.

Notwithstanding the forgoing, the Company may not rely on the failure of any condition set forth in this Article X to be satisfied if such failure (i) resulted from any action or inaction on the part of the Parent or the Merger Subsidiary requested in writing or consented to in writing by the Holders or the Company or (ii) was caused by the failure of the Company to comply with its obligations under this Agreement.

ARTICLE XI
TERMINATION

SECTION 11.1.   Termination of Agreement.  Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before the Closing only as follows:

(a)Mutual Consent.  By mutual written consent of the Company and the Parent;

(b)Failure to Close.  By the Company or the Parent, if at any time after the expiration of two Business Days from the scheduled date of the Closing fixed in accordance with Section 2.1 the conditions to the obligations of the other party to consummate the transactions contemplated hereby (other than any conditions to be satisfied through the making of payments or the delivery of documents at the Closing) shall have been satisfied, but the other party shall have failed or refused to consummate such transactions;

(c)Expiration Date.  By the Company or the Parent, if the Closing shall not have occurred prior to or on July 23, 2012 (which date may be extended by the mutual written agreement of the Company and the Parent); provided, however, that a party may not terminate this Agreement pursuant to this paragraph (c) if the failure of the Closing to occur on or before such date is attributable in whole or in any substantial part to the breach by such party of any covenant or obligation of such party contained in this Agreement; or

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(d)Consummation Prohibited.  By the Company or the Parent, if consummation of the transactions contemplated hereby would violate any non-appealable final Order of a Governmental Authority having competent jurisdiction.

SECTION 11.2.   Effect of Termination.

(a)If this Agreement is terminated pursuant to Section 11.1, all further obligations of the parties to this Agreement shall terminate without further liability of any party to another, except that this Section 11.2, Section 7.4 and Article XIV shall survive any termination; provided, however, that nothing herein shall relieve a breaching or defaulting party for liability arising from any breach or default by it that takes place prior to the date of termination of this Agreement.

(b)If this Agreement is terminated for any reason, the Parent shall return or cause to be returned to the Company all Confidential Information and all other documents, materials and records (including records in electronic form) obtained from any of the Holders or the Company or any of their Affiliates or any other Person acting on their behalf in connection with the transactions contemplated hereby and will continue to keep confidential and not use or disclose any information not returned because it is not included or reflected in any documents, materials or records.

ARTICLE XII
INDEMNIFICATION

SECTION 12.1.   Survival of Representations and Warranties and Covenants.  The representations and warranties (other than the Fundamental Representations and the Statutory Representation) and covenants and agreements of the parties contained in this Agreement, and rights to indemnification in respect thereof, shall survive the Closing and continue in effect until **; provided, that those covenants and agreements that by their terms are to be performed in whole or in part subsequent to the Closing shall remain in full force until such particular covenant or agreement is fully performed as provided in this Agreement.  The Fundamental Representations, and the rights of indemnification in respect thereof, shall survive the Closing and continue in effect **.  The Statutory Representation, and the rights of indemnification in respect thereof, shall survive the Closing and continue in effect until ** with respect to the subject matter thereof.  The agreement of the Holders to provide indemnification pursuant to Section 12.2(b) shall continue until ** with respect to the Taxes that are covered by Section 12.2(b).  The agreement of the Holders to provide indemnification pursuant to Section 12.2(c) shall continue until ** applicable to the subject matter of such indemnification provision.  The period for which a representation or warranty, covenant or agreement contained in this Agreement survives the Closing is referred to herein as the “Survival Period.”  Notwithstanding anything herein to the contrary, after the expiration of the Survival Period applicable to any representation, warranty, covenant or agreement of the parties set forth in this Agreement: (A) such representation, warranty, covenant or agreement shall be of no further force or effect; and (B) no Indemnified Party shall be entitled to any indemnification rights arising from a breach of such representation, warranty, covenant or agreement except to the extent that such Indemnified Party has given written notice thereof to the

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Indemnifying Party during the Survival Period pursuant to the applicable provisions of this Article XII.

SECTION 12.2.   Holders’ Indemnification Obligations.

(a)Subject to the limitations set forth in this Article XII, from and after the Closing Date, each Holder shall, severally (in proportion to its Sharing Ratio) and not jointly, indemnify and hold the Parent and each of its officers, directors, managers, partners, members and employees (the “Parent Indemnified Parties”) harmless from and against any and all Claims, judgments, causes of action, liabilities, obligations, damages, losses, deficiencies, costs, penalties, interest and expenses (collectively, “Losses”) arising out of (i) any breach of any representation or warranty of such Holder contained in Article IV, (ii) any breach of any covenant on the part of such Holder contained in this Agreement, (iii) any breach of any representation or warranty of the Company contained in Article V and (iv) any breach of any covenant on the part of the Company contained in this Agreement, but only to the extent that such agreement or covenant is required to be performed prior to or at Closing.

(b)Subject to the limitations set forth in this Article XII, from and after the Closing Date, each Holder shall, severally (in proportion to its Sharing Ratio) and not jointly, indemnify and hold the Parent Indemnified Parties harmless from and against any Losses arising out of Taxes of the Company that are attributable to any taxable periods and partial taxable periods ending on or before the Closing Date (“Pre-Closing Tax Periods”), except to the extent such Taxes were reflected as liabilities in the Final Working Capital or were reserved for in the Latest Balance Sheet.  For purposes of this Section 12.2(b), in the case of any Taxes that are payable for a Tax period that includes, but does not end on, the Closing Date (a “Straddle Period”), the portion of such Tax attributable to the Pre-Closing Tax Period shall (A) in the case of any Tax based upon or related to income, sales, gross receipts or wages, be deemed to equal the amount that would be payable if the Pre-Closing Tax Period ended (and the books of the Company were closed) on the Closing Date and (B) in the case of any Taxes other than those described in clause (A) (e.g., property or ad valorem Taxes), be deemed to be the amount of such Tax for the Straddle Period multiplied by a fraction (i) the numerator of which is the days in the Pre-Closing Tax Period and (ii) the denominator of which is the number of days in the entire Straddle Period.

(c)Subject to the limitations set forth in this Article XII, from and after the Closing Date, the Holders shall, severally (in proportion to their Sharing Ratios) and not jointly, indemnify and hold the Parent Indemnified Parties harmless from and against any **.  For the avoidance of doubt, the Holders obligations under this Section 12.2(c) shall not extend to **.  After the Closing, the Parent agrees that it shall use commercially reasonable efforts to cause the Surviving Entity to **.  Each of Rex and Summit hereby releases and forever discharges the Parent, the Surviving Entity, and each and every of their respective Affiliates, officers, directors, shareholders, partners, members, managers, employees and agents (the “Parent Releasees”), from any and all claims, demands, proceedings, causes of action, orders, obligations, debts and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, which Rex, Summit or any of their respective Affiliates has, has ever had or may hereafter have against any Parent Releasee arising in connection with ** the Company Disclosure Schedule.

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(d)For the purposes of the indemnification provisions contained in this Article XII, in determining the amount of any Loss arising out of any inaccuracy in or breach of any representation or warranty (but not for purposes of determining whether a breach of any such representation or warranty has occurred), all materiality, Material Adverse Effect or other similar qualifications contained in or otherwise applicable to such representation or warranty shall be disregarded.

SECTION 12.3.   Parent’s Indemnification Obligations.  Subject to the limitations set forth in this Article XII, from and after the Closing Date, the Parent shall indemnify and hold each of the Holders and its Affiliates and each of their respective officers, directors, managers, partners, members and employees (the “Holder Indemnified Parties”) harmless from and against any and all Losses arising out of (a) any breach of any representation or warranty of the Parent contained in Article VI, (b) any breach of any covenant on the part of the Parent contained in this Agreement or (c) any breach of any covenant on the part of the Company or Surviving Entity contained in this Agreement, but only to the extent that such agreement or covenant is required to be performed after Closing.

SECTION 12.4.   Limitations on Indemnification.

(a)In no event shall the indemnification obligations of the Holders include any obligation to provide indemnification for Covered Losses unless and until the aggregate amount of all Covered Losses for which the Parent Indemnified Parties are entitled to indemnification exceeds an amount equal to ** (the “Indemnity Basket”), in which case the Parent Indemnified Parties may be entitled (subject to the other limitations herein) to indemnification only for Covered Losses in excess of the Indemnity Basket.  In addition to the foregoing limitation, if the total amount of Covered Losses arising out of a specific breach does not exceed **, then no Parent Indemnified Party shall be entitled to indemnification for any such Covered Losses and such Covered Losses shall not be included for purposes of determining whether the Indemnity Basket has been exceeded.

(b)The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Sections 12.2(a) (other than in respect of the Fundamental Holder Representations, the Fundamental Company Representations or the Statutory Representation) shall be limited to **.  Notwithstanding the preceding sentence, **, the maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Sections 12.2(a) (other than in respect of the Fundamental Holder Representations, the Fundamental Company Representations or the Statutory Representation) and 12.2(c) shall be limited to an amount equal to **; provided, however, that any such indemnification obligation shall be satisfied first from the Escrow Account to the extent any funds remain therein, and thereafter by each Holder, severally (in accordance with its Sharing Ratio) but not jointly.

(c)The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Section 12.2(a)(iii) in respect of the Statutory Representation and pursuant to Sections 12.2(b) and 12.2(c) shall be limited to an amount equal to **; provided, however, that any such indemnification obligation shall be satisfied

36

first from the Escrow Account to the extent any funds remain therein, and thereafter by each Holder, severally (in accordance with its Sharing Ratio) but not jointly.

(d)The maximum obligation of the Holders to provide indemnification to any and all Parent Indemnified Parties pursuant to Sections 12.2(a)(i) and 12.2(a)(iii) in respect of the Fundamental Holder Representations and the Fundamental Company Representations shall be limited to an amount equal to **; provided, however, that any such indemnification obligation shall be satisfied first from the Escrow Account to the extent any funds remain therein, and thereafter (A) in the case of the Fundamental Holder Representations, by the Holder who made such representations and (B) in the case of the Fundamental Company Representations, by each Holder, severally (in accordance with its Sharing Ratio) but not jointly.

(e)Notwithstanding anything to the contrary contained in this Article XII, any Losses subject to indemnification pursuant to Section 12.2 shall be decreased to the extent that the amount of such Losses are reflected as a liability, reserve, accrual or other item on the Final Balance Sheet or are otherwise included in the determination of the Final Adjustment Amount.

SECTION 12.5.   Third-Party Claims.  If any third party asserts a Claim (a “Third-Party Claim”) against an Indemnified Party that could reasonably be expected to give rise to a right on the part of the Indemnified Party to indemnification under this Article XII, the Indemnified Party shall give notice of such Third-Party Claim to the Holder Representative (in the case of a Third-Party Claim asserted against a Parent Indemnified Party) or the Parent (in the case of a Third-Party Claim asserted against a Holder Indemnified Party) as soon as practicable (but in no event later than ten Business Days after receiving written notice of such Third-Party Claim), and the Indemnifying Party shall have the right to assume the defense of such Third-Party Claim; provided, however, that the failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that the Indemnifying Party may have hereunder with respect to such Third-Party Claim, except to the extent that the Indemnifying Party is materially prejudiced as a result of such failure, including where the failure to so notify the Indemnifying Party results in material Losses to the Indemnifying Party or the forfeiture of substantive rights or defenses that would otherwise be available in the defense of such Third-Party Claim; and provided, further that the Indemnifying Party shall not have the right to assume the defense of any Third-Party Claim asserted by or on behalf of a Governmental Authority or any Third-Party Claim seeking injunctive relief if the Indemnified Party determines in good faith that such action would reasonably be expected to have a material adverse effect on the conduct of its business or future operations (other than as the result of the payment of any damages in respect of such Third-Party Claim).  If the Indemnifying Party elects not to assume the defense, is not entitled to assume the defense or fails to assume the defense in a timely manner, then the Indemnified Party may employ counsel reasonably satisfactory to the Indemnifying Party to represent or defend it against any such Third-Party Claim, and, subject to Section 12.4, the reasonable out-of-pocket attorney’s fees and other out-of-pocket costs incurred by the Indemnified Party for such counsel and defense will be included in the Indemnified Party’s Losses; provided, however, that the Indemnified Party’s Losses shall not, in connection with any Legal Proceeding or separate but substantially similar Legal Proceedings arising out of the same general allegations, include the fees and expenses of

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more than one separate firm of attorneys at any time for all Indemnified Persons, except to the extent that local counsel, in addition to its regular counsel, is required, in the reasonable judgment of the Indemnified Party, in order to effectively defend against such Legal Proceeding.  If the Indemnifying Party does assume the defense of a Third-Party Claim, the Indemnified Party shall have the right to participate in the defense of such Third-Party Claim at its expense.  If the Indemnified Party retains its own counsel, the Indemnifying Party shall reasonably cooperate in providing information to and consulting with the Indemnified Party about the Third-Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, enter into any settlement with respect to any Third-Party Claim it has assumed the defense of (i) unless such settlement includes an unconditional release of the Indemnified Party for liability arising out of such claim or (ii) if such settlement imposes injunctive relief upon the Company in a manner that would adversely impact the business or future operations of the Company.  Notwithstanding anything to the contrary contained herein, in no event shall the Indemnified Party consent to the entry of judgment or enter into any settlement with respect to a Third-Party Claim for which it is seeking indemnification without the prior written consent of the Indemnifying Party.  In the case of any Third Party Claim as to which the Holder Representative assumes or conducts the defense of such claim, the reasonable out of pocket costs and expenses of such defense shall be paid by each Holder, severally (in proportion to its Sharing Ratio) but not jointly.

SECTION 12.6.   Procedures.

(a)Notwithstanding anything to the contrary herein, no Parent Indemnified Party shall be entitled to indemnification under this Article XII unless it has duly delivered a written notice to the Holder Representative (a “Notice of Claim”) before the expiration of the applicable Survival Period setting forth: (i) a statement that such Parent Indemnified Party believes in good faith that there is or has been a breach of a representation, warranty, covenant or obligation contained in this Agreement, with reference to the specific representation, warranty, covenant or obligation, and that such Parent Indemnified Party is entitled to be held harmless and indemnified under this Article XII, (ii) a brief description of the circumstances supporting such Parent Indemnified Party’s belief that there is or has been such a breach, (iii) a good faith estimate of the aggregate dollar amount of actual and potential Losses for which it is entitled to be indemnified hereunder and that have arisen and may arise as a result of the breach (the “Claimed Amount”) and (iv) in the event of a Third-Party Claim, a copy of such Third-Party Claim (if available) and a description of the basis for such Third-Party Claim.

(b)If during the 30-Business Day period commencing upon the receipt by the Holder Representative of a Notice of Claim, the Holder Representative delivers to the Parent Indemnified Party a written response (the “Response Notice”) in which the Holder Representative objects to the payment of some or all of the Claimed Amount to such Parent Indemnified Party, then the Holder Representative and such Parent Indemnified Party shall attempt in good faith to resolve the dispute.

(c)If the Holder Representative and Parent Indemnified Party are unable to resolve the dispute during the 30-day period commencing upon the receipt of the Response Notice by the Parent Indemnified Party, then such dispute (and any other disputes relating

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to the Claimed Amount or the related Indemnification Claim) shall be submitted to, and settled by, arbitration in accordance with the procedures in Section 14.10.

(d)Funds shall be released from the Escrow Account only in accordance with the Escrow Agreement.

SECTION 12.7.   Exclusive Remedy.  Notwithstanding anything in this Agreement to the contrary, any indemnification obligation of any Holder for Losses under this Agreement shall be satisfied first by recourse to the Escrow Account, and the Parent Indemnified Parties shall not seek any recovery from the Holders themselves until such time as the Escrow Account has been exhausted.  Parent shall not seek any indemnification, contribution repayment or other remedy or recourse directly or indirectly (through any director or officer of the Company or otherwise) from any Holder or its respective Affiliates with respect to any matter relating to the Company or its business, operations, properties or assets (including, but not limited to, any matters relating to the merchantability, value or use of any such properties or assets), financial condition or results of operations, or the subject matter of this Agreement (whether on the basis of a claim sounding in tort, contract, statute or otherwise) other than claims for indemnification pursuant to, and subject to the limitations contained in, this Article XII.  Unless otherwise prohibited by applicable Law (pursuant to statutory or other provisions that cannot be waived by the parties), and except for claims for intentional fraud, from and after the Closing, the remedies of the parties specifically provided for in this Article XII shall be the sole and exclusive remedies of the parties for all matters covered or contemplated by this Agreement (including any breach of a representation, warranty or covenant); provided, however, that nothing herein shall limit the right of any party to seek specific performance or injunctive relief in connection with a breach by another party of its obligations under this Agreement that occurs after the Closing Date.  In no event shall any party be liable to any other party for special, punitive, exemplary, incidental, consequential or indirect damages, lost profits, diminution in value, damage to reputation or loss to goodwill, whether based in contract, tort, strict liability or otherwise, except in the case of such items payable in satisfaction of a Third Party Claim for which such party is entitled to indemnification hereunder.

SECTION 12.8.   Mitigation; Insurance.  In the case of any Indemnification Claims for which it is reasonably likely that a party may have a direct or indirect right of recovery against one or more third parties (including, but not limited to, rights of recovery under insurance policies or indemnification arrangements with third parties), such party shall seek recovery of such Indemnification Claims from such third parties for so long as pursuit of such recovery is commercially reasonable unless such party reasonably determines that seeking such recovery is likely to result in a material increase in future premiums.  To the extent that a party obtains recovery in respect of any Indemnification Claims from any third parties, such party shall use the funds provided by such recovery (in lieu of funds provided by any other party pursuant to the indemnification provisions of this Article XII) to pay or otherwise satisfy such Indemnification Claims and the amount of any Losses with respect to any Indemnification Claim for which indemnification is available under this Article XII shall be reduced by the amount of such insurance proceeds or other such funds realized or paid to the Indemnified Party.  If, after the making of any payment in respect of an Indemnification Claim under this Article XII, the amount of the Losses to which such payment relates is reduced by recovery, settlement

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or otherwise under any insurance coverage, or pursuant to any claim, recovery, settlement or payment by or against any other Person, the amount of such reduction will promptly be repaid by the Indemnified Party to the Indemnifying Party.  Each party hereto shall take commercially reasonable steps within its control to mitigate its Losses upon and after becoming aware of any event which could reasonably be expected to give rise to any Losses; provided, that any obligation to seek insurance recovery shall be subject to limitations set forth in the first sentence of this Section 12.8.

SECTION 12.9.   Indemnification Net of Tax Benefit.  The amount of any Losses with respect to any Claim for which indemnification is available under this Article XII (an “Indemnification Claim”) shall be reduced by the Tax Benefit actually realized by the Indemnified Parties and their Affiliates as a result of such Losses.  For these purposes, “Tax Benefit” means the positive excess, if any, of (i) the excess (if any) of the Tax liability of the Indemnified Parties and their Affiliates without regard to such Losses for the taxable year in which the Loss occurs, over the Tax liability of the Indemnified Parties and their Affiliates for the taxable year in which the Loss occurs taking into account such Losses, with all other circumstances remaining unchanged, over (ii) the excess (if any) of the Tax liability of the Indemnified Parties and their Affiliates for the taxable year in which the Loss occurs determined after taking into account the receipt/accrual of the indemnity payments under this Article XII with respect to such Indemnification Claim, over the Tax liability of the Indemnified Parties and their Affiliates for the taxable year in which the Loss occurs determined without regard to the receipt/accrual of the indemnity payments under this Article XII with respect to such Indemnification Claim. Notwithstanding anything contained herein, this provision shall not enable the Holders or Holder Representative to have access to the Tax records of the Parent or its Affiliates (including the Company) following Closing.

SECTION 12.10.   Cooperation; Access to Documents and Information.  The parties shall cooperate with each other in connection with resolving any Indemnification Claims.  Without limiting the generality of the foregoing, any Indemnified Party who desires to assert an Indemnification Claim pursuant to this Agreement shall (i) provide to the Indemnifying Party all documents books, records and other information relating to such Indemnification Claim which are in the possession of the Indemnified Party or its Affiliates or can be obtained by the Indemnified Party without undue cost or expense as promptly as practicable and (ii) give the Indemnifying Party reasonable access from time to time to the accounting and other appropriate personnel and the independent accountants of the Indemnified Party and its Affiliates in order to permit the Indemnifying Party to obtain information reasonably required to evaluate such Indemnification Claim.

ARTICLE XIII
DEFINITIONS

SECTION 13.1.   Certain Definitions.  As used in this Agreement, the terms set forth below shall have the following respective meanings:

“Acquisition Proposal” means any inquiry, proposal or offer from any Person (other than Parent or any of its Affiliates) concerning (i) a merger, consolidation, liquidation, recapitalization, share exchange or other business combination transaction

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involving the Company; (ii) the issuance or acquisition of Equity Interests of the Company; or (iii) the sale, lease, exchange or other disposition of the System or any significant portion of the Company’s properties or assets.

“Affiliate” means, with respect to any Person, (a) any Subsidiary of such Person or (b) any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person.  For the purposes of this definition, “control” means the possession of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Business Day” means any day except a Saturday, Sunday or federal holiday.

“Claim” means any demand, claim, investigation or action that is asserted or arises in a Legal Proceeding or otherwise.

“Closing Calculation Date” means the last calendar day of the full month ended immediately prior to the month in which the Closing Date occurs; provided, that if the Closing occurs on the last calendar day of a month, then the “Closing Calculation Date” means the Closing Date, but immediately prior to Closing.

“Closing Cash” means the aggregate amount of the Company’s cash and cash equivalents on hand or in bank accounts (including deposits in transit) as of the Closing Date, but immediately prior to the Closing.

“Closing Indebtedness” means the amount of principal and interest outstanding under the Company Credit Agreement immediately prior to Closing.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company Credit Agreement” means the Credit Agreement, dated March 7, 2012, by and among the Company, U.S. Bank National Association, as Administrative Agent and LC Issuer, and the Lenders party thereto.

“Company’s Knowledge” means those facts, events or circumstances actually known to ** as of the applicable date based upon information that comes to the attention of any such individual (i) in the course of performing his or her duties ** and (ii) after inquiry to such person’s direct reports regarding the accuracy of the representations and warranties contained in Article V, it being understood that this definition shall not require any further inquiry or investigation on the part of any such persons.

“Company Property” means all Real Property owned, leased or used by the Company on which any portion of the System is situated or that is material to the construction or operation of the System as currently conducted.

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of January 30, 2012, between the Company and the Parent.

“Consent” means any consent, approval or authorization required to be obtained from any Governmental Authority or third Person.

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“Contract” means any written contract, agreement, indenture, note, bond, loan, instrument, lease, conditional sale contract, mortgage or insurance policy.

“Copyrights” means United States and foreign copyrights and maskwork rights, whether registered or unregistered, and pending applications to register the same.

“Covered Losses” means Losses for which indemnification is available pursuant to Section 12.2(a), but excluding (i) Losses covered by Section 12.2(a)(i) that arise from the breach by a Holder of a Fundamental Holder Representation, (ii) Losses covered by Section 12.2(a)(ii) that arise from the breach by a Holder of an agreement or covenant of such Holder that is required to be performed after the Closing or (iii) Losses covered by Section 12.2(a)(iii) that arise from the breach by the Company of a Fundamental Company Representation or Statutory Representation.

“Disclosure Schedule” means a disclosure schedule provided by a party to one or more other parties from time to time in connection with this Agreement.

“Enforceability Exceptions” means, with reference to the enforcement of the terms and provisions of this Agreement or any other Contract, that the enforcement thereof is or may be subject to the effect of (i) applicable bankruptcy, receivership, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws relating to or affecting the enforcement of the rights and remedies of creditors or parties to executory contracts generally; (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity) and the exercise of equitable powers by a court of competent jurisdiction; and (iii) applicable law or public policy limiting the enforcement of provisions providing for the indemnification of any Person.

“Environmental Laws” means any Laws relating to protection of the environment or human health or safety from actual or potential exposure (or the effects of exposure) to any actual or potential release, discharge, spill or emission of, or regarding the manufacture, processing, production, gathering, handling transportation, use, remediation, treatment, storage or disposal of, any Hazardous Materials.

“Environmental Liability” of any Person means any liability or obligation of such Person, whether accrued, contingent, absolute or otherwise (i) resulting from or attributable to the actual or threatened Releases of Hazardous Materials or resulting from or attributable to exposure to Hazardous Materials; (ii) arising under Environmental Laws or environmental obligations established pursuant to any Contract and resulting from or attributable to the generation, manufacture, processing, distribution, use, treatment, storage, Release or threatened Release, transport, or handling of Hazardous Materials; or (iii) otherwise arising under or related to Environmental Laws or the violation thereof.

“Equity Interests” means (i) with respect to any corporation, all shares, interests, participations or other equivalents of capital stock of such corporation, however designated, and (ii) with respect to any partnership or limited liability company, all partnership or limited liability company interests, units, participations or equivalents of partnership or

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limited liability company interests of such partnership or limited liability company, however designated.

“Escrow Agent” means CSC Trust Company.

“Escrow Amount” means an amount equal to **.

**

**

“Final Closing Cash” means the Closing Cash as finally determined in accordance with the provisions of Section 2.5.

“Final Working Capital” means Net Working Capital as finally determined in accordance with the provisions of Section 2.5.

“Fundamental Company Representations” means the representations and warranties of the Company set forth in Sections 5.1, 5.2 and 5.5.

“Fundamental Holder Representations” means, with respect to each Holder, the representations and warranties of such Holder set forth in Sections 4.1, 4.2 and 4.4.

“Fundamental Parent Representations” means the representations and warranty of the Parent and the Merger Subsidiary set forth in Sections 6.1 and 6.2.

“Fundamental Representations” means the Fundamental Company Representations, the Fundamental Holder Representations and the Fundamental Parent Representations.

“GAAP” means United States generally accepted accounting principles, consistently applied, in effect as of the date of the financial statements to which it refers.

“Governmental Authority” means any federal, state, provincial or local government or governmental regulatory body and any of their respective subdivisions, agencies, instrumentalities, authorities or tribunals.

“GPA Amendment” means the amendment, dated as of the Closing Date, to the Gas Gathering, Compression and Processing Agreement, dated December 21, 2009 (the “GPA Agreement”), as amended April 2011, by and between the Company, Rex and Summit, with Rex Energy Corporation and Sumitomo Corporation (for the limited purpose specifically set forth in the GPA Agreement), in the form agreed to by the parties on or prior to the date hereof.

“Hazardous Materials” means any contaminant, pollutant, substance, material, waste or chemical that is listed, regulated or defined by any Environmental Law, or any other substance that is declared or defined to be hazardous under or pursuant to any

43

Environmental Law, and including any petroleum product, asbestos and asbestos-containing materials, polychlorinated biphenyls, or naturally occurring radioactive material.

“HSR Act” means Section 7A of the Clayton Act (Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976), as amended (including any successor statute).

“Indebtedness” of any Person means, without duplication, (i) indebtedness of such Person for borrowed money, (ii) indebtedness evidenced by notes, debentures, bonds or loan agreements, the payment of which such Person is responsible, (iii) any accrued and unpaid interest on the indebtedness described in clauses (i) and (ii), and (iv) any obligation, contingent or otherwise, of such Person guaranteeing payment of any indebtedness described in clauses (i) and (ii) and the accrued and unpaid interest thereon, of another Person.

“Indemnified Party” means a Holder Indemnified Party or a Parent Indemnified Party.

“Indemnifying Party” means (i) the Parent, in the event a Holder Indemnified Party is entitled to indemnification under the terms of this Agreement or (ii) the Holders, in the event a Parent Indemnified Party is entitled to indemnification under the terms of this Agreement; provided, however, that the Holder Representative shall be entitled to take all actions and make all decisions on behalf of the Holders for purposes of Article XII.

“Intellectual Property” means all intellectual property or proprietary rights throughout the world, including without limitation all such rights embodied in software, source and object code, Internet domain names, and including Copyrights, Patents, Trademarks and Trade Secrets.

“Law” means any federal, state, provincial or local law, statute, rule, ordinance, code or regulation.

“Legal Proceeding” means any judicial, administrative or arbitral action, suit or proceeding (whether public or private and whether civil, criminal or administrative) by or before any court or other Governmental Authority.

“Lien” means any lien, pledge, mortgage, deed of trust, security interest, attachment, levy, right of first refusal or preference right or other similar encumbrance affecting title.

“Manager” means Stonehenge.

“Material Adverse Effect” means (i) any event, change, development or occurrence that, individually or together with any other event, change, development or occurrence, has had or would reasonably be expected to have a material and adverse effect on the Company’s business, condition (financial or otherwise), assets or results of operations, or (ii) an event or circumstance affecting the Company that makes impossible the consummation of the transactions contemplated by this Agreement, but, in each case, excluding any such effect attributable to or resulting from (a) the public announcement of

44

the transactions contemplated hereby, (b) any change in the Laws of general applicability or interpretations thereof by any courts or other Governmental Authorities, (c) any change in general economic conditions or in interest rates, (d) any change in commodity prices or any disruption in the capital markets, (e) any change in conditions affecting the oil and gas industry generally or any sector thereof, (f) any change in the overall business, results of operations or financial condition of any Holder, (g) any action or omission of the Company taken in accordance with the terms of this Agreement or with the prior consent of the Parent, (h) any facts or developments described in the Company Disclosure Schedule, or (i) any expenses incurred by the Company in connection with this Agreement or the transactions contemplated hereby; provided, however, that exceptions contained in clauses (b), (c), (d) and (e) above shall not prevent a determination that there has been a Material Adverse Effect if the event, change, development or occurrence referred to therein affects the Company in a disproportionately adverse manner relative to other similarly situated participants in the gas gathering and processing industry (provided that such event, change, development or occurrence may only be considered to the extent of such disproportionate adverse impact).

“Net Working Capital” means the excess of (i) the current assets of the Company (excluding Closing Cash) over (ii) the current liabilities of the Company (excluding current maturities of and interest on Closing Indebtedness), in each case as calculated as of the Closing Calculation Date, in accordance with and in a manner consistent with the illustration and principles set forth in Exhibit B, and, to the extent that any determination is not governed by such illustration and principles, in accordance with GAAP applied on a basis consistent with past practice and the principles used in the preparation of the Latest Balance Sheet.  For purposes of determining current assets and current liabilities, deferred tax assets and deferred tax liabilities will not be taken into account.

“Order” means any order, judgment, injunction, ruling or decree of any court or other Governmental Authority.

“Ordinary Course of Business” means, with respect to the Company, the ordinary course of business consistent with the past custom and practice of the Company, including (a) making expenditures contemplated by and consistent with the Company’s business plan for 2012 prepared by the Manager of the Company in accordance with the Organizational Documents of the Company, (b) making cash distributions to the Holders, (c) incurring expenses in connection with the negotiation and execution of this Agreement and the consummation of the transactions contemplated hereby or (d) taking any actions contemplated by this Agreement.

“Organizational Documents” means (i) in the case of any Person organized as a corporation, the certificate or articles of incorporation of such corporation (or, if applicable, the memorandum and articles of association of such corporation) and the bylaws of such corporation, (ii) in the case of any Person organized as a limited liability company, the certificate of formation or organization and the limited liability company agreement, operating agreement or regulations of such limited liability company, (iii) in the case of any Person organized as a limited partnership, the certificate of limited partnership and partnership agreement of such limited partnership and (iv) in the case of any other Person, all constitutive or organizational documents of such Person which address matters relating

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to the business and affairs of such Person similar to the matters addressed by the documents referred to in clauses (i) through (iii) above in the case of Persons organized as corporations, limited liability companies or limited partnerships.

“Parent Disclosure Schedule” means the Disclosure Schedule delivered by the Parent to the Company.

“Patents” means issued United States and foreign patents and pending patent applications, including, without limitation, provisional patent applications, continuations, continuations-in-part, divisions, reissues, reexaminations and extensions.

“Permit” means any permit, license, authorization or approval issued by a Governmental Authority.

“Permitted Lien” means any (i) mechanic’s, materialman’s, warehouseman’s, carrier’s and similar liens for labor, materials or supplies incurred under applicable Law or in the Ordinary Course of Business, (ii) purchase money security interests arising in the Ordinary Course of Business, (iii) Liens for Taxes, assessments and other governmental levies, fees or charges which are not due and payable, (iv) rights of landlords in respect of any Real Property Agreement made available to the Parent prior to the date of this Agreement or made available after the date of this Agreement and prior to Closing in respect of Real Property Agreements entered into after the date of this Agreement in accordance with this Agreement, (v) conditions in any Permit granted or issued by any Governmental Authority, (vi) all matters of record in respect of any Right of Way or the property which is the subject of **, (vii) all matters visible on the ground, imperfections to title, Liens, claims, easements, covenants, conditions, restrictions, and other charges and encumbrances the existence of which would not, individually or in the aggregate, reasonably be expected to be material to the business or operation of the Company or prevent, impede or otherwise adversely affect in any material respect the transactions contemplated by this Agreement; or (viii) Liens and matters of record in connection with such Liens, as identified in Section 13.1(a) of the Company Disclosure Schedule.

“Person” means any natural person, corporation, partnership, limited liability company, trust, unincorporated organization or other entity.

“Real Property” means any lot, parcel or tract of land in which any Person has a property interest.

“Release” means any emission, spill, seepage, leak, escape, leaching, emitting, discharge, injection, pumping, pouring, emptying, dumping, disposal, migration, or release of Hazardous Materials from any source into or upon the environment.

**

“Sharing Ratios” means, in respect of the Holders, the following percentages:

Rex:	28%
Stonehenge:	60%
Summit:	12%

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“Statutory Representation” means the representations and warranties set forth in Section 5.16 (Taxes).

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any other Person of which the parent, directly or indirectly, owns Equity Interests that (i) represent more than 50% of the total number of outstanding common or other residual Equity Interests (however denominated) of such Person, (ii) represent more than 50% of the total voting power of all outstanding Equity Interests of such Person which are entitled to vote in the election of directors, managers or other persons performing similar functions for and on behalf of such Person, (iii) are entitled to more than 50% of the dividends paid and other distributions made by such Person prior to liquidation or (iv) are entitled to more than 50% of the assets of such Person or proceeds from the sale thereof upon liquidation.

“System” means the (i) gas pipelines, (ii) gas compression, treating and dehydration facilities, (iii) gas processing facilities, (iv) residue gas compression, delivery, transportation and marketing facilities,  (v) natural gas liquids fractionation, transportation and marketing facilities, and (vi) all other facilities, equipment and assets utilized in connection with any of the foregoing, in each case owned, leased or used by the Company and used in the conduct of its business as currently conducted.

“Target Working Capital” means zero ($0) dollars.

“Tax” means all taxes, levies, imposts and similar assessments paid or payable to a Governmental Authority, including, but not limited to, all net income, gross income, gross receipts, sales, use, value added, services, ad valorem, occupation, transfer, franchise, capital stock, profits, license, withholding, payroll, employment, unemployment, excise, estimated, severance, stamp, occupancy or property taxes, together with any interest, penalty or addition to any such tax, and including any liability for any such tax pursuant to Treasury Regulation Section 1.1502-6 or any analogous provision of foreign, state, or local Law, or as a transferee or successor.

“Tax Return” means any return, report, declaration, estimate, information return or other document (including any related or supporting information) filed or required to be filed with any Governmental Entity with respect to Taxes.

“Termination and Release” means the Termination and Release, dated as of the Closing Date, by and among the Company and each Holder, in the form agreed to by the parties on or prior to the date hereof.

“Trade Secrets” means trade secret rights and other similar rights in confidential ideas, know-how, concepts, methods, processes, formulae, reports, data, customer lists, mailing lists, business plans, and other proprietary information, all of which derive value, monetary or otherwise, from being maintained in confidence and not known to the Company’s competitors.

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“Trademarks” means United States, state and foreign trademarks and service marks, logos, designs, slogans, product and service names, product descriptions, trade dress, trade names, corporate names, and other trade designations, whether the foregoing are registered or unregistered, and all United States, state and foreign registrations and applications to register the foregoing.

“U.S. Bank” means U.S. Bank National Association.

SECTION 13.2.   Other Defined Terms.  Each of the terms set forth below has the meaning set forth in the provision set forth opposite such term in the following table:

Term	Provision
AAA	Section 14.10(b)
Accounting Services	Section 7.9(a)
Act	Recitals
Agreed Asset Acquisition Statement	Section 8.5
Agreement	Preamble
Arbiter Objection Statement	Section 2.5(d)
Baker Botts	Section 14.16
Base Consideration	Section 2.1(a)
Books and Records	Section 7.5(a)
Certificate of Merger	Section 1.2
Claimed Amount	Section 12.6(a)
Closing	Section 3.1
Closing Date	Section 3.1
Company	Preamble
Company Disclosure Schedule	Article V
Confidential Information	Confidentiality Agreement
Covered Claims	Section 12.4(a)
DOJ	Section 5.4
Effective Time	Section 1.2
Environmental Permits	Section 5.18(a)
Escrow Account	Section 2.6
Escrow Agreement	Section 2.6
**	Section 12.4(b)
Estimated Closing Cash	Section 2.2(a)
Estimated Working Capital	Section 2.2(a)
Final Adjustment Amount	Section 2.4(c)
Final Arbiter	Section 2.5(d)
Final Balance Sheet	Section 2.3
Final CFO Certificate	Section 2.3
Financial Statements	Section 5.6(a)
FTC	Section 5.4
GPA Agreement	Section 13.1
Holders	Preamble
Holder Disclosure Schedule	Article IV

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Term	Provision
Holder Indemnified Parties	Section 12.3
Holder Representative	Section 14.1(a)
Indemnification Claim	Section 12.9
Indemnity Basket	Section 12.4(a)
Initial Closing Certificate	Section 2.2(a)
Initial Merger Consideration	Section 2.1(a)
Latest Balance Sheet	Section 5.6(a)
Latest Financial Statements	Section 5.6(a)
Leases	Section 5.10(a)
Losses	Section 12.2(a)
Management Services	Section 7.9(a)
Material Consents	Section 9.6
Material Contracts	Section 5.12
Membership Interests	Recitals
Merger	Recitals
Merger Consideration	Section 2.1(b)
Merger Subsidiary	Preamble
Notice of Claim	Section 12.6(a)
Negotiation Period	Section 2.5(b)
Objection Date	Section 2.5(a)
Objection Notice	Section 2.5(a)
Parent	Preamble
Parent Indemnified Parties	Section 12.2(a)
Parent Releasees	Section 12.2(c)
Permitted Representation	Section 14.16
Pre-Closing Tax Periods	Section 12.2(b)
Real Property Agreement	Section 5.10(a)
Response Notice	Section 12.6(b)
Rex	Preamble
Rights of Way	Section 5.10(a)
Stonehenge	Preamble
Straddle Period	Section 12.2(b)
Straddle Period Tax Return	Section 8.1(b)
Summit	Preamble
Survival Period	Section 12.1
Surviving Entity	Section 1.1
Surviving Entity LLC Agreement	Section 1.4
Tax Benefit	Section 12.9
Tax Contest	Section 8.4
Tax Purchase Price	Section 8.5
Third-Party Claim	Section 12.5
Transition Services Period	Section 7.9(a)
Year-End Financial Statements	Section 5.6(a)

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ARTICLE XIV
GENERAL

SECTION 14.1.   Holder Representative.

(a)           Each Holder (A) consents to the deposit of the Escrow Amount in the Escrow Account, (B) agrees that the Merger Consideration will be subject to the adjustment provisions set forth in Article II, (C) agrees that it will be subject to the indemnification provisions set forth in Article XII and (D) designates and appoints KMS Shareholder Representative, LLC, to serve as its true and lawful attorney-in-fact and to act as representative of the Holders (the “Holder Representative”) under this Agreement and the Escrow Agreement and, as such, to act as such Holder’s agent (with full power of substitution) and to take any action on such Holder’s behalf with respect to any and all matters relating to this Agreement and the transactions contemplated hereby, including, without limitation:

(i)            to accept payment from the Parent and Escrow Agent on behalf of the Holders;

(ii)           to (1) dispute or refrain from disputing, on behalf of such Holder, any claim made by the Parent under this Agreement or the Escrow Agreement; (2) negotiate and compromise, on behalf of such Holder, any dispute that may arise under, and to exercise or refrain from exercising any remedies available under, this Agreement or the Escrow Agreement; and (3) execute, on behalf of such Holder, any settlement agreement, release or other document with respect to such dispute or remedy;

(iii)          to enforce, on behalf of such Holder, any claim against Parent arising under this Agreement or the Escrow Agreement;

(iv)          to engage attorneys, accountants and agents, including the Final Arbiter in accordance with Section 2.5, at the expense of the Holders;

(v)           to amend this Agreement (other than this Section 14.1), or any of the instruments to be delivered to the Parent by such Holder pursuant to this Agreement or the Escrow Agreement;

(vi)          to have exclusive power and authority to institute legal action or otherwise act on behalf of such Holder with respect to any claims against the Parent (including any and all claims for non-payment or claims relating to disbursement of escrowed funds) relating to payment of the Merger Consideration and to control and direct any such claims;

(vii)         to cause to be paid, on behalf of such Holder, any amount owed to such Holder under the terms of this Agreement or in any other written agreement executed by such Holder or any claim asserted against such Holder by Parent or any Parent Indemnified Party;

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(viii)        to give such instructions and to take such action or refrain from taking such action, on behalf of such Holder, as the Holder Representative deems, in its sole discretion, necessary or appropriate to carry out the provisions of this Agreement and the Escrow Agreement;

(ix)          to withhold and set aside from the payments made hereunder or pursuant to the Escrow Agreement, cash in such amount as the Holder Representative determines in its sole discretion is required to pay any amounts or claims described in Section 14.1(a)(vii) or any fees, charges or expenses incurred in connection with the actions and obligations of the Holder Representative as authorized by this Section 14.1;

(x)           to determine, in its sole discretion, the time or times when, purpose for, and manner in which any of the above powers conferred upon the Holder Representative shall be exercised, and the conditions, provisions, covenants of any instrument or document that may be executed by the Holder Representative pursuant to this Section 14.1.

The authority conferred upon the Holder Representative shall be irrevocable and coupled with an interest.

(b)           The Parent and the Escrow Agent shall be entitled to conclusively rely on the instructions, decisions and acts of the Holder Representative required, permitted or contemplated to be taken by the Holder Representative hereunder or under the Escrow Agreement.

(c)           All decisions and actions by the Holder Representative, including, without limitation, any agreement between the Holder Representative and the Parent (or any Parent Indemnified Party) relating to indemnification obligations under Article XII or any disputes arising hereunder, including the defense or settlement of any claims and the making of payments with respect hereto, shall be binding upon all of the Holders, and no Holder shall have the right to object, dissent, protest or otherwise contest the same.  The Holder Representative shall not incur any liability to any of the Holders with respect to any action taken or suffered by any Holder in reliance upon any notice, direction, instruction, consent, statement or other documents believed by the Holder Representative to be genuinely and duly authorized, nor for any other action or inaction taken in its capacity as Holder Representative, including with respect to the indemnification obligations under Article XII, including the defense or settlement of any claims and the making of payments with respect thereto.  The Holder Representative may, in all questions arising under this Agreement and the transactions contemplated hereby, rely on the advice of counsel and for anything done, omitted or suffered in good faith by the Holder Representative shall not be liable to any of the Holders.  The Holder Representative shall not have any duties or responsibilities except those expressly set forth in this Agreement, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or shall otherwise exist against the Holder Representative.

(d)           The Holder Representative shall be entitled to rely, and shall be fully protected in relying, upon any statements furnished to it by any Holder, or the Parent, or

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any other evidence deemed by the Holder Representative to be reliable, and the Holder Representative shall be entitled to act on the advice of counsel selected by it.  The Holder Representative shall be fully justified in failing or refusing to take any action under this Agreement unless it shall have received such advice or concurrence of such Holders as it deems appropriate or it shall have been expressly indemnified to its satisfaction by the Holders, against any and all liability and expense that the Holder Representative may incur by reason of taking or continuing to take any such action.

(e)           Each of the Holders shall (i) indemnify the Holder Representative (in its capacity as such) against and hold the Holder Representative (in its capacity as such) harmless from, any and all Losses which may at any time be imposed upon, incurred by or asserted against the Holder Representative or any member thereof in such capacity in any way relating to or arising out of its action or failure to take action in good faith pursuant to this Agreement (other than Losses arising out of gross negligence) connection herewith in such capacity, and (ii) reimburse the Holder Representative for all costs and expenses incurred on behalf of Holders (and not reimbursable from the Escrow Account) in accordance with such Holder’s Sharing Ratio of such costs and expenses.

(f)            The Holder Representative shall instruct the Parent and the Escrow Agent, as applicable, that the amounts to be distributed to or for the benefit of the Holders pursuant to this Agreement or the Escrow Agreement shall be distributed as follows:

(i) first, to the Holder Representative to pay any amounts, claims, fees, charges or other expenses in accordance with Section 14.1(a)(vii) or (ix); and

(ii) second, to the Holders in accordance with their relative Sharing Ratios.

(g)           The agreements in this Section 14.1 shall survive termination of this Agreement.

SECTION 14.2.   Amendments.  This Agreement may only be amended, modified or supplemented by an instrument in writing executed by each of the parties hereto, subject to Section 14.1(a)(v).

SECTION 14.3.   Waivers.  The observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) by the party entitled to the benefits of such term, but such waiver shall be effective only if it is in a writing signed by the party entitled to the benefits of such term and against which such waiver is to be asserted.  Unless otherwise expressly provided in this Agreement, no delay or omission on the part of any party in exercising any right or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right or privilege under this Agreement operate as a waiver of any other right or privilege under this Agreement nor shall any single or partial exercise of any right or privilege preclude any other or further exercise thereof or the exercise of any other right or privilege under this Agreement.

SECTION 14.4.   Notices.  Any notices or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if delivered

52

personally or sent by facsimile transmission or recognized international overnight courier to the parties at the following addresses (or at such other address for any party as shall be specified by like notice); provided, that notices of a change of address shall be effective only upon receipt thereof.  Notices sent by facsimile transmission shall be effective when receipt is acknowledged, and notices sent by courier guaranteeing next day delivery shall be effective on the next business day after delivery to the courier.

(a)           If to any Holder or the Holder Representative, to:

KMS Shareholder Representative, LLC

5956 Sherry Lane, Suite 900

Dallas, Texas 75225-8020

Attn:  Energy Spectrum Partners V, LP

Facsimile: (214) 987-6110

With a copy (which shall not constitute effective notice) to:

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201

Attn: Geoffrey L. Newton

Facsimile:  (214) 661-4753

(b)           If to the Company, to:

Keystone Midstream Services, LLC

c/o Stonehenge Energy Resources, L.P.

11400 Westmoor Circle, Suite 325

Westminster, CO 80021

Attn: Chuck Wilkinson

Facsimile: (303) 451-7394

With a copy (which shall not constitute effective notice) to:

Baker Botts L.L.P.

2001 Ross Avenue

Dallas, Texas 75201

Attn: Geoffrey L. Newton

Facsimile:  (214) 661-4753

(c)           If to the Parent, to:

MarkWest Liberty Midstream & Resources, L.L.C.

1515 Arapahoe Street

Tower 1, Suite 1600

Denver, CO 80202

Attn: Sr. Vice President and Chief Commercial Officer

Facsimile: (303) 925-9305

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With a copy (which shall not constitute effective notice) to:

MarkWest Liberty Midstream & Resources, L.L.C.

1515 Arapahoe Street

Tower 1, Suite 1600

Denver, CO 80202

Attn:  Sr. Vice President and General Counsel

Facsimile:  (303) 925-9308

and

Hogan Lovells US LLP

One Tabor Center

1200 Seventeenth Street, Suite 1500

Denver, CO 80202

Attn: George Hagerty

Facsimile: (303) 899-7333

SECTION 14.5.   Successors and Assigns; Parties in Interest.  This Agreement shall be binding upon and shall inure solely to the benefit of the parties hereto and their respective successors, legal representatives and permitted assigns.  Neither this Agreement nor any rights or obligations hereunder may be assigned without the written consent of the other parties.  Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person, other than the parties hereto and the Indemnified Parties (with respect to the provisions of Article XII), any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement, and no other Person shall be deemed a third-party beneficiary under or by reason of this Agreement.

SECTION 14.6.   Severability.  If any provision of this Agreement or the application of any such provision to any Person or circumstance, shall be declared judicially to be invalid, unenforceable or void, such decision shall not have the effect of invalidating or voiding the remainder of this Agreement, it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to render it valid, legal and enforceable while preserving its intent or, if such modification is not possible, by substituting therefor another provision that is valid, legal and enforceable and that achieves the same objective.

SECTION 14.7.   Entire Agreement.  This Agreement (including the Disclosure Schedules and the Exhibits hereto, and the documents and instruments executed and delivered in connection herewith) and the Confidentiality Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, whether written or oral, among the parties or any of them with respect to the subject matter hereof, and there are no representations, understandings or agreements relating to the subject matter hereof that are not fully expressed in this Agreement and the documents and instruments executed and delivered in connection herewith.  All Exhibits and Disclosure Schedules attached to

54

this Agreement are expressly made a part of, and incorporated by reference into, this Agreement.

SECTION 14.8.   Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware for contracts made and to be fully performed in such state, without giving effect to any choice-of-law rules that would require the application of the laws of another jurisdiction.

SECTION 14.9.   Remedies.  Each of the parties hereto acknowledges and agrees that (i) the provisions of this Agreement are reasonable and necessary to protect the proper and legitimate interests of the other parties hereto and (ii) the other parties hereto would be irreparably damaged if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  It is accordingly agreed that the parties hereto shall be entitled to preliminary and permanent injunctive relief to prevent breaches of the provisions of this Agreement by other parties hereto without the necessity of proving actual damages or of posting any bond, and to enforce specifically the terms and provisions hereof, which rights shall be cumulative and in addition to any other remedy to which the parties hereto may be entitled hereunder or at law or equity (which other remedies shall be limited to the provisions of Article XII from and after the Closing).

SECTION 14.10.   Arbitration.  The parties agree that all disputes, controversies or claims that may arise out of the transactions contemplated by this Agreement, or the breach, termination or invalidity thereof (other than (i) any dispute, controversy or claim in respect of the Final Working Capital or Final Adjustment Amount, which shall be governed by Section 2.5 and (ii) a suit to obtain specific performance of the provisions of this Agreement or obtain other injunctive relief), shall be submitted to, and determined by, binding arbitration in accordance with the following procedures:

(a)           Either the Parent or the Holder Representative may submit a dispute, controversy or claim to arbitration by giving the other party written notice to such effect, which notice shall describe, in reasonable detail, the facts and legal grounds forming the basis for the filing party’s request for relief.  The arbitration shall be held before one neutral arbitrator in Denver, Colorado.

(b)           Within 30 days after the other party’s receipt of such demand, the Parent and the Holder Representative shall mutually agree upon a neutral arbitrator.  If the parties are unable to agree on the arbitrator within that time period, the arbitrator shall be selected by the American Arbitration Association (“AAA”).  In any event, the arbitrator shall have a background in, and knowledge of, transactions in the oil and gas industry and shall otherwise be an appropriate person based on the nature of the dispute.  If a person with experience in such matters is not available, the arbitrator shall be chosen from the retired federal judges pool maintained by AAA.

(c)           The arbitration shall be governed by the Commercial Arbitration Rules of the AAA, except as otherwise expressly provided in this Section 14.10.  However, the arbitration shall be administered by any organization mutually agreed to in writing by the

55

parties.  If the parties are unable to agree on the organization to administer the arbitration, it shall be administered by the AAA.

(d)           Discovery shall be limited (i) to that for which each party has a substantial, demonstrable need and (ii) to the request for and production of documents, depositions and interrogatories.  Except as otherwise provided in this Section 14.10, all discovery shall be guided by the Federal Rules of Civil Procedure.  All issues concerning discovery upon which the parties cannot agree shall be submitted to the arbitrator for determination.

(e)           In rendering an award, the arbitrator shall determine the rights and obligations of the parties based on the evidence presented and according to the substantive and procedural laws of the State of Delaware, except as otherwise expressly provided in this Section 14.10.

(f)            The decision of, and award rendered by, the arbitrator shall (unless the arbitrator determines that this time frame is impracticable) be determined no more than 30 days after the selection of the arbitrator and shall be final and binding on the parties and shall not be subject to appeal.  Judgment on the award may be entered in and enforced by any court of competent jurisdiction.

(g)           Each party shall bear its own costs and expenses (including filing fees) with respect to the arbitration, including one-half of the fees and expenses of the arbitrator; provided, however, that following the Closing, any such fees or expenses that are to be borne by any Holder or the Holder Representative shall be satisfied out of the Escrow Account to the extent of any funds remaining in such account.

SECTION 14.11.   Expenses.  Except as otherwise expressly provided herein, each of the parties hereto shall bear its own expenses (including, without limitation, fees and disbursements of its counsel, accountants and other experts) incurred by it in connection with the preparation, negotiation, execution, delivery and performance of this Agreement, each of the other documents and instruments executed in connection with or contemplated by this Agreement and the consummation of the transactions contemplated hereby.

SECTION 14.12.   Survival.  Except as otherwise set forth in this Agreement, the representations and warranties made in this Agreement or in any agreement, certificate or other document executed in connection herewith shall not survive the Closing.

SECTION 14.13.   Release of Information.  The parties shall cooperate with each other in releasing information concerning this Agreement and the transactions contemplated hereby.  No press releases or other public announcements concerning the transactions contemplated by this Agreement shall be made by any party without prior consultation with, and agreement of, the other parties, except for any legally required communication by any party, including any rules or regulations of any stock exchange, and then only with prior consultation with the other party to the extent practicable.

SECTION 14.14.   Disclosure Schedules.  For purposes of the representations and warranties of each party contained herein, disclosure in any section of a

56

Disclosure Schedule delivered by such party of any facts or circumstances shall be deemed to be adequate disclosure of such facts or circumstances with respect to all other representations or warranties made by such party, whether or not such disclosure specifically identifies or purports to respond to one or more of such other representations and warranties, if it is reasonably apparent on its face that such disclosure pertains to the subject matter of such other representations and warranties.  Any information provided in a Disclosure Schedule is solely for informational purposes, and the inclusion of such information shall not be deemed to enlarge or enhance any of the representations or warranties of the party providing the Disclosure Schedule pursuant to this Agreement.  The inclusion of any information in any section of the Disclosure Schedule or other document delivered by the parties pursuant to this Agreement shall not be deemed to be an admission or evidence of the materiality of such item, nor shall it establish a standard of materiality for any purpose whatsoever.

SECTION 14.15.   Certain Rules of Construction.  The article and section headings and the table of contents contained in this Agreement are for convenience of reference only and shall in no way define, limit, extend or describe the scope or intent of any provisions of this Agreement.  Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.  In addition, as used in this Agreement, unless otherwise provided to the contrary, (a) all references to days, months or years shall be deemed references to calendar days, months or years or (b) any reference to a “Section,” “Article” or “Exhibit” shall be deemed to refer to a section or article of this Agreement, a Disclosure Schedule or an exhibit attached to this Agreement.  Unless the context otherwise requires, the words “hereof,” “herein,” and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.  The words “include,” “includes,” or “including” shall be deemed to be followed by the words “without limitation.”  Unless otherwise specifically provided for herein, the term “or” shall not be deemed to be exclusive.  Whenever this Agreement refers to an event, occurrence or development that “would reasonably be expected to have” or “would not reasonably be expected to have” a specified effect on the Company or any other Person (including a Material Adverse Effect) a determination as to whether such effect would reasonably be expected to occur shall be made from the viewpoint of a reasonable and objective third party that is experienced in the oil and gas industry, and not from the viewpoint of, or taking into account any special circumstances applicable to, any particular Person (including the Parent).

SECTION 14.16.   Waiver of Conflicts.  The Parent and the Company agree that, notwithstanding any current or prior representation of the Company by Baker Botts L.L.P. (“Baker Botts”), Baker Botts shall be allowed to represent any Holder, the Holder Representative or any of their respective Affiliates in any matters and disputes related to this Agreement and the transactions contemplated hereby, including the GPA Amendment, even if such matter or dispute is adverse to the Parent, the Company or the Surviving Entity (such representation in any such matter permitted by the foregoing, a “Permitted Representation”).  Each of the Parent, Merger Subsidiary and the Company (on behalf of itself and the Surviving Entity) hereby (i) waives any claim that any of them have or may have that Baker Botts has a conflict of interest or is otherwise prohibited from

57

engaging in such Permitted Representation and (ii) agrees that, in the event that a dispute related to a Permitted Representation arises after the Closing between the Parent or the Surviving Entity, on the one hand, and any Holder, the Holder Representative or any of their Affiliates, on the other hand, Baker Botts may represent such Holder, the Holder Representative or Affiliate in such dispute constituting a Permitted Representation even though the interests of such Holder, the Holder Representative or Affiliate may be directly adverse to the Parent or the Surviving Entity and even though Baker Botts may have represented the Company in a matter substantially related to such dispute, or may be handling ongoing matters for the Company at any time prior to the Closing.  The Parent and the Company each further agree (on behalf of itself and the Surviving Entity) that any and all documents in Baker Botts’ files relating to this Agreement and the transactions contemplated hereby (including any offers or indications of interest received by the Company in connection therewith) shall be the property of and shall be retained by Baker Botts and shall not be delivered to the Company, the Surviving Entity or the Parent, but all other documents relating to the Company’s assets and arising out of the representation of the Company by Baker Botts, for periods prior to the Closing, shall remain the property of the Company and shall be delivered to Parent and the Surviving Entity at or promptly following the Closing.

SECTION 14.17.   Counterparts.  This Agreement may be executed in multiple counterparts (delivery of which may be made by facsimile or in portable document format (.pdf)), each of which shall be deemed an original and all of which taken together shall constitute one instrument binding on all the parties, notwithstanding that all the parties are not signatories to the original or the same counterpart.

[signature pages follow]

58

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first above written.

HOLDERS:
STONEHENGE ENERGY RESOURCES, L.P.,
a Delaware limited partnership
By: 3MG Enterprises, LLC
Its: General Partner
	By:		/s/ John H. Rheinheimer
	Name:		John H. Rheinheimer
	Title:		Manager
R.E. GAS DEVELOPMENT, LLC,
a Delaware limited liability company
By:		/s/ Thomas C. Stabley
Name:		Thomas C. Stabley
Title:		Vice President
SUMMIT DISCOVERY RESOURCES II, LLC,
a Delaware limited liability company
By: Summit Oil & Gas USA Corporation, its Manager
By:		/s/ Kazuyuki Onose
Name:		Kazuyuki Onose
Title:		President

[Signature Page to Agreement and Plan of Merger]

COMPANY:
KEYSTONE MIDSTREAM SERVICES, LLC,
a Delaware limited liability company
By: Stonehenge Energy Resources, L.P..
Its: Manager
	By: 3MG Enterprises, LLC
	Its: General Partner
	By:		/s/ John H. Rheinheimer
	Name:		John H. Rheinheimer
	Title:		Manager
PARENT:
MARKWEST LIBERTY MIDSTREAM & RESOURCES, L.L.C.,
a Delaware limited liability company
By:		/s/ Frank M. Semple
Name:		Frank M. Semple
Title:		Chairman, President & CEO
MERGER SUBSIDIARY:
MARKWEST LIBERTY BLUESTONE, L.L.C.,
a Delaware limited liability company
By:		/s/ Frank M. Semple
Name:		Frank M. Semple
Title:		Chairman, President & CEO

[Signature Page to Agreement and Plan of Merger]

HOLDER REPRESENTATIVE:
KMS SHAREHOLDER REPRESENTATIVE, LLC
By:	Energy Spectrum Partners V LP,
	its manager
By:	Energy Spectrum Capital V LP,
	its general partner
By:	Energy Spectrum V LLC,
	its general partner
By:		/s/ Peter Augustini
Name:		Peter Augustini
Title:		Partner

[Signature Page to Agreement and Plan of Merger]

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Frank M. Semple, certify that:

1.I have reviewed this quarterly report on Form 10-Q of MarkWest Energy Partners, L.P.

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 registrant’s 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), 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)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s 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

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

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

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 registrant’s 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 registrant’s internal control over financial reporting.

Date: August 6, 2012	By:	/s/ FRANK M. SEMPLE
		Frank M. Semple
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Nancy K. Buese, certify that:

1.I have reviewed this quarterly report on Form 10-Q of MarkWest Energy Partners, L.P.

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 registrant’s 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f), 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)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s 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

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

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

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 registrant’s 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 registrant’s internal control over financial reporting.

Date: August 6, 2012	By:	/s/ NANCY K. BUESE
		Nancy K. Buese
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MarkWest Energy Partners, L.P. (the “Partnership”), on Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Frank M. Semple, Chief Executive Officer of 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, to my knowledge:

(1)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 result of operations of the Partnership.

Date: August 6, 2012	By:	/s/ FRANK M. SEMPLE
		Frank M. Semple
		Chairman, President and Chief Executive Officer
		(Principal Executive Officer)

This 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 disclosure document. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent this Exhibit 32.1 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MarkWest Energy Partners, L.P. (the “Partnership”) on Form 10-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nancy K. Buese, Chief Financial Officer of 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, to my knowledge:

(1)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 result of operations of the Partnership.

Date: August 6, 2012	By:	/s/ NANCY K. BUESE
		Nancy K. Buese
		Senior Vice President & Chief Financial Officer
		(Principal Financial Officer)

This 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 disclosure document. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent this Exhibit 32.2 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Variable Interest Entities (Details) (USD $)							1 Months Ended			6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2012 Total Variable Interest Entities	Dec. 31, 2011 Total Variable Interest Entities	Jan. 31, 2012 MarkWest Utica EMG	Jun. 30, 2012 MarkWest Utica EMG	Jan. 02, 2012 MarkWest Utica EMG	Jun. 30, 2012 MarkWest Pioneer
Variable interest entities
Percentage of ownership interest held in joint venture							60.00%			50.00%
Percentage of ownership interest held by non-controlling interest									40.00%	50.00%
Initial contribution requirements by non-controlling interest in exchange for a ownership interest							$ 350,000,000
Noncontrolling interest owners total minimum funding requirement									500,000,000
Percentage of capital required by noncontrolling owners after initial contribution									40.00%
Minimum Percentage of ownership interest held by non-controlling interest									30.00%
Percentage of capital contribution to maintain ownership percentage									30.00%
Percentage of initial capital funding of VIE									60.00%
Percentage of capital contribution after non-controlling interest minimum required contribution									100.00%
Percentage of additional capital contribution to increase ownership percentage									100.00%
Percentage of ownership interest in joint venture maximum									70.00%
ASSETS
Cash and cash equivalents	125,462,000	117,016,000	95,035,000	67,450,000	3,168,000	2,684,000		79,000		3,089,000
Receivables, net	138,371,000	226,561,000			1,428,000	1,569,000				1,428,000
Other current assets	8,915,000	11,748,000			69,000	169,000				69,000
Property, plant and equipment, net	3,643,636,000	2,864,307,000			168,344,000			29,098,000		139,246,000
Accumulated depreciation	520,766,000	438,062,000			18,704,000	15,551,000		8,000		18,696,000
Other long-term assets	1,510,000	1,595,000			102,000	102,000				102,000
Total assets	5,134,598,000	4,070,425,000			173,111,000			29,177,000		143,934,000
LIABILITIES
Accounts payable	208,019,000	179,871,000			292,000	96,000		250,000		42,000
Accrued liabilities	231,719,000	171,451,000			14,306,000	1,144,000		13,135,000		1,171,000
Other long-term liabilities	128,231,000	121,356,000			76,000	73,000				76,000
Total liabilities					$ 14,674,000			$ 13,385,000		$ 1,289,000

XML

Segment Information (Details 3) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Segment Assets
Certain cash and cash equivalents	$ 125,462	$ 117,016	$ 95,035	$ 67,450
Fair value of derivatives	63,793	24,790
Investment in unconsolidated affiliate	26,695	27,853
Total assets	5,134,598	4,070,425
Total reportable segments
Segment Assets
Total assets	4,864,813	3,903,207
Southwest Segment
Segment Assets
Total assets	1,698,454	1,701,919
Northeast Segment
Segment Assets
Total assets	491,428	533,591
Liberty Segment
Segment Assets
Total assets	2,147,784	1,114,654
Gulf Coast Segment
Segment Assets
Total assets	527,147	553,043
Unallocated Segment
Segment Assets
Certain cash and cash equivalents	113,529	66,212
Fair value of derivatives	63,793	24,790
Investment in unconsolidated affiliate	26,695	27,853
Other	$ 65,768	$ 48,363

XML

Equity (Details) (USD $) In Thousands, except Share data in Millions, unless otherwise specified	1 Months Ended			3 Months Ended			6 Months Ended
	May 31, 2012	Mar. 31, 2012	Jan. 31, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Jun. 30, 2012	Jun. 30, 2011
Equity Offerings
Issuance of units in public offering, net of offering costs (in units)	8.0	6.8	0.7
Net proceeds from public offering after deducting underwriters fees and other third-party expenses	$ 427,000	$ 388,000	$ 38,000				$ 852,873	$ 138,163
Distributions of Available Cash
Distribution per common unit (in dollars per unit)				$ 0.80	$ 0.79	$ 0.76
Declaration Date				July 26, 2012	April 26, 2012	January 26, 2012
Record Date				August 6, 2012	May 7, 2012	February 6, 2012
Payment Date				August 14, 2012	May 15, 2012	February 14, 2012

XML

Supplemental Condensed Consolidating Financial Information (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 125,462	$ 117,016	$ 95,035	$ 67,450
Restricted cash	25,285	26,193
Receivables and other current assets	176,039	294,200
Fair value of derivative instruments	28,556	8,698
Total current assets	355,342	446,107
Total property, plant and equipment, net	3,643,636	2,864,307
Other long-term assets:
Investment in unconsolidated affiliate	26,695	27,853
Intangibles, net of accumulated amortization	885,183	603,767
Fair value of derivative instruments	35,237	16,092
Other long-term assets	188,505	112,299
Total assets	5,134,598	4,070,425
Current liabilities:
Fair value of derivative instruments	30,479	90,551
Other current liabilities	439,738	351,322
Total current liabilities	470,217	441,873
Deferred income taxes	156,783	93,664
Fair value of derivative instruments	18,951	65,403
Long-term debt, net of discounts	1,997,985	1,846,062
Other long-term liabilities	128,231	121,356
Equity:
Non-controlling interest in consolidated subsidiaries	69,711	70,227
Total equity	2,362,431	1,502,067	1,504,948	1,458,566
Total liabilities and equity	5,134,598	4,070,425
Common Units
Equity:
Common units	1,540,189	679,309
Total equity	1,540,189	679,309	1,029,496	993,049
Class B Units
Equity:
Common units	752,531	752,531
Total equity	752,531	752,531
Parent
Current assets:
Cash and cash equivalents		22	3
Receivables and other current assets	5,824	7,097
Intercompany receivables	772,994	19,981
Total current assets	778,818	27,100
Total property, plant and equipment, net	3,811	4,012
Other long-term assets:
Investment in consolidated affiliates	3,294,718	3,071,124
Intercompany notes receivable	219,000	235,700
Other long-term assets	41,289	41,492
Total assets	4,337,636	3,379,428
Current liabilities:
Intercompany payables	268	40,503
Other current liabilities	25,851	38,775
Total current liabilities	26,119	79,278
Deferred income taxes	1,059	1,228
Long-term debt, net of discounts	1,997,985	1,846,062
Other long-term liabilities	3,056	3,232
Equity:
Total equity	2,309,417	1,449,628
Total liabilities and equity	4,337,636	3,379,428
Parent | Common Units
Equity:
Common units	1,556,886	697,097
Parent | Class B Units
Equity:
Common units	752,531	752,531
Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	118,908	99,580	71,584	63,850
Receivables and other current assets	137,690	232,010
Intercompany receivables	7,818	40,519
Fair value of derivative instruments	26,883	8,015
Total current assets	291,299	380,124
Total property, plant and equipment, net	1,926,844	1,714,857
Other long-term assets:
Investment in unconsolidated affiliate	26,695	27,853
Investment in consolidated affiliates	1,813,342	1,097,350
Intangibles, net of accumulated amortization	581,273	603,224
Fair value of derivative instruments	34,472	16,092
Other long-term assets	70,212	70,434
Total assets	4,744,137	3,909,934
Current liabilities:
Intercompany payables	774,338	40,374
Fair value of derivative instruments	30,398	90,551
Other current liabilities	151,498	219,622
Total current liabilities	956,234	350,547
Deferred income taxes	155,724	92,436
Long-term intercompany financing payable	196,000	212,700
Fair value of derivative instruments	18,951	65,403
Other long-term liabilities	122,510	117,724
Equity:
Total equity	3,294,718	3,071,124
Total liabilities and equity	4,744,137	3,909,934
Guarantor Subsidiaries | Common Units
Equity:
Common units	3,294,718	3,071,124
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	6,554	17,414	23,448	3,600
Restricted cash	25,285	26,193
Receivables and other current assets	32,525	55,098
Intercompany receivables	7,866	22,193
Fair value of derivative instruments	1,673	683
Total current assets	73,903	121,581
Total property, plant and equipment, net	1,832,027	1,163,226
Other long-term assets:
Intangibles, net of accumulated amortization	303,910	543
Fair value of derivative instruments	765
Other long-term assets	77,004	373
Total assets	2,287,609	1,285,723
Current liabilities:
Intercompany payables	14,072	1,816
Fair value of derivative instruments	81
Other current liabilities	262,389	92,930
Total current liabilities	276,542	94,746
Long-term intercompany financing payable	125,349	23,000
Other long-term liabilities	2,665	400
Equity:
Total equity	1,883,053	1,167,577
Total liabilities and equity	2,287,609	1,285,723
Non-Guarantor Subsidiaries | Common Units
Equity:
Common units	1,883,053	1,167,577
Consolidating Adjustments
Current assets:
Receivables and other current assets		(5)
Intercompany receivables	(788,678)	(82,693)
Total current assets	(788,678)	(82,698)
Total property, plant and equipment, net	(119,046)	(17,788)
Other long-term assets:
Investment in consolidated affiliates	(5,108,060)	(4,168,474)
Intercompany notes receivable	(219,000)	(235,700)
Total assets	(6,234,784)	(4,504,660)
Current liabilities:
Intercompany payables	(788,678)	(82,693)
Other current liabilities		(5)
Total current liabilities	(788,678)	(82,698)
Long-term intercompany financing payable	(321,349)	(235,700)
Equity:
Non-controlling interest in consolidated subsidiaries	69,711	70,227
Total equity	(5,124,757)	(4,186,262)
Total liabilities and equity	(6,234,784)	(4,504,660)
Consolidating Adjustments | Common Units
Equity:
Common units	$ (5,194,468)	$ (4,256,489)

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Goodwill (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Changes in goodwill
Gross goodwill beginning of the period	$ 96,623
Acquisition	76,664
Gross goodwill end of the period	173,287
Cumulative impairment	(28,705)
Balance at the end of the period	144,582	67,918
Southwest Segment
Changes in goodwill
Gross goodwill beginning of the period		24,324
Gross goodwill end of the period	24,324	24,324
Cumulative impairment	(18,851)
Balance at the end of the period	5,473
Northeast Segment
Changes in goodwill
Gross goodwill beginning of the period		62,445
Gross goodwill end of the period	62,445	62,445
Balance at the end of the period	62,445
Liberty Segment
Changes in goodwill
Acquisition	76,664
Gross goodwill end of the period	76,664
Balance at the end of the period	76,664
Gulf Coast Segment
Changes in goodwill
Gross goodwill beginning of the period		9,854
Gross goodwill end of the period	9,854	9,854
Cumulative impairment	$ (9,854)

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Earnings (Loss) Per Common Unit (Tables)

6 Months Ended

Jun. 30, 2012

Earnings (Loss) Per Common Unit

Computation of basic and diluted net income (loss) per common unit

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Net income (loss) attributable to the Partnership	$	186,908	$	78,497	$	202,928	$	(5,532	)
Less: Income allocable to phantom units	1,209		719		1,391		847
Income (loss) available for common unitholders - basic	185,699		77,778		201,537		(6,379		)
Add: Income allocable to phantom units and DER expense	1,218		—		1,414		—
Income (loss) available for common unitholders - diluted	$	186,917	$	77,778	$	202,951	$	(6,379	)
Weighted average common units outstanding - basic	106,825		75,160		101,833		74,847
Potential common shares (Class B and phantom units)	20,643		106		20,698		—
Weighted average common units outstanding - diluted	127,468		75,266		122,531		74,847
Net income (loss) attributable to the Partnership’s common unitholders per common unit (1)
Basic	$	1.74	$	1.03	$	1.98	$	(0.09	)
Diluted	$	1.47	$	1.03	$	1.66	$	(0.09	)

(1)Earnings per Class B units equals zero as Class B unitholders are not entitled to receive distributions and therefore no income is allocable to Class B units under the two class method.

XML

Supplemental Condensed Consolidating Financial Information (Details 3) (USD $) In Thousands, unless otherwise specified	1 Months Ended			6 Months Ended
	May 31, 2012	Mar. 31, 2012	Jan. 31, 2012	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidating Statements of Cash Flows
Net cash (used in) provided by operating activities				$ 256,437	$ 206,364
Cash flows used in investing activities:
Restricted cash				1,003
Capital expenditures				(582,203)	(234,116)
Acquisition of business, net of cash acquired				(506,797)	(230,728)
Proceeds from disposal of property, plant and equipment				499	2,795
Net cash flows used in investing activities				(1,087,498)	(462,049)
Cash flows from financing activities:
Proceeds from public equity offerings, net	427,000	388,000	38,000	852,873	138,163
Proceeds from revolving credit facility				238,065	781,700
Payments of revolving credit facility				(86,200)	(535,200)
Payments for deferred financing costs				(2,315)	(6,747)
Contributions from non-controlling interest				1,940	24,400
Share-based payment activity				(5,841)	(5,173)
Payment of distributions				(158,010)	(134,589)
Payments of SMR liability				(1,005)	(916)
Net cash flows provided by financing activities				839,507	283,270
Proceeds from long-term debt					499,000
Payments of long-term debt					(437,848)
Payments of premiums on redemption of long-term debt					(39,520)
Net increase in cash and cash equivalents				8,446	27,585
Cash and cash equivalents at beginning of year			117,016	117,016	67,450
Cash and cash equivalents at end of period				125,462	95,035
Parent
Condensed Consolidating Statements of Cash Flows
Net cash (used in) provided by operating activities				(77,181)	(66,828)
Cash flows used in investing activities:
Capital expenditures				(114)	(610)
Equity investments				(26,640)	(21,556)
Distributions from consolidated affiliates				36,575	27,208
Collection of intercompany notes, net				16,700	(17,450)
Net cash flows used in investing activities				26,521	(12,408)
Cash flows from financing activities:
Proceeds from public equity offerings, net				852,873	138,163
Proceeds from revolving credit facility				238,065	781,700
Payments of revolving credit facility				(86,200)	(535,200)
Payments for deferred financing costs				(2,315)	(6,747)
Share-based payment activity				(8,048)	(6,269)
Payment of distributions				(155,073)	(100,058)
Intercompany advances, net				(788,664)	(213,982)
Net cash flows provided by financing activities				50,638	79,239
Proceeds from long-term debt					499,000
Payments of long-term debt					(437,848)
Payments of premiums on redemption of long-term debt					(39,520)
Net increase in cash and cash equivalents				(22)	3
Cash and cash equivalents at beginning of year			22	22
Cash and cash equivalents at end of period					3
Guarantor Subsidiaries
Condensed Consolidating Statements of Cash Flows
Net cash (used in) provided by operating activities				211,915	189,342
Cash flows used in investing activities:
Capital expenditures				(166,926)	(58,715)
Equity investments				(843,960)	(130,361)
Acquisition of business, net of cash acquired					(230,728)
Distributions from consolidated affiliates				53,355	35,147
Proceeds from disposal of property, plant and equipment				1,713	89
Net cash flows used in investing activities				(955,818)	(384,568)
Cash flows from financing activities:
Payments related to intercompany financing, net				(16,700)	(5,550)
Contributions from parent and affiliates				26,640	21,556
Share-based payment activity				2,207	1,096
Payment of distributions				(36,575)	(27,208)
Payments of SMR liability				(1,005)	(916)
Intercompany advances, net				788,664	213,982
Net cash flows provided by financing activities				763,231	202,960
Net increase in cash and cash equivalents				19,328	7,734
Cash and cash equivalents at beginning of year			99,580	99,580	63,850
Cash and cash equivalents at end of period				118,908	71,584
Non-Guarantor Subsidiaries
Condensed Consolidating Statements of Cash Flows
Net cash (used in) provided by operating activities				121,980	87,113
Cash flows used in investing activities:
Restricted cash				1,003
Capital expenditures				(416,377)	(179,302)
Acquisition of business, net of cash acquired				(506,797)
Proceeds from disposal of property, plant and equipment					3,954
Net cash flows used in investing activities				(922,171)	(175,348)
Cash flows from financing activities:
Payments related to intercompany financing, net				(277)	23,000
Contributions from parent and affiliates				843,960	130,361
Contributions from non-controlling interest				1,940	24,400
Payment of distributions				(56,292)	(69,678)
Net cash flows provided by financing activities				789,331	108,083
Net increase in cash and cash equivalents				(10,860)	19,848
Cash and cash equivalents at beginning of year			17,414	17,414	3,600
Cash and cash equivalents at end of period				6,554	23,448
Consolidating Adjustments
Condensed Consolidating Statements of Cash Flows
Net cash (used in) provided by operating activities				(277)	(3,263)
Cash flows used in investing activities:
Capital expenditures				1,214	4,511
Equity investments				870,600	151,917
Distributions from consolidated affiliates				(89,930)	(62,355)
Collection of intercompany notes, net				(16,700)	17,450
Proceeds from disposal of property, plant and equipment				(1,214)	(1,248)
Net cash flows used in investing activities				763,970	110,275
Cash flows from financing activities:
Payments related to intercompany financing, net				16,977	(17,450)
Contributions from parent and affiliates				(870,600)	(151,917)
Payment of distributions				89,930	62,355
Net cash flows provided by financing activities				$ (763,693)	$ (107,012)

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2012

Variable Interest Entities

Consolidated assets and liabilities attributable to VIEs reflected in the Partnership's Consolidated Balance Sheets

	As of June 30, 2012
	MarkWest Pioneer		MarkWest Utica EMG		Total
ASSETS
Cash and cash equivalents	$	3,089	$	79	$	3,168
Receivables, net	1,428		—		1,428
Other current assets	69		—		69
Property, plant and equipment, net of accumulated depreciation of $18,696 and $8, respectively	139,246		29,098		168,344
Other long-term assets	102		—		102
Total assets	$	143,934	$	29,177	$	173,111
LIABILITIES
Accounts payable	$	42	$	250	$	292
Accrued liabilities	1,171		13,135		14,306
Other long-term liabilities	76		—		76
Total liabilities	$	1,289	$	13,385	$	14,674

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Tax
Income (loss) before provision for income tax	$ 231,609	$ 103,913	$ 252,427	$ 15,112
Federal income tax at statutory rate			33,110	(889)
Permanent items			16	(5)
State income taxes net of federal benefit			5,024	35
Provision on income from Class A units			10,868	1,311
Other				126
Total provision for income tax	44,473	14,708	49,018	578
Corporation
Income Tax
Income (loss) before provision for income tax			94,600	(2,541)
Federal statutory income tax rate (as a percent)			35.00%	35.00%
Federal income tax at statutory rate			33,110	(889)
Permanent items			16	(5)
State income taxes net of federal benefit			4,259	(72)
Provision on income from Class A units			10,868	1,311
Other				126
Total provision for income tax			48,253	471
Partnership
Income Tax
Income (loss) before provision for income tax			155,621	20,951
State income taxes net of federal benefit			765	107
Total provision for income tax			765	107
Eliminations
Income Tax
Income (loss) before provision for income tax			$ 2,206	$ (3,298)

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Fair Value (Details 2) (Commodity contracts (net), Significant unobservable inputs (Level 3))	6 Months Ended
	Jun. 30, 2012
Assets | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Crude option volatilities (as a percent)	39.55%
Assets | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Crude option volatilities (as a percent)	18.41%
Assets | Propane prices | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	0.92
Assets | Propane prices | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	0.84
Assets | Isobutane prices | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	1.44
Assets | Isobutane prices | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	1.32
Assets | Normal butane prices | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	1.30
Assets | Normal butane prices | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	1.22
Assets | Natural gasoline prices | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	1.83
Assets | Natural gasoline prices | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	1.75
Liabilities | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Crude option volatilities (as a percent)	39.55%
Liabilities | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Crude option volatilities (as a percent)	18.41%
Liabilities | Propane prices | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	0.89
Liabilities | Propane prices | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets and Liabilities
Forward price (in dollars per unit)	0.87

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Subsequent Events (Tables)

6 Months Ended

Jun. 30, 2012

Subsequent Events

Schedule of increase in minimum future lease payments

The following table shows the increase in minimum future lease payments as of June 30, 2012 compared to the amount disclosed in Note 18 Commitments and Contingencies in the Form 10-K for the year ended December 31, 2011 (in thousands):

2012	$	569
2013	4,295
2014	3,995
2015	3,926
2016	4,747
2017 and thereafter	58,221
Total	$	75,753

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Segment information
Revenue	$ 309,986	$ 359,849	$ 709,167	$ 708,749
Purchased product costs	112,731	154,580	267,286	308,209
Facility expenses	48,538	40,698	97,378	80,122
Income from operations	258,902	133,214	310,341	117,920
Capital expenditures			582,203	234,116
Total reportable segments
Segment information
Revenue	311,687	362,271	713,136	719,114
Purchased product costs	112,731	154,580	267,286	308,209
Net operating margin	198,956	207,691	445,850	410,905
Facility expenses	51,220	43,365	102,475	84,604
Portion of operating income (loss) attributable to non-controlling interests	1,477	16,528	2,923	30,077
Income from operations	146,259	147,798	340,452	296,224
Capital expenditures			578,471	231,554
Southwest Segment
Segment information
Revenue	189,162	235,575	403,887	437,349
Purchased product costs	91,792	128,988	196,025	232,184
Net operating margin	97,370	106,587	207,862	205,165
Facility expenses	23,034	20,855	46,026	41,012
Portion of operating income (loss) attributable to non-controlling interests	1,590	1,346	3,036	2,518
Income from operations	72,746	84,386	158,800	161,635
Capital expenditures			95,657	51,312
Northeast Segment
Segment information
Revenue	42,051	53,676	128,969	145,767
Purchased product costs	12,921	15,702	38,608	56,580
Net operating margin	29,130	37,974	90,361	89,187
Facility expenses	4,932	6,929	11,310	12,523
Income from operations	24,198	31,045	79,051	76,664
Capital expenditures			43,475	3,370
Liberty Segment
Segment information
Revenue	59,477	48,337	135,054	89,556
Purchased product costs	8,018	9,890	32,653	19,445
Net operating margin	51,459	38,447	102,401	70,111
Facility expenses	13,647	7,269	25,894	13,767
Portion of operating income (loss) attributable to non-controlling interests	(113)	15,182	(113)	27,559
Income from operations	37,925	15,996	76,620	28,785
Capital expenditures			432,287	176,027
Gulf Coast Segment
Segment information
Revenue	20,997	24,683	45,226	46,442
Net operating margin	20,997	24,683	45,226	46,442
Facility expenses	9,607	8,312	19,245	17,302
Income from operations	11,390	16,371	25,981	29,140
Capital expenditures			7,052	845
Unallocated Segment
Segment information
Capital expenditures			$ 3,732	$ 2,562

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Long-Term Debt (Details) (USD $)	6 Months Ended			6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Revolving credit facility	Jun. 29, 2012 Revolving credit facility	Dec. 31, 2011 Revolving credit facility	Jun. 30, 2012 Senior Notes	Dec. 31, 2011 Senior Notes	Jun. 30, 2012 2018 Senior Notes, 8.75% interest, issued April and May 2008 and due April 2018	Dec. 31, 2011 2018 Senior Notes, 8.75% interest, issued April and May 2008 and due April 2018	Jun. 30, 2012 2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020	Dec. 31, 2011 2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020	Jun. 30, 2012 2021 Senior Notes, 6.5% interest, issued February and March 2011 and due August 2021	Dec. 31, 2011 2021 Senior Notes, 6.5% interest, issued February and March 2011 and due August 2021	Jun. 30, 2012 2022 Senior Notes, 6.25% interest, issued October 2011 and due June 2022	Dec. 31, 2011 2022 Senior Notes, 6.25% interest, issued October 2011 and due June 2022
Long-Term Debt
Long-term debt, net of discounts	$ 1,997,985,000		$ 1,846,062,000	$ 217,865,000		$ 66,000,000			$ 80,993,000	$ 80,983,000	$ 500,000,000	$ 500,000,000	$ 499,127,000	$ 499,079,000	$ 700,000,000	$ 700,000,000
Debt instrument, stated interest rate percentage				4.00%					8.75%		6.75%		6.50%		6.25%
Long-term debt, discounts	992,000		1,050,000						119,000	129,000			873,000	921,000
Estimate aggregate fair value of debt							1,853,300,000	1,880,700,000
Credit facility current lending capacity					1,200,000,000
Accordion option to increase borrowing capacity under the Credit Facility					250,000,000
Deferred financing costs associated with modifications of the Credit Facility	2,315,000	6,747,000		2,500,000
Extension of maturity date					1 year
Borrowings outstanding amount				217,900,000
Letters of credit outstanding amount				22,300,000
Credit facility remaining borrowing capacity				$ 959,800,000

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Business Combination

6 Months Ended

Jun. 30, 2012

Business Combination

Business Combination

3. Business Combination

Keystone Acquisition

On May 29, 2012, the Partnership acquired natural gas gathering and processing assets from Keystone Midstream Services, LLC (“Keystone”) for a cash purchase price of approximately $509.6 million, subject to finalization of working capital adjustments. Keystone’s existing assets are located in Butler County, Pennsylvania and include two cryogenic gas processing plants totaling 90 MMcf/d of processing capacity, a gas gathering system and associated field compression. The acquisition is referred to as the Keystone Acquisition.

As a result of the Keystone Acquisition, the Partnership became a party to a long-term fee-based agreement to gather and process certain natural gas owned or controlled by R.E. Gas Development, L.L.C. (“Rex”), a subsidiary of Rex Energy Corporation, and Summit Discovery Resources II, L.L.C. (“Summit”), a subsidiary of Sumitomo Corporation, at the acquired facilities and in 2013 to exchange the resulting NGLs for fractionated products at facilities already owned and operated by the Partnership. Rex and Summit have dedicated an area of approximately 900 square miles to the Partnership as part of this long-term gathering and processing agreement. As a result of the Keystone Acquisition, the Partnership has expanded its position in the liquids rich Marcellus Shale area into northwest Pennsylvania.

The Keystone Acquisition is accounted for as a business combination. The total purchase price is allocated to identifiable assets acquired and liabilities assumed based on the estimated fair values at the acquisition date. The remaining purchase price in excess of the fair value of the identifiable assets and liabilities is recorded as goodwill. The acquired assets and the related results of operations are included in the Partnership’s Liberty segment. The following table summarizes the preliminary purchase price allocation for the Keystone Acquisition (in thousands):

Assets:
Cash	$	2,837
Accounts receivable	1,756
Property, plant and equipment	136,593
Goodwill	76,664
Intangible asset	304,708
Liabilities:
Accounts payable	(12,117		)
Other short-term liabilities	(175		)
Other long-term liabilities	(632		)
Total	$	509,634

As of June 30, 2012, the purchase price for the Keystone Acquisition is $509.6 million subject to further working capital adjustments. Due to the potential changes in the purchase price and the Partnership’s continuing process to finalize the fair value estimates of the acquired assets and liabilities, the purchase price allocation is subject to further adjustment, which could impact depreciation and amortization expense.

The goodwill recognized from the Keystone Acquisition results primarily from synergies created from integrating the Keystone assets with the Partnership’s existing Marcellus Shale operations and the Partnership’s strengthened competitive position as it plans to expand its business in the newly developing liquids-rich areas of the Marcellus Shale. All of the goodwill is deductible for tax purposes.

The intangible asset consists of an identifiable contractual customer relationship with Rex and Summit. The acquired intangible asset will be amortized on a straight-line basis over the estimated customer contract useful life of approximately 19 years.

The results of operations of Keystone are included in the condensed consolidated financial statements from the acquisition date. Revenue and net income related to the Keystone are immaterial for the quarter ended June 30, 2012.

Pro forma financial results that give effect to the Keystone Acquisition are not presented as they are not material to the Partnership’s historical results.

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Fair Value (Details 3) (Embedded Derivatives in commodity contracts, Significant unobservable inputs (Level 3))	6 Months Ended
	Jun. 30, 2012 Y
Assets | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of Assets
Forward ERCOT Pricing (per MegaWatt Hour)	94.26
Assets | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of Assets
Forward ERCOT Pricing (per MegaWatt Hour)	25.38
Liabilities
Unobservable inputs used in the valuation of Level 3 instruments of assets
Probability of renewal (as a percent)	0.00%
Number of renewal periods	2
Term of counterparty option to renew gas purchase agreement (in years)	5
Propane prices | Liabilities | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	0.92
Propane prices | Liabilities | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	0.83
Isobutane prices | Liabilities | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	1.44
Isobutane prices | Liabilities | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	1.31
Normal butane prices | Liabilities | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	1.30
Normal butane prices | Liabilities | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	1.18
Natural gasoline prices | Liabilities | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	1.83
Natural gasoline prices | Liabilities | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	1.74
Natural gas prices | Liabilities | Maximum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	5.79
Natural gas prices | Liabilities | Minimum
Unobservable inputs used in the valuation of Level 3 instruments of assets
Forward price (in dollars per unit)	2.75

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill.

Schedule of changes in goodwill

	Southwest			Northeast		Liberty		Gulf Coast			Total
Gross goodwill as of December 31, 2011	$	24,324		$	62,445	$	—	$	9,854		$	96,623
Acquisition (1)	—			—		76,664		—			76,664
Gross goodwill as of June 30, 2012	24,324			62,445		76,664		9,854			173,287
Cumulative impairment (2)	(18,851		)	—		—		(9,854		)	(28,705		)
Balance as of June 30, 2012	$	5,473		$	62,445	$	76,664	$	—		$	144,582

(1)           Represents goodwill associated with the Keystone Acquisition (see Note 3).

(2)           All impairments recorded in the fourth quarter of 2008.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2012

Inventories

Components of inventory

	June 30, 2012		December 31, 2011
NGLs	$	12,470	$	32,352
Spare parts, materials and supplies	9,739		8,654
Total inventories	$	22,209	$	41,006

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Supplemental Condensed Consolidating Financial Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidating Statements of Operations
Total revenue	$ 446,053	$ 400,439	$ 796,519	$ 663,660
Operating expenses:
Purchased product costs	61,152	154,326	234,507	327,349
Facility expenses	47,392	43,625	94,486	80,038
Selling, general and administrative expenses	21,879	18,580	47,103	40,292
Depreciation and amortization	55,225	48,031	107,355	93,212
Other operating expenses	1,503	2,663	2,727	4,849
Total operating expenses	187,151	267,225	486,178	545,740
(Loss) income from operations	258,902	133,214	310,341	117,920
Loss on redemption of debt				(43,328)
Other expense, net	(27,293)	(29,301)	(57,914)	(59,480)
Income before provision for income tax	231,609	103,913	252,427	15,112
Provision for income tax expense	44,473	14,708	49,018	578
Net income	187,136	89,205	203,409	14,534
Net income attributable to non-controlling interest	(228)	(10,708)	(481)	(20,066)
Net income (loss) attributable to the Partnership	186,908	78,497	202,928	(5,532)
Parent
Operating expenses:
Selling, general and administrative expenses	12,539	11,224	26,956	24,078
Depreciation and amortization	148	181	312	356
Other operating expenses		374		673
Total operating expenses	12,687	11,779	27,268	25,107
(Loss) income from operations	(12,687)	(11,779)	(27,268)	(25,107)
Earnings from consolidated affiliates	217,483	114,152	273,914	112,919
Loss on redemption of debt				(43,328)
Other expense, net	(20,700)	(22,071)	(44,044)	(46,965)
Income before provision for income tax	184,096	80,302	202,602	(2,481)
Provision for income tax expense	699	449	765	107
Net income	183,397	79,853	201,837	(2,588)
Net income (loss) attributable to the Partnership	183,397	79,853	201,837	(2,588)
Guarantor Subsidiaries
Condensed Consolidating Statements of Operations
Total revenue	381,527	348,371	652,598	566,851
Operating expenses:
Purchased product costs	53,041	144,403	201,642	307,847
Facility expenses	33,111	35,419	67,047	64,350
Selling, general and administrative expenses	2,205	7,153	7,700	15,371
Depreciation and amortization	40,634	38,008	79,927	74,477
Other operating expenses	628	1,987	1,739	3,826
Total operating expenses	129,619	226,970	358,055	465,871
(Loss) income from operations	251,908	121,401	294,543	100,980
Earnings from consolidated affiliates	14,518	10,769	38,752	18,144
Other expense, net	(5,169)	(3,759)	(11,128)	(5,734)
Income before provision for income tax	261,257	128,411	322,167	113,390
Provision for income tax expense	43,774	14,259	48,253	471
Net income	217,483	114,152	273,914	112,919
Net income (loss) attributable to the Partnership	217,483	114,152	273,914	112,919
Non-Guarantor Subsidiaries
Condensed Consolidating Statements of Operations
Total revenue	67,001	52,068	146,396	96,809
Operating expenses:
Purchased product costs	8,111	9,923	32,865	19,502
Facility expenses	14,614	8,373	27,948	16,022
Selling, general and administrative expenses	11,378	1,932	14,509	3,969
Depreciation and amortization	15,572	10,011	28,483	18,696
Other operating expenses	875	302	988	350
Total operating expenses	50,550	30,541	104,793	58,539
(Loss) income from operations	16,451	21,527	41,603	38,270
Other expense, net	(1,705)	(50)	(2,370)	(60)
Income before provision for income tax	14,746	21,477	39,233	38,210
Net income	14,746	21,477	39,233	38,210
Net income (loss) attributable to the Partnership	14,746	21,477	39,233	38,210
Consolidating Adjustments
Condensed Consolidating Statements of Operations
Total revenue	(2,475)		(2,475)
Operating expenses:
Facility expenses	(333)	(167)	(509)	(334)
Selling, general and administrative expenses	(4,243)	(1,729)	(2,062)	(3,126)
Depreciation and amortization	(1,129)	(169)	(1,367)	(317)
Total operating expenses	(5,705)	(2,065)	(3,938)	(3,777)
(Loss) income from operations	3,230	2,065	1,463	3,777
Earnings from consolidated affiliates	(232,001)	(124,921)	(312,666)	(131,063)
Other expense, net	281	(3,421)	(372)	(6,721)
Income before provision for income tax	(228,490)	(126,277)	(311,575)	(134,007)
Net income	(228,490)	(126,277)	(311,575)	(134,007)
Net income attributable to non-controlling interest	(228)	(10,708)	(481)	(20,066)
Net income (loss) attributable to the Partnership	$ (228,718)	$ (136,985)	$ (312,056)	$ (154,073)

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Fair Value (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Commodity contracts (net)
Derivative assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy
Fair value at beginning of period	$ (17,450)	$ (35,906)	$ (2,965)	$ (14,357)
Total gain (loss) (realized and unrealized) included in earnings	46,290	10,456	34,214	(12,537)
Settlements	716	3,160	(1,693)	4,604
Fair value at end of period	29,556	(22,290)	29,556	(22,290)
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period	43,894	10,206	30,304	(10,578)
Embedded derivatives in commodity contracts (net)
Derivative assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy
Fair value at beginning of period	(60,804)	(50,607)	(53,904)	(34,936)
Total gain (loss) (realized and unrealized) included in earnings	48,109	(2,825)	37,671	(22,105)
Settlements	2,300	3,985	5,838	7,594
Fair value at end of period	(10,395)	(49,447)	(10,395)	(49,447)
The amount of total gains or (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period	$ 47,300	$ (2,429)	$ 36,698	$ (20,277)

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Long-Term Debt

Schedule of long-term debt

	June 30, 2012		December 31, 2011
Credit Facility
Revolving credit facility, 4% interest, due September 2017	$	217,865	$	66,000
Senior Notes (1)
2018 Senior Notes, 8.75% interest, net of discount of $119 and $129, respectively, issued April and May 2008 and due April 2018	80,993		80,983
2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020	500,000		500,000
2021 Senior Notes, 6.5% interest, net of discount of $873 and $921, respectively, issued February and March 2011 and due August 2021	499,127		499,079
2022 Senior Notes, 6.25% interest, issued October 2011 and due June 2022	700,000		700,000
Total long-term debt	$	1,997,985	$	1,846,062

(1)The estimated aggregate fair value of the senior notes (collectively, the “Senior Notes”) was approximately $1,853.3 million and $1,880.7 million as of June 30, 2012 and December 31, 2011, respectively, based on quoted prices in an inactive market. The fair value of the Partnership’s Senior Notes is considered a Level 3 measurement.

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Equity (Tables)

6 Months Ended

Jun. 30, 2012

Equity

Distributions of Available Cash

Quarter Ended	Distribution Per Common Unit		Declaration Date	Record Date	Payment Date
June 30, 2012	$	0.80	July 26, 2012	August 6, 2012	August 14, 2012
March 31, 2012	$	0.79	April 26, 2012	May 7, 2012	May 15, 2012
December 31, 2011	$	0.76	January 26, 2012	February 6, 2012	February 14, 2012

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Recent Accounting Pronouncements

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

In May 2011, the FASB amended the accounting guidance for fair value measurement and disclosure. The amendment primarily clarifies the application of the existing guidance and provides for increased disclosures, particularly related to Level 3 fair value measurements. The amended guidance is effective for the Partnership prospectively as of January 1, 2012. Except for the additional disclosures included in Note 6, the adoption of the amended guidance did not have a material effect on the Partnership’s condensed consolidated financial statements.

In December 2011, the FASB amended the accounting guidance for balance sheet offsetting for financial assets and financial liabilities. The amended guidance is intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting arrangements on a company’s financial position and provides for increased disclosures. The amended guidance is effective for the Partnership prospectively as of January 1, 2013. Except for additional disclosures related to our offsetting arrangements, the adoption of the amended guidance is not expected to have a material effect on the Partnership’s consolidated financial statements.

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2012

Income Taxes

Reconciliation of the provision for income tax to the amount computed by applying the federal statutory rate

	Six months ended June 30, 2012
	Corporation			Partnership			Eliminations			Consolidated
Income before provision for income tax	$	94,600		$	155,621		$	2,206		$	252,427
Federal statutory rate	35		%	0		%	0		%
Federal income tax at statutory rate	33,110			—			—			33,110
Permanent items	16			—			—			16
State income taxes, net of federal benefit	4,259			765			—			5,024
Provision on income from Class A units (1)	10,868			—			—			10,868
Provision for income tax	$	48,253		$	765		$	—		$	49,018

	Six months ended June 30, 2011
	Corporation			Partnership			Eliminations			Consolidated
(Loss) income before provision for income tax	$	(2,541	)	$	20,951		$	(3,298	)	$	15,112
Federal statutory rate	35		%	0		%	0		%
Federal income tax at statutory rate	(889		)	—			—			(889		)
Permanent items	(5		)	—			—			(5		)
State income taxes, net of federal benefit	(72		)	107			—			35
Provision on income from Class A units (1)	1,311			—			—			1,311
Other	126			—			—			126
Provision for income tax	$	471		$	107		$	—		$	578

(1)The Corporation and the General Partner of the Partnership own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in the income or loss of the Partnership, except for items attributable to the Partnership’s ownership of or sale of shares of the Corporation’s common stock. The provision on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity.

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Derivative Financial Instruments (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Derivative contracts not designated as hedging instruments
Fair value of derivative instruments - current assets	$ 28,556,000		$ 28,556,000		$ 8,698,000
Fair value of derivative instruments - long-term assets	35,237,000		35,237,000		16,092,000
Total derivative assets	63,793,000		63,793,000		24,790,000
Fair value of derivative instruments - current liabilities	(30,479,000)		(30,479,000)		(90,551,000)
Fair value of derivative liabilities - long-term liabilities	(18,951,000)		(18,951,000)		(65,403,000)
Total derivative liabilities	(49,430,000)		(49,430,000)		(155,954,000)
Financial Statement Impact of Derivative Contracts
Unrealized gain (loss)			145,527,000	(26,265,000)
Total revenue: derivative loss	136,067,000	40,590,000	87,352,000	(45,089,000)
Total derivative loss related to purchased product costs	51,579,000	254,000	32,779,000	(19,140,000)
Total gain (loss)	188,792,000	37,917,000	123,023,000	(64,145,000)
Gain (Loss) on Early Settlement of Commodity Contracts	8,800,000
Embedded derivative in natural gas processing and purchase contract
Derivative financial instruments
Notional amount for embedded derivative in commodity contract (in Dth per day)	9,000		9,000
Estimated fair value of embedded derivative contract liability including portion allocable to host processing agreement	74,311,000		74,311,000
Inception value for period from April 1, 2015 to December 31, 2022	(53,507,000)		(53,507,000)
Recorded value of embedded derivative contract liability	20,804,000		20,804,000
Embedded derivative in electricity purchase contract
Derivative financial instruments
Estimated fair value of embedded derivative contract asset	10,400,000		10,400,000
Derivative instruments not designated as hedging instruments
Derivative financial instruments
Notional quantity of crude oil contract (in bbl)	7,241,527		7,241,527
Notional quantity of natural gas contract (in MMBtu)	11,308,002		11,308,002
Natural Gas Liquids (gal)	40,771,965		40,771,965
Derivative contracts not designated as hedging instruments
Fair value of derivative instruments - current assets	28,556,000		28,556,000		8,698,000
Fair value of derivative instruments - long-term assets	35,237,000		35,237,000		16,092,000
Total derivative assets	63,793,000		63,793,000		24,790,000
Fair value of derivative instruments - current liabilities	(30,479,000)		(30,479,000)		(90,551,000)
Fair value of derivative liabilities - long-term liabilities	(18,951,000)		(18,951,000)		(65,403,000)
Total derivative liabilities	(49,430,000)		(49,430,000)		(155,954,000)
Derivative instruments not designated as hedging instruments | Derivative revenue
Financial Statement Impact of Derivative Contracts
Realized gain (loss)	2,841,000	(12,186,000)	(7,637,000)	(26,577,000)
Unrealized gain (loss)	133,226,000	52,776,000	94,989,000	(18,512,000)
Total revenue: derivative loss	136,067,000	40,590,000	87,352,000	(45,089,000)
Amortization of premium payments		1,100,000		2,100,000
Derivative instruments not designated as hedging instruments | Derivative related to purchased product costs
Financial Statement Impact of Derivative Contracts
Realized gain (loss)	(7,793,000)	(5,560,000)	(14,867,000)	(13,447,000)
Unrealized gain (loss)	59,372,000	5,814,000	47,646,000	(5,693,000)
Total derivative loss related to purchased product costs	51,579,000	254,000	32,779,000	(19,140,000)
Derivative instruments not designated as hedging instruments | Derivative related to facility expenses
Financial Statement Impact of Derivative Contracts
Unrealized gain (loss)	$ 1,146,000	$ (2,927,000)	$ 2,892,000	$ 84,000

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Segment Information (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Segment information
Revenue	$ 309,986	$ 359,849	$ 709,167	$ 708,749
Derivative gain (loss) not allocated to segments	136,067	40,590	87,352	(45,089)
Revenue deferral adjustment	(1,701)	(2,422)	(3,969)	(10,365)
Total revenue	446,053	400,439	796,519	663,660
Selling, general and administrative expenses	(21,879)	(18,580)	(47,103)	(40,292)
Depreciation	(42,918)	(37,201)	(84,063)	(71,565)
Amortization of intangible assets	(12,307)	(10,830)	(23,292)	(21,647)
Loss on disposal of property, plant and equipment	(1,342)	(2,373)	(2,328)	(4,472)
Accretion of asset retirement obligations	(161)	(290)	(399)	(377)
Income from operations	258,902	133,214	310,341	117,920
Earnings (loss) from unconsolidated affiliate	551	(216)	542	(755)
Interest income	159	63	231	152
Interest expense	(26,762)	(27,874)	(56,234)	(56,137)
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245)	(1,443)	(2,515)	(2,871)
Loss on redemption of debt				(43,328)
Miscellaneous income, net	4	169	62	131
Income before provision for income tax	231,609	103,913	252,427	15,112
Total reportable segments
Segment information
Revenue	311,687	362,271	713,136	719,114
Portion of operating income (loss) attributable to non-controlling interests	1,477	16,528	2,923	30,077
Income from operations	146,259	147,798	340,452	296,224
Southwest Segment
Segment information
Revenue	189,162	235,575	403,887	437,349
Revenue deferral adjustment	200	200	400	6,700
Portion of operating income (loss) attributable to non-controlling interests	1,590	1,346	3,036	2,518
Income from operations	72,746	84,386	158,800	161,635
Northeast Segment
Segment information
Revenue	42,051	53,676	128,969	145,767
Revenue deferral adjustment	1,500	2,200	3,600	3,600
Income from operations	24,198	31,045	79,051	76,664
Unallocated Segment
Segment information
Derivative gain (loss) not allocated to segments	188,792	37,917	123,023	(64,145)
Revenue deferral adjustment	(1,701)	(2,422)	(3,969)	(10,365)
Compensation expense included in facility expenses not allocated to segments	(184)	(188)	(633)	(1,228)
Facility expenses adjustments	$ 2,866	$ 2,855	$ 5,730	$ 5,710

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents ($3,168 and $2,684, respectively)	$ 125,462	$ 117,016
Restricted cash	25,285	26,193
Receivables, net ($1,428 and $1,569, respectively)	138,371	226,561
Inventories	22,209	41,006
Fair value of derivative instruments	28,556	8,698
Deferred income taxes	6,544	14,885
Other current assets ($69 and $169, respectively)	8,915	11,748
Total current assets	355,342	446,107
Property, plant and equipment ($187,048 and $156,808, respectively)	4,164,402	3,302,369
Less: accumulated depreciation ($18,704 and $15,551, respectively)	(520,766)	(438,062)
Total property, plant and equipment, net	3,643,636	2,864,307
Other long-term assets:
Investment in unconsolidated affiliate	26,695	27,853
Intangibles, net of accumulated amortization of $191,388 and $168,168, respectively	885,183	603,767
Goodwill	144,582	67,918
Deferred financing costs, net of accumulated amortization of $15,726 and $13,194, respectively	41,581	41,798
Deferred contract cost, net of accumulated amortization of $2,418 and $2,262, respectively	832	988
Fair value of derivative instruments	35,237	16,092
Other long-term assets ($102 and $102, respectively)	1,510	1,595
Total assets	5,134,598	4,070,425
Current liabilities:
Accounts payable ($292 and $96, respectively)	208,019	179,871
Accrued liabilities ($14,306 and $1,144, respectively)	231,719	171,451
Fair value of derivative instruments	30,479	90,551
Total current liabilities	470,217	441,873
Deferred income taxes	156,783	93,664
Fair value of derivative instruments	18,951	65,403
Long-term debt, net of discounts of $992 and $1,050, respectively	1,997,985	1,846,062
Other long-term liabilities ($76 and $73, respectively)	128,231	121,356
Commitments and contingencies (Note 11)
Equity:
Non-controlling interest in consolidated subsidiaries	69,711	70,227
Total equity	2,362,431	1,502,067
Total liabilities and equity	5,134,598	4,070,425
Common Units
Equity:
Common units	1,540,189	679,309
Total equity	1,540,189	679,309
Class B Units
Equity:
Common units	752,531	752,531
Total equity	$ 752,531	$ 752,531

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Inventories
NGLs	$ 12,470	$ 32,352
Spare parts, materials and supplies	9,739	8,654
Total inventories	$ 22,209	$ 41,006

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 203,409	$ 14,534
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	84,063	71,565
Amortization of intangible assets	23,292	21,647
Loss on redemption of debt		43,328
Amortization of deferred financing costs and discount	2,515	2,871
Accretion of asset retirement obligations	399	377
Amortization of deferred contract cost	156	156
Phantom unit compensation expense	8,585	8,093
Equity in (earnings) loss of unconsolidated affiliate	(542)	755
Distributions from unconsolidated affiliate	1,700	300
Unrealized (gain) loss on derivative instruments	(145,527)	26,265
Loss on disposal of property, plant and equipment	2,328	4,472
Deferred income taxes	28,868	(3,567)
Changes in operating assets and liabilities, net of working capital acquired:
Receivables	90,664	(9,215)
Inventories	18,895	(6,326)
Other current assets	2,738	526
Accounts payable and accrued liabilities	(71,784)	20,473
Other long-term assets	85	(384)
Other long-term liabilities	6,593	10,494
Net cash provided by operating activities	256,437	206,364
Cash flows used in investing activities:
Restricted cash	1,003
Capital expenditures	(582,203)	(234,116)
Acquisition of business, net of cash acquired	(506,797)	(230,728)
Proceeds from disposal of property, plant and equipment	499	2,795
Net cash flows used in investing activities	(1,087,498)	(462,049)
Cash flows from financing activities:
Proceeds from public equity offerings, net	852,873	138,163
Proceeds from revolving credit facility	238,065	781,700
Payments of revolving credit facility	(86,200)	(535,200)
Proceeds from long-term debt		499,000
Payments of long-term debt		(437,848)
Payments of premiums on redemption of long-term debt		(39,520)
Payments for debt issuance costs, deferred financing costs and registration costs	(2,315)	(6,747)
Contributions from non-controlling interest	1,940	24,400
Payments of SMR liability	(1,005)	(916)
Cash paid for taxes related to net settlement of share-based payment awards	(8,048)	(6,269)
Excess tax benefits related to share-based compensation	2,207	1,096
Payment of distributions to common unitholders	(155,073)	(100,058)
Payment of distributions to non-controlling interest	(2,937)	(34,531)
Net cash flows provided by financing activities	839,507	283,270
Net increase in cash and cash equivalents	8,446	27,585
Cash and cash equivalents at beginning of year	117,016	67,450
Cash and cash equivalents at end of period	$ 125,462	$ 95,035

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Subsequent Events (Details) (Lease amendment, USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Lease amendment
Subsequent events
2012	$ 569
2013	4,295
2014	3,995
2015	3,926
2016	4,747
2017 and thereafter	58,221
Total	$ 75,753

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Supplemental Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2012

Supplemental Condensed Consolidating Financial Information

Condensed Consolidating Balance Sheets

Condensed Consolidating Balance Sheets

	As of June 30, 2012
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	118,908	$	6,554	$	—		$	125,462
Restricted cash	—		—		25,285		—			25,285
Receivables and other current assets	5,824		137,690		32,525		—			176,039
Intercompany receivables	772,994		7,818		7,866		(788,678		)	—
Fair value of derivative instruments	—		26,883		1,673		—			28,556
Total current assets	778,818		291,299		73,903		(788,678		)	355,342
Total property, plant and equipment, net	3,811		1,926,844		1,832,027		(119,046		)	3,643,636
Other long-term assets:
Investment in unconsolidated affiliate	—		26,695		—		—			26,695
Investment in consolidated affiliates	3,294,718		1,813,342		—		(5,108,060		)	—
Intangibles, net of accumulated amortization	—		581,273		303,910		—			885,183
Fair value of derivative instruments	—		34,472		765		—			35,237
Intercompany notes receivable	219,000		—		—		(219,000		)	—
Other long-term assets	41,289		70,212		77,004		—			188,505
Total assets	$	4,337,636	$	4,744,137	$	2,287,609	$	(6,234,784	)	$	5,134,598
LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	268	$	774,338	$	14,072	$	(788,678	)	$	—
Fair value of derivative instruments	—		30,398		81		—			30,479
Other current liabilities	25,851		151,498		262,389		—			439,738
Total current liabilities	26,119		956,234		276,542		(788,678		)	470,217
Deferred income taxes	1,059		155,724		—		—			156,783
Long-term intercompany financing payable	—		196,000		125,349		(321,349		)	—
Fair value of derivative instruments	—		18,951		—		—			18,951
Long-term debt, net of discounts	1,997,985		—		—		—			1,997,985
Other long-term liabilities	3,056		122,510		2,665		—			128,231
Equity:
Common units	1,556,886		3,294,718		1,883,053		(5,194,468		)	1,540,189
Class B units	752,531		—		—		—			752,531
Non-controlling interest in consolidated subsidiaries	—		—		—		69,711			69,711
Total equity	2,309,417		3,294,718		1,883,053		(5,124,757		)	2,362,431
Total liabilities and equity	$	4,337,636	$	4,744,137	$	2,287,609	$	(6,234,784	)	$	5,134,598

	As of December 31, 2011
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	22	$	99,580	$	17,414	$	—		$	117,016
Restricted cash	—		—		26,193		—			26,193
Receivables and other current assets	7,097		232,010		55,098		(5		)	294,200
Intercompany receivables	19,981		40,519		22,193		(82,693		)	—
Fair value of derivative instruments	—		8,015		683		—			8,698
Total current assets	27,100		380,124		121,581		(82,698		)	446,107
Total property, plant and equipment, net	4,012		1,714,857		1,163,226		(17,788		)	2,864,307
Other long-term assets:
Investment in unconsolidated affiliate	—		27,853		—		—			27,853
Investment in consolidated affiliates	3,071,124		1,097,350		—		(4,168,474		)	—
Intangibles, net of accumulated amortization	—		603,224		543		—			603,767
Fair value of derivative instruments	—		16,092		—		—			16,092
Intercompany notes receivable	235,700		—		—		(235,700		)	—
Other long-term assets	41,492		70,434		373		—			112,299
Total assets	$	3,379,428	$	3,909,934	$	1,285,723	$	(4,504,660	)	$	4,070,425
LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	40,503	$	40,374	$	1,816	$	(82,693	)	$	—
Fair value of derivative instruments	—		90,551		—		—			90,551
Other current liabilities	38,775		219,622		92,930		(5		)	351,322
Total current liabilities	79,278		350,547		94,746		(82,698		)	441,873
Deferred income taxes	1,228		92,436		—		—			93,664
Long-term intercompany financing payable	—		212,700		23,000		(235,700		)	—
Fair value of derivative instruments	—		65,403		—		—			65,403
Long-term debt, net of discounts	1,846,062		—		—		—			1,846,062
Other long-term liabilities	3,232		117,724		400		—			121,356
Equity:
Common Units	697,097		3,071,124		1,167,577		(4,256,489		)	679,309
Class B Units	752,531		—		—		—			752,531
Non-controlling interest in consolidated subsidiaries	—		—		—		70,227			70,227
Total equity	1,449,628		3,071,124		1,167,577		(4,186,262		)	1,502,067
Total liabilities and equity	$	3,379,428	$	3,909,934	$	1,285,723	$	(4,504,660	)	$	4,070,425

Condensed Consolidating Statements of Operations

Condensed Consolidating Statements of Operations

	Three Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	381,527		$	67,001		$	(2,475	)	$	446,053
Operating expenses:	—			—			—			—
Purchased product costs	—			53,041			8,111			—			61,152
Facility expenses	—			33,111			14,614			(333		)	47,392
Selling, general and administrative expenses	12,539			2,205			11,378			(4,243		)	21,879
Depreciation and amortization	148			40,634			15,572			(1,129		)	55,225
Other operating expenses	—			628			875			—			1,503
Total operating expenses	12,687			129,619			50,550			(5,705		)	187,151
(Loss) income from operations	(12,687		)	251,908			16,451			3,230			258,902
Earnings from consolidated affiliates	217,483			14,518			—			(232,001		)	—
Other expense, net	(20,700		)	(5,169		)	(1,705		)	281			(27,293		)
Income before provision for income tax	184,096			261,257			14,746			(228,490		)	231,609
Provision for income tax expense	699			43,774			—			—			44,473
Net income	183,397			217,483			14,746			(228,490		)	187,136
Net income attributable to non-controlling interest	—			—			—			(228		)	(228		)
Net income attributable to the Partnership	$	183,397		$	217,483		$	14,746		$	(228,718	)	$	186,908

	Three Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	348,371		$	52,068		$	—		$	400,439
Operating expenses:
Purchased product costs	—			144,403			9,923			—			154,326
Facility expenses	—			35,419			8,373			(167		)	43,625
Selling, general and administrative expenses	11,224			7,153			1,932			(1,729		)	18,580
Depreciation and amortization	181			38,008			10,011			(169		)	48,031
Other operating expenses	374			1,987			302			—			2,663
Total operating expenses	11,779			226,970			30,541			(2,065		)	267,225
(Loss) income from operations	(11,779		)	121,401			21,527			2,065			133,214
Earnings from consolidated affiliates	114,152			10,769			—			(124,921		)	—
Other expense, net	(22,071		)	(3,759		)	(50		)	(3,421		)	(29,301		)
Income before provision for income tax	80,302			128,411			21,477			(126,277		)	103,913
Provision for income tax expense	449			14,259			—			—			14,708
Net income	79,853			114,152			21,477			(126,277		)	89,205
Net income attributable to non-controlling interest	—			—			—			(10,708		)	(10,708		)
Net income attributable to the Partnership	$	79,853		$	114,152		$	21,477		$	(136,985	)	$	78,497

	Six Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	652,598		$	146,396		$	(2,475	)	$	796,519
Operating expenses:
Purchased product costs	—			201,642			32,865			—			234,507
Facility expenses	—			67,047			27,948			(509		)	94,486
Selling, general and administrative expenses	26,956			7,700			14,509			(2,062		)	47,103
Depreciation and amortization	312			79,927			28,483			(1,367		)	107,355
Other operating expenses	—			1,739			988			—			2,727
Total operating expenses	27,268			358,055			104,793			(3,938		)	486,178
(Loss) income from operations	(27,268		)	294,543			41,603			1,463			310,341
Earnings from consolidated affiliates	273,914			38,752			—			(312,666		)	—
Other expense, net	(44,044		)	(11,128		)	(2,370		)	(372		)	(57,914		)
Income before provision for income tax	202,602			322,167			39,233			(311,575		)	252,427
Provision for income tax expense	765			48,253			—			—			49,018
Net income	201,837			273,914			39,233			(311,575		)	203,409
Net income attributable to non-controlling interest	—			—			—			(481		)	(481		)
Net income attributable to the Partnership	$	201,837		$	273,914		$	39,233		$	(312,056	)	$	202,928

	Six Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	566,851		$	96,809		$	—		$	663,660
Operating expenses:
Purchased product costs	—			307,847			19,502			—			327,349
Facility expenses	—			64,350			16,022			(334		)	80,038
Selling, general and administrative expenses	24,078			15,371			3,969			(3,126		)	40,292
Depreciation and amortization	356			74,477			18,696			(317		)	93,212
Other operating expenses	673			3,826			350			—			4,849
Total operating expenses	25,107			465,871			58,539			(3,777		)	545,740
(Loss) income from operations	(25,107		)	100,980			38,270			3,777			117,920
Earnings from consolidated affiliates	112,919			18,144			—			(131,063		)	—
Loss on redemption of debt	(43,328		)	—			—			—			(43,328		)
Other expense, net	(46,965		)	(5,734		)	(60		)	(6,721		)	(59,480		)
(Loss) income before provision for income tax	(2,481		)	113,390			38,210			(134,007		)	15,112
Provision for income tax expense	107			471			—			—			578
Net (loss) income	(2,588		)	112,919			38,210			(134,007		)	14,534
Net income attributable to non-controlling interest	—			—			—			(20,066		)	(20,066		)
Net (loss) income attributable to the Partnership	$	(2,588	)	$	112,919		$	38,210		$	(154,073	)	$	(5,532	)

Condensed Consolidating Statements of Cash Flows

Condensed Consolidating Statements of Cash Flows

	Six Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(77,181	)	$	211,915		$	121,980		$	(277	)	$	256,437
Cash flows from investing activities:
Restricted cash	—			—			1,003			—			1,003
Capital expenditures	(114		)	(166,926		)	(416,377		)	1,214			(582,203		)
Equity investments	(26,640		)	(843,960		)	—			870,600			—
Acquisition of business, net of cash acquired	—			—			(506,797		)	—			(506,797		)
Distributions from consolidated affiliates	36,575			53,355			—			(89,930		)	—
Collection of intercompany notes, net	16,700			—			—			(16,700		)	—
Proceeds from disposal of property, plant and equipment	—			1,713			—			(1,214		)	499
Net cash flows provided by (used in) investing activities	26,521			(955,818		)	(922,171		)	763,970			(1,087,498		)
Cash flows from financing activities:
Proceeds from public equity offerings, net	852,873			—			—			—			852,873
Proceeds from revolving credit facility	238,065			—			—			—			238,065
Payments of revolving credit facility	(86,200		)	—			—			—			(86,200		)
Payments related to intercompany financing, net	—			(16,700		)	(277		)	16,977			—
Payments for deferred financing costs	(2,315		)	—			—			—			(2,315		)
Contributions from parent and affiliates	—			26,640			843,960			(870,600		)	—
Contribution from non-controlling interest	—			—			1,940			—			1,940
Share-based payment activity	(8,048		)	2,207			—			—			(5,841		)
Payment of distributions	(155,073		)	(36,575		)	(56,292		)	89,930			(158,010		)
Payments of SMR liability	—			(1,005		)	—			—			(1,005		)
Intercompany advances, net	(788,664		)	788,664			—			—			—
Net cash flows provided by financing activities	50,638			763,231			789,331			(763,693		)	839,507
Net increase (decrease) in cash	(22		)	19,328			(10,860		)	—			8,446
Cash and cash equivalents at beginning of year	22			99,580			17,414			—			117,016
Cash and cash equivalents at end of period	$	—		$	118,908		$	6,554		$	—		$	125,462

	Six Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(66,828	)	$	189,342		$	87,113		$	(3,263	)	$	206,364
Cash flows from investing activities:
Capital expenditures	(610		)	(58,715		)	(179,302		)	4,511			(234,116		)
Acquisitions	—			(230,728		)	—			—			(230,728		)
Equity investments	(21,556		)	(130,361		)	—			151,917			—
Distributions from consolidated affiliates	27,208			35,147			—			(62,355		)	—
Investment in intercompany notes, net	(17,450		)	—			—			17,450			—
Proceeds from disposal of property, plant and equipment	—			89			3,954			(1,248		)	2,795
Net cash flows used in investing activities	(12,408		)	(384,568		)	(175,348		)	110,275			(462,049		)
Cash flows from financing activities:
Proceeds from revolving credit facility	781,700			—			—			—			781,700
Payments of revolving credit facility	(535,200		)	—			—			—			(535,200		)
Proceeds from long-term debt	499,000			—			—			—			499,000
Payments of long-term debt	(437,848		)	—			—			—			(437,848		)
Payments of premiums on redemption of long-term debt	(39,520		)	—			—			—			(39,520		)
(Payments of) proceeds from intercompany notes, net	—			(5,550		)	23,000			(17,450		)	—
Payments for debt issuance costs, deferred financing costs and registration costs	(6,747		)	—			—			—			(6,747		)
Contributions from parent and affiliates	—			21,556			130,361			(151,917		)	—
Contributions from non-controlling interest	—			—			24,400			—			24,400
Payments of SMR liability	—			(916		)	—			—			(916		)
Proceeds from public equity offering, net	138,163			—			—			—			138,163
Share-based payment activity	(6,269		)	1,096			—			—			(5,173		)
Payment of distributions	(100,058		)	(27,208		)	(69,678		)	62,355			(134,589		)
Intercompany advances, net	(213,982		)	213,982			—			—			—
Net cash flows provided by financing activities	79,239			202,960			108,083			(107,012		)	283,270
Net increase in cash	3			7,734			19,848			—			27,585
Cash and cash equivalents at beginning of year	—			63,850			3,600			—			67,450
Cash and cash equivalents at end of period	$	3		$	71,584		$	23,448		$	—		$	95,035

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Information

Supplemental Cash Flow Information

16. Supplemental Cash Flow Information

The following table provides information regarding supplemental cash flow information (in thousands):

	Six months ended June 30,
	2012		2011
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized	$	61,543	$	57,820
Cash paid for income taxes, net	18,425		514
Supplemental schedule of non-cash investing and financing activities:
Accrued property, plant and equipment	$	236,495	$	58,429
Interest capitalized on construction in progress	8,048		199
Issuance of common units for vesting of share-based payment awards	2,501		5,282

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Information

Information regarding supplemental cash flow information

	Six months ended June 30,
	2012		2011
Supplemental disclosures of cash flow information:
Cash paid for interest, net of amounts capitalized	$	61,543	$	57,820
Cash paid for income taxes, net	18,425		514
Supplemental schedule of non-cash investing and financing activities:
Accrued property, plant and equipment	$	236,495	$	58,429
Interest capitalized on construction in progress	8,048		199
Issuance of common units for vesting of share-based payment awards	2,501		5,282

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Business Combination (Tables)

6 Months Ended

Jun. 30, 2012

Business Combination

Schedule of purchase price allocation

Assets:
Cash	$	2,837
Accounts receivable	1,756
Property, plant and equipment	136,593
Goodwill	76,664
Intangible asset	304,708
Liabilities:
Accounts payable	(12,117		)
Other short-term liabilities	(175		)
Other long-term liabilities	(632		)
Total	$	509,634

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Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2012

Organization and Basis of Presentation

Organization and Basis of Presentation

1. Organization and Basis of Presentation

MarkWest Energy Partners, L.P. was formed in 2002 as a Delaware limited partnership. The Partnership is engaged in the gathering, transportation and processing of natural gas; the transportation, fractionation, marketing and storage of NGLs; and the gathering and transportation of crude oil. The Partnership has extensive natural gas gathering, processing and transmission operations in the southwest, Gulf Coast, and northeast regions of the United States, including the Marcellus Shale, and is the largest natural gas processor and fractionator in the Appalachian region.

These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC for interim financial reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the Partnership’s consolidated financial statements included in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011. In management’s opinion, the Partnership has made all adjustments necessary for a fair presentation of its results of operations, financial position and cash flows for the periods shown. These adjustments are of a normal recurring nature. Finally, results for the three and six months ended June 30, 2012 are not necessarily indicative of results for the full year 2012 or any other future period.

The Partnership’s unaudited condensed consolidated financial statements include all majority-owned or majority-controlled subsidiaries. In addition, MarkWest Utica EMG, L.L.C. and its subsidiaries (“MarkWest Utica EMG”), and MarkWest Pioneer, L.L.C. (“MarkWest Pioneer”), VIEs for which the Partnership has been determined to be the primary beneficiary, are included in the condensed consolidated financial statements (see Note 4). All intercompany investments, accounts and transactions have been eliminated. The Partnership’s investment in Centrahoma Processing, LLC (“Centrahoma”), in which the Partnership exercises significant influence but does not control and is not the primary beneficiary, is accounted for using the equity method.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Cash and cash equivalents	$ 125,462	$ 117,016
Receivables, net	138,371	226,561
Other current assets	8,915	11,748
Property, plant and equipment	4,164,402	3,302,369
Accumulated depreciation	520,766	438,062
Accumulated amortization, intangibles	191,388	168,168
Accumulated amortization, deferred financing costs	15,726	13,194
Accumulated amortization, deferred contract cost	2,418	2,262
Other long-term assets	1,510	1,595
Accounts payable	208,019	179,871
Accrued liabilities	231,719	171,451
Long-term debt, discounts	992	1,050
Other long-term liabilities	128,231	121,356
Common Units
Common units issued (in units)	110,694	94,940
Common units outstanding (in units)	110,694	94,940
Class B Units
Common units issued (in units)	19,954	19,954
Common units outstanding (in units)	19,954	19,954
Total Variable Interest Entities
Cash and cash equivalents	3,168	2,684
Receivables, net	1,428	1,569
Other current assets	69	169
Property, plant and equipment	187,048	156,808
Accumulated depreciation	18,704	15,551
Other long-term assets	102	102
Accounts payable	292	96
Accrued liabilities	14,306	1,144
Other long-term liabilities	$ 76	$ 73

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Legal

The Partnership is subject to a variety of risks and disputes, and is a party to various legal proceedings in the normal course of its business. The Partnership maintains insurance policies in amounts and with coverage and deductibles as it believes reasonable and prudent. However, the Partnership cannot assure that the insurance companies will promptly honor their policy obligations or that the coverage or levels of insurance will be adequate to protect the Partnership from all material expenses related to future claims for property loss or business interruption to the Partnership, or for third-party claims of personal and property damage, or that the coverages or levels of insurance it currently has will be available in the future at economical prices. While it is not possible to predict the outcome of the legal actions with certainty, management is of the opinion that appropriate provisions and accruals for potential losses associated with all legal actions have been made in the consolidated financial statements.

In the ordinary course of business, the Partnership is a party to various legal and regulatory actions. In the opinion of management, none of these actions, either individually or in the aggregate, will have a material adverse effect on the Partnership’s financial condition, liquidity or results of operations.

Contract Contingencies

Certain natural gas processing arrangements in the Partnership’s Liberty and Northeast segments require the Partnership to construct new natural gas processing plants and NGL pipelines. Some contracts contain certain fees and charges if specified construction milestones are not achieved for reasons other than force majeure. The Partnership has experienced delays in the construction of a processing facility in the Partnership’s Liberty Segment due to events that management considers force majeure including inabilities or delays in obtaining requisite permits, as well as due to extreme weather events. The requisite permits were subsequently issued several months later than expected and construction has re-commenced however those delays exacerbated construction conditions. In addition, the Partnership continued to experience extraordinary weather events in the first quarter of 2012 which have resulted in additional delays. Delay charges for delays other than due to force majeure events are $1.0 million for each month (pro-rated for partial months) that the Partnership does not achieve certain intermediate and final completion construction milestones. In addition, if delays (other than due to force majeure events) are six months or longer, the producer has the option to purchase the processing facilities and terminate the processing agreement with a substantial termination fee. The Partnership has made a force majeure claim as the delays were a direct result of permit delays and weather which are force majeure events under the applicable contract. The customer has reserved its rights to dispute the Partnership’s force majeure claim, but has not requested the payment of any delay charges. The Partnership’s management believes it has a convincing legal position and believes that its force majeure claim would be recognized as valid if contested. The Partnership has completed construction of interim compression and transportation facilities and is providing alternative processing services to mitigate the impact of these delays.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 30, 2012 Common Units	Jul. 30, 2012 Class B Units
Entity Registrant Name	MARKWEST ENERGY PARTNERS L P
Entity Central Index Key	0001166036
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		110,693,615	19,954,389
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes

Income Taxes

12. Income Taxes

A reconciliation of the provision for income tax and the amount computed by applying the federal statutory rate to income (loss) before provision for income tax for the six months ended June 30, 2012 and 2011 is as follows (in thousands):

	Six months ended June 30, 2012
	Corporation			Partnership			Eliminations			Consolidated
Income before provision for income tax	$	94,600		$	155,621		$	2,206		$	252,427
Federal statutory rate	35		%	0		%	0		%
Federal income tax at statutory rate	33,110			—			—			33,110
Permanent items	16			—			—			16
State income taxes, net of federal benefit	4,259			765			—			5,024
Provision on income from Class A units (1)	10,868			—			—			10,868
Provision for income tax	$	48,253		$	765		$	—		$	49,018

	Six months ended June 30, 2011
	Corporation			Partnership			Eliminations			Consolidated
(Loss) income before provision for income tax	$	(2,541	)	$	20,951		$	(3,298	)	$	15,112
Federal statutory rate	35		%	0		%	0		%
Federal income tax at statutory rate	(889		)	—			—			(889		)
Permanent items	(5		)	—			—			(5		)
State income taxes, net of federal benefit	(72		)	107			—			35
Provision on income from Class A units (1)	1,311			—			—			1,311
Other	126			—			—			126
Provision for income tax	$	471		$	107		$	—		$	578

(1)The Corporation and the General Partner of the Partnership own Class A units of the Partnership that were received in the merger of the Corporation and the Partnership completed in February 2008. The Class A units share, on a pro-rata basis, in the income or loss of the Partnership, except for items attributable to the Partnership’s ownership of or sale of shares of the Corporation’s common stock. The provision on income from Class A units includes intra period allocations to continued operations and excludes allocations to equity.

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Condensed Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue:
Revenue	$ 309,986	$ 359,849	$ 709,167	$ 708,749
Derivative gain (loss)	136,067	40,590	87,352	(45,089)
Total revenue	446,053	400,439	796,519	663,660
Operating expenses:
Purchased product costs	112,731	154,580	267,286	308,209
Derivative (gain) loss related to purchased product costs	(51,579)	(254)	(32,779)	19,140
Facility expenses	48,538	40,698	97,378	80,122
Derivative (gain) loss related to facility expenses	(1,146)	2,927	(2,892)	(84)
Selling, general and administrative expenses	21,879	18,580	47,103	40,292
Depreciation	42,918	37,201	84,063	71,565
Amortization of intangible assets	12,307	10,830	23,292	21,647
Loss on disposal of property, plant and equipment	1,342	2,373	2,328	4,472
Accretion of asset retirement obligations	161	290	399	377
Total operating expenses	187,151	267,225	486,178	545,740
Income from operations	258,902	133,214	310,341	117,920
Other income (expense):
Earnings (loss) from unconsolidated affiliate	551	(216)	542	(755)
Interest income	159	63	231	152
Interest expense	(26,762)	(27,874)	(56,234)	(56,137)
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245)	(1,443)	(2,515)	(2,871)
Loss on redemption of debt				(43,328)
Miscellaneous income, net	4	169	62	131
Income before provision for income tax	231,609	103,913	252,427	15,112
Provision for income tax expense (benefit):
Current	4,809	4,089	20,150	4,145
Deferred	39,664	10,619	28,868	(3,567)
Total provision for income tax	44,473	14,708	49,018	578
Net income	187,136	89,205	203,409	14,534
Net income attributable to non-controlling interest	(228)	(10,708)	(481)	(20,066)
Net income (loss) attributable to the Partnership	$ 186,908	$ 78,497	$ 202,928	$ (5,532)
Net income (loss) attributable to the Partnership's common unitholders per common unit (Note 13):
Basic (in dollars per unit)	$ 1.74	$ 1.03	$ 1.98	$ (0.09)
Diluted (in dollars per unit)	$ 1.47	$ 1.03	$ 1.66	$ (0.09)
Weighted average number of outstanding common units:
Basic (in units)	106,825	75,160	101,833	74,847
Diluted (in units)	127,468	75,266	122,531	74,847
Cash distribution declared per common unit (in dollars per unit)	$ 0.79	$ 0.67	$ 1.55	$ 1.32

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Fair Value

6 Months Ended

Jun. 30, 2012

Fair Value

Fair Value

6. Fair Value

Fair value measurements and disclosures relate primarily to the Partnership’s derivative positions discussed in Note 5. The following table presents the derivative instruments carried at fair value as of June 30, 2012 and December 31, 2011 (in thousands):

As of June 30, 2012	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	22,846	$	(27,644	)
Significant unobservable inputs (Level 3)
Commodity contracts	30,538		(982		)
Embedded derivatives in commodity contracts	10,409		(20,804		)
Total carrying value in Condensed Consolidated Balance Sheet	$	63,793	$	(49,430	)

As of December 31, 2011	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	5,063	$	(79,358	)
Significant unobservable inputs (Level 3)
Commodity contracts	12,210		(15,175		)
Embedded derivatives in commodity contracts	7,517		(61,421		)
Total carrying value in Condensed Consolidated Balance Sheet	$	24,790	$	(155,954	)

The following table provides additional information about the significant unobservable inputs used in the valuation of Level 3 instruments as of June 30, 2012. The market approach is used for valuation of all instruments.

Level 3 Instrument	Balance Sheet Classification	Unobservable Inputs	Value Range			Time Period
Commodity contracts	Assets	Forward propane prices (per gallon)	$0.84	-	$0.92	Jan. 2013 - Dec. 2014
		Forward isobutane prices (per gallon)	$1.32	-	$1.44	Jan. 2013 - Dec. 2014
		Forward normal butane prices (per gallon)	$1.22	-	$1.30	Jan. 2013 - Dec. 2014
		Forward natural gasoline prices (per gallon)	$1.75	-	$1.83	Jan. 2013 - Dec. 2014
		Crude option volatilities (%)	18.41%	-	39.55%	Jul. 2012 - Dec. 2014
	Liabilities	Forward propane prices (per gallon)	$0.87	-	$0.89	Dec. 2012 - Mar. 2013
		Crude option volatilities (%)	18.41%	-	39.55%	Jul. 2012 - Dec. 2012
Embedded derivatives in commodity contracts	Liability	Forward propane prices (per gallon)	$0.83	-	$0.92	Jul. 2012 - Dec. 2022
		Forward isobutane prices (per gallon)	$1.31	-	$1.44	Jul. 2012 - Dec. 2022
		Forward normal butane prices (per gallon)	$1.18	-	$1.30	Jul. 2012 - Dec. 2022
		Forward natural gasoline prices (per gallon)	$1.74	-	$1.83	Jul. 2012 - Dec. 2022
		Forward natural gas prices (per mmbtu)	$2.75	-	$5.79	Jul. 2012 - Dec. 2022
		Probability of renewal (1)		0%
	Asset	ERCOT Pricing (per MegaWatt Hour) (2)	$25.38	-	$94.26	Jul. 2012 - Dec. 2014

(1)The producer counterparty to the embedded derivative has the option to renew the gas purchase agreement and the related keep-whole processing agreement for two successive five year terms after 2022. The embedded gas purchase agreement cannot be renewed without the renewal of the related keep-whole processing agreement. Due to the significant number of years until the renewal options are exercisable and the high level of uncertainty regarding the counterparty’s future business strategy, the future commodity price environment, and the future competitive environment for midstream services in the Appalachia area, management determined that a 0% probability of renewal is an appropriate assumption.

(2)The forward ERCOT prices utilized in the valuations are generally increasing over time with a seasonal spike in pricing in the summer months.

Fair Value Sensitivity Related to Unobservable Inputs

Commodity contracts (assets and liabilities) - For the Partnership’s commodity contracts, increases in forward NGL prices result in a decrease in the fair value of the derivative assets and an increase the fair value of the derivative liabilities. The forward prices for the individual NGL products generally increase or decrease in a positive correlation with one another. An increase in crude option volatilities will generally result in an increase in the fair value of the Partnership’s derivative assets and derivative liabilities in commodity contracts.

Embedded derivative in commodity contracts (liability) - The embedded derivative liability relates to the natural gas purchase agreement embedded in a keep-whole processing agreement as discussed further in Note 5. Increases (decreases) in forward NGL prices result in an increase (decrease) in the fair value of the embedded derivative liability. An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability.

Embedded derivative in commodity contracts (asset) - The embedded derivative asset relates to utilities costs discussed further in Note 5. Increases in the forward ERCOT prices, relative to natural gas prices, result in an increase in the fair value of the embedded derivative asset.

Level 3 Valuation Process

The Partnership’s Risk Management Department (the “Risk Department”) is responsible for the valuation of the Partnership’s commodity derivative contracts and embedded derivatives in commodity contracts. The Risk Department reports to the Chief Financial Officer and is responsible for the oversight of the Partnership’s commodity risk management program. The members of the Risk Department have the requisite experience, knowledge and day-to-day involvement in the energy commodity markets to ensure appropriate valuations and understand the changes in the valuations from period to period. The valuations of the commodity derivative contracts are performed by a third-party pricing service and reviewed and validated on a quarterly basis by the Risk Department by comparing the pricing and option volatilities to actual market data and/or data provided by other independent third-party pricing services. The valuations for the embedded derivatives in commodity contracts are completed by the Risk Department utilizing the market data and price curves provided by the third-party pricing service. For the embedded derivative in the keep-whole processing arrangement discussed in Note 5, the Risk Department must develop forward price curves for NGLs and natural gas for periods in which price curves are not available from third-party pricing services due to insufficient market data. As of June 30, 2012, the Risk Department utilized internally developed price curves for the period of January 2015 through December 2022 in the valuation of the embedded derivative in the keep-whole processing arrangement. In developing the pricing curves for these periods, the Risk Department maximizes its use of the latest known market data and trends as well as its understanding of the historical relationships between the forward NGL and natural gas prices and the forward market data that is available for the required period, such as crude oil pricing and natural gas pricing from other markets. However, there is very limited actual market data available to validate the Partnership’s estimated price curves. The fair value of the Partnership’s commodity derivative contracts and embedded derivatives in commodity contracts are reviewed quarterly by the Hedge Committee.

Changes in Level 3 Fair Value Measurements

The table below includes a rollforward of the balance sheet amounts for the three and six months ended June 30, 2012 and 2011 for assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy (in thousands).

	Three months ended June 30, 2012
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(17,450	)	$	(60,804	)
Total gain (realized and unrealized) included in earnings (1)	46,290			48,109
Settlements	716			2,300
Fair value at end of period	$	29,556		$	(10,395	)
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	43,894		$	47,300

	Three months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(35,906	)	$	(50,607	)
Total gain (loss) (realized and unrealized) included in earnings (1)	10,456			(2,825		)
Settlements	3,160			3,985
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	10,206		$	(2,429	)

	Six months ended June 30, 2012
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(2,965	)	$	(53,904	)
Total loss (realized and unrealized) included in earnings (1)	34,214			37,671
Settlements	(1,693		)	5,838
Fair value at end of period	$	29,556		$	(10,395	)
The amount of total gain for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	30,304		$	36,698

	Six months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(14,357	)	$	(34,936	)
Total loss (realized and unrealized) included in earnings (1)	(12,537		)	(22,105		)
Settlements	4,604			7,594
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	(10,578	)	$	(20,277	)

(1)Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Derivative gain (loss) related to revenue. Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs, Derivative gain (loss) related to purchased product costs, Facility expenses, and Derivative gain (loss) related to facility expenses.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2012

Derivative Financial Instruments

Derivative Financial Instruments

5. Derivative Financial Instruments

Commodity Derivatives

NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional factors that are beyond the Partnership’s control. The Partnership’s profitability is directly affected by prevailing commodity prices primarily as a result of processing or conditioning at its own or third-party processing plants, purchasing and selling or gathering and transporting volumes of natural gas at index-related prices and the cost of third-party transportation and fractionation services. To the extent that commodity prices influence the level of natural gas drilling by the Partnership’s producer customers, such prices also affect profitability. To protect itself financially against adverse price movements and to maintain more stable and predictable cash flows so that the Partnership can meet its cash distribution objectives, debt service and capital expenditures, the Partnership executes a strategy governed by the risk management policy approved by the General Partner’s board of directors (the “Board”). The Partnership has a committee comprised of senior management that oversees risk management activities (the “Hedge Committee”), continually monitors the risk management program and adjusts its strategy as conditions warrant. The Partnership enters into certain derivative contracts to reduce the risks associated with unfavorable changes in the prices of natural gas, NGLs and crude oil. Derivative contracts utilized are swaps and options traded on the OTC market and fixed price forward contracts. The risk management policy does not allow for trading derivative contracts.

To mitigate its cash flow exposure to fluctuations in the price of NGLs, the Partnership has entered into derivative financial instruments relating to the future price of NGLs and crude oil. Generally the Partnership manages its NGL price risk using crude oil contracts as NGL financial markets are not as liquid and historically there has been a strong relationship between changes in NGL and crude oil prices. The pricing relationship between NGLs and crude oil, which may vary in certain periods due to various market conditions, has significantly weakened during the first half of 2012. In periods where NGL prices and crude oil prices are not consistent with the historical relationship, the Partnership incurs increased risk and additional gains or losses. The Partnership enters into NGL derivative contracts when adequate market liquidity exists and prices are satisfactory.

To mitigate its cash flow exposure to fluctuations in the price of natural gas, the Partnership primarily utilizes derivative financial instruments relating to the future price of natural gas and takes into account the partial offset of its long and short gas positions resulting from normal operating activities.

As a result of its current derivative positions, the Partnership has mitigated a portion of its expected commodity price risk through the fourth quarter of 2014. The Partnership would be exposed to additional commodity risk in certain situations such as if producers under deliver or over deliver product or when processing facilities are operated in different recovery modes. In the event the Partnership has derivative positions in excess of the product delivered or expected to be delivered, the excess derivative positions will be terminated.

The Partnership enters into derivative contracts primarily with financial institutions that are participating members of the Credit Facility (“participating bank group members”). Currently, all of the Partnership’s financial derivative positions are with participating bank group members. Management conducts a standard credit review on counterparties to derivative contracts. There are no collateral requirements for derivative contracts among the Partnership and any participating bank group members. Specifically, the Partnership is not required to post collateral when it enters into derivative contracts with participating bank group members as the participating bank group members have a collateral position in substantially all the wholly-owned assets of the Partnership. The Partnership uses standard master netting arrangements that allow for offset of positive and negative exposures.

The Partnership records derivative contracts at fair value in the Condensed Consolidated Balance Sheets and has not elected hedge accounting or the normal purchases and normal sales designation which may cause volatility in the Condensed Consolidated Statements of Operations as the Partnership recognizes in current earnings all unrealized gains and losses from the changes in fair value on derivatives.

As of June 30, 2012, the Partnership had the following outstanding commodity contracts that were entered into to manage cash flow risk associated with future sales of NGLs or future purchases of natural gas.

Derivative contracts not designated as hedging instruments	Financial Position	Notional Quantity (net)
Crude Oil (bbl)	Short	7,241,527
Natural Gas (MMBtu)	Long	11,308,002
NGLs (gal)	Short	40,771,965

Embedded Derivatives in Commodity Contracts

The Partnership has a commodity contract with a producer in the Appalachia region that creates a floor on the frac spread for gas purchases of 9,000 Dth/d. The commodity contract is a component of a broader regional arrangement that also includes a keep-whole processing agreement. This contract is accounted for as an embedded derivative and is recorded at fair value. The changes in fair value of this commodity contract are based on the difference between the contractual and index pricing and are recorded in earnings through Derivative (gain) loss related to purchased product costs. In February 2011, the Partnership executed agreements with the producer to extend the commodity contract and the related processing agreement from March 31, 2015 to December 31, 2022. As of June 30, 2012, the estimated fair value of this contract was a liability of $74.3 million and the recorded value was a liability of $20.8 million. The recorded liability does not include the inception fair value of the commodity contract related to the extended period from April 1, 2015 to December 31, 2022. In accordance with GAAP for non-option embedded derivatives, the fair value of this extended portion of the commodity contract at its inception of February 1, 2011 is deemed to be allocable to the host processing contract and therefore not recorded as a derivative liability. See the following table for a reconciliation of the liability recorded for the embedded derivative as of June 30, 2012 (in thousands):

Fair value of commodity contract	$	74,311
Inception value for period from April 1, 2015 to December 31, 2022	(53,507		)
Derivative liability as of June 30, 2012	$	20,804

The Partnership has a commodity contract that gives it an option to fix a component of the utilities cost to an index price on electricity at its plant location in the Gulf Coast segment through the fourth quarter of 2014. Changes in the fair value of the derivative component of this contract are recorded in Derivative gain related to facility expenses. As of June 30, 2012, the estimated fair value of this contract was an asset of $10.4 million.

Financial Statement Impact of Derivative Instruments

There were no material changes to the Partnership’s policy regarding the accounting for these instruments as previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011. The fair value of the Partnership’s derivative instruments recorded on its Condensed Consolidated Balance Sheets and its Condensed Consolidated Statements of Operations is summarized below (in thousands):

	Assets				Liabilities
Derivative instruments not designated as hedging instruments and their balance sheet location	June 30, 2012		December 31, 2011		June 30, 2012			December 31, 2011
Commodity contracts(1)
Fair value of derivative instruments — current	$	28,556	$	8,698	$	(30,479	)	$	(90,551	)
Fair value of derivative instruments - long-term	35,237		16,092		(18,951		)	(65,403		)
Total	$	63,793	$	24,790	$	(49,430	)	$	(155,954	)

(1)Includes Embedded Derivatives in Commodity Contracts as discussed above.

Derivative contracts not designated as hedging instruments and the	Three months ended June 30,						Six months ended June 30,
location of gain or (loss) recognized in income	2012			2011			2012			2011
Revenue: Derivative gain (loss)
Realized gain (loss)	$	2,841		$	(12,186	)	$	(7,637	)	$	(26,577	)
Unrealized gain (loss)	133,226			52,776			94,989			(18,512		)
Total revenue: derivative gain (loss)	136,067			40,590			87,352			(45,089		)
Derivative gain (loss) related to purchased product costs
Realized loss	(7,793		)	(5,560		)	(14,867		)	(13,447		)
Unrealized gain (loss)	59,372			5,814			47,646			(5,693		)
Total derivative gain (loss) related to purchased product costs	51,579			254			32,779			(19,140		)
Derivative gain (loss) related to facility expenses
Unrealized gain (loss)	1,146			(2,927		)	2,892			84
Total gain (loss)	$	188,792		$	37,917		$	123,023		$	(64,145	)

For the three months ended June 30, 2012 and 2011, the Realized gain (loss)—revenue includes amortization of premium payments of zero and $1.1 million, respectively. For the six months ended June 30, 2012 and 2011, the Realized gain (loss)—revenue includes amortization of premium payments of zero and $2.1 million, respectively.

During the second quarter of 2012, the Partnership settled a portion of its crude oil derivative positions related to 2014 commodity price exposure prior to the contractual settlement date in order to take advantage of favorable crude oil prices at which the Partnership could settle these proxy hedges that are expected to be less effective. The Partnership plans to opportunistically enter into future NGL hedge transactions to manage the 2014 NGL price exposure. Upon early settlement, the Partnership received $8.8 million which was recorded as a realized gain in Revenue: Derivative gain (loss) in the accompanying Consolidated Statements of Operations.

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Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events

Subsequent Events

17. Subsequent Events

Effective July 2012, the Partnership amended its lease for its corporate offices in Denver, Colorado to include additional space and extend the term of the lease through 2024. The following table shows the increase in minimum future lease payments as of June 30, 2012 compared to the amount disclosed in Note 18 Commitments and Contingencies in the Form 10-K for the year ended December 31, 2011 (in thousands):

2012	$	569
2013	4,295
2014	3,995
2015	3,926
2016	4,747
2017 and thereafter	58,221
Total	$	75,753

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Earnings (Loss) Per Common Unit

6 Months Ended

Jun. 30, 2012

Earnings (Loss) Per Common Unit

Earnings (Loss) Per Common Unit

13. Earnings (Loss) Per Common Unit

The following table shows the computation of basic and diluted net income (loss) per common unit for the three and six months ended June 30, 2012 and 2011, and the weighted-average units used to compute basic and diluted net income (loss) per common unit (in thousands, except per unit data):

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Net income (loss) attributable to the Partnership	$	186,908	$	78,497	$	202,928	$	(5,532	)
Less: Income allocable to phantom units	1,209		719		1,391		847
Income (loss) available for common unitholders - basic	185,699		77,778		201,537		(6,379		)
Add: Income allocable to phantom units and DER expense	1,218		—		1,414		—
Income (loss) available for common unitholders - diluted	$	186,917	$	77,778	$	202,951	$	(6,379	)
Weighted average common units outstanding - basic	106,825		75,160		101,833		74,847
Potential common shares (Class B and phantom units)	20,643		106		20,698		—
Weighted average common units outstanding - diluted	127,468		75,266		122,531		74,847
Net income (loss) attributable to the Partnership’s common unitholders per common unit (1)
Basic	$	1.74	$	1.03	$	1.98	$	(0.09	)
Diluted	$	1.47	$	1.03	$	1.66	$	(0.09	)

(1)Earnings per Class B units equals zero as Class B unitholders are not entitled to receive distributions and therefore no income is allocable to Class B units under the two class method.

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Long-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt

Long-Term Debt

9. Long-Term Debt

Debt is summarized below (in thousands):

	June 30, 2012		December 31, 2011
Credit Facility
Revolving credit facility, 4% interest, due September 2017	$	217,865	$	66,000
Senior Notes (1)
2018 Senior Notes, 8.75% interest, net of discount of $119 and $129, respectively, issued April and May 2008 and due April 2018	80,993		80,983
2020 Senior Notes, 6.75% interest, issued November 2010 and due November 2020	500,000		500,000
2021 Senior Notes, 6.5% interest, net of discount of $873 and $921, respectively, issued February and March 2011 and due August 2021	499,127		499,079
2022 Senior Notes, 6.25% interest, issued October 2011 and due June 2022	700,000		700,000
Total long-term debt	$	1,997,985	$	1,846,062

(1)The estimated aggregate fair value of the senior notes (collectively, the “Senior Notes”) was approximately $1,853.3 million and $1,880.7 million as of June 30, 2012 and December 31, 2011, respectively, based on quoted prices in an inactive market. The fair value of the Partnership’s Senior Notes is considered a Level 3 measurement.

Credit Facility

On June 29, 2012, the Partnership amended the Credit Facility to increase the borrowing capacity to $1.2 billion and retained the existing accordion option, providing for potential future increases of up to an aggregate of $250 million upon the satisfaction of certain requirements. The term of the Credit Facility was extended one year and now matures on September 7, 2017. The Partnership incurred approximately $2.5 million of deferred financing costs associated with modifications of the Credit Facility during the quarter ended June 30, 2012.

Under the provisions of the Credit Facility, the Partnership is subject to a number of restrictions and covenants. These covenants are used to calculate the available borrowing capacity on a quarterly basis. The Credit Facility is guaranteed by the Partnership’s wholly-owned subsidiaries, other than MarkWest Liberty Midstream and its subsidiaries, and collateralized by substantially all of the Partnership’s assets and those of its wholly-owned subsidiaries, other than MarkWest Liberty Midstream and its subsidiaries. As of June 30, 2012, the Partnership had approximately $217.9 million of borrowings outstanding and approximately $22.3 million of letters of credit outstanding under the Credit Facility, leaving approximately $959.8 million available for borrowing.

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Inventories

6 Months Ended

Jun. 30, 2012

Inventories

Inventories

7. Inventories

Inventories consist of the following (in thousands):

	June 30, 2012		December 31, 2011
NGLs	$	12,470	$	32,352
Spare parts, materials and supplies	9,739		8,654
Total inventories	$	22,209	$	41,006

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Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill.

Goodwill

8. Goodwill

Changes in goodwill for the six months ended June 30, 2012 are summarized as follows (in thousands):

	Southwest			Northeast		Liberty		Gulf Coast			Total
Gross goodwill as of December 31, 2011	$	24,324		$	62,445	$	—	$	9,854		$	96,623
Acquisition (1)	—			—		76,664		—			76,664
Gross goodwill as of June 30, 2012	24,324			62,445		76,664		9,854			173,287
Cumulative impairment (2)	(18,851		)	—		—		(9,854		)	(28,705		)
Balance as of June 30, 2012	$	5,473		$	62,445	$	76,664	$	—		$	144,582

(1)           Represents goodwill associated with the Keystone Acquisition (see Note 3).

(2)           All impairments recorded in the fourth quarter of 2008.

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Equity

6 Months Ended

Jun. 30, 2012

Equity

Equity

10. Equity

Equity Offerings

In January 2012, the Partnership issued approximately 0.7 million common units representing limited partner interests pursuant to the underwriters’ exercise of their option to purchase additional common units under the equity offering initiated in December 2011. The total net proceeds from the exercise of this option were approximately $38 million and were used to partially fund the Partnership’s ongoing capital expenditure program.

In March 2012, the Partnership completed a public offering of approximately 6.8 million newly issued common units representing limited partner interests, which includes the full exercise of the underwriters’ over-allotment option. Net proceeds after deducting underwriting fees and other third-party offering expenses were approximately $388 million and were used to partially fund the Partnership’s ongoing capital expenditure program.

In May 2012, the Partnership completed a public offering of 8.0 million newly issued common units representing limited partner interests. Net proceeds after deducting underwriting fees and other third-party offering expenses were approximately $427 million, which were used to partially fund the Keystone Acquisition.

Distributions of Available Cash

Quarter Ended	Distribution Per Common Unit		Declaration Date	Record Date	Payment Date
June 30, 2012	$	0.80	July 26, 2012	August 6, 2012	August 14, 2012
March 31, 2012	$	0.79	April 26, 2012	May 7, 2012	May 15, 2012
December 31, 2011	$	0.76	January 26, 2012	February 6, 2012	February 14, 2012

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information

Schedule of operating income and capital expenditures of geographical segments

Three months ended June 30, 2012:

	Southwest		Northeast		Liberty			Gulf Coast		Total
Segment revenue	$	189,162	$	42,051	$	59,477		$	20,997	$	311,687
Purchased product costs	91,792		12,921		8,018			—		112,731
Net operating margin	97,370		29,130		51,459			20,997		198,956
Facility expenses	23,034		4,932		13,647			9,607		51,220
Portion of operating income (loss) attributable to non-controlling interests	1,590		—		(113		)	—		1,477
Operating income before items not allocated to segments	$	72,746	$	24,198	$	37,925		$	11,390	$	146,259

Three months ended June 30, 2011:

	Southwest		Northeast		Liberty		Gulf Coast		Total
Segment revenue	$	235,575	$	53,676	$	48,337	$	24,683	$	362,271
Purchased product costs	128,988		15,702		9,890		—		154,580
Net operating margin	106,587		37,974		38,447		24,683		207,691
Facility expenses	20,855		6,929		7,269		8,312		43,365
Portion of operating income attributable to non-controlling interests	1,346		—		15,182		—		16,528
Operating income before items not allocated to segments	$	84,386	$	31,045	$	15,996	$	16,371	$	147,798

Six months ended June 30, 2012:

	Southwest		Northeast		Liberty			Gulf Coast		Total
Segment revenue	$	403,887	$	128,969	$	135,054		$	45,226	$	713,136
Purchased product costs	196,025		38,608		32,653			—		267,286
Net operating margin	207,862		90,361		102,401			45,226		445,850
Facility expenses	46,026		11,310		25,894			19,245		102,475
Portion of operating income (loss) attributable to non-controlling interests	3,036		—		(113		)	—		2,923
Operating income before items not allocated to segments	$	158,800	$	79,051	$	76,620		$	25,981	$	340,452
Capital expenditures	$	95,657	$	43,475	$	432,287		$	7,052	$	578,471
Capital expenditures not allocated to segments										3,732
Total capital expenditures										$	582,203

Six months ended June 30, 2011:

	Southwest		Northeast		Liberty		Gulf Coast		Total
Segment revenue	$	437,349	$	145,767	$	89,556	$	46,442	$	719,114
Purchased product costs	232,184		56,580		19,445		—		308,209
Net operating margin	205,165		89,187		70,111		46,442		410,905
Facility expenses	41,012		12,523		13,767		17,302		84,604
Portion of operating income attributable to non-controlling interests	2,518		—		27,559		—		30,077
Operating income before items not allocated to segments	$	161,635	$	76,664	$	28,785	$	29,140	$	296,224
Capital expenditures	$	51,312	$	3,370	$	176,027	$	845	$	231,554
Capital expenditures not allocated to segments									2,562
Total capital expenditures									$	234,116

Reconciliation of segment revenue total revenue and operating income to before items not allocated to segments to (loss) income before provision for income tax

	Three months ended June 30,
	2012			2011
Total segment revenue	$	311,687		$	362,271
Derivative gain not allocated to segments	136,067			40,590
Revenue deferral adjustment (1)	(1,701		)	(2,422		)
Total revenue	$	446,053		$	400,439
Operating income before items not allocated to segments	$	146,259		$	147,798
Portion of operating income attributable to non-controlling interests	1,477			16,528
Derivative gain not allocated to segments	188,792			37,917
Revenue deferral adjustment (1)	(1,701		)	(2,422		)
Compensation expense included in facility expenses not allocated to segments	(184		)	(188		)
Facility expenses adjustments (2)	2,866			2,855
Selling, general and administrative expenses	(21,879		)	(18,580		)
Depreciation	(42,918		)	(37,201		)
Amortization of intangible assets	(12,307		)	(10,830		)
Loss on disposal of property, plant and equipment	(1,342		)	(2,373		)
Accretion of asset retirement obligations	(161		)	(290		)
Income from operations	258,902			133,214
Earnings (loss) from unconsolidated affiliate	551			(216		)
Interest income	159			63
Interest expense	(26,762		)	(27,874		)
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245		)	(1,443		)
Miscellaneous income, net	4			169
Income before provision for income tax	$	231,609		$	103,913

(1)Amount relates to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore, the impact of the revenue deferrals is excluded for segment reporting purposes. For the three months ended June 30, 2012, approximately $0.2 million and $1.5 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the three months ended June 30, 2011, in comparison, approximately $0.2 million and $2.2 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Beginning in 2015, the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

(2)Facility expenses adjustments consist of the reallocation of the MarkWest Pioneer field services fee and the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Gulf Coast segment.

	Six months ended June 30,
	2012			2011
Total segment revenue	$	713,136		$	719,114
Derivative gain (loss) not allocated to segments	87,352			(45,089		)
Revenue deferral adjustment (1)	(3,969		)	(10,365		)
Total revenue	$	796,519		$	663,660
Operating income before items not allocated to segments	$	340,452		$	296,224
Portion of operating income attributable to non-controlling interests	2,923			30,077
Derivative gain (loss) not allocated to segments	123,023			(64,145		)
Revenue deferral adjustment (1)	(3,969		)	(10,365		)
Compensation expense included in facility expenses not allocated to segments	(633		)	(1,228		)
Facility expenses adjustments (2)	5,730			5,710
Selling, general and administrative expenses	(47,103		)	(40,292		)
Depreciation	(84,063		)	(71,565		)
Amortization of intangible assets	(23,292		)	(21,647		)
Loss on disposal of property, plant and equipment	(2,328		)	(4,472		)
Accretion of asset retirement obligations	(399		)	(377		)
Income from operations	310,341			117,920
Earnings (loss) from unconsolidated affiliate	542			(755		)
Interest income	231			152
Interest expense	(56,234		)	(56,137		)
Amortization of deferred financing costs and discount (a component of interest expense)	(2,515		)	(2,871		)
Loss on redemption of debt	—			(43,328		)
Miscellaneous income, net	62			131
Income before provision for income tax	$	252,427		$	15,112

(1)Amount relates to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore the impact of the revenue deferrals is excluded for segment reporting purposes. For the six months ended June 30, 2012, approximately $0.4 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the six months ended June 30, 2011, approximately $6.7 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Beginning in 2015, the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

(2)Facility expenses adjustments consist of the reallocation of the MarkWest Pioneer field services fee and the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Gulf Coast segment.

Segment assets information

	June 30, 2012		December 31, 2011
Southwest	$	1,698,454	$	1,701,919
Northeast	491,428		533,591
Liberty	2,147,784		1,114,654
Gulf Coast	527,147		553,043
Total segment assets	4,864,813		3,903,207
Assets not allocated to segments:
Certain cash and cash equivalents	113,529		66,212
Fair value of derivatives	63,793		24,790
Investment in unconsolidated affiliate	26,695		27,853
Other (1)	65,768		48,363
Total assets	$	5,134,598	$	4,070,425

(1)Includes corporate fixed assets, deferred financing costs, income tax receivable, receivables and other corporate assets not allocated to segments.

XML

Earnings (Loss) Per Common Unit (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Earnings (Loss) Per Common Unit
Net income (loss) attributable to the Partnership	$ 186,908	$ 78,497	$ 202,928	$ (5,532)
Less: Income allocable to phantom units	1,209	719	1,391	847
Income (loss) available for common unitholders - basic	185,699	77,778	201,537	(6,379)
Add: Income allocable to phantom units and DER expense	1,218		1,414
Income (loss) available for common unitholders - diluted	$ 186,917	$ 77,778	$ 202,951	$ (6,379)
Weighted average common units outstanding - basic (in units)	106,825	75,160	101,833	74,847
Potential common shares (Class B and phantom units)	20,643	106	20,698
Weighted average common units outstanding - diluted (in units)	127,468	75,266	122,531	74,847
Net income (loss) attributable to the Partnership's common unitholders per common unit
Basic (in dollars per unit)	$ 1.74	$ 1.03	$ 1.98	$ (0.09)
Diluted (in dollars per unit)	$ 1.47	$ 1.03	$ 1.66	$ (0.09)

XML

Supplemental Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2012

Supplemental Condensed Consolidating Financial Information

Supplemental Condensed Consolidating Financial Information

15. Supplemental Condensed Consolidating Financial Information

The Partnership has no operations independent of its subsidiaries. As of June 30, 2012, the Partnership’s obligations under the outstanding Senior Notes (see Note 9) were fully, jointly and severally guaranteed, by all of its wholly-owned subsidiaries other than MarkWest Liberty Midstream and its subsidiaries. The guarantees are unconditional except for certain customary circumstances in which a subsidiary would be released from the guarantee under the indentures. MarkWest Liberty Midstream, MarkWest Utica EMG and MarkWest Pioneer, together with certain of the Partnership’s other subsidiaries that do not guarantee the outstanding Senior Notes, have significant assets and operations in the aggregate. For the purpose of the following financial information, the Partnership’s investments in its subsidiaries and the guarantor subsidiaries’ investments in their subsidiaries are presented in accordance with the equity method of accounting. The financial information may not necessarily be indicative of results of operations, cash flows, or financial position had the subsidiaries operated as independent entities. The operations, cash flows and financial position of the co-issuer of the Senior Notes, MarkWest Energy Finance Corporation, are minor and therefore have been included with the Parent’s financial information. Condensed consolidating financial information for the Partnership, its combined guarantor subsidiaries and combined non-guarantor subsidiaries as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011 is as follows (in thousands):

Condensed Consolidating Balance Sheets

	As of June 30, 2012
	Parent		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	118,908	$	6,554	$	—		$	125,462
Restricted cash	—		—		25,285		—			25,285
Receivables and other current assets	5,824		137,690		32,525		—			176,039
Intercompany receivables	772,994		7,818		7,866		(788,678		)	—
Fair value of derivative instruments	—		26,883		1,673		—			28,556
Total current assets	778,818		291,299		73,903		(788,678		)	355,342
Total property, plant and equipment, net	3,811		1,926,844		1,832,027		(119,046		)	3,643,636
Other long-term assets:
Investment in unconsolidated affiliate	—		26,695		—		—			26,695
Investment in consolidated affiliates	3,294,718		1,813,342		—		(5,108,060		)	—
Intangibles, net of accumulated amortization	—		581,273		303,910		—			885,183
Fair value of derivative instruments	—		34,472		765		—			35,237
Intercompany notes receivable	219,000		—		—		(219,000		)	—
Other long-term assets	41,289		70,212		77,004		—			188,505
Total assets	$	4,337,636	$	4,744,137	$	2,287,609	$	(6,234,784	)	$	5,134,598
LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	268	$	774,338	$	14,072	$	(788,678	)	$	—
Fair value of derivative instruments	—		30,398		81		—			30,479
Other current liabilities	25,851		151,498		262,389		—			439,738
Total current liabilities	26,119		956,234		276,542		(788,678		)	470,217
Deferred income taxes	1,059		155,724		—		—			156,783
Long-term intercompany financing payable	—		196,000		125,349		(321,349		)	—
Fair value of derivative instruments	—		18,951		—		—			18,951
Long-term debt, net of discounts	1,997,985		—		—		—			1,997,985
Other long-term liabilities	3,056		122,510		2,665		—			128,231
Equity:
Common units	1,556,886		3,294,718		1,883,053		(5,194,468		)	1,540,189
Class B units	752,531		—		—		—			752,531
Non-controlling interest in consolidated subsidiaries	—		—		—		69,711			69,711
Total equity	2,309,417		3,294,718		1,883,053		(5,124,757		)	2,362,431
Total liabilities and equity	$	4,337,636	$	4,744,137	$	2,287,609	$	(6,234,784	)	$	5,134,598

	As of December 31, 2011
	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	22	$	99,580	$	17,414	$	—		$	117,016
Restricted cash	—		—		26,193		—			26,193
Receivables and other current assets	7,097		232,010		55,098		(5		)	294,200
Intercompany receivables	19,981		40,519		22,193		(82,693		)	—
Fair value of derivative instruments	—		8,015		683		—			8,698
Total current assets	27,100		380,124		121,581		(82,698		)	446,107
Total property, plant and equipment, net	4,012		1,714,857		1,163,226		(17,788		)	2,864,307
Other long-term assets:
Investment in unconsolidated affiliate	—		27,853		—		—			27,853
Investment in consolidated affiliates	3,071,124		1,097,350		—		(4,168,474		)	—
Intangibles, net of accumulated amortization	—		603,224		543		—			603,767
Fair value of derivative instruments	—		16,092		—		—			16,092
Intercompany notes receivable	235,700		—		—		(235,700		)	—
Other long-term assets	41,492		70,434		373		—			112,299
Total assets	$	3,379,428	$	3,909,934	$	1,285,723	$	(4,504,660	)	$	4,070,425
LIABILITIES AND EQUITY
Current liabilities:
Intercompany payables	$	40,503	$	40,374	$	1,816	$	(82,693	)	$	—
Fair value of derivative instruments	—		90,551		—		—			90,551
Other current liabilities	38,775		219,622		92,930		(5		)	351,322
Total current liabilities	79,278		350,547		94,746		(82,698		)	441,873
Deferred income taxes	1,228		92,436		—		—			93,664
Long-term intercompany financing payable	—		212,700		23,000		(235,700		)	—
Fair value of derivative instruments	—		65,403		—		—			65,403
Long-term debt, net of discounts	1,846,062		—		—		—			1,846,062
Other long-term liabilities	3,232		117,724		400		—			121,356
Equity:
Common Units	697,097		3,071,124		1,167,577		(4,256,489		)	679,309
Class B Units	752,531		—		—		—			752,531
Non-controlling interest in consolidated subsidiaries	—		—		—		70,227			70,227
Total equity	1,449,628		3,071,124		1,167,577		(4,186,262		)	1,502,067
Total liabilities and equity	$	3,379,428	$	3,909,934	$	1,285,723	$	(4,504,660	)	$	4,070,425

Condensed Consolidating Statements of Operations

	Three Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	381,527		$	67,001		$	(2,475	)	$	446,053
Operating expenses:	—			—			—			—
Purchased product costs	—			53,041			8,111			—			61,152
Facility expenses	—			33,111			14,614			(333		)	47,392
Selling, general and administrative expenses	12,539			2,205			11,378			(4,243		)	21,879
Depreciation and amortization	148			40,634			15,572			(1,129		)	55,225
Other operating expenses	—			628			875			—			1,503
Total operating expenses	12,687			129,619			50,550			(5,705		)	187,151
(Loss) income from operations	(12,687		)	251,908			16,451			3,230			258,902
Earnings from consolidated affiliates	217,483			14,518			—			(232,001		)	—
Other expense, net	(20,700		)	(5,169		)	(1,705		)	281			(27,293		)
Income before provision for income tax	184,096			261,257			14,746			(228,490		)	231,609
Provision for income tax expense	699			43,774			—			—			44,473
Net income	183,397			217,483			14,746			(228,490		)	187,136
Net income attributable to non-controlling interest	—			—			—			(228		)	(228		)
Net income attributable to the Partnership	$	183,397		$	217,483		$	14,746		$	(228,718	)	$	186,908

	Three Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	348,371		$	52,068		$	—		$	400,439
Operating expenses:
Purchased product costs	—			144,403			9,923			—			154,326
Facility expenses	—			35,419			8,373			(167		)	43,625
Selling, general and administrative expenses	11,224			7,153			1,932			(1,729		)	18,580
Depreciation and amortization	181			38,008			10,011			(169		)	48,031
Other operating expenses	374			1,987			302			—			2,663
Total operating expenses	11,779			226,970			30,541			(2,065		)	267,225
(Loss) income from operations	(11,779		)	121,401			21,527			2,065			133,214
Earnings from consolidated affiliates	114,152			10,769			—			(124,921		)	—
Other expense, net	(22,071		)	(3,759		)	(50		)	(3,421		)	(29,301		)
Income before provision for income tax	80,302			128,411			21,477			(126,277		)	103,913
Provision for income tax expense	449			14,259			—			—			14,708
Net income	79,853			114,152			21,477			(126,277		)	89,205
Net income attributable to non-controlling interest	—			—			—			(10,708		)	(10,708		)
Net income attributable to the Partnership	$	79,853		$	114,152		$	21,477		$	(136,985	)	$	78,497

	Six Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	652,598		$	146,396		$	(2,475	)	$	796,519
Operating expenses:
Purchased product costs	—			201,642			32,865			—			234,507
Facility expenses	—			67,047			27,948			(509		)	94,486
Selling, general and administrative expenses	26,956			7,700			14,509			(2,062		)	47,103
Depreciation and amortization	312			79,927			28,483			(1,367		)	107,355
Other operating expenses	—			1,739			988			—			2,727
Total operating expenses	27,268			358,055			104,793			(3,938		)	486,178
(Loss) income from operations	(27,268		)	294,543			41,603			1,463			310,341
Earnings from consolidated affiliates	273,914			38,752			—			(312,666		)	—
Other expense, net	(44,044		)	(11,128		)	(2,370		)	(372		)	(57,914		)
Income before provision for income tax	202,602			322,167			39,233			(311,575		)	252,427
Provision for income tax expense	765			48,253			—			—			49,018
Net income	201,837			273,914			39,233			(311,575		)	203,409
Net income attributable to non-controlling interest	—			—			—			(481		)	(481		)
Net income attributable to the Partnership	$	201,837		$	273,914		$	39,233		$	(312,056	)	$	202,928

	Six Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Total revenue	$	—		$	566,851		$	96,809		$	—		$	663,660
Operating expenses:
Purchased product costs	—			307,847			19,502			—			327,349
Facility expenses	—			64,350			16,022			(334		)	80,038
Selling, general and administrative expenses	24,078			15,371			3,969			(3,126		)	40,292
Depreciation and amortization	356			74,477			18,696			(317		)	93,212
Other operating expenses	673			3,826			350			—			4,849
Total operating expenses	25,107			465,871			58,539			(3,777		)	545,740
(Loss) income from operations	(25,107		)	100,980			38,270			3,777			117,920
Earnings from consolidated affiliates	112,919			18,144			—			(131,063		)	—
Loss on redemption of debt	(43,328		)	—			—			—			(43,328		)
Other expense, net	(46,965		)	(5,734		)	(60		)	(6,721		)	(59,480		)
(Loss) income before provision for income tax	(2,481		)	113,390			38,210			(134,007		)	15,112
Provision for income tax expense	107			471			—			—			578
Net (loss) income	(2,588		)	112,919			38,210			(134,007		)	14,534
Net income attributable to non-controlling interest	—			—			—			(20,066		)	(20,066		)
Net (loss) income attributable to the Partnership	$	(2,588	)	$	112,919		$	38,210		$	(154,073	)	$	(5,532	)

Condensed Consolidating Statements of Cash Flows

	Six Months Ended June 30, 2012
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(77,181	)	$	211,915		$	121,980		$	(277	)	$	256,437
Cash flows from investing activities:
Restricted cash	—			—			1,003			—			1,003
Capital expenditures	(114		)	(166,926		)	(416,377		)	1,214			(582,203		)
Equity investments	(26,640		)	(843,960		)	—			870,600			—
Acquisition of business, net of cash acquired	—			—			(506,797		)	—			(506,797		)
Distributions from consolidated affiliates	36,575			53,355			—			(89,930		)	—
Collection of intercompany notes, net	16,700			—			—			(16,700		)	—
Proceeds from disposal of property, plant and equipment	—			1,713			—			(1,214		)	499
Net cash flows provided by (used in) investing activities	26,521			(955,818		)	(922,171		)	763,970			(1,087,498		)
Cash flows from financing activities:
Proceeds from public equity offerings, net	852,873			—			—			—			852,873
Proceeds from revolving credit facility	238,065			—			—			—			238,065
Payments of revolving credit facility	(86,200		)	—			—			—			(86,200		)
Payments related to intercompany financing, net	—			(16,700		)	(277		)	16,977			—
Payments for deferred financing costs	(2,315		)	—			—			—			(2,315		)
Contributions from parent and affiliates	—			26,640			843,960			(870,600		)	—
Contribution from non-controlling interest	—			—			1,940			—			1,940
Share-based payment activity	(8,048		)	2,207			—			—			(5,841		)
Payment of distributions	(155,073		)	(36,575		)	(56,292		)	89,930			(158,010		)
Payments of SMR liability	—			(1,005		)	—			—			(1,005		)
Intercompany advances, net	(788,664		)	788,664			—			—			—
Net cash flows provided by financing activities	50,638			763,231			789,331			(763,693		)	839,507
Net increase (decrease) in cash	(22		)	19,328			(10,860		)	—			8,446
Cash and cash equivalents at beginning of year	22			99,580			17,414			—			117,016
Cash and cash equivalents at end of period	$	—		$	118,908		$	6,554		$	—		$	125,462

	Six Months Ended June 30, 2011
	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
Net cash (used in) provided by operating activities	$	(66,828	)	$	189,342		$	87,113		$	(3,263	)	$	206,364
Cash flows from investing activities:
Capital expenditures	(610		)	(58,715		)	(179,302		)	4,511			(234,116		)
Acquisitions	—			(230,728		)	—			—			(230,728		)
Equity investments	(21,556		)	(130,361		)	—			151,917			—
Distributions from consolidated affiliates	27,208			35,147			—			(62,355		)	—
Investment in intercompany notes, net	(17,450		)	—			—			17,450			—
Proceeds from disposal of property, plant and equipment	—			89			3,954			(1,248		)	2,795
Net cash flows used in investing activities	(12,408		)	(384,568		)	(175,348		)	110,275			(462,049		)
Cash flows from financing activities:
Proceeds from revolving credit facility	781,700			—			—			—			781,700
Payments of revolving credit facility	(535,200		)	—			—			—			(535,200		)
Proceeds from long-term debt	499,000			—			—			—			499,000
Payments of long-term debt	(437,848		)	—			—			—			(437,848		)
Payments of premiums on redemption of long-term debt	(39,520		)	—			—			—			(39,520		)
(Payments of) proceeds from intercompany notes, net	—			(5,550		)	23,000			(17,450		)	—
Payments for debt issuance costs, deferred financing costs and registration costs	(6,747		)	—			—			—			(6,747		)
Contributions from parent and affiliates	—			21,556			130,361			(151,917		)	—
Contributions from non-controlling interest	—			—			24,400			—			24,400
Payments of SMR liability	—			(916		)	—			—			(916		)
Proceeds from public equity offering, net	138,163			—			—			—			138,163
Share-based payment activity	(6,269		)	1,096			—			—			(5,173		)
Payment of distributions	(100,058		)	(27,208		)	(69,678		)	62,355			(134,589		)
Intercompany advances, net	(213,982		)	213,982			—			—			—
Net cash flows provided by financing activities	79,239			202,960			108,083			(107,012		)	283,270
Net increase in cash	3			7,734			19,848			—			27,585
Cash and cash equivalents at beginning of year	—			63,850			3,600			—			67,450
Cash and cash equivalents at end of period	$	3		$	71,584		$	23,448		$	—		$	95,035

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Derivative Financial Instruments

Volume of Derivative Activity

As of June 30, 2012, the Partnership had the following outstanding commodity contracts that were entered into to manage cash flow risk associated with future sales of NGLs or future purchases of natural gas.

Derivative contracts not designated as hedging instruments	Financial Position	Notional Quantity (net)
Crude Oil (bbl)	Short	7,241,527
Natural Gas (MMBtu)	Long	11,308,002
NGLs (gal)	Short	40,771,965

Reconciliation of liability recorded for embedded derivative

Fair value of commodity contract	$	74,311
Inception value for period from April 1, 2015 to December 31, 2022	(53,507		)
Derivative liability as of June 30, 2012	$	20,804

Derivative contracts not designated as hedging instruments

	Assets				Liabilities
Derivative instruments not designated as hedging instruments and their balance sheet location	June 30, 2012		December 31, 2011		June 30, 2012			December 31, 2011
Commodity contracts(1)
Fair value of derivative instruments — current	$	28,556	$	8,698	$	(30,479	)	$	(90,551	)
Fair value of derivative instruments - long-term	35,237		16,092		(18,951		)	(65,403		)
Total	$	63,793	$	24,790	$	(49,430	)	$	(155,954	)

(1)Includes Embedded Derivatives in Commodity Contracts as discussed above.

Derivative contracts not designated as hedging instruments and the	Three months ended June 30,						Six months ended June 30,
location of gain or (loss) recognized in income	2012			2011			2012			2011
Revenue: Derivative gain (loss)
Realized gain (loss)	$	2,841		$	(12,186	)	$	(7,637	)	$	(26,577	)
Unrealized gain (loss)	133,226			52,776			94,989			(18,512		)
Total revenue: derivative gain (loss)	136,067			40,590			87,352			(45,089		)
Derivative gain (loss) related to purchased product costs
Realized loss	(7,793		)	(5,560		)	(14,867		)	(13,447		)
Unrealized gain (loss)	59,372			5,814			47,646			(5,693		)
Total derivative gain (loss) related to purchased product costs	51,579			254			32,779			(19,140		)
Derivative gain (loss) related to facility expenses
Unrealized gain (loss)	1,146			(2,927		)	2,892			84
Total gain (loss)	$	188,792		$	37,917		$	123,023		$	(64,145	)

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Commitments and Contingencies (Details) (Contract Contingencies, USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Commitments and Contingencies
Charges if milestones are not achieved	$ 1.0
Maximum
Commitments and Contingencies
Maximum period of delay	6

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Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet
Total carrying value of derivative assets in Condensed Consolidated Balance Sheet	$ 63,793	$ 24,790
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheet	(49,430)	(155,954)
Recurring | Significant other observable inputs (Level 2) | Commodity contracts (net)
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet
Total carrying value of derivative assets in Condensed Consolidated Balance Sheet	22,846	5,063
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheet	(27,644)	(79,358)
Recurring | Significant unobservable inputs (Level 3) | Commodity contracts (net)
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet
Total carrying value of derivative assets in Condensed Consolidated Balance Sheet	30,538	12,210
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheet	(982)	(15,175)
Recurring | Significant unobservable inputs (Level 3) | Embedded derivatives in commodity contracts (net)
Derivative instruments carried at fair value in Condensed Consolidated Balance Sheet
Total carrying value of derivative assets in Condensed Consolidated Balance Sheet	10,409	7,517
Total carrying value of derivative liabilities in Condensed Consolidated Balance Sheet	$ (20,804)	$ (61,421)

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Condensed Consolidated Statements of Changes in Equity (USD $) In Thousands, unless otherwise specified	Total	Common Units	Class B Units	Non-controlling Interest
Balance at Dec. 31, 2010	$ 1,458,566	$ 993,049		$ 465,517
Balance (in units) at Dec. 31, 2010		71,440
Increase (Decrease) in Equity
Issuance of units in public offering, net of offering costs	138,163	138,163
Issuance of units in public offering, net of offering costs (in units)		3,450
Distributions paid	(134,589)	(100,058)		(34,531)
Contributions from non-controlling interest/ MarkWest Liberty Midstream joint venture	24,400			24,400
Share-based compensation activity	2,778	2,778
Share-based compensation activity (in units)		270
Excess tax benefits related to share-based compensation	1,096	1,096
Net (loss) income	14,534	(5,532)		20,066
Balance at Jun. 30, 2011	1,504,948	1,029,496		475,452
Balance (in units) at Jun. 30, 2011		75,160
Balance at Dec. 31, 2011	1,502,067	679,309	752,531	70,227
Balance (in units) at Dec. 31, 2011		94,940	19,954
Increase (Decrease) in Equity
Issuance of units in public offering, net of offering costs	852,873	852,873
Issuance of units in public offering, net of offering costs (in units)		15,508
Distributions paid	(158,010)	(155,073)		(2,937)
Contributions from non-controlling interest/ MarkWest Liberty Midstream joint venture	1,940			1,940
Share-based compensation activity	537	537
Share-based compensation activity (in units)		246
Excess tax benefits related to share-based compensation	2,207	2,207
Deferred income tax impact from changes in equity	(42,592)	(42,592)
Net (loss) income	203,409	202,928		481
Balance at Jun. 30, 2012	$ 2,362,431	$ 1,540,189	$ 752,531	$ 69,711
Balance (in units) at Jun. 30, 2012		110,694	19,954

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Variable Interest Entities

6 Months Ended

Jun. 30, 2012

Variable Interest Entities

Variable Interest Entities

4. Variable Interest Entities

MarkWest Utica EMG

Effective January 1, 2012, the Partnership and EMG Utica, LLC (“EMG Utica”) executed agreements to form a joint venture, MarkWest Utica EMG, to develop significant natural gas gathering, processing and NGL fractionation, transportation and marketing infrastructure in Eastern Ohio. Under the terms of the agreements, the Partnership will make an initial contribution to MarkWest Utica EMG in a nominal amount in exchange for a 60% membership interest in MarkWest Utica EMG, and EMG Utica will make an initial contribution in a nominal amount and has agreed to contribute to MarkWest Utica EMG $350 million in cash on an as needed basis (the “Initial EMG Contribution”) in exchange for a 40% membership interest in MarkWest Utica EMG. Following the funding of the Initial EMG Contribution, the Partnership has the one time right to elect that (i) EMG Utica fund, as needed, all capital required to develop projects within MarkWest Utica EMG until the earlier of December 31, 2016 or such time as EMG Utica’s total investment balance reaches $500 million (the “Minimum EMG Investment”) or (ii) the Partnership fund 60% of all capital required to develop projects within MarkWest Utica EMG until such time as EMG Utica’s total investment balance equals the Minimum EMG Investment and EMG Utica will be required to fund the remaining 40% of all such capital. Once EMG Utica has funded capital equal to the Minimum EMG Investment, or if EMG has not funded the Minimum EMG Investment by December 31, 2016, then commencing on January 1, 2017, the Partnership is required to fund, as needed, 100% of all capital required to develop projects within MarkWest Utica EMG until such time as the total investment balances of the Partnership and EMG Utica are in the ratio of 60% and 40%, respectively (such time being referred to as the “First Equalization Date”). If the First Equalization Date has not occurred by December 31, 2016, each member’s ownership interest will be adjusted to equal the proportionate share of capital that it has contributed, and allocations of profits and losses and distributions of available cash will be made in accordance with those adjusted membership interests. Following the First Equalization Date, the Partnership shall have the right to elect to continue to fund up to 100% of any additional capital required until such time as the investment balances of the Partnership and EMG Utica are in the ratio of 70% and 30%, respectively (such time being referred to as the “Second Equalization Date”). To the extent the Partnership does not fully exercise such right at any time prior to the Second Equalization Date, EMG Utica shall have the right, but not the obligation, to contribute such additional capital that is requested and that is not contributed by the Partnership. After the Second Equalization Date, EMG Utica shall have the right, but not the obligation, to maintain a 30% interest in MarkWest Utica EMG by funding 30% of any additional required capital.

The Partnership has determined that MarkWest Utica EMG is a VIE primarily due to the Partnership’s disproportionate economic interests as compared to its stated ownership interests and voting interests. The Partnership’s 60% ownership interest in the entity is disproportionate to its economic interest due to the timing of the capital funding requirements described above. The Partnership has concluded that it is the primary beneficiary of MarkWest Utica EMG based on its role as the operator and its right to receive benefits and absorb losses of MarkWest Utica EMG. The Partnership believes that its role as the operator along with its equity interests give it the power to direct the activities that most significantly affect the economic performance of MarkWest Utica EMG.

MarkWest Pioneer

MarkWest Pioneer is the owner and operator of the Arkoma Connector Pipeline. The Partnership and Arkoma Pipeline Partners, LLC share the equity interests in MarkWest Pioneer equally (50% and 50%). As discussed in Note 4 in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011, the Partnership determined that MarkWest Pioneer is a VIE and the Partnership is the primary beneficiary.

Financial Statement Impact of VIEs

As the primary beneficiary of MarkWest Pioneer and MarkWest Utica EMG, the Partnership consolidates the entities and recognizes non-controlling interests. As of December 31, 2011, MarkWest Pioneer was the only VIE included in the Partnership’s condensed consolidated financial statements and its assets and liabilities are disclosed parenthetically on the accompanying Condensed Consolidated Balance Sheets. The following tables show the consolidated assets and liabilities attributable to MarkWest Pioneer and MarkWest Utica EMG, excluding intercompany balances, as of June 30, 2012 (in thousands).

	As of June 30, 2012
	MarkWest Pioneer		MarkWest Utica EMG		Total
ASSETS
Cash and cash equivalents	$	3,089	$	79	$	3,168
Receivables, net	1,428		—		1,428
Other current assets	69		—		69
Property, plant and equipment, net of accumulated depreciation of $18,696 and $8, respectively	139,246		29,098		168,344
Other long-term assets	102		—		102
Total assets	$	143,934	$	29,177	$	173,111
LIABILITIES
Accounts payable	$	42	$	250	$	292
Accrued liabilities	1,171		13,135		14,306
Other long-term liabilities	76		—		76
Total liabilities	$	1,289	$	13,385	$	14,674

The assets of the VIEs are the property of the respective entities and are not available to the Partnership for any other purpose, including as collateral for its secured debt (see Note 9 and Note 15). VIE asset balances can only be used to settle obligations of each respective VIE. The liabilities of the VIEs do not represent additional claims against the Partnership’s general assets, and the creditors or beneficial interest holders of the VIE do not have recourse to the general credit of the Partnership. The Partnership’s maximum exposure to loss as a result of its involvement with the VIEs includes its equity investment, any additional capital contribution commitments and any operating expense incurred by the subsidiary operator in excess of its compensation received for the performance of the operating services. The Partnership may temporarily fund MarkWest Utica EMG for certain projects due to the timing of the capital call process. The Partnership will receive distributions as reimbursement for any temporary funding. Other than temporary funding, the Partnership did not provide any financial support to the VIEs that it was not contractually obligated to provide during the six months ended June 30, 2012 and 2011.

The results of operations of MarkWest Utica EMG and MarkWest Pioneer are included in the Partnership’s Liberty and Southwest segments, respectively (see Note 14). The result of operations and cash flows for MarkWest Pioneer are not material to the Partnership. During the six months ended June 30, 2012, construction began for MarkWest Utica EMG assets, but operating activities have not commenced. Therefore, the results of operations and cash flows related to MarkWest Utica EMG are not material to the Partnership.

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Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Supplemental Cash Flow Information
Cash paid for interest, net of amounts capitalized	$ 61,543	$ 57,820
Cash paid for income taxes, net	18,425	514
Supplemental schedule of non-cash investing and financing activities:
Accrued property, plant and equipment	236,495	58,429
Interest capitalized on construction in progress	8,048	199
Issuance of common units for vesting of share-based payment awards	$ 2,501	$ 5,282

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value

Derivative instruments carried at fair value

As of June 30, 2012	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	22,846	$	(27,644	)
Significant unobservable inputs (Level 3)
Commodity contracts	30,538		(982		)
Embedded derivatives in commodity contracts	10,409		(20,804		)
Total carrying value in Condensed Consolidated Balance Sheet	$	63,793	$	(49,430	)

As of December 31, 2011	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	5,063	$	(79,358	)
Significant unobservable inputs (Level 3)
Commodity contracts	12,210		(15,175		)
Embedded derivatives in commodity contracts	7,517		(61,421		)
Total carrying value in Condensed Consolidated Balance Sheet	$	24,790	$	(155,954	)

Summary of significant unobservable inputs used in the valuation of Level 3 instruments

The following table provides additional information about the significant unobservable inputs used in the valuation of Level 3 instruments as of June 30, 2012. The market approach is used for valuation of all instruments.

Level 3 Instrument	Balance Sheet Classification	Unobservable Inputs	Value Range			Time Period
Commodity contracts	Assets	Forward propane prices (per gallon)	$0.84	-	$0.92	Jan. 2013 - Dec. 2014
		Forward isobutane prices (per gallon)	$1.32	-	$1.44	Jan. 2013 - Dec. 2014
		Forward normal butane prices (per gallon)	$1.22	-	$1.30	Jan. 2013 - Dec. 2014
		Forward natural gasoline prices (per gallon)	$1.75	-	$1.83	Jan. 2013 - Dec. 2014
		Crude option volatilities (%)	18.41%	-	39.55%	Jul. 2012 - Dec. 2014
	Liabilities	Forward propane prices (per gallon)	$0.87	-	$0.89	Dec. 2012 - Mar. 2013
		Crude option volatilities (%)	18.41%	-	39.55%	Jul. 2012 - Dec. 2012
Embedded derivatives in commodity contracts	Liability	Forward propane prices (per gallon)	$0.83	-	$0.92	Jul. 2012 - Dec. 2022
		Forward isobutane prices (per gallon)	$1.31	-	$1.44	Jul. 2012 - Dec. 2022
		Forward normal butane prices (per gallon)	$1.18	-	$1.30	Jul. 2012 - Dec. 2022
		Forward natural gasoline prices (per gallon)	$1.74	-	$1.83	Jul. 2012 - Dec. 2022
		Forward natural gas prices (per mmbtu)	$2.75	-	$5.79	Jul. 2012 - Dec. 2022
		Probability of renewal (1)		0%
	Asset	ERCOT Pricing (per MegaWatt Hour) (2)	$25.38	-	$94.26	Jul. 2012 - Dec. 2014

(1)The producer counterparty to the embedded derivative has the option to renew the gas purchase agreement and the related keep-whole processing agreement for two successive five year terms after 2022. The embedded gas purchase agreement cannot be renewed without the renewal of the related keep-whole processing agreement. Due to the significant number of years until the renewal options are exercisable and the high level of uncertainty regarding the counterparty’s future business strategy, the future commodity price environment, and the future competitive environment for midstream services in the Appalachia area, management determined that a 0% probability of renewal is an appropriate assumption.

(2)The forward ERCOT prices utilized in the valuations are generally increasing over time with a seasonal spike in pricing in the summer months.

Roll forward of the balance sheet amounts for assets and liabilities classified within Level 3 of the valuation hierarchy

	Three months ended June 30, 2012
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(17,450	)	$	(60,804	)
Total gain (realized and unrealized) included in earnings (1)	46,290			48,109
Settlements	716			2,300
Fair value at end of period	$	29,556		$	(10,395	)
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	43,894		$	47,300

	Three months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(35,906	)	$	(50,607	)
Total gain (loss) (realized and unrealized) included in earnings (1)	10,456			(2,825		)
Settlements	3,160			3,985
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	10,206		$	(2,429	)

	Six months ended June 30, 2012
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(2,965	)	$	(53,904	)
Total loss (realized and unrealized) included in earnings (1)	34,214			37,671
Settlements	(1,693		)	5,838
Fair value at end of period	$	29,556		$	(10,395	)
The amount of total gain for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	30,304		$	36,698

	Six months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(14,357	)	$	(34,936	)
Total loss (realized and unrealized) included in earnings (1)	(12,537		)	(22,105		)
Settlements	4,604			7,594
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	(10,578	)	$	(20,277	)

(1)Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Derivative gain (loss) related to revenue. Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs, Derivative gain (loss) related to purchased product costs, Facility expenses, and Derivative gain (loss) related to facility expenses.

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Business Combination (Details) (Keystone Acquisition, USD $)	1 Months Ended	6 Months Ended
	May 31, 2012 MMcf item	Jun. 30, 2012 Y	May 29, 2012 sqmi
Keystone Acquisition
Business Combination
Purchase price		$ 509,600,000	$ 509,600,000
Number of cryogenic natural gas processing plants acquired	2
Capacity of cryogenic natural gas processing plant (in MMcf/d)	90
Area of land (in square miles)			900
Assets
Cash			2,837,000
Accounts receivable			1,756,000
Property, plant and equipment			136,593,000
Goodwill			76,664,000
Intangible asset			304,708,000
Liabilities
Accounts payable			(12,117,000)
Other short-term liabilities			(175,000)
Other long-term liabilities			(632,000)
Total			$ 509,634,000
Estimated useful life of intangibles (in years)		19

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information

Segment Information

14. Segment Information

The Partnership prepares segment information in accordance with GAAP. Certain items below Income from operations in the accompanying Condensed Consolidated Statements of Operations, certain compensation expense, certain other non-cash items and any gains (losses) from derivative instruments are not allocated to individual segments. Management does not consider these items allocable to or controllable by any individual segment and therefore excludes these items when evaluating segment performance. Segment results are also adjusted to exclude the portion of operating income attributable to the non-controlling interests.

The tables below present the Partnership’s segment profit measure, Operating income before items not allocated to segments, for the three and six months ended June 30, 2012 and 2011 and capital expenditures for the six months ended June 30, 2012 and 2011 for the reported segments (in thousands).

Three months ended June 30, 2012:

	Southwest		Northeast		Liberty			Gulf Coast		Total
Segment revenue	$	189,162	$	42,051	$	59,477		$	20,997	$	311,687
Purchased product costs	91,792		12,921		8,018			—		112,731
Net operating margin	97,370		29,130		51,459			20,997		198,956
Facility expenses	23,034		4,932		13,647			9,607		51,220
Portion of operating income (loss) attributable to non-controlling interests	1,590		—		(113		)	—		1,477
Operating income before items not allocated to segments	$	72,746	$	24,198	$	37,925		$	11,390	$	146,259

Three months ended June 30, 2011:

	Southwest		Northeast		Liberty		Gulf Coast		Total
Segment revenue	$	235,575	$	53,676	$	48,337	$	24,683	$	362,271
Purchased product costs	128,988		15,702		9,890		—		154,580
Net operating margin	106,587		37,974		38,447		24,683		207,691
Facility expenses	20,855		6,929		7,269		8,312		43,365
Portion of operating income attributable to non-controlling interests	1,346		—		15,182		—		16,528
Operating income before items not allocated to segments	$	84,386	$	31,045	$	15,996	$	16,371	$	147,798

The following is a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax for the three months ended June 30, 2012 and 2011 (in thousands):

	Three months ended June 30,
	2012			2011
Total segment revenue	$	311,687		$	362,271
Derivative gain not allocated to segments	136,067			40,590
Revenue deferral adjustment (1)	(1,701		)	(2,422		)
Total revenue	$	446,053		$	400,439
Operating income before items not allocated to segments	$	146,259		$	147,798
Portion of operating income attributable to non-controlling interests	1,477			16,528
Derivative gain not allocated to segments	188,792			37,917
Revenue deferral adjustment (1)	(1,701		)	(2,422		)
Compensation expense included in facility expenses not allocated to segments	(184		)	(188		)
Facility expenses adjustments (2)	2,866			2,855
Selling, general and administrative expenses	(21,879		)	(18,580		)
Depreciation	(42,918		)	(37,201		)
Amortization of intangible assets	(12,307		)	(10,830		)
Loss on disposal of property, plant and equipment	(1,342		)	(2,373		)
Accretion of asset retirement obligations	(161		)	(290		)
Income from operations	258,902			133,214
Earnings (loss) from unconsolidated affiliate	551			(216		)
Interest income	159			63
Interest expense	(26,762		)	(27,874		)
Amortization of deferred financing costs and discount (a component of interest expense)	(1,245		)	(1,443		)
Miscellaneous income, net	4			169
Income before provision for income tax	$	231,609		$	103,913

(1)Amount relates to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore, the impact of the revenue deferrals is excluded for segment reporting purposes. For the three months ended June 30, 2012, approximately $0.2 million and $1.5 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the three months ended June 30, 2011, in comparison, approximately $0.2 million and $2.2 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Beginning in 2015, the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

(2)Facility expenses adjustments consist of the reallocation of the MarkWest Pioneer field services fee and the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Gulf Coast segment.

Six months ended June 30, 2012:

	Southwest		Northeast		Liberty			Gulf Coast		Total
Segment revenue	$	403,887	$	128,969	$	135,054		$	45,226	$	713,136
Purchased product costs	196,025		38,608		32,653			—		267,286
Net operating margin	207,862		90,361		102,401			45,226		445,850
Facility expenses	46,026		11,310		25,894			19,245		102,475
Portion of operating income (loss) attributable to non-controlling interests	3,036		—		(113		)	—		2,923
Operating income before items not allocated to segments	$	158,800	$	79,051	$	76,620		$	25,981	$	340,452
Capital expenditures	$	95,657	$	43,475	$	432,287		$	7,052	$	578,471
Capital expenditures not allocated to segments										3,732
Total capital expenditures										$	582,203

Six months ended June 30, 2011:

	Southwest		Northeast		Liberty		Gulf Coast		Total
Segment revenue	$	437,349	$	145,767	$	89,556	$	46,442	$	719,114
Purchased product costs	232,184		56,580		19,445		—		308,209
Net operating margin	205,165		89,187		70,111		46,442		410,905
Facility expenses	41,012		12,523		13,767		17,302		84,604
Portion of operating income attributable to non-controlling interests	2,518		—		27,559		—		30,077
Operating income before items not allocated to segments	$	161,635	$	76,664	$	28,785	$	29,140	$	296,224
Capital expenditures	$	51,312	$	3,370	$	176,027	$	845	$	231,554
Capital expenditures not allocated to segments									2,562
Total capital expenditures									$	234,116

The following is a reconciliation of segment revenue to total revenue and operating income before items not allocated to segments to income before provision for income tax for the six months ended June 30, 2012 and 2011 (in thousands):

	Six months ended June 30,
	2012			2011
Total segment revenue	$	713,136		$	719,114
Derivative gain (loss) not allocated to segments	87,352			(45,089		)
Revenue deferral adjustment (1)	(3,969		)	(10,365		)
Total revenue	$	796,519		$	663,660
Operating income before items not allocated to segments	$	340,452		$	296,224
Portion of operating income attributable to non-controlling interests	2,923			30,077
Derivative gain (loss) not allocated to segments	123,023			(64,145		)
Revenue deferral adjustment (1)	(3,969		)	(10,365		)
Compensation expense included in facility expenses not allocated to segments	(633		)	(1,228		)
Facility expenses adjustments (2)	5,730			5,710
Selling, general and administrative expenses	(47,103		)	(40,292		)
Depreciation	(84,063		)	(71,565		)
Amortization of intangible assets	(23,292		)	(21,647		)
Loss on disposal of property, plant and equipment	(2,328		)	(4,472		)
Accretion of asset retirement obligations	(399		)	(377		)
Income from operations	310,341			117,920
Earnings (loss) from unconsolidated affiliate	542			(755		)
Interest income	231			152
Interest expense	(56,234		)	(56,137		)
Amortization of deferred financing costs and discount (a component of interest expense)	(2,515		)	(2,871		)
Loss on redemption of debt	—			(43,328		)
Miscellaneous income, net	62			131
Income before provision for income tax	$	252,427		$	15,112

(1)Amount relates to certain contracts in which the cash consideration that the Partnership receives for providing service is greater during the initial years of the contract compared to the later years. In accordance with GAAP, the revenue is recognized evenly over the term of the contract as the Partnership will perform a similar level of service for the entire term; therefore, the revenue recognized in the current reporting period is less than the cash received. However, the Partnership’s chief operating decision maker and management evaluate the segment performance based on the cash consideration received and therefore the impact of the revenue deferrals is excluded for segment reporting purposes. For the six months ended June 30, 2012, approximately $0.4 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. For the six months ended June 30, 2011, approximately $6.7 million and $3.6 million of the revenue deferral adjustment is attributable to the Southwest segment and Northeast segment, respectively. Beginning in 2015, the cash consideration received from these contracts will decline and the reported segment revenue will be less than the revenue recognized for GAAP purposes.

(2)Facility expenses adjustments consist of the reallocation of the MarkWest Pioneer field services fee and the reallocation of the interest expense related to the SMR, which is included in facility expenses for the purposes of evaluating the performance of the Gulf Coast segment.

The tables below present information about segment assets as of June 30, 2012 and December 31, 2011 (in thousands):

	June 30, 2012		December 31, 2011
Southwest	$	1,698,454	$	1,701,919
Northeast	491,428		533,591
Liberty	2,147,784		1,114,654
Gulf Coast	527,147		553,043
Total segment assets	4,864,813		3,903,207
Assets not allocated to segments:
Certain cash and cash equivalents	113,529		66,212
Fair value of derivatives	63,793		24,790
Investment in unconsolidated affiliate	26,695		27,853
Other (1)	65,768		48,363
Total assets	$	5,134,598	$	4,070,425

(1)Includes corporate fixed assets, deferred financing costs, income tax receivable, receivables and other corporate assets not allocated to segments.