Transaction Details: 

The Acquired Assets include Paramount's recently constructed Kakwa sour natural gas processing complex and associated infrastructure including gas gathering pipelines, sales gas pipeline and future disposal wells (the "Kakwa Assets"); and Paramount's preliminary engineering studies, licenses and surface rights for the future construction of a sour natural gas processing facility (the "6-18 Facility"). The Transaction will add 250 million cubic feet per day ("mmcf/d") of processing capacity in one of Pembina's core areas. This will increase total processing capacity under Pembina's Gas Services business to over 1.7 billion cubic feet per day ("bcf/d"), inclusive of the Musreau III and the Resthaven expansions which are expected to be on-stream by mid-2016, making Pembina one of the largest third-party gas processors serving the Western Canadian Sedimentary Basin.

Description of the Acquired Assets

Kakwa Assets

The Kakwa Assets are comprised of a recently constructed natural gas processing facility located approximately 15 kilometres from Pembina's existing Cutbank Complex with raw gas processing capacity of 250 mmcf/d, including a 200 mmcf/d deep cut train, a 50 mmcf/d shallow cut train and 22,500 barrels per day ("bbls/d") of condensate stabilization. The Kakwa Assets also include an amine processing train to facilitate sour gas processing at the facility, and is the only sour gas processing facility west of the Smoky River within 50 kilometres. Additionally, the Kakwa Assets include gas gathering pipelines, sales gas transportation pipelines and future disposal wells. The Kakwa Assets are connected to Pembina's conventional pipelines for natural gas liquids and condensate transportation services, as well as connected to Pembina's Cutbank Complex, via an existing pipeline operated by Paramount. The shallow cut and deep cut facilities were placed into service in the first quarter of 2012 and August 2014, respectively.

6-18 Facility

Paramount has secured site licenses and undertaken preliminary engineering work to support the construction of a new sour shallow cut facility to be located approximately seven kilometers from Pembina's Cutbank Complex. As part of the Transaction,Pembina will acquire all of Paramount's preliminary engineering studies, licenses and surface rights for the proposed facility. Upon Paramount's election or sufficient third-party demand, subject to certain conditions, Pembina will construct a sour natural gas processing facility at 6-18. If built, commercial provisions underlying the 6-18 Facility are expected to be similar to the Kakwa Assets and include a substantial take-or-pay commitment.

Key Transaction highlights include:

• Development of a Strategic Asset Base: The combination of the Acquired Assets with Pembina's existing Cutbank Complex will create a strategic asset base with over 1 bcf/d of processing capacity by mid-2016, including 405 mmcf/d of deep cut processing capacity, and approximately 450 kilometres of gathering pipelines. The Kakwa Assets are already physically connected to Pembina's Cutbank Complex via an existing pipeline operated by Paramount.
• Enhances Service Offering: By acquiring sour gas processing, Pembina is expanding the Company's service offering and strengthening its ability to capture future liquids rich sour gas production growth.
• Supporting Economic Geology: Situated in the liquids rich and economic Deep Basin, the Acquired Assets serve amongst the most economic resource plays in North America, given their condensate focus. Paramount has established a substantial land base of Montney and Cretaceous rights, which have the potential to support robust throughput levels, for both the Kakwa Assets and the proposed 6-18 Facility, for decades to come, with attractive returns even in a low commodity price environment.
• Long-Term, Take-or-Pay Volume Commitment: In conjunction with the Transaction, Pembina and Paramount have entered into a 20 year midstream services agreement, which includes a substantial take-or-pay commitment, in support of the Kakwa Assets. Pembina retains the right to contract spare capacity to third-parties.
• Cash Flow per Share Accretion: The Transaction is expected to be immediately accretive to cash flow per share.
• Platform for Long-Term Growth: The Transaction includes accretive growth potential through the expansion option for the future 6-18 Facility. Pembina has agreed to construct, subject to certain conditions, additional sour natural gas processing assets. The site acquired in conjunction with the Transaction has sufficient scale to support additional processing facilities and in Pembina's view, the 6-18 site is capable of supporting up to 600 mmcf/d of additional sweet or sour gas processing capacity.