Definitive Agreements Executed for Contributions of Sand Hills and Southern Hills Natural Gas Liquids Pipeline Interests to DCP Midstream

Spectra Energy Corp

and Spectra Energy Partners, LP

have executed an agreement for the acquisition by Spectra Energy of Spectra Energy Partners' one-third ownership interests in the Sand Hills and Southern Hills natural gas liquids (NGL) pipelines. Spectra Energy Corp logo Spectra Energy has also executed an agreement with Phillips 66

and DCP Midstream, LLC (the 50-50 joint venture between Spectra Energy and Phillips 66) under which Spectra Energy will contribute its interests in the Sand Hills and Southern Hills pipelines and Phillips 66 will contribute $1.5 billion in cash, respectively, to DCP Midstream. The plan to contribute these assets was previously announced on Sept. 8, 2015 as part of a series of actions that would establish a foundation for sustainable cash flows at DCP Midstream. In consideration for Spectra Energy Partners' interests in Sand Hills and Southern Hills, Spectra Energy will transfer for redemption and cancellation 21,560,000 limited partner (LP) units, 440,000 general partner (GP) units, and a reduction in the distribution right payments associated with the cancelled units. In addition, Spectra Energy will grant a three-year, $4 million per calendar quarter giveback of distributions on its incentive distribution rights (IDRs), beginning with distributions payable in the first quarter 2016. "The contribution of cash and the interests in the Sand Hills and Southern Hills NGL pipelines to DCP Midstream will provide DCP with a stronger balance sheet and increased financial flexibility while positioning it to grow through future commodity cycles. The solution we have put in place with our joint venture partner, Phillips 66, allows DCP to retain and expand upon its leading position in the NGL sector while preserving the upside for the owners that will occur when commodity prices ultimately recover," said Greg Ebel, chairman and CEO, Spectra Energy and Spectra Energy Partners. "The transaction between Spectra Energy and Spectra Energy Partners allows SEP to realize consistent distributable cash flow per unit and enhanced distribution coverage as a result of the redemption of units and the IDR giveback. Spectra Energy Partners' strong growth profile with solid, fee-based revenues gives us continued confidence in distribution coverage in the range of 1.05 to 1.15 times, which is consistent with our previous guidance. In addition, Spectra Energy Partners' distribution growth guidance continues at 8 to 9 percent through at least 2017," continued Ebel. Subject to customary closing conditions, both transactions are expected to close in the fourth quarter. The transaction between Spectra Energy and Spectra Energy Partners was unanimously approved by the Board of Directors of Spectra Energy Partners, based on the unanimous approval and recommendation of its Conflicts Committee, which is comprised entirely of independent directors.