1166036--3/7/2007--MARKWEST_ENERGY_PARTNERS_L

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{operation, natural, condition}

{stock, price, operating}

{customer, product, revenue}

{acquisition, growth, future}

{cost, regulation, environmental}

{personnel, key, retain}

{cost, operation, labor}

{tax, income, asset}

{loss, insurance, financial}

{control, financial, internal}

{provision, law, control}

{product, market, service}

{cost, contract, operation}

Risks Inherent in Our Business We may not have sufficient cash after the establishment of cash reserves and payment of our general partner s fees and expenses to enable us to pay distributions at the current level. If we do not make acquisitions on economically acceptable terms, our future growth will be limited. If we are unable to successfully integrate our future acquisitions, our future financial performance may suffer. Growing our business by constructing new pipelines and processing and treating facilities subjects us to construction risks and risks that natural gas supplies will not be available upon completion of the facilities. Our substantial debt and other financial obligations could impair our financial condition, results of operations and cash flows, and our ability to fulfill our debt obligations. A significant decrease in natural gas production in our areas of operation would reduce our ability to make distributions to our unitholders. We depend on third parties for the natural gas and refinery off-gas we process, and the NGLs we fractionate at our facilities, and a reduction in these quantities could reduce our revenues and cash flow. We derive a significant portion of our revenues from our gas processing, transportation, fractionation and storage agreements with MarkWest Hydrocarbon, and its failure to satisfy its payment or other obligations under these agreements could reduce our revenues and cash flow. The fees charged to third parties under our gathering, processing, transmission, transportation, fractionation and storage agreements may not escalate sufficiently to cover increases in costs. The agreements may not be renewed or may be suspended in some circumstances. We are exposed to the credit risks of our key customers, and any material nonpayment or nonperformance by our key customers could reduce our ability to make distributions to our unitholders. We may not be able to retain existing customers, or acquire new customers, which would reduce our revenues and limit our future profitability. Our profitability is affected by the volatility of NGL product and natural gas prices. Our commodity derivative activities may reduce our earnings, profitability and cash flows. We have found a material weakness in our internal controls that requires remediation and concluded, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, that our internal controls over financial reporting at December 31, 2006, were not effective. In addition, we and Deloitte Touche LLP identified material weaknesses in our control environment and our risk management and accounting for derivative financial instruments as of December 31, 2005. Additionally, we and KPMG LLP, our independent registered public accounting firm at that time, identified material weaknesses in our internal control over financial reporting as of December 31, 2004. Transportation on certain of our pipelines may be subject to federal or state rate and service regulation, and the imposition and/or cost of compliance with such regulation could adversely affect our profitability. If we are unable to obtain new rights-of-way or the cost of renewing existing rights-of-way increases, then we may be unable to fully execute our growth strategy and our cash flows could be adversely affected. We are indemnified for liabilities arising from an ongoing remediation of property on which our facilities are located and our results of operation and our ability to make payments of principal and interest on our debt and distributions to our unitholders could be adversely affected if the indemnifying party fails to perform its indemnification obligation. Our business is subject to federal, state and local laws and regulations with respect to environmental, safety and other regulatory matters, and the violation of, or the cost of compliance with, such laws and regulations could adversely affect our profitability. The amount of gas we process, gather and transmit, or the crude oil we gather and transport, may be reduced if the pipelines to which we deliver the natural gas or crude oil cannot, or will not, accept the gas or crude oil. Our business would be adversely affected if operations at any of our facilities were interrupted. Due to our lack of asset diversification, adverse developments in our gathering, processing, transportation, transmission, fractionation and storage businesses would reduce our ability to make distributions to our unitholders. As a result of damage caused by Hurricanes Katrina and Rita in the Gulf of Mexico and Gulf Coast regions in 2005, insurance costs related to oil and gas assets in these regions have increased significantly. We may be unable to obtain insurance on our interest in Starfish at rates we consider reasonable. A shortage of skilled labor may make it difficult for us to maintain labor productivity at competitive costs and could adversely affect our profitability. Our business may suffer if any of our key senior executives discontinues employment with us or if we are unable to recruit and retain highly skilled accounting and finance staff. Risks Related to Our Partnership Structure Cost reimbursements and fees due our general partner may be substantial and reduce our cash available for distribution to unitholders. MarkWest Hydrocarbon and its affiliates have conflicts of interest and limited fiduciary duties, which may permit them to favor their own interests to the detriment of the unitholders. Unitholders have less ability to elect or remove management than holders of common stock in a corporation. The control of our general partner may be transferred to a third party, and that party could replace our current management team, in each case without unitholder consent. Our general partner s absolute discretion in determining the level of cash reserves may adversely affect our ability to make cash distributions to our unitholders. We do not have any employees and rely solely on employees of MarkWest Hydrocarbon and its affiliates who serve as our agents. We may issue additional common units without unitholder approval, which would dilute individual ownership interests. Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price. Unitholders may not have limited liability if a court finds that unitholder action constitutes control of our business. Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as our not being subject to entity-level taxation by states. If the IRS were to treat us as a corporation or if we were to become subject to entity-level taxation for state tax purposes, then our cash flows would be substantially reduced.

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1166036--3/7/2007--MARKWEST_ENERGY_PARTNERS_L_P