Hiland Partners SC 13E3 Going private transaction

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Discussion Materials January 5, 2008

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Table of Contents Draft I. Situational Analysis II. Strategic Alternatives III. Appendix I. High Yield Market Conditions Wachovia Securities is the trade name for the corporate and investment banking services of Wachovia Corporation and its subsidiaries. Debt and equity underwriting, trading, research and sales, loan syndications agent services, and corporate finance and M&A advisory services are offered by Wachovia Capital Markets, LLC, member FINRA, NYSE and SIPC. Mezzanine capital, private equity, municipal securities trading and sales, cash management, credit, international, leasing and risk management products and services are offered by various non-broker dealer subsidiaries of Wachovia Corporation. Project Double Barrel 2

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Strategic Alternatives in Perspective Draft Strategic Alternatives Renegotiate Status Quo Existing Credit Agreement Use Asset Sale Eliminate Growth Compliant with debt Proceeds to Repay covenants? No Capital Debt Expenditures Issue Convertible Yes Security to Repay Reduce Current Compliant with debt Distribution per Debt covenants? No Unit Issue Subordinated Yes Debt to Repay Compliant with debt Debt No covenants? Issue New Equity Yes to Repay Debt Maximizes unitholder value? Merger Yes Yes Yes Restructure / Go Private Project Double Barrel 3

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Strategic Alternatives Summary Draft Description Highlights ConsiderationsMaintain current status without any Recovery/compliance dependent onCovenant problem requires pursuing a changes to operations, organizational sharp increase in near term commodity strategic solution. Status Quo structure or capital structure. prices.Likely no access to capital markets.Small market cap exacerbates risk.Restructure current credit agreement toPreserves asset base and future upside.Potential for bank group defections. Renegotiate Credit provide temporary covenant relief.Minimizes investor dilution.Size of covenant problem. AgreementLikely onerous terms. Use Asset SalePartially monetize existing assets andProvides proceeds relatively near termHighest quality assets would need to be sold. Proceeds to use net proceeds to repay debt. to repay bank debt.Limited universe of buyers. Partially RepayNegative impact on revolver availability. Existing Debt Remaining entity too small to remain public. Issue Convertible toDelever through the issuance ofStrengthens balance sheet.Significant execution risk. Partially Repay convertible security. Proceeds used toPreserves independence.Equity dilution. Existing Debt repay bank debt.Unitholder approval needed. Issue Sub. Debt toIssue deeply subordinated bridge loanProvides unitholders ability to retain Requires consent of existing lenders. Partial ly Repay and use proceeds to repay bank debt. upside without immediate dilution.Dilution if refinanced with new equity. Existing Debt Preserves independence.Apply net proceeds from commonStrengthens balance sheet.Significant execution risk and dilution to Issue New Equity to equity issuance to existing debt inPreserves independence. existing unitholders. Partially Repay order to comply with debt covenants.Permanently impairs the value of HPGP’s Existing Debt sub units and IDRs.Unitholder approval needed.Combine with peer to extract synergiesPreserves equity holder participation inLoss of control. Merger and potentially alleviate credit future recovery. Limited universe of partners. concerns.Diversification.Cease to be publicly traded entity.Avoids downside risk to unitholdersReputational risk if not perceived correctly. associated with other alternatives. Litigation risk if not valued fairly. Restructure /Provides immediate liquidity to equityAdditional equity investments needed. Go Private holders. May be easier to grow as private company. Project Double Barrel 4

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Situational Analysis Project Double Barrel 5

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1-Year Price Performance – HLND and HPGP Draft 1/25/08 – HLND and HPGP 3/19/08 – HLND and HPGP 7/25/08 – HLND and HPGP 10/24/08 – HLND and increase distributions to announce resignation of increase distributions to HPGP increase distributions $0.7950 from $0.7550 and CFO Ken Maples $0.8625 from $0.8275 and to $0.8800 from $0.8625 $0.2550 from $0.2300, 4/25/08 – HLND and HPGP $0.3050 from $0.2800, increase distributions to and $0.3175 from respectively respectively $0.8275 from $0.7950 and $0.3050, respectively $0.2800 from $0.2550, 2/21/08 – HLND 8/7/08 – HLND and respectively $60 and HPGP report HPGP report Second-Fourth-Quarter 2007 Quarter 2008 results 11/6/08 – HLND 5/8/08 – HLND and results and HPGP report HPGP report First-Third-Quarter 2008 Quarter 2008 results 10/23/08 – HLND and results $50 HPGP receive $12.1 million from SemCrude bankruptcy proceedings 11/18/08 – HLND and HPGP announce $40 fiscal year 2009 guidance $30 $20 $10 $5.13 $2.37 $0 12/31/07 12/30/07 2/22/08 4/17/08 6/9/08 7/30/08 9/19/08 11/10/08 12/31/08 Source: FactSet, Hiland press releases HLND HPGP Project Double Barrel 6

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HLND Price Performance Draft HLND vs. Public Comparables — IPO to Present 250 200 150 Indexed Price 100 50 (61%) (77%) 0 HLND’s unit price had 2/10/05 8/31/05 3/22/06 10/11/06 5/02/07 11/21/07 6/11/08 12/31/08 outperformed its peer Hiland Partners, LP Gathering & Processing Index 1 group from the time HLND vs. Public Comparables — 8/31/08 to Present of its IPO until 120 recently 100 80 Indexed Price 60 40 (68%) 20 (89%) 0 8/31/08 8/29/08 9/18/08 10/09/08 10/30/08 11/19/08 12/10/08 12/31/08 Hiland Partners, LP Gathering & Processing Index 1 Source: FactSet 1 Includes APL, CPNO, XTEX, DPM, EROC, EXLP, MWE, KGS, RGNC, NGLS, WES and WPZ Project Double Barrel 7

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HPGP Price Performance Draft HPGP vs. Public Comparables — IPO to Present 250 200 150 Indexed Price 100 50 (82%) (87%) (88%) 0 Like HLND, HPGP has 9/20/06 1/17/07 5/16/07 9/12/07 1/09/08 5/07/08 9/03/08 12/31/08 HPGP XTXI AHD seen its unit price fall HPGP vs. Public Comparables — 8/31/08 to Present sharply since the end of the summer 120 100 80 Indexed Price 60 40 20 (87%) (88%) (89%) 0 8/31/08 8/29/08 9/15/08 10/03/08 10/21/08 11/07/08 11/25/08 12/12/08 12/31/08 HPGP XTXI AHD Source: FactSet Project Double Barrel 8

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Price Performance Relative to Commodities Draft HLND, HPGP, Oil, NGLs & Natural Gas — HLND IPO to Present 350 300 250 200 150 100 (5%) (9%) (20%) 50 (77%) 0 (87%) 2/10/05 10/4/05 5/30/06 1/23/07 9/14/07 5/12/08 12/31/08 Both Hiland’s unit HLND HPGP Oil Natural Gas NGLs 1 price and commodity HLND, HPGP, Oil, NGLs & Natural Gas — 8/31/08 to Present prices have declined 120 in recent months 100 (23%) 80 60 40 (58%) (65%) 20 (89%) (89%) 0 9/2/08 8/31/08 9/18/08 10/6/08 10/22/08 11/7/08 11/25/08 12/15/08 12/31/08 1 HLND HPGP Oil Natural Gas NGLs Source: FactSet 1 Natural Gas Liquids is a weighted average of Mont Belvieu C2, C3, nC4, iC4 and C5 Project Double Barrel 9

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Premiums Paid Analysis and Historical Trading of HLND and HPGP Draft Premiums Paid Analysis (All Transactions)1 Premiums Paid Analysis (Cash Transactions)1 U.S. Based Acquisitions U.S. Based Acquisitions January 2000 — Present January 2000 — Present One Day One Week Four Weeks One Day One Week Four Weeks Prior Prior Prior Prior Prior Prior Mean 35.1% 36.2% 40.1% Mean 38.5% 39.4% 42.4% Median 26.5% 28.4% 29.6% Median 29.8% 30.0% 32.3% 25th Percentile 14.3% 15.0% 15.7% 25th Percentile 15.3% 16.5% 16.2% 75th Percentile 43.3% 45.0% 47.2% 75th Percentile 48.6% 49.6% 47.3% HLND Unit Price $5.13 $3.91 $8.36 HLND Unit Price $5.13 $3.91 $8.36 HLND Implied Price Per Unit at Median $6.49 $5.02 $10.84 HLND Implied Price Per Unit at Median $6.66 $5.08 $11.06 HPGP Unit Price $2.37 $1.97 $3.30 HPGP Unit Price $2.37 $1.97 $3.30 HPGP Implied Price Per Unit at Median $3.00 $2.53 $4.28 HPGP Implied Price Per Unit at Median $3.08 $2.56 $4.37 1 U.S. transactions; Deal size between $50 Million and $250 Million 1 U.S. transactions; Deal size between $50 Million and $250 Million HLND 12-Month Units Traded Analysis (as of 12/31/08) HPGP 12-Month Units Traded Analysis (as of 12/31/08) 38.2% 31.2% 28.6% 16.5% 14.5% 15.5% 13.4% 9.8% 8.8% 8.7% 6.6% 5.5% 2.7% $0.00 - $3.00 $3.00 — $5.00 $5.00 — $10.00 $10.00 — $16.00 $16.00 — $22.00 $22.00+ $0.00 — $10.00 $10.00 - $12.00 $12.00 — $17.00 $17.00 — $27.00 $27.00 — $37.00 $37.00 — $47.00 $47.00+ Unit Price Unit Price Premium to 12/31/08 price (100.0%) — 53.8% 53.8% — 84.6% 84.6% — 161.5% 161.5% — 315.4% 315.4% — 469.2% 469.2% — 623.1% 623.1% — 669.2% Premium to 12/31/08 price (100.0%) — 8.3% 8.3% - 80.5% 80.5% — 261.0% 261.0% — 477.6% 477.6% — 694.2% 694.2% — 928.7% % Public Float 31.2% 5.5% 6.6% 16.5% 2.7% 28.6% 8.8% % Public Float 14.5% 8.7% 9.8% 13.4% 15.5% 38.2% Cumulative % of Public Float 31.2% 36.7% 43.3% 59.9% 62.6% 91.2% 100.0% Cumulative % of Public Float 14.5% 23.2% 33.0% 46.3% 61.8% 100.0% 10-Day VWAP 30-Day VWAP 60-Day VWAP 90-Day VWAP 10-Day VWAP 30-Day VWAP 60-Day VWAP 90-Day VWAP $4.85 $7.04 $12.66 $14.78 $2.18 $3.10 $6.72 $9.27 Source: CapIQ, Bloomberg Project Double Barrel 10

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HLND Equity Research Draft Research Coverage “With the rapid decline in NGL and natural gas prices, and the effective collapse Firm Name Ratings Target Price of the processing spreads in the early part of the 4Q/08 has dampen [sic] the Raymond James Buy $15.00 outlook for the partnership. We expect to see the management team get RBC Hold 36.00 defensive and have reduced our growth assumption and required growth capex, Barclays Hold 23.00 as we have done with other MLPs. We expect management to reduce the Morgan Keegan Sell NA distribution growth rate to retain cash to fund projects internally.” Average $24.67 — RBC Capital Markets (Mark Easterbrook) 11/18/08 % Buy 25% “LT growth prospect positive in a normalized commodity and credit market % Hold 50% given strong partnership with a key shale producer.” % Sell 25% — Barclays Capital (Richard Gross) 11/14/08 “We believe that the commodity price environment has worsened since our downgrade of HLND two weeks ago. We are now estimating that HLND will cut its distribution to a very modest $0.20/unit or 2.8% yield (a significant discount to the 48.6% yield based on the latest distribution declaration), less than the S&P 500. Without a distribution, we do not see any compelling reason to own HLND units until definitive signs of sustained commodity price improvement.” — Morgan Keegan (John Edwards) 12/11/08 Note: Excludes Wachovia Securities Project Double Barrel 11

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Commodity Price History Draft Commodity prices have been in a free fall since late summer, with NGL prices hit particularly hard by the impact of Hurricanes Gustav and Ike shortly after Labor Day. 5-Year Price — Crude Oil / Natural Gas / Natural Gas Liquids1 Average Price Since Current vs. Price At 1/1/2004 1/1/2006 8/31/2008 11/18/2008 1/1/2008 8/31/2008 11/18/2008 Crude Oil $67.36 $79.73 $69.43 $44.84 (53.7%) (58.7%) (9.0%) NGLs $41.98 $48.13 $37.19 $23.54 (63.6%) (64.6%) (10.4%) Natural Gas $5.01 $7.45 $6.59 $6.44 (28.7%) (27.0%) (16.7%) $225 $16 / Bbl) $200 Natural $14 $ $175 $12 $150 $10 $125 $7.51/MMBtu $8 Gas Price ( Oil & NGL Price ( $ $100 Crude / $73.57/Bbl $6 MMBtu) $75 $4 $50$ 28.97/Bbl $25$ 2 $0 $0 1/1/04 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 Crude Oil Natural Gas Natural Gas Liquids Crude Oil Strip Natural Gas Strip Natural Gas Liquids Strip Source: Historical data from Bloomberg; forward strip prices from Wachovia Commodities 1 Natural Gas Liquids is a weighted average of Mont Belvieu C2, C3, nC4, iC4 and C5 Project Double Barrel 12

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NGL-to-Crude Relationship History Draft The severe price deterioration in NGLs is evident in the deviation from the historical NGL-to-crude ratio. 5-Year NGL-to-Crude Ratio 1 100% Average Since 2004-2007 1/1/2004 Last 2 Years LTM 8/31/2008 90% 65.8% 63.6% 60.5% 54.7% 48.6% 80% 70% 54% 54% 60% 50% 39% 40% 30% 20% 10% 0% 1/1/04 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 NGL to Crude Ratio NGL to Crude Ratio — Strip NGL- to Crude Ratio - Hiland Projections Source: Historical data from Bloomberg; forward strip prices from Wachovia Commodities; Hiland projections based on NGL to Crude ratios provided by Management and using crude strip prices from Wachovia Commodities 1 Natural Gas Liquids is a weighted average of Mont Belvieu C2, C3, nC4, iC4 and C5 Project Double Barrel 13

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Hiland Capitalization Draft HLND HPGP Total Current unit price (as of 12/31/08) $5.13 $2.37 Equity Market Capitalization $48.9 $51.2 $100.1 Net debt 255.1 0.3 255.4 Enterprise Value 304.0 51.5 355.5 Hiland Partners, LP Capitalization Table (in Millions) 9/30/08 12/31/08 Est.1 Cash $12.1 $1.3 Debt HLND is expected to Credit Facility 262.1 254.1 Capital Lease Obligations 5.2 4.6 end the year only Total Debt 267.3 258.7 slightly within its key Partners’ Equity 139.0 127.9 debt / EBITDA Total Capitalization 406.3 386.6 covenant LTM EBITDA 70.8 68.0 Credit Statistics Debt / LTM EBITDA 3.77x 3.81x Debt / Total Capitalization 65.8% 66.9% 1 Based on HLND’s management guidance Project Double Barrel 14

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Hiland EBITDA Price Sensitivity Draft 2009 EBITDA Price Sensitivity to Commodity Prices $80 $70.3 $70 $65.0 $60.6 .$ 60 $51.0 Millions) $50 To maintain the MQD $41.4 in $40 and achieve covenant $ $31.8 ( compliance, Hiland $30 EBITDA requires a 2009E $22.1 $20 EBITDA of $65.0 million, or 57.1% $10 greater than projected $0 at current strip prices 2009 Commodity Prices: -50% -25% Strip1 +25% +50% +75% Crude Oil $27.22 $40.83 $54.44 $68.06 $81.67 $95.28 Natural Gas 3.04 4.56 6.08 7.60 9.12 10.64 NGLs 0.35 0.52 0.69 0.86 1.04 1.21 2009 EBITDA EBITDA to Meet 4.0x Debt/EBITDA Covenant at 12/31/09 Note: Assumes payment of minimum quarterly distributions, with remainder of cash flow used to reduce debt. Differentials held at a constant percent of natural gas strip prices 1 Strip prices as of December 31, 2008 per Wachovia Commodities Project Double Barrel 15

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Status Quo Draft Commentary Status Quo ProjectionsBased on management’s operating 2009 Quarterly Projections Annual Projections projections and commodity strip prices as ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 Commodity Prices (as of 12/31/08)1 of December 31, 2008, HLND is projected NYMEX Natural Gas $5.79 $5.78 $6.08 $6.68 $6.08 $7.10 $7.26 $7.20 $7.13 to be in violation of its debt covenants NYMEX Crude Oil $48.77 $53.51 $56.53 $58.97 $54.44 $63.88 $68.79 $71.14 $72.79 beginning in 2Q 2009. Conway Basket Average $0.649 $0.657 $0.681 $0.710 $0.674 $0.738 $0.989 $1.023 $1.047 Mt. Belvieu Basket Average $0.676 $0.695 $0.720 $0.747 $0.710 $0.778 $1.052 $1.088 $1.113Commodity price assumptions: CIG Differential ($1.694) ($1.996) ($2.169) ($1.789) ($1.912) ($2.257) ($2.348) ($2.328) ($2.307)NYMEX natural gas and crude oil PEPL Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.220) ($1.209) ($1.198) Centerpoint Differential ($1.288) ($1.016) ($1.010) ($1.003) ($1.079) ($0.922) ($1.134) ($1.124) ($1.114) prices through 2013 from Wachovia’s OGT Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.111) ($1.102) ($1.091) commodities group Financial Results2NGL prices for 2009 and 2010 from Base EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 Growth EBITDA 0.0 0.0 0.0 0.0 0.0 1.1 3.6 3.6 3.6 Wachovia’s commodities group and EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $48.0 $65.5 $67.5 $68.5 from 2011 through 2013 based on Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5) historical correlations to crude oil Interest Expense3 (2.8) (2.7) (2.7) (2.5) (10.8) (10.0) (12.0) (13.5) (15.1) Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4)Alternatives include: Distributable Cash Flow $4.6 $4.9 $6.0 $7.1 $22.7 $29.1 $44.6 $45.1 $44.5Eliminate capital expenditures Subordinated Debt Cash Interest $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Remaining Common Distributable Cash Flow $4.6 $4.9 $6.0 $7.1 $22.7 $29.1 $44.6 $45.1 $44.5Decrease/eliminate equity Distribution Coverage 1.1x 1.1x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x distributions Cash to be Distributed/Pay Debt $4.3 $4.3 $5.0 $6.0 $19.6 $24.2 $37.2 $37.6 $37.1Renegotiate existing credit agreement Average Common Units Outstanding 6.3 7.3 7.3 7.3 7.0 8.8 9.3 9.3 9.3 Average Subordinated Units Outstanding 3.1 2.0 2.0 2.0 2.3 0.5 0.0 0.0 0.0Repay debt with proceeds from asset Distribution Per Common Unit $0.45 $0.45 $0.52 $0.60 $2.02 $2.44 $3.22 $3.24 $3.22 sales Distribution Per Subordinated Unit $0.45 $0.45 $0.52 $0.60 $2.02 $0.62 $0.00 $0.00 $0.00Raise convertible security to repay Total Distributions Paid Total Distributions to Common $2.8 $3.3 $3.8 $4.4 $14.3 $21.5 $30.1 $30.3 $30.1 debt Total Distributions to Subordinated 1.4 0.9 1.1 1.2 4.6 1.3 0.0 0.0 0.0Raise new equity to repay debt Total Distributions to GP/IDRs 0.1 0.1 0.1 0.3 0.6 1.4 7.1 7.3 7.1 Total Distributions Paid $4.3 $4.3 $5.0 $6.0 $19.5 $24.2 $37.2 $37.6 $37.1Merge with another entity Expansion Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5Restructure existing enterprise / go Equity Issuance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 private Subordinated Debt Balance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Credit Metrics Senior Debt Balance $265.2 $268.5 $271.4 $274.1 $274.1 $290.7 $304.8 $318.8 $332.9 Senior Debt/LTM EBITDA 4.41x 5.35x 6.40x 6.62x 6.62x 6.06x 4.65x 4.73x 4.86x Covenant 4.75x 4.75x 4.75x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x Leverage Cushion / (Excess Leverage) $20.6 ($30.0) ($70.1) ($108.5) ($108.5) ($98.8) ($42.6) ($48.9) ($58.7) LTM EBITDA/LTM Interest Expense 4.97x 4.28x 3.81x 3.84x 3.84x 4.79x 5.45x 5.01x 4.54x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $5.6 $3.5 $2.2 $2.1 $9.1 $17.9 $29.5 $27.1 $23.2 1 Based on commodity prices from Wachovia’s commodities group as of December 31, 2008 2 Based on HLND’s management guidance 3 Interest expense based on LIBOR from Wachovia Economics through 2010 and assumed to be 1.75% for 2011, 2.00% for 2012 and 2.25% for 2013 Project Double Barrel 16

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Discontinue Growth Capital Expenditures Draft Commentary Projections – Discontinued Growth Capital Expenditures 2009 Quarterly Projections Annual ProjectionsEliminating growth capital ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 expenditures will not alleviate Commodity Prices (as of 12/31/08)1 HLND’s credit concerns: NYMEX Natural Gas $5.79 $5.78 $6.08 $6.68 $6.08 $7.10 $7.26 $7.20 $7.13 NYMEX Crude Oil $48.77 $53.51 $56.53 $58.97 $54.44 $63.88 $68.79 $71.14 $72.79Reduction of growth capital Conway Basket Average $0.649 $0.657 $0.681 $0.710 $0.674 $0.738 $0.989 $1.023 $1.047 expenditures of $18.5 million Mt. Belvieu Basket Average $0.676 $0.695 $0.720 $0.747 $0.710 $0.778 $1.052 $1.088 $1.113 CIG Differential ($1.694) ($1.996) ($2.169) ($1.789) ($1.912) ($2.257) ($2.348) ($2.328) ($2.307) in 2009 and $21.5 million per PEPL Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.220) ($1.209) ($1.198) year, thereafter Centerpoint Differential ($1.288) ($1.016) ($1.010) ($1.003) ($1.079) ($0.922) ($1.134) ($1.124) ($1.114) OGT Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.111) ($1.102) ($1.091)Reduction in EBITDA of $1.1 Financial Results2 million in 2010 and $3.6 Base EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 Growth EBITDA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 million per year, thereafter EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5)HLND remains in violation of its Interest Expense3 (2.8) (2.7) (2.6) (2.4) (10.5) (9.1) (10.2) (10.5) (10.8) debt covenants. Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) Distributable Cash Flow $4.6 $5.0 $6.1 $7.3 $23.0 $28.9 $42.9 $44.5 $45.3 Subordinated Debt Cash Interest $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Remaining Common Distributable Cash Flow $4.6 $5.0 $6.1 $7.3 $23.0 $28.9 $42.9 $44.5 $45.3 Distribution Coverage 1.1x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x Cash to be Distributed/Pay Debt $4.3 $4.3 $5.1 $6.1 $19.8 $24.1 $35.7 $37.1 $37.7 Average Common Units Outstanding 6.3 7.3 7.3 7.3 7.0 8.8 9.3 9.3 9.3 Average Subordinated Units Outstanding 3.1 2.0 2.0 2.0 2.3 0.5 0.0 0.0 0.0 Distribution Per Common Unit $0.45 $0.45 $0.53 $0.61 $2.04 $2.43 $3.14 $3.21 $3.25 Distribution Per Subordinated Unit $0.45 $0.45 $0.53 $0.61 $2.04 $0.62 $0.00 $0.00 $0.00 Total Distributions Paid Total Distributions to Common $2.8 $3.3 $3.8 $4.5 $14.4 $21.4 $29.4 $30.0 $30.4 Total Distributions to Subordinated 1.4 0.9 1.1 1.2 4.6 1.3 0.0 0.0 0.0 Total Distributions to GP/IDRs 0.1 0.1 0.1 0.4 0.7 1.4 6.4 7.0 7.4 Total Distributions Paid $4.3 $4.3 $5.1 $6.1 $19.7 $24.1 $35.7 $37.1 $37.7 Expansion Capital Expenditures $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Equity Issuance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Subordinated Debt Balance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Credit Metrics Senior Debt Balance $258.3 $257.6 $256.6 $255.4 $255.4 $250.6 $243.4 $236.0 $228.5 Senior Debt/LTM EBITDA 4.29x 5.13x 6.05x 6.17x 6.17x 5.34x 3.93x 3.69x 3.52x Covenant 4.75x 4.75x 4.75x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x Leverage Cushion / (Excess Leverage) $27.6 ($19.2) ($55.3) ($89.9) ($89.9) ($63.1) $4.4 $19.5 $31.3 LTM EBITDA/LTM Interest Expense 4.99x 4.32x 3.89x 3.96x 3.96x 5.15x 6.08x 6.08x 6.02x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $5.6 $3.5 $2.3 $2.3 $10.0 $19.6 $31.4 $32.3 $32.6 1 Based on commodity prices from Wachovia’s commodities group as of December 31, 2008 2 Based on HLND’s management guidance 3 Interest expense based on LIBOR from Wachovia Economics through 2010 and assumed to be 1.75% for 2011, 2.00% for 2012 and 2.25% for 2013 Project Double Barrel 17

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Eliminate Equity Distributions and Growth Capital Expenditures Draft Commentary Projections – Elimination of Equity DistributionsBy eliminating distributions and growth 2009 Quarterly Projections Annual Projections ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 capital expenditures while in violation Commodity Prices (as of 12/31/08)1 of debt covenants in 2009 and 2010, NYMEX Natural Gas $5.79 $5.78 $6.08 $6.68 $6.08 $7.10 $7.26 $7.20 $7.13 HLND preserves capital to repay debt. NYMEX Crude Oil $48.77 $53.51 $56.53 $58.97 $54.44 $63.88 $68.79 $71.14 $72.79 Conway Basket Average $0.649 $0.657 $0.681 $0.710 $0.674 $0.738 $0.989 $1.023 $1.047HLND remains in violation of its debt Mt. Belvieu Basket Average $0.676 $0.695 $0.720 $0.747 $0.710 $0.778 $1.052 $1.088 $1.113 CIG Differential ($1.694) ($1.996) ($2.169) ($1.789) ($1.912) ($2.257) ($2.348) ($2.328) ($2.307) covenant through 2010. PEPL Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.220) ($1.209) ($1.198)Distributions to common and Centerpoint Differential ($1.288) ($1.016) ($1.010) ($1.003) ($1.079) ($0.922) ($1.134) ($1.124) ($1.114) OGT Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.111) ($1.102) ($1.091) subordinated unitholders resume in 1Q Financial Results2 2011. Base EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 Growth EBITDA 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5) Interest Expense3 (2.8) (2.6) (2.5) (2.3) (10.2) (8.1) (8.1) (8.2) (8.0) Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) Distributable Cash Flow $4.7 $5.1 $6.2 $7.4 $23.3 $29.9 $45.0 $46.8 $48.1 Subordinated Debt Cash Interest $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Remaining Common Distributable Cash Flow $4.7 $5.1 $6.2 $7.4 $23.3 $29.9 $45.0 $46.8 $48.1 Distribution Coverage NM NM NM NM NM NM 1.2x 1.2x 1.2x Cash to be Distributed/Pay Debt $4.7 $5.1 $6.2 $7.4 $23.3 $29.9 $37.5 $39.0 $40.1 Average Common Units Outstanding 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 6.3 Average Subordinated Units Outstanding 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 Distribution Per Common Unit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $5.54 $3.32 $3.37 Distribution Per Subordinated Unit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.59 $3.32 $3.37 Total Distributions Paid Total Distributions to Common $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $34.8 $20.9 $21.2 Total Distributions to Subordinated 0.0 0.0 0.0 0.0 0.0 0.0 1.8 10.2 10.3 Total Distributions to GP/IDRs 0.0 0.0 0.0 0.0 0.0 0.0 0.9 8.0 8.5 Total Distributions Paid $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $37.5 $39.0 $40.1 Expansion Capital Expenditures $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Equity Issuance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Subordinated Debt Balance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Credit Metrics Senior Debt Balance $254.0 $249.0 $242.8 $235.4 $235.4 $205.5 $198.0 $190.2 $182.2 Senior Debt/LTM EBITDA 4.22x 4.96x 5.73x 5.69x 5.69x 4.38x 3.20x 2.98x 2.81x Covenant 4.75x 4.75x 4.75x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x Leverage Cushion / (Excess Leverage) $31.9 ($10.5) ($41.5) ($69.9) ($69.9) ($18.0) $49.8 $65.3 $77.6 LTM EBITDA/LTM Interest Expense 5.00x 4.35x 3.94x 4.07x 4.07x 5.80x 7.69x 7.83x 8.14x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $5.5 $3.5 $2.3 $2.5 $10.9 $22.6 $37.8 $39.4 $41.0 1 Based on commodity prices from Wachovia’s commodities group as of December 31, 2008 2 Based on HLND’s management guidance 3 Int erest expense based on LIBOR from Wachovia Economics through 2010 and assumed to be 1.75% for 2011, 2.00% for 2012 and 2.25% for 2013 Project Double Barrel 18

DRAFT

Financial Projections – Upside Case Draft Financial Projections ($ in millions, except commodity prices) Q1 2009 Q2 2009 Q3 2009 Q4 2009 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Upside Commodity Prices NYMEX Natural Gas $8.25 $8.25 $8.25 $8.25 $8.25 $8.75 $9.50 $10.00 $10.00 NYMEX Crude Oil 70.00 70.00 70.00 70.00 70.00 75.00 80.00 85.00 85.00 Conway Basket Average 1.007 1.007 1.007 1.007 1.007 1.079 1.150 1.222 1.222 Mt. Belvieu Basket Average 1.071 1.071 1.071 1.071 1.071 1.147 1.224 1.300 1.300 CIG Differential (2.667) (2.667) (2.667) (2.667) (2.667) (2.829) (3.071) (3.233) (3.233) PEPL Differential (1.385) (1.385) (1.385) (1.385) (1.385) (1.469) (1.595) (1.679) (1.679) Centerpoint Differential (1.288) (1.288) (1.288) (1.288) (1.288) (1.366) (1.483) (1.561) (1.561) OGT Differential (1.262) (1.262) (1.262) (1.262) (1.262) (1.338) (1.453) (1.530) (1.530) Financial Information EBITDA $13.7 $14.8 $15.9 $16.5 $61.0 $71.1 $73.5 $78.1 $77.1 Growth CAPEX EBITDA $0.0 $0.0 $0.0 $0.0 $0.0 $1.1 $3.6 $3.6 $3.6 Adjusted EBITDA $13.7 $14.8 $15.9 $16.5 $61.0 $72.2 $77.1 $81.7 $80.7 Maintenance Capital Expenditures $1.6 $2.2 $2.0 $1.7 $7.6 $8.5 $8.5 $8.5 $8.5 Growth Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5 Total Capital Expenditures $8.5 $6.1 $5.9 $5.6 $26.1 $30.0 $30.0 $30.0 $30.0 Source: Hiland management Project Double Barrel 19

DRAFT

Strategic Alternatives Project Double Barrel 20

DRAFT

Alternatives Summary — HLND Draft Implied Common Unit Price $0.00 $6.00 $12.00 $18.00 $24.00 $30.00 $36.00 Strip Case Comparable Transaction Multiples $3.46 $12.32 7.0x — 9.0x 2009E EBITDA multiple ($41.4 MM) Public Company Valuation1 NM $3.46 4.5x — 7.0x 2009E EBITDA multiple ($41.4 MM) Convertible Security Issuance $6.65 $10.25 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Subordinated Debt Issuance $7.19 $12.63 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Common Equity Issuance $4.35 $7.92 12.5% — 22.5% 2013 exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Implied TEV / 2009E EBITDA Multiple ($41.4 MM) 6.2x 7.6x 8.9x 10.3x 11.6x 13.0x 14.3x Implied TEV / 2010E EBITDA Multiple ($48.0 MM) 5.4x 6.5x 7.7x 8.9x 10.0x 11.2x 12.4x Upside Case HLND Closing Price Comparable Transaction Multiples @12/31/08 $18.12 $31.17 7.0x — 9.0x 2009E EBITDA multiple ($61.0 MM) ($5.13) Public Company Valuation1 $1.81 $18.12 4.5x — 7.0x 2009E EBITDA multiple ($61.0 MM) Convertible Security Issuance $8.73 $13.36 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Subordinated Debt Issuance $8.13 $14.76 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Common Equity Issuance $5.59 $9.74 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Implied TEV / 2009E EBITDA Multiple ($61.0 MM) 4.2x 5.1x 6.1x 7.0x 7.9x 8.8x 9.7x Implied TEV / 2010E EBITDA Multiple ($72.2 MM) 3.6x 4.3x 5.1x 5.9x 6.7x 7.4x 8.2x 1 Range excludes the high and low values Project Double Barrel 21

DRAFT

Alternatives Summary — HPGP Draft Implied Common Unit Price $0.00 $1.25 $2.50 $3.75 $5.00 $6.25 $7.50 Strip Case Public Company Valuation1 $1.34 $1.52 3.5x — 10.0x 2009E GP Cash Flow multiple ($0.6 MM) Convertible Security Issuance $1.70 $2.58 12.5% — 22.5% 2013E exit yield and 20.0% - 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Subordinated Debt Issuance $1.73 $3.09 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Common Equity Issuance HPGP Closing Price $0.38 $0.72 @12/31/08 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) ($2.37) Upside Case Public Company Valuation1 $2.22 $4.02 3.5x — 10.0x 2009E GP Cash Flow multiple ($6.0 MM) Convertible Security Issuance $2.73 $4.00 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Subordinated Debt Issuance $2.23 $4.20 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate (8.0x — 4.4x 2013E EBITDA exit multiple) Common Equity Issuance 12.5% — 22.5% 2013E exit yield and 20.0% — 30.0% discount rate $1.21 $2.21 (8.0x - 4.4x 2013E EBITDA exit multiple) 1 Range excludes the high and low values Project Double Barrel 22

DRAFT

Renegotiate Existing Credit Agreement DraftAmending HLND’s existing credit facility requires majority approval by lenders.The amendment process would entail a thorough, in-person business update presentation to the lenders that allows banks to do their diligence.Before the meeting with all the lenders, Hiland and MidFirst together should reach out to 3-4 of its largest lenders to build support and finalize terms for the amendment request At the currently Bank Total Commitment % of Total MidFirst Bank $41,250,000 13.8% projected Bank of America 37,500,000 12.5% Debt/EBITDA ratios of Bank of Scotland 37,500,000 12.5% Compass Bank 37,500,000 12.5% 6.0x – 7.0x based on US Bank 37,500,000 12.5% the current strip, Fortis Bank 31,200,000 10.4% Bank of Oklahoma 30,000,000 10.0% gaining an Wachovia 28,050,000 9.4% amendment that Natixis 9,750,000 3.3% Wells Fargo 9,750,000 3.3% solves the covenant Total $300,000,000 100.0% problem would be highly unlikely inIn today’s environment, lenders would potentially allow HLND to increase its Debt/EBITDA covenant to 5.0x for up to three quarters. today’s environmentPotential terms under an amended facility are the following:L + 350 – 425 pricing grid50 – 100 bps unused commitment fee across the grid50 – 150 bps amendment fee, depending on whether HLND receives an equity infusionLenders may ask for a commitment reduction Project Double Barrel 23

DRAFT

Asset Sales Draft Commentary Projections – Asset SalesDivesting of assets will not alleviate HLND’s 2009 Quarterly Projections Annual Projections ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 credit concerns: Pre-Transaction Financial Results1$100 million proceeds used to repay debt EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $48.0 $65.5 $67.5 $68.5 Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5)8.0x TEV / 2009E EBITDA divestiture Interest Expense (2.8) (2.7) (2.7) (2.5) (10.8) (10.0) (12.0) (13.5) (15.1) Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) valuation Distributable Cash Flow $4.6 $4.9 $6.0 $7.1 $22.7 $29.1 $44.6 $45.1 $44.5Percentage EBITDA reduction in 2009 Distribution Coverage 1.1x 1.1x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x Cash to be Distributed/Pay Debt $4.3 $4.3 $5.0 $6.0 $19.6 $24.2 $37.2 $37.6 $37.1 drives EBITDA and maintenance capital Distribution Per Common Unit $0.45 $0.45 $0.52 $0.60 $2.02 $2.44 $3.22 $3.24 $3.22 expenditures reduction in 2010 through Distribution Per Subordinated Unit $0.45 $0.45 $0.52 $0.60 $2.02 $0.62 $0.00 $0.00 $0.00 2013 Expansion Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5 Credit MetricsHLND remains in violation of its debt Debt Balance $265.2 $268.5 $271.4 $274.1 $274.1 $290.7 $304.8 $318.8 $332.9 Total Debt/LTM EBITDA 4.41x 5.35x 6.40x 6.62x 6.62x 6.06x 4.65x 4.73x 4.86x covenants through 2011. Covenant 4.75x 4.75x 4.75x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x Leverage Cushion / (Excess Leverage) $20.6 ($30.0) ($70.1) ($108.5) ($108.5) ($98.8) ($42.6) ($48.9) ($58.7)Distributions to common unitholders resume in LTM EBITDA/LTM Interest 4.97x 4.28x 3.81x 3.84x 3.84x 4.79x 5.45x 5.01x 4.54x 1Q 2011. Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $5.6 $3.5 $2.2 $2.1 $9.1 $17.9 $29.5 $27.1 $23.2 Post-Transaction Financial Results1 EBITDA $6.1 $6.8 $7.6 $8.3 $28.9 $34.6 $49.3 $50.7 $51.4 Maintenance Capital Expenditures (1.1) (1.5) (1.4) (1.2) (5.3) (5.9) (5.9) (5.9) (5.9) Interest Expense (2.4) (1.9) (1.8) (1.8) (7.8) (5.9) (6.6) (7.5) (8.8) Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) Distributable Cash Flow $2.5 $3.4 $4.3 $5.2 $15.4 $22.4 $36.4 $36.8 $36.3 Distribution Coverage NM NM NM NM NM NM 1.2x 1.2x 1.2x Cash to be Distributed/Pay Debt $2.5 $3.4 $4.3 $5.2 $15.4 $22.4 $30.4 $30.7 $30.2 Distribution Per Common Unit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $2.87 $2.90 $2.82 Distribution Per Subordinated Unit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Accretion/Dilution to Common Unitholder ($) ($0.45) ($0.45) ($0.52) ($0.60) ($2.02) ($2.44) ($0.35) ($0.34) ($0.39) Accretion/Dilution to Common Unitholder (%) (100.0%) (100.0%) (100.0%) (100.0%) (100.0%) (100.0%) (10.9%) (10.4%) (12.2%) YE 2009 Debt / EBITDA Multiple Sensitivity Accretion/Dilution to Subordinated Unitholder ($) ($0.45) ($0.45) ($0.52) ($0.60) ($2.02) ($0.62) $0.00 $0.00 $0.00 Accretion/Dilution to SubordinatedUnitholder (%) (100.0%) (100.0%) (100.0%) (100.0%) (100.0%) (100.0%) NA NA NA Net Asset Sale Proceeds Expansion Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5 $100.0 $115.0 $130.0 $145.0 $160.0 $175.0 Credit Metrics EBITDA TEV / 6.0x 6.7x 6.8x 7.0x 7.3x 7.6 x 8.0x Debt Balance at Year-End $163.0 $163.6 $163.2 $161.8 $161.8 $162.1 $178.1 $194.0 $210.1 7.0x 6.0x 6.0x 5.9x 5.9x 5.8x 5.8x Total Debt/LTM EBITDA 3.01x 3.98x 5.41x 5.60x 5.60x 4.69x 3.61x 3.83x 4.09x Assumed 8.0x 5.6x 5.5x 5.3x 5.2x 4.9x 4.7x Covenant 4.00x 4.75x 4.75x 4.75x 4.75x 4.00x 4.00x 4.00x 4.00x 2009 9.0x 5.3x 5.1x 4.9x 4.7x 4.4x 4.1x Leverage Cushion / (Excess Leverage) $53.7 $31.6 ($20.0) ($24.6) ($24.6) ($23.8) $19.2 $8.6 ($4.4) 10.0x 5.1x 4.9x 4.6x 4.3x 4.0x 3.7x LTM EBITDA/LTM Interest 4.66x 3.95x 3.37x 3.68x 3.68x 5.88x 7.51x 6.73x 5.84x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $3.9 $1.8 $0.7 $1.2 $5.3 $16.9 $29.6 $28.1 $25.0 1 Based on HLND’s management guidance Project Double Barrel 24

DRAFT

Convertible Security Issuance Draft Commentary Projections – Convertible Security IssuanceHLND repays debt by issuing a 4-year 2009 Quarterly Projections Annual Projections convertible security for $120 million at ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 December 31, 2008. Commodity Prices (as of 12/31/08)1 NYMEX Natural Gas $5.79 $5.78 $6.08 $6.68 $6.08 $7.10 $7.26 $7.20 $7.13Convertible security allows for: NYMEX Crude Oil $48.77 $53.51 $56.53 $58.97 $54.44 $63.88 $68.79 $71.14 $72.79 Conway Basket Average $0.649 $0.657 $0.681 $0.710 $0.674 $0.738 $0.989 $1.023 $1.0478% preferred dividend Mt. Belvieu Basket Average $0.676 $0.695 $0.720 $0.747 $0.710 $0.778 $1.052 $1.088 $1.1137% PIK CIG Differential ($1.694) ($1.996) ($2.169) ($1.789) ($1.912) ($2.257) ($2.348) ($2.328) ($2.307) PEPL Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.220) ($1.209) ($1.198)Conversion price based on 20% Centerpoint Differential ($1.288) ($1.016) ($1.010) ($1.003) ($1.079) ($0.922) ($1.134) ($1.124) ($1.114) premium to 12/31/08 unit price OGT Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.111) ($1.102) ($1.091) Financial Results2$6.16 conversion price allows for a Base EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 24.5% return to preferred holders Growth EBITDA 0.0 0.0 0.0 0.0 0.0 1.1 3.6 3.6 3.6 with an assumed yield of 12.5% in EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $48.0 $65.5 $67.5 $68.5 Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5) 2013 Interest Expense3 (1.7) (1.8) (1.8) (1.6) (6.9) (6.2) (7.0) (8.1) (9.2)Security converted to 25.7 million common Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) Distributable Cash Flow $5.7 $5.9 $6.9 $8.0 $26.5 $32.8 $49.7 $50.5 $50.5 units on 1/1/2013. Convertible Security Dividend ($2.4) ($2.4) ($2.5) ($2.5) ($9.9) ($10.6) ($11.3) ($12.1) $0.0GP contributes to maintain its 2% Remaining Common Distributable Cash Flow $3.3 $3.5 $4.4 $5.5 $16.7 $22.3 $38.3 $38.4 $50.5 interest Distribution Coverage 0.8x 0.8x 1.0x 1.2x 1.0x 1.2x 1.2x 1.2x 1.2x Cash to be Distributed/Pay Debt $4.3 $4.3 $4.3 $4.6 $17.5 $18.6 $31.9 $32.0 $42.1HLND is in compliance with debt covenants. Average Common Units Outstanding 6.3 7.3 7.3 7.3 7.0 8.8 9.3 9.3 35.1 Average Subordinated Units Outstanding 3.1 2.0 2.0 2.0 2.3 0.5 0.0 0.0 0.0 Distribution Per Common Unit $0.45 $0.45 $0.45 $0.48 $1.83 $1.94 $2.94 $2.94 $1.18 Distribution Per Subordinated Unit $0.45 $0.45 $0.45 $0.48 $1.83 $0.51 $0.00 $0.00 $0.00 Total Distributions Paid Total Distributions to Common $2.8 $3.3 $3.3 $3.5 $12.9 $17.1 $27.5 $27.5 $41.2 Total Distributions to Subordinated 1.4 0.9 0.9 1.0 4.2 1.0 0.0 0.0 0.0 Total Distributions to GP/IDRs 0.1 0.1 0.1 0.1 0.3 0.4 4.5 4.5 0.8 Convertible Security Returns Sensitivity Total Distributions Paid $4.3 $4.3 $4.3 $4.6 $17.5 $18.6 $31.9 $32.0 $42.1 Expansion Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5 Assumed Im plied 2013 Conversion Premium Equity Issuance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 2013 Yield Unit Price 10.0% 20.0% 30.0% Convertible Security Balance $122.1 $124.2 $126.4 $128.6 $128.6 $137.9 $147.8 $158.4 $0.0 7.5% $15.67 37.6% 35.6% 33.7% Credit Metrics 10.0% $11.75 31.1% 29.2% 27.5% Senior Debt Balance $146.5 $151.2 $155.0 $158.0 $158.0 $175.8 $190.9 $206.0 $214.1 12.5% $9.40 26.4% 24.6% 23.0% Senior Debt/LTM EBITDA 2.43x 3.01x 3.66x 3.82x 3.82x 3.66x 2.91x 3.05x 3.12x 15.0% $7.83 22.8% 21.1% 19.6% Covenant 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 17.5% $6.71 19.9% 18.3% 16.8% Leverage Cushion / (Excess Leverage) $94.2 $49.6 $14.5 $7.6 $7.6 $16.1 $71.3 $63.9 $60.0 20.0% $5.88 17.6% 16.0% 14.6% LTM EBITDA/LTM Interest Expense 5.76x 5.53x 5.61x 6.01x 6.01x 7.69x 9.38x 8.36x 7.48x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $4.8 $4.4 $4.6 $5.0 $20.7 $29.3 $44.6 $43.3 $41.0 1 Based on commodity prices from Wachovia’s commodities group as of December 31, 2008 2 Based on HLND’s management guidance 3 Interest expense based on LIBOR from Wachovia Economics through 2010 and assumed to be 1.75% for 2011, 2.00% for 2012 and 2.25% for 2013 Project Double Barrel 25

DRAFT

Convertible Security Cash Flow Draft Convertible Security Cash Flows – Strip Case ($ in millions, except per unit amounts) 12/31/08 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2010 2011 2012 2013 Conversion Convertible Investment ($120.0) Preferred Distributions $2.4 $2.4 $2.5 $2.5 $10.6 $11.3 $12.1 PIK Interest $2.1 $2.1 $2.2 $2.2 $9.2 $9.9 $10.6 LP Unit Distributions $30.2 Principal Balance $158.4 Conversion Price (20.0% Premium) $6.16 Units Issued at Conversion 25.7 2013 Common Unit Distribution $1.18 Assumed Yield 12.5% Projected 2013 Unit Price $9.40 Projected Value at Conversion $241.9 Convertible Cash Flow ($120.0) $2.4 $2.4 $2.5 $2.5 $10.6 $11.3 $12.1 $30.2 $241.9 Return on Convertible Security 24.6% Convertible Security Cash Flows – Upside Case ($ in millions, except per unit amounts) 12/31/08 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2010 2011 2012 2013 Conversion Convertible Investment ($120.0) Preferred Distributions $2.4 $2.4 $2.5 $2.5 $10.6 $11.3 $12.1 PIK Interest $2.1 $2.1 $2.2 $2.2 $9.2 $9.9 $10.6 LP Unit Distributions $38.7 Principal Balance $158.4 Conversion Price (20.0% Premium) $6.16 Units Issued at Conversion 25.7 2013 Common Unit Distribution $1.50 Assumed Yield 12.5% Projected 2013 Unit Price $12.04 Projected Value at Conversion $309.7 Convertible Cash Flow ($120.0) $2.4 $2.4 $2.5 $2.5 $10.6 $11.3 $12.1 $38.7 $309.7 Return on Convertible Security 30.4% Project Double Barrel 26

DRAFT

Convertible Security Issuance – HLND Unit DCF Analysis Draft HLND Common Unit DCF – Strip Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $1.83 $1.94 $2.94 $2.94 $1.18 Assumed Yield 12.5% Implied Future Unit Price $9.40 Discounted Cash Flow 1 $8.89 $1.47 $1.24 $1.51 $1.20 $3.47 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Strip Case 2009E TEV/EBITDA Sensitivity – Strip Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $10.25 $9.62 $9.17 $8.83 $8.57 Rate 20.0% 8.3x 8.2x 8.1x 8.0x 7.9x 22.5% $9.53 $8.96 $8.56 $8.25 $8.02 22.5% 8.1x 8.0x 7.9x 7.8x 7.8x Discount 25.0% $8.89 $8.37 $8.01 $7.73 $7.52 Discount 25.0% 8.0x 7.9x 7.8x 7.7x 7.7x 27.5% $8.30 $7.84 $7.51 $7.26 $7.06 27.5% 7.9x 7.8x 7.7x 7.6x 7.6x 30.0% $7.78 $7.36 $7.05 $6.83 $6.65 30.0% 7.7x 7.6x 7.6x 7.5x 7.5x HLND Common Unit DCF – Upside Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $2.14 $3.38 $3.51 $3.65 $1.50 Assumed Yield 12.5% Implied Future Unit Price $12.04 Discounted Cash Flow 1 $11.60 $1.71 $2.16 $1.80 $1.49 $4.44 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Upside Case 2009E TEV/EBITDA Sensitivity – Upside Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% 20.0% $13.36 $12.56 $11.98 $11.55 $11.21 Rate 20.0% 6.1x 6.0x 5.9x 5.8x 5.8x Rate 22.5% $12.44 $11.71 $11.19 $10.80 $10.50 22.5% 6.0x 5.9x 5.8x 5.7x 5.7x Discount 25.0% $11.60 $10.95 $10.48 $10.13 $9.85 Discount 25.0% 5.8x 5.7x 5.7x 5.6x 5.6x 27.5% $10.85 $10.26 $9.83 $9.51 $9.26 27.5% 5.7x 5.6x 5.6x 5.5x 5.5x 30.0% $10.17 $9.63 $9.24 $8.95 $8.73 30.0% 5.6x 5.5x 5.5x 5.4x 5.4x Project Double Barrel 27

DRAFT

Convertible Security Issuance – HPGP Unit DCF Analysis Draft HPGP Common Unit DCF – Strip Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.42 $0.45 $0.89 $0.89 $0.27 Assumed Yield 12.5% Implied Future Unit Price $2.17 Discounted Cash Flow 1 $2.24 $0.34 $0.29 $0.45 $0.36 $0.80 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Strip Case 2009E TEV/GP CF Sensitivity – Strip Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $2.58 $2.44 $2.33 $2.26 $2.20 Rate 20.0% 5.5x 5.2x 5.0x 4.8x 4.7x 22.5% $2.40 $2.27 $2.18 $2.11 $2.05 22.5% 5.2x 4.9x 4.7x 4.5x 4.4x Discount 25.0% $2.24 $2.12 $2.04 $1.97 $1.92 Discount 25.0% 4.8x 4.6x 4.4x 4.2x 4.1x 27.5% $2.09 $1.99 $1.91 $1.85 $1.81 27.5% 4.5x 4.3x 4.1x 4.0x 3.9x 30.0% $1.96 $1.86 $1.79 $1.74 $1.70 30.0% 4.2x 4.0x 3.9x 3.8x 3.7x HPGP Common Unit DCF – Upside Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.57 $1.18 $1.27 $1.37 $0.36 Assumed Yield 12.5% Implied Future Unit Price $2.90 Discounted Cash Flow 1 $3.49 $0.46 $0.76 $0.65 $0.56 $1.07 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Upside Case 2009E TEV/GP CF Sensitivity – Upside Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $4.00 $3.81 $3.67 $3.57 $3.49 Rate 20.0% 6.5x 6.2x 5.9x 5.8x 5.7x 22.5% $3.74 $3.56 $3.44 $3.34 $3.27 22.5% 6.1x 5.8x 5.6x 5.4x 5.3x Discount 25.0% $3.49 $3.34 $3.22 $3.14 $3.07 Discount 25.0% 5.7x 5.4x 5.2x 5.1x 5.0x 27.5% $3.28 $3.13 $3.03 $2.95 $2.89 27.5% 5.3x 5.1x 4.9x 4.8x 4.7x 30.0% $3.08 $2.95 $2.85 $2.78 $2.73 30.0% 5.0x 4.8x 4.6x 4.5x 4.4x Project Double Barrel 28

DRAFT

Subordinated Debt Issuance – Strip Case Draft Commentary Projections – Subordinated Debt IssuanceHLND repays existing bank debt by issuing 2009 Quarterly Projections Annual Projections ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 $120 million of subordinated debt at Commodity Prices (as of 12/31/08)1 December 31, 2008. NYMEX Natural Gas $5.79 $5.78 $6.08 $6.68 $6.08 $7.10 $7.26 $7.20 $7.13 NYMEX Crude Oil $48.77 $53.51 $56.53 $58.97 $54.44 $63.88 $68.79 $71.14 $72.79Subordinated debt allows for: Conway Basket Average $0.649 $0.657 $0.681 $0.710 $0.674 $0.738 $0.989 $1.023 $1.047 Mt. Belvieu Basket Average $0.676 $0.695 $0.720 $0.747 $0.710 $0.778 $1.052 $1.088 $1.11310% cash interest CIG Differential ($1.694) ($1.996) ($2.169) ($1.789) ($1.912) ($2.257) ($2.348) ($2.328) ($2.307)PEPL Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.220) ($1.209) ($1.198) 5% PIK Centerpoint Differential ($1.288) ($1.016) ($1.010) ($1.003) ($1.079) ($0.922) ($1.134) ($1.124) ($1.114) OGT Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.111) ($1.102) ($1.091)12/31/2011 maturity Financial Results2MQD paid to common and subordinated Base EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 Growth EBITDA 0.0 0.0 0.0 0.0 0.0 1.1 3.6 3.6 3.6 unitholders through Q4 2011. EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $48.0 $65.5 $67.5 $68.5Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5) Once the subordinated debt has reached Interest Expense3 (1.7) (1.8) (1.8) (1.7) (6.9) (6.4) (6.9) (7.6) (8.8) maturity, distributions in 2012-2013 are Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) Distributable Cash Flow $5.7 $5.9 $6.9 $8.0 $26.5 $32.7 $49.8 $50.9 $50.8 based on 1.2x distribution coverage ratio Subordinated Debt Cash Interest ($3.0) ($3.0) ($3.1) ($3.1) ($12.2) ($12.8) ($13.5) $0.0 $0.0Equity issuance of 9.7 million common units Remaining Common Distributable Cash Flow $2.7 $2.9 $3.8 $4.9 $14.3 $19.8 $36.2 $50.9 $50.8 Distribution Coverage 0.6x 0.7x 0.9x 1.1x 0.8x 1.2x 1.7x 1.2x 1.2x at $14.40 per unit used to retire $139.3 Cash to be Distributed/Pay Debt $4.3 $4.3 $4.3 $4.3 $17.2 $17.2 $21.6 $42.4 $42.3 million of subordinated debt at 12/31/2011. Average Common Units Outstanding 6.3 7.3 7.3 7.3 7.0 8.8 11.8 19.0 19.0 Average Subordinated Units Outstanding 3.1 2.0 2.0 2.0 2.3 0.5 0.0 0.0 0.0Issuance price based on 12.5% yield on Distribution Per Common Unit $0.45 $0.45 $0.45 $0.45 $1.80 $1.80 $1.80 $2.16 $2.16 the LQA distribution Distribution Per Subordinated Unit $0.45 $0.45 $0.45 $0.45 $1.80 $0.45 $0.00 $0.00 $0.00 Total Distributions PaidGP contributes to maintain its 2% Total Distributions to Common $2.8 $3.3 $3.3 $3.3 $12.7 $15.9 $21.2 $41.1 $41.0 interest Total Distributions to Subordinated 1.4 0.9 0.9 0.9 4.1 0.9 0.0 0.0 0.0 Total Distributions to GP/IDRs 0.1 0.1 0.1 0.1 0.3 0.3 0.4 1.4 1.41/3 of current outstanding subordinated Total Distributions Paid $4.3 $4.3 $4.3 $4.3 $17.2 $17.2 $21.6 $42.4 $42.3 units convert to common units at 3/31/09 Expansion Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5 Equity Issuance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $139.3 $0.0 $0.0 and 2/3 of current outstanding subordinated Subordinated Debt Balance $121.5 $123.0 $124.6 $126.1 $126.1 $132.5 $0.0 $0.0 $0.0 units convert at 3/31/10 per the 12-quarter Credit Metrics Senior Debt Balance $147.1 $152.4 $156.8 $160.1 $160.1 $178.9 $182.9 $196.0 $209.0 MQD test. Senior Debt/LTM EBITDA 2.44x 3.04x 3.70x 3.87x 3.87x 3.73x 2.79x 2.90x 3.05x Covenant 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00xHLND is in compliance with debt covenants. Leverage Cushion / (Excess Leverage) $93.6 $48.4 $12.7 $5.5 $5.5 $13.0 $79.2 $73.9 $65.1 LTM EBITDA/LTM Interest Expense 5.76x 5.52x 5.59x 5.98x 5.98x 7.48x 9.51x 8.83x 7.77x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $4.8 $4.4 $4.6 $4.9 $20.6 $28.7 $44.9 $44.5 $42.1 Total Debt Balance $268.6 $275.5 $281.4 $286.2 $286.2 $311.5 $182.9 $196.0 $209.0 Total Debt/LTM EBITDA 4.46x 5.49x 6.64x 6.92x 6.92x 6.49x 2.79x 2.90x 3.05x 1 Based on commodity prices from Wachovia’s commodities group as of December 31, 2008 2 Based on HLND’s management guidance 3 Interest expense based on LIBOR from Wachovia Economics through 2010 and assumed to be 1.75% for 2011, 2.00% for 2012 and 2.25% for 2013 Project Double Barrel 29

DRAFT

Subordinated Debt Cash Flow Draft Subordinated Debt Cash Flows ($ in millions, except per unit amounts) 12/31/08 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2010 2011 Retirement Convertible Investment ($120.0) Preferred Distributions1 $3.0 $3.0 $3.1 $3.1 $12.8 $13.5 PIK Interest2 $1.5 $1.5 $1.5 $1.6 $6.4 $6.8 Principal Balance $139.3 Convertible Cash Flow ($120.0) $3.0 $3.0 $3.1 $3.1 $12.8 $13.5 $139.3 Return on Convertible Security 16.0% 1 Calculated based on annual 10% simple interest 2 Calculated based on annual 5% simple interest

DRAFT

Subordinated Debt Issuance – HLND Unit DCF Analysis Draft HLND Common Unit DCF – Strip Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $1.80 $1.80 $1.80 $2.16 $2.16 Assumed Yield 12.5% Implied Future Unit Price $17.24 Discounted Cash Flow 1 $10.75 $1.44 $1.15 $0.92 $0.88 $6.36 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Strip Case 2009E TEV/EBITDA Sensitivity – Strip Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $12.63 $11.47 $10.65 $10.03 $9.55 Rate 20.0% 8.8x 8.6x 8.4x 8.2x 8.1x 22.5% $11.64 $10.60 $9.85 $9.29 $8.86 22.5% 8.6x 8.4x 8.2x 8.1x 8.0x Discount 25.0% $10.75 $9.81 $9.14 $8.64 $8.24 Discount 25.0% 8.4x 8.2x 8.0x 7.9x 7.8x 27.5% $9.96 $9.11 $8.50 $8.04 $7.69 27.5% 8.2x 8.0x 7.9x 7.8x 7.7x 30.0% $9.25 $8.48 $7.92 $7.51 $7.19 30.0% 8.1x 7.9x 7.8x 7.7x 7.6x HLND Common Unit DCF – Upside Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $1.80 $1.80 $1.80 $2.72 $2.67 Assumed Yield 12.5% Implied Future Unit Price $21.36 Discounted Cash Flow 1 $12.50 $1.44 $1.15 $0.92 $1.11 $7.87 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Upside Case 2009E TEV/EBITDA Sensitivity – Upside Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% 20.0% $14.76 $13.33 $12.31 $11.54 $10.94 Rate 20.0% 6.3x 6.1x 5.9x 5.8x 5.7x Rate 22.5% $13.56 $12.27 $11.35 $10.66 $10.12 22.5% 6.1x 5.9x 5.8x 5.7x 5.6x Discount 25.0% $12.50 $11.33 $10.50 $9.88 $9.39 Discount 25.0% 6.0x 5.8x 5.7x 5.6x 5.5x 27.5% $11.55 $10.49 $9.74 $9.17 $8.73 27.5% 5.8x 5.7x 5.6x 5.5x 5.4x 30.0% $10.69 $9.73 $9.05 $8.53 $8.13 30.0% 5.7x 5.6x 5.4x 5.4x 5.3x Project Double Barrel 31

DRAFT

Subordinated Debt Issuance – HPGP Unit DCF Analysis Draft HPGP Common Unit DCF – Strip Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.41 $0.41 $0.41 $0.54 $0.54 Assumed Yield 12.5% Implied Future Unit Price $4.33 Discounted Cash Flow 1 $2.62 $0.33 $0.26 $0.21 $0.22 $1.60 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Strip Case 2009E TEV/GP CF Sensitivity – Strip Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $3.09 $2.80 $2.59 $2.44 $2.32 Rate 20.0% 6.7x 6.1x 5.7x 5.3x 5.1x 22.5% $2.84 $2.58 $2.39 $2.25 $2.15 22.5% 6.2x 5.6x 5.2x 4.9x 4.7x Discount 25.0% $2.62 $2.39 $2.22 $2.09 $1.99 Discount 25.0% 5.7x 5.2x 4.8x 4.6x 4.4x 27.5% $2.43 $2.21 $2.06 $1.95 $1.86 27.5% 5.3x 4.8x 4.5x 4.3x 4.1x 30.0% $2.25 $2.06 $1.92 $1.81 $1.73 30.0% 4.9x 4.5x 4.2x 4.0x 3.8x HPGP Common Unit DCF – Upside Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.41 $0.41 $0.41 $0.84 $0.81 Assumed Yield 12.5% Implied Future Unit Price $6.46 Discounted Cash Flow 1 $3.53 $0.33 $0.26 $0.21 $0.35 $2.38 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Upside Case 2009E TEV/GP CF Sensitivity – Upside Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $4.20 $3.76 $3.45 $3.22 $3.04 Rate 20.0% 9.1x 8.2x 7.5x 7.0x 6.6x 22.5% $3.84 $3.45 $3.18 $2.97 $2.80 22.5% 8.4x 7.5x 6.9x 6.5x 6.1x Discount 25.0% $3.53 $3.18 $2.93 $2.74 $2.59 Discount 25.0% 7.7x 6.9x 6.4x 6.0x 5.7x 27.5% $3.25 $2.93 $2.70 $2.53 $2.40 27.5% 7.1x 6.4x 5.9x 5.5x 5.2x 30.0% $3.00 $2.71 $2.50 $2.35 $2.23 30.0% 6.5x 5.9x 5.5x 5.1x 4.9x Project Double Barrel 32

DRAFT

New Common Equity Issuance – Strip Case Draft Commentary Projections – Common Equity Issuance at Discounted Unit PriceHLND repays debt by issuing $120 2009 Quarterly Projections Annual Projections million in equity at December 31, ($ in millions, except per unit amounts) 1Q 2009 2Q 2009 3Q 2009 4Q 2009 2009 2010 2011 2012 2013 Commodity Prices (as of 12/31/08)1 2008. NYMEX Natural Gas $5.79 $5.78 $6.08 $6.68 $6.08 $7.10 $7.26 $7.20 $7.1322.9 million common units issued NYMEX Crude Oil $48.77 $53.51 $56.53 $58.97 $54.44 $63.88 $68.79 $71.14 $72.79 for $117.6 million Conway Basket Average $0.649 $0.657 $0.681 $0.710 $0.674 $0.738 $0.989 $1.023 $1.047 Mt. Belvieu Basket Average $0.676 $0.695 $0.720 $0.747 $0.710 $0.778 $1.052 $1.088 $1.113GP contributes to maintain 2% CIG Differential ($1.694) ($1.996) ($2.169) ($1.789) ($1.912) ($2.257) ($2.348) ($2.328) ($2.307) interest PEPL Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.220) ($1.209) ($1.198) Centerpoint Differential ($1.288) ($1.016) ($1.010) ($1.003) ($1.079) ($0.922) ($1.134) ($1.124) ($1.114)29.2 million common units pro OGT Differential ($1.400) ($1.239) ($1.109) ($1.114) ($1.216) ($0.958) ($1.111) ($1.102) ($1.091) forma for equity issuance Financial Results2Base EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $46.9 $62.0 $63.9 $64.9 6.3 million common units Growth EBITDA 0.0 0.0 0.0 0.0 0.0 1.1 3.6 3.6 3.6 currently outstanding EBITDA $9.2 $10.0 $10.8 $11.5 $41.4 $48.0 $65.5 $67.5 $68.5Maintenance Capital Expenditures (1.6) (2.2) (2.0) (1.7) (7.6) (8.5) (8.5) (8.5) (8.5) 22.9 million new units issued Interest Expense3 (1.7) (1.7) (1.6) (1.6) (6.7) (6.0) (6.7) (7.6) (8.7)New investors receive 71.0% of the Capital Lease Payments (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.4) (0.4) (0.4) LP units outstanding post issuance Distributable Cash Flow $5.7 $5.9 $7.0 $8.1 $26.7 $33.1 $49.9 $51.0 $51.0Subordinated Debt Cash Interest $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 HLND is in compliance with debt Remaining Common Distributable Cash Flow $5.7 $5.9 $7.0 $8.1 $26.7 $33.1 $49.9 $51.0 $51.0 covenants. Distribution Coverage 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x 1.2x Cash to be Distributed/Pay Debt $4.8 $4.9 $5.8 $6.7 $22.3 $27.6 $41.6 $42.5 $42.5 Average Common Units Outstanding 29.2 29.2 29.2 29.2 29.2 29.2 29.2 29.2 29.2 Average Subordinated Units Outstanding 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 Distribution Per Common Unit $0.16 $0.17 $0.20 $0.23 $0.75 $0.93 $1.40 $1.42 $1.43 Distribution Per Subordinated Unit $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Distributions Paid Total Distributions to Common $4.7 $4.9 $5.7 $6.6 $21.8 $27.0 $40.8 $41.6 $41.6 Total Distributions to Subordinated 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Distributions to GP/IDRs 0.1 0.1 0.1 0.1 0.4 0.6 0.8 0.8 0.8 Total Distributions Paid $4.8 $4.9 $5.8 $6.7 $22.3 $27.6 $41.6 $42.5 $42.5 Expansion Capital Expenditures $6.9 $3.9 $3.9 $3.9 $18.5 $21.5 $21.5 $21.5 $21.5 Equity Issuance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Subordinated Debt Balance $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Credit Metrics Senior Debt Balance $144.6 $147.5 $15 0.2 $152.7 $152.7 $168.7 $181.9 $194.9 $207.9 Senior Debt/LTM EBITDA 2.40x 2.94x 3.54x 3.69x 3.69x 3.52x 2.78x 2.89x 3.03x Covenant 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x 4.00x Leverage Cushion / (Excess Leverage) $96.1 $53.3 $19.3 $12.8 $12.8 $23.2 $80.2 $74.9 $66.2 LTM EBITDA/LTM Interest Expense 5.77x 5.55x 5.72x 6.18x 6.18x 8.05x 9.73x 8.87x 7.91x Covenant 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x 3.00x Coverage Cushion / (Coverage Shortage) $4.8 $4.4 $4.4 $5.1 $21.3 $30.1 $45.3 $44.7 $42.5 1 Based on commodity prices from Wachovia’s commodities group as of December 31, 2008 2 Based on HLND’s management guidance 3 Interest expense based on LIBOR from Wachovia Economics through 2010 and assumed to be 1.75% for 2011, 2.00% for 2012 and 2.25% for 2013 Project Double Barrel 33

DRAFT

New Common Equity Issuance Investor Returns DraftBased on the strip case, new common equity investors receive a 36.3% IRR on their investment at an assumed 12.5% 2013 exit yield.$120 million required to achieve debt covenant complianceGP contributes $2.4 million to maintain 2% ownership22.9 million common units issued at current price of $5.13 per unit.71.0% LP ownership of HLNDBased on the upside case, new common equity investors receive a 47.2% IRR on their investment at an assumed 12.5% 2013 exit yield. Common Equity Investor Returns – Strip Case Common Equity Investor Returns – Upside Case ($ in millions) ($ in millions) IRR: 47.2% $350.0 $350.0 IRR: 36.3% $37.3 $300.0 $300.0 $32.7 IRR: 41.6% $250.0 $250.0 IRR: 30.6% $37.3 IRR: 37.9% $200.0 $32.7 $200.0 IRR: 26.8% $30.3 $34.0 $36.1 $38.4 $37.3 $21.2 $32.0 $32.7 $32.7 $150.0 $17.1 $150.0 $298.7 $261.4 $213.3 $100.0 $100.0 $186.7 Equity Investment Cash Flow Stream Equity Investment Cash Flow Stream $165.9 $145.2 $117.6 $117.6 $50.0 $50.0 $-$ — Transaction 2009 2010 2011 2012 2013 2013 2013 Transaction 2009 2010 2011 2012 2013 2013 2013 22.5% Exit 17.5% Exit 12.5% Exit 22.5% Exit 17.5% Exit 12.5% Exit Yield Yield Yield Yield Yield Yield New Equity Purchase Price Exit Valuation Price Distributions New Equity Purchase Price Exit Valuation Price Distributions Project Double Barrel 34

DRAFT

New Common Equity Issuance – HLND Unit DCF Analysis Draft HLND Common Unit DCF – Strip Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.75 $0.93 $1.40 $1.42 $1.43 Assumed Yield 12.5% Implied Future Unit Price $11.40 Discounted Cash Flow 1 $6.69 $0.60 $0.59 $0.71 $0.58 $4.20 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Strip Case 2009E TEV/EBITDA Sensitivity – Strip Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $7.92 $7.15 $6.61 $6.20 $5.88 Rate 20.0% 7.8x 7.6x 7.5x 7.4x 7.3x 22.5% $7.27 $6.58 $6.09 $5.72 $5.43 22.5% 7.6x 7.5x 7.4x 7.3x 7.2x Discount 25.0% $6.69 $6.07 $5.62 $5.29 $5.03 Discount 25.0% 7.5x 7.4x 7.3x 7.2x 7.1x 27.5% $6.18 $5.61 $5.21 $4.91 $4.67 27.5% 7.4x 7.2x 7.2x 7.1x 7.0x 30.0% $5.71 $5.20 $4.83 $4.56 $4.35 30.0% 7.3x 7.2x 7.1x 7.0x 7.0x HLND Common Unit DCF – Upside Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $1.32 $1.48 $1.58 $1.68 $1.63 Assumed Yield 12.5% Implied Future Unit Price $13.03 Discounted Cash Flow 1 $8.30 $1.06 $0.95 $0.81 $0.69 $4.80 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Upside Case 2009E TEV/EBITDA Sensitivity – Upside Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $9.74 $8.87 $8.25 $7.78 $7.41 Rate 20.0% 5.6x 5.4x 5.3x 5.3x 5.2x 22.5% $8.98 $8.19 $7.63 $7.21 $6.88 22.5% 5.4x 5.3x 5.2x 5.2x 5.1x Discount 25.0% $8.30 $7.59 $7.08 $6.70 $6.40 Discount 25.0% 5.3x 5.2x 5.1x 5.1x 5.0x 27.5% $7.69 $7.05 $6.59 $6.24 $5.97 27.5% 5.2x 5.1x 5.1x 5.0x 5.0x 30.0% $7.15 $6.56 $6.14 $5.83 $5.59 30.0% 5.2x 5.1x 5.0x 5.0x 4.9x Project Double Barrel 35

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New Common Equity Issuance – HPGP Unit DCF Analysis Draft HPGP Common Unit DCF – Strip Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.05 $0.07 $0.13 $0.14 $0.14 Assumed Yield 12.5% Implied Future Unit Price $1.08 Discounted Cash Flow 1 $0.60 $0.04 $0.04 $0.07 $0.06 $0.40 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Strip Case 2009E TEV/GP CF Sensitivity – Strip Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $0.72 $0.64 $0.59 $0.55 $0.52 Rate 20.0% 7.4x 6.7x 6.2x 5.8x 5.5x 22.5% $0.66 $0.59 $0.54 $0.51 $0.48 22.5% 6.8x 6.2x 5.7x 5.4x 5.1x Discount 25.0% $0.60 $0.54 $0.50 $0.47 $0.44 Discount 25.0% 6.3x 5.7x 5.3x 5.0x 4.7x 27.5% $0.55 $0.50 $0.46 $0.43 $0.41 27.5% 5.8x 5.3x 4.9x 4.6x 4.4x 30.0% $0.51 $0.46 $0.43 $0.40 $0.38 30.0% 5.4x 4.9x 4.6x 4.3x 4.1x HPGP Common Unit DCF – Upside Case PV Annual Projections 12/31/2008 2009 2010 2011 2012 2013 Distribution Per Common Unit $0.12 $0.36 $0.38 $0.41 $0.40 Assumed Yield 12.5% Implied Future Unit Price $3.19 Discounted Cash Flow 1 $1.86 $0.10 $0.23 $0.20 $0.17 $1.17 1 Based on a 25.0% discount rate Common Unit DCF Sensitivity – Upside Case 2009E TEV/GP CF Sensitivity – Upside Case 2013 Exit 2013 Exit Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Multiple 8.0x 6.7x 5.7x 5.0x 4.4x Yield 12.5% 15.0% 17.5% 20.0% 22.5% Yield 12.5% 15.0% 17.5% 20.0% 22.5% Rate 20.0% $2.21 $2.00 $1.84 $1.73 $1.64 Rate 20.0% 12.6x 11.4x 10.5x 9.9x 9.4x 22.5% $2.03 $1.83 $1.70 $1.59 $1.51 22.5% 11.5x 10.5x 9.7x 9.1x 8.7x Discount 25.0% $1.86 $1.69 $1.57 $1.47 $1.40 Discount 25.0% 10.6x 9.7x 9.0x 8.4x 8.0x 27.5% $1.72 $1.56 $1.45 $1.36 $1.30 27.5% 9.8x 8.9x 8.3x 7.8x 7.5x 30.0% $1.59 $1.45 $1.34 $1.27 $1.21 30.0% 9.1x 8.3x 7.7x 7.3x 6.9x Project Double Barrel 36

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Merger Cost of Capital and Liquidity Analysis Draft Current Total Available Current Cost of Cost of Cost of Liquidity Partnership Yield Equity1 Debt2 Capital3 (in MMs)4 Western Gas Partners, LP 9.4% 9.5% 7.2% 8.4% $98 Enterprise Product Partners L.P. 10.1% 11.7% 7.2% 9.5% 1,962 Oneok Partners, L.P. 9.5% 11.7% 8.0% 9.9% 410 Energy Transfer Partners, L.P. 10.5% 16.6% 9.2% 12.9% 1,700 Quicksilver Gas Services LP 14.8% 15.1% 15.6% 15.4% 53 Copano Energy, L.L.C. 19.5% 19.5% 14.8% 17.2% 509 Williams Partners L.P. 21.3% 26.2% 11.2% 18.7% 306 Wachovia has Regency Energy Partners LP 22.1% 23.0% 18.3% 20.6% 240 Targa Resources Partners LP 26.7% 29.5% 15.6% 22.5% 412 analyzed the cost of DCP Midstream Partners, LP 25.5% 30.4% 15.6% 23.0% 253 capital and liquidity MarkWest Energy Partners, L.P. 32.1% 32.1% 16.7% 24.4% 445 Eagle Rock Energy Partners, L.P. 34.8% 35.2% 15.6% 25.4% 394 position of the Crosstex Energy, L.P. 45.8% 60.6% 15.6% 38.1% 319 Atlas Pipeline Partners, L.P. 64.0% 82.0% 16.4% 49.2% 239 gathering and processing universe of Hiland Partners, LP 68.6% 89.2% 0.0% 44.6% $40 partnerships Note: Yellow shading indicates partnerships analyzed on following page 1 Incorporates percentage of total distributions paid to the general partner 2 Based on the partnerships’ outstanding bond yields, or 15.6% for partnerships without bonds outstanding (Wachovia Midstream MLP Index average yield) 3 Based on assumed long-term target capital structure of 50% debt / 50% equity 4 Based on current credit facility availability plus cash, less $10 million minimum balance Project Double Barrel 37

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Merger Ability To Pay Analysis Draft Assumptions MLP Ability to Pay1 . $12.00Based on consensus 2009E EBITDA for potential $10.15 acquirors and Hiland 2009E EBITDA based on strip         .$ 10.00 prices as of 12/31/08 from Wachovia Commodities. $8.3750% debt / 50% equity financing. $8.00 $7.53No premium paid for HPGP. HLND Price $6.00 (@12/31/08):2009 EBITDA multiple based on $41.4 million. Price per HLND Unit $5.13$5.0 million in expected synergies. Purchase $4.00 $2.00 Breakeven N/M N/M N/M $0.00 OKS WES EPD ETP CPNO WPZ Premium to HLND Price: $5.02 $3.24 $2.40 N/M N/M N/M % Premium to HLND Price: 97.9% 63.1% 46.7% N/M N/M N/M Implied Total Purchase Price (In Millions):2 $406 $389 $381 $290 $262 $174 2009E EBITDA Multiple:2 9.8x 9.4x 9.2x 7.0x 6.3x 4.2x 1 Assumes no accretion / dilution for acquiror 2 Includes purchase of HPGP at current price Project Double Barrel 38

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Recent Midstream Transactions Draft Recent Midstream Transactions Acquiror Seller Date Price Target Description Valuation 12/8/2008 $730.0 MMDEP announced the acquisition of partnership interests in three 15.0x midstream energy companies located in Texas from affiliates of EPDEPD now owns approximately 74% of the outstanding limited partner 10.0x 6.6x units of DEPDEP paid EPD $280.5 million in cash and issued to EPD approximately 5.0x 37.3 million of DEP Class B units valued at $449.5 millionMultiple could be affected by the drop-down nature of transaction where 0.0x the parent holds a significant economic interest in the underlying assets Estimated 11/11/2008 $210.0 MMWestern Gas plans to acquire gathering and processing assets in the Powder River Basin from its GP sponsor Anadarko 15.0xTo enhance the stability of WES’ cash flow, management plans to sign a swap agreement with APC to mitigate commodity price risk 10.0x 8.0xWES will issue a $175 million 5-year note to APC with an interest rate fixed at 4% for the first two years and then floating at LIBOR plus 150 5.0x bps. $35 million will be funded with 2.56 million common units issued to APC at $13.69/unit 0.0xMultiple could be affected by the drop-down nature of transaction where Estimated the parent holds a significant economic interest in the underlying assets 9/17/2008 $976.0 MMEl Paso Pipeline Partners, L.P. (“EPB”) agreed to acquire an additional 15.0x 30% interest in Colorado Interstate Gas Company (“CIG”) and an 9.8x additional 15% interest in Southern Natural Gas Company (“SNG”) from 10.0x 8.5x 8.1x El Paso Corporation (“EP”)Funded through: $175 million of private placement debt, $65 million 5.0x cash, $10 million note to EP, 27,761,611 common units issued to EP and $240 million of assumed debt 0.0xMultiple could be affected by the drop-down nature of transaction where LTM 2008E 2009E the parent holds a significant economic interest in the underlying assets 6/30/08 9/16/2008 $236.0 MMEROC agreed to acquire 100% of the outstanding units of Millennium 15.0x Midstream Partners (“MMP”) 8.7x 8.1xMMP is a natural gas gathering and processing company located in East 10.0x Texas, Central Texas and West Texas 5.0x$181 million paid in cash and $55 million paid through the issuance EROC common units 0.0x116.8 MMBtu/d gathered and 215 MMcf/d processed LTM 6/30/08 2009E 8/28/2008 $116.0 MMKinder Morgan Energy Partners, L.P. (“KMP”) acquired two pipeline 15.0x systems from Knight Inc.Knight’s one-third interest in the Express-Platte crude oil pipeline systems 10.0x that run from Alberta to Illinois 6.5xA 24-mile jet fuel pipeline that serves the Vancouver, British Columbia, 5.0x airportKnight’s significant promoted interest in the assets and private company 0.0x status could account for a lower transaction multiple Estimated 4/30/2008 $184.0 MMSunoco Logistics Partners L.P. acquired a refined produ cts pipeline 15.0x system located in Texas from affiliates of Exxon Mobil Corporation 9.2x 10.0x472-mile refined product pipeline system in Texas and 6 refined product terminals 5.0xInitially financed with debt and support of $5.5 million from the GP of 0.0x Sunoco over 4 years to provide accretion to the common unitholders Estimated Project Double Barrel 39

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Go Private Assumptions Draft General Assumptions Purchase Price Analysis ($ in millions, except per unit amounts) HLND HPGP4.0 million of HLND and 8.4 million units of HPGP are purchased for total consideration of $44.2 Current Units Units % of Total $ Value (MM) Units % of Total % Mkt Value Harold Hamm 0 0.0% $0.0 13,244,675 61.3% $31.4 million. HPGP Ownership 5,381,471 57.6% 27.6 0 0.0% 0.0$6.16 per HLND unit Purchased Units Other Insiders 58,748 0.6% $0.3 203,808 0.9% $0.5$2.37 per HPGP unit Total Insiders 5,440,219 58.2% $27.9 13,448,483 62.2% $31.9 Institutional Ownership 2,529,290 27.1% 13.0 6,016,139 27.8% 14.38.6x 2009E EBITDA based on strip case Public Ownership 1,372,826 14.7% 7.0 2,142,878 9.9% 5.1Transaction close on 12/31/08. Total Purchased 3,960,864 42.4% $20.3 8,362,825 38.7% $19.8 Total Outstanding 9,342,335 100.0% $47.9 21,607,500 100.0% $51.2$1.0 million in savings from elimination of public Current Unit Price $5.13 $2.37 company costs. Current Market Value of Purchased Units $20.3 $19.8Free cash flow used to repay revolver. Implied Market Capitalization $47.9 $51.2 Current Unit Price $5.13 $2.37Dividends allowed with leverage below 4.0x      % Premium 20.0% 0.0% debt/EBITDA Purchase Price per Unit $6.16 $2.37 Minority Stake Purchase Price $24.4 $19.8Acquisition financed with revolver and cash from Implied Equity Value $57.5 $51.2 equity investor(s). Net Debt Outstanding 254.1 0.7 Enterprise Value $311.6 $51.9Target leverage at close of 4.0x 2009E EBITDA 2009E EBITDA (Base) $42.4Existing revolver remains in place 2009E EBITDA (Upside) $62.0 Implied Multiple of 2009E EBITDA (Strip) 7.4xRequires $85.3 million in additional equity to Implied Multiple of 2009E EBITDA (Upside) 5.0x comply with debt covenants. Total Purchase Price $44.2 Total Implied Equity Value $108.7Interest expense based on current pricing grid. Total Net Debt 254.8 Total Enterprise Value $363.5 Implied Multiple of 2009E EBITDA (Strip) 8.6x Implied Multiple of 2009E EBITDA (Upside) 5.9x 1 Assumes savings of $450K for K-1/Tax Prep Fees, $300K of lower Board Fees and $250K of savings for Other Public Company costs (D&O, non-deal roadshow travel, conferences, etc.). Project Double Barrel 40

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Returns Analysis Draft Internal Rate of Return – Strip Case Cash On Cash Returns – Strip Case 60.0% 3.0x 2.6x 48.4% 2.4x 50.0% 2.5x 2.1x 39.8% 40.0% 36.7% 1.9x 34.5% 2.0x 31.9% 1.7x 1.4x 30.0% 28.7% 1.5x 22.3% 21.9% 1.2x 21.3% Cash on Cash Internal Rate of Return 1.0x 20.0% 1.0x 0.8x 10.0% 0.5x 0.0% 0.0x 2011 2012 2013 2011 2012 2013 7.0x EBITDA Exit Multiple 9.0x EBITDA Exit Multiple 11.0x EBITDA Exit Multiple 7.0x EBITDA Exit Multiple 9.0x EBITDA Exit Multiple 11.0x EBITDA Exit Multiple Internal Rate of Return – Upside Case Cash On Cash Returns – Upside Case 75.6% 4.0x 80.0% 3.6x 3.5x 3.5x 70.0% 63.2% 63.1% 3.0x 3.0x 2.8x 60.0% 55.1% 53.9% 2.6x 48.0% 50.0% 45.2% 48.3% 2.5x 2.2x 41.4% 1.9x 2.0x 1.8x 40.0% Cash on Cash 1.4x Internal Rate of Return 30.0% 1.5x 20.0% 1.0x 10.0% 0.5x 0.0% 0.0x 2011 2012 2013 2011 2012 2013 7.0x EBITDA Exit Multiple 9.0x EBITDA Exit Multiple 11.0x EBITDA Exit Multiple 7.0x EBITDA Exit Multiple 9.0x EBITDA Exit Multiple 11.0x EBITDA Exit Multiple Note: IRR and Cash on Cash Returns assumes 20% and 0% premium to HLND and HPGP unit price, respectively Cash on Cash Returns calculated as all equity receipts over equity investments

DRAFT

Returns Sensitivity Analysis Draft 5-Year Equity IRR – Strip Case Unit Price % Premium Purchase Market TEV / 2009E 2013 Exit Multiple HLND HPGP HLND HPGP Price Cap TEV EBITDA 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x $6.16 $2.37 20.0% 0.0% $44.2 $108.7 $363.5 8.6x 21.3% 25.2% 28.7% 31.7% 34.5% 37.0% to Unit $6.67 $2.61 30.0% 10.0% $48.2 $118.6 $373.4 8.8x 19.7% 23.7% 27.1% 30.1% 32.9% 35.4% $7.18 $2.84 40.0% 20.0% $52.2 $128.5 $383.4 9.0x 18.3% 22.2% 25.6% 28.7% 31.4% 33.9% Premium Price $7.70 $3.08 50.0% 30.0% $56.2 $138.5 $393.3 9.3x 16.9% 20.8% 24.2% 27.2% 30.0% 32.5% $8.21 $3.32 60.0% 40.0% $60.3 $148.4 $403.2 9.5x 15.6% 19.5% 22.9% 25.9% 28.6% 31.1% $8.72 $3.56 70.0% 50.0% $64.3 $158.3 $413.1 9.7x 14.4% 18.3% 21.7% 24.7% 27.4% 29.8% 5-Year Equity IRR – Upside Case Unit Price % Premium Purchase Market TEV / 2009E 2013 Exit Multiple HLND HPGP HLND HPGP Price Cap TEV EBITDA 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x $6.16 $2.37 20.0% 0.0% $44.2 $108.7 $363.5 5.9x 41.4% 45.1% 48.3% 51.3% 53.9% 56.4% to Unit $6.67 $2.61 30.0% 10.0% $48.2 $118.6 $373.4 6.0x 38.8% 42.5% 45.8% 48.7% 51.4% 53.8% $7.18 $2.84 40.0% 20.0% $52.2 $128.5 $383.4 6.2x 36.4% 40.2% 43.4% 46.3% 49.0% 51.4% Premium Price $7.70 $3.08 50.0% 30.0% $56.2 $138.5 $393.3 6.3x 34.2% 38.0% 41.2% 44.2% 46.8% 49.3% $8.21 $3.32 60.0% 40.0% $60.3 $148.4 $403.2 6.5x 32.2% 35.9% 39.2% 42.1% 44.8% 47.2% $8.72 $3.56 70.0% 50.0% $64.3 $158.3 $413.1 6.7x 30.3% 34.0% 37.3% 40.2% 42.9% 45.3%

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Sources and Uses, Capitalization and Credit Metrics – Strip Case Draft Sources and Uses Pro Forma Capitalization ($ in Millions) ($ in Millions) Pro Forma Cumulative Cumulative Sources Uses Capitalization PF 12/31/2009 PF 12/31/2010 New Equity (Cash to Delever) $85.3 Partial Repayment of Debt $85.3 $ % Leverage 1 Leverage 2 New Equity (Cash to HLND & HPGP) 44.2 Purchase of Public Equity 44.2 Revolver 2.0 Fees and Expenses 2.0 Revolver $169.5 46.1% Total Senior Secured Debt 169.5 46.1% 4.0x 3.5x Total Sources $131.5 Total Uses $131.5 Capital Leases 4.6 1.2% Total Debt 174.1 47.3% 4.1x 3.6x Equity 194.0 52.7% Total Capitalization $368.1 100.0% 8.7x 7.5x 1 Based on Pro Forma 12/31/09 Adjusted EBITDA of: $42.4 2 Based on Pro Forma 12/31/10 Adjusted EBITDA of: $49.0 Credit Metrics1 ($ in Millions) Projected 2008 2009 2010 2011 2012 2013 Revenue $387.7 $309.9 $381.9 $418.3 $420.8 $421.6 % Growth n/a (20.1%) 23.2% 9.5% 0.6% 0.2% EBITDA $66.4 $42.4 $49.0 $66.5 $68.5 $69.5 % Margin 17.1% 13.7% 12.8% 15.9% 16.3% 16.5% Less: Working Capital Usage ($3.4) $0.7 $1.5 $0.2 $0.2 Less: Total Cash Interest Expense 7.1 6.3 8.9 11.0 11.9 Less: Maintenance Capital Expenditures 7.6 8.5 8.5 8.5 8.5 Less: Expansion Capital Expenditures 18.5 21.5 21.5 21.5 21.5 Free Cash Flow Before Debt Repayment $12.6 $12.0 $26.1 $27.3 $27.5 Less: Scheduled Debt Repayment 0.0 0.0 0.0 0.0 0.0 Excess Cash Flow Available for Debt Sweep, Incremental CapEx or Dividends $12.6 $12.0 $26.1 $27.3 $27.5 Revolver (Repayments)/Borrowings ($4.6) $26.3 $70.3 $7.7 $4.3 Equity (Infusion)/Dividend $8.0 $38.3 $96.3 $35.0 $31.8 Cash Balance (End of Year) $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 Senior Secured Debt Balance (End of Year) $169.5 $165.0 $191.3 $261.6 $269.3 $273.5 Total Debt Balance (End of Year) $174.1 $169.5 $195.9 $266.2 $273.9 $278.1 Leverage Statistics Senior Secured Debt / EBITDA 2.6x 3.9x 3.9x 3.9x 3.9x 3.9x Total Debt / EBITDA 2.6x 4.0x 4.0x 4.0x 4.0x 4.0x EBITDA / Interest Expense 11.2x 6.0x 7.8x 7.5x 6.3x 5.9x 1 Assumes 12/31/08 close Project Double Barrel 43

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Sources and Uses, Capitalization and Credit Metrics – Upside Case Draft Sources and Uses Pro Forma Capitalization ($ in Millions) ($ in Millions) Pro Forma Cumulative Cumulative Sources Uses Capitalization PF 12/31/2009 PF 12/31/2010 New Equity (Cash to Delever) $85.3 Partial Repayment of Debt $85.3 $ % Leverage 1 Leverage 2 New Equity (Cash to HLND & HPGP) 44.2 Purchase of Public Equity 44.2 Revolver 2.0 Fees and Expenses 2.0 Revolver $169.5 46.1% Total Senior Secured Debt 169.5 46.1% 2.7x 2.3x Total Sources $131.5 Total Uses $131.5 Capital Leases 4.6 1.2% Total Debt 174.1 47.3% 2.8x 2.4x Equity 194.0 52.7% Total Capitalization $368.1 100.0% 5.9x 5.0x 1 Based on Pro Forma 12/31/09 Adjusted EBITDA of: $62.0 2 Based on Pro Forma 12/31/10 Adjusted EBITDA of: $73.2 Credit Metrics1 ($ in Millions) Projected 2008 2009 2010 2011 2012 2013 Revenue $387.7 $421.2 $477.6 $517.0 $543.7 $543.0 % Growth n/a 8.6% 13.4% 8.3% 5.2% (0.1%) EBITDA $66.4 $62.0 $73.2 $78.1 $82.7 $81.7 % Margin 17.1% 14.7% 15.3% 15.1% 15.2% 15.0% Less: Working Capital Usage ($1.7) $1.1 $0.5 $0.5 $0.0 Less: Total Cash Interest Expense 8.3 8.9 11.4 12.9 14.0 Less: Maintenance Capital Expenditures 7.6 8.5 8.5 8.5 8.5 Less: Expansion Capital Expenditures 18.5 21.5 21.5 21.5 21.5 Free Cash Flow Before Debt Repayment $29.3 $33.2 $36.2 $39.4 $37.7 Less: Scheduled Debt Repayment 0.0 0.0 0.0 0.0 0.0 Excess Cash Flow Available for Debt Sweep, Incremental CapEx or Dividends $29.3 $33.2 $36.2 $39.4 $37.7 Revolver (Repayments)/Borrowings $73.7 $44.9 $19.6 $18.6 ($4.1) Equity (Infusion)/Dividend $103.0 $78.1 $55.7 $57.9 $33.6 Cash Balance (End of Year) $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 Senior Secured Debt Balance (End of Year) $169.5 $243.3 $288.2 $307.7 $326.3 $322.2 Total Debt Balance (End of Year) $174.1 $247.8 $292.7 $312.3 $330.9 $326.8 Leverage Statistics Senior Secured Debt / EBITDA 2.6x 3.9x 3.9x 3.9x 3.9x 3.9x Total Debt / EBITDA 2.6x 4.0x 4.0x 4.0x 4.0x 4.0x EBITDA / Interest Expense 11.2x 7.5x 8.2x 6.8x 6.4x 5.8x 1 Assumes 12/31/08 close Project Double Barrel 44

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Appendix

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High Yield Market Conditions

DRAFT

Historical Trading Analysis Draft Midstream Bonds Performance vs. Broader Market 42.00% Change From: 1 Week 1 Month 1 Year Midstream Index (22) bps 10 bps 917 bps BB Index (38) bps (137) bps 636 bps B Index (38) bps (137) bps 636 bps 34.80% CCC Index (526) bps (416) bps 2,114 bps 33.92% 27.60% 20.40% 18.65% 16.87% 14.66% 13.20% 6.00% 8 8 8 8 8 8 8 — 07 08 — - 0 — 0 — 0 — 0 08 — - 08 — 0 08 - 08 — - 0 — 0 c b r y l g e an e p a Ju u ct D J F Mar A M Jun A Sep O Nov Dec Midstream Index BB Index B Index CCC Index Source: FT Interactive and Wachovia Securities Project Double Barrel 47

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Recently Priced High Yield Deals Draft Recently Priced High Yield Deals Final Pricing vs. Date Company Security Maturity Call Feature Amount Price Talk At Issue Yield STT Rating Dec-16-08 Kansas City Southern Co. Sr. Notes 2013 NC3 $190 Inside 16.500% 1,501 B2/BB-Dec-09-08 El Paso Corp Sr. Notes 2013 NC5 $500 Inside 15.250% 1,362 Ba3/BB-Oct-30-08 MGM Mirage Sr. Secured 1st Priority Notes 2013 NCL $750 Inside 15.000% 1,225 Ba1/BB Sep-24-08 Perkins & Marie Callenders Sr. Secured Notes 2013 NC3 $132 n/a 15.750% n/a Not Rated Sep-19-08 SunGard Data Systems Sr. Notes 2015 NC4 $500 Inside 10.875% 769 Caa1/B Sep-12-08 Frontier Oil Corp Sr. Notes 2016 NC4 $200 High 8.750% 482 Ba3/BB Sep-11-08 Clear Channel Communications Sr. Notes 2016 NC4 $228 High 18.012% 1,459 Caa1/CCC+ Sep-10-08 Sabine Pass LNG LP Sr. Secured 1st Lien Notes 2016 NCL $145 High 11.519% 840 B2/B+ Quarterly High Yield New Issuance Since 2002 $60 $50 Billions) $40 in $ $30 ( Volume $20 $10 $0 1Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 8 2Q02 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 3Q0 4Q08 Source: IFR Markets Project Double Barrel 48

DRAFT

Midstream High Yield Issuers Draft Midstream High Yield Issuers ($ in Millions) LTM Total Debt / Issue Next Call December 31, 2008 Issuer EBITDA EBITDA Security Amount Coupon Rating Maturity Date Price Price YTW STW Atlas Pipeline Partners, L.P. $305.6 4.7x Sr. Notes $250.0 8.750% B3/B- 05/15/18 06/15/13 104.375 65.500 15.93% 1,374 Copano Energy, L.L.C. $210.0 4.6x Sr. Notes $300.0 7.750% B1/B+ 06/01/18 06/01/13 103.875 67.500 14.09% 1,189 Holly Energy Partners, L.P. $81.5 5.0x Sr. Notes $185.0 6.250% B1/B+ 03/01/15 03/01/10 103.125 67.000 14.54% 1,291 Inergy, L.P. $243.7 4.5x Sr. Notes $200.0 8.250% B1/B+ 03/01/16 03/01/11 104.125 78.000 13.07% 1,120 MarkWest Energy Partners, L.P. $293.0 3.4x Sr. Notes $500.0 8.750% B2/B+ 04/15/18 04/15/13 104.375 62.000 17.03% 1,484 Regency Energy Partners L.P. $249.0 4.0x Sr. Notes $357.5 8.375% B1/B 12/15/13 12/15/10 104.188 68.500 18.33% 1,685 Targa Resources, Inc $195.6 6.1x Sr. Notes $250.0 8.500% B3/CCC+ 11/01/13 11/01/09 104.250 54.000 25.64% 2,422 Targa Resources Partners, L.P. $222.6 2.7x Sr. Notes $250.0 8.250% B2/B 07/01/16 07/01/12 104.125 62.000 17.57% 1,549 Mean 65.563 17.02% 1,514 Note: Adjusted for publicly announced transactions Source: FT Interactive, Wachovia Securities and Public Filings