##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE
    QUARTERLY PERIOD ENDED SEPTEMBER 30,
    2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
    FROM          TO   Commission file number:
    000-51120
  Hiland Partners, LP
 (Exact name of Registrant as
    specified in its charter)
  DELAWARE(State or other jurisdiction
    of
    incorporation or organization)

71-0972724(I.R.S. Employer
    Identification No.)205 West Maple, Suite 1100
    Enid, Oklahoma(Address of principal
    executive offices)

73701(Zip Code)    (580) 242-6040
 (Registrants telephone
    number, including area code)
   þ o
  Regulation S-T o o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   rule 12b-2 o þ




---



##### 



HILAND
    PARTNERS, LP
  INDEX
   
 PART I. FINANCIAL INFORMATIONItem 1.

Financial Statements (Unaudited)Consolidated Balance Sheets


3Consolidated Statements of Operations


4Consolidated Statements of Cash Flows


5Consolidated Statement of Changes in
    Partners Equity and Comprehensive Income (Loss)


6Condensed Notes to Consolidated Financial
    Statements (Unaudited)


7Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


33Item 3.

Quantitative and Qualitative Disclosures About
    Market Risks


51Item 4.

Controls and Procedures


52PART II. OTHER INFORMATIONItem 1.

Legal Proceedings


53Item 1A.

Risk Factors


53Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds


56Item 3.

Defaults Upon Senior Securities


56Item 4.

Submission of Matters to a Vote of Security
    Holders


56Item 5.

Other Information


56Item 6.

Exhibits


56SIGNATURES


58Certification of CEO under Section 302Certification of CFO under Section 302Certification of CEO under Section 906Certification of CFO under Section 906EX-31.1EX-31.2EX-32.1EX-32.2   2




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##### Table of Contents



PART I.
    FINANCIAL INFORMATIONItem 1. Financial Statements
    (Unaudited)  HILAND
    PARTNERS, LP
  Consolidated Balance Sheets
  September 30,


December 31,2009


2008(Unaudited)(In thousands, except unit amounts)ASSETSCurrent assets:Cash and cash equivalents

$
3,557


$
1,173Accounts receivable:Trade  net of allowance for doubtful accounts of $304


17,872



23,863Affiliates


1,262



2,34619,134



26,209Fair value of derivative assets


3,860



6,851Other current assets


816



1,584Total current assets


27,367



35,817Property and equipment, net


322,681



345,855Intangibles, net


29,902



35,642Fair value of derivative assets


608



7,141Other assets, net


1,303



1,684Total assets

$
381,861


$
426,139LIABILITIES AND PARTNERS EQUITYCurrent liabilities:Accounts payable

$
11,221


$
22,470Accounts payable  affiliates


4,298



7,662Fair value of derivative liabilities


835



1,439Accrued liabilities and other


5,466



2,463Total current liabilities


21,820



34,034Commitments and contingencies (Note 9)Long-term debt


256,934



256,466Fair value of derivative liabilities


267



Asset retirement obligation


2,593



2,483Partners equityLimited partners interest:Common unitholders (6,300,624 and 6,286,755 units issued andoutstanding at September 30, 2009 and December 31,
    2008, respectively)


105,226



122,666Subordinated unitholders (3,060,000 units issued and
    outstanding)


(5,816
)


3,055General partner interest


1,645



2,202Accumulated other comprehensive income (loss)


(808
)


5,233Total partners equity


100,247



133,156Total liabilities and partners equity

$
381,861


$
426,139    3




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##### Table of Contents



HILAND
    PARTNERS, LP
  Consolidated
    Statements of Operations
 For the Three and Nine Months Ended
  Three Months Ended September 30,


Nine Months Ended September 30,2009


2008


2009


2008(Unaudited)(In thousands, except per unit amounts)Revenues:Midstream operationsThird parties

$
53,015


$
107,158


$
151,133


$
308,625Affiliates


626



7,390



2,525



10,433Compression services, affiliate


1,205



1,205



3,615



3,615Total revenues


54,846



115,753



157,273



322,673Operating costs and expenses:Midstream purchases (exclusive of items shown separately below)


18,526



45,616



52,943



139,258Midstream purchases  affiliate (exclusive of items
    shown separately below)


11,740



36,279



35,538



99,328Operations and maintenance


7,736



7,881



23,216



22,201Depreciation, amortization and accretion


10,472



9,554



30,981



27,652Property impairments


20,500







21,450



Bad debt






(7,799
)






304General and administrative


2,579



2,259



8,458



6,423Total operating costs and expenses


71,553



93,790



172,586



295,166Operating (loss) income


(16,707
)


21,963



(15,313
)


27,507Other income (expense):Interest and other income


10



96



91



267Amortization of deferred loan costs


(149
)


(147
)


(448
)


(426
)Interest expense


(2,702
)


(3,271
)


(7,739
)


(9,888
)Other income (expense), net


(2,841
)


(3,322
)


(8,096
)


(10,047
)Net (loss) income


(19,548
)


18,641



(23,409
)


17,460Less general partners interest in net (loss) income


(391
)


2,641



(468
)


6,513Limited partners interest in net (loss) income

$
(19,157
)

$
16,000


$
(22,941
)

$
10,947Net (loss) income per limited partners unit 
    basic

$
(2.05
)

$
1.71


$
(2.45
)

$
1.17Net (loss) income per limited partners unit 
    diluted

$
(2.05
)

$
1.71


$
(2.45
)

$
1.17Weighted average limited partners units
    outstanding  basic


9,356



9,339



9,352



9,323Weighted average limited partners units
    outstanding  diluted


9,356



9,365



9,352



9,364    4




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##### Table of Contents



HILAND
    PARTNERS, LP
  Consolidated
    Statements of Cash Flows
 For the Nine Months Ended
  September 30,


September 30,2009


2008(Unaudited, in thousands)Cash flows from operating activities:Net (loss) income

$
(23,409
)

$
17,460Adjustments to reconcile net (loss) income to net cash provided
    by operating activities:Depreciation and amortization


30,864



27,550Accretion of asset retirement obligation


117



102Property impairments


21,450



Amortization of deferred loan cost


448



426Gain on derivative transactions


(9
)


(3,685
)Net proceeds from settlement of derivative contracts


3,155



Unit based compensation


837



1,159Bad debt






304Gain on sale of assets


(3
)


(12
)Increase in other assets


(57
)


(72
)(Increase) decrease in current assets:Accounts receivable  trade


5,991



(10,036
)Accounts receivable  affiliates


1,084



(3,846
)Other current assets


768



(1,459
)Increase (decrease) in current liabilities:Accounts payable


(2,366
)


(2,856
)Accounts payable  affiliates


(3,364
)


435Accrued liabilities and other


3,031



1,241Net cash provided by operating activities


38,537



26,711Cash flows from investing activities:Purchases of property and equipment


(32,299
)


(37,164
)Proceeds from disposals of property and equipment


12



18Net cash used in investing activities


(32,287
)


(37,146
)Cash flows from financing activities:Proceeds from long-term borrowings


12,000



41,000Payments on long-term borrowings


(11,000
)


Increase in deferred offering cost






(7
)Debt issuance costs


(10
)


(355
)Proceeds from unit options exercise






1,052General partner contribution for issuance of restricted common
    units and from conversion of vested phantom units


(2
)


7Redemption of vested phantom units






(35
)Forfeiture of unvested restricted common units


18



Payments on capital lease obligations


(560
)


(369
)Cash distributions to unitholders


(4,312
)


(29,208
)Net cash (used in) provided by financing activities


(3,866
)


12,085Increase for the period


2,384



1,650Beginning of period


1,173



10,497End of period

$
3,557


$
12,147Supplementary informationCash paid for interest, net of amounts capitalized

$
7,923


$
9,707    5




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##### Table of Contents



HILAND
    PARTNERS, LP
  Consolidated
    Statement of Changes in Partners Equity and Comprehensive
    Income (Loss)
 For the Nine Months Ended September 30, 2009
  Common


Subordinated





AccumulatedLimited


Limited


General


Other





TotalPartner


Partner


Partner


Comprehensive





ComprehensiveInterest


Interest


Interest


Income (Loss)


Total


Income (Loss)(Unaudited)(In thousands, except unit amounts)Balance, January 1, 2009

$
122,666


$
3,055


$
2,202


$
5,233


$
133,156Issuance of 7,869 common unitsfrom 8,250 vested phantom units


(3
)






1







(2
)Forfeiture of 4,250 unvested


22







(4
)






18restricted common unitsPeriodic cash distributions


(2,849
)


(1,377
)


(86
)






(4,312
)Unit based compensation


837















837Other comprehensive incomereclassified to income onclosed derivative transactions














(5,848
)


(5,848
)

$
(5,848
)Change in fair value of derivatives














(193
)


(193
)


(193
)Net loss


(15,447
)


(7,494
)


(468
)






(23,409
)


(23,409
)Comprehensive loss





















$
(29,450
)Balance, September 30, 2009

$
105,226


$
(5,816
)

$
1,645


$
(808
)

$
100,247    6




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)
 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 and 2008
 (in thousands, except unit information or unless otherwise
    noted)
  Note 1:
    Organization,
    Basis of Presentation and Principles of Consolidation    start-up
  Form 10-K
  Principles
    of Consolidation
   7




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  Use of
    Estimates
    Concentration
    and Credit Risk
    Fair
    Value of Financial Instruments
    Interest
    Rate Risk Management
    Commodity
    Risk Management
   8




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
      Long
    Lived Assets
      
    changes in general economic conditions in regions in which the
    assets are located;
    the availability and prices of NGLs and NGL products and
    competing commodities;
    the availability and prices of raw natural gas supply;
    our ability to negotiate favorable marketing agreements;
    the risks that third party oil and gas exploration and
    production activities will not occur or be successful;
    our dependence on certain significant customers and producers of
    natural gas; and
    competition from other midstream service providers and
    processors, including major energy companies. 9




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
       Comprehensive
    Income (Loss)
    Three Months Ended September 30,


Nine Months Ended September 30,2009


2008


2009


2008Net (loss) income

$
(19,548
)

$
18,641


$
(23,409
)

$
17,460Closed derivative transactions reclassified to income


(1,969
)


1,395



(5,848
)


6,478Change in fair value of derivatives


(1,143
)


13,219



(193
)


2,965Comprehensive (loss) income

$
(22,660
)

$
33,255


$
(29,450
)

$
26,903   Net
    Income (Loss) per Limited Partners Unit
    Recent
    Accounting Pronouncements
     10




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
               11




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  earnings-per-share
      Note 2:
    Merger
    Agreements     12




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
        Hart-Scott-Rodino
 13




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
   Note 3:
    Property
    and Equipment and Asset Retirement Obligations    As of


As ofSeptember 30,


December 31,2009


2008Land

$
295


$
295Construction in progress


2,558



15,583Midstream pipeline, plants and compressors


441,853



405,842Compression and water injection equipment


19,421



19,391Other


4,987



4,621469,114



445,732Less: accumulated depreciation and amortization


146,433



99,877$
322,681


$
345,855   right-of-ways,
      Asset retirement obligation, January 1, 2009

$
2,483Less: obligation extinguished


(17
)Add: additions on leased locations


10Add: accretion expense


117Asset retirement obligation, September 30, 2009

$
2,593   Note 4:
    Intangible
    Assets   14




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
      As of


As ofSeptember 30,


December 31,2009


2008Gas sales contracts

$
25,585


$
25,585Compression contracts


18,515



18,515Customer relationships


10,492



10,49254,592



54,592Less accumulated amortization


24,690



18,950Intangible assets, net

$
29,902


$
35,642     Note 5:
    Derivatives  Interest
    Rate Swap
      Notional


Interest


Fair ValueDescription and Period

Amount


Rate


(Liability)Interest Rate SwapOctober 2009  December 2009

$
100,000



2.245
%

$
(512
)   Commodity
    Swaps
   15




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
         16




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2009


2008


2009


2008Net gains (losses) on closed/settled transactionsreclassified from (to) accumulated othercomprehensive income

$
1,969


$
(1,395
)

$
5,848


$
(6,478
)Increases (decreases) in fair values of openderivatives recorded to (from) accumulatedother comprehensive income

$
(1,143
)

$
13,219


$
(193
)

$
2,965Unrealized non-cash gains (losses) on ineffectiveportions of qualifying derivative transactions

$
(238
)

$
133


$
9


$
128Unrealized non-cash gains onnon-qualifying derivatives

$



$
5,487


$



$
3,557       As of


As ofSeptember 30,


December 31,2009


2008Fair value of derivative assets  current

$
3,860


$
6,851Fair value of derivative assets  long term


608



7,141Fair value of derivative liabilities  current


(835
)


(1,439
)Fair value of derivative liabilities  long term


(267
)


Net fair value of derivatives

$
3,366


$
12,553       Average

FairFixed

ValueDescription and Production Period

Volume

Price

Asset(MMBtu)

(Per MMBtu)Natural Gas  Sold Fixed for Floating Price SwapsOctober 2009  September 2010

2,136,000

$6.87

$
3,537October 2010  December 2010

534,000

$6.73


341$
3,878  17




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
   Note 6:
    Fair
    Value Measurements    mark-to-market
  Level 1

Level 2


Level 3


TotalCommodity  based derivative assets

$  

$
4,468


$



$
4,468Commodity  based derivative liabilities




(590
)






(590
)Interest  based derivative liabilities








(512
)


(512
)Total

$  

$
3,878


$
(512
)

$
3,366     Balance, January 1, 2009

$
(1,439
)Cash settlements from other comprehensive income


1,406Change in fair value of derivative


(479
)Balance, September 30, 2009

$
(512
)    18




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
      Note 7:
    Long-Term
    Debt    As of


As ofSeptember 30,


December 31,2009


2008Credit facility

$
253,064


$
252,064Capital lease obligations


4,492



5,051257,556



257,115Less: current portion of capital lease obligations


622



649Long-term debt

$
256,934


$
256,466   Credit Facility.
    step-up
 19




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  in-the-money in-the-money
      1 step-up
         20




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
      Capital Lease Obligations.
    Note 8:
    Share-Based
    Compensation     21




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  Phantom Units.
    Weighted


WeightedAverage


AverageFair Value


Fair Value atat Grant


RedemptionPhantom Units

Units


Date ($)


Date ($)Unvested at January 1, 2009


50,794


$
47.74Granted


Vested and converted or redeemed


(8,250
)

$
49.34


$
7.40Forfeited


(5,050
)

$
45.11Unvested at September 30, 2009


37,494


$
47.75     Restricted Units.
    WeightedAverageFair Valueper Unitat GrantRestricted Units

Units


Date ($)Unvested at January 1, 2009


18,500


$
48.73Granted


Vested


(6,000
)

$
44.29Forfeited


(4,250
)

$
47.56Unvested at September 30, 2009


8,250


$
52.56    22




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  Unit Options.
  Note 9:
    Commitments
    and Contingencies            Robert
    Pasternack v. Hiland Partners, LP et al. No. 4397-VCS; Andrew Jones v. Hiland Partners, LP et
    al. No. 4558-VCS; Arthur G. Rosenberg v. Hiland Partners,
    LP et al. No. C3-09-211-02.
  Pasternack
 23




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  Pasternack
    Note 10:
    Significant
    Customers and Suppliers    For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2009


2008


2009


2008Customer 1


24
%


5
%


21
%


15
%Customer 2


18
%


7
%


12
%


12
%Customer 3


12
%


10
%


14
%


9
%Customer 4


7
%


18
%


9
%


13
%Customer 5


2
%


14
%


2
%


10
%       For the Three Months


For the Nine MonthsEnded September 30,


Ended September 30,2009


2008


2009


2008Supplier 1 (affiliated company)


39
%


45
%


41
%


42
%Supplier 2


20
%


14
%


19
%


15
%Supplier 3


16
%


17
%


16
%


18
%   Note 11:
    Related
    Party Transactions   24




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
            Note 12:
    Reportable
    Segments              25




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
  For the Three Months Ended September 30,2009


2008Midstream


Compression





Midstream


CompressionSegment


Segment


Total


Segment


Segment


TotalRevenues

$
53,641


$
1,205


$
54,846


$
114,548


$
1,205


$
115,753Operating costs and expenses:Midstream purchases (exclusive ofitems shown separately below)


30,266







30,266



81,895







81,895Operations and maintenance


7,559



177



7,736



7,617



264



7,881Depreciation and amortization


9,575



897



10,472



8,658



896



9,554Property impairments


20,500







20,500











Bad debt














(7,799
)






(7,799
)General and administrative


2,522



57



2,579



2,235



24



2,259Total operating costs and expenses


70,422



1,131



71,553



92,606



1,184



93,790Operating (loss) income

$
(16,781
)

$
74



(16,707
)

$
21,942


$
21



21,963Other income (expense):Interest and other income










10











96Amortization of deferred loan costs










(149
)










(147
)Interest expense










(2,702
)










(3,271
)Total other income (expense)










(2,841
)










(3,322
)Net (loss) income









$
(19,548
)









$
18,641   For the Nine Months Ended September 30,2009


2008Midstream


Compression





Midstream


CompressionSegment


Segment


Total


Segment


Segment


TotalRevenues

$
153,658


$
3,615


$
157,273


$
319,058


$
3,615


$
322,673Operating costs and expenses:Midstream purchases (exclusive ofitems shown separately below)


88,481







88,481



238,586







238,586Operations and maintenance


22,612



604



23,216



21,428



773



22,201Depreciation and amortization


28,289



2,692



30,981



24,966



2,686



27,652Property impairments


21,450







21,450











Bad debt














304







304General and administrative


8,262



196



8,458



6,350



73



6,423Total operating costs and expenses


169,094



3,492



172,586



291,634



3,532



295,166Operating (loss) income

$
(15,436
)

$
123



(15,313
)

$
27,424


$
83



27,507Other income (expense):Interest and other income










91











267Amortization of deferred loan costs










(448
)










(426
)Interest expense










(7,739
)










(9,888
)Total other income (expense)










(8,096
)










(10,047
)Net (loss) income









$
(23,409
)









$
17,460  26




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
   Note 13:
    Net
    Income (Loss) per Limited Partners Unit    For the Three Months Ended September 30,2009


2008(Loss)








IncomeAttributable








Attributableto Limited


Limited





to Limited


LimitedPartners


Partner Units


Per Unit


Partners


Partner Units


Per Unit(Numerator)


(Denominator)


Amount


(Numerator)


(Denominator)


Amount(Loss) income per limited partner unit  basic and
    diluted:(Loss) income attributable to limited partners

$
(19,157
)





$
(2.05
)

$
16,000






$
1.71Weighted average limited partner units outstanding






9,356,000











9,339,000Income per limited partner unit  diluted: Unit
    Options, restricted and phantom units


















26,000(Loss) income attributable to limitedpartners plus assumed conversions

$
(19,157
)


9,356,000


$
(2.05
)

$
16,000



9,365,000


$
1.71   For the Nine Months Ended September 30,2009


2008(Loss)








IncomeAttributable








Attributableto Limited


Limited





to Limited


LimitedPartners


Partner Units


Per Unit


Partners


Partner Units


Per Unit(Numerator)


(Denominator)


Amount


(Numerator)


(Denominator)


Amount(Loss) income per limited partner unit  basic and
    diluted:(Loss) income attributable to limited partners

$
(22,941
)





$
(2.45
)

$
10,947






$
1.17Weighted average limited partner units outstanding






9,352,000











9,323,000Income per limited partner unit  diluted: Unit
    Options, restricted and phantom units


















41,000(Loss) income attributable to limited partners plus assumed
    conversions

$
(22,941
)


9,352,000


$
(2.45
)

$
10,947



9,364,000


$
1.17    27




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
   Note 14:
    Partners
    Capital and Cash Distributions      
    first, 98% to the common units and 2% to our general
    partner, until each common unit has received a minimum quarterly
    distribution of $0.45 plus any arrearages from prior quarters;
    second, 98% to the subordinated units and 2% to our
    general partner, until each subordinated unit has received a
    minimum quarterly distribution of $0.45; and
    third, 98% to all units pro rata, and 2% to our general
    partner, until each unit has received a distribution of $0.495.       28




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##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
    Distribution

Date Cash


Per Unit Cashfor Quarter

Distribution


Distribution


Common


Subordinated


General Partner


Total CashEnding

Paid


Amount


Units


Units


Regular


Incentive


Distribution12/31/07


02/14/08



0.7950


$
4,169


$
3,243


$
182


$
1,492


$
9,08603/31/08


05/14/08



0.8275



4,364



3,376



194



1,789



9,72306/30/08


08/14/08



0.8625



5,446



2,639



208



2,107



10,40009/30/08


11/14/08



0.8800



5,574



2,694



214



2,268



10,75012/31/08


02/13/09



0.4500



2,849



1,377



86







4,31203/31/09


























06/30/09


























09/30/09


























$
3.8150


$
22,402


$
13,329


$
884


$
7,656


$
44,271   Note 15:
    Subsequent
    Events      Schedule 13E-3 Schedule 13E-3
 29




---



##### Table of Contents



HILAND
    PARTNERS, LP
  CONDENSED
    NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS (UNAUDITED)  (Continued)
       30




---



##### Table of Contents



Cautionary
    Statement About Forward-Looking Statements
  Form 10-Q
    
    with respect to the mergers: (1) the occurrence of any
    event, change or other circumstances that could give rise to the
    termination of the merger agreements or the failure of required
    conditions to close the mergers; (2) the outcome of any
    legal proceedings that have been or may be instituted against
    the Partnership
    and/or
    Hiland Holdings and others; (3) the inability to obtain
    unitholder approval or the failure to satisfy other conditions
    to completion of the mergers, including the receipt of certain
    regulatory approvals; (4) risks that the proposed
    transaction disrupts current plans and operations and the
    potential difficulties in employee retention as a result of the
    mergers; (5) the performance of Harold Hamm, his affiliates
    and the Hamm family trusts , (6) the amount of the costs,
    fees, expenses and related charges and (7) the ability of
    the Hiland companies to receive clearance of the supplement to
    the definitive joint proxy statement a sufficient amount of time
    prior to the reconvened special meeting date to permit
    distribution of the supplement;
    the ability to comply with certain covenants in our credit
    facility and the ability to reach agreement with our lenders in
    the event of a breach of such covenants;
    the ability to pay distributions to our unitholders;
    our cash flow is affected by the volatility of natural gas and
    NGL product prices, which could adversely affect our ability to
    make distributions to unitholders.
    the continued ability to find and contract for new sources of
    natural gas supply;
    the general economic conditions in the United States of America
    as well as the general economic conditions and currencies in
    foreign countries;
    the amount of natural gas gathered on our gathering systems and
    the associated level of throughput in our natural gas processing
    and treating facilities given the recent reduction in drilling
    activity in our areas of operations;
    the fees we charge and the margins realized for our services;
    the prices and market demand for, and the relationship between,
    natural gas and NGLs;
    energy prices generally;
    the level of domestic crude oil and natural gas production;
    the availability of imported crude oil and natural gas;
    actions taken by foreign crude oil and natural gas producing
    nations;
    the political and economic stability of petroleum producing
    nations;
    the weather in our operating areas;
    the extent of governmental regulation and taxation; 31




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##### Table of Contents




    hazards or operating risks incidental to the gathering, treating
    and processing of natural gas and NGLs that may not be fully
    covered by insurance;
    competition from other midstream companies;
    loss of key personnel;
    the availability and cost of capital and our ability to access
    certain capital sources;
    margin call risk with counterparties on our derivative
    instruments;
    changes in laws and regulations to which we are subject,
    including tax, environmental, transportation and employment
    regulations;
    the costs and effects of legal and administrative proceedings;
    the ability to successfully identify and consummate strategic
    acquisitions at purchase prices that are accretive to our
    financial results;
    risks associated with the construction of new pipelines and
    treating and processing facilities or additions to our existing
    pipelines and facilities;
    the completion of significant, unbudgeted expansion projects may
    require debt
    and/or
    equity financing which may not be available to us on acceptable
    terms, or at all; and;
    increases in interest rates could increase our borrowing costs,
    adversely impact our unit price and our ability to issue
    additional equity, which could have an adverse effect on our
    cash flows and our ability to fund our growth.     32




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  General
    Trends and Outlook
    U.S. Natural Gas Supply and
    Outlook.
  U.S. Crude Oil Supply and Outlook. $33.87/Bbl
  U.S. NGL Supply and Outlook.
   33




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##### Table of Contents



Disruption
    to functioning of capital markets
    Overview
      
    Midstream Segment,which is engaged in purchasing,
    gathering, compressing, dehydrating, treating, processing and
    marketing of natural gas and the fractionating and marketing of
    NGLs. The midstream segment generated 95.1% and 96.4% of total
    segment margin for the three months ended September 30,
    2009 and 2008, respectively and 94.7% and 95.7% of total segment
    margin for the nine months ended September 30, 2009 and
    2008, respectively.
    Compression Segment,which is engaged in providing air
    compression and water injection services for oil and gas
    secondary recovery operations that are ongoing in North Dakota.
    The compression segment generated 4.9% and 3.6% of total segment
    margin for the three months ended September 30, 2009 and
    2008, respectively and 5.3% and 4.3% of total segment margin for
    the nine months ended September 30, 2009 and 2008,
    respectively.      Recent
    Events
  Merger Agreements.
 34




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##### Table of Contents



Hedging Transactions.
  SEC Filings.
  Schedule 13E-3 Schedule 13E-3
    Distributions.
  Historical
    Results of Operations
   35




---



##### Table of Contents



Our
    Results of Operations
      Three Months Ended September 30,2009


2008(In thousands)Total Segment Margin Data:Midstream revenues

$
53,641


$
114,548Midstream purchases


30,266



81,895Midstream segment margin


23,375



32,653Compression revenues(1)


1,205



1,205Total segment margin(2)

$
24,580


$
33,858Summary of Operations Data:Midstream revenues

$
53,641


$
114,548Compression revenues


1,205



1,205Total revenues


54,846



115,753Midstream purchases (exclusive of items shown separately below)


30,266



81,895Operations and maintenance


7,736



7,881Depreciation, amortization and accretion


10,472



9,554Property impairments


20,500



Bad debt






(7,799
)General and administrative


2,579



2,259Total operating costs and expenses


71,553



93,790Operating (loss) income


(16,707
)


21,963Other income (expense)


(2,841
)


(3,322
)Net (loss) income


(19,548
)


18,641Add:Depreciation, amortization and accretion


10,472



9,554Property impairments


20,500



Amortization of deferred loan costs


149



147Interest expense


2,702



3,271EBITDA(3)

$
14,275


$
31,613Operating Data:Inlet natural gas (Mcf/d)


257,950



261,345Natural gas sales (MMBtu/d)


86,979



95,889NGL sales (Bbls/d)


7,115



6,036  36




---



##### Table of Contents



Nine Months Ended September 30,2009


2008(In thousands)Total Segment Margin Data:Midstream revenues

$
153,658


$
319,058Midstream purchases


88,481



238,586Midstream segment margin


65,177



80,472Compression revenues(1)


3,615



3,615Total segment margin(2)

$
68,792


$
84,087Summary of Operations Data:Midstream revenues

$
153,658


$
319,058Compression revenues


3,615



3,615Total revenues


157,273



322,673Midstream purchases (exclusive of items shown separately below)


88,481



238,586Operations and maintenance


23,216



22,201Depreciation, amortization and accretion


30,981



27,652Property impairments


21,450



Bad debt






304General and administrative


8,458



6,423Total operating costs and expenses


172,586



295,166Operating (loss) income


(15,313
)


27,507Other income (expense)


(8,096
)


(10,047
)Net (loss) income


(23,409
)


17,460Add:Depreciation, amortization and accretion


30,981



27,652Property impairments


21,450



Amortization of deferred loan costs


448



426Interest expense


7,739



9,888EBITDA(3)

$
37,209


$
55,426Operating Data:Inlet natural gas (Mcf/d)


268,937



245,098Natural gas sales (MMBtu/d)


88,703



89,615NGL sales (Bbls/d)


7,141



5,763     (1)
    
    Compression revenues and compression segment margin are the
    same. There are no compression purchases associated with the
    compression segment. 37




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##### Table of Contents



(2)
    
    Reconciliation of total segment margin to operating income:  Three Months Ended September 30,2009


2008(In thousands)Reconciliation of Total Segment Margin to Operating IncomeOperating (loss) income

$
(16,707
)

$
21,963Add:Operations and maintenance expenses


7,736



7,881Depreciation, amortization and accretion


10,472



9,554Property impairments


20,500



Bad debt






(7,799
)General and administrative


2,579



2,259Total segment margin

$
24,580


$
33,858   Nine Months Ended September 30,2009


2008(In thousands)Reconciliation of Total Segment Margin to Operating IncomeOperating (loss) income

$
(15,313
)

$
27,507Add:Operations and maintenance expenses


23,216



22,201Depreciation, amortization and accretion


30,981



27,652Property impairments


21,450



Bad debt






304General and administrative expenses


8,458



6,423Total segment margin

$
68,792


$
84,087   (3)
    
    We define EBITDA, a non-GAAP financial measure, as net income
    (loss) plus interest expense, provisions for income taxes and
    depreciation, amortization and accretion expense. EBITDA is used
    as a supplemental financial measure by our management and by
    external users of our financial statements such as investors,
    commercial banks, research analysts and others to assess:
    (1) the financial performance of our assets without regard
    to financial methods, capital structure or historical cost
    basis; (2) the ability of our assets to generate cash
    sufficient to pay interest costs and support our indebtedness;
    (3) our operating performance and return on capital as
    compared to those of other companies in the midstream energy
    sector, without regard to financing or structure; and
    (4) the viability of acquisitions and capital expenditure
    projects and the overall rates of return on alternative
    investment opportunities. EBITDA is also a financial measurement
    that, with certain negotiated adjustments, is reported to our
    lenders and is used as a gauge for compliance with our financial
    covenants under our credit facility. EBITDA should not be
    considered an alternative to net income (loss), operating
    income, cash flows from operating activities or any other
    measure of financial performance presented in accordance with
    GAAP. Our EBITDA may not be comparable to EBITDA of similarly
    titled measures of other entities, as other entities may not
    calculate EBITDA in the same manner as we do.  Three
    Months Ended September 30, 2009 Compared with Three Months
    Ended September 30, 2008
  Revenues.
 38




---



##### Table of Contents



39




---



##### Table of Contents



Midstream Purchases.
  Midstream Segment Margin. percentage-of-proceeds mark-to-market
  Operations and Maintenance.
  Depreciation, Amortization and
    Accretion.
  Property Impairments.
 40




---



##### Table of Contents



Bad Debt.
  General and Administrative.
  Other Income (Expense).
  Nine
    Months Ended September 30, 2009 Compared with Nine Months
    Ended September 30, 2008
  Revenues.
     41




---



##### Table of Contents



Midstream Purchases.
  Midstream Segment Margin.
 42




---



##### Table of Contents



percentage-of-proceeds mark-to-market
  Operations and Maintenance.
  Depreciation, Amortization and
    Accretion.
  Property Impairments.
  Bad Debt.
  General and Administrative.
  Other Income (Expense).
 43




---



##### Table of Contents



LIQUIDITY
    AND CAPITAL RESOURCES
  U.S.
    Natural Gas, Crude Oil and NGL Supplies and
    Outlook
    Disruption
    to Functioning of Capital Markets
    Overview
  step-up in-the-money
 44




---



##### Table of Contents



in-the-money
  Cash
    Flows from Operating Activities
        Cash
    Flows Used for Investing Activities
    Cash
    Flows from Financing Activities
     45




---



##### Table of Contents



Capital
    Requirements
    
    maintenance capital expenditures, which are capital expenditures
    made to replace partially or fully depreciated assets to
    maintain the existing operating capacity of our assets and to
    extend their useful lives, or other capital expenditures that
    are incurred in maintaining existing system volumes and related
    cash flows; and
    expansion capital expenditures such as those to acquire
    additional assets to grow our business, to expand and upgrade
    gathering systems, processing plants, treating facilities and
    fractionation facilities and to construct or acquire similar
    systems or facilities.  and/or
  North
    Dakota Bakken
  68-mile
  Financial
    Derivatives and Commodity Hedges
      Average


FairFixed


ValueDescription and Production Period

Volume


Price


Asset(MMBtu)


(per MMBtu)Natural Gas  Sold Fixed for Floating Price SwapsOctober 2009  September 2010


2,136,000


$
6.87


$
3,537October 2010  December 2010


534,000


$
6.73



341$
3,878    46




---



##### Table of Contents



Fair ValueNotional

Interest

AssetDescription and Period

Amount

Rate

(Liability)Interest Rate SwapOctober 2009  December 2009

$
100,000



2.245
%

$
(512
)   Off-Balance
    Sheet Arrangements
    Available
    Credit
    Credit
    Facility
      step-up in-the-money in-the-money
 47




---



##### Table of Contents



1 2 step-up
            Impact
    of Inflation
    Recent
    Accounting Pronouncements
   48




---



##### Table of Contents



49




---



##### Table of Contents



earnings-per-share
      Significant
    Accounting Policies and Estimates
    Form 10-K
 50




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk    Commodity Price Risks.
  Natural Gas Price Change ($/MMBtu)Three Months Ended September 30,2009


2008$
0.10


$
(0.10
)

$
0.10


$
(0.10
)NGL Price Change ($/gal)

$
0.01


$
177,000


$
159,000


$
130,000


$
156,000$
(0.01
)

$
(159,000
)

$
(177,000
)

$
(159,000
)

$
(134,000
)       Average


FairFixed


ValueDescription and Production Period

Volume


Price


Asset(MMBtu)


(Per MMBtu)Natural Gas  Sold Fixed for Floating Price SwapsOctober 2009  September 2010


2,136,000


$
6.87


$
3,537October 2010  December 2010


534,000


$
6.73



341$
3,878   Interest Rate Risk. floating-to-fixed
 51




---



##### Table of Contents



Fair ValueNotional

Interest

AssetDescription and Period

Amount

Rate

(Liability)Interest Rate SwapOctober 2009  December 2009

$
100,000



2.245
%

$
(512
)   Credit Risk.
    Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  (a) Evaluation
    of disclosure controls and procedures.
  Rule 13a-15(b) Rules 13a-15(e) 15d-15(e) Form 10-Q.
  (b) Changes
    in internal control over financial reporting.
  Rules 13a-15(f) 15d-15(f)
 52




---



##### Table of Contents



PART II.
    OTHER INFORMATION
  Item 1.
    Legal
    Proceedings  Robert
    Pasternack v. Hiland Partners, LP et al. No. 4397-VCS; Andrew Jones v. Hiland Partners, LP et
    al. No. 4558-VCS; Arthur G. Rosenberg v. Hiland Partners,
    LP et al. No. C3-09-211-02.
  Pasternack Pasternack
      Item 1A.
    Risk
    Factors  The
    failure to complete the Hiland Partners Merger could adversely
    affect the price of our common units and otherwise have an
    adverse effect on us.
   53




---



##### Table of Contents



Form 10-Q);
  and/or
    
    Certain costs relating to the Hiland Partners Merger, including
    legal, accounting and financial advisory fees, are payable by us
    whether or not the Hiland Partners Merger is completed.
    Under circumstances set out in the merger agreement, if the
    Hiland Partners Merger is not completed we may be required to
    reimburse up to $1,420,000 of Mr. Hamm and his
    affiliates expenses associated with the Hiland Partners
    Merger.
    Our managements and our employees attention will
    have been diverted from our
    day-to-day
    operations, we may experience unusually high employee attrition
    and our business and customer relationships may be disrupted.  We are
    subject to litigation related to the Hiland Partners
    Merger.
  Robert Pasternack v. Hiland Partners,
    LP et al. No. 4397-VCS; Andrew Jones v. Hiland Partners, LP et
    al. No. 4558-VCS; Arthur G. Rosenberg v. Hiland Partners,
    LP et al. No. C3-09-211-02.
  Pasternack Pasternack
 54




---



##### Table of Contents



day-to-day
  If
    commodity prices and inlet natural gas volumes do not improve
    above the expected prices and inlet natural gas volumes for the
    fourth quarter of 2009, we may be in violation of the maximum
    consolidated funded debt to EBITDA covenant ratio as early as
    December 31, 2009, unless the ratio is amended, the senior
    secured revolving credit facility is restructured, we receive an
    infusion of equity capital or the Partnership is able to
    monetize
    in-the-money
    hedge positions. Failure to comply with the covenants could
    cause an event of default under our credit
    facility.
    
    EBITDA to interest expense of not less than 3.0 to 1.0; and
    consolidated funded debt to EBITDA of not more than 4.0 to 1.0
    with the option to increase the consolidated funded debt to
    EBITDA ratio to not more than 4.75 to 1.0 for a period of up to
    nine months following an acquisition or a series of acquisitions
    totaling $40 million in a
    12-month
    period (subject to an increased applicable interest rate margin
    and commitment fee rate).  in-the-money
  Form 10-K Form 10-K
 55




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##### Table of Contents



Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds    Item 3.
    Defaults
    Upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders    Item 5.
    Other
    Information    Item 6.
    Exhibits  ExhibitNumber



Description2
.1



Acquisition Agreement by and among Hiland Operating, LLC and
    Hiland Partners, LLC dated as of September 1, 2005 (incorporated
    by referenced to Exhibit 2.1 of Registrants Form 8-K filed
    September 29, 2005).2
.2



Agreement and Plan of Merger, dated as of June 1, 2009, by and
    between Hiland Partners, LP, Hiland Partners GP, LLC, HH GP
    Holding, LLC and HLND MergerCo, LLC (incorporated by reference
    to Exhibit 2.1 of Registrants Form 8-K filed on June 1,
    2009).  Schedules and Exhibits are omitted pursuant to Section
    601(b)(2) of Regulation S-K.2
.3



Equity Commitment Letter Agreement, dated as of June 1, 2009, by
    and between Harold Hamm and HH GP Holding, LLC (incorporated by
    reference to Exhibit 2.2 of Registrants
    Form 8-K
    filed on June 1, 2009).2
.4



Support Agreement, dated as of June 1, 2009, by and between
    Hiland Partners, LP, Hiland Partners GP, LLC, Hiland Holdings
    GP, LP, Hiland Partners GP Holdings, LLC, HH GP Holding, LLC and
    HLND MergerCo, LLC (incorporated by reference to Exhibit 2.3 of
    Registrants Form 8-K filed on June 1, 2009).LLC
    (incorporated by reference to Exhibit 2.3 of Registrants
    Form 8-K filed on June 1, 2009).2
.5



Agreement and Plan of Merger, dated as of June 1, 2009, by and
    between Hiland Holdings GP, LP, Hiland Partners GP Holdings,
    LLC, HH GP Holding, LLC and HPGP MergerCo, LLC (incorporated by
    reference to Exhibit 2.1 of Hiland Holdings Form 8-K filed
    on June 1, 2009). Schedules and Exhibits are omitted pursuant to
    Section 601(b)(2) of Regulation S-K.2
.6



Equity Commitment Letter Agreement, dated as of June 1, 2009, by
    and between Harold Hamm and HH GP Holding, LLC (incorporated by
    reference to Exhibit 2.3 of Hiland Holdings
    Form 8-K
    filed on June 1, 2009).2
.7



Support Agreement, dated as of June 1, 2009, by and between
    Hiland Holdings GP, LP, Hiland Partners GP Holdings, LLC, Harold
    Hamm, Continental Gas Holdings, Inc., Bert Mackie, as trustee of
    the Harold Hamm DST Trust and the Harold Hamm HJ Trust, HH GP
    Holding, LLC and HPGP MergerCo, LLC (incorporated by reference
    to Exhibit 2.1 of Hiland Holdings
    Form 8-K
    filed on June 1, 2009).2
.8



Amendment No. 1, dated October 26, 2009, to the Agreement and
    Plan of Merger, dated as of June 1, 2009, by and between Hiland
    Partners, LP, Hiland Partners GP, LLC, HH GP Holding, LLC and
    HLND MergerCo, LLC (incorporated by reference to Exhibit 2.1 of
    Registrants
    Form 8-K
    filed on October 27, 2009). 56




---



##### Table of Contents



ExhibitNumber



Description2
.9



Amendment No. 1, dated October 26, 2009, to the Agreement and
    Plan of Merger, dated as of June 1, 2009, by and between Hiland
    Holdings GP, LP, Hiland Partners GP Holdings, LLC, HH GP
    Holding, LLC and HPGP MergerCo, LLC (incorporated by reference
    to Exhibit 2.1 of Hiland Holdings Form 8-K filed on
    October 27, 2009).3
.2



First Amended and Restated Limited Partnership Agreement of
    Hiland Partners, LP (incorporated by reference to Exhibit 3.2 of
    Registrants annual report on Form 10-K filed on March 30,
    2005).3
.3



Certificate of Formation of Hiland Partners GP, LLC
    (incorporated by reference to Exhibit 3.3 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).3
.4



Second Amended and Restated Limited Liability Company Agreement
    of Hiland Partners GP, LLC (incorporated by reference to exhibit
    10.2 of Registrants Form 8-K filed on September 29, 2006).4
.1



Certificate of Limited Partnership of Hiland Partners, LP.
    (incorporated by reference to Exhibit 3.1 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).4
.2



First Amended and Restated Limited Partnership Agreement of
    Hiland Partners, LP (incorporated by reference to Exhibit 3.2 of
    Registrants annual report on Form 10-K filed on March 30,
    2005).4
.3



Certificate of Formation of Hiland Partners GP, LLC
    (incorporated by reference to Exhibit 3.3 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).4
.4



Second Amended and Restated Limited Liability Company Agreement
    of Hiland Partners GP, LLC (incorporated by reference to exhibit
    10.2 of Registrants Form 8-K filed on September 29, 2006).19
.1



Code of Ethics for Chief Executive Officer and Senior Finance
    Officers (incorporated by reference to Exhibit 19.1 of
    Registrants annual report on Form 10-K filed on March 30,
    2005).31
.1



Certification of Chief Executive Officer under Section 302 of
    the Sarbanes-Oxley Act of 2002.31
.2



Certification of Chief Financial Officer under Section 302 of
    the Sarbanes-Oxley Act of 2002.32
.1



Certification of Chief Executive Officer under Section 906 of
    the Sarbanes-Oxley Act of 2002.32
.2



Certification of Chief Financial Officer under Section 906 of
    the Sarbanes-Oxley Act of 2002.     
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.*
    
    Constitutes management contracts or compensatory plans or
    arrangements. 57




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##### Table of Contents



SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the
    Securities Exchange Act of 1934, the registrant has duly caused
    this report to be signed on its behalf by the undersigned,
    thereunto duly authorized in Enid, Oklahoma, on this
    9th day of November, 2009.



HILAND PARTNERS, LP



By: Hiland Partners GP, LLC, its general partner By:
    /s/  Joseph
    L. Griffin   Chief Executive Officer, President and Director
 (principal executive officer)
  By:
    /s/  Matthew
    S. Harrison   Chief Financial Officer, Vice President-Finance, Secretary
    and Director (principal financial and accounting officer)
 58




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##### Table of Contents



Exhibit Index
  2
.1



Acquisition Agreement by and among Hiland Operating, LLC and
    Hiland Partners, LLC dated as of September 1, 2005 (incorporated
    by referenced to Exhibit 2.1 of Registrants Form 8-K filed
    September 29, 2005).2
.2



Agreement and Plan of Merger, dated as of June 1, 2009, by and
    between Hiland Partners, LP, Hiland Partners GP, LLC, HH GP
    Holding, LLC and HLND MergerCo, LLC (incorporated by reference
    to Exhibit 2.1 of Registrants Form 8-K filed on June 1,
    2009).  Schedules and Exhibits are omitted pursuant to Section
    601(b)(2) of Regulation S-K.2
.3



Equity Commitment Letter Agreement, dated as of June 1, 2009, by
    and between Harold Hamm and HH GP Holding, LLC (incorporated by
    reference to Exhibit 2.2 of Registrants Form 8-K filed on
    June 1, 2009).2
.4



Support Agreement, dated as of June 1, 2009, by and between
    Hiland Partners, LP, Hiland Partners GP, LLC, Hiland Holdings
    GP, LP, Hiland Partners GP Holdings, LLC, HH GP Holding, LLC and
    HLND MergerCo, LLC (incorporated by reference to Exhibit 2.3 of
    Registrants Form 8-K filed on June 1, 2009).2
.5



Agreement and Plan of Merger, dated as of June 1, 2009, by and
    between Hiland Holdings GP, LP, Hiland Partners GP Holdings,
    LLC, HH GP Holding, LLC and HPGP MergerCo, LLC (incorporated by
    reference to Exhibit 2.1 of Hiland Holdings Form 8-K filed
    on June 1, 2009). Schedules and Exhibits are omitted pursuant to
    Section 601(b)(2) of Regulation S-K.2
.6



Equity Commitment Letter Agreement, dated as of June 1, 2009, by
    and between Harold Hamm and HH GP Holding, LLC (incorporated by
    reference to Exhibit 2.3 of Hiland Holdings
    Form 8-K
    filed on June 1, 2009).2
.7



Support Agreement, dated as of June 1, 2009, by and between
    Hiland Holdings GP, LP, Hiland Partners GP Holdings, LLC, Harold
    Hamm, Continental Gas Holdings, Inc., Bert Mackie, as trustee of
    the Harold Hamm DST Trust and the Harold Hamm HJ Trust, HH GP
    Holding, LLC and HPGP MergerCo, LLC (incorporated by reference
    to Exhibit 2.1 of Hiland Holdings
    Form 8-K
    filed on June 1, 2009).2
.8



Amendment No. 1, dated October 26, 2009, to the Agreement and
    Plan of Merger, dated as of June 1, 2009, by and between Hiland
    Partners, LP, Hiland Partners GP, LLC, HH GP Holding, LLC and
    HLND MergerCo, LLC (incorporated by reference to Exhibit 2.1 of
    Registrants
    Form 8-K
    filed on October 27, 2009).2
.9



Amendment No. 1, dated October 26, 2009, to the Agreement and
    Plan of Merger, dated as of June 1, 2009, by and between Hiland
    Holdings GP, LP, Hiland Partners GP Holdings, LLC, HH GP
    Holding, LLC and HPGP MergerCo, LLC (incorporated by reference
    to Exhibit 2.1 of Hiland Holdings Form 8-K filed on
    October 27, 2009).3
.1



Certificate of Limited Partnership of Hiland Partners, LP.
    (incorporated by reference to Exhibit 3.1 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).3
.2



First Amended and Restated Limited Partnership Agreement of
    Hiland Partners, LP (incorporated by reference to exhibit 3.2 of
    Registrants annual report on Form 10-K filed on March 30,
    2005).3
.3



Certificate of Formation of Hiland Partners GP, LLC
    (incorporated by reference to Exhibit 3.3 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).3
.4



Second Amended and Restated Limited Liability Company Agreement
    of Hiland Partners GP, LLC (incorporated by reference to Exhibit
    10.2 of Registrants Form 8-K filed on September 29, 2006).4
.1



Certificate of Limited Partnership of Hiland Partners, LP.
    (incorporated by reference to Exhibit 3.1 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).4
.2



First Amended and Restated Limited Partnership Agreement of
    Hiland Partners, LP (incorporated by reference to Exhibit 3.2 of
    Registrants annual report on Form 10-K filed on March 30,
    2005).4
.3



Certificate of Formation of Hiland Partners GP, LLC
    (incorporated by reference to Exhibit 3.3 of Registrants
    Registration Statement on Form S-1 (File No. 333-119908)).4
.4



Second Amended and Restated Limited Liability Company Agreement
    of Hiland Partners GP, LLC (incorporated by reference to Exhibit
    10.2 of Registrants Form 8-K filed on September 29, 2006). 59




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##### Table of Contents



19
.1



Code of Ethics for Chief Executive Officer and Senior Finance
    Officers (incorporated by reference to Exhibit 19.1 of
    Registrants annual report on Form 10-K filed on March 30,
    2005).31
.1



Certification of Chief Executive Officer under Section 302 of
    the Sarbanes-Oxley Act of 2002.31
.2



Certification of Chief Financial Officer under Section 302 of
    the Sarbanes-Oxley Act of 2002.32
.1



Certification of Chief Executive Officer under Section 906 of
    the Sarbanes-Oxley Act of 2002.32
.2



Certification of Chief Financial Officer under Section 906 of
    the Sarbanes-Oxley Act of 2002.     
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.*
    
    Constitutes management contracts or compensatory plans or
    arrangements. 60