From MarkWest Partners today:
MarkWest Energy Partners Announces Major Expansion Projects and Reports Record Financial and Operational Results for Second Quarter 2014
•Second quarter DCF of $161.7 million and increased quarterly distribution of 88 cents per common unit with 104 percent distribution coverage
• Placed into service five major infrastructure projects, consisting of two processing plants with 320 MMcf/d of capacity in the Marcellus Shale, a 200 MMcf/d processing plant in the Utica Shale, 20,000 Bbl/d of ethane and heavier fractionation in the Marcellus Shale, and a 40,000 Bbl/d de-ethanization facility in the Utica Shale
• Announced 7 major infrastructure projects adding 720 MMcf/d of processing capacity and 110,000 Bbl/d of fractionation capacity
• 19 major processing and fractionation facilities under construction and maintains capital forecast of $2.0 to $2.3 billion in 2014 and approximately $2.0 billion in 2015
• Achieved investment grade rating on the $1.3 billion Senior Secured Credit Facility
• Increased fee-based net operating margin to 71 percent from 61 percent when compared to the second quarter of 2013
• Narrowed 2014 DCF forecast to $630 to $670 million, which increases midpoint to $650 million
• Achieved the number one ranking in the 2014 Oil & Natural Gas Midstream Services Customer Satisfaction Survey conducted byEnergyPoint Research. The Partnership has achieved the highest ranking for total customer satisfaction in four out of five surveys that EnergyPoint has conducted since 2006
DENVER—August 6, 2014—MarkWest Energy Partners, L.P. (NYSE: MWE) ("the Partnership") today reported quarterly cash available for distribution to common unitholders, or distributable cash flow (DCF), of $161.7 million for the three months ended June 30, 2014, and $310.2 million for the six months ended June 30, 2014. DCF for the three months ended June 30, 2014 represents distribution coverage of 104 percent. The second quarter distribution of $155.8 million, or $0.88 per common unit, will be paid to unitholders on August 14, 2014. The second quarter 2014 distribution represents an increase of $0.01 per common unit or 1.2 percent over the first quarter 2014 distribution and an increase of $0.04 per common unit or 4.8 percent compared to the second quarter 2013 distribution. As a Master Limited Partnership, cash distributions to common unitholders are largely determined based on DCF. A reconciliation of DCF to net income, the most directly comparable GAAP financial measure, is provided within the financial tables of this press release.
The Partnership reported Adjusted EBITDA for the three and six months ended June 30, 2014, of $208.2 million and $395.8 million, respectively, compared to $155.7 million and $296.5 million for the respective three and six months ended June 30, 2013. The Partnership believes the presentation of Adjusted EBITDA provides useful information because it is commonly used by investors in Master Limited Partnerships to assess financial performance and operating results of ongoing business operations. A reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, is provided within the financial tables of this press release.
The Partnership reported income before provision for income tax for the three and six months ended June 30, 2014 of $10.1 million and $38.6 million, respectively. Income before provision for income tax includes non-cash losses associated with the change in fair value of derivative instruments of $18.8 million and $7.0 million for the respective three and six months ended June 30, 2014. Excluding these items, income before provision for income tax for the three and six months ended June 30, 2014 would have been $28.9 million and $45.6 million, respectively.
"We are excited to announce major capacity expansions and record financial and operational performance for the second quarter of 2014," stated Frank Semple, Chairman, President, and Chief Executive Officer. "The completion of five major infrastructure projects in the Marcellus and Utica Shales over the past three months has provided our producer customers the ability to continue expanding their rich-gas development programs. Due to their ongoing success, we expect overall system volumes to continue to rapidly expand and provide us with unique opportunities to significantly grow cash flow and achieve future distribution growth targets."
•In May, the Partnership announced that it will increase total processing capacity at the Mobley complex in Wetzel County, West Virginia to 920 million cubic feet per day (MMcf/d) with the construction of an additional 200 MMcf/d processing plant. The new plant is anchored by a long-term, fee-based contract with EQT Corporation (NYSE: EQT) and is expected to be in service by the second quarter of 2015. The Mobley complex currently consists of three plants with 520 MMcf/d of total processing capacity and during the fourth quarter of this year, the Partnership will begin operations of a fourth plant at the complex, increasing capacity to 720 MMcf/d. The Mobley complex supports growing Marcellus rich-gas production from EQT Corporation, Magnum Hunter Resources Corporation (NYSE: MHR), Stone Energy Corporation (NYSE: SGY), CONSOL Energy Inc. (NYSE: CNX), and Noble Energy, Inc. (NYSE: NBL).
• In May, the Partnership commenced operations of a fifth 200 MMcf/d Majorsville processing plant at the Majorsville complex in Marshall County, West Virginia. The new plant is anchored by Range Resources Corporation (NYSE: RRC) (Range Resources) and has increased the total capacity of the Majorsville Complex to 870 MMcf/d.
• In May, the Partnership completed the 120 MMcf/d Bluestone II processing plant in Butler County, Pennsylvania. The new plant is anchored by a long term, fee-based contract with Rex Energy Corporation (NASDAQ: REXX). In conjunction with new processing, the Partnership began operations of an additional 20,000 barrels per day (Bbl/d) of ethane and heavier fractionation infrastructure to support growing NGL production from the rich-gas areas of the northeast Marcellus Shale and Upper Devonian formation. To facilitate the production of ethane at the Bluestone complex, the Partnership has also completed a 32-mile purity ethane pipeline connecting to the Mariner West project.
•Today, the Partnership is announcing that it will construct a seventh 200 MMcf/d processing plant at the Sherwood complex in Doddridge County, West Virginia, at the request of Antero Resources Corporation (NYSE: AR) (Antero Resources). The new plant is anchored by long-term, fee-based agreements and will expand total capacity at the Sherwood complex to 1.4 billion cubic feet per day (Bcf/d) by the third quarter of 2015. Later this month, the Partnership will begin operations of the Sherwood IV plant. Antero Resources is the anchor producer supporting the Sherwood complex and continues to develop its prolific rich-gas acreage position in northern West Virginia.
• Today, the Partnership is announcing that it will construct a sixth processing complex in the Marcellus Shale. The new Hillman complex will be located in Washington County, Pennsylvania and will support Range Resources’ rapidly growing rich-gas production. The Hillman complex will initially consist of Hillman I, a 200 MMcf/d processing plant, and an associated de-ethanization facility. The Hillman complex is scheduled to become operational during the first quarter of 2016. Propane and heavier natural gas liquids recovered at the Hillman complex will be transported by a new pipeline to the Houston complex for fractionation.
•In June, the Partnership and The Energy & Minerals Group (EMG) announced an expansion of the Hopedale fractionation and marketing complex (Hopedale complex) in Harrison County, Ohio to support growing NGL production from the Marcellus and Utica Shales. The expansion will double the propane and heavier fractionation capacity at the Hopedale complex to 120,000 Bbl/d and is expected to be operational in the first quarter of 2015.
• In June, Summit Midstream Partners, LLC (Summit), the privately held company that owns and controls the general partner of Summit Midstream Partners, LP (NYSE: SMLP), exercised the option it acquired from a subsidiary of Gulfport Energy Corporation (NASDAQ: GPOR) (Gulfport Energy) to purchase a 40% equity interest in two of the Partnership’s and EMG’s unconsolidated affiliates, Ohio Gathering Company, L.L.C. and Ohio Condensate Company, L.L.C., through a cash investment of approximately $324.7 million and $7.3 million, respectively, that was received in May 2014 and true-up payments of $16.5 million and $1.3 million, respectively, that were received in July 2014.
• In July, MarkWest Utica EMG completed the 200 MMcf/d Seneca III processing plant in Noble County, Ohio. The new plant is anchored by Antero Resources under a long-term, fee-based contract and has expanded the total processing capacity of the Seneca complex to 600 MMcf/d. In order to support the continued growth of Antero Resources and other producers, the Partnership expects to complete a fourth 200 MMcf/d processing plant in the second quarter of 2015.
• In July, MarkWest Utica EMG completed a 40,000 Bbl/d de-ethanization facility at the Cadiz complex in Harrison County, Ohio. This new fractionation facility will provide MarkWest Utica EMG’s producer customers with the ability to meet residue gas quality specifications and downstream ethane pipeline commitments. Purity ethane produced at the new Cadiz facility will be delivered to the ATEX pipeline.
• Today, MarkWest Utica EMG is announcing the development of Cadiz III, a 200 MMcf/d processing plant at the Cadiz complex in Harrison County, Ohio. The new facility is expected to begin operations during the first quarter of 2015 and will increase total processing capacity
of the Cadiz complex to 525 MMcf/d. The Cadiz complex currently consists of a 125 MMcf/d cryogenic processing plant and during September 2014, MarkWest Utica EMG will begin operations of the 200 MMcf/d Cadiz II plant to support rich-gas production from Gulfport Energy and other producers.
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