Second Quarter 2011 Results
Adjusted EBITDAX for the quarter was
For the quarter ended
EVEP reported net income of
The
Utica Shale Update
EnerVest partnerships, including EVEP, are uniquely positioned in
"EnerVest acts as the operator for EVEP and an EnerVest institutional partnership on over 400,000 net acres in
"We are optimistic about the
"We are very fortunate that the EnerVest partnerships, including EVEP, are the largest conventional oil and gas producer in
EVEP's financial statements and related footnotes are available on our second quarter 2011 Form 10-Q, which was filed today and is available through the Investor Relations/SEC Filings section of the EVEP web site at http://www.evenergypartners.com.
Conference Call
As announced on
(code #: EVEP/G)
This press release may include "forward-looking statements" as defined by the
Any forward-looking statement speaks only as of the date on which such statement is made and EVEP undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.
Operating Statistics
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Production data:
Oil (MBbls) 241 171 449 297
Natural gas liquids (MBbls) 272 178 542 360
Natural gas (MMcf) 6,999 4,734 14,003 8,719
Net production (MMcfe) 10,080 6,831 19,951 12,665
Average sales price per unit: (1)
Oil (Bbl) $ 98.63 $ 73.20 $ 94.58 $ 73.73
Natural gas liquids (Bbl) 54.80 40.23 51.45 42.91
Natural gas (Mcf) 4.20 4.16 4.10 4.66
Mcfe 6.76 5.77 6.40 6.16
Average unit cost per Mcfe:
Production costs:
Lease operating expenses (2) $ 1.78 $ 2.18 $ 1.77 $ 2.08
Production taxes 0.31 0.24 0.29 0.30
--------- --------- --------- ---------
Total 2.09 2.42 2.06 2.38
Asset retirement obligations
accretion expense 0.10 0.11 0.10 0.10
Depreciation, depletion and
amortization 1.83 1.97 1.80 2.02
General and administrative
expenses 0.71 0.85 0.79 0.83
(1) Prior to $12.8 and $16.0 million of net hedge gains and settlements on
commodity derivatives for the three months ended June 30, 2011 and June 30,
2010 , respectively and $30.0 and $26.2 million for the six months ended
June 30, 2011 and June 30, 2010 .
(2) Lease operating expenses for the three and six months ended June 30,
2010 include $2.3 million or $0.34 per mcfe and $2.5 million or $0.20 per
mcfe, respectively of non-cash charges related to oil in tanks purchased in
connection with the Appalachian Basin acquisitions closed during the fourth
quarter of 2009 and the first quarter of 2010.
Condensed Consolidated Balance Sheets
(Unaudited)
(In $ thousands, except number of units)
June 30, December 31,
2011 2010
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 26,392 $ 23,127
Accounts receivable:
Oil, natural gas and natural gas liquids
revenues 36,600 27,742
Related party 3,967 -
Other 300 441
Derivative asset 51,215 55,100
Assets held for sale 11,402 -
Other current assets 1,047 1,158
------------ ------------
Total current assets 130,923 107,568
Oil and natural gas properties, net of
accumulated depreciation, depletion and
amortization; June 30, 2011 , $210,073 ; December
31, 2010, $176,897 1,300,294 1,324,240
Other property, net of accumulated depreciation
and amortization; June 30, 2011 , $536 ; December
31, 2010, $465 1,495 1,567
Long-term derivative asset 26,576 51,497
Other assets 7,533 1,885
------------ ------------
Total assets $ 1,466,821 $ 1,486,757
============ ============
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
Third party $ 27,642 $ 20,678
Related party - 182
Liabilities related to assets held for sale 2,895 -
Derivative liability 1,178 1,943
------------ ------------
Total current liabilities 31,715 22,803
Asset retirement obligations 68,266 67,175
Long-term debt 480,183 619,000
Long-term liabilities 988 3,048
Long-term derivative liability 6,594 784
Commitments and contingencies
Owners' equity:
Common unitholders - 34,173,650 units and
30,510,313 units issued and outstanding as of
June 30, 2011 and December 31, 2010 ,
respectively 887,843 779,327
General partner interest (8,768) (5,380)
------------ ------------
Total owners' equity 879,075 773,947
------------ ------------
Total liabilities and owners' equity $ 1,466,821 $ 1,486,757
============ ============
Condensed Consolidated Statements of Operations (Unaudited)
(In $ thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Revenues:
Oil, natural gas and natural
gas liquids revenues $ 68,109 $ 39,431 $ 127,730 $ 78,027
Transportation and
marketing-related revenues 1,484 1,476 2,885 3,054
--------- --------- --------- ---------
Total revenues 69,593 40,907 130,615 81,081
--------- --------- --------- ---------
Operating costs and expenses:
Lease operating expenses 17,949 14,869 35,311 26,301
Cost of purchased natural gas 1,120 1,095 2,170 2,315
Dry hole and exploration costs 441 - 844 -
Production taxes 3,119 1,673 5,770 3,800
Asset retirement obligations
accretion expense 970 764 1,936 1,274
Depreciation, depletion and
amortization 18,443 13,436 36,007 25,520
General and administrative
expenses 7,132 5,825 15,725 10,549
Impairment of oil and natural
gas properties 5,078 - 6,666 -
Gain on sale of oil and
natural gas properties - (4,388) - (3,824)
--------- --------- --------- ---------
Total operating costs and
expenses 54,252 33,274 104,429 65,935
--------- --------- --------- ---------
Operating income 15,341 7,633 26,186 15,146
Other income (expense), net:
Realized gains on derivatives,
net 14,242 13,901 27,784 21,866
Unrealized gains (losses) on
derivatives, net 17,422 (2,158) (35,633) 30,502
Interest expense (8,124) (3,269) (13,283) (5,372)
Other income, net 313 252 233 393
--------- --------- --------- ---------
Total other income
(expense), net 23,853 8,726 (20,899) 47,389
--------- --------- --------- ---------
Income before income taxes 39,194 16,359 5,287 62,535
Income taxes (31) (79) (113) (131)
--------- --------- --------- ---------
Net income $ 39,163 $ 16,280 $ 5,174 $ 62,404
========= ========= ========= =========
General partner's interest in
net income, including incentive
distribution rights $ 3,728 $ 2,624 $ 5,982 $ 5,836
========= ========= ========= =========
Limited partners' interest in
net income (loss) $ 35,435 $ 13,656 $ (808) $ 56,568
========= ========= ========= =========
Net income (loss) per limited
partner unit:
Basic $ 1.03 $ 0.50 $ (0.02) $ 2.14
========= ========= ========= =========
Diluted $ 1.03 $ 0.50 $ (0.02) $ 2.14
========= ========= ========= =========
Weighted average limited partner
units outstanding:
Basic 34,294 27,210 33,002 26,403
========= ========= ========= =========
Diluted 34,534 27,264 33,002 26,438
========= ========= ========= =========
Distributions declared per unit $ 0.761 $ 0.757 $ 1.521 $ 1.513
========= ========= ========= =========
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In $ thousands)
Six Months Ended
June 30,
--------------------
2011 2010
--------- ---------
Cash flows from operating activities:
Net Income $ 5,174 $ 62,404
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Asset retirement obligations accretion expense 1,936 1,274
Depreciation, depletion and amortization 36,007 25,520
Equity-based compensation cost 3,877 2,103
Impairment of oil and natural gas properties 6,666 -
Gain on sale of oil and natural gas properties - (3,824)
Non-cash derivative activity 30,951 (30,502)
Amortization of discount on long-term debt 183 -
Amortization of deferred loan costs 554 275
Other, net 56 (1)
Changes in operating assets and liabilities:
Accounts receivable (12,866) (4,098)
Other current assets 111 2,625
Accounts payable and accrued liabilities 7,630 879
Long-term liabilities - (734)
Other, net (149) (119)
--------- ---------
Net cash flows provided by operating activities 80,130 55,802
--------- ---------
Cash flows from investing activities:
Acquisition of oil and natural gas properties 3,101 (147,769)
Development of oil and natural gas properties (33,686) (8,170)
Proceeds from sale of oil and natural gas properties 1,170 4,471
Settlements from acquired derivatives 2,834 -
Earnest money received for sale of oil and natural
gas properties 900 -
--------- ---------
Net cash flows used in investing activities (25,681) (151,468)
--------- ---------
Cash flows from financing activities:
Long-term debt borrowings - 138,000
Repayment of long-term debt borrowings (431,500) (95,000)
Proceeds from debt offering 292,500 -
Loan costs incurred (6,202) (8)
Proceeds from public equity offering 147,108 92,770
Offering costs (308) (154)
Contributions from general partner 3,191 1,977
Distributions paid (55,973) (43,433)
--------- ---------
Net cash flows (used in) provided by financing
activities (51,184) 94,152
--------- ---------
Increase (decrease) in cash and cash equivalents 3,265 (1,514)
Cash and cash equivalents - beginning of period 23,127 18,806
--------- ---------
Cash and cash equivalents - end of period $ 26,392 $ 17,292
========= =========
Non-GAAP Measures
We define Adjusted EBITDAX as net income plus income tax provision, interest expense, net, realized losses on interest rate swaps, depreciation, depletion and amortization, asset retirement obligation accretion expense, non-cash realized (gains) on derivatives, non-cash unrealized (gains) losses on derivatives, non-cash equity compensation, impairment of oil and natural gas properties, gain on sale of oil and natural gas properties, write down of crude oil inventory, and dry hole and exploration costs. Distributable
Adjusted EBITDAX and Distributable Cash Flow are used by our management to provide additional information and statistics relative to the performance of our business, including (prior to the creation of any reserves) the cash available to pay distributions to our unitholders. These financial measures indicate to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. Adjusted EBITDAX and Distributable Cash Flow are also quantitative standards used throughout the investment community with respect to performance of publicly-traded partnerships. Adjusted EBITDAX and Distributable Cash Flow should not be considered as alternatives to net income, operating income, cash flows from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDAX and Distributable Cash Flow exclude some, but not all, items that affect net income and operating income and these measures may vary among companies. Therefore, our Adjusted EBITDAX and Distributable Cash Flow may not be comparable to similarly titled measures of other companies.
Reconciliation of Net Income to Adjusted EBITDAX and Distributable Cash
Flow
(In $ thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Net income $ 39,163 $ 16,280 $ 5,174 $ 62,404
Add:
Income taxes 31 79 113 131
Interest expense, net 8,118 3,264 13,272 5,340
Realized losses on interest rate
swaps 1,828 2,143 3,967 4,301
Depreciation, depletion and
amortization 18,443 13,436 36,007 25,520
Asset retirement obligation
accretion expense 970 764 1,936 1,274
Non-cash realized (gains) on
derivatives (3,279) - (1,784) -
Non-cash unrealized (gains)
losses on derivatives (17,422) 2,158 35,633 (30,502)
Non-cash equity compensation
expense 1,739 1,037 3,877 2,103
Impairment of oil and natural
gas properties 5,078 - 6,666 -
Gain on sale of oil and natural
gas properties - (4,388) - (3,824)
Non-cash inventory expense from
2009 Appalachian Basin
acquisition included in lease
operating expense - 2,302 - 2,542
Dry hole and exploration costs 441 - 844 -
--------- --------- --------- ---------
Adjusted EBITDAX 55,110 37,075 105,705 69,289
--------- --------- --------- ---------
Less:
Income taxes 31 79 113 131
Cash interest expense, net 7,600 3,126 12,535 5,065
Realized losses on interest rate
swaps 1,828 2,143 3,967 4,301
Estimated maintenance capital
expenditures (1) 12,600 8,539 24,446 16,414
--------- --------- --------- ---------
Distributable Cash Flow $ 33,051 $ 23,188 $ 64,644 $ 43,378
========= ========= ========= =========
(1) Estimated maintenance capital expenditures are those expenditures
estimated to be necessary to maintain the production levels of our oil and
gas properties over the long term and the operating capacity of our other
assets over the long term.
Hedge Summary Table (as of 08/09/2011)
Swap Swap Collar Collar Collar
Period Index Volume Price Volume Floor Ceiling
---------- --------------------- -------- ------- ---------- ------- -------
(MmmBtu/ (MmmBtu/
Mbbls) Mbbls)
Natural
Gas
----------
3Q 2011 NYMEX 3,793.4 $6.34 396.4 $5.90 $7.03
Dominion Appalachia 230.0 $8.69 276.0 $9.00 $12.15
El Paso Permian 230.0 $9.30
Houston Ship Channel 322.0 $8.25 $11.65
MichCon Citygate 414.0 $8.70 $11.85
NGPL TX/OK 256.9 $5.75 $6.58
4Q 2011 NYMEX 3,609.4 $6.43 396.4 $5.90 $7.03
Dominion Appalachia 230.0 $8.69 276.0 $9.00 $12.15
El Paso Permian 230.0 $9.30
Houston Ship Channel 322.0 $8.25 $11.65
MichCon Citygate 414.0 $8.70 $11.85
NGPL TX/OK 256.9 $5.75 $6.58
1H 2012 NYMEX 7,025.2 $6.64 1,016.3 $6.22 $6.94
El Paso Permian 364.0 $9.21
Dominion Appalachia 910.0 $8.95 $11.45
Houston Ship Channel 546.0 $8.25 $11.10
MichCon Citygate 819.0 $8.75 $11.05
2H 2012 NYMEX 6,550.4 $6.79 1,027.5 $6.22 $6.94
El Paso Permian 368.0 $9.21
Dominion Appalachia 920.0 $8.95 $11.45
Houston Ship Channel 552.0 $8.25 $11.10
MichCon Citygate 828.0 $8.75 $11.05
2013 NYMEX 16,607.5 $5.65
El Paso Permian 1,095.0 $6.77
El Paso San Juan 1,095.0 $6.66
2014 NYMEX 14,600.0 $5.75
2015 NYMEX 14,600.0 $6.00
Crude Oil
----------
3Q 2011 WTI 107.5 $94.91 118.3 $105.66 $156.16
4Q 2011 WTI 101.9 $95.12 118.3 $105.66 $156.16
1Q 2012 WTI 167.0 $96.49 113.6 $104.54 $156.77
2Q 2012 WTI 157.9 $96.50 113.6 $104.54 $156.77
3Q 2012 WTI 155.0 $96.38 114.8 $104.54 $156.77
4Q 2012 WTI 145.8 $96.43 114.8 $104.54 $156.77
Swap Swap Collar Collar Collar
Period Index Volume Price Volume Floor Ceiling
----------- ----------------------- -------- ------- -------- ------ -------
(Mmmbtu/ (Mmmbtu/
Mbbls) Mbbls)
Crude Oil
-----------
1Q 2013 WTI 252.0 $86.74
2Q 2013 WTI 250.3 $86.53
3Q 2013 WTI 248.4 $86.37
4Q 2013 WTI 243.8 $86.17
1H 2014 WTI 452.5 $89.52
2H 2014 WTI 444.7 $94.33
Ethane
-----------
Mt. Belvieu(Non-TET)-
3Q 2011 OPIS 96.6 $20.32
Mt. Belvieu(Non-TET)-
4Q 2011 OPIS 92.0 $19.79
Propane
-----------
Mt. Belvieu(Non-TET)-
3Q 2011 OPIS 57.5 $49.36
Mt. Belvieu(Non-TET)-
4Q 2011 OPIS 55.2 $50.20
Basis Swaps
-----------------------------------
Premium to NYMEX
2H 2011 Dominion Appalachia 174.4 $0.1975
2H 2011 Columbia Appalachia 47.7 $0.1500
Interest Rate Swap Notional Fixed
Agreements Amount Rate
----------------------------------- -------- -------
(in $
mill)
July 2011 - July 2012 90.0 4.157%
July 2011 - Sept 2012 40.0 2.145%
July 2012 - July 2015 110.0 3.315%
EV Energy Partners, L.P. ,Houston Michael E. Mercer 713-651-1144 http://www.evenergypartners.com
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