HOUSTON, May 10, 2013 /PRNewswire/ -- EV Energy Partners, L.P. (Nasdaq: EVEP) today announced results for the first quarter 2013 and filed its Form 10-Q with the Securities and Exchange Commission. In addition, an update of EVEP's commodity hedge positions, which includes additional natural gas hedges entered into since March 31, 2013, is presented in the Hedge Summary Table at the end of this release.
First Quarter 2013 Results
Adjusted EBITDAX for the quarter was $48.5 million, a 25 percent decrease over the first quarter of 2012 and a 30 percent decrease versus the fourth quarter of 2012. Distributable Cash Flow for the quarter was $21.8 million, a 37 percent decrease over the first quarter of 2012 and a 43 percent decrease versus the fourth quarter of 2012. The decreases in Adjusted EBITDAX and Distributable Cash Flow, which are described in the attached table under "Non-GAAP Measures," are primarily due to decreases in realized gains on commodity derivatives and lower average sales prices per unit for natural gas liquids and crude oil.
Production for the first quarter of 2013 was 10.3 Bcf of natural gas, 263 MBbls of crude oil and 503 MBbls of natural gas liquids, or 165.2 Mmcfe/day. This represents a four percent increase from first quarter 2012 production of 159.5 Mmcfe/day and a one percent decrease from the fourth quarter 2012 production of 166.3 Mmcfe/day.
For the first quarter of 2013, EVEP reported a net loss of $46.6 million, or $(1.08) per basic and diluted weighted average limited partner unit outstanding. Included in net loss were $38.3 million of unrealized losses on commodity and interest rate derivatives, $0.7 million of non-cash realized losses related to terminated interest rate swaps, $0.4 million of dry hole and exploration costs, $5.2 million of non-cash leasehold impairment charges, $0.1 million of non-cash deferred income taxes and $4.5 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were $3.2 million of payroll related cash costs associated with the annual vesting of phantom units during the first quarter which will not be incurred during the second through fourth quarters of 2013.
For the first quarter of 2012, EVEP reported a net income of $28.6 million, or $0.69 per basic and diluted weighted average limited partner unit outstanding. Included in net income were $11.7 million of unrealized gains on commodity and interest rate derivatives, $0.6 million of non-cash realized losses on commodity derivatives, a $1.2 million non-cash charge to lease operating expense related to oil in tanks purchased in connection with 2011 acquisitions, $2.2 million of dry hole and exploration costs, a $0.6 million impairment charge primarily related to non-core assets sold during the quarter, $0.6 million of non-cash deferred income taxes and $4.3 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were $1.8 million of payroll tax related cash costs associated with the annual vesting of phantom units during the first quarter and $0.2 million of acquisition related due diligence and transaction costs. For the fourth quarter of 2012, EVEP reported a net loss of $9.9 million, or $(0.23) per basic and diluted weighted average limited partner unit outstanding. Included in net loss were $9.6 million of unrealized losses on commodity and interest rate derivatives, $1.2 million of non-cash realized losses on commodity and interest rate derivatives, $1.1 million of dry hole and exploration costs and $4.0 million of non-cash costs contained in general and administrative expenses. Also recognized during the fourth quarter were $16.7 million of impairment charges primarily related to the write-down of certain oil and natural gas properties to their fair value due to the effects of declining natural gas prices on expected future net cash flows.
Mark Houser, President and CEO, said, "We had strong operating performance through a tough winter. Our Barnett Shale results were excellent, our Utica midstream investment is progressing with start-up of initial processing and fractionation at UEO expected this June, and our Utica acreage sale process is proceeding."
Quarterly Report on Form 10-Q
EVEP's financial statements and related footnotes are available on our first quarter 2013 Form 10-Q, which was filed today and is available through the Investor Relations/SEC Filings section of the EVEP website at http://www.evenergypartners.com.
Conference Call
As announced on May 3, 2013, EV Energy Partners, L.P. will host an investor conference call Friday, May 10, 2013 at 9:00 a.m. Eastern Time. Investors interested in participating in the call may dial (877) 941-9205 (quote conference ID 4618219) at least 5 minutes prior to the start time, or may listen live over the Internet through the Investor Relations section of the EVEP website at http://www.evenergypartners.com.
EV Energy Partners, L.P. is a master limited partnership engaged in acquiring, producing and developing oil and gas properties. More information about EVEP is available at http://www.evenergypartners.com.
(code #: EVEP/G)
(Logo: http://photos.prnewswire.com/prnh/20130415/DA94198LOGO)
This press release may include statements that are not historical facts which are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements include information about the sale of our Utica Shale assets, our midstream investments, future plans and other statements which include words such as "anticipates," "plans," "projects," "expects," "intends," "believes," "should," and similar expressions of forward-looking information. Forward-looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of EV Energy Partners, L.P. Actual results may differ materially from those contained in the press release. Such risks and uncertainties include, but are not limited to, changes in commodity prices, changes in reserve estimates, requirements and actions of purchasers of properties (including the Utica Shale), changes in the metrics and procedures used to value midstream assets, exploration and development activities in the Utica Shale and elsewhere, the availability and cost of financing, the returns on our capital investments and acquisition strategies, the availability of sufficient cash flow to pay distributions and execute our business plan and general economic conditions. Additional information on risks and uncertainties that could affect our business prospects and performance are provided in the most recent reports of EV Energy Partners with the Securities and Exchange Commission. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements.
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.
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Operating Statistics
|
|
|
|
|
|
|
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Three Months Ended March 31,
|
|
|
2013
|
|
2012
|
|
Production data:
|
|
|
|
|
|
Oil (MBbls)
|
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263
|
|
285
|
|
Natural gas liquids (MBbls)
|
|
503
|
|
423
|
|
Natural gas (MMcf)
|
|
10,267
|
|
10,263
|
|
Net production (MMcfe)
|
|
14,864
|
|
14,513
|
|
Average sales price per unit: (1)
|
|
|
|
|
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Oil (Bbl)
|
|
$ 93.47
|
|
$ 100.05
|
|
Natural gas liquids (Bbl)
|
|
30.38
|
|
46.42
|
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Natural gas (Mcf)
|
|
3.20
|
|
2.79
|
|
Mcfe
|
|
4.89
|
|
5.29
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Average unit cost per Mcfe:
|
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|
|
|
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Production costs:
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|
|
|
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Lease operating expenses (2)
|
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$ 1.76
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|
$ 1.97
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Production taxes
|
|
0.20
|
|
0.23
|
|
Total
|
|
1.96
|
|
2.20
|
|
|
|
|
|
|
Asset retirement obligations accretion expense
|
|
0.09
|
|
0.08
|
|
Depreciation, depletion and amortization
|
|
2.07
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|
1.69
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|
General and administrative expenses
|
|
0.85
|
|
0.83
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(1) Prior to $12.3 million and $25.9 million of net hedge gains and settlements on commodity derivatives for the three months ended March 31, 2013 and March 31, 2012.
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(2) Lease operating expenses for the three months ended March 31, 2012 contains $1.2 million ($0.08 per Mcfe) of non-cash charges related to oil in tanks purchased in connection with 2011 acquisitions.
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Condensed Consolidated Balance Sheets
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(In $ thousands, except number of units)
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(Unaudited)
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March 31, 2013
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December 31, 2012
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ASSETS
|
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Current assets:
|
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|
|
|
|
Cash and cash equivalents
|
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$ 18,907
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|
$ 7,486
|
|
Accounts receivable:
|
|
|
|
|
|
Oil, natural gas and natural gas liquids revenues
|
|
35,967
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|
34,909
|
|
Related party
|
|
4,138
|
|
1,422
|
|
Other
|
|
4,047
|
|
11,263
|
|
Derivative asset
|
|
14,132
|
|
40,771
|
|
Other current assets
|
|
1,777
|
|
1,750
|
|
Total current assets
|
|
78,968
|
|
97,601
|
|
|
|
|
|
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Oil and natural gas properties, net of accumulated depreciation, depletion and amortization; March 31, 2013, $420,005; December 31, 2012, $389,206
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1,863,584
|
|
1,875,890
|
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Other property, net of accumulated depreciation and amortization; March 31, 2013, $636; December 31, 2012, $598
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|
1,317
|
|
1,325
|
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Long–term derivative asset
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36,268
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|
45,839
|
|
Investments in unconsolidated affiliates
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|
103,018
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|
34,545
|
|
Other assets
|
|
9,631
|
|
10,214
|
|
Total assets
|
|
$ 2,092,786
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$ 2,065,414
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|
|
|
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|
|
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LIABILITIES AND OWNERS' EQUITY
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Current liabilities:
|
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|
|
|
|
Accounts payable and accrued liabilities
|
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$ 53,852
|
|
$ 40,171
|
|
Derivative liability
|
|
1,554
|
|
-
|
|
Total current liabilities
|
|
55,406
|
|
40,171
|
|
|
|
|
|
|
Asset retirement obligations
|
|
104,103
|
|
102,707
|
|
Long–term debt
|
|
944,237
|
|
859,218
|
|
Long-term derivative liability
|
|
1,189
|
|
-
|
|
Other long–term liabilities
|
|
1,444
|
|
3,494
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
Owners' equity:
|
|
|
|
|
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Common unitholders - 42,599,080 units and 42,320,707 units issued and outstanding as of March 31, 2013 and December 31, 2012, respectively
|
|
999,937
|
|
1,072,175
|
|
General partner interest
|
|
(13,530)
|
|
(12,351)
|
|
Total owners' equity
|
|
986,407
|
|
1,059,824
|
|
Total liabilities and owners' equity
|
|
$ 2,092,786
|
|
$ 2,065,414
|
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Condensed Consolidated Statements of Operations
|
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(In $ thousands, except per unit data)
|
|
(Unaudited)
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|
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Three Months Ended March 31,
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|
|
2013
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
Oil, natural gas and natural gas liquids revenues
|
|
$ 72,669
|
|
$ 76,801
|
|
Transportation and marketing–related revenues
|
|
1,033
|
|
930
|
|
Total revenues
|
|
73,702
|
|
77,731
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
Lease operating expenses
|
|
26,094
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|
28,600
|
|
Cost of purchased natural gas
|
|
743
|
|
645
|
|
Dry hole and exploration costs
|
|
417
|
|
2,173
|
|
Production taxes
|
|
2,916
|
|
3,282
|
|
Asset retirement obligations accretion expense
|
|
1,354
|
|
1,208
|
|
Depreciation, depletion and amortization
|
|
30,833
|
|
24,591
|
|
General and administrative expenses
|
|
12,622
|
|
12,117
|
|
Impairment of oil and natural gas properties
|
|
5,169
|
|
635
|
|
Total operating costs and expenses
|
|
80,148
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|
73,251
|
|
|
|
|
|
|
Operating (loss) income
|
|
(6,446)
|
|
4,480
|
|
|
|
|
|
|
Other (expense) income, net:
|
|
|
|
|
|
Realized gains on derivatives, net
|
|
10,759
|
|
24,190
|
|
Unrealized (losses) gains on derivatives, net
|
|
(38,273)
|
|
11,661
|
|
Interest expense
|
|
(12,829)
|
|
(11,084)
|
|
Other income, net
|
|
187
|
|
4
|
|
Total other (expense) income, net
|
|
(40,156)
|
|
24,771
|
|
|
|
|
|
|
(Loss) income before income taxes and equity in
income of unconsolidated affiliates
|
|
(46,602)
|
|
29,251
|
|
Income taxes
|
|
(177)
|
|
(658)
|
|
(Loss) income before equity in income of unconsolidated affiliates
|
|
(46,779)
|
|
28,593
|
|
Equity in income of unconsolidated affiliates
|
|
198
|
|
-
|
|
Net (loss) income
|
|
($ 46,581)
|
|
$ 28,593
|
|
|
|
|
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Net (loss) income per limited partner unit:
|
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Basic
|
|
($ 1.08)
|
|
$ 0.69
|
|
Diluted
|
|
($ 1.08)
|
|
$ 0.69
|
|
Weighted average limited partner units outstanding:
|
|
|
|
|
|
Basic
|
|
42,556
|
|
40,440
|
|
Diluted
|
|
42,556
|
|
40,760
|
|
|
|
|
|
|
Distributions declared per unit
|
|
$ 0.768
|
|
$ 0.764
|
|
Consolidated Statements of Cash Flows
|
|
(In $ thousands)
|
|
(Unaudited)
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
2012
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net (loss) income
|
|
($ 46,581)
|
|
$ 28,593
|
|
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities:
|
|
|
|
|
|
Dry hole costs
|
|
51
|
|
225
|
|
Asset retirement obligations accretion expense
|
|
1,354
|
|
1,208
|
|
Depreciation, depletion and amortization
|
|
30,833
|
|
24,591
|
|
Equity–based compensation cost
|
|
4,485
|
|
4,280
|
|
Impairment of oil and natural gas properties
|
|
5,169
|
|
635
|
|
Non-cash derivative activity
|
|
38,953
|
|
(11,661)
|
|
Equity in income of unconsolidated affiliates
|
|
(198)
|
|
-
|
|
Distributions from unconsolidated affiliates
|
|
48
|
|
-
|
|
Other
|
|
593
|
|
2,295
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
(4,527)
|
|
(11,150)
|
|
Other current assets
|
|
(27)
|
|
245
|
|
Accounts payable and accrued liabilities
|
|
11,351
|
|
20,382
|
|
Other, net
|
|
(119)
|
|
(1,144)
|
|
Net cash flows provided by operating activities
|
|
41,385
|
|
58,499
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Acquisitions of oil and natural gas properties
|
|
-
|
|
(36,544)
|
|
Final settlement of purchase price of oil and natural gas properties
|
|
7,998
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|
-
|
|
Additions to oil and natural gas properties
|
|
(21,136)
|
|
(29,067)
|
|
Proceeds from sale of oil and natural gas properties
|
|
-
|
|
5,489
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|
Investments in unconsolidated affiliates
|
|
(68,345)
|
|
(11,597)
|
|
Distributions from unconsolidated affiliates
|
|
23
|
|
-
|
|
Settlements from acquired derivatives
|
|
-
|
|
1,687
|
|
Net cash flows used in investing activities
|
|
(81,460)
|
|
(70,032)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Long-term debt borrowings
|
|
85,000
|
|
35,000
|
|
Repayment of long-term debt borrowings
|
|
-
|
|
(460,000)
|
|
Proceeds from debt offering
|
|
-
|
|
206,000
|
|
Loan costs incurred
|
|
-
|
|
(3,929)
|
|
Proceeds from public equity offering
|
|
-
|
|
262,833
|
|
Offering costs
|
|
-
|
|
(157)
|
|
Contributions from general partner
|
|
334
|
|
5,714
|
|
Distributions paid
|
|
(33,838)
|
|
(29,815)
|
|
Net cash flows provided by financing activities
|
|
51,496
|
|
15,646
|
|
|
|
|
|
|
Increase in cash and cash equivalents
|
|
11,421
|
|
4,113
|
|
Cash and cash equivalents – beginning of period
|
|
7,486
|
|
30,312
|
|
Cash and cash equivalents – end of period
|
|
$ 18,907
|
|
$ 34,425
|
Non-GAAP Measures
We define Adjusted EBITDAX as net (loss) income plus income taxes, interest expense, net, realized losses on interest rate swaps, depreciation, depletion and amortization, asset retirement obligations accretion expense, non-cash realized losses on derivatives, unrealized losses (gains) on derivatives, non-cash equity compensation expense, impairment of oil and natural gas properties, non-cash inventory write down expense, and dry hole and exploration costs. Distributable Cash Flow is defined as Adjusted EBITDAX less cash income taxes, cash interest expense, net, realized losses on interest rate swaps, and estimated maintenance capital expenditures.
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.
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Reconciliation of Net Income to Adjusted EBITDAX and Distributable Cash Flow
|
|
(In $ thousands)
|
|
(Unaudited)
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Net (loss) income
|
|
($ 46,581)
|
|
$ 28,593
|
|
Add:
|
|
|
|
|
|
Income taxes
|
|
177
|
|
658
|
|
Interest expense, net
|
|
12,828
|
|
11,077
|
|
Realized losses on interest rate swaps
|
|
865
|
|
1,116
|
|
Depreciation, depletion and amortization
|
|
30,833
|
|
24,591
|
|
Asset retirement obligations accretion expense
|
|
1,354
|
|
1,208
|
|
Non-cash realized losses on derivatives
|
|
680
|
|
584
|
|
Unrealized losses (gains) on derivatives
|
|
38,273
|
|
(11,661)
|
|
Non-cash equity compensation expense
|
|
4,485
|
|
4,280
|
|
Impairment of oil and natural gas properties
|
|
5,169
|
|
635
|
|
Non-cash inventory write down expense
|
|
-
|
|
1,202
|
|
Dry hole and exploration costs
|
|
417
|
|
2,173
|
|
Adjusted EBITDAX
|
|
$ 48,500
|
|
$ 64,456
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
Cash income taxes
|
|
44
|
|
78
|
|
Cash interest expense, net
|
|
12,216
|
|
10,498
|
|
Realized losses on interest rate swaps
|
|
865
|
|
1,116
|
|
Estimated maintenance capital expenditures (1)
|
|
13,581
|
|
18,141
|
|
Distributable Cash Flow
|
|
$ 21,794
|
|
$ 34,623
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
Summary of New Hedge Positions (since March 31, 2013)
|
|
|
|
|
|
|
Swap
|
Swap
|
|
Period
|
Index
|
Volume
|
Price
|
|
Natural Gas
|
|
(Mmmbtu/Mbbls)
|
|
|
May-Dec 2013
|
NYMEX
|
735.0
|
$4.39
|
|
2014
|
NYMEX
|
5,475.0
|
$4.34
|
|
2015
|
NYMEX
|
5,475.0
|
$4.34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedge Summary Table (as of May 9, 2013)
|
|
|
|
|
|
|
Swap
|
Swap
|
|
Period
|
Index
|
Volume
|
Price
|
|
Natural Gas
|
|
(Mmmbtu/Mbbls)
|
|
|
2Q-4Q 2013
|
NYMEX
|
26,117.5
|
$4.82
|
|
El Paso Permian
|
825.0
|
$6.77
|
|
El Paso San Juan
|
825.0
|
$6.66
|
|
|
|
|
|
1Q 2014
|
NYMEX
|
7,794.0
|
$4.90
|
|
2Q 2014
|
NYMEX
|
7,880.6
|
$4.90
|
|
3Q 2014
|
NYMEX
|
7,967.2
|
$4.88
|
|
4Q 2014
|
NYMEX
|
7,967.2
|
$4.83
|
|
|
|
|
|
2015
|
NYMEX
|
31,572.5
|
$5.07
|
|
|
|
|
|
Crude
|
|
|
|
|
2Q 2013
|
WTI
|
384.5
|
$89.11
|
|
2H 2013
|
WTI
|
763.6
|
$88.99
|
|
|
|
|
|
1H 2014
|
WTI
|
760.2
|
$89.78
|
|
2H 2014
|
WTI
|
757.5
|
$92.61
|
|
|
|
|
|
2015
|
WTI
|
730.0
|
$90.09
|
|
|
|
|
|
Interest Rate Swap Agreements
|
|
Notional Amount
|
Fixed Rate
|
|
|
(in $ mill)
|
|
|
April 2013 - July 2015
|
|
110
|
3.315%
|
EV Energy Partners, L.P., Houston
Michael E. Mercer
713-651-1144
http://www.evenergypartners.com
SOURCE EV Energy Partners, LP