HOUSTON, TX -- (Marketwire) -- 08/10/09 -- EV Energy Partners, L.P. (NASDAQ: EVEP) today
announced results for the second quarter 2009 and filed its Form 10-Q with
the Securities and Exchange Commission. EVEP has also recently entered
into additional commodity price hedge agreements as described below.
Second Quarter 2009 Results
Adjusted EBITDA for the quarter was $33.1 million, an 8% increase over the
second quarter of 2008 and a 6% increase versus the first quarter of 2009.
Distributable Cash Flow for the quarter was $18.0 million, a 2% decrease
over the second quarter of 2008 and a 7% increase versus the first quarter
of 2009. Adjusted EBITDA and Distributable Cash Flow are described in the
attached table under "Non-GAAP Measures."
EVEP reported a net loss of $31.6 million, or ($1.93) per basic and diluted
weighted average unit outstanding, for the second quarter of 2009.
Included in net income were $44.5 million of non-cash net unrealized losses
on commodity and interest rate derivatives and $0.7 million of non-cash
costs contained in general and administrative expenses. For the second
quarter of 2008, net loss was $99.5 million, or ($6.58) per basic and
diluted weighted average unit outstanding, which included $118.1 million of
non-cash net unrealized losses on commodity derivatives and $0.8 million of
non-cash costs contained in general and administrative expenses. For the
first quarter of 2009, net income was $38.3 million, or $2.23 per basic and
diluted weighted average unit outstanding, which included $26.7 million of
non-cash net unrealized gains on commodity and interest rate derivatives.
The $44.5 million non-cash net unrealized losses on derivatives for the
second quarter of 2009 was primarily due to the significant increase in
future oil prices at June 30, 2009 as compared to those at March 31, 2009,
partially offset by the decline in natural gas prices as of such dates, and
the effect of such price changes on EVEP's commodity price hedges.
For the quarter ended June 30, 2009, EVEP produced 4.0 Bcf of natural gas,
127 MBbls of crude oil and 186 MBbls of natural gas liquids, or 5.9 Bcfe.
Second quarter 2009 production of 5.9 Bcfe represents a 23% increase over
second quarter 2008 production of 4.8 Bcfe, primarily due to acquisitions
made during 2008. Production slightly declined from first quarter 2009
production of 6.0 Bcfe.
Additional Commodity Hedge Positions
EVEP uses oil and natural gas commodity contracts to hedge a significant
portion of its anticipated oil and natural gas production against the risk
of commodity price volatility. In addition to hedges entered into in
conjunction with the previously announced Austin Chalk add-on acquisition,
EVEP has added the following commodity price hedges to its portfolio since
July 1, 2009. A complete schedule of EVEP's updated commodity price hedge
positions is included at the end of this release, including the hedges
detailed below.
Swap Swap
Volume Price
---------- ----------
(Mmmbtu/Mbbls)
Natural Gas
NYMEX
2010 365 $ 6.41
2011 365 $ 6.41
2012 293 $ 6.88
2013 1,825 $ 7.02
Jan - Aug 2014 1,215 $ 7.06
Crude Oil
NYMEX
2010 58.4 $ 78.70
2011 43.8 $ 80.80
2012 36.6 $ 82.35
2013 182.5 $ 83.38
Jan - July 2014 106.0 $ 84.60
Quarterly Report on Form 10-Q
EVEP's financial statements and related footnotes are available on our
second quarter 2009 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 August 5, 2009, EV Energy Partners, L.P. will host an
investor conference call Tuesday, August 11, 2009 at 9:00am (Eastern Time).
Investors interested in participating in the call may dial (480) 629-9692
and ask for conference ID 4135815 at least 5 minutes prior to the start
time, or may listen live over the internet through the Investor Relations
section of the EVEP web site 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 on the internet at
http://www.evenergypartners.com.
(code #: EVEP/G)
This press release may include "forward-looking statements" as defined by
the Securities and Exchange Commission. All statements, other than
statements of historical facts, included in this press release that address
activities, events or developments that the partnership expects, believes
or anticipates will or may occur in the future are forward-looking
statements. These statements are based on certain assumptions made by EVEP
based on its experience and perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the
control of EVEP, which may cause our actual results to differ materially
from those implied or expressed by the forward-looking statements. These
include risks relating to financial performance and results, availability
of sufficient cash flow to pay distributions and execute our business plan,
prices and demand for natural gas and oil, our ability to replace reserves
and efficiently develop our current reserves and other important factors
that could cause actual results to differ materially from those projected
as described in the EVEP's reports filed with the Securities and Exchange
Commission.
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,
----------------- -----------------
2009 2008 2009 2008
-------- -------- -------- --------
Production data:
Oil (MBbls) 127 97 254 190
Natural gas liquids (MBbls) 186 135 400 259
Natural gas (MMcf) 4,017 3,403 7,980 7,020
-------- -------- -------- --------
Net production (MMcfe) 5,893 4,797 11,903 9,712
Average sales price per unit (1):
Oil (Bbl) $ 54.16 $ 121.72 $ 44.15 $ 108.97
Natural gas liquids (Bbl) 27.95 67.57 25.81 64.26
Natural gas (Mcf) 3.26 10.63 3.71 9.16
Mcfe 4.27 11.91 4.30 10.47
Average unit cost per Mcfe:
Production costs:
Lease operating expenses $ 1.61 $ 1.99 $ 1.74 $ 1.93
Production taxes 0.21 0.54 0.22 0.48
-------- -------- -------- --------
Total 1.82 2.53 1.96 2.41
Depreciation, depletion and amortization 2.16 1.63 2.22 1.68
General and administrative expenses 0.69 0.74 0.70 0.72
(1) Prior to $21.2 and $(12.2) million of net hedge gains (losses) for the
three months ended June 30, 2009 and June 30, 2008, respectively, and
prior to $40.7 and ($14.4) million of net realized hedge gains
(losses) for the six months ended June 30, 2009 and June 30, 2008,
respectively.
Unaudited Condensed Consolidated Balance Sheets
(in $ thousands)
June 30, December 31,
2009 2008
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 24,040 $ 41,628
Accounts receivable:
Oil, natural gas and natural gas liquids
revenues 10,687 17,588
Related party 3,331 1,463
Other 1,253 3,278
Derivative asset 45,140 50,121
Prepaid expenses and other current assets 734 1,037
------------ ------------
Total current assets 85,185 115,115
Oil and natural gas properties, net of
accumulated depreciation, depletion and
amortization; June 30, 2009, $96,308; December
31, 2008, $69,958 745,684 765,243
Other property, net of accumulated depreciation
and amortization; June 30, 2009, $302; December
31, 2008, $284 161 180
Long-term derivative asset 82,244 96,720
Other assets 3,431 2,737
------------ ------------
Total assets $ 916,705 $ 979,995
============ ============
LIABILITIES AND OWNERSÂ’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 9,610 $ 14,063
Deferred revenues - 4,120
Derivative liability 490 2,115
------------ ------------
Total current liabilities 10,100 20,298
Asset retirement obligations 35,210 33,787
Long-term debt 352,000 467,000
Other long-term liabilities 1,016 1,426
Commitments and contingencies
OwnersÂ’ equity 518,379 457,484
------------ ------------
Total liabilities and owners' equity $ 916,705 $ 979,995
============ ============
Unaudited Condensed Consolidated Statements of Operations
(in $ thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenues:
Oil, natural gas and
natural gas liquids
revenues $ 25,156 $ 57,136 $ 51,163 $ 101,664
Gain on derivatives, net - 604 - 662
Transportation and
marketing-related revenues 1,832 3,309 5,050 6,480
---------- ---------- ---------- ----------
Total revenues 26,988 61,049 56,213 108,806
---------- ---------- ---------- ----------
Operating costs and
expenses:
Lease operating expenses 9,507 9,552 20,654 18,714
Cost of purchased natural
gas 975 2,803 2,451 5,415
Production taxes 1,216 2,606 2,643 4,628
Asset retirement
obligations accretion
expense 570 308 1,014 606
Depreciation, depletion and
amortization 12,737 7,811 26,369 16,355
General and administrative
expenses 4,098 3,571 8,351 7,024
---------- ---------- ---------- ----------
Total operating costs and
expenses 29,103 26,651 61,482 52,742
---------- ---------- ---------- ----------
Operating (loss) income (2,115) 34,398 (5,269) 56,064
Other (expense) income,
net:
Realized gains (losses) on
mark-to-market
derivatives, net 19,037 (12,155) 36,760 (14,378)
Unrealized losses on
mark-to-market
derivatives, net (44,500) (118,734) (17,832) (159,087)
Interest expense (3,968) (3,069) (6,844) (6,827)
Other (expense) income, net (52) 94 (44) 162
---------- ---------- ---------- ----------
Total other (expense)
income, net (29,483) (133,864) 12,040 (180,130)
---------- ---------- ---------- ----------
(Loss) income before income
taxes (31,598) (99,466) 6,771 (124,066)
Income taxes (32) (58) (57) (130)
---------- ---------- ---------- ----------
Net (loss) income $ (31,630) $ (99,524) $ 6,714 $ (124,196)
========== ========== ========== ==========
General partner's interest
in net (loss) income,
including incentive
distribution rights $ 1,063 $ (981) $ 3,183 $ (831)
========== ========== ========== ==========
Limited partners' interest
in net (loss) income $ (32,693) $ (98,543) $ 3,531 $ (123,365)
========== ========== ========== ==========
Net (loss) income per
limited partner unit
(basic and diluted) $ (1.93) $ (6.58) $ 0.21 $ (8.24)
========== ========== ========== ==========
Weighted average limited
partner units outstanding:
Basic and Diluted 16,926 14,982 16,572 14,979
Unaudited Condensed Consolidated Statements of Cash Flows
(in $ thousands)
Six Months Six Months
Ended Ended
June 30, June 30,
2009 2008
----------- -----------
Cash flows from operating activities:
Net income (loss) $ 6,714 $ (124,196)
Adjustments to reconcile net income (loss) to net
cash flows provided by operating activities:
Asset retirement obligations accretion expense 1,014 606
Depreciation, depletion and amortization 26,369 16,355
Equity-based compensation cost 1,300 1,261
Amortization of deferred loan costs 526 144
Unrealized losses on derivatives, net 17,832 158,425
Other, net 148 -
Changes in operating assets and liabilities:
Accounts receivable 7,057 (19,099)
Prepaid expenses and other current assets 114 300
Other Assets (1) (5)
Accounts payable and accrued liabilities (1,796) 3,183
Deferred revenues (4,120) 1,395
Other 35 -
----------- -----------
Net cash flows provided by operating activities 55,192 38,369
----------- -----------
Cash flows from investing activities:
Acquisitions of oil and natural gas properties - (17,491)
Deposit on acquisition of oil and natural gas
properties (1,218) -
Development of oil and natural gas properties (8,983) (13,597)
----------- -----------
Net cash flows used in investing activities (10,201) (31,088)
=========== ===========
Cash flows from financing activities:
Debt borrowings - 17,000
Repayment of debt borrowings (115,000) -
Deferred loan costs - (125)
Proceeds from public equity offering, net of
underwriters' discount 78,649 -
Offering costs (219) -
Contribution from general partner 1,641 -
Distributions paid to partners (27,650) (19,869)
----------- -----------
Net cash flows used in financing activities (62,579) (2,994)
----------- -----------
(Decrease) increase in cash and cash equivalents (17,588) 4,287
Cash and cash equivalents - beginning of period 41,628 10,220
----------- -----------
Cash and cash equivalents - end of period $ 24,040 $ 14,507
=========== ===========
Non GAAP Measures
We define Adjusted EBITDA as net income (loss) plus income tax provision,
interest expense, net, realized (gains) losses on interest rate swaps,
depreciation, depletion and amortization, asset retirement obligation
accretion expense, non-cash (gains) losses on derivatives, amortization of
upfront premiums paid to enter into commodity price hedge agreements and
non-cash equity compensation. Distributable Cash Flow is defined as
Adjusted EBITDA less income tax provision, interest expense, net, realized
(gains) losses on interest rate swaps, amortization of upfront premiums
paid to enter into commodity price hedge agreements and estimated
maintenance capital expenditures.
Adjusted EBITDA and Distributable Cash Flow are used by our management to
provide additional information and metrics 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 EBITDA and Distributable Cash Flow are also
quantitative standards used throughout the investment community with
respect to performance of publicly-traded partnerships. Adjusted EBITDA
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 EBITDA and Distributable Cash Flow exclude some, but not
all, items that effect net income and operating income and these measures
may vary among companies. Therefore, our Adjusted EBITDA and Distributable
Cash Flow may not be comparable to similarly titled measures of other
companies.
Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow
(in $ thousands)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- -----------------------
2009 2008 2009 2008
---------- ---------- ----------- ----------
Net (loss) income $ (31,630) $ (99,524) $ 6,714 $ (124,196)
Add:
Income taxes 32 58 57 130
Interest expense, net 3,927 2,989 6,728 6,678
Realized losses on interest
rate swaps 2,125 - 3,974 -
Depreciation, depletion and
amortization 12,737 7,811 26,369 16,355
Asset retirement obligation
accretion expense 570 308 1,014 606
Non-cash losses on
derivatives 44,500 118,131 17,832 158,425
Amortization of premiums on
derivatives 116 - 190 -
Non-cash equity
compensation expense 681 786 1,300 1,261
---------- ---------- ----------- ----------
Adjusted EBITDA $ 33,058 $ 30,559 $ 64,178 $ 59,259
Less:
Income taxes 32 58 57 130
Interest expense, net 3,927 2,989 6,728 6,678
Realized losses on interest
rate swaps 2,125 - 3,974 -
Amortization of premiums on
derivatives 116 - 190 -
Estimated maintenance
capital expenditures (1) 8,840 9,115 18,440 18,455
---------- ---------- ----------- ----------
Distributable Cash Flow $ 18,018 $ 18,397 $ 34,789 $ 33,996
(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 (includes hedges added through 08/10/2009)
Swap Swap Collar Collar Collar Put Put
Volume Price Volume Floor Ceiling Volume Strike
------ ------- --------- ------- ------- ------ ------
(Mmmbtu/ (Mmmbtu/ (Mmmbtu
Mbbls) Mbbls) /Mbbls)
Natural Gas
2H 2009
NYMEX 1,656 $ 8.05 184 $ 7.50 $ 8.80
NYMEX 736 $ 7.75 $ 9.15
NYMEX 368 $ 8.00 $ 10.55
NYMEX 920 $ 4.00
Dominion Appalachia 1,178 $ 9.03
El Paso Permian 644 $ 7.80
Houston Ship
Channel 1,243 $ 7.60
MichCon Citygate 920 $ 8.27
2010
NYMEX 5,950 $ 8.00 548 $ 7.50 $ 10.00
Dominion Appalachia 2,044 $ 8.65
El Paso Permian 913 $ 7.68
Houston Ship
Channel 360 $ 5.96 1,278 $ 7.25 $ 9.55
MichCon Citygate 1,825 $ 8.34
2011
NYMEX 5,585 $ 8.19
Dominion Appalachia 913 $ 8.69 1,095 $ 9.00 $ 12.15
El Paso Permian 913 $ 9.30
Houston Ship
Channel 1,278 $ 8.25 $ 11.65
MichCon Citygate 1,643 $ 8.70 $ 11.85
2012
NYMEX 5,527 $ 8.63
Dominion Appalachia 1,830 $ 8.95 $ 11.45
El Paso Permian 732 $ 9.21
Houston Ship
Channel 1,098 $ 8.25 $ 11.10
MichCon Citygate 1,647 $ 8.75 $ 11.05
2013
NYMEX 3,285 $ 7.23
El Paso Permian 1,095 $ 6.77
El Paso San Juan 1,095 $ 6.66
Jan - Aug 2014
NYMEX 1,215 $ 7.06
Crude Oil
(NYMEX)
2H 2009 327.6 $ 93.10 23.0 $ 62.00 $ 73.90
2010 688.0 $ 89.80
2011 219.0 $103.66 401.5 $110.00 $166.45
2012 205.0 $104.05 366.0 $110.00 $170.85
2013 365.0 $ 77.94
Jan - July 2014 106.0 $ 84.60
Interest Rate Swap Agreements:
Notional Fixed Floating
Amount Rate Rate
(in $ mill)
July 2009 -
July 2012 $ 200 4.163% 1mo LIBOR
July 2009 -
Sept 2012 $ 40 2.145% 1mo LIBOR
EV Energy Partners, L.P., Houston
Michael E. Mercer
713-651-1144
http://www.evenergypartners.com
