EV Energy Partners Announces Full Year and Fourth Quarter 2008 Results, 2008 Year-End Proved Reserves, 2009 Guidance and Update of Commodity Hedge Positions
HOUSTON, March 13, 2009 (BUSINESS WIRE) -- EV Energy Partners, L.P. (Nasdaq:EVEP) today announced results for the full year and fourth quarter 2008, its year-end 2008 proved reserves and the filing of its Form 10-K with the Securities and Exchange Commission. In addition, EVEP provided 2009 guidance and an update of its commodity hedge positions presented in the Hedge Summary Table at the end of this release.
Full Year 2008 Results
Adjusted EBITDA and distributable cash flow for 2008 were $118.7 million and $62.9 million, increases of 79% and 67%, respectively, over 2007, primarily due to acquisitions made during 2007 and 2008. Adjusted EBITDA and Distributable Cash Flow are described in the attached table under "Non-GAAP Measures".
For 2008, EVEP reported net income of $225.5 million, or $11.14 per basic and diluted weighted average unit outstanding. Included in net income were $164.9 million of non-cash net unrealized gains on commodity and interest rate derivatives and $1.2 million of non-cash costs contained in general and administrative expenses. For 2007, EVEP reported net income of $11.2 million, or $0.74 per basic and diluted weighted average unit outstanding. Included in 2007 net income were $25.7 million of non-cash net unrealized losses on commodity derivatives and $1.5 million of non-cash costs contained in general and administrative expense.
Production for 2008 was 14.6 Bcf of natural gas, 437 MBbls of crude oil and 543 MBbls of natural gas liquids, or 20.5 Bcfe. This was a 73% increase over 2007 production of 11.8 Bcfe, primarily due to acquisitions made during 2007 and 2008.
Fourth Quarter 2008 Results
Adjusted EBITDA for the fourth quarter of 2008 was $31.9 million, a 33% increase over the fourth quarter of 2007 and a 16% increase over the third quarter of 2008. Distributable Cash Flow for the fourth quarter of 2008 was $14.9 million, a 23% increase over the fourth quarter of 2007 and a 7% increase over the third quarter of 2008.
EVEP reported net income of $145.5 million, or $6.88 per basic and diluted weighted average unit outstanding, for the fourth quarter of 2008. Included in net income were $134.0 million of non-cash net unrealized gains on commodity and interest rate derivatives. For the fourth quarter of 2007, EVEP had a net loss of $11.9 million, or ($0.78) per basic and diluted weighted average unit outstanding, which included $23.0 million of non-cash net unrealized losses on commodity derivatives and $0.6 million of non-cash costs contained in general and administrative expenses.
The $134.0 million non-cash net unrealized gains on commodity and interest rate derivatives for the fourth quarter of 2008 was primarily due to the significant decrease in future oil and natural gas prices that occurred from September 30, 2008 to December 31, 2008 and the effect of such decreased prices on EVEP's commodity price hedges, which extend through 2013.
For the fourth quarter of 2008, EVEP produced 4.27 Bcf of natural gas, 136 MBbls of crude oil and 157 MBbls of natural gas liquids, or 6.0 Bcfe. This is a 39% increase over fourth quarter 2007 production of 4.35 Bcfe, primarily from acquisitions made during 2007 and 2008. Production increased by 28% from third quarter 2008 production of 4.71 Bcfe, primarily due to acquisitions made during the third quarter of 2008 and pipeline curtailments experienced in the Monroe field throughout the third quarter of 2008 which continued until late October 2008.
Third-party natural gas liquids fractionation facilities at Mt. Belvieu, TX, through which some of the natural gas liquids production from EVEP’s Austin Chalk, Permian Basin and San Juan Basin assets are fractionated, sustained damage from Hurricane Ike. In addition, these facilities underwent a mandatory turnaround during the fourth quarter of 2008. These events resulted in a reduction in the volume of EVEP’s natural gas liquids that were fractionated and sold from late September into the fourth quarter of 2008. These volumes of natural gas liquids were delivered into storage in Mt. Belvieu and will be recorded as production and revenues after they have been fractionated and sold. EVEP estimates that approximately 37.7 MBbls of natural gas liquids that were produced during 2008 remained in storage as of December 31, 2008. EVEP currently expects these remaining stored volumes to be fractionated and sold, and thereby recorded as production and revenues, during the first quarter of 2009.
In addition, EVEP continued to experience production curtailments, which had begun in May 2008, of over 3 mmcf per day in the Monroe field until late October. For the fourth quarter of 2008, these curtailments totaled approximately 85 mmcf of natural gas. However, during this period, EVEP was contractually entitled to receive payment from the purchaser for the amount of natural gas production curtailed, subject to the purchaser recouping all or part of such amounts out of a percentage of future production. EVEP has not experienced any further such curtailments in the Monroe Field since late October 2008.
Year-End 2008 Estimated Net Proved Reserves
EVEP’s year-end 2008 estimated net proved reserves were 359.2 billion cubic feet equivalents (Bcfe), a 9% increase over year-end 2007 estimated net proved reserves. Approximately 74% were natural gas, 16% were natural gas liquids and 10% were crude oil. In addition, 95% were categorized as proved developed. At December 31, 2008 the Standardized Measure of our estimated net proved reserves was $441.9 million. Standardized Measure is the present value of estimated future net revenues to be generated from the production of proved reserves, determined using prices and costs in effect as of the date of estimation and discounted using an annual discount rate of 10%.
The decrease in commodity prices at December 31, 2008 compared with December 31, 2007 had a significant negative impact on EVEP’s estimated net proved reserves at December 31, 2008. The prices used in determining our estimated net proved reserves at December 31, 2008 were $44.60 per Bbl of oil, $5.71 per MMBtu of natural gas and $25.38 per Bbl of natural gas liquids as compared to $95.95 per Bbl of oil, $6.795 per MMBtu of natural gas and $57.50 per Bbl of natural gas liquids at December 31, 2007. Had the commodity prices at December 31, 2008 been the same as those in effect at December 31, 2007, EVEP’s estimated net proved reserves at December 31, 2008 would have been approximately 61.5 Bcfe higher, or 420.7 Bcfe (a 28% increase over year-end 2007 estimated net proved reserves), and the present value of future net pre-tax cash flows discounted at 10% at December 31, 2008 would have been approximately $388 million higher, or $830.9 million.
| | | | | | | | | | | | Natural Gas | |
| | | Natural Gas | | | Crude Oil | | | NGL's | | | Equivalents | |
| | | (Bcf) | | | (MMBbls) | | | (MMBbls) | | | (Bcfe) | |
| Appalachian Basin | | | 47.6 | | | | 1.0 | | | | 0.0 | | | | 53.3 | |
| Michigan | | | 53.4 | | | | 0.0 | | | | 0.0 | | | | 53.4 | |
| Monroe Field | | | 71.5 | | | | 0.0 | | | | 0.0 | | | | 71.5 | |
| Central and East Texas | | | 16.9 | | | | 2.1 | | | | 1.8 | | | | 40.4 | |
| Permian Basin | | | 23.6 | | | | 0.5 | | | | 4.0 | | | | 50.8 | |
| San Juan Basin | | | 36.5 | | | | 1.2 | | | | 3.8 | | | | 66.2 | |
| Mid-Continent area | | | 16.5 | | | | 1.1 | | | | 0.0 | | | | 23.6 | |
| Total Proved Reserves | | | 266.0 | | | | 5.9 | | | | 9.6 | | | | 359.2 | |
| | | | | | | | | | | | | | | | | |
| Proved Developed Reserves | | | 253.1 | | | | 5.7 | | | | 9.0 | | | | 340.8 | |
2009 Guidance
Guidance estimates for 2009 are presented in the table below.
| (in $ thousands) | | | | | |
| | | Full Year 2009 | |
| Net Production: | | | | | |
| Natural Gas (MMcf) | | 15,500 | - | 17,500 | |
| Crude Oil (MBbls) | | 475 | - | 525 | |
| Natural Gas Liquids (MBbls) | | 710 | - | 790 | |
| Total Mmcfe | | 22,610 | - | 25,390 | |
| | | | | | |
| Average Daily Production (Mmcfe/d) | | 61.9 | - | 69.6 | |
| | | | | | |
| Average Price Differential vs NYMEX | | | | | |
| Natural Gas ($ per Mcf) | | ($0.25) | - | ($0.70) | |
| Crude Oil (% of NYMEX Crude Oil) | | 94% | - | 98% | |
| Natural Gas Liquids (% of NYMEX Crude Oil) | | 48% | - | 64% | |
| | | | | | |
| Transportation Margin (a) | | 1,500 | - | 2,000 | |
| | | | | | |
| Expenses: | | | | | |
| Operating Expenses: | | | | | |
| LOE and other | | 44,000 | - | 48,000 | |
| Production Taxes (as % of revenue) | | 5.5% | - | 6.0% | |
| | | | | | |
| General and administrative expense (b) | | 13,000 | - | 15,000 | |
| | | | | | |
| Capital Expenditure (c) | | 17,000 | - | 20,000 | |
| (a) | Represents estimated transportation and marketing-related revenues less cost of purchased natural gas. |
| (b) | Excludes non-cash general and administrative expense, of which non-cash unit based compensation is a part. |
| (c) | Represents estimates for drilling and related capital expenditures. Does not include any amounts for acquisitions of oil and gas properties. |
Annual Report on Form 10-K and Unitholders’ Schedule K-1
EVEP’s financial statements and related footnotes are available on our 2008 Form 10-K, which was filed today and is available through the Investor Relations/SEC Filings section of the EVEP web site at http://www.evenergypartners.com.
Also available for download on our website are unitholders’ Schedule K-1 for the tax year 2008. For any questions regarding their Schedule K-1, unitholders are invited to call the Tax Package Support helpline at 1-800-973-7551.
Conference Call
As announced on March 11, 2009, EV Energy Partners, L.P. will host an investor conference call Friday, March 13, 2009, at 10:00am (Eastern Daylight Savings Time). Investors interested in participating in the call may dial (303)-262-2140 and ask for the EV Energy Partners call 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.
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions at oil and gas prices in effect at the time of the estimate, without future escalation. We include in this press release an estimate of net proved reserves at December 31, 2008 using prices in effect at December 31, 2007, rather than prices at the time of the estimate, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 10-K, available from us at www.evenergypartners.com or from the SEC at www.sec.gov.
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.
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Production data: | | | | | | | | | | | | |
| Oil (MBbls) | | | 136 | | | | 75 | | | | 437 | | | | 225 | |
| Natural gas liquids (MBbls) | | | 157 | | | | 129 | | | | 543 | | | | 199 | |
| Natural gas (MMcf) | | | 4,274 | | | | 3,125 | | | | 14,578 | | | | 9,254 | |
| Net production (MMcfe) | | | 6,034 | | | | 4,347 | | | | 20,457 | | | | 11,798 | |
| | | | | | | | | | | | | | | | | |
| Average sales price per unit (1): | | | | | | | | | | | | | | | | |
| Oil (Bbl) | | $ | 58.01 | | | $ | 91.19 | | | $ | 94.76 | | | $ | 74.42 | |
| Natural gas liquids (Bbl) | | | 28.07 | | | | 59.32 | | | | 54.75 | | | | 54.18 | |
| Natural gas (Mcf) | | | 5.88 | | | | 6.64 | | | | 8.34 | | | | 6.69 | |
| | | | | | | | | | | | | | | | | |
| Average unit cost per Mcfe: | | | | | | | | | | | | | | | | |
| Production costs: | | | | | | | | | | | | | | | | |
| Lease operating expenses | | $ | 2.01 | | | $ | 1.75 | | | $ | 2.09 | | | $ | 1.82 | |
| Production taxes | | | 0.31 | | | | 0.39 | | | | 0.44 | | | | 0.28 | |
| Total | | | 2.32 | | | | 2.14 | | | | 2.53 | | | | 2.10 | |
| Depreciation, depletion and amortization | | | 2.29 | | | | 1.84 | | | | 1.86 | | | | 1.67 | |
| General and administrative expense | | | 0.63 | | | | 0.92 | | | | 0.67 | | | | 0.88 | |
(1) Prior to $10.9 and $0.8 million of net hedge gains for the three months ended December 31, 2008 and December 31, 2007, respectively, and prior to ($13.0) and $9.0 million of net realized hedge (losses) gains for the twelve months ended December 31, 2008 and December 31, 2007, respectively.
| | | December 31, 2008 | | | December 31, 2007 | |
| ASSETS | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 41,628 | | | $ | 10,220 | |
| Accounts receivable: | | | | | | | | |
| Oil, natural gas and natural gas liquids revenues | | | 17,588 | | | | 18,658 | |
| Related party | | | 1,463 | | | | 3,656 | |
| Other | | | 3,278 | | | | 15 | |
| Derivative asset | | | 50,121 | | | | 1,762 | |
| Prepaid expenses and other current assets | | | 1,037 | | | | 594 | |
| Total current assets | | | 115,115 | | | | 34,905 | |
| | | | | | | | | |
| Oil and natural gas properties, net of accumulated depreciation, depletion and amortization; December 31, 2008, $69,958; December 31, 2007, $30,724 | | | 765,243 | | | | 570,398 | |
| Other property, net of accumulated depreciation and amortization; December 31, 2008, $284; December 31, 2007, $239 | | | 180 | | | | 225 | |
| Other property, net of accumulated depreciation and amortization; December 31, 2008, $284; December 31, 2007, $239 | | | 180 | | | | 225 | |
| Long-term derivative asset | | | 96,720 | | | | - | |
| Other assets | | | 2,737 | | | | 2,013 | |
| Total assets | | $ | 979,995 | | | $ | 607,541 | |
| | | | | | | | | |
| LIABILITIES AND OWNERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable and accrued liabilities | | $ | 14,063 | | | $ | 12,113 | |
| Deferred revenues | | | 4,120 | | | | 1,122 | |
| Derivative liability | | | 2,115 | | | | 5,232 | |
| Total current liabilities | | | 20,298 | | | | 18,467 | |
| | | | | | | | | |
| Asset retirement obligations | | | 33,787 | | | | 19,463 | |
| Long-term debt | | | 467,000 | | | | 270,000 | |
| Other long-term liabilities | | | 1,426 | | | | 1,507 | |
| Long–term derivative liability | | | - | | | | 15,074 | |
| | | | | | | | | |
| Commitments and contingencies | | | | | | | | |
| | | | | | | | | |
| Owners’ equity | | | | | | | | |
| Common unitholders | | | 432,031 | | | | 282,676 | |
| Subordinated unitholders | | | 21,618 | | | | (5,488 | ) |
| General partner interest | | | 3,835 | | | | 4,245 | |
| Accumulated other comprehensive income | | | - | | | | 1,597 | |
| Total owners' equity | | | 457,484 | | | | 283,030 | |
| Total liabilities and owners' equity | | $ | 979,995 | | | $ | 607,541 | |
Results of Operations
(in $ thousands, except per unit data)
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Revenues: | | | | | | | | | | | | |
| Oil, natural gas and natural gas liquids revenues | | $ | 37,421 | | | $ | 35,237 | | | $ | 192,757 | | | $ | 89,422 | |
| Gain on derivatives, net | | | 372 | | | | 608 | | | | 1,597 | | | | 3,171 | |
| Transportation and marketing–related revenues | | | 3,310 | | | | 3,589 | | | | 12,959 | | | | 11,415 | |
| Total revenues | | | 41,103 | | | | 39,434 | | | | 207,313 | | | | 104,008 | |
| | | | | | | | | | | | | | | | | |
| Operating costs and expenses: | | | | | | | | | | | | | | | | |
| Lease operating expenses | | | 12,139 | | | | 7,619 | | | | 42,681 | | | | 21,515 | |
| Cost of purchased natural gas | | | 1,983 | | | | 3,068 | | | | 9,849 | | | | 9,830 | |
| Production taxes | | | 1,867 | | | | 1,689 | | | | 9,088 | | | | 3,360 | |
| Asset retirement obligations accretion expense | | | 447 | | | | 419 | | | | 1,434 | | | | 814 | |
| Depreciation, depletion and amortization | | | 13,845 | | | | 7,982 | | | | 38,032 | | | | 19,759 | |
| General and administrative expenses | | | 3,786 | | | | 4,017 | | | | 13,653 | | | | 10,384 | |
| Total operating costs and expenses | | | 34,067 | | | | 24,794 | | | | 114,737 | | | | 65,662 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 7,036 | | | | 14,640 | | | | 92,576 | | | | 38,346 | |
| | | | | | | | | | | | | | | | | |
| Other income (expense), net: | | | | | | | | | | | | | | | | |
| Interest expense | | | (5,565 | ) | | | (4,076 | ) | | | (16,128 | ) | | | (8,009 | ) |
| Gain (loss) on mark–to–market derivatives, net | | | 143,794 | | | | (22,891 | ) | | | 148,713 | | | | (19,906 | ) |
| Other income, net | | | 307 | | | | 393 | | | | 559 | | | | 813 | |
| Total other income (expense), net | | | 138,536 | | | | (26,574 | ) | | | 133,144 | | | | (27,102 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 145,572 | | | | (11,934 | ) | | | 225,720 | | | | 11,244 | |
| Income taxes | | | (30 | ) | | | 34 | | | | (235 | ) | | | (54 | ) |
| Net income (loss) | | $ | 145,542 | | | $ | ( 11,900 | ) | | $ | 225,485 | | | $ | 11,190 | |
| General partner’s interest in net income (loss) | | $ | 34,568 | | | $ | ( 238 | ) | | $ | 54,643 | | | $ | 1,670 | |
| Limited partners’ interest in net income (loss) | | $ | 110,974 | | | $ | ( 12,138 | ) | | $ | 170,842 | | | $ | 9,520 | |
| Net income (loss) per limited partner unit: | | | | | | | | | | | | | | | | |
| Common units (basic and diluted) | | $ | 6.88 | | | $ | ( .78 | ) | | $ | 11.14 | | | $ | .74 | |
| Subordinated units (basic and diluted) | | $ | 6.88 | | | $ | ( .78 | ) | | $ | 11.14 | | | $ | .74 | |
| Weighted average limited partner units outstanding: | | | | | | | | | | | | | | | | |
| Common units (basic and diluted) | | | 13,027 | | | | 11,839 | | | | 12,240 | | | | 9,815 | |
| Subordinated units (basic and diluted) | | | 3,100 | | | | 3,100 | | | | 3,100 | | | | 3,100 | |
| | | Twelve Months Ended | | | Twelve Months Ended | |
| | | December 31, 2008 | | | December 31, 2007 | |
| | | | | | | |
| Cash flows from operating activities: | | | | | | |
| Net income | | $ | 225,485 | | | $ | 11,190 | |
| Adjustments to reconcile net income to net cash flows provided by operating activities: | | | | | | | | |
| Asset retirement obligations accretion expense | | | 1,434 | | | | 814 | |
| Depreciation, depletion and amortization | | | 38,032 | | | | 19,759 | |
| Share–based compensation cost | | | 1,241 | | | | 1,507 | |
| Amortization of deferred loan costs | | | 370 | | | | 155 | |
| Unrealized (gain) loss on derivatives, net | | | (164,867 | ) | | | 25,713 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | 327 | | | | (8,926 | ) |
| Prepaid expenses and other current assets | | | (151 | ) | | | 441 | |
| Other assets | | | (265 | ) | | | (288 | ) |
| Accounts payable and accrued liabilities | | | (233 | ) | | | 4,627 | |
| Deferred revenues | | | 2,998 | | | | 1,122 | |
| Net cash flows provided by operating activities | | | 104,371 | | | | 56,114 | |
| | | | | | | | | |
| Cash flows from investing activities: | | | | | | | | |
| Acquisitions of oil and natural gas properties | | | (176,992 | ) | | | (456,513 | ) |
| Development of oil and natural gas properties | | | (33,017 | ) | | | (10,543 | ) |
| Deposit on acquisition of oil and natural gas properties | | | | | | | | |
| Net cash flows used in investing activities | | | (210,009 | ) | | | (467,056 | ) |
| | | | | | | | | |
| Cash flows from financing activities: | | | | | | | | |
| Debt borrowings | | | 197,000 | | | | 438,350 | |
| Repayment of debt borrowings | | | - | | | | (196,350 | ) |
| Deferred loan costs | | | (1,331 | ) | | | (1,046 | ) |
| Proceeds from private equity offerings | | | - | | | | 220,000 | |
| Offering costs | | | - | | | | (302 | ) |
| Distributions paid | | | (45,306 | ) | | | (25,127 | ) |
| Distributions related to acquisitions | | | (13,918 | ) | | | (16,238 | ) |
| Contributions by partners | | | 601 | | | | | |
| Net cash flows provided by financing activities | | | 137,046 | | | | 419,287 | |
| | | | | | | | | |
| Increase in cash and cash equivalents | | | 31,408 | | | | 8,345 | |
| Cash and cash equivalents – beginning of period | | | 10,220 | | | | 1,875 | |
| Cash and cash equivalents – end of period | | $ | 41,628 | | | $ | 10,220 | |
Non GAAP Measures
We define Adjusted EBITDA as net income (loss) plus interest expense (income), depreciation, depletion and amortization, accretion of asset retirement obligation, unrealized loss (gain) on derivatives, non-cash compensation and other expense, write-off of deferred financing costs, income tax provision, exploration expense and dry hole cost and impairment of unproved properties. Distributable Cash flow is defined as Adjusted EBITDA less interest expense, net, income taxes 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
| | | Three Months Ended December 31, | | | Twelve Months Ended December 31, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | 145,542 | | | $ | ( 11,900 | ) | | $ | 225,485 | | | $ | 11,190 | |
| Add: | | | | | | | | | | | | | | | | |
| Income taxes | | | 30 | | | | (34 | ) | | | 235 | | | | 54 | |
| Interest expense, net (1) | | | 6,176 | | | | 3,669 | | | | 17,354 | | | | 7,148 | |
| Depreciation, depletion and amortization | | | 13,845 | | | | 7,982 | | | | 38,032 | | | | 19,759 | |
| Asset retirement obligation accretion expense | | | 447 | | | | 419 | | | | 1,434 | | | | 814 | |
| Non-cash (gains) losses on derivatives | | | (133,956 | ) | | | 23,041 | | | | (164,867 | ) | | | 25,713 | |
| Non-cash unit based compensation expense | | | 33 | | | | 575 | | | | 1,241 | | | | 1,507 | |
| Non-cash write-off related to prior acquisition | | | | | | | 273 | | | | | | | | 273 | |
| (Gains) losses on settlement of asset retirement obligations | | | (182 | ) | | | | | | | (182 | ) | | | | |
| Adjusted EBITDA | | | 31,935 | | | | 24,025 | | | | 118,732 | | | | 66,458 | |
| | | | | | | | | | | | | | | | | |
| Less: | | | | | | | | | | | | | | | | |
| Interest expense, net (1) | | | 6,176 | | | | 3,669 | | | | 17,354 | | | | 7,148 | |
| Income taxes | | | 30 | | | | (34 | ) | | | 235 | | | | 54 | |
| Estimated maintenance capital expenditures (2) | | | 10,800 | | | | 8,250 | | | | 38,205 | | | | 21,650 | |
| Distributable Cash Flow | | | 14,929 | | | | 12,140 | | | | 62,938 | | | | 37,606 | |
(1) Interest expense, net includes realized losses for the period on interest rate swaps of $742 and $1,598 for the three months and twelve months ended December 31, 2008, respectively.
(2) 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.
| | | Swap | | | Swap | | | Collar | | | Collar | | | Collar | |
| | | Volume | | | Price | | | Volume | | | Floor | | | Ceiling | |
| | | (Mmmbtu/Mbbls) | | | | | | (Mmmbtu/Mbbls) | | | | | | | |
| Natural Gas | | | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | | | |
| NYMEX | | | 3,285 | | | $ | 8.05 | | | | 365 | | | $ | 7.50 | | | $ | 8.80 | |
| NYMEX | | | | | | | | | | | 1,460 | | | $ | 7.75 | | | $ | 9.15 | |
| NYMEX | | | | | | | | | | | 730 | | | $ | 8.00 | | | $ | 10.55 | |
| Dominion Appalachia | | | 2,336 | | | $ | 9.03 | | | | | | | | | | | | | |
| El Paso Permian | | | 1,278 | | | $ | 7.80 | | | | | | | | | | | | | |
| Houston Ship Channel | | | 2,051 | | | $ | 8.25 | | | | | | | | | | | | | |
| MichCon Citygate | | | 1,825 | | | $ | 8.27 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| 2010 | | | | | | | | | | | | | | | | | | | | |
| NYMEX | | | 4,928 | | | $ | 8.28 | | | | 548 | | | $ | 7.50 | | | $ | 10.00 | |
| Dominion Appalachia | | | 2,044 | | | $ | 8.65 | | | | | | | | | | | | | |
| El Paso Permian | | | 913 | | | $ | 7.68 | | | | | | | | | | | | | |
| Houston Ship Channel | | | | | | | | | | | 1,278 | | | $ | 7.25 | | | $ | 9.55 | |
| MichCon Citygate | | | 1,825 | | | $ | 8.34 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| 2011 | | | | | | | | | | | | | | | | | | | | |
| NYMEX | | | 4,563 | | | $ | 8.53 | | | | | | | | | | | | | |
| 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 | | | 4,575 | | | $ | 9.01 | | | | | | | | | | | | | |
| 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 | | | 1,460 | | | $ | 7.50 | | | | | | | | | | | | | |
| El Paso Permian | | | 1,095 | | | $ | 6.77 | | | | | | | | | | | | | |
| El Paso San Juan | | | 1,095 | | | $ | 6.66 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Crude Oil | | | | | | | | | | | | | | | | | | | | |
| (NYMEX) | | | | | | | | | | | | | | | | | | | | |
| 2009 | | | 649.9 | | | $ | 93.10 | | | | 45.6 | | | $ | 62.00 | | | $ | 73.90 | |
| 2010 | | | 629.6 | | | $ | 90.84 | | | | | | | | | | | | | |
| 2011 | | | 175.2 | | | $ | 109.38 | | | | 401.5 | | | $ | 110.00 | | | $ | 166.45 | |
| 2012 | | | 168.4 | | | $ | 108.76 | | | | 366.0 | | | $ | 110.00 | | | $ | 170.85 | |
| 2013 | | | 182.5 | | | $ | 72.50 | | | | | | | | | | | | | |
| | | Notional | | | Fixed | | | Floating | |
| | | Amount | | | Rate | | | Rate | |
| | | (in $ millions) | | | | | | | |
| July 2008 – June 2012 | | $ | 200 | | | | 4.163 | % | | | 1 month LIBOR | |
| Mar 2009 – Sept 2012 | | $ | 40 | | | | 2.145 | % | | | 1 month LIBOR | |
SOURCE: EV Energy Partners, L.P.
EV Energy Partners, L.P., Houston
Michael E. Mercer, 713-651-1144
http://www.evenergypartners.com
