August 26, 2005
Mr. James G. Ivey
Chief Financial Officer
Markwest Energy Partners, L.P.
155 Inverness Drive West, Suite 200
Englewood, CO 80112-5000
Re: Markwest Energy Partners, L.P.
Form 10-K for Fiscal Year Ended December 31, 2004
Filed June 24, 2005
Form 10-Q for Fiscal Quarters Ended March 31, 2005 and June 30,
2005
Filed June 24, 2005 and August 9, 2005
File No. 0-21956
Dear Mr. James G. Ivey:
We have reviewed your filings and have the following
comments.
We have limited our review of your filing to those issues we have
addressed in our comments Where indicated, we think you should
revise
your document in response to these comments. If you disagree, we
will consider your explanation as to why our comment is
inapplicable
or a revision is unnecessary. Please be as detailed as necessary
in
your explanation. In some of our comments, we may ask you to
provide
us with information so we may better understand your disclosure.
After reviewing this information, we may raise additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Fiscal Year Ended December 31, 2004
Overview of the Industry and Our Business, page 9
1. Please expand your disclosure on page 12 to explain how the
ratios
disclosed were calculated and to define your use of the term gross
margin. Compare and contrast these measures to the information
disclosed in your segment footnote on page 96.
Financial Statements
Note 2, Summary of Significant Accounting Policies, page 72
Basis of Presentation, page 72
2. Please expand your basis of presentation accounting policy to
disclose the principles under which you determine whether an
entity
is consolidated. In this regard, please expand your disclosure to
describe how you determine consolidation is appropriate and
whether
you have interests in unconsolidated entities and the related
methods
used to account for those interests.
Revenue Recognition, page 75
3. We note your description of various types of contracts with
customers beginning on pages 17 through 20 and 31. Please expand
your accounting policy to address the nature of these contracts
and
your revenue recognition accounting policy for each. Additionally
explain in your disclosure how you have applied the revenue
recognition principles in SAB Topic 13.A to the contractual terms
of
your arrangements and your operations. .
4. Please expand your disclosure to address your accounting
policies
for buy/sell arrangements. To the extent you have these
arrangements
please submit to us the disclosure revisions that you believe
would
be responsive to our February 11, 2005 Industry Letter, posted on
our
website at
www.sec.gov/divisions/corpfin/guidance/oilgas021105.htm.
Note 4, Asset Retirement Obligation, page 81
5. We note your disclosure indicating that certain assets have
indeterminate lives which limits your ability to determine the
associated asset retirement obligation. Please explain the nature
of
these assets and the consideration given for other estimates used
for
these same assets such as your determination of their estimated
useful lives. Additionally, please explain why you believe that
you
have considered all information to reasonably estimate the timing
of
the settlement of your asset retirement obligations. Please
describe
to us the limiting factors which prohibit you from further
recognizing an asset retirement obligation, if that is your
belief.
Note 6, Intangible Assets Subject to Amortization, page 82
6. We note that in determining the fair value of your customer
contracts you considered renewals of your contracts. Please
provide
us a summary of the impact your assumptions, relating to contract
renewals, had on the valuation of your customer contracts. Please
demonstrate how you concluded, on a case by case basis, that your
contracts are renewable and how such renewals can be effected with
little or no cost. Please refer to paragraphs 11(c) and 11(d) of
SFAS
142 and EITF 03-09.
Note 13, Commitments and Contingencies, page 91
7. We note your disclosure regarding lawsuits filed in connection
with the pipeline leak between the Maytown and Siloam facilities.
In
this regard we note your disclosure provided on Form 10-Q for the
fiscal quarter ended June 30, 2005 in which you indicate your
insurer
has initially denied your claim in this matter. Please expand your
disclosure to quantify any reasonably possible loss or range of
loss,
or a statement indicating that the loss is remote. Refer to SFAS
5.
Closing Comments
As appropriate, please amend your filing and respond to these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Jonathan Duersch at (202) 551-3719 if you
have
questions regarding comments on the financial statements and
related
matters. Please contact me at (202) 551-3683 with any other
questions.
Sincerely,
Jill Davis
Branch Chief
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Mr. James G. Ivey
Markwest Energy Partners, L.P
August 26, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE
MAIL STOP 04-05