Exhibit 99.1
HILAND PARTNERS, LP REPORTS FIRST QUARTER RESULTS
ENID, Okla., May 12 /PRNewswire-FirstCall/ -- Hiland Partners, LP (Nasdaq:
HLND) (the "Partnership") today reported quarterly net income for the three
months ended March 31, 2005 of $1.6 million compared to net income of $0.8
million for the three months ended March 31, 2004, an increase of 113%. EBITDA
for the three months ended March 31, 2005 was $3.7 million compared to $1.8
million for the three months ended March 31, 2004, an increase of 102%. Total
segment margin for the three months ended March 31, 2005 was $5.6 million
compared to $3.2 million for the three months ended March 31, 2004, an increase
of 72%. This increase is primarily attributable to higher average realized
natural gas prices and NGL sales prices and inclusion of the results of
operations from the assets acquired from Hiland Partners, LLC on February 15,
2005.
The financial position and results of operations for the three-month period
ended March 31, 2005 include the financial results of Continental Gas, Inc. (our
predecessor) through February 14, 2005. The financial results also include the
results of operations of Hiland Partners, LP for the period from February 15,
2005, the date Hiland Partners, LP commenced operations. As a result, operating
income and volumes are not comparable on a period-to-period basis.
For the period from February 15, 2005, inception of operations, to March 31,
2005, the Partnership reported quarterly net income of $1.1 million ($0.16 per
basic and diluted limited partners unit) and EBITDA of $2.5 million. The
Partnership commenced operations February 15, 2005 upon successful completion of
its initial public offering and the concurrent contribution of certain assets
from its predecessor entity and certain assets acquired from Hiland Partners,
LLC.
On April 25, 2005, the Partnership announced a cash distribution for the
first quarter of 2005 of $0.225 per unit, based on the minimum quarterly cash
distribution of $0.45 prorated for the period since inception of operations,
February 15, 2005, payable on all common, subordinated and general partner
units. The pro rata distribution declared for the quarter of $0.225 on all units
totals to $1.6 million.
"I am pleased with our first quarter results," said Randy Moeder, President
and Chief Executive Officer of Hiland Partners, LP. "Our near-term focus
continues to remain on organic growth. To that end, I am pleased to announce
that the Partnership has provided written notice to the owners of the Bakken Gas
Plant and Gas Gathering System advising of our intent to exercise the option to
purchase the system in accordance with the terms of the purchase option that the
Partnership has on this facility. If the parties are able to reach an agreement
on the purchase price, the transaction will have to be approved by the
independent members of our General Partner's Board of Directors."
Conference Call Information
The Partnership has scheduled a conference call for 10:00 am Central
Daylight Time, Friday, May 13, 2005, to discuss the 2005 first quarter results.
To participate in the call, dial 1.888.396.2298 and participant passcode
92002423, or access it live over the Internet by logging onto the web at
www.hilandpartners.com , on the "investor relations" section of the
Partnership's website.
Use of Non-GAAP Financial Measures
This press release and the accompanying schedules include the non- generally
accepted accounting principles ("non-GAAP") financial measures of EBITDA and
total segment margin. The accompanying schedules provide reconciliations of
these non-GAAP financial measures to their most directly comparable financial
measure calculated and presented in accordance with accounting principles
generally accepted in the United States of America ("GAAP"). Our non-GAAP
financial measures should not be considered as alternatives to GAAP measures
such as net income, operating income or any other GAAP measure of liquidity or
financial performance.
About Hiland Partners, LP
Hiland Partners, LP is a publicly traded midstream energy partnership
engaged in gathering, compressing, dehydrating, treating, processing and
marketing natural gas, and fractionating, or separating, natural gas liquids, or
NGLs. The Partnership also provides air compression and water injection services
to an oil and gas exploration and production company for use in its oil and gas
secondary recovery operations. The Partnership's operations are primarily
located in the Mid-Continent and Rocky Mountain regions of the United States.
Hiland Partners, LP's midstream assets consist of seven natural gas gathering
systems with approximately 825 miles of gathering pipelines, four natural gas
processing plants, three natural gas treating facilities and two NGL
fractionation facilities. The Partnership's compression assets consist of two
air compression facilities and a water injection plant.
This press release may include certain statements concerning expectations
for the future that are forward-looking statements. Such forward-looking
statements are subject to a variety of known and unknown risks, uncertainties,
and other factors that are difficult to predict and many of which are beyond
management's control. An extensive list of factors that can affect future
results are discussed in the Partnership's Annual Report on Form 10-K and other
documents filed from time to time with the Securities and Exchange Commission.
The Partnership undertakes no obligation to update or revise any forward-looking
statements to reflect new information or events.
- table to follow -
Other Financial and Operating Data (Unaudited)
Results of Operations
Set forth in the table below is financial and operating data for Continental
Gas, Inc. (predecessor) and Hiland Partners, LP for the periods indicated.
Three Months Ended March 31,
--------------------------------------------------
2005
Continental 2004
Hiland Gas, Inc. Continental
Partners, (Predecessor) Total Gas, Inc.
LP (A) (B) (C) (Predecessor)
--------- ------------- --------- -------------
(in thousands)
Total Segment Margin Data:
Midstream revenues $ 13,362 $ 11,813 $ 25,175 $ 21,050
Midstream purchases 10,456 9,747 20,203 17,810
Midstream segment margin 2,906 2,066 4,972 3,240
Compression revenues (D) 603 --- 603 ---
Total segment margin (E) $ 3,509 $ 2,066 $ 5,575 $ 3,240
Summary of Operations Data:
Midstream revenues $ 13,362 $ 11,813 $ 25,175 $ 21,050
Compression revenues 603 --- 603 ---
Total revenues 13,965 11,813 25,778 21,050
Operating costs and expenses
Midstream purchases
(exclusive of items shown
separately below) 10,456 9,747 20,203 17,810
Operations and maintenance 797 780 1,577 1,196
Depreciation, amortization
and accretion 1,165 512 1,677 847
General and administrative 187 166 353 264
Total operating costs and
expenses 12,605 11,205 23,810 20,117
Operating income 1,360 608 1,968 933
Other income (expense) (217) (115) (332) (181)
Income from continuing operations 1,143 493 1,636 752
Discontinued operations, net --- --- --- 15
Net income 1,143 493 1,636 767
Add:
Depreciation, amortization
and accretion 1,165 512 1,677 847
Amortization of deferred loan
costs 192 13 205 25
Interest expense 26 108 134 169
EBITDA (F) $ 2,526 $ 1,126 $ 3,652 $ 1,808
Operating Data:
Natural gas sales (MMBTU/d) 41,794 37,052 39,423 38,232
NGL sales (Bbls/d) 1,428 1,206 1,317 938
March 31, December 31,
2005 2004
--------- ------------
(in thousands)
Balance Sheet Data (at period end):
Property and equipment, at cost, net $ 67,622 $ 37,075
Total assets 109,986 49,175
Accounts payable-affiliates 2,698 2,998
Long-term debt, net of current maturities --- 12,643
Net equity 99,457 24,510
(A) Amounts presented in the Hiland Partners, LP column include only the
activity for the period beginning on the formation date February 15,
2005. Amounts include the operations of the assets acquired from Hiland
Partners, LLC at closing of the initial public offering (Worland
gathering system and compression assets).
(B) Amounts presented in the Predecessor column include only the activity of
CGI for the period prior to the formation of Hiland Partners, LP on
February 15, 2005.
(C) Total income and expense items included in the Consolidated Combined
Statements of Operations of Hiland Partners, LP and its predecessor will
be included in the Partnership's first quarter 2005 10-Q.
(D) Compression revenues and compression segment margin are the same. There
are no compression purchases associated with the compression segment.
(E) Reconciliation of total segment margin to operating income:
Three Months Ended March 31,
---------------------------------------------------------
2005 2004
Continental Continental
Hiland Gas, Inc. Gas, Inc.
Partners, LP (Predecessor) Total (Predecessor)
------------ ------------- ---------- -------------
Operating income $ 1,360 $ 608 $ 1,968 $ 933
Add:
Operations and
maintenance 797 780 1,577 1,196
Depreciation,
amortization
and accretion 1,165 512 1,677 847
General and
administrative 187 166 353 264
Total segment
margin $ 3,509 $ 2,066 $ 5,575 $ 3,240
We view total segment margin, a non-GAAP financial measure, as an
important performance measure of the core profitability of our
operations. We review total segment margin monthly for a consistency and
trend analysis. We define midstream segment margin as midstream revenue
less midstream purchases. Midstream purchases include the following
costs and expenses: cost of natural gas and NGLs purchased by us from
third parties, cost of natural gas and NGLs purchased by us from
affiliates, and cost of crude oil purchased by us from third parties.
Our compression segment margin will equal the fee we will earn under our
Compression Services Agreement with Continental Resources, Inc. for
providing air compression and water injection services. The fee that we
will earn under this agreement will be fixed as long as our facilities
meet specified availability requirements, regardless of Continental
Resources, Inc.'s utilization. As a result, our compression segment
margin will be dependent on our ability to meet their utilization
levels.
(F) We define EBITDA, a non-GAAP financial measure, as net income plus
interest expense, provisions for income taxes and depreciation,
amortization and accretion expense. EBITDA is used as a supplemental
financial measure by our management and by external users of our
financial statements such as investors, commercial banks, research
analysts and others to access: (1) the financial performance of our
assets without regard to financial methods, capital structure or
historical cost basis; (2) the ability of our assets to generate cash
sufficient to pay interest costs and support our indebtedness; (3) our
operating performance and return on capital structure; and (4) the
viability of acquisitions and capital expenditure projects and the
overall rates of return on alternative investment opportunities. EBITDA
is also a financial measurement that, with certain negotiated
adjustments, is reported to our banks and is used as a gauge for
compliance with our financial covenants under our credit facilities.
SOURCE Hiland Partners, LP
-0- 05/12/2005
/CONTACT: Ken Maples, Vice President and CFO of Hiland Partners, LP,
+1-580-242-6040/
/Web site: http://www.hilandpartners.com /