EV Energy Partners, L.P. (NASDAQ:EVEP) today announced results for
the fourth quarter and full year 2016 and the filing of its Form
10-K with the Securities and Exchange Commission. In
addition, EVEP announced its 2016 year-end proved reserves and 2017
guidance.
Highlights
- Overall operating results for the year in line with 2016
guidance
- Completed divestment of certain gas-weighted assets in the
Barnett Shale for $52.1 million on December 1, 2016 (before
post-closing purchase price adjustments)
- Completed $58.7 million asset purchase on January 31, 2017
(before post-closing purchase price adjustments) in the Eagle Ford
and Austin Chalk in Karnes County, TX using proceeds from the
Barnett Shale divestiture through a like-kind exchange transaction
and $6.6 million of borrowings under the credit facility
- Repurchased $82.7 million of outstanding Senior Secured Notes
due April 2019 for $35 million
- Increased capital spending budget to $30 to $45 million for
2017 from $10.7 million in 2016
- Maintained significant liquidity, which is currently over $175
million, between borrowing base capacity and cash on hand
Fourth Quarter 2016 Results
For the fourth quarter 2016, EVEP reported a net loss of $165.7
million, or $(3.31) per basic and diluted weighted average limited
partner unit outstanding compared to a net loss of $19.2 million,
or $(0.38) per basic and diluted weighted average limited partner
unit outstanding for the third quarter of 2016. Included in
net loss were the following items:
- $127.9 million of impairment charges primarily related to the
write-down of certain oil and natural gas properties due to the
effects of commodity prices on expected future net cash flows and
the disposition of oil and natural gas properties,
- $27.5 million of non-cash losses on commodity and interest rate
derivatives, and
- $1.8 million of non-cash costs contained in general and
administrative expenses.
For the fourth quarter of 2015, EVEP reported a net loss of
$71.3 million, or $(1.43) per basic and diluted weighted average
limited partner unit outstanding.
Production for the fourth quarter of 2016 was 11 Bcf of natural
gas, 278 Mbbls of oil and 547 Mbbls of natural gas liquids, or
173.6 million cubic feet equivalent per day (Mmcfe/day). This
represents a 17 percent decrease from fourth quarter 2015
production of 209.8 Mmcfe/d and an 11 percent decrease from third
quarter 2016 production of 195.3 Mmcfe/day. The decreases
were primarily due to reduced drilling activity and the
divestitures completed on December 1, 2016.
Adjusted EBITDAX for the fourth quarter of 2016 was $28.5
million, a 46 percent decrease from the fourth quarter of 2015 and
a 10 percent increase over the third quarter of 2016.
Distributable Cash Flow for the fourth quarter of 2016 was $7.9
million, a 70 percent decrease from the fourth quarter of 2015 and
a 24 percent increase over the third quarter of 2016. The
decreases in Adjusted EBITDAX and Distributable Cash Flow from the
fourth quarter of 2015 were attributable to lower realized hedge
gains and lower production, partially offset by higher realized
oil, natural gas and natural gas liquids prices. The
increases in Adjusted EBITDAX and Distributable Cash Flow over the
third quarter of 2016 were primarily due to higher realized oil,
natural gas and natural gas liquids prices and lower operating
expenses, partially offset by lower production. Adjusted
EBITDAX and Distributable Cash Flow are Non-GAAP financial measures
and are described in the attached table under “Non-GAAP
Measures.”
Full Year 2016 Results
For 2016, EVEP reported a net loss of $242.9 million, or $(4.85)
per basic and diluted weighted average limited partner unit
outstanding as compared to net income of $21.3 million, or $0.41
per basic and diluted weighted average limited partner unit
outstanding for 2015. Included in net loss were the following
items:
- $131.3 million of impairment charges primarily related to the
write-down of certain oil and natural gas properties due to the
effects of commodity prices on expected future net cash flows and
the disposition of oil and natural gas properties,
- $93.8 million of non-cash losses on commodity and interest rate
derivatives,
- $47.7 million of gain on early extinguishment of debt related
to repurchases of Senior Notes at a discount to par,
- $6.6 million of non-cash costs contained in general and
administrative expenses,
- $3.2 of gain on settlement of contract, and
- $0.7 million of dry hole and exploration costs.
Production for 2016 was 49.3 Bcf of natural gas, 1.2 Mmbbls of
oil and 2.3 Mmbbls of natural gas liquids, or 192.9 Mmcfe/day,
which is a 10 percent increase over 2015 production of 174.8
Mmcfe/day. The increase over 2015 production was primarily
due to the addition of producing properties acquired on October 1,
2015.
Adjusted EBITDAX and Distributable Cash Flow for 2016 of $101.3
million and $18.7 million decreased 50 percent and 81 percent,
respectively, versus 2015. The decreases in Adjusted EBITDAX
and Distributable Cash Flow as compared to 2015 are primarily due
to lower realized hedge gains and lower realized oil and natural
gas prices, partially offset by the addition of producing
properties acquired on October 1, 2015, lower operating expenses
and higher realized natural gas liquids prices.
"In 2016, our overall results were in line with guidance, we
continued to reduce operating costs through the hard work of our
asset teams, and we reduced debt by $83 million. In December,
we sold some of our Barnett Shale natural gas assets, and in
January, redeployed the proceeds in an oil-weighted Karnes County
acquisition that we believe has significantly more drilling
opportunities at attractive rates of return in the current
commodity price environment. In 2017, we plan to increase our
capital spending, while remaining focused on our cost structure and
maintaining sufficient liquidity," said Michael Mercer, President
and CEO.
Additional Commodity Hedges
EVEP entered into the following additional commodity hedges in
2016 subsequent to its press release on November 9, 2016.
EVEP's current hedge position, including these new hedges, is
presented at the end of this press release under Total Current
Hedge Position.
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Swap |
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Swap |
Period |
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Index |
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Volume |
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Price |
Natural Gas
(Mmmbtus) |
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Jan - Mar 2018 |
|
NYMEX |
|
4,500 |
|
$3.46 |
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Ethane (Mbbls) |
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2017 |
|
Mt Belvieu |
|
511.0 |
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$11.66 |
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Propane (Mbbls) |
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2017 |
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Mt Belvieu |
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255.5 |
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$25.10 |
Year-end 2016 Estimated Net Proved Reserves
EVEP’s year-end 2016 estimated net proved reserves were 851
Bcfe. Approximately 68 percent were natural gas, 23 percent
were natural gas liquids and 9 percent were crude oil. In
addition, 90 percent were categorized as proved developed.
Year-end 2016 estimated net proved reserves decreased by 22 percent
or 246 Bcfe from year-end 2015 estimated net proved reserves due to
reduced commodity pricing, asset divestitures, and volumes produced
and sold during 2016. The prices used in determining
estimated net proved reserves at December 31, 2016 were $42.75 per
Bbl of oil and $2.48 per Mmbtu of natural gas as compared to $50.28
per Bbl of oil and $2.59 per Mmbtu of natural gas at December 31,
2015.
At December 31, 2016, the present value of future net pre-tax
cash flows discounted at 10 percent (“PV 10”) was $373.6 million (a
non-GAAP measure) and the standardized measure of estimated net
proved reserves was $371.1 million. Standardized measure is
the present value of estimated future net revenues to be generated
from the production of proved reserves, determined in accordance
with the rules and regulations of the Securities and Exchange
Commission (the “SEC”), without giving effect to non–property
related expenses such as certain general and administrative
expenses, debt service and future federal income tax expenses or to
depreciation, depletion and amortization and discounted using an
annual discount rate of 10 percent. Our standardized measure
includes approximately $2.5 million of present value of future
obligations under the Texas gross margin tax, but it does not
include future federal income tax expenses because we are a
partnership and are not subject to federal income taxes. We
have included PV 10 because we believe it is a measure frequently
utilized by investors.
EVEP’s year-end 2016 estimated net proved reserves and
standardized measure are net of the recently announced divestiture
of 74 Bcf of proved natural gas properties in the Barnett Shale on
December 1, 2016 and prior to the acquisition of estimated net
proved reserves of 35 Bcfe of Eagle Ford and Austin Chalk oil and
natural gas properties in Karnes County, TX which closed on January
31, 2017.
|
|
Estimated Net Proved Reserves |
|
|
Crude Oil (MMBbls) |
|
Natural Gas (Bcf) |
|
NGL's (MMBbls) |
|
Natural Gas Equivalents (Bcfe) |
|
PV 10 ($mm) |
Barnett Shale |
|
0.4 |
|
239.1 |
|
21.0 |
|
367.8 |
|
$ |
128.6 |
|
San Juan Basin |
|
1.1 |
|
94.9 |
|
7.1 |
|
144.0 |
|
|
46.3 |
|
Appalachia Basin |
|
7.2 |
|
91.7 |
|
0.3 |
|
136.4 |
|
|
98.4 |
|
Michigan |
|
- |
|
74.7 |
|
0.4 |
|
77.8 |
|
|
29.1 |
|
Central Texas |
|
2.4 |
|
20.5 |
|
2.4 |
|
49.1 |
|
|
44.0 |
|
Monroe Field |
|
- |
|
27.9 |
|
- |
|
27.9 |
|
|
(1.2 |
) |
Mid-Continent area |
1.1 |
|
18.9 |
|
0.4 |
|
27.8 |
|
|
18.9 |
|
Permian Basin |
|
0.4 |
|
7.6 |
|
1.8 |
|
20.4 |
|
|
9.5 |
|
Total |
|
12.6 |
|
575.3 |
|
33.4 |
|
851.2 |
|
|
373.6 |
|
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|
|
|
|
|
|
|
|
|
|
For comparative purposes, utilizing NYMEX forward closing prices
for oil and natural gas on December 30, 2016 (the last trading day
of 2016), total NYMEX strip-based proved reserves at December 31,
2016 were 1,277 Bcfe (69 percent proved developed), with a PV 10 of
$790 million, an increase of 426 Bcfe over SEC reserves and $416
million over SEC PV 10. Also at these prices, our January
2017 Karnes County, TX acquisition had strip-based proved reserves
of 38 Bcfe (21 percent proved developed), with a PV 10 of $87
million. NYMEX strip-based proved reserves are calculated
based on the SEC proved reserves estimation methodology, but
applying NYMEX strip prices rather than SEC prices. We believe that
the PV 10 of NYMEX strip-based reserves is useful to investors to
illustrate the potential value of proved reserves that are
economically recoverable in the current commodity price environment
rather than SEC prices. Neither the PV 10 of our SEC reserves, the
PV 10 of our NYMEX strip-based reserves nor the standardized
measure represents an estimate of fair market value of our oil and
natural gas properties.
2017 Guidance
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($ in
millions) |
|
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|
Full Year 2017 |
|
|
|
Net Production |
|
|
|
|
|
|
|
|
Natural
Gas (Mmcf) |
|
|
|
40,720 |
|
- |
|
45,005 |
|
|
|
|
Crude Oil
(Mbbls) |
|
|
|
1,325 |
|
- |
|
1,465 |
|
|
|
|
Natural
Gas Liquids (Mbbls) |
|
|
|
2,055 |
|
- |
|
2,270 |
|
|
|
|
Total Mmcfe |
|
|
|
61,000 |
|
- |
|
67,415 |
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Average Daily
Production (Mmcfe/d) |
|
|
|
167 |
|
- |
|
185 |
|
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|
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|
|
Net Transportation
Margin (a) |
|
|
$0.5 |
|
- |
$1.0 |
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Average Price
Differential vs NYMEX |
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Natural
Gas ($/Mcf) |
|
|
($0.37) |
|
- |
($0.25) |
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Crude Oil
($/Bbl) |
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|
($5.40) |
|
- |
($3.90) |
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NGL (% of
NYMEX Crude Oil) |
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34% |
|
- |
|
38% |
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Expenses |
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Operating
Expenses: |
|
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|
|
|
|
|
|
|
|
LOE and
other |
|
|
$98.1 |
|
- |
$108.5 |
|
|
|
|
Production Taxes (as % of revenue) |
|
|
|
4.2% |
|
- |
|
5.2% |
|
|
|
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|
- |
|
|
|
|
General and
administrative expense (b) |
|
|
$22.0 |
|
- |
$26.0 |
|
|
|
|
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|
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|
|
|
|
|
Capital Expenditures
(c) |
|
|
$30.0 |
|
- |
$45.0 |
|
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(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, also |
|
excludes any amounts for future acquisition related due
diligence and transaction costs. |
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(c)
Represents estimates for drilling and related capital expenditures.
Does not include any amounts for acquisitions of |
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oil and
gas properties. |
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Annual Report on Form 10-K and Unitholders’ Schedule
K-1
EVEP’s financial statements and related footnotes are available
on our 2016 Form 10-K, which was filed today and is available
through the Investor Relations/SEC Filings section of the EVEP
website at http://www.evenergypartners.com.
Also available for download on our website by March 6, 2016 will
be unitholders’ Schedule K-1’s for the tax year 2016. 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 January 31, 2016, EV Energy Partners, L.P. will
host an investor conference call on March 1, 2016, at 9 a.m.
Eastern Standard Time (8 a.m. Central). Investors interested
in participating in the call may dial 1-888-245-0988 (quote
conference ID 9028703) 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 natural gas
properties. More information about EVEP is available on the
Internet at http://www.evenergypartners.com.
(code #: EVEP/G)
Forward Looking Statements
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 future
plans, our reserve quantities and the present value of our
reserves, estimates of maintenance capital and production amounts,
the information under the heading “2017 Guidance” 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 EVEP.
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. 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,
exploration and development activities, 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 EVEP with
the SEC. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. 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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|
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|
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Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
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|
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2016 |
|
|
2015 |
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|
2016 |
|
|
2015 |
|
|
Production data: |
|
|
|
|
|
|
|
|
|
|
Oil
(Mbbls) |
|
|
278 |
|
|
351 |
|
|
1,216 |
|
|
1,041 |
|
|
Natural
gas liquids (Mbbls) |
|
|
547 |
|
|
655 |
|
|
2,331 |
|
|
2,326 |
|
|
Natural
gas (Mmcf) |
|
|
11,029 |
|
|
13,266 |
|
|
49,333 |
|
|
43,592 |
|
|
Net
production (Mmcfe) |
|
|
15,975 |
|
|
19,301 |
|
|
70,612 |
|
|
63,792 |
|
|
Average sales price per
unit: (1) |
|
|
|
|
|
|
|
|
|
|
Oil
(Bbl) |
|
$45.42 |
|
$38.69 |
|
$38.78 |
|
$43.67 |
|
|
Natural
gas liquids (Bbl) |
|
|
19.33 |
|
|
13.86 |
|
|
15.32 |
|
|
14.04 |
|
|
Natural
gas (Mcf) |
|
|
2.60 |
|
|
1.86 |
|
|
2.02 |
|
|
2.23 |
|
|
Mcfe |
|
|
3.25 |
|
|
2.45 |
|
|
2.59 |
|
|
2.74 |
|
|
Average unit cost per
Mcfe: |
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|
|
|
|
|
|
|
|
|
Production costs: |
|
|
|
|
|
|
|
|
|
|
Lease
operating expenses |
|
$1.43 |
|
$1.54 |
|
$1.46 |
|
$1.56 |
|
|
Production taxes |
|
|
0.12 |
|
|
0.11 |
|
|
0.10 |
|
|
0.11 |
|
|
Total |
|
|
1.55 |
|
|
1.65 |
|
|
1.56 |
|
|
1.67 |
|
|
Depreciation, depletion
and amortization |
|
|
1.73 |
|
|
1.62 |
|
|
1.69 |
|
|
1.66 |
|
|
General and
administrative expenses |
|
|
0.55 |
|
|
0.52 |
|
|
0.48 |
|
|
0.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior
to $8.8 million and $44.9 million of net hedge gains on settlements
of commodity derivatives for the three months ended December 30,
2016 and 2015, respectively, and $57.9 million and $143.3 million
for the twelve months ended December 31, 2016 and 2015,
respectively. |
|
Consolidated
Balance Sheets |
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|
(In $
thousands, except number of units) |
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December 31, 2016 |
|
December 31, 2015 |
ASSETS |
|
|
|
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|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$5,557 |
|
|
$20,415 |
|
Accounts
receivable: |
|
|
|
|
Oil,
natural gas and natural gas liquids revenues |
|
|
39,629 |
|
|
|
24,285 |
|
Related
party |
|
|
745 |
|
|
|
- |
|
Other |
|
|
2,451 |
|
|
|
7,137 |
|
Derivative asset |
|
|
201 |
|
|
|
60,662 |
|
Other
current assets |
|
|
3,718 |
|
|
|
3,057 |
|
Total
current assets |
|
|
52,301 |
|
|
|
115,556 |
|
|
|
|
|
|
Oil and natural gas
properties, net of accumulated |
|
|
|
|
depreciation, depletion and amortization; December 31, |
|
|
|
|
2016,
$1,051,600; December 31, 2015, $971,499 |
|
|
1,497,211 |
|
|
|
1,790,455 |
|
Other property, net of
accumulated depreciation |
|
|
|
|
and
amortization; December 31, 2016, $1,002; |
|
|
|
|
December
31, 2015, $970 |
|
|
996 |
|
|
|
1,019 |
|
Restricted cash |
|
|
52,076 |
|
|
|
- |
|
Long–term derivative
asset |
|
|
- |
|
|
|
10,741 |
|
Other assets |
|
|
4,186 |
|
|
|
5,831 |
|
Total assets |
|
$1,606,770 |
|
|
$1,923,602 |
|
|
|
|
|
|
|
|
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|
LIABILITIES AND OWNERS’ EQUITY |
|
|
|
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|
Current
liabilities: |
|
|
|
|
Accounts
payable and accrued liabilities: |
|
|
|
|
Third
party |
|
$31,700 |
|
|
$43,135 |
|
Related
party |
|
|
5,797 |
|
|
|
5,952 |
|
Derivative liability |
|
|
21,679 |
|
|
|
- |
|
Income
taxes |
|
|
- |
|
|
|
11,657 |
|
Total
current liabilities |
|
|
59,176 |
|
|
|
60,744 |
|
|
|
|
|
|
Asset retirement
obligations |
|
|
180,241 |
|
|
|
174,003 |
|
Long–term debt,
net |
|
|
606,948 |
|
|
|
688,614 |
|
Long–term derivative
liability |
|
|
955 |
|
|
|
- |
|
Other long–term
liabilities |
|
|
1,043 |
|
|
|
1,682 |
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
Owners’ equity: |
|
|
|
|
Common
unitholders - 49,055,214 units and |
|
|
|
|
48,871,399 units issued and outstanding as of |
|
|
|
|
December
31, 2016 and 2015, respectively |
|
|
776,158 |
|
|
|
1,011,509 |
|
General
partner interest |
|
|
(17,751) |
|
|
|
(12,950) |
|
Total
owners' equity |
|
|
758,407 |
|
|
|
998,559 |
|
Total liabilities and
owners' equity |
|
$1,606,770 |
|
|
$1,923,602 |
|
|
|
|
|
|
Consolidated
Statements of Operations |
|
|
|
|
|
|
|
|
|
(In $
thousands, except per unit data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Oil,
natural gas and natural gas liquids revenues |
|
$51,842 |
|
|
$47,354 |
|
|
$182,696 |
|
|
$175,088 |
|
|
Transportation and marketing–related revenues |
|
|
599 |
|
|
|
598 |
|
|
|
2,198 |
|
|
|
2,883 |
|
|
Total
revenues |
|
|
52,441 |
|
|
|
47,952 |
|
|
|
184,894 |
|
|
|
177,971 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
Lease
operating expenses |
|
|
22,839 |
|
|
|
29,793 |
|
|
|
103,371 |
|
|
|
99,626 |
|
|
Cost of
purchased natural gas |
|
|
421 |
|
|
|
400 |
|
|
|
1,497 |
|
|
|
1,988 |
|
|
Dry hole
and exploration costs |
|
|
(544) |
|
|
|
1,975 |
|
|
|
651 |
|
|
|
3,695 |
|
|
Production taxes |
|
|
1,885 |
|
|
|
2,076 |
|
|
|
7,386 |
|
|
|
6,784 |
|
|
Accretion
expense on obligations |
|
|
2,079 |
|
|
|
2,050 |
|
|
|
8,225 |
|
|
|
5,598 |
|
|
Depreciation, depletion and amortization |
|
|
27,679 |
|
|
|
31,251 |
|
|
|
119,171 |
|
|
|
105,969 |
|
|
General
and administrative expenses |
|
|
8,775 |
|
|
|
10,026 |
|
|
|
33,637 |
|
|
|
38,994 |
|
|
Impairment of oil and natural gas properties |
|
|
127,889 |
|
|
|
14,423 |
|
|
|
131,260 |
|
|
|
136,667 |
|
|
Impairment of goodwill |
|
|
- |
|
|
|
65,924 |
|
|
|
- |
|
|
|
65,924 |
|
|
Loss
(gain) on settlement of contract |
|
|
- |
|
|
|
1,210 |
|
|
|
(3,185) |
|
|
|
1,210 |
|
|
Gain on
sales of oil and natural gas properties |
|
|
(69) |
|
|
|
(20) |
|
|
|
(69) |
|
|
|
(551) |
|
|
Total
operating costs and expenses |
|
|
190,954 |
|
|
|
159,108 |
|
|
|
401,944 |
|
|
|
465,904 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(138,513) |
|
|
|
(111,156) |
|
|
|
(217,050) |
|
|
|
(287,933) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense),
net: |
|
|
|
|
|
|
|
|
|
Gain
(loss) on derivatives, net |
|
|
(18,758) |
|
|
|
26,739 |
|
|
|
(35,950) |
|
|
|
78,145 |
|
|
Interest
expense |
|
|
(9,933) |
|
|
|
(12,057) |
|
|
|
(42,487) |
|
|
|
(50,336) |
|
|
Gain on
early extinguishment of debt |
|
|
- |
|
|
|
24,024 |
|
|
|
47,695 |
|
|
|
24,024 |
|
|
Other
income, net |
|
|
936 |
|
|
|
27 |
|
|
|
2,522 |
|
|
|
78 |
|
|
Total
other income (expense), net |
|
|
(27,755) |
|
|
|
38,733 |
|
|
|
(28,220) |
|
|
|
51,911 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes |
|
|
(166,268) |
|
|
|
(72,423) |
|
|
|
(245,270) |
|
|
|
(236,022) |
|
|
Income taxes |
|
|
596 |
|
|
|
1,159 |
|
|
|
2,375 |
|
|
|
1,843 |
|
|
Income (loss) from
continuing operations |
|
|
(165,672) |
|
|
|
(71,264) |
|
|
|
(242,895) |
|
|
|
(234,179) |
|
|
Income from
discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
255,512 |
|
|
Net income (loss) |
|
$(165,672) |
|
|
$(71,264) |
|
|
$(242,895) |
|
|
$21,333 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per limited
partner unit (basic and diluted): |
|
|
|
|
|
|
|
|
|
Income
(loss) from continuing operations |
|
$(3.31) |
|
|
$(1.43) |
|
|
$(4.85) |
|
|
$(4.72) |
|
|
Income
from discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5.13 |
|
|
Net
income (loss) |
|
$(3.31) |
|
|
$(1.43) |
|
|
$(4.85) |
|
|
$0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
limited partner units outstanding (basic and diluted) |
|
|
49,055 |
|
|
|
48,871 |
|
|
|
49,048 |
|
|
|
48,853 |
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared
per common unit |
|
$ - |
|
|
$0.075 |
|
|
$ - |
|
|
$1.575 |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows |
|
|
|
|
|
(In $
thousands) |
|
|
|
|
|
|
|
Twelve Months Ended December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Cash flows from
operating activities: |
|
|
|
|
|
Net
income (loss) |
|
$(242,895) |
|
|
$21,333 |
|
|
Adjustments to reconcile net income (loss) to net cash flows
provided by operating activities: |
|
|
|
|
|
Income
from discontinued operations |
|
|
- |
|
|
|
(255,512) |
|
|
Amortization of volumetric production payment liability |
|
|
(4,108) |
|
|
|
(1,196) |
|
|
Accretion
expense on obligations |
|
|
8,225 |
|
|
|
5,598 |
|
|
Depreciation, depletion and amortization |
|
|
119,171 |
|
|
|
105,969 |
|
|
Equity–based compensation cost |
|
|
6,611 |
|
|
|
12,001 |
|
|
Impairment of oil and natural gas properties |
|
|
131,260 |
|
|
|
136,667 |
|
|
Impairment of goodwill |
|
|
- |
|
|
|
65,924 |
|
|
Gain on
sales of oil and natural gas properties |
|
|
(69) |
|
|
|
(551) |
|
|
Loss
(gain) on derivatives, net |
|
|
35,950 |
|
|
|
(78,145) |
|
|
Cash
settlements of matured derivative contracts |
|
|
54,884 |
|
|
|
140,657 |
|
|
Gain on
early extinguishment of debt |
|
|
(47,695) |
|
|
|
(24,024) |
|
|
Deferred
taxes |
|
|
(404) |
|
|
|
(13,285) |
|
|
Other |
|
|
2,523 |
|
|
|
4,487 |
|
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
Accounts
receivable |
|
|
(11,403) |
|
|
|
14,850 |
|
|
Other
current assets |
|
|
(361) |
|
|
|
511 |
|
|
Accounts
payable and accrued liabilities |
|
|
(5,862) |
|
|
|
(4,067) |
|
|
Income
taxes |
|
|
(11,657) |
|
|
|
10,683 |
|
|
Other,
net |
|
|
(295) |
|
|
|
(245) |
|
|
Net cash flows provided
by operating activities from continuing operations |
|
|
33,875 |
|
|
|
141,655 |
|
|
Net cash flows used in
operating activities from discontinued operations |
|
|
- |
|
|
|
(372) |
|
|
Net cash flows provided
by operating activities |
|
|
33,875 |
|
|
|
141,283 |
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
Acquisitions of oil and natural gas properties, net of cash
acquired |
|
|
- |
|
|
|
(250,357) |
|
|
Additions
to oil and natural gas properties |
|
|
(15,258) |
|
|
|
(67,923) |
|
|
Proceeds
from sales of oil and natural gas properties |
|
|
54,509 |
|
|
|
1,457 |
|
|
Restricted cash |
|
|
(52,076) |
|
|
|
33,768 |
|
|
Cash
settlements from acquired derivative contracts |
|
|
3,003 |
|
|
|
2,615 |
|
|
Other |
|
|
56 |
|
|
|
73 |
|
|
Net cash flows used in
investing activities from continuing operations |
|
|
(9,766) |
|
|
|
(280,367) |
|
|
Net cash flows provided
by investing activities from discontinued operations |
|
|
- |
|
|
|
572,160 |
|
|
Net cash flows (used
in) provided by investing activities |
|
|
(9,766) |
|
|
|
291,793 |
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
Long-term
debt borrowings |
|
|
57,000 |
|
|
|
295,000 |
|
|
Repayments of long-term debt borrowings |
|
|
(57,000) |
|
|
|
(561,000) |
|
|
Redemption of 8% Senior Notes due 2019 |
|
|
(34,978) |
|
|
|
(49,954) |
|
|
Loan
costs paid |
|
|
(121) |
|
|
|
(4,074) |
|
|
Contributions from general partner |
|
|
- |
|
|
|
91 |
|
|
Distributions paid |
|
|
(3,868) |
|
|
|
(100,979) |
|
|
Net cash flows used in
financing activities |
|
|
(38,967) |
|
|
|
(420,916) |
|
|
|
|
|
|
|
|
(Decrease) increase in
cash and cash equivalents |
|
|
(14,858) |
|
|
|
12,160 |
|
|
Cash and cash
equivalents – beginning of period |
|
|
20,415 |
|
|
|
8,255 |
|
|
Cash and cash
equivalents – end of period |
|
$5,557 |
|
|
$20,415 |
|
|
|
|
|
|
|
|
Non GAAP Measures
We define Adjusted EBITDAX as net income (loss) plus income from
discontinued operations, EBITDAX from discontinued operations,
income taxes, interest expense, net, cash settlements of matured
interest rate swaps, depreciation, depletion and amortization,
accretion expense on obligations, amortization of volumetric
production payment (VPP), loss (gain) on derivatives, net, cash
settlements of matured derivative contracts, non-cash equity-based
compensation, impairment of oil and natural gas properties,
impairment of goodwill, non-cash inventory write down expense, dry
hole and exploration costs, gain on sales of oil and natural gas
properties, loss (gain) on settlement of contract, gain on early
extinguishment of debt, and (gain) loss on sale of investment,
contained in Other income, net. 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. We believe these financial
measures may indicate to investors whether or not we are generating
cash flow at a level that can sustain or support quarterly
distributions. 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.
Reconciliation of Net Income (Loss) to Adjusted EBITDAX and
Distributable Cash Flow |
|
|
|
|
(In $
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
Dec 31, 2016 |
|
Dec 31, 2015 |
|
Sep 30, 2016 |
|
Dec 31, 2016 |
|
Dec 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$(165,672) |
|
|
$(71,264) |
|
|
$(19,230) |
|
|
$(242,895) |
|
|
$21,333 |
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(255,512) |
|
EBITDAX from
discontinued operations |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
15,941 |
|
Income taxes |
|
|
(596) |
|
|
|
(1,159) |
|
|
|
(1,429) |
|
|
|
(2,375) |
|
|
|
(1,843) |
|
Interest expense,
net |
|
|
9,932 |
|
|
|
12,050 |
|
|
|
9,889 |
|
|
|
42,476 |
|
|
|
50,314 |
|
Cash settlements of
matured interest rate swaps |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,736 |
|
Depreciation, depletion
and amortization |
|
|
27,679 |
|
|
|
31,251 |
|
|
|
31,639 |
|
|
|
119,171 |
|
|
|
105,969 |
|
Accretion expense on
obligations |
|
|
2,079 |
|
|
|
2,050 |
|
|
|
2,057 |
|
|
|
8,225 |
|
|
|
5,598 |
|
Amortization of
VPP |
|
|
(1,038) |
|
|
|
(1,196) |
|
|
|
(1,027) |
|
|
|
(4,108) |
|
|
|
(1,196) |
|
Loss (gain) on
derivatives, net |
|
|
18,758 |
|
|
|
(26,739) |
|
|
|
(8,559) |
|
|
|
35,950 |
|
|
|
(78,145) |
|
Cash settlements of
matured derivative contracts |
|
|
8,765 |
|
|
|
44,904 |
|
|
|
10,117 |
|
|
|
57,887 |
|
|
|
143,272 |
|
Non-cash equity-based
compensation |
|
|
1,758 |
|
|
|
2,366 |
|
|
|
1,889 |
|
|
|
6,611 |
|
|
|
12,001 |
|
Impairment of oil and
natural gas properties |
|
|
127,889 |
|
|
|
14,423 |
|
|
|
687 |
|
|
|
131,260 |
|
|
|
136,667 |
|
Impairment of
goodwill |
|
|
- |
|
|
|
65,924 |
|
|
|
- |
|
|
|
- |
|
|
|
65,924 |
|
Non-cash inventory
write down expense |
|
|
(422) |
|
|
|
973 |
|
|
|
- |
|
|
|
(299) |
|
|
|
1,122 |
|
Dry hole and
exploration costs |
|
|
(544) |
|
|
|
1,975 |
|
|
|
294 |
|
|
|
651 |
|
|
|
3,695 |
|
Gain on sales of oil
and natural gas properties |
|
|
(69) |
|
|
|
(20) |
|
|
|
- |
|
|
|
(69) |
|
|
|
(551) |
|
Loss (gain) on
settlement of contract |
|
|
- |
|
|
|
1,210 |
|
|
|
- |
|
|
|
(3,185) |
|
|
|
1,210 |
|
Gain on early
extinguishment of debt |
|
|
- |
|
|
|
(24,024) |
|
|
|
- |
|
|
|
(47,695) |
|
|
|
(24,024) |
|
(Gain) loss on sale of
investment, contained in Other income, net |
|
|
- |
|
|
|
- |
|
|
|
(309) |
|
|
|
(309) |
|
|
|
358 |
|
Adjusted EBITDAX |
|
$28,519 |
|
|
$52,724 |
|
|
$26,018 |
|
|
$101,296 |
|
|
$203,869 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
Cash income taxes |
|
|
- |
|
|
|
441 |
|
|
|
(933) |
|
|
|
(933) |
|
|
|
441 |
|
Cash interest expense,
net |
|
|
9,609 |
|
|
|
11,264 |
|
|
|
9,566 |
|
|
|
39,558 |
|
|
|
48,504 |
|
Realized losses on
interest rate swaps |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,736 |
|
Estimated maintenance
capital expenditures (1) |
|
|
11,000 |
|
|
|
14,875 |
|
|
|
11,000 |
|
|
|
44,000 |
|
|
|
54,672 |
|
Distributable Cash
Flow |
|
$7,910 |
|
|
$26,144 |
|
|
$6,385 |
|
|
$18,671 |
|
|
$98,516 |
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
Total Current Hedge Position
|
|
Swap |
Swap |
|
Collar |
Collar |
Collar |
Period |
Index |
Volume |
Price |
|
Volume |
Floor |
Ceiling |
Natural Gas
(Mmmbtus) |
|
|
|
|
|
|
2017 |
NYMEX |
32,850 |
$3.07 |
|
10,950 |
$2.75 |
$3.27 |
Jan - Mar 2018 |
NYMEX |
4,500 |
$3.46 |
|
|
|
|
|
|
|
|
|
|
|
Crude
(Mbbls) |
|
|
|
|
|
|
2017 |
WTI |
365 |
$52.85 |
|
|
|
|
|
|
|
|
|
|
|
Ethane
(Mbbls) |
|
|
|
|
|
|
2017 |
Mt Belvieu |
511.0 |
$11.66 |
|
|
|
|
|
|
|
|
|
|
|
Propane
(Mbbls) |
|
|
|
|
|
|
2017 |
Mt Belvieu |
255.5 |
$25.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Notional Amount |
|
Fixed Rate |
|
|
|
|
Interest Rate Swap Agreements |
($ mill) |
|
|
|
|
Jan 2017 - Dec
2017 |
|
100 |
|
1.039% |
|
|
|
|
Jan 2018 - Sep
2020 |
|
100 |
|
1.795% |
|
|
|
|
EV Energy Partners, L.P., Houston
Nicholas Bobrowski
713-651-1144
http://www.evenergypartners.com