CANONSBURG, Pa., Feb. 22, 2017 /PRNewswire/ -- Rice
Midstream Partners LP (NYSE: RMP) ("RMP") today announced its
2017 capital budget and guidance. Estimated capital investments and
financial guidance include:
- Capital budget of $315 million to
further develop gas gathering and water services assets
- Forecasted gathering throughput of 1,315 - 1,380 MDth/d, a 34%
- 40% increase over 2016 throughput
- Anticipated water volumes of 1,300 - 1,450 million
gallons
- Forecasted 2017 annual distribution growth of 20%
Commenting on the 2017 RMP capital budget and guidance,
Daniel J. Rice IV, Chief Executive
Officer, said, "We believe Rice Midstream Partners is unique in
that it combines the low capital requirements resulting from strong
asset concentration with high throughput growth attributable to its
core footprint and technically-leading customers. We think this is
reflected in our 2017 capital budget and throughput projections. In
addition, Rice Midstream Partners has line of sight to become one
of the largest Appalachian Basin gas gathering providers by 2020 in
terms of throughput, assuming its acquisition of Rice Midstream
Holdings' Ohio gas gathering
systems. We believe this throughput growth potential, combined with
relatively low capital requirements and 100% fee-based contracts,
will allow us to generate some of the best-in-class returns in the
midstream MLP space in the coming years."
2017 Capital Budget
We plan to allocate our capital investments according to the
table below:
2017 Capital
Budget ($ in millions)
|
Gas Gathering and
Compression
|
$
|
255
|
Water
Services
|
$
|
60
|
Total Capital
Expenditures
|
$
|
315
|
|
|
|
Estimated Maintenance
Capital
|
$
|
18
|
We expect to invest $315 million
in capital expenditures during 2017 consisting of $255 million to develop gas gathering and
compression assets in Washington
and Greene Counties and
$60 million to expand our water
services assets in Pennsylvania
and Ohio. Our capital budget is
focused on supporting the significant, expected future growth
across approximately 100,000 additional acres that was acquired by
or dedicated to RMP in 2016. This significant expansion was
primarily achieved through the Vantage Energy acquisition and the
previously renegotiated midstream agreement in western Greene County.
Rice Energy today announced its 2017 capital budget in a
separate news release, which is available on
www.riceenergy.com.
2017 Financial Guidance
We are unable to provide a projection of full-year 2017 net
income and net cash provided by operating activities, the most
comparable financial measures to Adjusted EBITDA and distributable
cash flow, respectively, calculated in accordance with GAAP. We do
not anticipate the changes in operating assets and liabilities to
be material, but changes in depreciation expense, accounts
receivable, accounts payable and accrued liabilities could be
significant, such that the amount of net cash provided by operating
activities would vary substantially from the amount of projected
Adjusted EBITDA and distributable cash flow. In addition, we are
unable to project net income because this metric includes the
impact of certain non-cash items that we are unable to project with
any reasonable degree of accuracy without unreasonable effort.
Please see the "Supplemental Non-GAAP Financial Measures" section
of this news release.
We anticipate 2017 Adjusted EBITDA(1) to be within a
range of $185 - $200 million and
DCF(1) to be within a range of $160 - $170 million. We expect to increase our
annual distribution by 20% while maintaining an average DCF
coverage ratio(1) of 1.35x - 1.45x over the course of
the year. Our 2017 guidance is based on the key assumptions in the
table below:
|
|
2017
Guidance
|
G&A ($ in
millions)
|
$
|
25
|
-
|
$
|
30
|
|
|
|
|
Adjusted
EBITDA(1) ($ in millions)
|
|
|
|
|
|
Gas Gathering and
Compression
|
$
|
145
|
-
|
$
|
155
|
Water
Services
|
$
|
40
|
-
|
$
|
45
|
Total Adjusted
EBITDA
|
$
|
185
|
-
|
$
|
200
|
|
% Third
Party
|
|
15%
|
-
|
20%
|
|
|
|
|
|
|
Distributable Cash
Flow(1) ($ in millions)
|
$
|
160
|
-
|
$
|
170
|
Average DCF Coverage
Ratio(1)
|
|
1.35x
|
-
|
|
1.45x
|
% Distribution
Growth
|
20%
|
|
|
|
|
|
|
|
Operating
Statistics
|
|
|
|
|
|
Gathering Throughput
(MDth/d)
|
1,315
|
-
|
1,380
|
Water Volumes
(MMGal)
|
1,300
|
-
|
1,450
|
|
|
1
|
Please see
"Supplemental Non-GAAP Financial Measures" for a description of
Adjusted EBITDA, distributable cash flow and DCF coverage
ratio.
|
About Rice Midstream Partners
Rice Midstream Partners LP is a fee-based, growth-oriented
limited partnership formed by Rice Energy Inc. (NYSE: RICE) to own,
operate, develop and acquire midstream assets in the Appalachian
basin. RMP provides midstream services to Rice Energy and
third-party companies through its natural gas gathering,
compression and water assets in the dry gas cores of the Marcellus
and Utica Shales.
For more information, please visit our website at
www.ricemidstream.com.
Forward Looking Statements
This release includes forward-looking statements that are
subject to a number of risks and uncertainties, many of which are
beyond our control. All statements, other than historical facts
included in this release, that address activities, events or
developments that we expect or anticipate will or may occur in the
future, including such things as, forecasted gas gathering and
water volumes, revenues, Adjusted EBITDA, DCF and DCF coverage
ratio, distribution growth, and distributable cash flow, the timing
of completion of midstream projects, future capital expenditures
(including the amount and nature thereof), business strategy and
measures to implement strategy, competitive strengths, goals,
expansion and growth of our business and operations, plans, market
conditions, references to future success, references to intentions
as to future matters and other such matters are forward-looking
statements. All forward-looking statements speak only as of the
date of this release. Although we believe that the plans,
intentions and expectations reflected in or suggested by the
forward-looking statements are reasonable, there is no assurance
that these plans, intentions or expectations will be achieved.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in such statements.
We caution you that these forward-looking statements are subject
to risks and uncertainties, most of which are difficult to predict
and many of which are beyond our control, incident to our gathering
and compression and water services businesses. These risks include,
but are not limited to: commodity price volatility; inflation;
environmental risks; regulatory changes; the uncertainty inherent
in projecting future throughput volumes, cash flow and access to
capital, and the timing of development expenditures of Rice Energy
or our other customers. Information concerning these and other
factors can be found in our filings with the Securities and
Exchange Commission, including our Forms 10-K, 10-Q and 8-K.
Consequently, all of the forward-looking statements made in this
news release are qualified by these cautionary statements and there
can be no assurances that the actual results or developments
anticipated by us will be realized, or even if realized, that they
will have the expected consequences to or effects on us, our
business or operations. We have no intention, and disclaim any
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future results or
otherwise.
Supplemental Non-GAAP Financial
Measures
(Unaudited)
Adjusted EBITDA, distributable cash flow and DCF coverage ratio
are non-GAAP supplemental financial measures that management and
external users of our consolidated financial statements, such as
industry analysts, investors, lenders and rating agencies, may use
to assess the financial performance of our assets, without regard
to financing methods, capital structure or historical cost basis;
our operating performance and return on capital as compared to
other companies in the midstream energy sector, without regard to
historical cost basis or, in the case of Adjusted EBITDA, financing
or capital structure; our ability to incur and service debt and
fund capital expenditures; the ability of our assets to generate
sufficient cash flow to make distributions to our unitholders; and
the viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities.
We define Adjusted EBITDA as net income (loss) before interest
expense, depreciation expense, amortization of intangible assets,
non-cash equity compensation expense, amortization of deferred
financing costs and other non-recurring items. Adjusted EBITDA
is not a measure of net income as determined by GAAP. We define
distributable cash flow as Adjusted EBITDA less cash interest
expense, and estimated maintenance capital expenditures. We define
DCF coverage ratio as distributable cash flow divided by total
distributions declared. Distributable cash flow does not reflect
changes in working capital balances and is not a presentation made
in accordance with GAAP.
We believe that the presentation of Adjusted EBITDA,
distributable cash flow and DCF coverage ratio will provide useful
information to investors in assessing our financial condition and
results of operations. The GAAP measures most directly comparable
to Adjusted EBITDA and distributable cash flow are net income and
net cash provided by operating activities, respectively. Our
non-GAAP financial measures of Adjusted EBITDA and distributable
cash flow should not be considered as alternatives to GAAP net
income or net cash provided by operating activities. Each of
Adjusted EBITDA and distributable cash flow has important
limitations as an analytical tool because they exclude some but not
all items that affect net income and net cash provided by operating
activities. You should not consider Adjusted EBITDA, distributable
cash flow or DCF coverage ratio in isolation or as a substitute for
analysis of our results as reported under GAAP. Because Adjusted
EBITDA, distributable cash flow and DCF coverage ratio may be
defined differently by other companies in our industry, our
definitions of Adjusted EBITDA, distributable cash flow and DCF
coverage ratio may not be comparable to similarly titled measures
of other companies, thereby diminishing its utility.
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SOURCE Rice Midstream Partners LP