Rattler Midstream LP (NASDAQ: RTLR) (“Rattler” or the “Company”), a
subsidiary of Diamondback Energy, Inc. (NASDAQ: FANG)
(“Diamondback”), today announced financial and operating results
for the second quarter ended June 30, 2020.
SECOND QUARTER 2020 HIGHLIGHTS
- Q2 2020 consolidated net income
(including non-controlling interest) of $12.5 million, consolidated
adjusted net income (as defined and reconciled below) of $27.9
million
- Consolidated Adjusted EBITDA (as
defined and reconciled below) of $53.9 million
- Board of Directors of Rattler's
general partner approved a cash distribution for the second quarter
of 2020 of $0.29 per common unit ($1.16 annualized); implies a 14%
annualized yield based on the August 4, 2020 unit closing price of
$8.06
- Q2 2020 cash operated capital
expenditures of $39.5 million
- Q2 2020 average produced water
gathering and disposal volumes of 771 MBbl/d, flat from Q2 2019 and
down 18% from Q1 2020
- Q2 2020 average sourced water
volumes of 78 MBbl/d, down 83% from both Q2 2019 and Q1 2020; 30%
of total sourced water volumes in Q2 2020 sourced from recycled
produced water
- Q2 2020 average crude oil gathering
volumes of 91 MBbl/d, up 17% over Q2 2019 and down 6% from Q1
2020
- Q2 2020 average gas gathering
volumes of 108 BBtu/d, up 27% over Q2 2019 and down 9% from Q1
2020
“The second quarter of 2020 presented historic volatility in
global energy demand and commodity prices. Rattler, despite
all of its operations being located in the premier low-cost shale
basin and operated by a low-cost operator in Diamondback, was not
spared from this volatility. Diamondback made the prudent
decision to suspend completion activity and curtail production in
the quarter, directly impacting Rattler’s second quarter volumes,”
stated Travis Stice, Chief Executive Officer of Rattler’s general
partner.
Mr. Stice continued, “Looking ahead, while this quarter
reflected the effects of a severe disruption in the pace of
expected development activity on Rattler’s assets, we are focused
on reducing capital expenditures and operating costs across our
asset base to increase free cash flow in a lower growth
environment. Additionally, with three of our major equity
method investments in full service, and minimal operated growth
capex expected to be required in the future, Rattler is positioned
to provide significant free cash flow to support its
distribution. Rattler, with its equity method investment
build cycle nearing completion, operated assets generating free
cash flow and conservative financial leverage, is well-situated to
weather this commodity cycle."
OPERATIONS AND FINANCIAL
UPDATE
During the second quarter of 2020, the Company
recorded total operating income of $28.5 million, down 53% compared
to the first quarter of 2020 and a decrease of 49% from the second
quarter of 2019. During the second quarter of 2020, the Company
recorded consolidated net income (including non-controlling
interest) of $12.5 million, inclusive of a $15.8 million impairment
charge associated with goodwill related to its interest in the OMOG
JV, a decrease of 77% from the first quarter of 2020 and a decrease
of 73% from the second quarter of 2019. Second quarter 2020
adjusted net income (as defined and reconciled below) was $27.9
million, down 49% from the first quarter of 2020 and down 40% from
the second quarter of 2019. Second quarter 2020 Adjusted EBITDA (as
defined and reconciled below) was $53.9 million, down 33% from the
first quarter of 2020 and down 19% from the second quarter of
2019.
Average produced water gathering and disposal
volumes for Q2 2020 were 771 MBbl/d, flat from Q2 2019 and down 18%
from Q1 2020. Average sourced water volumes were 78 MBbl/d,
down 83% from both Q2 2019 and Q1 2020 due to Diamondback
suspending almost all completion activity between mid April and
late June. Average crude oil gathering volumes were 91
MBbl/d, up 17% over Q2 2019 and down 6% from Q1 2020. Average
gas gathering volumes were 108 BBtu/d, down 9% from Q1 2020 and up
27% over Q2 2019.
Second quarter operated capital expenditures
totaled $39.5 million, and aggregate contributions to equity method
joint ventures were $33.5 million. Rattler also received
proceeds of $8.1 million in distributions from equity method
investments. As of June 30, 2020, the Company had $11.2
million of cash and $77.0 million available under its $600.0
million revolving credit facility.
SENIOR NOTES OFFERING
On July 14, 2020, the Company completed an
offering (the “Notes Offering”) of $500.0 million in aggregate
principal amount of its 5.625% Senior Notes due 2025. The
Company received net proceeds of approximately $489.5 million from
the Notes Offering. The Company loaned the gross proceeds to
Rattler Midstream LLC, which used such proceeds to pay down
borrowings under its revolving credit facility. As of June 30,
2020, pro forma for this offering, Rattler had $11.2 million of
cash and $566.5 million available under its $600.0 million
revolving credit facility, resulting in total liquidity of $577.7
million.
CASH DISTRIBUTION
On July 31, 2020, the Board of Directors of
Rattler's general partner approved a cash distribution for the
second quarter of 2020 of $0.29 per common unit, payable on August
24, 2020 to unitholders of record at the close of business on
August 17, 2020.GUIDANCE UPDATE
Below is Rattler's revised guidance for the full
year 2020, with net income, capital expenditure and equity method
contribution guidance updated to reflect the latest base case
operating plan.
|
|
|
Rattler Midstream LP Guidance |
|
2020 |
|
|
Rattler Operated Volumes
(a) |
|
Produced Water Gathering and
Disposal Volumes (MBbl/d) |
800 - 900 |
Sourced Water Volumes
(MBbl/d) |
150 - 250 |
Crude Oil Gathering Volumes
(MBbl/d) |
85 - 95 |
Gas Gathering Volumes
(BBtu/d) |
95 - 115 |
|
|
Financial Metrics ($ millions
except per unit metrics) |
|
Net Income |
$120 - $150 |
Adjusted EBITDA |
$260 - $300 |
Equity Method Investment
EBITDA(b) |
$30 - $50 |
Operated Midstream Capex |
$125 - $150 |
2020 Equity Method Investment
Contributions(b) |
$85 - $105 |
Depreciation, Amortization
& Accretion |
$45 - $60 |
Annualized Distribution per
Unit |
$1.16 |
(a) Does not include any volumes from the EPIC, Gray Oak, Wink
to Webster, OMOG and Amarillo Rattler joint ventures(b) Includes
the EPIC, Gray Oak, Wink to Webster, OMOG and Amarillo Rattler
joint ventures
CONFERENCE CALL
Rattler will host a conference call and webcast
for investors and analysts to discuss its results for the second
quarter and full year of 2020 on Thursday, August 6, 2020 at 9:00
a.m. CT. Participants should call (877) 288-2756 (United
States/Canada) or (470) 495-9481 (International) and use the
confirmation code 1608579. A telephonic replay will be
available from 11:20 a.m. CT on Thursday, August 6, 2020 through
Thursday, August 13, 2020 at 11:20 a.m. CT. To access the
replay, call (855) 859-2056 (United States/Canada) or (404)
537-3406 (International) and enter confirmation code 1608579.
A live broadcast of the earnings conference call will also be
available via the internet at www.rattlermidstream.com under the
“Investors” section of the site. A replay will also be
available on the website following the call.
About Rattler Midstream LP
Rattler Midstream LP is a growth-oriented
Delaware limited partnership formed in July 2018 by Diamondback
Energy, Inc. to own, operate, develop and acquire midstream
infrastructure assets in the Midland and Delaware Basins of the
Permian Basin. Rattler provides crude oil, natural gas and
water-related midstream services to Diamondback under long-term,
fixed-fee contracts. For more information, please visit
www.rattlermidstream.com.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural
gas company headquartered in Midland, Texas focused on the
acquisition, development, exploration and exploitation of
unconventional, onshore oil and natural gas reserves in the Permian
Basin in West Texas. For more information, please visit
www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains forward-looking
statements within the meaning of the federal securities
laws. All statements, other than historical facts, that
address activities that Rattler assumes, plans, expects, believes,
intends or anticipates (and other similar expressions) will, should
or may occur in the future are forward-looking statements.
The forward-looking statements are based on management’s current
beliefs, based on currently available information, as to the
outcome and timing of future events, including specifically the
statements regarding expectations of plans, strategies, objectives
and anticipated financial and operating results of Rattler,
including Rattler's capital expenditure levels and other guidance
discussed above. These forward-looking statements involve
certain risks and uncertainties that could cause the results to
differ materially from those expected by the management of
Rattler. Information concerning these risks and other factors
can be found in Rattler’s filings with the Securities and Exchange
Commission (“SEC”), Forms 10-Q and 8-K and Annual Report on Form
10-K for the year ended December 31, 2019 which can be obtained
free of charge on the SEC’s web site at http://www.sec.gov.
Rattler undertakes no obligation to update or revise any
forward-looking statement.
Rattler Midstream LP |
Consolidated Balance Sheets |
(unaudited, in thousands) |
|
|
|
|
|
June 30, |
|
December 31, |
|
2020 |
|
2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
11,170 |
|
|
$ |
10,633 |
|
Accounts receivable—related party |
4,456 |
|
|
50,270 |
|
Accounts receivable—third party, net |
7,694 |
|
|
9,071 |
|
Sourced water inventory |
10,400 |
|
|
14,325 |
|
Other current assets |
688 |
|
|
1,428 |
|
Total current assets |
34,408 |
|
|
85,727 |
|
Property, plant and
equipment: |
|
|
|
Land |
88,309 |
|
|
88,509 |
|
Property, plant and equipment |
1,037,264 |
|
|
930,768 |
|
Accumulated depreciation, amortization and accretion |
(81,572 |
) |
|
(61,132 |
) |
Property, plant and equipment, net |
1,044,001 |
|
|
958,145 |
|
Right of use assets |
86 |
|
|
418 |
|
Equity method investments |
514,110 |
|
|
479,558 |
|
Real estate assets, net |
96,473 |
|
|
98,679 |
|
Intangible lease assets,
net |
6,579 |
|
|
8,070 |
|
Deferred tax asset |
78,134 |
|
|
— |
|
Other assets |
5,232 |
|
|
5,796 |
|
Total assets |
$ |
1,779,023 |
|
|
$ |
1,636,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rattler Midstream LP |
Consolidated Balance Sheets - Continued |
(unaudited, in thousands, except unit
amounts) |
|
|
|
|
|
June 30, |
|
December 31, |
|
2020 |
|
2019 |
Liabilities and Unitholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
149 |
|
|
$ |
147 |
|
Accrued liabilities |
55,386 |
|
|
76,625 |
|
Taxes payable |
406 |
|
|
189 |
|
Short-term lease liability |
86 |
|
|
418 |
|
Total current liabilities |
56,027 |
|
|
77,379 |
|
Long-term debt |
523,000 |
|
|
424,000 |
|
Asset retirement
obligations |
13,272 |
|
|
11,347 |
|
Deferred income taxes |
— |
|
|
7,827 |
|
Total liabilities |
592,299 |
|
|
520,553 |
|
Commitment and
contingencies |
|
|
|
Unitholders’ equity: |
|
|
|
General partner—Diamondback |
939 |
|
|
979 |
|
Common units—public (43,996,243 units issued and outstanding as of
June 30, 2020 and 43,700,000 units issued and outstanding as of
December 31, 2019) |
400,928 |
|
|
737,777 |
|
Class B units—Diamondback (107,815,152 units issued and outstanding
as of June 30, 2020 and as of December 31, 2019) |
939 |
|
|
979 |
|
Accumulated other comprehensive loss |
(320 |
) |
|
(198 |
) |
Total Rattler Midstream LP unitholders’ equity |
402,486 |
|
|
739,537 |
|
Non-controlling interest |
785,239 |
|
|
376,928 |
|
Non-controlling interest in
accumulated other comprehensive loss |
(1,001 |
) |
|
(625 |
) |
Total equity |
1,186,724 |
|
|
1,115,840 |
|
Total liabilities and unitholders’ equity |
$ |
1,779,023 |
|
|
$ |
1,636,393 |
|
|
|
|
|
|
|
|
|
Rattler Midstream LP |
Consolidated Statements of Operations |
(unaudited, in thousands, except per unit
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues—related party |
$ |
78,031 |
|
|
$ |
103,066 |
|
|
$ |
194,614 |
|
|
$ |
191,642 |
|
|
Revenues—third party |
|
7,175 |
|
|
|
5,078 |
|
|
|
16,275 |
|
|
|
8,565 |
|
|
Rental income—related party |
|
1,417 |
|
|
|
1,256 |
|
|
|
2,819 |
|
|
|
1,971 |
|
|
Rental income—third party |
|
1,885 |
|
|
|
2,038 |
|
|
|
3,786 |
|
|
|
4,105 |
|
|
Other real estate income—related party |
|
53 |
|
|
|
81 |
|
|
|
169 |
|
|
|
154 |
|
|
Other real estate income—third party |
|
174 |
|
|
|
255 |
|
|
|
467 |
|
|
|
513 |
|
|
Total revenues |
|
88,735 |
|
|
|
111,774 |
|
|
|
218,130 |
|
|
|
206,950 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses |
|
37,378 |
|
|
|
26,406 |
|
|
|
70,252 |
|
|
|
46,592 |
|
|
Cost of goods sold (exclusive of depreciation and
amortization) |
|
4,744 |
|
|
|
15,849 |
|
|
|
20,705 |
|
|
|
28,902 |
|
|
Real estate operating expenses |
|
590 |
|
|
|
695 |
|
|
|
1,318 |
|
|
|
1,221 |
|
|
Depreciation, amortization and accretion |
|
12,100 |
|
|
|
10,158 |
|
|
|
24,606 |
|
|
|
20,062 |
|
|
General and administrative expenses |
|
4,175 |
|
|
|
3,068 |
|
|
|
8,689 |
|
|
|
4,437 |
|
|
Loss (gain) on disposal of property, plant and equipment |
|
1,243 |
|
|
|
(4 |
) |
|
|
2,781 |
|
|
|
(4 |
) |
|
Total costs and expenses |
|
60,230 |
|
|
|
56,172 |
|
|
|
128,351 |
|
|
|
101,210 |
|
|
Income from
operations |
|
28,505 |
|
|
|
55,602 |
|
|
|
89,779 |
|
|
|
105,740 |
|
|
Other
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(1,926 |
) |
|
|
(85 |
) |
|
|
(4,547 |
) |
|
|
(85 |
) |
|
Loss from equity method investments |
|
(13,034 |
) |
|
|
(114 |
) |
|
|
(13,279 |
) |
|
|
(64 |
) |
|
Total other expense, net |
|
(14,960 |
) |
|
|
(199 |
) |
|
|
(17,826 |
) |
|
|
(149 |
) |
|
Net income before
income taxes |
|
13,545 |
|
|
|
55,403 |
|
|
|
71,953 |
|
|
|
105,591 |
|
|
Provision for income taxes |
|
1,083 |
|
|
|
8,724 |
|
|
|
4,903 |
|
|
|
19,556 |
|
|
Net
income |
$ |
12,462 |
|
|
$ |
46,679 |
|
|
$ |
67,050 |
|
|
$ |
86,035 |
|
|
Net income before
initial public offering |
$ |
— |
|
|
$ |
26,639 |
|
|
$ |
— |
|
|
$ |
65,995 |
|
|
Net income subsequent
to initial public offering |
$ |
— |
|
|
$ |
20,040 |
|
|
$ |
— |
|
|
$ |
20,040 |
|
|
Net income attributable to
non-controlling interest |
|
9,640 |
|
|
|
15,237 |
|
|
|
51,197 |
|
|
|
15,237 |
|
|
Net income
attributable to Rattler Midstream LP |
$ |
2,822 |
|
|
$ |
4,803 |
|
|
$ |
15,853 |
|
|
$ |
4,803 |
|
|
Net income
attributable to limited partners per common unit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.05 |
|
|
$ |
0.11 |
|
|
$ |
0.33 |
|
|
$ |
0.11 |
|
|
Diluted |
$ |
0.05 |
|
|
$ |
0.11 |
|
|
$ |
0.33 |
|
|
$ |
0.11 |
|
|
Weighted average
number of limited partner common units outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
43,812 |
|
|
|
43,197 |
|
|
|
43,756 |
|
|
|
43,197 |
|
|
Diluted |
|
43,812 |
|
|
|
44,340 |
|
|
|
43,756 |
|
|
|
44,340 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rattler
Midstream LP |
Consolidated
Statements of Cash Flows |
(unaudited,
in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
Net income |
|
|
|
|
|
|
|
|
$ |
67,050 |
|
|
$ |
86,035 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for deferred income taxes |
|
|
|
|
|
|
|
|
|
4,903 |
|
|
|
19,556 |
|
|
Depreciation, amortization and accretion |
|
|
|
|
|
|
|
|
|
24,606 |
|
|
|
20,062 |
|
|
Loss (gain) on disposal of property, plant and equipment |
|
|
|
|
|
|
|
|
|
2,781 |
|
|
|
(4 |
) |
|
Unit-based compensation expense |
|
|
|
|
|
|
|
|
|
4,339 |
|
|
|
831 |
|
|
Loss from equity method investments |
|
|
|
|
|
|
|
|
|
13,279 |
|
|
|
64 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable—related party |
|
|
|
|
|
|
|
|
|
28,166 |
|
|
|
(15,439 |
) |
|
Accounts receivable—third party |
|
|
|
|
|
|
|
|
|
130 |
|
|
|
173 |
|
|
Accounts payable, accrued liabilities and taxes payable |
|
|
|
|
|
|
|
|
|
(18,787 |
) |
|
|
44,842 |
|
|
Other |
|
|
|
|
|
|
|
|
|
5,397 |
|
|
|
(16,723 |
) |
|
Net cash provided by operating
activities |
|
|
|
|
|
|
|
|
|
131,864 |
|
|
|
139,397 |
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
|
|
|
|
|
|
|
(91,587 |
) |
|
|
(102,935 |
) |
|
Contributions to equity method investments |
|
|
|
|
|
|
|
|
|
(66,032 |
) |
|
|
(37,420 |
) |
|
Distributions from equity method investments |
|
|
|
|
|
|
|
|
|
17,870 |
|
|
|
— |
|
|
Proceeds from the sale of fixed assets |
|
|
|
|
|
|
|
|
|
42 |
|
|
|
18 |
|
|
Net cash used in investing
activities |
|
|
|
|
|
|
|
|
|
(139,707 |
) |
|
|
(140,337 |
) |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings from credit facility |
|
|
|
|
|
|
|
|
|
99,000 |
|
|
|
10,000 |
|
|
Payments on credit facility |
|
|
|
|
|
|
|
|
|
— |
|
|
|
(9,000 |
) |
|
Distribution equivalent rights |
|
|
|
|
|
|
|
|
|
(1,296 |
) |
|
|
— |
|
|
Net proceeds from initial public offering—public |
|
|
|
|
|
|
|
|
|
— |
|
|
|
719,627 |
|
|
Net proceeds from initial public offering—General Partner |
|
|
|
|
|
|
|
|
|
— |
|
|
|
1,000 |
|
|
Net proceeds from initial public offering—Diamondback |
|
|
|
|
|
|
|
|
|
— |
|
|
|
999 |
|
|
Units repurchased for tax withholding |
|
|
|
|
|
|
|
|
|
(1,365 |
) |
|
|
— |
|
|
Distribution to General Partner |
|
|
|
|
|
|
|
|
|
(40 |
) |
|
|
— |
|
|
Distribution to public |
|
|
|
|
|
|
|
|
|
(25,346 |
) |
|
|
— |
|
|
Distribution to Diamondback |
|
|
|
|
|
|
|
|
|
(62,573 |
) |
|
|
(726,513 |
) |
|
Net cash provided by (used in)
financing activities |
|
|
|
|
|
|
|
|
|
8,380 |
|
|
|
(3,887 |
) |
|
Net increase
(decrease) in cash |
|
|
|
|
|
|
|
|
|
537 |
|
|
|
(4,827 |
) |
|
Cash at beginning of period |
|
|
|
|
|
|
|
|
|
10,633 |
|
|
|
8,564 |
|
|
Cash at end of period |
|
|
|
|
|
|
|
|
$ |
11,170 |
|
|
$ |
3,737 |
|
|
Supplemental
disclosure of non-cash financing activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions from Diamondback |
|
|
|
|
|
|
|
|
$ |
— |
|
|
$ |
456,055 |
|
|
Supplemental
disclosure of non-cash investing activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in long term assets and inventory due to contributions
from Diamondback |
|
|
|
|
|
|
$ |
— |
|
|
$ |
456,055 |
|
|
Accounts payable related to capital expenditures |
|
|
|
|
|
|
|
|
$ |
57,357 |
|
|
$ |
68,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rattler Midstream LP |
|
Pipeline Infrastructure Assets |
|
|
(unaudited, in miles) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2020 |
|
(miles)(a) |
|
|
|
|
|
Delaware Basin |
|
Midland Basin |
|
|
|
Permian Total |
|
|
Crude oil |
|
|
|
|
|
108 |
|
44 |
|
|
|
152 |
|
|
Natural gas |
|
|
|
|
|
151 |
|
— |
|
|
|
151 |
|
|
Produced water |
|
|
|
|
|
266 |
|
237 |
|
|
|
503 |
|
|
Sourced water |
|
|
|
|
|
27 |
|
74 |
|
|
|
101 |
|
|
Total |
|
|
|
|
|
552 |
|
355 |
|
|
|
907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Does not include any assets of the
EPIC, Gray Oak, Wink to Webster, Amarillo Rattler or OMOG joint
ventures.
Rattler Midstream LP |
Capacity/Capability |
(unaudited) |
|
|
|
|
|
|
|
|
|
As of June 30, 2020 |
(capacity/capability)(a) |
Delaware Basin |
|
Midland Basin |
|
Permian Total |
|
Utilization |
Crude oil gathering
(Bbl/d) |
180,000 |
|
|
56,000 |
|
|
236,000 |
|
|
39 |
% |
Natural gas compression
(Mcf/d) |
135,000 |
|
|
— |
|
|
135,000 |
|
|
59 |
% |
Natural gas gathering
(Mcf/d) |
150,000 |
|
|
— |
|
|
150,000 |
|
|
53 |
% |
Produced water gathering and
disposal (Bbl/d) |
1,481,500 |
|
|
1,842,300 |
|
|
3,323,800 |
|
|
23 |
% |
Sourced water (Bbl/d) |
120,000 |
|
|
455,000 |
|
|
575,000 |
|
|
14 |
% |
(a) Does not include any assets of the
EPIC, Gray Oak, Wink to Webster, Amarillo Rattler or OMOG joint
ventures.
Rattler Midstream LP |
Throughput and Volumes |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(throughput)(a) |
2020 |
|
2019 |
|
2020 |
|
2019 |
Crude oil gathering volumes
(Bbl/d) |
91,256 |
|
|
78,066 |
|
|
94,275 |
|
|
76,326 |
|
Natural gas gathering volumes
(MMBtu/d) |
107,502 |
|
|
84,426 |
|
|
112,631 |
|
|
72,546 |
|
Produced water gathering and
disposal volumes (Bbl/d) |
771,337 |
|
|
770,091 |
|
|
856,483 |
|
|
740,807 |
|
Sourced water gathering
volumes (Bbl/d) |
78,059 |
|
|
447,823 |
|
|
262,386 |
|
|
400,476 |
|
(a) Does not include any volumes of the
EPIC, Gray Oak, Wink to Webster, Amarillo Rattler or OMOG joint
ventures.NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA is a supplemental non-GAAP
financial measure used by management and external users of its
financial statements, such as industry analysts, investors, lenders
and rating agencies. Management believes Adjusted EBITDA is
useful because the measure allows it to more effectively evaluate
the Company's operating performance and compare the results of its
operations period to period without regard to its financing methods
or capital structure.
The Company defines Adjusted EBITDA as net
income before income taxes, interest expense, net of amount
capitalized, its proportional impairment related to equity method
investments, non-cash unit-based compensation expense,
depreciation, amortization and accretion on assets and liabilities
of Rattler Midstream Operating LLC, its proportional interest of
depreciation and interest on its equity method investments and
other non-cash transactions. Adjusted EBITDA should not be
considered an alternative to net income or any other measure of
financial performance or liquidity presented in accordance with
generally accepted accounting principles in the United States
("GAAP"). The GAAP measure most directly comparable to
Adjusted EBITDA is net income. Adjusted EBITDA excludes some,
but not all, items that affect net income, and these measures may
vary from those of other companies. As a result, Adjusted
EBITDA as presented below may not be comparable to similarly titled
measures of other companies.
The Company does not provide guidance on the
reconciling items between forecasted Net Income and forecasted
Adjusted EBITDA due to the uncertainty regarding timing and
estimates of these items. Rattler provides a range for the
forecasts of Net Income and Adjusted EBITDA to allow for the
variability in timing and uncertainty of estimates of reconciling
items between forecasted Net Income and forecasted Adjusted EBITDA.
Therefore, the Company cannot reconcile forecasted Net Income to
forecasted Adjusted EBITDA without unreasonable effort.
The following table presents a reconciliation of
Adjusted EBITDA to net income, the most directly comparable GAAP
financial measure for each of the periods indicated:
Rattler Midstream LP |
Adjusted EBITDA |
(unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Reconciliation of Net
Income to Adjusted EBITDA: |
|
|
|
|
|
|
|
Net income |
$ |
12,462 |
|
|
$ |
46,679 |
|
|
$ |
67,050 |
|
|
$ |
86,035 |
|
Interest expense, net of amount capitalized |
1,926 |
|
|
85 |
|
|
4,547 |
|
|
85 |
|
Depreciation, amortization and accretion |
12,100 |
|
|
10,158 |
|
|
24,606 |
|
|
20,062 |
|
Depreciation and interest expense related to equity method
investments |
7,244 |
|
|
149 |
|
|
11,010 |
|
|
149 |
|
Impairment related to equity method investments |
15,839 |
|
|
— |
|
|
15,839 |
|
|
— |
|
Non-cash unit-based compensation expense |
2,120 |
|
|
831 |
|
|
4,339 |
|
|
831 |
|
Other non-cash transactions |
1,105 |
|
|
— |
|
|
2,565 |
|
|
— |
|
Provision for income taxes |
1,083 |
|
|
8,724 |
|
|
4,903 |
|
|
19,556 |
|
Adjusted
EBITDA |
53,879 |
|
|
|
66,626 |
|
|
134,859 |
|
|
|
126,718 |
|
Less: Adjusted EBITDA prior to
the IPO |
— |
|
|
40,651 |
|
|
— |
|
|
100,743 |
|
Adjusted EBITDA
subsequent to the IPO |
53,879 |
|
|
25,975 |
|
|
134,859 |
|
|
25,975 |
|
Less: Adjusted EBITDA
attributable to non-controlling interest |
38,288 |
|
|
18,483 |
|
|
95,912 |
|
|
18,483 |
|
Adjusted EBITDA
attributable to Rattler Midstream LP |
$ |
15,591 |
|
|
$ |
7,492 |
|
|
$ |
38,947 |
|
|
$ |
7,492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income is a non-GAAP financial
measure equal to net income adjusted for impairment related to
equity method investments and related income tax adjustments. The
Partnership's computation of adjusted net income may not be
comparable to other similarly titled measures of other companies or
to such measure in our credit facility or any of our other
contracts.
Rattler Midstream LP |
Adjusted Net Income |
(unaudited, in thousands, except per unit
data) |
|
|
|
Three MonthsEnded June 30,
2020 |
|
Pre-TaxAmounts |
Net income |
$ |
12,462 |
|
|
Impairment related to equity
method investments |
15,839 |
|
|
Adjusted income excluding
above items |
28,301 |
|
|
Income tax adjustment for
above items |
(367 |
) |
|
Adjusted net
income(1) |
27,934 |
|
|
Less: Adjusted net income
attributable to non-controlling interest |
20,889 |
|
|
Adjusted net income
attributable to Rattler Midstream LP |
$ |
7,045 |
|
|
|
|
Adjusted net income
attributable to limited partners per common unit |
$ |
0.15 |
|
|
(1) Adjusted net income was equal to net income for the three
months ended March 31, 2020 and three months ended June 30,
2019.
Investor Contact:Adam Lawlis+1
432.221.7467IR@rattlermidstream.com Source: Rattler Midstream LP;
Diamondback Energy, Inc.
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