EX-99.1 2 a05-20320_3ex99d1.htm PRESS RELEASE

Exhibit 99.1

 

 

MarkWest Hydrocarbon, Inc.

 

 

Contact:

Frank Semple, President and CEO

155 Inverness Drive West, Suite 200

 

 

 

James Ivey, CFO

Englewood, CO 80112-5000

 

 

 

Andy Schroeder, VP of Finance/Treasurer

(800) 730-8388

 

 

Phone:

(303) 290-8700

(303) 290-8700

 

 

E-mail:

investorrelations@markwest.com

(303) 290-8769 Fax

 

 

Website:

www.markwest.com

 

MarkWest Hydrocarbon Reports 2005 First Quarter Results

 

DENVER—December 9, 2005—MarkWest Hydrocarbon, Inc. (AMEX: MWP) (the “Company”) today reported net income for the three months ended March 31, 2005 of $1.5 million, or $0.14 per diluted share, compared to net income of $0.7 million, or $0.07 per diluted share, for the first quarter of 2004.

 

The Company reported income from operations increased $6.1 million reporting $9.4 million for the three months ended March 31, 2005, compared to $3.3 million for the first quarter of 2004.  $1.3 million of this increase is attributable to MarkWest Hydrocarbon Standalone operations.  Equity NGL product sales margins contributed $1.8 million of this improvement and the non-recurrence of crude oil hedging losses contributed approximately $2.9 million to this improvement compared to same period in the prior year. These amounts were offset by a $1.0 million increase in selling, general and administrative expense, and a $2.2 million mark-to-market increase in the long-term shrink purchase obligation.  The majority of the increase in selling, general and administrative expense is due to non-cash compensation expense associated with the Company’s GP Participation Plan and Stock Incentive Plan.  The long-term shrink purchase obligation is also a non-cash expense. Income from operations at MarkWest Energy Partners increased by $4.8 million, primarily due to the East Texas acquisition it made in the third quarter of 2004.

 

A key element of the MarkWest Hydrocarbon Standalone activity is the distributions it receives on its ownership interest in MarkWest Energy Partners, L.P., which consists of approximately 2.5 million limited partner units, its 2% general partner interest and its incentive distribution rights. MarkWest Hydrocarbon received $2.95 million in distributions in the first quarter of 2005, which represents a significant increase over the $1.93 million received in the first quarter of 2004.

 

In May 2005, the Company paid a dividend for the quarter ended March 31, 2005 of $0.10 per share of its common stock held by the common stockholders.  This represented a $0.025 per share increase over the previous quarter’s dividend.  The indicated annual rate is $0.40 per share.

 

“Our strong first quarter results reflect the continued focus on improving our NGL marketing business and growing MarkWest Energy Partners,” said Frank Semple, President and CEO.  “MarkWest Energy Partners continues to identify and execute on growth opportunities, which will continue to positively impact results for 2005 and well into the future.  The East

 


 

Texas Carthage processing plant is on schedule for start-up in January 2006 and a number of internal growth projects in the Southwest business unit are being developed.  We are also excited about MarkWest Energy Partners’ recently announced acquisition of the Javelina facilities in Corpus Christi, Texas, which closed on November 1, 2005.  We anticipate the Javelina facility will contribute significant earnings in 2006 and beyond.”

 

The Company will host a conference call on Tuesday, December 13, 2005, at 2:00 P.M. MST to review it first quarter 2005 earnings.  Interested parties can participate in the call by dialing the following number approximately ten minutes prior to the scheduled start time: 1-800-257-6607.  A replay of the call will be available through December 20, 2005 by dialing     1-800-405-2236 and entering the following passcode: 11048394#.  To access the webcast, please visit our website at www.markwest.com.

 

###

 

MarkWest Hydrocarbon, Inc. (AMEX: MWP) controls and operates MarkWest Energy Partners, L.P. (AMEX: MWE), a publicly traded limited partnership engaged in the gathering, processing and transmission of natural gas; the transportation, fractionation and storage of natural gas liquids; and the gathering and transportation of crude oil. We also market natural gas and NGLs.

 

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect our operations, financial performance and other factors as discussed in our filings with the Securities and Exchange Commission. Among the factors that could cause results to differ materially are those risks discussed in our Form 10-K for the year ended December 31, 2004, as filed with the SEC.

 


 

MarkWest Hydrocarbon, Inc.

Statement of Operations

(in thousands of dollars except per share amounts)

 

 

 

Three Months
Ended
March 31, 2005

 

Three Months
Ended
March 31, 2004

 

Statement of Operations Data

 

 

 

 

 

Revenues

 

$

138,353

 

$

93,700

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Purchased product costs

 

104,699

 

75,488

 

Facility expenses

 

9,260

 

6,086

 

Selling, general and administrative expenses

 

8,102

 

5,314

 

Depreciation, amortization and accretion

 

6,846

 

3,562

 

Total operating expenses

 

128,907

 

90,450

 

 

 

 

 

 

 

Income from operations

 

9,446

 

3,250

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

249

 

135

 

Interest expense

 

(3,704

)

(1,130

)

Amortization of deferred financing costs

 

(536

)

(307

)

Dividend income

 

92

 

—

 

Other income

 

87

 

25

 

 

 

 

 

 

 

Income before non-controlling interest in net income of consolidated subsidiary and income taxes

 

5,634

 

1,973

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

770

 

(56

)

 

 

 

 

 

 

Non-controlling interest in net income of consolidated subsidiary

 

(3,325

)

(1,309

)

 

 

 

 

 

 

Net income

 

$

1,539

 

$

720

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

Basic

 

$

0.14

 

$

0.07

 

Diluted

 

$

0.14

 

$

0.07

 

Weighted average number of outstanding shares of common stock:

 

 

 

 

 

Basic

 

10,766

 

10,577

 

Diluted

 

10,917

 

10,595

 

 


 

MarkWest Hydrocarbon, Inc.

Income (Loss) from Operations

(in thousands of dollars)

 

 

 

MarkWest
Hydrocarbon
Standalone

 

MarkWest
Energy Partners,
L.P.

 

Eliminating
Entries

 

Total

 

Three Months Ended March 31, 2005

 

 

 

 

 

 

 

 

 

Revenues

 

$

64,521

 

$

89,637

 

$

(15,805

)

$

138,353

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Purchased product costs

 

53,821

 

60,785

 

(9,907

)

104,699

 

Facility expenses

 

5,827

 

9,331

 

(5,898

)

9,260

 

Selling, general and administrative expenses

 

3,463

 

4,639

 

—

 

8,102

 

Depreciation, amortization and accretion

 

415

 

6,431

 

—

 

6,846

 

Total operating expenses

 

63,526

 

81,186

 

(15,805

)

128,907

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

995

 

$

8,451

 

$

—

 

$

9,446

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2004

 

 

 

 

 

 

 

 

 

Revenues

 

$

44,392

 

$

63,825

 

$

(14,517

)

$

93,700

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Purchased product costs

 

35,851

 

47,853

 

(8,216

)

75,488

 

Facility expenses

 

6,097

 

6,290

 

(6,301

)

6,086

 

Selling, general and administrative expenses

 

2,416

 

2,898

 

—

 

5,314

 

Depreciation, amortization and accretion

 

383

 

3,179

 

—

 

3,562

 

Total operating expenses

 

44,747

 

60,220

 

(14,517

)

90,450

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

(355

)

$

3,605

 

$

—

 

$

3,250

 

 

MarkWest Hydrocarbon, Inc.

Financial Statistics

(in thousands)

 

 

 

Hydrocarbon
Standalone

 

MarkWest
Energy
Partners, L.P.

 

Eliminating
Entries

 

Total

 

 

 

(in thousands)

 

March 31, 2005

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

21,364

 

$

15,184

 

$

—

 

$

36,548

 

Marketable securities

 

20,544

 

—

 

—

 

20,544

 

Current assets

 

64,915

 

51,231

 

—

 

116,146

 

Current liabilities

 

17,840

 

54,611

 

—

 

72,451

 

Total assets

 

70,541

 

557,828

 

—

 

628,369

 

Total debt

 

—

 

265,000

 

—

 

265,000

 

 

 

 

 

 

 

 

 

 

 

March 31, 2004

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash

 

$

37,899

 

$

11,216

 

$

—

 

$

49,115

 

Marketable securities

 

4,430

 

—

 

—

 

4,430

 

Current assets

 

55,920

 

27,610

 

—

 

83,530

 

Current liabilities

 

14,360

 

23,512

 

—

 

37,872

 

Total assets

 

59,759

 

214,992

 

—

 

274,751

 

Total debt

 

—

 

84,200

 

—

 

84,200

 

 


 

MarkWest Hydrocarbon, Inc.

Operating Statistics

 

 

 

Three Months Ended March 31,

 

 

 

2005

 

2004

 

% Change

 

 

 

 

 

 

 

 

 

Hydrocarbon Standalone

 

 

 

 

 

 

 

Marketing:

 

 

 

 

 

 

 

NGL product sales (gallons) (1)

 

52,164,000

 

51,525,000

 

1

%

 

 

 

 

 

 

 

 

Wholesale:

 

 

 

 

 

 

 

NGL product sales (gallons) (2)

 

19,672,332

 

888,665

 

2,114

%

 

 

 

 

 

 

 

 

MarkWest Energy Partners

 

 

 

 

 

 

 

Southwest:

 

 

 

 

 

 

 

East Texas (3)

 

 

 

 

 

 

 

Gathering system throughput (Mcf/d)

 

287,000

 

NA

 

NA

 

NGL product sales

 

27,612,000

 

NA

 

NA

 

Oklahoma

 

 

 

 

 

 

 

Foss Lake gathering system throughput (Mcf/d)

 

67,000

 

55,000

 

22

%

Arapaho NGL product sales (gallons)

 

15,217,000

 

10,459,000

 

45

%

Other

 

 

 

 

 

 

 

Appleby gathering system throughput (Mcf/d)

 

28,000

 

24,000

 

17

%

Other gathering systems throughput (Mcf/d)

 

17,000

 

18,000

 

(6

)%

Lateral throughput (Mcf/d) (4)

 

52,000

 

61,000

 

(15

)%

 

 

 

 

 

 

 

 

Appalachia:

 

 

 

 

 

 

 

Natural gas processed for a fee (Mcf/d) (5)

 

210,000

 

207,000

 

1

%

NGLs fractionated for a fee (Gal/d)

 

462,000

 

462,000

 

0

%

NGL product sales (gallons)

 

10,765,000

 

10,926,000

 

(1

)%

 

 

 

 

 

 

 

 

Michigan:

 

 

 

 

 

 

 

Natural gas volumes transported (Mcf/d)

 

6,900

 

13,900

 

(50

)%

NGL product sales (gallons)

 

1,563,000

 

2,714,000

 

(42

)%

Crude oil transported (Bbl/d)

 

14,100

 

14,600

 

(3

)%

 

Footnotes:

NA – Not applicable

(1)     Represents sales at the Siloam fractionator.

(2)     Represents sales from our wholesale business.  Volumes are from the period since the Company started the line of business in February 2004.

(3)     We acquired our East Texas System in late July 2004. Volumes are for the period of time since acquiring the facility.

(4)     We acquired our Lubbock pipeline (a/k/a the Power-Tex lateral pipeline) in September 2003 and our Hobbs Lateral pipeline in April 2004.  The Lubbock and Hobbs pipelines are the only laterals we own that produce revenue on a per-unit-of-throughput basis.  We receive a flat fee from our other lateral pipelines and consequently, the throughput data from these lateral pipelines is excluded from this statistic.

(5)     Includes throughput from the Kenova, Cobb and Boldman processing plants.