EX-99.1 2 d616783dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

         LOGO     

News Release

 

Three Radnor Corporate Center, Suite 301

100 Matsonford Road

Radnor, PA 19087

    

 

 

FOR IMMEDIATE RELEASE

PVR PARTNERS ANNOUNCES THIRD QUARTER 2013 RESULTS

AND DECLARES CASH DISTRIBUTION

RADNOR, PA - October 24, 2013 … PVR Partners, L.P. (NYSE: PVR) (“PVR”) today reported financial and operational results for the three months ended September 30, 2013. In addition, PVR declared a quarterly distribution of $0.55 per unit.

Third Quarter Results

Third quarter 2013 highlights and results, with comparisons to results for the third quarter of 2012 (“last year”) and the second quarter of 2013 (“last quarter”), included the following:

 

  •   Adjusted EBITDA of $79.9 million as compared to $61.2 million last year and $76.1 million last quarter.

 

  •   Distributable Cash Flow (“DCF”) of $49.5 million as compared to $36.6 million last year and $49.0 million last quarter.

 

  •   Average daily natural gas throughput volumes of 1.8 billion cubic feet per day (“Bcfd”) as compared with 1.0 Bcfd last year and 1.7 Bcfd last quarter.

In addition, on August 19 PVR sold its 25% membership interest in Thunder Creek Gas Services, L.L.C. for $58.6 million which resulted in a reported gain of $14.3 million. The $14.3 million gain is included in Other Revenue and has been subtracted from the calculation of Adjusted EBITDA and DCF.

Adjusted EBITDA and DCF are not Generally Accepted Accounting Principles (“GAAP”) measures. Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow.

Quarterly Distribution

The Board of Directors of PVR GP, LLC, the general partner of PVR, declared a quarterly distribution of $0.55 per unit payable in cash on November 13, 2013 to common unitholders of record at the close of business on November 6, 2013. This distribution equates to an annualized rate of $2.20 per unit, which is unchanged from the distribution paid with respect to the second quarter of 2013 and represents a 1.9% increase over the distribution paid with respect to the third quarter of 2012.

Management Comment

“We are pleased with our third quarter results” said Bill Shea, President and CEO of PVR’s general partner. “The Eastern Midstream Segment continues to show progress in volumes over last year and last quarter and we expect that progress to continue. Our Midcontinent Midstream Segment benefitted from an improved commodity pricing environment, and our Coal and Natural Resource Management Segment has performed in-line with our expectations.”

PVR Reports Third Quarter 2013 Results    Page 2

 

Eastern Midstream Segment Results

The Eastern Midstream Segment reported third quarter 2013 results, with comparisons to third quarter 2012 results and the second quarter of 2013, as follows:

 

  •   Adjusted EBITDA of $43.5 million as compared to $21.4 million last year and $38.1 million last quarter, primarily due to the continued development of internal growth projects and the acquisition of Chief Gathering LLC.

 

  •   Quarterly average throughput volumes of 1.4 Bcfd as compared to 0.6 Bcfd last year and 1.3 Bcfd last quarter, reflecting growth on PVR’s existing systems, as well as the acquisition and expansion of the Chief Gathering systems.

Midcontinent Midstream Segment Results

The Midcontinent Midstream Segment reported third quarter 2013 results, with comparisons to third quarter 2012 results and the second quarter of 2013, as follows:

 

  •   Adjusted EBITDA of $17.1 million as compared to $13.0 million last year and $14.9 million last quarter.

 

  •   Quarterly average throughput volumes of 381 MMcfd as compared to 410 MMcfd last year and 382 MMcfd last quarter.

Coal and Natural Resource Management Segment Results

The Coal and Natural Resource Management Segment reported third quarter 2013 results, with comparisons to third quarter 2012 results and the second quarter of 2013, as follows:

 

  •   Adjusted EBITDA of $19.3 million as compared to $26.8 million last year and $23.1 million last quarter. The year-over-year decline was primarily due to decreased coal production and pricing.

 

  •   Coal royalty tons of 5.7 million tons as compared to 7.7 million tons last year and 6.9 million tons last quarter.

 

  •   Coal royalties revenue of $20.8 million, or $3.66 per ton, as compared to $28.8 million, or $3.73 per ton last year and $23.2 million or $3.37 per ton last quarter.

Capital Investment and Resources

We invested $76.9 million on internal growth projects in our midstream businesses during the third quarter of 2013, of which $64.8 million was invested in the Eastern Midstream Segment.

In September PVR closed on a public offering of 5.5 million common units. The terms of the offering granted the underwriter the option to purchase a maximum of 825,000 additional common units. On October 16th, the underwriter purchased 600,000 units available under that option. Net proceeds from the offering, including the option exercised, totaled approximately $138.1 million and were used to repay a portion of the borrowings outstanding under PVR’s $1.0 billion revolving credit facility. As of September 30, 2013, we had borrowings of $332.5 million under our revolving credit facility.

PVR Reports Third Quarter 2013 Results    Page 3

 

Expansion Projects Update

The development and build-out of important growth projects in the Marcellus, Utica, Cline and Mississippian Lime continued during the third quarter of 2013.

 

•   As previously announced, PVR executed a definitive agreement with Hess Corporation to provide trunkline, gathering and compression services in the Utica Shale.

 

•   Two new compressor facilities in the Eastern Midstream Segment were completed and began operation. These facilities will help maintain volumes of PVR’s Susquehanna/Wyoming gathering system and increase the injection capacity into the Tennessee Gas Pipeline.

 

•   An additional phase of the Lycoming gathering system, for which Inflection Energy is the primary shipper, was completed and began service.

 

•   The PVR/Aqua joint venture water system put a new water truck loading facility into service, which will significantly expand the service territory reach for the water service to natural gas producers.

 

•   The Eastern Midstream Segment connected 25 wells during the third quarter for a total of 68 for the nine months ending September 30th. PVR currently anticipates connecting an additional 36 wells during the fourth quarter.

 

•   An additional 39 new wells were connected in the Midcontinent Midstream Segment during the third quarter for a total of 144 for the nine months ending September 30th.

Third Quarter 2013 Financial and Operational Results Conference Call

A conference call and webcast, during which management will discuss third quarter 2013 financial and operational results, is scheduled for Thursday, October 24, 2013 at 11:00 a.m. Eastern Daylight Time. Prepared remarks by members of company management will be followed by a question and answer period. Interested parties may listen via webcast at http://www.videonewswire.com/event.asp?id=96084 or by logging on using the link posted on our website, www.pvrpartners.com. Participants who would like to ask questions may join the conference via phone by dialing 800-860-2442 (international 412-858-4600) five to ten minutes before the scheduled start of the conference call (reference the PVR Partners call). An on-demand replay of the webcast will be available on our website shortly after the conclusion of the call. A telephonic replay of the call will be available through October 30 by dialing 877-344-7529 (international: 412-317-0088) and using conference playback number 10034216.

******

PVR Partners, L.P. (NYSE: PVR) is a publicly traded limited partnership which owns and operates a network of natural gas midstream pipelines and processing plants, and owns and manages coal and natural resource properties. Our midstream assets, located principally in Texas, Oklahoma and Pennsylvania, provide gathering, transportation, compression, processing, dehydration and related services to natural gas producers. Our coal and natural resource properties, located in the Appalachian, Illinois and San Juan basins, are leased to experienced operators in exchange for royalty payments. More information about PVR is available on our website at www.pvrpartners.com.

******

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of the Partnership’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

PVR Reports Third Quarter 2013 Results    Page 4

 

******

This press release includes “forward-looking statements” within the meaning of federal securities laws. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Partnership’s ability to control or predict, which could cause results to differ materially from those expected by management. Such risks and uncertainties include, but are not limited to, regulatory, economic and market conditions, our ability to complete the proposed merger with Regency Energy Partners L.P., the timing and success of business development efforts and other uncertainties. Additional information concerning these and other factors can be found in our press releases and public periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2012 and most recently filed Quarterly Reports on Form 10-Q. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

Contact:    Stephen R. Milbourne
   Director - Investor Relations
   Phone: 610-975-8204
   E-Mail: invest@pvrpartners.com

PVR PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - unaudited

(in thousands, except per unit data)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

Revenues

     

Natural gas

    $ 92,005      $ 78,026      $ 282,830      $ 215,780   

Natural gas liquids

      104,585        96,237        298,563        316,161   

Gathering fees

      24,673        15,482        73,475        34,094   

Trunkline fees

      27,389        11,747        70,143        28,394   

Coal royalties

      20,816        28,760        66,990        91,150   

Gain on sale of assets

      —          31,292        —          31,292   

Other

      19,496        7,303        33,839        21,305   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      288,964        268,847        825,840        738,176   
  

 

 

    

 

 

    

 

 

    

 

 

  

Expenses

         

Cost of gas purchased

      163,824        147,246        489,106        453,543   

Operating

      17,506        17,587        50,026        47,530   

General and administrative

      13,402        11,531        40,359        34,574   

Acquisition related costs

      —          —          —          14,049   

Impairments

      —          —          —          124,845   

Depreciation, depletion and amortization

      47,133        31,992        138,032        84,301   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total expenses

      241,865        208,356        717,523        758,842   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating income

      47,099        60,491        108,317        (20,666 ) 

Other income (expense)

         

Interest expense

      (28,358 )      (20,288 )      (78,362 )      (45,616 ) 

Derivatives

      (965 )      (1,524 )      (560 )      2,201   

Interest income and other

      112        104        1,238        329   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

    $ 17,888      $ 38,783      $ 30,633      $ (63,752 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Earnings (loss) per common unit, basic and diluted

    $ (0.09 )    $ 0.16      $ (0.47 )    $ (1.14 ) 

Weighted average number of common units outstanding, basic and diluted

      96,983        88,366        96,283        83,834   

Weighted average number of Class B units outstanding

      23,621        21,620        23,129        10,770   

Weighted average number of Special units outstanding

      10,346        10,346        10,346        5,173   

Other data by segment:

         

Eastern Midstream:

         

Gathered volumes (MMcfd)

      622        444        606        330   

Trunkline volumes (MMcfd) (1)

      804        169        716        127   

Midcontinent Midstream:

         

Daily throughput volumes (MMcfd)

      381        410        385        435   

Coal and Natural Resource Management:

         

Coal royalty tons (in thousands)

      5,684        7,703        19,023        23,584   

 

(1) Trunkline volumes include a significant portion of gathered volumes.

PVR PARTNERS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited

(in thousands)

 

     September 30,      December 31,  
     2013      2012  

Assets

      

Cash and cash equivalents

    $ 7,901       $ 14,713   

Accounts receivable

      136,279         133,546   

Assets held for sale

      —           11,450   

Derivative assets

      229         —     

Other current assets

      5,127         5,446   
  

 

 

     

 

 

  

Total current assets

      149,536         165,155   

Property, plant and equipment, net

      2,166,092         1,989,346   

Other long-term assets

      784,652         844,208   
  

 

 

     

 

 

  

Total assets

    $ 3,100,280       $ 2,998,709   
  

 

 

     

 

 

  

Liabilities and Partners’ Capital

      

Accounts payable and accrued liabilities

    $ 159,225       $ 197,034   

Deferred income

      5,886         3,788   

Derivative liabilities

      691         —     
  

 

 

     

 

 

  

Total current liabilities

      165,802         200,822   

Other long-term liabilities

      30,976         35,468   

Senior notes

      1,300,000         900,000   

Revolving credit facility

      332,500         590,000   

Partners’ capital

      1,271,002         1,272,419   
  

 

 

     

 

 

  

Total liabilities and partners’ capital

    $ 3,100,280       $ 2,998,709   
  

 

 

     

 

 

  

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited

(in thousands)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2013     2012     2013     2012  

Cash flows from operating activities

     

Net income (loss)

    $ 17,888      $ 38,783      $ 30,633      $ (63,752 ) 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

         

Gain on sale of assets

      (14,302 )      (31,292 )      (14,302 )      (31,292 ) 

Depreciation, depletion and amortization

      47,133        31,992        138,032        84,301   

Impairments

      —          —          —          124,845   

Commodity derivative contracts:

         

Total derivative losses (gains) included in net income

      965        1,524        560        (2,201 ) 

Cash receipts (payments) to settle derivatives for the period

      (123 )      (1,332 )      (313 )      (8,578 ) 

Non-cash interest expense

      1,917        1,589        5,399        4,217   

Non-cash unit-based compensation

      1,248        1,086        3,356        4,643   

Equity earnings, net of distributions received

      1,961        697        5,635        142   

Other

      (291 )      (231 )      (3,359 )      (929 ) 

Changes in operating assets and liabilities

      17,695        23,334        13,472        23,396   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net cash provided by operating activities

      74,091        66,150        179,113        134,792   
  

 

 

    

 

 

    

 

 

    

 

 

  

Cash flows from investing activities

         

Acquisitions

      —          787        (2,334 )      (850,156 ) 

Additions to property, plant and equipment

      (84,754 )      (173,455 )      (344,103 )      (348,449 ) 

Joint venture capital contributions

      (500 )      (10,200 )      (10,700 )      (21,900 ) 

Proceeds from sale of assets

      58,628        62,271        70,592        62,271   

Other

      246        268        2,118        908   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net cash used in investing activities

      (26,380 )      (120,329 )      (284,427 )      (1,157,326 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Cash flows from financing activities

         

Distributions to partners

      (52,781 )      (46,833 )      (158,302 )      (128,516 ) 

Net proceeds (costs) from equity offering

      124,643        (219 )      124,643        577,743   

Proceeds from issuance of senior notes

      —          —          400,000        600,000   

Repayments (proceeds) from borrowings, net

      (125,000 )      103,000        (257,500 )      (6,000 ) 

Cash paid for debt issuance costs

      (158 )      (617 )      (9,695 )      (19,206 ) 

Other

      (437 )      —          (644 )      —     
  

 

 

    

 

 

    

 

 

    

 

 

  

Net cash provided by (used in) financing activities

      (53,733 )      55,331        98,502        1,024,021   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in cash and cash equivalents

      (6,022 )      1,152        (6,812 )      1,487   

Cash and cash equivalents - beginning of period

      13,923        8,975        14,713        8,640   
  

 

 

    

 

 

    

 

 

    

 

 

  

Cash and cash equivalents - end of period

    $ 7,901      $ 10,127      $ 7,901      $ 10,127   
  

 

 

    

 

 

    

 

 

    

 

 

  

PVR PARTNERS, L.P.

CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited

(in thousands)

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2013     2012     2013     2012  

Reconciliation of Non-GAAP “Total Segment Adjusted EBITDA” to GAAP “Net income (loss)”:

         

Segment Adjusted EBITDA (a):

         

Eastern Midstream

    $ 43,515      $ 21,440     $ 119,296      $ 49,060  

Midcontinent Midstream

      17,103        12,994       47,733        38,001  

Coal and Natural Resource Management

      19,312        26,757       65,018        84,176  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total segment adjusted EBITDA

    $ 79,930      $ 61,191     $ 232,047      $ 171,237  

Adjustments to reconcile total Segment Adjusted EBITDA to Net income (loss)

         

Depreciation, depletion and amortization

      (47,133 )      (31,992 )     (138,032 )      (84,301 )

Impairments on PP&E

      —          —          —          (124,845 )

Acquisition related costs

      —          —          —          (14,049 )

Gain on sale of assets

      14,302        31,292       14,302        31,292  

Interest expense

      (28,358 )      (20,288 )     (78,362 )      (45,616 )

Derivatives

      (965 )      (1,524 )     (560 )      2,201  

Other

      112        104       1,238        329  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

    $ 17,888      $ 38,783     $ 30,633      $ (63,752 )
  

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation of GAAP “Net income (loss)” to Non-GAAP “Distributable cash flow”:

         

Net income (loss)

    $ 17,888      $ 38,783     $ 30,633      $ (63,752 )

Depreciation, depletion and amortization

      47,133        31,992       138,032        84,301  

Impairments on PP&E

      —          —          —          124,845  

Acquisition related costs

      —          —          —          14,049  

Gain on sale of assets

      (14,302 )      (31,292 )     (14,302 )      (31,292 )

Derivative contracts:

         

Derivative (gains) losses included in net income

      965        1,524       560        (2,201 )

Cash receipts (payments) to settle derivatives for the period

      (123 )      (1,332 )     (313 )      (8,578 )

Equity earnings from joint ventures, net of distributions

      1,961        697       5,635        142  

Maintenance capital expenditures

      (4,044 )      (3,749 )     (11,858 )      (12,197 )
  

 

 

    

 

 

    

 

 

    

 

 

  

Distributable cash flow (b)

    $ 49,478      $ 36,623     $ 148,387      $ 105,317  
  

 

 

    

 

 

    

 

 

    

 

 

  

Distribution to Partners:

         

Total cash distribution paid during the period

    $ 52,781      $ 46,833     $ 158,302      $ 128,516  
  

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation of GAAP “Net income (loss)” to Non-GAAP “Net income as adjusted”:

         

Net income (loss)

    $ 17,888      $ 38,783     $ 30,633      $ (63,752 )

Impairments on PP&E and equity investments

      —          —          —          124,845  

Acquisition related costs

      —          —          —          14,049  

Gain on sale of assets

      (14,302 )      (31,292 )     (14,302 )      (31,292 )

Adjustments for derivatives:

         

Derivative (gains) losses included in net income

      965        1,524       560        (2,201 )

Cash receipts (payments) to settle derivatives for the period

      (123 )      (1,332 )     (313 )      (8,578 )
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income, as adjusted (c)

    $ 4,428      $ 7,683     $ 16,578      $ 33,071  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(a) Segment Adjusted EBITDA, or earnings before interest, tax and depreciation, depletion and amortization (“DD&A”), represents net income plus DD&A, plus impairments, plus acquisition related costs, minus gain on sale of assets, plus interest expense, plus or minus derivative losses or gains and minus other items included in net income. We believe EBITDA or a version of Adjusted EBITDA is commonly used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the natural gas midstream and coal industries. We use this information for comparative purposes within the industry. Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income.
(b) Distributable cash flow represents net income plus DD&A, plus impairments, plus acquisition related costs, minus gain on sale of assets, plus (minus) derivative losses (gains) included in net income, plus (minus) cash received (paid) for derivative settlements, minus equity earnings in joint ventures, plus cash distributions from joint ventures, minus maintenance capital expenditures. At management’s discretion, a fixed amount of $1.8 million per quarter in 2013 and $1.3 million per quarter in 2012 has been included in maintenance capital for well connects. Distributable cash flow is also the quantitative standard used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of publicly traded partnerships. Distributable cash flow is presented because we believe it is a useful adjunct to net cash provided by operating activities under GAAP. Distributable cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities, as an indicator of cash flows, as a measure of liquidity or as an alternative to net income. For comparative purposes, prior year amounts exclude replacement capital expenditures.
(c) Net income, as adjusted, represents net income adjusted to exclude the effects of non-cash impairment charges, one-time charges related to acquisitions and changes in the fair value of derivatives, minus gain on sale of assets. We believe this presentation is commonly used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the natural gas midstream industry. We use this information for comparative purposes within the industry. Net income, as adjusted, is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income.

PVR PARTNERS, L.P.

QUARTERLY SEGMENT INFORMATION - unaudited

(in thousands)

 

                                                                   
     Eastern Midstream  
     Three Months Ended      Nine Months Ended  
     September 30,      September 30,  
     2013      2012      2013     2012  

Revenues

           

Gathering fees

    $ 24,021       $ 14,012       $ 71,162      $ 28,316   

Trunkline fees

      27,389         11,747         70,143        28,394   

Other

      309         1,041         (251 )      2,687   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total revenues

      51,719         26,800         141,054        59,397   
  

 

 

     

 

 

     

 

 

    

 

 

  

Expenses

           

Operating

      3,190         2,124         8,045        4,211   

General and administrative

      5,014         3,236         13,713        6,126   

Acquisition related costs

      —           —           —          14,049   

Depreciation, depletion and amortization

      25,355         11,867         71,461        22,322   
  

 

 

     

 

 

     

 

 

    

 

 

  

Total expenses

      33,559         17,227         93,219        46,708   
  

 

 

     

 

 

     

 

 

    

 

 

  

Operating income

    $ 18,160       $ 9,573       $ 47,835      $ 12,689   
  

 

 

     

 

 

     

 

 

    

 

 

  

 

                                                                   
     Midcontinent Midstream  
     Three Months Ended      Nine Months Ended  
     September 30,      September 30,  
     2013      2012      2013      2012  

Revenues

            

Natural gas

    $ 92,005       $ 78,026       $ 282,830       $ 215,780   

Natural gas liquids

      104,585         96,237         298,563         316,161   

Gathering fees

      652         1,470         2,313         5,778   

Gain on sale of plant

      —           31,292         —           31,292   

Other

      14,637         497         16,183         2,042   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total revenues

      211,879         207,522         599,889         571,053   
  

 

 

     

 

 

     

 

 

     

 

 

  

Expenses

            

Cost of gas purchased

      163,824         147,246         489,106         453,543   

Operating

      11,591         11,164         32,519         31,642   

General and administrative

      5,059         4,826         16,229         16,575   

Impairments

      —           —           —           124,845   

Depreciation, depletion and amortization

      15,719         11,913         45,679         37,220   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total expenses

      196,193         175,149         583,533         663,825   
  

 

 

     

 

 

     

 

 

     

 

 

  

Operating income (loss)

    $ 15,686       $ 32,373       $ 16,356       $ (92,772 ) 
  

 

 

     

 

 

     

 

 

     

 

 

  

 

                                                                   
     Coal and Natural Resource Management  
     Three Months Ended      Nine Months Ended  
     September 30,      September 30,  
     2013      2012      2013      2012  

Revenues

            

Coal royalties

    $ 20,816       $ 28,760       $ 66,990       $ 91,150   

Coal services

      543         1,953         2,552         4,583   

Timber

      1,350         1,411         4,468         4,284   

Oil and gas royalties

      898         977         2,245         2,165   

Other

      1,759         1,424         8,642         5,544   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total revenues

      25,366         34,525         84,897         107,726   
  

 

 

     

 

 

     

 

 

     

 

 

  

Expenses

            

Operating

      2,725         4,299         9,462         11,677   

General and administrative

      3,329         3,469         10,417         11,873   

Depreciation, depletion and amortization

      6,059         8,212         20,892         24,759   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total expenses

      12,113         15,980         40,771         48,309   
  

 

 

     

 

 

     

 

 

     

 

 

  

Operating income

    $ 13,253       $ 18,545       $ 44,126       $ 59,417   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(1) Includes a $31.3 second quarter gain on sale of plant and a $8.7 million impairment charge related to an equity investment in the fourth quarter of 2012.

PVR PARTNERS, L.P.

DERIVATIVE CONTRACT SUMMARY - unaudited

As of September 30, 2013

 

     Average
Volume Per
Day		     Swap Price  

Crude oil swap (WTI)

      (barrels )      (per barrel ) 

Fourth quarter 2013

      500      $ 94.80   

Natural gas swaps (1)

      (MMBtu )      (per MMBtu ) 

Fourth quarter 2013

      5,500      $ 3.823   

Propane swap - OPIS Conway

      (gallons )      (per gallon ) 

Fourth quarter 2013

      42000      $ 1.00875   

Our exposure profile with respect to commodity prices depends on many factors, including inlet volumes, plant operational efficiencies, contractual terms, and the price relationship between ethane and natural gas.

We anticipate operating our plants in “ethane rejection” for the remainder of 2013. Under this operational mode, we estimate that for every $1.00 per MMBtu change in the natural gas price, our natural gas midstream gross margin and operating income for the remainder of 2013 would change by $4.7 million, excluding the effect of the natural gas hedges described above, and all other factors remaining constant. The natural gas hedges described above would reduce the net impact to $4.2 million.

Similarly, for every $5.00 per barrel change in crude oil prices, with all other factors remaining constant, and excluding the effect of the 2013 crude oil derivative described above, we estimate that our natural gas midstream gross margin and operating income would change by $0.5 million. The crude oil hedge described above would reduce the net impact to $0.2 million.

For every $0.05 per gallon increase in the price of ethane with all other factors remaining constant, we estimate that our gross margin and operating income will decrease by $0.7 million while operating in ethane rejection. Finally, for every $0.05 per gallon increase in the price of other NGLs with all other factors remaining constant, we estimate that our gross margin and operating income will increase by $0.4 million. The propane hedge described above would reduce the net impact to $0.2 million.

 

(1) The natural gas swaps settle against the monthly index price reported in Inside FERC’s Natural Gas Market Report for Southern Star Central Gas Pipeline (Texas, Oklahoma, Kansas), which has historically tended to be settled at a lower price than the Henry Hub national benchmark. A significant portion of our physical gas sales are also priced using this reported monthly index.

PVR PARTNERS, L.P.

OPERATING STATISTICS

($ Amounts in 000s)

 

                                                                   
     Three Months Ended      Nine Months Ended  
     September 30,      September 30,  
     2013      2012      2013      2012  

EASTERN MIDSTREAM

            

Volumes (MMcfd)

            

Lycoming Trunkline

      293         169         323         127   

Wyoming Trunkline

      511         —           393         —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Trunkline Volume

      804         169         716         127   
  

 

 

     

 

 

     

 

 

     

 

 

  

Lycoming Gathering

      248         203         236         144   

Wyoming Gathering

      210         149         197         137   

East Lycoming Gathering

      106         75         115         40   

Bradford Gathering

      50         13         50         7   

Preston Gathering

      —           —           —           —     

Greene Gathering

      8         4         8         2   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Gathering

      622         444         606         330   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Throughput

      1,426         613         1,322         457   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Trunkline Fees

    $ 27,389       $ 11,747       $ 70,143       $ 28,394   

Total Gathering Fees

    $ 24,021       $ 14,012       $ 71,162       $ 28,316   

Trunkline Fees / Mcf

    $ 0.37       $ 0.76       $ 0.36       $ 0.82   

Gathering Fees / Mcf

    $ 0.42       $ 0.34       $ 0.43       $ 0.31   

MIDCONTINENT MIDSTREAM

            

Volumes (MMcfd)

            

Panhandle System

      329         360         332         349   

Crossroads System (1)

      —           —           —           36   

Crescent System

      29         26         29         24   

Hamlin System

      6         6         6         7   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Processing Systems

      364         392         367         416   

Arkoma System

      9         9         9         9   

North Texas System

      8         9         8         10   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Gathering Only Systems

      17         18         18         19   

Total All Systems

      381         410         385         435   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Gathering and Processing Fees, Net (2)

    $ 33,418       $ 28,487       $ 94,600       $ 84,176   

Fees Per Mcf

    $ 0.95       $ 0.75       $ 0.90       $ 0.71   

 

(1)  Crossroads System was sold July 3, 2012
(2)  Processing fees include revenues from natural gas, natural gas liquids and gathering fees less cost of gas purchased

 

                                                                   

COAL PRODUCTION

            

Coal royalty tons by region (000s)

            

Central Appalachia

      2,609         3,546         8,010         11,090   

Northern Appalachia

      375         1,013         2,382         2,911   

Illinois Basin

      424         801         1,753         2,900   

San Juan Basin

      2,276         2,343         6,878         6,683   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Tons

      5,684         7,703         19,023         23,584   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total Coal Royalties

    $ 20,816       $ 28,760       $ 66,990       $ 91,150   
  

 

 

     

 

 

     

 

 

     

 

 

  

Average Coal Royalty per ton

    $ 3.66       $ 3.73       $ 3.52       $ 3.86