HOUSTON, TX — (Marketwire) — 05/09/12 — EV Energy Partners, L.P. (NASDAQ: EVEP) today announced results for the first quarter 2012 and filed its Form 10-Q with the Securities and Exchange Commission.
Adjusted EBITDAX for the quarter was $64.5 million, a 27 percent increase over the first quarter of 2011 and an 18 percent increase versus the fourth quarter of 2011. Distributable Cash Flow for the quarter was $34.6 million, a 10 percent increase over the first quarter of 2011 and a 12 percent increase versus the fourth quarter of 2011. The increases in Adjusted EBITDAX and Distributable Cash Flow, which are described in the attached table under “Non-GAAP Measures,” are primarily due to acquisitions completed during 2011.
Production for the first quarter of 2012 was 10.3 Bcf of natural gas, 285 MBbls of crude oil and 423 MBbls of natural gas liquids, or 14.5 Bcfe. This represents a 47 percent increase from first quarter 2011 production of 9.9 Bcfe and a 30 percent increase from the fourth quarter 2011 production of 11.1 Bcfe, primarily due to acquisitions completed during 2011.
For the first quarter of 2012, EVEP reported a net income of $28.6 million, or $0.69 per basic and diluted weighted average limited partner unit outstanding. Included in net income were $11.7 million of unrealized gains on commodity and interest rate derivatives, $0.6 million of non-cash realized losses related to derivatives acquired in a December 2010 acquisition that settled during the quarter, a $1.2 million non-cash charge to lease operating expense related to oil in tanks purchased in connection with 2011 acquisitions, $2.2 million of dry hole and exploration costs, a $0.6 million impairment charge primarily related to non-core assets sold during the quarter, $0.6 million of non-cash deferred income taxes and $4.3 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were $1.8 million of costs associated with the annual vesting of phantom units during the first quarter and $0.2 million of acquisition related due diligence and transaction costs.
The $11.7 million unrealized gain on derivatives for the first quarter of 2012 was due to the decrease in future natural gas and NGL prices, partially offset by the increase in future crude oil prices that occurred from December 31, 2011 to March 31, 2012 and the effect of such price changes on the mark-to-market valuation of EVEP–s outstanding commodity derivatives which extend through December 2015.
For the first quarter of 2011, EVEP reported a net loss of $34.0 million, or ($1.14) per basic and diluted weighted average limited partner unit outstanding. Included in net loss were $54.6 million of unrealized losses on commodity and interest rate derivatives, a $1.6 million impairment charge related to non-core assets sold during the quarter and $2.1 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were $1.0 million of costs associated with the annual vesting of phantom units during the first quarter and $0.3 million of acquisition related due diligence and transaction costs. For the fourth quarter of 2011, net income was $9.7 million, or $0.27 per basic and diluted weighted average limited partner unit outstanding. Included in net income were $2.3 million of unrealized gains on commodity and interest rate derivatives, $1.1 million non-cash realized losses related to derivatives acquired in a December 2010 acquisition that settled during the quarter, $10.5 million of dry hole and exploration costs, $4.4 million of impairment costs primarily related to assets held for sale, a $4.0 million gain on the sale of assets related to Utica Shale acreage and $3.2 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were approximately $2.3 million of acquisition related due diligence and transaction costs.
Mark Houser, President and CEO, said, “We are pleased with this quarter–s results, the completion of our common unit and Senior Notes offerings with proceeds used to repay bank debt incurred to fund 2011 acquisitions, and our progress in integrating these acquisitions. Preparations continue for the launch, expected by the end of this quarter, of the process to sell or monetize all or a portion of our approximately 150,000 Utica Shale net working interest acres in Ohio. Our Utica Shale drilling program for the year has also begun, with one well recently completed and a second well in the drilling stage.”
EVEP–s financial statements and related footnotes are available on our first quarter 2012 Form 10-Q, which was filed today and is available through the Investor Relations/SEC Filings section of the EVEP web site at .
As announced on April 26, 2012, EV Energy Partners, L.P. will host an investor conference call Wednesday, May 9, 2012 at 4:30 p.m. Eastern Time. Investors interested in participating in the call may dial (480) 629-9771 (quote conference ID 4534936) at least 5 minutes prior to the start time, or may listen live over the internet through the investor relations section of the EVEP web site at .
EV Energy Partners, L.P., is a master limited partnership engaged in acquiring, producing and developing oil and gas properties. More information about EVEP is available at .
(code #: EVEP/G)
This press release may include “forward-looking statements” as defined by the Securities and Exchange Commission. All statements, other than statements of historical facts, included in this press 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 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. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of EVEP, which may cause our actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to financial performance and results, availability of sufficient cash flow to pay distributions and execute our business plan, prices and demand for natural gas and oil, our ability to replace reserves and efficiently develop our current reserves and other important factors that could cause actual results to differ materially from those projected as described in the EVEP–s reports filed with the Securities and Exchange Commission.
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.
We define Adjusted EBITDAX as net income (loss) plus income tax provision, interest expense, net, realized losses on interest rate swaps, depreciation, depletion and amortization, asset retirement obligation accretion expense, non-cash realized losses on commodity derivatives, unrealized (gains) losses on derivatives, non-cash equity compensation, impairments of oil and natural gas properties, write down of crude inventory, and dry hole and exploration costs. Distributable Cash Flow is defined as Adjusted EBITDAX less cash income tax provision, 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. These financial measures indicate to investors whether or not we are generating cash flow at a level that can sustain or support an increase in our quarterly distribution rates. 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.
EV Energy Partners, L.P., Houston
Michael E. Mercer
713-651-1144