HOUSTON, TX — (Marketwire) — 02/29/12 — EV Energy Partners, L.P. (NASDAQ: EVEP) today announced results for the full year and fourth quarter 2011 and the filing of its Form 10-K with the Securities and Exchange Commission. In addition, EVEP announced 2012 guidance and an update of its commodity hedge positions presented in the Hedge Summary Table at the end of this release.
Adjusted EBITDAX and distributable cash flow for 2011 were $212.4 million and $126.2 million, increases of 43 percent and 34 percent, respectively, over 2010. The increase in Adjusted EBITDAX and Distributable Cash Flow are primarily due to acquisitions made in 2010 and 2011 and higher realized oil and NGL prices partially offset by lower realized gas prices. Adjusted EBITDAX and distributable cash flow are described in the attached table under “Non-GAAP Measures”.
Production for 2011 was 29.2 Bcf of natural gas, 891 MBbls of oil and 1,096 MBbls of natural gas liquids, or 41.2 billion cubic feet equivalents (Bcfe). This represents a 47 percent increase over 2010 production of 27.9 Bcfe, primarily due to acquisitions in 2010 and 2011.
For 2011, EVEP reported net income of $102.6 million, or $2.71 and $2.68 per basic and diluted weighted average limited partner unit outstanding, respectively. Included in net income were $35.5 million of unrealized gains on commodity and interest rate derivatives, which includes a $5.3 million unrealized gain on derivatives acquired in conjunction with a 2010 acquisition and $9.8 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were approximately $2.9 million of due diligence and other transaction costs for acquisitions. Other expenses incurred include $12.1 million of dry hole and exploration costs and $11.0 million of impairment costs related to divestitures of non-core oil and natural gas properties and assets held for sale. Also recognized, during the fourth quarter, was a $4.0 million gain on sale of assets related to Utica Shale acreage in an agreement with Total and Chesapeake. For 2010, EVEP reported net income of $106.1 million, or $3.35 and $3.34 per basic and diluted weighted average limited partner unit outstanding, respectively. Included in net income were $3.0 million of unrealized gains on commodity and interest rate derivatives and $5.0 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were approximately $1.4 million of due diligence and other transaction costs for acquisitions. Also recognized was a $40.7 million gain on sale of certain unproved acreage and a $2.5 million non-cash charge to lease operating expenses related to oil in tanks purchased in connection with the Appalachian Basin acquisition closed in March 2010.
Adjusted EBITDAX for the fourth quarter of 2011 was $54.5 million, a 31 percent increase over the fourth quarter of 2010 and a 4 percent increase over the third quarter of 2011. Distributable cash flow for the fourth quarter of 2011 was $30.8 million, a 15 percent increase over the fourth quarter of 2010 and flat to the third quarter of 2011.
Production for the fourth quarter of 2011 was 8.1 Bcf of natural gas, 235 MBbls of oil and 269 MBbls of natural gas liquids, or 11.1 Bcfe. This represents a 34 percent increase over fourth quarter 2010 production of 8.3 Bcfe and a 10 percent increase over third quarter 2011 production of 10.1. The increases in production are, primarily due to acquisitions completed during the fourth quarters of 2011 and 2010.
EVEP reported net income of $9.7 million, or $0.27 per basic and diluted weighted average limited partner unit outstanding, for the fourth quarter of 2011. Included in net income were $2.3 million of unrealized gains on commodity and interest rate derivatives, which includes a $1.1 million dollar unrealized gain on derivatives acquired in conjunction with a 2010 acquisition, $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 in an agreement with Total and Chesapeake 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 due diligence and other transaction costs for acquisitions completed during the quarter. EVEP reported a net loss of $14.5 million for the fourth quarter of 2010. However, included in net loss were $31.6 million of unrealized losses on commodity and interest rate derivatives and $1.6 million of non-cash costs contained in general and administrative expenses. Also contained in general and administrative expenses were approximately $0.4 million of due diligence and other transaction costs for acquisitions completed during the quarter. For the third quarter of 2011, EVEP reported net income of $87.8 million, or $2.42 and $2.40 per basic and diluted weighted average limited partner unit outstanding, respectively. Included in net income were $68.8 million of unrealized gains on commodity and interest rate derivatives and $2.7 million of non-cash costs contained in general and administrative expenses. General and administrative expenses also included $0.2 million of acquisition-related due diligence and other related transaction costs. Also included in net income was a $1.3 million non-cash realized loss on derivatives related to derivatives acquired in conjunction with a 2010 property acquisition.
The $2.3 million unrealized gain on commodity and interest rate derivatives for the fourth quarter of 2011 was due to the decrease in future natural gas prices, significantly offset by the increase in future crude oil prices that occurred from September 30, 2011 to December 31, 2011 and the effect of such price changes on the mark-to-market valuation of EVEP–s outstanding derivatives.
John Walker, Executive Chairman said, “We are pleased with our results for 2011, including the almost $500 million of accretive acquisitions in core areas of operations. We look forward to 2012 as we integrate these acquisitions into our asset base and begin the process of pursuing alternatives for the sale or monetization of all or a portion of our working interest position in the Utica Shale.”
EVEP–s financial statements and related footnotes are available on our 2011 Form 10-K, which was filed today and is available through the Investor Relations/SEC Filings section of the EVEP web site at .
Also available for download on our web site by March 5, 2012 will be unitholders– Schedule K-1–s for the tax year 2011. For any questions regarding their Schedule K-1, unitholders are invited to call the Tax Package Support helpline at 1-800-973-7551.
As announced on February 24, 2012, EV Energy Partners, L.P. will host an investor conference call on February 29, 2012, at 5:00 p.m. Eastern Time (4:00 p.m. Central). Investors interested in participating in the call may dial (480) 629-9722 (quote conference ID 4519964) 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 . Financial results will also be posted in the investor relations section on the web site.
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 on the internet 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 and unrealized (gains) losses on derivatives, non-cash equity compensation, impairments of oil and natural gas properties, (gain) on sales of oil and natural gas properties, inventory write down, and dry hole and exploration costs. Distributable Cash Flow is defined as Adjusted EBITDAX less 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