EV Energy Partners Announces Third Quarter 2015 Results; Distribution and Guidance Updates

HOUSTON, Nov. 9, 2015 /PRNewswire/ -- EV Energy Partners, L.P. EVEP today announced results for the third quarter of 2015 and the filing of its Form 10-Q with the Securities and Exchange Commission.  Additionally, EVEP has provided an update on distributions and fourth quarter 2015 guidance.

Third Quarter 2015 Results

Adjusted EBITDAX for the third quarter of 2015 was $43.8 million, a 29 percent decrease from the third quarter of 2014 and an 18 percent decrease from the second quarter of 2015.  Distributable Cash Flow for the third quarter of 2015 was $20.1 million, a 37 percent decrease from the third quarter of 2014 and a 23 percent decrease from the second quarter of 2015.  The decreases in Adjusted EBITDAX and Distributable Cash Flow are primarily due to the sale of our Utica midstream interests, lower production and lower realized commodity prices, partially offset by decreased operating costs and expenses.  Adjusted EBITDAX and Distributable Cash Flow are Non-GAAP financial measures and are described in the attached table under "Non-GAAP Measures."

Production for the third quarter of 2015 was 9.7 Bcf of natural gas, 212 Mbbls of oil and 526 Mbbls of natural gas liquids, or 153.8 Mmcfe/day.  This represents a 13 percent decrease from third quarter 2014 production of 175.8 Mmcfe/d and a 6 percent decrease from second quarter 2015 production of 162.8 Mmcfe/day. Third quarter production was primarily impacted by adjustments from prior periods, timing of certain well completions and natural decline.

EVEP reported a net loss of $9.8 million, or $(0.20) per basic and diluted weighted average limited partner unit outstanding, for the third quarter of 2015. Included in net loss were the following items:

• $15.8 million of impairment charges related to the write down of certain oil and natural gas properties due to the effects of commodity prices on expected future net cash flows;
• $1.2 million of non-cash gains on commodity derivatives;
• $2.3 million of non-cash costs contained in general and administrative expenses;
• $0.5 million of cash due diligence and other transaction costs for the acquisitions completed on October 1^st contained in general and administrative expenses; and
• $1.0 million of dry hole and exploration costs.

For the second quarter of 2015, EVEP reported net income of $164.1 million, or $3.25 per basic and diluted weighted average limited partner unit outstanding, which included the sale of our Utica midstream interests.  For the third quarter of 2014, EVEP reported net income of $42.6 million, or $0.85 per basic and diluted weighted average limited partner unit outstanding.

Distribution Update

As EVEP moves forward into 2016, both the volumes and swap prices of its natural gas and crude oil hedges decline from 2015 levels.  In addition, there has been a prolonged downturn in commodity prices over the past year, including the deterioration in future strip prices for crude oil, natural gas, and natural gas liquids.  Due to these factors, EVEP expects that its distributable cash flow, beginning in 2016, will be below levels necessary to maintain a $0.50 per unit quarterly distribution, absent a significant, near-term rebound in commodity prices.  Management believes it is important to maintain a strong liquidity position during times of low commodity prices until there is more certainty and visibility on the timing and extent of a rebound in commodity prices. Therefore, over the next several months, as the budgeting process for 2016 is completed, EVEP will address its future quarterly distribution levels and policies to align future distributions with projected distributable cash flow. EVEP expects to provide additional information on future quarterly distribution levels by its next distribution announcement date in late January.

"In early October, we closed on our previously announced acquisitions and amended our credit facility, which included an increase in our borrowing base to $625 million.  The acquisitions increase our production and reserves by over 30 percent and leave the Partnership with over $425 million of liquidity, which we believe is very important during this period of depressed commodity prices.  While we expect higher commodity prices over time, our goal is to maintain liquidity and flexibility to manage through the current commodity price environment, including addressing appropriate future quarterly distribution levels through this downturn," commented Mr. Michael Mercer, President and CEO.

Fourth Quarter 2015 Guidance Update

With the closing of the previously announced acquisitions on October 1, updated fourth quarter guidance ranges including the acquisitions are as follows:    

 

 

Quarterly Report on Form 10-Q

EVEP's financial statements and related footnotes are available in the third quarter 2015 Form 10-Q, which was filed today and is available through the Investor Relations/SEC Filings section of the EVEP website at http://www.evenergypartners.com.

Conference Call and Webcast

As announced on October 29, 2015, EV Energy Partners, L.P. will host an investor conference call on November 9, 2015, at 9 a.m. Eastern Time (8 a.m. Central).  Investors interested in participating in the call may dial 1-888-632-5023 (quote conference ID 672346) at least 5 minutes prior to the start time, or may listen live over the Internet through the Investor Relations section of the EVEP website at http://ir.evenergypartners.com/events.cfm. 

About EV Energy Partners, L.P.

EV Energy Partners, L.P. is a master limited partnership engaged in acquiring, producing and developing oil and natural gas properties.  More information about EVEP is available on the Internet at http://www.evenergypartners.com.

(code #: EVEP/G)

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Forward Looking Statements

This press release may include statements that are not historical facts which are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  These statements include information about, future plans, our reserve quantities and the present value of our reserves, estimates of maintenance capital and other statements which include words such as "anticipates," "plans," "projects," "expects," "intends," "believes," "should," and similar expressions of forward-looking information.  Forward-looking statements are inherently uncertain and necessarily involve risks that may affect the business prospects and performance of EV Energy Partners, L.P. Actual results may differ materially from those contained in the press release.  Such risks and uncertainties include, but are not limited to, changes in commodity prices, changes in reserve estimates, requirements and actions of purchasers of properties, exploration and development activities, the availability and cost of financing, the returns on our capital investments and acquisition strategies, the availability of sufficient cash flow to pay distributions and execute our business plan and general economic conditions.  Additional information on risks and uncertainties that could affect our business prospects and performance are provided in the most recent reports of EV Energy Partners with the Securities and Exchange Commission.  All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements.

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.

 

 

 

 

 

 

 

 

 

Non-GAAP Measures

We define Adjusted EBITDAX as net (loss) income plus income from discontinued operations, EBITDAX from discontinued operations, income taxes, interest expense, net, cash settlements of matured interest rate swaps, depreciation, depletion and amortization, asset retirement obligations accretion expense, (gain) loss on derivatives, net, cash settlements of matured derivative contracts, non-cash equity compensation expense, impairment of oil and natural gas properties, non-cash inventory write down expense, dry hole and exploration costs, gain on sales of oil and natural gas properties, and loss on sale of investment in unconsolidated affiliates, contained in Other income, net.  Distributable Cash Flow is defined as Adjusted EBITDAX less cash income taxes, 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.  We believe these financial measures may 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
Nicholas Bobrowski
713-651-1144
http://www.evenergypartners.com

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SOURCE EV Energy Partners, L.P.