MWP Markwest Hydrocarbon,

DENVER, Dec. 19 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc. (AMEX:MWP) (the "Company") today reported a net loss for the three months ended June 30, 2005 of $1.6 million, or $0.15 per diluted share, compared to a net loss of $6.4 million, or $0.60 per diluted share, for the second quarter of 2004. For the six months ended June 30, 2005, MarkWest Hydrocarbon reported a net loss of less than $0.1 million, or $0.01 per diluted share, compared to a net loss of $5.6 million, or $0.53 per diluted share, for the six months ended June 30, 2004. The Company reported a $4.4 million increase in income from operations, reporting $1.5 million for the three months ended June 30, 2005, compared to a $3.0 million loss from operations for the second quarter of 2004. For the six months ended June 30, 2005, the Company reported income from operations of $10.9 million, compared to $0.3 million for the six months ended June 30, 2004. For the three months ended June 30, 2005, $4.2 million of the $4.4 million increase in income from operations is attributable to MarkWest Hydrocarbon Standalone operations. Equity NGL product net operating margin contributed $1.9 million of this improvement and the non-recurrence of crude oil hedging losses contributed approximately $0.2 million to this improvement compared to same period in the prior year. Facility expenses declined by $0.7 million, selling, general and administrative expenses declined by $0.1 million, and the long-term shrink purchase obligation benefited from a $1.5 million mark-to-market decrease. The long-term shrink purchase obligation is a non-cash adjustment. Income from operations at MarkWest Energy Partners, L.P. increased by $0.2 million, primarily due to the East Texas acquisition it made in the third quarter of 2004. The contribution to income from operations made by the East Texas assets was offset by the repairs and maintenance expenditures on the Appalachian liquids pipeline and by increases in selling, general and administrative expense. 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 $3.1 million in distributions in the second quarter of 2005, which represents a significant increase over the $2.0 million received in the second quarter of 2004. In August 2005, the Company paid a dividend for the quarter ended June 30, 2005 of $0.10 per share of its common stock held by the common stockholders. "Our second 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 affect results for the balance of 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 continue to be developed. In addition, the recently announced acquisition of the Javelina facilities in Corpus Christi, Texas closed on November 1, 2005. We anticipate that all of these facilities will contribute significant earnings in 2006 and beyond." The Company will host a conference call in January 2006, to review its second and third quarter 2005 earnings. Details of the call will be provided with the third quarter 2005 earnings release. 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 Three Six Six Months Months Months Months Ended Ended Ended Ended June 30, June 30, June 30, June 30, 2005 2004 2005 2004 Statement of Operations Data Revenues $141,040 $89,024 $279,393 $182,724 Operating expenses: Purchased product costs 112,354 77,262 217,053 152,750 Facility expenses 10,985 5,975 20,245 12,061 Selling, general and administrative expenses 9,125 5,070 17,227 10,385 Depreciation, amortization and accretion 7,101 3,691 13,947 7,253 Total operating expenses 139,565 91,998 268,472 182,449 Income (loss) from operations 1,475 (2,974) 10,921 275 Other income (expense): Earnings from unconsolidated subsidiary 989 -- 990 -- Interest income 321 221 570 10,385 Interest expense (4,588) (923) (8,293) (3,061) Amortization of deferred financing costs (558) (307) (1,094) 10,385 Dividend income 96 83 188 83 Other income (expense) 148 (31) 235 (5) Loss before non-controlling interest in net income of consolidated subsidiary and income taxes (2,117) (3,931) 3,517 (1,958) Provision (benefit) for income taxes (802) 491 (32) 437 Non-controlling interest in net income of consolidated subsidiary (294) (1,946) (3,619) (3,255) Net (loss) $(1,609) $(6,368) $(70) $(5,650) Net (loss) per share: Basic $(0.15) $(0.60) (0.01) $(0.53) Diluted $(0.15) $(0.60) (0.01) $(0.53) Weighted average number of outstanding shares of common stock: Basic 10,782 10,681 10,774 10,628 Diluted 10,867 10,681 10,886 10,628 MarkWest Hydrocarbon, Inc. Income (Loss) from Operations (in thousands of dollars) MarkWest MarkWest Hydrocarbon Energy Eliminating Standalone Partners Entries Total Three Months Ended June 30, 2005: Revenues $52,786 $102,960 $(14,706) $141,040 Purchased product costs 47,729 73,862 (9,237) 12,354 Net operating margin 5,057 29,098 (5,469) 28,686 Facility expenses 5,094 11,360 (5,469) 10,985 Selling, general and administrative expenses 2,814 6,311 -- 9,125 Depreciation 419 4,576 -- 4,995 Amortization of intangible assets -- 2,095 -- 2,095 Accretion of asset retirement and sublease obligations 2 9 -- 11 Income (loss) from operations (3,272) 4,747 -- 1,475 Equity in earning of unconsolidated subsidiary (1) 990 989 Interest income 258 63 -- 321 Interest expense (30) (4,558) -- (4,588) Amortization of deferred financing costs (a component of interest expense) (61) (497) -- (558) Dividend income 96 -- -- 96 Other income (expense) 222 (74) -- 148 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes $(2,788) $671 $-- $(2,117) June 30, 2005: Cash, cash equivalents and restricted cash $12,175 $13,203 $-- $25,378 Marketable securities 20,344 -- -- 20,344 Current assets 75,548 44,483 -- 120,031 Current liabilities 26,968 43,269 -- 70,237 Total assets 80,577 563,358 -- 643,935 Total debt -- 290,000 -- 290,000 Three Months Ended June 30, 2004: Revenues $37,286 $65,659 $(13,921) $89,024 Purchased product costs 35,620 49,371 (7,729) 77,262 Net operating margin 1,666 16,288 (6,192) 11,762 Facility expenses 5,841 6,326 (6,192) 5,975 Selling, general and administrative expenses 2,945 2,125 -- 5,070 Depreciation 356 3,301 -- 3,657 Amortization of intangible assets -- 34 -- 34 Income (loss) from operations (7,476) 4,502 -- (2,974) Interest income 207 14 -- 221 Interest expense (8) (915) -- (923) Amortization of deferred financing cost (a component of interest expense) 8 (315) -- (307) Dividend income 83 -- -- 83 Other expense (6) (24) -- (30) Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes $(7,193) $3,262 $-- $3,931) June 30, 2004: Cash, cash equivalents and restricted cash $27,406 $8,871 $-- $36,277 Marketable securities 13,875 -- -- 13,875 Current assets 61,652 27,570 -- 89,222 Current liabilities 24,122 112,361 -- 136,483 Total assets 65,050 217,470 -- 282,520 Total debt -- 86,200 -- 86,200 MarkWest Hydrocarbon, Inc. Income (Loss) from Operations (in thousands of dollars) MarkWest MarkWest Hydrocarbon Energy Eliminating Standalone Partners Entries Total (in thousands) Six Months Ended June 30, 2005: Revenues $117,307 $192,597 $(30,511) $279,393 Purchased product costs 101,550 134,647 (19,144) 217,053 Net operating margin 15,757 57,950 (11,367) 62,340 Facility expenses 10,921 20,691 (11,367) 20,245 Selling, general and administrative expenses 6,277 10,950 -- 17,227 Depreciation 834 8,902 -- 9,736 Amortization of intangible assets -- 4,190 -- 4,190 Accretion of asset retirement and sublease obligations 2 19 -- 21 Income (loss) from operations (2,277) 13,198 -- 10,921 Equity in earnings of unconsolidated subsidiaries -- 990 -- 990 Interest income 440 130 -- 570 Interest expense (61) (8,232) -- (8,293) Amortization of deferred financing costs (a component of interest expense) (122) (972) -- (1,094) Dividend income 188 -- -- 188 Other income (expense) 413 (178) -- 235 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes $(1,419) $4,936 $-- $3,517 Six Months Ended June 30, 2004: Revenues $81,678 $129,484 $(28,438) $182,724 Purchased product costs 71,471 97,224 (15,945) 152,750 Net operating margin 10,207 32,260 (12,493) 29,974 Facility expenses 11,938 12,616 (12,493) 12,061 Selling, general and administrative expenses 5,362 5,023 -- 10,385 Depreciation 739 6,446 -- 7,185 Amortization of intangible assets -- 68 -- 68 Income (loss) from operations (7,832) 8,107 -- 275 Interest income 335 21 -- 356 Interest expense (9) (2,044) -- (2,053) Amortization of deferred financing cost (a component of interest expense) 9 (623) -- (614) Dividend income 83 -- -- 83 Other income (expense) 33 (38) -- (5) Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes $(7,381) $5,423 $-- $(1,958) MarkWest Hydrocarbon, Inc. Operating Statistics Three Months Six Months Ended June 30, Ended June 30, 2005 2004 2005 2004 Hydrocarbon Standalone Marketing NGL product sales (gallons) 31,317,000 35,703,000 83,481,000 87,228,000 Wholesale NGL product sales (gallons)(1) 7,087,000 4,058,000 26,759,000 4,947,000 MarkWest Energy Partners Southwest: East Texas(2) Gathering system throughput (Mcf/d) 323,000 NA 305,000 NA NGL product sales (gallons) 26,222,000 NA 50,596,000 NA Oklahoma Foss Lake gathering system throughput (Mcf/d) 70,000 63,000 69,000 59,000 Arapaho NGL product sales (gallons) 16,457,000 8,317,000 31,674,000 16,512,000 Other Appleby gathering systems throughput (Mcf/d) 32,000 25,000 30,000 25,000 Other gathering systems throughput (Mcf/d) 16,000 15,000 17,000 17,000 Lateral throughput volumes (Mcf/d)(3) 91,000 119,000 72,000 74,000 Appalachia: Natural gas processed for a fee (Mcf/d)(4) 192,000 197,000 200,000 202,000 NGLs fractionated for a fee (Gal/d) 421,000 480,000 441,000 469,000 NGL product sales (gallons) 10,154,000 11,001,000 20,919,000 21,927,000 Michigan: Natural gas volumes transported (Mcf/d) 6,800 12,200 6,900 13,000 NGL product sales (gallons) 1,493,000 2,390,000 3,056,000 5,103,000 Crude oil transported (Bbl/d) 14,200 14,700 14,200 14,700 Footnotes: NA -- Not applicable. (1) Represents sales from our wholesale business. Volumes are for the period since the Company started the line of business in February 2004. (2) We acquired our East Texas System in late July 2004. Volumes are for the periods of time since we acquired the facility in 2004. (3) We acquired our Lubbock pipeline (a/k/a the PowerTex 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. (4) Includes throughput from our Kenova, Cobb, and Boldman processing plants. DATASOURCE: MarkWest Hydrocarbon, Inc. CONTACT: Frank Semple, President and CEO, or James Ivey, CFO, or Andy Schroeder, VP of Finance/Treasurer, all of MarkWest Hydrocarbon, Inc., +1-303-290-8700, Web site: http://www.markwest.com/

Copyright