MWP Markwest Hydrocarbon,

DENVER, March 21 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc. (AMEX:MWP) (the "Company") today reported a net loss of $1.0 million for the three months ended December 31, 2005, or an $0.09 loss per diluted share, compared to net income of $6.7 million, or $0.63 per diluted share, for the fourth quarter of 2004. For the year ended December 31, 2005, the Company reported a net loss of $6.8 million, or $0.63 per diluted share, compared to a net loss of $0.9 million, or $0.08 per diluted share, for the year ended December 31, 2004. The Company reports its operations under two business segments, MarkWest Hydrocarbon Standalone (Standalone) and MarkWest Energy Partners. The Standalone business segment consists of the Company's natural gas liquid (NGL) marketing activities for our NGL's extracted primarily at MarkWest Energy Partners Siloam facility, the management of our keep-whole contracts in Appalachia and a wholesale propane marketing business. For the three months ended December 31, 2005, Standalone reported a loss from operations of $0.4 million, a decrease of $6.3 million when compared to the $5.9 million of income from operations for the same period in 2004. This result is summarized as follows: * Our realized fractionation (frac) spread declined significantly compared to the prior year. This amounted to an $11.6 million impact (approximately $0.09 per gallon in 2005 vs. approximately $0.41 per gallon in 2004). * The revaluation of our long-term shrink obligation (a non-cash item) increased revenue by $3 million in 2005 compared to a $0.4 million decrease in 2004, resulting in a $3.4 million positive impact to the quarter-over-quarter comparison. * The loss from operations was further offset by the favorable impact of decreased facility expense and selling, general and administrative expenses of $1.0 million and $0.6 million, respectively. For the year ended December 31, 2005, MarkWest Hydrocarbon Standalone reported a loss from operations of $11.8 million compared to a loss from operations for the year ended December 31, 2004 of $4.9 million, an increase of $6.9 million. This result is summarized as follows: * The long-term shrink obligation (a non-cash item) accounted for $5.2 million of this decrease. * A decline in the realized frac spread accounted for a further $4.7 million of this amount (approximately $0.19 per gallon in 2005 vs. approximately $0.21 per gallon in 2004). * The Michigan E&P activities and Net profits interest also declined by $1.0 million. * These amounts were offset by a $3.4 million reduction in facility expenses, primarily attributable to efficiencies at the new Cobb facility. Increased income from our wholesale and other fee business accounted for a $0.6 million improvement for 2005 compared to 2004. A key element of the MarkWest Hydrocarbon's activity is the cash distributions it receives on its ownership interest in MarkWest Energy Partners, L.P., which consists of approximately 2.8 million limited partner units, its 2% general partner interest and its incentive distribution rights. MarkWest Hydrocarbon received $3.3 million in distributions in the fourth quarter of 2005, which represents a significant increase over the $2.6 million received in the fourth quarter of 2004. For the year ended December 31, 2005 MarkWest Hydrocarbon received $12.3 million in distributions from MarkWest Energy Partners, compared to $8.7 million for the year ended December 31, 2004. MarkWest Energy Partners, L.P. reported income from operations of $13.5 million in the fourth quarter of 2005, up from $8.6 million in the fourth quarter of 2004. For the year ended December 31, 2005 MarkWest Energy Partners, L.P. reported income from operations of $33.3 million, up from $24.4 million for the year ended December 31, 2004. In January 2006, the Company paid a quarterly cash dividend of $0.125 per share of its common stock held by the common stockholders. This matched the quarterly dividend distribution for the third quarter of 2005. "The less favorable frac spreads significantly affected our earnings on a standalone basis when compared to the strong fourth quarter and year we experienced in 2004," said Frank Semple, President and Chief Executive Officer. "Frac spreads are an important part of our business from both a financial and operational risk perspective. We proactively manage this exposure primarily through a combination of frac spread hedges at times when we can lock in positive operating margin and optimization of our operational pre-delivery capabilities. In addition, as the cash flow from our investment in MarkWest Energy Partners increases over time, the Hydrocarbon standalone component of our business will decline and our relative sensitivity to commodity prices and frac spreads will also continue to decrease. We are very focused on both the continued growth of MWE and the mitigation of our frac spread exposure. I am extremely excited about 2006 and beyond. With the exception of the hurricane impact on Starfish, the MWE core assets are performing well and we now have a very broad asset base, which provides both diversity of cash flows and significant opportunities for internal growth capital projects. I am also very pleased by the organizational growth and development during the past year. This is always the biggest challenge with a rapidly expanding company and we have added significant capabilities both in the field and our corporate office in Denver." The Company will host a conference call on Wednesday, March 22, 2006, at 2:00 P.M. MST to review its fourth quarter 2005 earnings. Interested parties can participate in the call by dialing the following number approximately ten minutes prior to the scheduled start time: 1-800-366-3908. A replay of the call will be available through March 29, 2006 by dialing 1-800-405-2236 and entering the following passcode: 11056719#. To access the webcast, please visit our website at http://www.markwest.com/. 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, 2005 as filed with the SEC. MarkWest Hydrocarbon, Inc. Statement of Operations (in thousands, except per share amounts) Three Months Three Months Ended Ended Year Ended Year Ended December 31, December 31, December 31, December 31, Revenues $264,159 $155,878 $714,177 $460,113 Operating expenses: Purchased product costs 220,155 115,301 583,084 363,261 Facility expenses 13,250 8,121 45,577 28,580 Selling, general and administrative expenses 8,210 10,495 33,350 28,132 Depreciation 6,068 5,200 20,829 16,895 Amortization of intangible assets 3,368 2,172 9,656 3,640 Accretion of asset retirement obligation 23 2 160 15 Impairments -- 130 -- 130 Total operating expenses 251,074 141,421 692,656 440,653 Income from operations 13,085 14,457 21,521 19,460 Other income (expense): Income (loss) from unconsolidated subsidiary (2,144) 49 (2,153) -- Interest income 219 111 1,060 647 Interest expense (9,349) (3,591) (22,622) (9,383) Amortization of deferred financing costs (a component of interest expense) (5,328) (1,547) (6,979) (5,281) Dividend income 103 90 392 259 Miscellaneous income (expense) (34) 192 266 788 Income (loss) from continuing operations before non-controlling interest in net income of consolidated subsidiary and income taxes (3,448) 9,761 (8,515) 6,490 Income tax (expense) benefit Current (554) 131 (554) (20) Deferred (542) 380 2,358 (58) Income tax (expense) benefit (1,096) 511 1,804 (78) Non-controlling interest in net income of consolidated subsidiary 3,500 (3,556) (91) (7,315) Net income (loss) $(1,044) $6,716 $(6,802) $(903) Net income (loss) per share: Basic $(0.09) $0.63 $(0.63) $(0.08) Diluted $(0.09) $0.63 $(0.63) $(0.08) Weighted average number of outstanding shares of common stock: Basic 10,800 10,750 10,785 10,686 Diluted 10,800 10,825 10,785 10,686 MarkWest Hydrocarbon, Inc. Income (Loss) from Operations (in thousands) MarkWest MarkWest Hydrocarbon Energy Eliminating Standalone Partners Entries Total (in thousands) Three Months Ended December 31, 2005: Revenues $106,629 $175,919 $(18,389) $264,159 Purchased product costs 98,848 133,357 (12,050) 220,155 Net operating margin 7,781 42,562 (6,339) 44,004 Facility expenses 4,822 14,767 (6,339) 13,250 Selling, general and administrative expenses 3,124 5,086 -- 8,210 Depreciation 207 5,861 -- 6,068 Amortization of intangible assets -- 3,368 -- 3,368 Accretion of asset retirement and sublease obligations -- 23 -- 23 Income (loss) from operations $(372) $13,457 $-- $13,085 December 31, 2005: Cash, cash equivalents and restricted cash $863 $20,105 $-- $27,038 Current assets 92,821 148,498 (11,361) 229,958 Current liabilities 43,609 136,554 11,361 168,802 Total assets 124,966 1,046,093 (38,755) 1,132,304 Total debt 7,500 604,000 -- 611,500 Three Months Ended December 31, 2004: Revenues $ 77,619 $ 93,988 $(15,729) $155,878 Purchased product costs 61,915 62,594 (9,208) 115,301 Net operating margin 15,704 31,394 (6,521) 40,577 Facility expenses 5,844 8,798 (6,521) 8,121 Selling, general and administrative expenses 3,708 6,787 -- 10,495 Depreciation 297 4,903 -- 5,200 Amortization of intangible assets -- 2,172 -- 2,172 Accretion of asset retirement and lease obligations 2 -- -- 2 Impairments -- 130 -- 130 Income from operations $5,853 $8,604 $-- $ 14,457 December 31, 2004: Cash, cash equivalents and restricted cash $3,581 $24,263 $-- $27,844 Current assets 70,865 72,959 (12,849) 130,975 Current liabilities 27,505 62,412 12,849 77,068 Total assets 99,933 529,422 (35,781) 593,574 Total debt -- 225,000 -- 225,000 Year Ended December 31, 2005: Revenues $280,015 $499,084 $(64,922) $714,177 Purchased product costs 258,188 366,878 (41,982) 583,084 Net operating margin 21,827 132,206 (22,940) 131,093 Facility expenses 20,545 47,972 (22,940) 45,577 Selling, general and administrative expenses 11,777 21,573 -- 33,350 Depreciation 1,295 19,534 -- 20,829 Amortization of intangible assets -- 9,656 -- 9,656 Accretion of asset retirement and sublease obligations 1 159 -- 160 Income (loss) from operations $(11,791) $33,312 $-- $21,521 Year Ended December 31, 2004: Revenues $218,337 $301,314 $(59,538) $460,113 Purchased product costs 185,951 211,534 (34,224) 363,261 Net operating margin 32,386 89,780 (25,314) 96,852 Facility expenses 23,983 29,911 (25,314) 28,580 Selling, general and administrative expenses 11,999 16,133 -- 28,132 Depreciation 1,339 15,556 -- 16,895 Amortization of intangible assets -- 3,640 -- 3,640 Accretion of asset retirement and lease obligations 2 13 -- 15 Impairments -- 130 -- 130 Income (loss) from operations $(4,937) $24,397 $-- $19,460 MarkWest Hydrocarbon, Inc. Operating Statistics Three Months Ended Year Ended December 31, December 31, 2005 2004 2005 2004 MarkWest Hydrocarbon Standalone: Marketing NGL product sales (gallons) 45,516,000 47,900,000 162,000,000 178,000,000 Wholesale NGL product sales (gallons)(1) 27,305,000 26,338,000 68,879,000 42,154,000 MarkWest Energy Partners: Southwest: East Texas(2) Gathering systems throughput (Mcf/d) 342,300 267,700 321,000 259,300 NGL product sales (gallons) 37,518,000 29,210,000 126,476,000 41,478,000 Oklahoma Foss Lake gathering systems throughput (Mcf/d) 84,500 61,500 75,800 60,900 Arapaho NGL product sales (gallons) 14,723,000 16,587,000 60,903,000 45,273,000 Other Appleby gathering systems throughput (Mcf/d) 35,600 29,600 33,400 27,100 Other gathering systems throughput (Mcf/d) 17,000 16,600 16,500 17,000 Lateral throughput volumes (Mcf/d) (3) 52,300 67,100 81,000 75,500 Appalachia: Natural gas processed for a fee (Mcf/d)(4) 200,700 208,000 197,000 203,000 NGLs fractionated for a fee (Gal/day) 441,600 478,000 430,000 475,000 NGL product sales (gallons) 10,649,000 9,467,000 41,700,000 42,105,000 Michigan: Natural gas processed for a fee (Mcf/d) 6,100 10,800 6,600 12,300 NGL product sales (gallons) 1,250,000 2,261,000 5,697,000 9,818,000 Crude oil transported for a fee (Bbl/d) 14,260 14,400 14,200 14,700 Gulf Coast:(5) Natural gas processed for a fee (Mcf/d) 115,000 NA 115,000 NA NGLs fractionated for a fee (Gal/day) 19,400 NA 19,400 NA (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. (5) We acquired our Javelina gathering system in November 2005. Volumes are for the periods of time since we acquired the facility in 2005. DATASOURCE: MarkWest Hydrocarbon 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/

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