MWP Markwest Hydrocarbon,

DENVER, May 7 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc. (AMEX:MWP) (the "Company") today reported net income of $1.0 million for the three months ended March 31, 2007, or $0.08 per diluted share, compared to net income of $2.8 million, or $0.24 per diluted share, for the same period in 2006. Income (loss) from operations for the Standalone segment, as defined below, for the three months ended March 31, 2007 and March 31, 2006, was $0.3 million and $(0.4) million, respectively, and included $12.4 million and $(2.0) million, respectively, of non-cash costs (benefits) associated with the mark-to-market of derivative instruments, the revaluation of the long-term shrink obligation, and non-cash compensation expense. Excluding these non-cash items, income (loss) from operations for the three months ended March 31, 2007 and March 31, 2006, would have been $12.7 million and $(2.4) million, respectively. The Company declared a quarterly cash dividend of $0.32 per share of its common stock, for an implied annual rate of $1.28 per share, which is payable on May 22, 2007, to shareholders of record as of May 10, 2007. This quarterly cash dividend represents an increase of $0.02 per share, or 7 percent, over the cash dividend in the fourth quarter of 2006. "We are pleased with our continued strong financial performance and the resultant growth in dividends and shareholder value," said Frank Semple, President and Chief Executive Officer. "Our financial performance in the first quarter of 2007 resulted from MarkWest Energy Partners' distribution growth as well as strong operating cash flow performance from our natural gas liquid marketing business. Our share of distributions from our investment in the partnership was $7.1 million in the first quarter, representing an increase of 97 percent over the distributions in the first quarter of 2006." "We continue to experience a strong frac spread environment and have taken advantage of the forward markets to lock in favorable long-term frac spread margins through the second quarter of 2010." The Company reports its operations under two business segments, MarkWest Hydrocarbon Standalone ("Standalone") and MarkWest Energy Partners (the "Partnership"). The Standalone business segment consists of the Company's natural gas liquid ("NGL") marketing activities for NGL's extracted primarily at MarkWest Energy Partners' Siloam facility and the management of keep-whole contracts in Appalachia. FIRST QUARTER 2007 HIGHLIGHTS For the three months ended March 31, 2007, the Standalone segment reported income from operations of $0.3 million, compared to a loss from operations of $0.4 million for the same period in 2006. The increase was primarily attributable to: * The realized frac spread improved to $0.41 per gallon in the first quarter of 2007 versus $0.09 per gallon in the same period in 2006, resulting in a positive impact of $15.3 million on segment operating income. * The settled hedge gain in the first quarter of 2007 was $2.0 million whereas in the first quarter of 2006 the Company did not have a settled hedge gain. * The positive impact in the first quarter of 2007 related to the improved frac spread and settled hedge gain was offset by a net unrealized loss of $9.3 million for the mark-to-market of derivative instruments and the revaluation of the long-term shrink obligation, both of which are non-cash items. This compares to a net unrealized gain of $2.7 million for the same items in the first quarter of 2006, resulting in a negative quarter over quarter variance of $12.0 million. * In addition, selling, general and administrative expense increased quarter over quarter by $3.8 million, of which $2.5 million is attributable to higher non-cash compensation expense, and the remainder is due to increased costs to support the growth of the business. For the Partnership segment, the Company's share of net income attributable to the Partnership, net of the eliminating entry for non-controlling interest in net income of a consolidated subsidiary, was $0.8 million in the first quarter of 2007, down from $3.3 million in the first quarter of 2006. The Company received $7.1 million of distributions in the first quarter of 2007, which represents a 97 percent increase over the $3.6 million received in the first quarter of 2006. The Company will host a conference call Tuesday, May 8, 2007, at 5:00 P.M. EDT to review its first quarter 2007 financial results. Interested parties can participate in the call by dialing (800) 867-1054 approximately ten minutes prior to the scheduled start time. A replay of the call will be available through Tuesday, May 15, 2007, by dialing (800) 405-2236 and entering the following passcode: 11089098#. 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. (NYSE: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. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. 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, 2006 as filed with the SEC. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." We do not undertake any duty to update any forward-looking statement. MarkWest Hydrocarbon, Inc. Statement of Operations (Unaudited, in thousands, except per share amounts) Three months ended March 31, 2007 2006 (in thousands) Revenue: Revenue $175,397 $241,119 Derivative loss (13,909) (1,259) Total revenue 161,488 239,860 Operating expenses: Purchased product costs 104,207 181,628 Facility expenses 12,062 13,482 Selling, general and administrative expenses 20,715 11,376 Depreciation 8,174 7,378 Amortization of intangible assets 4,168 4,016 Accretion of asset retirement obligations 27 25 Total operating expenses 149,353 217,905 Income from operations 12,135 21,955 Other income (expense): Earnings from unconsolidated affiliates 1,767 945 Interest income 2,396 406 Interest expense (9,414) (11,044) Amortization of deferred financing costs and original issue discount (a component of interest expense) (720) (825) Dividend income 122 106 Miscellaneous (expense) income (872) 2,242 Income before non-controlling interest in net income of consolidated subsidiary and income taxes 5,414 13,785 Income tax (expense) benefit: Current (801) 493 Deferred 304 (902) Income tax expense (497) (409) Non-controlling interest in net income of consolidated subsidiary (3,960) (10,544) Net income $957 $2,832 Net income per share: Basic $0.08 $0.24 Diluted $0.08 $0.24 Weighted average number of outstanding shares of common stock (1): Basic 11,987 11,906 Diluted 12,043 12,019 (1) March 31, 2006 adjusted for the May 23, 2006 stock dividend. MarkWest Hydrocarbon, Inc. Segment Income (Unaudited, in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Three months ended March 31, 2007: Revenue: Revenue $72,926 $121,546 $(19,075) $175,397 Derivative loss (6,980) (6,929) -- (13,909) Total revenue 65,946 114,617 (19,075) 161,488 Purchased product costs 52,814 64,005 (12,612) 104,207 Facility expenses 5,569 12,956 (6,463) 12,062 Selling, general and administrative expenses 6,873 13,842 -- 20,715 Depreciation 388 7,786 -- 8,174 Amortization of intangible assets -- 4,168 -- 4,168 Accretion of asset retirement and lease obligations -- 27 -- 27 Income from operations 302 11,833 -- 12,135 Other income (expense): -- -- -- Earnings from unconsolidated affiliates -- 1,767 -- 1,767 Interest income 476 1,920 -- 2,396 Interest expense (59) (9,355) -- (9,414) Amortization of deferred financing costs (a component of interest expense) (59) (661) -- (720) Dividend income 122 -- -- 122 Miscellaneous expense (143) (729) -- (872) Income before non-controlling interest in net income of consolidated subsidiary and income taxes 639 4,775 -- 5,414 Income tax expense (494) (19) 16 (497) Non-controlling interest in net income of consolidated subsidiary -- -- (3,960) (3,960) Interest in net income of consolidated subsidiary 812 -- (812) -- Net income $957 $4,756 $(4,756) $957 MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Three months ended March 31, 2006: Revenue: Revenue $102,092 $156,742 $(17,715) $241,119 Derivative (loss) gain (1,499) 240 -- (1,259) Total revenue 100,593 156,982 (17,715) 239,860 Purchased product costs 92,322 100,961 (11,655) 181,628 Facility expenses 5,473 14,069 (6,060) 13,482 Selling, general and administrative expenses 3,038 8,338 -- 11,376 Depreciation 205 7,173 -- 7,378 Amortization of intangible assets -- 4,016 -- 4,016 Accretion of asset retirement and lease obligations -- 25 -- 25 (Loss) income from operations (445) 22,400 -- 21,955 Other income (expense): Earnings from unconsolidated affiliates -- 945 -- 945 Interest income 186 220 -- 406 Interest expense (68) (10,976) -- (11,044) Amortization of deferred financing costs (a component of interest expense) (17) (808) -- (825) Dividend income 106 -- -- 106 Miscellaneous income 150 2,092 -- 2,242 (Loss) income before non-controlling interest in net income of consolidated subsidiary and income taxes (88) 13,873 -- 13,785 Income tax expense (409) -- -- (409) Non-controlling interest in net income of consolidated subsidiary -- -- (10,544) (10,544) Interest in net income of consolidated subsidiary 3,329 -- (3,329) -- Net income $2,832 $13,873 $(13,873) $2,832 MarkWest Hydrocarbon, Inc. Segment Balance Sheet (Unaudited, in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total March 31, 2007 ASSETS Current assets: Cash and cash equivalents $50,648 $32,181 $-- $82,829 Marketable securities 8,626 -- -- 8,626 Receivables 14,187 100,995 (6,933) 108,249 Inventories 14,129 2,684 -- 16,813 Fair value of derivative instruments 358 1,627 -- 1,985 Other current assets 9,880 3,980 -- 13,860 Total current assets 97,828 141,467 (6,933) 232,362 Property, plant and equipment, net 3,835 595,764 -- 599,599 Investment in and advances to other equity investee -- 63,319 -- 63,319 Investment in consolidated subsidiaries 10,591 -- (10,591) -- Fair value of derivative instruments 2,592 1,739 -- 4,331 Other long term assets 2,905 355,393 -- 358,298 Total assets $117,751 $1,157,682 $(17,524) $1,257,909 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $18,938 $129,003 $(6,933) $141,008 Fair value of derivative instruments 5,568 2,832 -- 8,400 Deferred income taxes 526 -- -- 526 Total current liabilities 25,032 131,835 (6,933) 149,934 Long-term debt -- 576,947 -- 576,947 Deferred income taxes 8,744 769 (641) 8,872 Non-controlling interest in consolidated subsidiary 965 -- 431,946 432,911 Fair value of derivative instruments 6,488 4,340 -- 10,828 Other long-term liabilities 36,892 1,895 -- 38,787 Total liabilities 78,121 715,786 424,372 1,218,279 Total stockholders' equity 39,630 441,896 (441,896) 39,630 Total liabilities and stockholders' equity $117,751 $1,157,682 $(17,524) $1,257,909 MarkWest Hydrocarbon, Inc. Segment Balance Sheet (Unaudited, in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total December 31, 2006 ASSETS Current assets: Cash and cash equivalents $14,442 $34,402 $-- $48,844 Marketable securities 7,713 -- -- 7,713 Receivables 16,940 90,780 (6,604) 101,116 Inventories 31,668 3,593 -- 35,261 Fair value of derivative instruments 5,727 4,211 -- 9,938 Other current assets 12,217 3,047 -- 15,264 Total current assets 88,707 136,033 (6,604) 218,136 Property, plant and equipment, net 3,449 550,886 -- 554,335 Investment in and advances to other equity investee -- 64,240 -- 64,240 Investment in consolidated subsidiaries 12,683 -- (12,683) -- Fair value of derivative instruments 35 2,759 -- 2,794 Other long term assets 2,874 360,862 -- 363,736 Total assets $107,748 $1,114,780 $(19,287) $1,203,241 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $19,370 $131,684 $(6,604) $144,450 Fair value of derivative instruments 7,385 91 -- 7,476 Deferred income taxes 180 -- -- 180 Current portion of long term debt -- -- -- -- Total current liabilities 26,935 131,775 (6,604) 152,106 Long-term debt -- 526,865 -- 526,865 Deferred income taxes 9,425 769 (641) 9,553 Non-controlling interest in consolidated subsidiary 965 -- 440,607 441,572 Fair value of derivative instruments 98 1,362 -- 1,460 Other long-term liabilities 28,836 1,360 -- 30,196 Total liabilities 66,259 662,131 433,362 1,161,752 Total stockholders' equity 41,489 452,649 (452,649) 41,489 Total liabilities and stockholders' equity $107,748 $1,114,780 $(19,287) $1,203,241 MarkWest Hydrocarbon, Inc. Operating Statistics Three months ended March 31, 2007 2006 MarkWest Hydrocarbon Standalone: Marketing Hydrocarbon frac spread sales (gallons) 51,075,000 39,485,000 Maytown sales (gallons) 11,409,000 10,482,000 Total NGL product sales (gallons)(1) 62,484,000 49,967,000 Wholesale NGL product sales (gallons)(2) N/A 27,196,000 MarkWest Energy Partners: East Texas: Gathering systems throughput (Mcf/d) 401,400 346,000 NGL product sales (gallons) 41,788,000 35,436,000 Oklahoma : Foss Lake gathering system throughput (Mcf/d) 95,200 87,600 Woodford gathering system throughput (Mcf/d) (3) 51,200 N/A Grimes gathering system throughput (Mcf/d) (4) 12,700 N/A Arapaho NGL product sales (gallons) 20,524,000 18,417,000 Other Southwest: Appleby gathering system throughput (Mcf/d) 51,100 33,500 Other gathering systems throughput (Mcf/d) 16,400 19,100 Lateral throughput volumes (Mcf/d) 52,800 49,700 Appalachia: Natural gas processed (Mcf/d) 203,400 205,000 NGLs fractionated (Gal/d) 467,700 449,000 NGL product sales (gallons) 11,409,000 10,482,000 Michigan: Natural gas throughput (Mcf/d) 6,000 6,300 NGL product sales (gallons) 1,125,000 1,449,000 Crude oil transported (Bbl/d) 14,200 14,000 Gulf Coast: Refinery off-gas processed (Mcf/d) 119,300 120,000 Liquids fractionated (Bbl/d) 25,000 24,900 (1) Represents sales at the Siloam fractionator. (2) Represents sales from our wholesale business. In December 2006 the Company terminated its wholesale agreement. (3) The Partnership began construction and operation of the Woodford gathering system in late 2006. (4) The Partnership acquired the Grimes gathering system in December 2006. DATASOURCE: MarkWest Hydrocarbon, Inc. CONTACT: Frank Semple, President and CEO, or Nancy Buese, SVP and CFO, or Andy Schroeder, VP Finance & Treasurer, all of MarkWest Hydrocarbon, Inc., +1-866-858-0482, or fax, +1-303-290-8769, Web site: http://www.markwest.com/

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