MarkWest Hydrocarbon Reports 2004 Second Quarter Results DENVER,
Aug. 5 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc.
(AMEX:MWP) (the "Company") today reported a net loss for the three
months ended June 30, 2004 of $3.2 million, or $0.33 per diluted
share, compared to net income of $10.0 million, or $1.06 per
diluted share, for the second quarter of 2003. For the six months
ended June 30, 2004, MarkWest Hydrocarbon reported a net loss of
$2.4 million, or $0.25 per diluted share, compared to net income of
$8.9 million, or $0.95 per diluted share, for the six months ended
June 30, 2003. The decrease in results from 2003 to 2004 primarily
relates to the sale of most of the Company's San Juan Basin
properties on June 30, 2003 for a pretax gain of $19.7 million. The
Company reported a net loss from continuing operations of $3.2
million, or $0.33 per diluted share, for the three months ended
June 30, 2004, compared to a net loss from continuing operations of
$10.1 million, or $1.08 per diluted share, for the second quarter
of 2003. For the six months ended June 30, 2004, the Company
reported a net loss from continuing operations of $2.4 million, or
$0.25 per diluted share, compared to a net loss from continuing
operations of $13.4 million, or $1.43 per diluted share, for the
same period last year. "We are pleased with our first half
performance," said Frank Semple, President and CEO. "Our continued
focus on the quality growth of MarkWest Energy Partners and
improving the margins of our marketing business has resulted in
strong year to year improvement in our financial results from
continuing operations." On July 22, 2004, the board of directors of
MarkWest Hydrocarbon, Inc. declared a cash dividend of $0.025 per
share of its common stock payable on August 19, 2004 to the
stockholders of record as of the close of business on August 5,
2004. Consistent with the Board's objective to maintain a regular
quarterly dividend, this is the second consecutive dividend
declared in 2004. However, any such future declaration will be
dependent upon the financial performance of the Company. In
addition, on July 30, 2004, MarkWest Energy Partners, L.P. (the
"Partnership"), our consolidated subsidiary, expanded its midstream
business by completing the acquisition of American Central East
Texas Gas Company, L.P.'s Carthage gathering system and gas
processing assets for approximately $240 million. The acquisition
was funded with a combination of private equity and interim debt
financing. Consistent with its long-term strategy of maintaining a
debt to total capital ratio of less than 50%, the Partnership
intends in the near term to replace the interim debt financing with
additional equity and long-term debt financing. The Carthage
gathering system offers both low- and high-pressure service to
producers in the Carthage Field, gathering gas from the Cotton
Valley, Pettit and Travis Peak formations. The system consists of
approximately 180 miles of pipeline connected to approximately
1,700 wells with an additional 82 miles of pipeline currently under
construction. The gathering system also includes approximately
65,000 horsepower of compression with an additional 35,000
horsepower currently being installed. Current system through put is
approximately 245 MMcf/d and is anticipated to increase to
approximately 310 MMcf/d by the end of 2004. The gathering system
has a capacity of approximately 350 MMcf/d. This acquisition is
expected to generate cash flow from operations of approximately
$10.0 million for the Partnership for the balance of 2004. 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, 2003, as filed with the SEC. MarkWest
Hydrocarbon, Inc. Financial and Operating Statistics (in thousands
except per share amounts and operating statistics) Three Months
Ended June 30, Six Months Ended June 30, 2004 2003 % Change 2004
2003 % Change Statement of Operations Data Revenues (1) $87,796
$47,888 83% $181,484 $98,539 84% Net income (loss) $(3,210) $9,979
NM $(2,413) $8,937 NM Basic earnings (loss) per share $(0.33) $1.07
NM $(0.25) $0.96 NM Diluted earnings (loss) per share $(0.33) $1.06
NM $(0.25) $0.95 NM Weighted average shares outstanding (basic)
9,710 9,351 - 9,662 9,356 - Weighted average shares outstanding
(diluted) 9,710 9,371 - 9,662 9,376 - Operating Data Marketing NGL
product sales (gallons) 35,700,000 30,900,000 16% 87,200,000
84,900,000 3% MarkWest Energy Partners Appalachia: Natural gas
processed (2) (Mcf/d) 197,000 189,000 4% 202,000 196,000 3% NGLs
fractionated (gal/day) 480,000 391,000 23% 469,000 418,000 12%
Michigan: Gas volumes transported (Mcf/d) 12,200 14,500 (16)%
13,000 14,900 (13)% NGL product sales (gallons) 2,390,000 2,917,000
(18)% 5,103,000 5,859,000 (13)% Crude oil transported (3)
(barrels/day) 14,700 - NA 14,700 - NA Southwest: Gathering system
throughput (4) (Mcf/d) 103,900 44,600 133% 100,900 NM NM Lateral
pipeline throughput volumes (5) (Mcf/d) 119,300 - NA 74,100 - NA
NGL product sales (gallons) (6) 8,317,000 - NA 16,512,000 - NA June
30, 2004 December 31, 2003 June 30, 2003 Consolidated Balance Sheet
Data Total assets $284,485 $280,713 $299,467 Total debt $86,200
$126,200 $79,904 Stockholders' equity $46,723 $52,184 $65,923 NA -
Not applicable NM - Not meaningful (1) Exclusive of our
discontinued exploration and production activities. (2) Includes
throughput from the Kenova, Cobb and Boldman processing plants. (3)
MarkWest Energy Partners acquired its Michigan Crude Pipeline in
December 2003. (4) Includes volumes from MarkWest Energy Partners'
Pinnacle gathering systems, which were acquired in late March 2003,
and its Foss Lake (OK) gathering systems, which were acquired in
December 2003. (5) Includes volumes from MarkWest Energy Partners'
Power Tex Lateral pipeline (a/k/a the Lubbock Pipeline), which was
acquired in September 2003, and our Hobbs Lateral pipeline, which
was acquired in April 2004. The Power-Tex and Hobbs Lateral
pipelines are the only laterals the Partnership own that produce
revenue on a per-unit-of- throughput basis. MarkWest Energy
Partners receives a flat fee from the other three lateral pipelines
it owned during the first quarter of 2004 and, therefore, the
throughput data from these lateral pipelines is excluded from this
statistic. (6) Includes sales out of MarkWest Energy Partners'
Arapaho processing plant, which was acquired in December 2003.
MarkWest Hydrocarbon, Inc. Statement of Operations (in thousands of
dollars except per share amounts) Three Months Three Months Six
Months Six Months Ended Ended Ended Ended June 30, June 30, June
30, June 30, 2004 2003 2004 2003 Statement of Operations Data
Revenues $87,796 $47,888 $181,484 $98,539 Operating expenses:
Purchased product costs 75,451 44,357 150,587 90,360 Facility
expenses 5,747 4,417 11,866 8,779 Selling, general and
administrative expenses 4,262 3,363 8,746 5,913 Depreciation 3,770
2,041 7,410 3,571 Total operating expenses 89,230 54,178 178,609
108,623 Income (loss) from operations (1,434) (6,290) 2,875
(10,084) Other income (expense): Interest expense, net (1,092)
(1,998) (2,450) (3,061) Minority interest in net income of
consolidated subsidiary (2,549) (860) (4,242) (1,734) Other income
(expense) (31) 105 32 90 Loss before income taxes (5,106) (9,043)
(3,785) (14,789) Provision (benefit) for income taxes (1,896) 1,056
(1,372) (1,396) Loss from continuing operations (3,210) (10,099)
(2,413) (13,393) Income from discontinued exploration and
production operations, net of tax - 20,078 - 22,359 Income (loss)
before cumulative effect of accounting change (3,210) 9,979 (2,413)
8,966 Cumulative effect of accounting change, net of tax - - - (29)
Net income (loss) $(3,210) $9,979 $(2,413) $8,937 Loss from
continuing operations per share: Basic $(0.33) $(1.08) $(0.25)
$(1.43) Diluted (0.33) (1.08) (0.25) (1.43) Net income (loss) per
share: Basic (0.33) 1.07 (0.25) 0.96 Diluted (0.33) 1.06 (0.25)
0.95 Weighted average number of outstanding shares of common stock:
Basic 9,710 9,351 9,662 9,356 Diluted 9,710 9,371 9,662 9,376
MarkWest Hydrocarbon, Inc. Segment Operating Income and
Reconciliation to Loss from Continuing Operations Before Taxes (in
thousands of dollars) MarkWest Energy Eliminating Marketing
Partners, L.P. Entries Total Three Months Ended June 30, 2004
Revenues $37,284 $64,431 $(13,919) $87,796 Segment operating
expenses: Purchased product costs 35,620 47,560 (7,729) 75,451
Facility expenses 5,840 6,097 (6,190) 5,747 Depreciation 356 3,414
- 3,770 Total segment operating expenses 41,816 57,071 (13,919)
84,968 Segment operating income (loss) $(4,532) $7,360 $- $2,828
Three Months Ended June 30, 2003 Revenues $28,512 $29,636 $(10,260)
$47,888 Segment operating expenses: Purchased product costs 30,585
18,423 (4,651) 44,357 Facility expenses 4,859 5,167 (5,609) 4,417
Depreciation 181 1,860 - 2,041 Total segment operating expenses
35,625 25,450 (10,260) 50,815 Segment operating income (loss)
$(7,113) $4,186 $- $(2,927) Reconciliation of Segment Three Months
Three Months Operating Income (Loss) Ended Ended to Loss from
Continuing June 30, June 30, Operations Before Taxes 2004 2003
Total segment operating income $2,828 $(2,927) Selling, general and
administrative expenses (4,262) (3,363) Interest expense, net
(1,092) (1,998) Minority interest in net income of consolidated
subsidiary (2,549) (860) Other income (expense) (31) 105 Loss from
continuing operations before taxes $(5,106) $(9,043) MarkWest
Hydrocarbon, Inc. Segment Operating Income and Reconciliation to
Income (Loss) from Continuing Operations Before Taxes (in thousands
of dollars) MarkWest Energy Eliminating Marketing Partners, L.P.
Entries Total Six Months Ended June 30, 2004 Revenues $81,677
$128,244 $(28,437) $181,484 Segment operating expenses: Purchased
product costs 71,472 95,060 (15,945) 150,587 Facility expenses
11,937 12,421 (12,492) 11,866 Depreciation 739 6,671 - 7,410 Total
segment operating expenses 84,148 114,152 (28,437) 169,863 Segment
operating income (loss) $(2,471) $14,092 $- $11,621 Six Months
Ended June 30, 2003 Revenues $75,131 $47,329 $(23,921) $98,539
Segment operating expenses: Purchased product costs 75,795 26,815
(12,250) 90,360 Facility expenses 10,946 9,504 (11,671) 8,779
Depreciation 366 3,205 - 3,571 Total segment operating expenses
87,107 39,524 (23,921) 102,710 Segment operating income (loss)
$(11,976) $7,805 $- $(4,171) Reconciliation of Segment Six Months
Six Months Operating Income (Loss) Ended Ended to Loss from
Continuing June 30, June 30, Operations Before Taxes 2004 2003
Total segment operating income $11,621 $(4,171) Selling, general
and administrative expenses (8,746) (5,913) Interest expense, net
(2,450) (3,061) Minority interest in net income of consolidated
subsidiary (4,242) (1,734) Other income (expense) 32 90 Loss from
continuing operations before taxes $(3,785) $(14,789) 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/
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