MWP Markwest Hydrocarbon,

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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