MWP Markwest Hydrocarbon,

MarkWest Hydrocarbon Reports 2004 Third Quarter Results DENVER, Nov. 9 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc. (AMEX:MWP) (the "Company") today reported net income for the three months ended September 30, 2004 of $0.6 million, or $0.06 per diluted share, compared to a net loss of $7.0 million, or $0.74 per diluted share, for the third quarter of 2003. For the nine months ended September 30, 2004, MarkWest Hydrocarbon reported a net loss of $1.8 million, or $0.19 per diluted share, compared to net income of $2.0 million, or $0.21 per diluted share, for the nine months ended September 30, 2003. The Company reported net income from continuing operations of $0.6 million, or $0.06 per diluted share, for the three months ended September 30, 2004, compared to a net loss from continuing operations of $6.3 million, or $0.67 per diluted share, for the third quarter of 2003. For the nine months ended September 30, 2004, the Company reported a net loss from continuing operations of $1.8 million, or $0.19 per diluted share, compared to a net loss from continuing operations of $15.7 million, or $1.67 per diluted share, for the corresponding nine months of 2003. The improved results for the third quarter of 2004 as compared to the corresponding quarter of 2003 was attributed to the impact of better NGL product margins, the non-recurrence of approximately $3.9 million of crude oil hedging losses and higher NGL product sales volumes. Other matters benefiting third quarter results included an approximate $0.7 million in other income from the sale of the rights to a former Enron receivable that had been previously written-off. The improved net income from continuing operations for the first nine months of 2004 as compared to the corresponding period of 2003 was also attributed to the factors impacting the third quarter comparisons. Approximately $10.9 million of the change was attributable to a reduction in the Company's crude oil hedging losses. The remainder of the change was primarily due to better NGL product margins and due to acquisitions made by our subsidiary MarkWest Energy Partners, L.P., late in 2003 and in the third quarter of 2004. Finally, in September 2004, we entered into several new and amended agreements with one of the largest Appalachia producers, which allow us to significantly reduce our exposure to commodity price risk for approximately 25% of our keep-whole gas volumes. On October 28, 2004, the board of directors of MarkWest Hydrocarbon, Inc. declared a stock dividend of one share of our common stock for each ten shares of common stock held by our common stockholders. The stock dividend is to be paid on November 19, 2004 to stockholders of record as of the close of business on November 9, 2004. On the same date, our board of directors declared a cash dividend of $0.05 per share of its common stock held by our common stockholders. This represented a $0.025 per share increase over the previous quarter's dividend. The indicated annual rate is $0.20 per share. Our board has declared that the dividend is to be paid on December 6, 2004, to the stockholders of record as of the close of business on November 24, 2004. "We are pleased with our third quarter results," said Frank Semple, President and CEO. "Processing margins were very strong and we have taken several steps to improve our ongoing results. We hedged a portion of our winter frac spread gallons at attractive pricing levels and our previously announced contract restructurings with Equitable Production Company significantly reduces our exposure to low frac spreads." 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. Statement of Operations (in thousands of dollars except per share amounts) Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended September 30, September 30, September 30,September 30, 2004 2003 2004 2003 Statement of Operations Data Revenues $122,938 $48,228 $304,422 $146,767 Operating expenses: Purchased product costs 95,128 44,521 245,715 134,881 Facility expenses 8,281 5,204 20,147 13,983 Selling, general and administrative expenses 5,966 3,549 14,712 9,462 Depreciation and amortization 5,975 2,220 13,385 5,791 Loss on sale of terminals -- 55 -- 55 Total operating expenses 115,350 55,549 293,959 164,172 Income (loss) from operations 7,588 (7,321) 10,463 (17,405) Other income (expense): Interest expense, net (7,002) (1,115) (9,452) (4,176) Gain on sale to related party -- -- -- 188 Non-controlling interest in net income of consolidated subsidiary (210) (1,607) (4,452) (3,342) Other income 553 31 585 15 Income (loss) from continuing operations before income taxes 929 (10,012) (2,856) (24,720) Provision (benefit) for income taxes 360 (3,701) (1,011) (9,058) Income (loss) from continuing operations 569 (6,311) (1,845) (15,662) Income (loss) from discontinued exploration and production operations, net of tax -- (667) -- 17,650 Income (loss) before cumulative effect of accounting change 569 (6,978) (1,845) 1,988 Cumulative effect of accounting change, net of tax -- -- -- (29) Net income (loss) $569 $(6,978) $(1,845) $1,959 Income (loss) from continuing operations per share: Basic $0.06 $(0.67) $(0.19) $(1.67) Diluted $0.06 $(0.67) $(0.19) $(1.67) Net income (loss) per share: Basic $0.06 $(0.74) $(0.19) $0.21 Diluted $0.06 $(0.74) $(0.19) $0.21 Weighted average number of outstanding shares of common stock: Basic 9,760 9,378 9,695 9,364 Diluted 9,818 9,400 9,741 9,380 MarkWest Hydrocarbon, Inc. Segment Operating Income (Loss) and Reconciliation to Income (Loss) from Continuing Operations Before Taxes (in thousands of dollars) MarkWest Energy Partners, Eliminating Marketing L.P. Entries Total Three Months Ended September 30, 2004 Revenues $60,768 $77,083 $(14,913) $122,938 Segment operating expenses: Purchased product costs 52,564 51,635 (9,071) 95,128 Facility expenses 5,743 8,380 (5,842) 8,281 Depreciation 303 5,672 -- 5,975 Total segment operating expenses 58,610 65,687 (14,913) 109,384 Segment operating income $2,158 $11,396 $-- $13,554 Three Months Ended September 30, 2003 Revenues $29,340 $31,412 $(12,524) $48,228 Segment operating expenses: Purchased product costs 32,294 18,510 (6,283) 44,521 Facility expenses 6,049 5,396 (6,241) 5,204 Depreciation 194 2,026 -- 2,220 Total segment operating expenses 38,537 25,932 (12,524) 51,945 Segment operating income (loss) $(9,197) $5,480 $-- $(3,717) Reconciliation of Three Three Segment Operating Months Months Income (Loss) to Ended Ended Income (Loss) from September September Continuing Operations 30, 30, Before Taxes 2004 2003 Total segment operating income (loss) $13,554 $(3,717) Selling, general and administrative expenses (5,966) (3,549) Loss on sale of terminals -- (55) Interest expense, net (7,002) (1,115) Non-controlling interest in net income of consolidated subsidiary (210) (1,607) Other income 553 31 Income (loss) from continuing operations before taxes $929 $(10,012) MarkWest Hydrocarbon, Inc. Segment Operating Income (Loss) and Reconciliation to Income (Loss) from Continuing Operations Before Taxes (in thousands of dollars) MarkWest Energy Partners, Eliminating Marketing L.P. Entries Total Nine Months Ended September 30, 2004 Revenues $142,445 $205,327 $(43,350) $304,422 Segment operating expenses: Purchased product costs 124,036 146,695 (25,016) 245,715 Facility expenses 17,680 20,801 (18,334) 20,147 Depreciation 1,042 12,343 -- 13,385 Total segment operating expenses 142,758 179,839 (43,350) 279,247 Segment operating income (loss) $(313) $25,488 $-- $25,175 Nine Months Ended September 30, 2003 Revenues $104,026 $78,741 $(36,000) $146,767 Segment operating expenses: Purchased product costs 108,089 45,325 (18,533) 134,881 Facility expenses 16,550 14,900 (17,467) 13,983 Depreciation 560 5,231 -- 5,791 Total segment operating expenses 125,199 65,456 (36,000) 154,655 Segment operating income (loss) $(21,173) $13,285 $-- $(7,888) Reconciliation of Nine Nine Segment Operating Months Months Income (Loss) to Ended Ended Loss from Continuing September September Operations Before 30, 30, Taxes 2004 2003 Total segment operating income (loss) $25,175 $(7,888) Selling, general and administrative expenses (14,712) (9,462) Loss on sale of terminals -- (55) Interest expense, net (9,452) (4,176) Gain on sale to related party -- 188 Non-controlling interest in net income of consolidated subsidiary (4,452) (3,342) Other income 585 15 Loss from continuing operations before taxes $(2,856) $(24,720) MarkWest Hydrocarbon, Inc. Financial Statistics (in thousands except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2004 2003 % Change 2004 2003 % Change Statement of Operations Data Revenues(1) $122,938 $48,228 155% $304,422 $146,767 107% Net income (loss) $ 569 $(6,978) NM $(1,845) $1,959 NM Basic earnings (loss) per share $0.06 $(0.74) NM $(0.19) $0.21 NM Diluted earnings (loss) per share $0.06 $(0.74) NM $(0.19) $0.21 NM Weighted average shares outstanding (basic) 9,760 9,378 -- 9,695 9,364 -- Weighted average shares outstanding (diluted) 9,818 9,400 -- 9,741 9,380 -- September December September 30, 31, 30, 2004 2003 2003 Consolidated Balance Sheet Data Total assets $553,773 $280,713 $287,744 Total debt $197,500 $126,200 $63,300 Stockholders' equity $47,026 $52,184 $62,429 Footnotes: NM - Not meaningful (1) Exclusive of our discontinued exploration and production activities. MarkWest Hydrocarbon, Inc. Financial and Operating Statistics Three Months Ended Nine Months Ended September 30, September 30, % % 2004 2003 Change 2004 2003 Change Operating Data Marketing NGL product sales (gallons) 42,900,000 40,800,000 5% 130,100,000 125,700,000 4% Wholesale(1) NGL product sales (gallons) 10,879,000 -- NA 15,816,000 -- NA MarkWest Energy Partners Appalachia: Natural gas processed(2) (Mcf/d) 196,000 204,000 (4)% 201,000 198,000 2% NGLs fractionated (gal/day) 489,000 511,000 (4)% 474,000 449,000 6% NGLs product sales (gallons) 10,710,000 10,771,000 (1)% 32,638,000 29,142,000 12% Michigan: Natural gas processed for a fee (Mcf/d) 12,300 17,300 (29)% 12,800 15,900 (19)% NGL product sales (gallons) 2,453,000 3,982,000 (38)% 7,557,000 9,112,000 (17)% Crude oil transported(3) (barrels/day) 15,100 -- NA 14,800 -- NA Southwest: Gathering system throughput (Mcf/d): East Texas System(4) 246,600 -- NA 246,600 -- NA Foss Lake (OK)(5) 63,300 -- NA 60,700 -- NA Appleby(6) 24,500 25,200 (3)% 23,300 24,300 (4)% Other gathering systems(6) 15,500 21,300 (27)% 17,700 21,100 (16)% Lateral pipeline throughput volumes(7) (Mcf/d) 97,200 43,600 123% 83,100 43,600 91% NGL product sales (gallons): Arapaho (OK)(8) 12,174,000 -- NA 28,686,000 -- NA East Texas System(4) 12,268,000 -- NA 12,268,000 -- NA Footnotes: NA -- Not applicable (1) Wholesale NGL product sales started in February 2004. (2) Includes throughput from the Kenova, Cobb and Boldman processing plants. (3) MarkWest Energy Partners acquired its Michigan Crude Pipeline in December 2003. (4) MarkWest Energy Partners acquired its East Texas System in late July 2004. (5) Includes sales out of MarkWest Energy Partners' Foss Lake (OK) gathering systems, which were acquired in December 2003. (6) MarkWest Energy Partners acquired its Pinnacle gathering systems in late March 2003. (7) 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 owns that produce revenue on a per-unit-of-throughput basis. MarkWest Energy Partners receives a flat fee from the other lateral pipelines it owned during the first quarter of 2004 and, therefore, the throughput data from these lateral pipelines is excluded from this statistic. (8) MarkWest Energy Partners acquired its Arapaho (OK) processing plant in December 2003. DATASOURCE: MarkWest Hydrocarbon, Inc. CONTACT: Frank Semple, President and CEO, James Ivey, CFO, or Andy Schroeder, VP of Finance/Treasurer, +1-303-290-8700, Web site: http://www.markwest.com/

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