SMLP 2Q16 financial results

Summit Midstream Partners, LP has announced its financial and operating results for the three and six months ended 30 June 2016. SMLP reported a net loss of US$50.6 million for the second quarter of 2016 compared to a net loss of USUS$2.4 million for the prior year period, primarily due to (i) a loss from equity method investees of US$34.5 million related to a US$37.8 million impairment charge, net to SMLP, associated with Ohio Gathering's 23 thousand bpd condensate stabilisation facility, and (ii) US$17.5 million of non-cash accretion expense related to the deferred purchase price obligation associated with the 2016 Drop Down transaction. Net cash provided by operations totalled US$64.7 million in the second quarter of 2016, compared to US$57.3 million in the prior year period. Adjusted EBITDA totalled US$72.4 million and adjusted distributable cash flow totalled US$51.1 million for the second quarter of 2016 compared to US$61.9 million and US$45.7 million, respectively, for the prior year period.

Natural gas volume throughput averaged 1,512 million ft³/d in the second quarter of 2016, a decrease of 2.5% compared to 1550 million ft³/d in the prior year period, and a decrease of 0.7% compared to 1523 million ft³/d in the first quarter of 2016. Crude oil and produced water volume throughput in the second quarter of 2016 averaged 86.0 million bpd, an increase of 36.7% compared to 62.9 million bpd in the prior year period, and a decrease of 9.5% compared to 95.0 million bpd in the first quarter of 2016. All volume throughput metrics exclude SMLP's proportionate share of volume throughput from Ohio Gathering.

Steve Newby, President and Chief Executive Officer, commented: "SMLP reported another quarter of strong financial and operating results which were largely driven by sequential quarterly volume throughput growth across our Utica Shale gathering systems, together with continued progress on reducing expenses across each of our operating platforms. Volume throughput on our wholly owned Summit Utica system increased by 26.5% over the first quarter of 2016 due to volume tailwinds from eight wells that were completed in the middle of the first quarter of 2016, and two new wells that were connected and began flowing late in the second quarter. As expected, we saw flattening sequential quarterly volume growth on the Ohio Gathering system, which increased by 5.5% over the first quarter of 2016. Given our exposure to a vast acreage position spanning the condensate, liquids-rich, and dry gas windows of the Utica Shale, we continue to be optimistic about our prospects for continued volume and segment adjusted EBITDA growth from these assets. Overall, the assets included in the 2016 Drop Down transaction, which include our Utica, DJ, and additional Williston gathering systems, continue to perform in-line with the expectations we laid out at the time of the drop down.

“Our Piceance, Barnett, Williston and Marcellus assets are performing ahead of our prior expectations in the current commodity price environment and are benefiting from our fixed-fee business model and high level of long-term contractual underpinning in the form of minimum volume commitments. These minimum volume commitments are performing as designed, providing SMLP with a high degree of cash flow stability during a period when challenging commodity prices are resulting in lower drilling activity and causing volumes from certain of our customers to decline or growth to slow.

“Given the year-to-date operating and financial performance of our assets, which are performing in-line with our expectations, we are increasing the midpoint of our 2016 adjusted EBITDA guidance by 2% to US$280.0 million. Our strong financial performance has also resulted in a distribution coverage ratio of 1.25x for the second quarter of 2016; for the first six months of 2016, our distribution coverage ratio was 1.27x. As a result, we now expect our 2016 distribution coverage ratio will range from 1.15x to 1.25x in 2016 compared to prior guidance of 1.10x to 1.20x."

SMLP reported a net loss of US$54.2 million for the first six months of 2016 compared to a net loss of US$4.9 million for the prior year period. Net cash provided by operations totalled US$131.5 million in the first six months of 2016, compared to US$105.0 million in the prior year period. SMLP reported adjusted EBITDA of US$142.4 million and adjusted distributable cash flow of US$103.8 million compared to US$123.5 million and US$88.7 million, respectively, for the prior year period. Natural gas volume throughput averaged 1518 million ft³/d for the first six months of 2016 compared to 1577 million ft³/d in the prior year period. Crude oil and produced water volume throughput averaged 90.5 million bpd in the first six months of 2016 compared to 58.1 million bpd in the prior year period.

Read more about the results here. 

Edited from source by Stephanie Roker

Read the article online at: https://www.worldpipelines.com/business-news/08082016/smlp-2q16-financial-results/