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American Midstream reports 2017 full year results

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World Pipelines,

American Midstream Partners today reported financial results for the three and twelve months ended 31 December 2017. During 2017, American Midstream made considerable progress in executing on a capital redeployment strategy of simplifying its businesses while gaining asset scale and density in core operating areas.

The company has effectively reallocated over US$530 million in capital in eight highly accretive transactions, which have high graded its asset base and provide a foundation for meaningful future growth. With this expanded asset base and in conjunction with numerous organic growth projects, American Midstream is poised for materially higher 2018 Adjusted EBITDA and distributable cash flows.

Financial highlights

  • Net loss attributable to American Midstream was US$131.3 million for the year ended 31 December 2017 as compared to net loss of US$51.3 million for the same period in 2016.
  • Adjusted EBITDA was US$176.4 million for the year ended 31 December 2017, a decrease of 1% compared to 2016.
  • Total segment gross margin was US$242.1 million for the year ended 31 December 2017, an increase of 8% compared to 2016.
  • Enhanced American Midstream’s capital structure with an additional issuance of US$125 million aggregate principal amount of its existing 8.5% Senior Notes due 2021.
  • Maintained a quarterly distribution of US$0.4125 per common unit, or US$1.65 per common unit on an annualised basis.

Operational highlights

  • Reallocated approximately US$530 million in capital to eight accretive high growth opportunities.
  • Closed US$170 million divestiture of Propane Marketing and Services business, simplifying American Midstream and re-purposing capital to higher growth assets at meaningfully accretive valuations.
  • Closed US$90 million acquisition of Viosca Knoll and Panther pipelines, creating a one-of-a-kind interconnected system from offshore production to multiple onshore markets.
  • Closed US$184 million of additional equity interest drop downs in Delta House and Destin pipeline, further bolstering the unique portfolio of interconnected and complementary fee-based offshore assets.
  • Commenced deliveries on the Cayenne pipeline, which has the ability to move virtually all natural gas liquids volumes out of the prolific deepwater Gulf of Mexico Mississippi Canyon block.
  • Closed US$48 million drop down of Trans-Union pipeline, further enhancing American Midstream’s core Southeast transmission asset footprint.
  • Announced the US$816 million acquisition of Southcross Holding and merger of Southcross Energy Partners collectively, to form a strategically integrated South Texas footprint.

Executive summary

"This has been a tremendously active fourth quarter and 2017 for American Midstream. We have taken meaningful strides in our capital optimisation programme as we continue to build a fully integrated midstream company. In 2017, we acquired or announced more than US$1.8 billion of accretive growth transactions ultimately continuing the transformation into a growth-oriented company. We continue to redeploy capital to higher growth opportunities allowing us to capture greater cash flow.

"In 4Q17, we announced the Southcross acquisition, which furthers our ability to participate in the full midstream value chain, from wellhead supply to downstream end user markets in the strategic Gulf Coast. It is a meaningful step in the continuing pursuit of strategic opportunities allowing American Midstream to grow, compete and thrive in the midstream space. We have significantly high graded our asset base and are now solidifying our strategic footprint allowing us to focus on meaningful organic growth opportunities," stated Lynn Bourdon III, President and Chief Executive Officer.

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