DENVER, Oct. 24 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon,
Inc. (AMEX:MWP) (the "Company") on October 21 reported net income
for the three months ended December 31, 2004 of $6.7 million, or
$0.62 per diluted share, compared to a restated net loss of $12.6
million, or $1.21 per diluted share, for the fourth quarter of
2003. For the year ended December 31, 2004, MarkWest Hydrocarbon
reported a net loss of $0.9 million, or $0.08 per diluted share,
compared to a restated net loss of $11.0 million, or $1.07 per
diluted share, for the year ended December 31, 2003. The Company
reported income from continuing operations of $6.7 million, or
$0.62 per diluted share, for the three months ended December 30,
2004, compared to a restated loss from continuing operations of
$6.6 million, or $0.63 per diluted share, for the fourth quarter of
2003. For the year ended December 31, 2004, the Company reported a
net loss from continuing operations of $0.9 million, or $0.08 per
diluted share, compared to a restated net loss from continuing
operations of $22.4 million, or $2.17 per diluted share, for the
corresponding year 2003. The improved results for the fourth
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 $5.2 million of crude oil hedging
losses and higher NGL product sales volumes. The reduction in net
loss from continuing operations for the calendar year 2004 as
compared to the corresponding period of 2003 was also attributed to
the factors impacting the fourth quarter comparisons. Approximately
$15.9 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 the Company's subsidiary, MarkWest Energy Partners, L.P.,
late in 2003 and in the third quarter of 2004. Finally, in
September 2004, the Company entered into several new and amended
agreements with one of the largest Appalachia producers, which
allow the Company to significantly reduce its exposure to commodity
price risk for approximately 25% of its keep-whole gas volumes. In
February 2005, the Company paid a dividend for the quarter ended
December 30, 2004 of $0.075 per share of its common stock held by
the common stockholders. This represented a $0.025 per share
increase over the previous quarter's dividend. The indicated annual
rate is $0.30 per share. "It has been a very challenging year for
us from a financial reporting perspective," said Frank Semple,
President and CEO. "However, we are pleased to report results for
the fourth quarter and full year 2004. Our improved performance was
primarily a result of increased NGL product sales and margins as
well as the continued growth of MarkWest Energy Partners, L.P.
Completing the financial reports and improving our accounting
capabilities and processes have been key priorities, however, we
have also been very focused on the continued growth of MarkWest
energy partners and optimization of our processing agreements in
Appalachia. I am very pleased with the increased equity income from
our ownership of MarkWest Energy common units and GP interest.
MarkWest Energy Partners continues to identify and execute on
growth opportunities, which have impacted the 2004 results, and we
believe will continue for the foreseeable future. The East Texas
Carthage processing plant is on schedule for start-up in January
2006 and a number of internal growth projects in the Southwest
business unit are being developed. Both the Appleby and Western
Oklahoma assets continue to grow as high quality drilling
opportunities behind these systems are exploited by our producer
customers. We are also excited about MarkWest Energy Partners
recently announced acquisition of the Javelina facilities in Corpus
Christi, Texas, which is anticipated to close November 1, 2005 and
we anticipate will add significant earnings in 2006 and well into
the future. MarkWest Energy Partners will be a key part of our
future growth and we are very pleased with their current
performance and future opportunities." The Company will host a
conference call on Tuesday, October 25, 2005, at 2:00 P.M. MDT to
review their fourth quarter 2004 earnings. Interested parties can
participate in the call by dialing the following number
approximately ten minutes prior to the scheduled start time:
1-800-257-2182. A replay of the call will be available through
November 1, 2005 by dialing 1-800-405-2236 and entering the
following passcode: 11043136#. To access the webcast, please visit
our website at http://www.markwest.com/. 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 Year Year Ended
Ended Ended Ended December 31, December 31, December 31, December
31, 2004 2003 2004 2003 (as restated) (as restated) Statement of
Operations Data Revenues $155,878 $61,077 $460,113 $209,268
Operating expenses: Purchased product costs 115,301 52,663 363,261
187,544 Facility expenses 8,121 6,207 28,580 20,957 Selling,
general and administrative expenses 10,495 5,768 28,132 15,865
Depreciation, amortization, accretion and impairments 7,504 4,811
20,680 10,982 Total operating expenses 141,421 69,449 440,653
235,348 Income (loss) from operations 14,457 (8,372) 19,460
(26,080) Other income (expense): Interest expense, net (3,480)
(1,335) (8,736) (4,241) Amortization of deferred financing costs
(1,547) (834) (5,281) (2,104) Dividend income 90 -- 259 --
Miscellaneous income (expenses) 241 (52) 788 (92) Income (loss)
from continuing operations before income taxes 9,761 (10,593) 6,490
(32,517) Provision (benefit) for income taxes (511) (3,830) 78
(13,085) Non-controlling interest in net income of consolidated
subsidiary (3,556) 200 (7,315) (2,988) Income (loss) from
continuing operations 6,716 (6,563) (903) (22,420) Income (loss)
from discontinued exploration and production operations, net of tax
-- (6,025) -- 11,443 Income (loss) before cumulative effect of
accounting change 6,716 (12,588) (903) (10,977) Cumulative effect
of accounting change, net of tax -- -- -- (29) Net income (loss)
$6,716 $(12,588) $(903) $(11,006) Income (loss) from continuing
operations per share: Basic $0.62 $(0.63) $(0.08) $(2.17) Diluted
$0.62 $(0.63) $(0.08) $(2.17) Net income (loss) per share: Basic
$0.62 $(1.21) $(0.08) $(1.07) Diluted $0.62 $(1.21) $(0.08) $(1.07)
Weighted average number of outstanding shares of common stock:
Basic 10,750 10,399 10,686 10,328 Diluted 10,825 10,419 10,740
10,347 MarkWest Hydrocarbon, Inc. Income (Loss) from Operations (in
thousands of dollars) MarkWest MarkWest Hydrocarbon Energy
Eliminating Stand-alone Partners, L.P. Entries Total Three Months
Ended December 31, 2004 Revenues $77,619 $93,988 $(15,729) $155,878
Operating expenses: Purchased product costs 61,915 62,594 (9,208)
115,301 Facility expenses 5,844 8,798 (6,521) 8,121 Selling,
general and administrative expenses 3,708 6,787 -- 10,495
Depreciation, amortization, accretion, and impairments 299 7,205 --
7,504 Total operating expenses 71,766 85,384 (15,729) 141,421
Income from operations $5,853 $8,604 $-- $14,457 Three Months Ended
December 31, 2003 (as restated) Revenues $36,361 $38,689 $(13,973)
$61,077 Operating expenses: Purchased product costs 34,544 25,507
(7,388) 52,663 Facility expenses 7,229 5,563 (6,585) 6,207 Selling,
general and administrative expenses 2,392 3,376 -- 5,768
Depreciation and Impairments 1,346 3,465 -- 4,811 Total operating
expenses 45,511 37,911 (13,973) 69,449 Income (loss) from
operations $(9,150) $778 $-- $(8,372) Year Ended December 31, 2004
Revenues $218,337 $301,314 $(59,538) $460,113 Operating expenses:
Purchased product costs 185,951 211,534 (34,224) 363,261 Facility
expenses 23,983 29,911 (25,314) 28,580 Selling general and
administrative expenses 11,999 16,133 -- 28,132 Depreciation,
amortization, accretion and impairments 1,341 19,339 -- 20,680
Total operating expenses 223,274 276,917 (59,538) 440,653 Income
(loss) from operations $(4,937) $24,397 $-- $19,460 Year Ended
December 31, 2003 (as restated) Revenues $142,569 $117,430
$(50,731) $209,268 Operating expenses: Purchased product costs
142,633 70,832 (25,921) 187,544 Facility expenses 25,304 20,463
(24,810) 20,957 Selling general and administrative expenses 7,267
8,598 -- 15,865 Depreciation, amortization, accretion and
impairments 2,286 8,696 -- 10,982 Total operating expenses 177,491
108,588 (50,731) 235,348 Income (loss) from operations $(34,921)
$8,841 $-- $(26,080) MarkWest Hydrocarbon, Inc. Financial
Statistics (in thousands) Hydrocarbon MarkWest Eliminating
Stand-alone Energy Entries Total (in thousands) Year Ended December
31, 2004 Cash, cash equivalents and restricted cash $3,581 $24,263
$-- $27,844 Marketable securities 14,815 -- -- 14,815 Current
assets 58,016 72,959 -- 130,975 Current liabilities 14,656 62,412
-- 77,068 Total assets 64,152 529,422 -- 593,574 Total debt --
225,000 -- 225,000 Year Ended December 31, 2003, (as restated)
Cash, cash equivalents and restricted cash $33,391 $8,753 $--
$42,144 Current assets 63,498 23,581 -- 87,079 Current liabilities
21,208 21,124 -- 42,332 Total assets 67,624 212,871 -- 280,495
Total debt -- 126,200 -- 126,200 MarkWest Hydrocarbon, Inc.
Financial and Operating Statistics Three Months Ended December 31,
2004 2003 % Change Operating Data Marketing NGL product sales
(gallons) (1) 47,900,000 51,300,000 (6.6)% Wholesale(2) NGL product
sales (gallons) 26,338,000 NA NA MarkWest Energy Partners
Southwest: Gathering system throughput (Mcf/d): East Texas
System(3) 267,700 NA NA Foss Lake (OK)(4) 61,500 57,000 8%
Appleby(5) 29,600 22,300 33% Other gathering systems(5) 16,600
18,100 (8)% Lateral pipeline throughput volumes (6) (Mcf/d) 67,100
28,300 137% NGL product sales (gallons): Arapaho (OK)(7) 16,587,000
2,910,000 NA East Texas System(4) 29,210,000 NA NA Appalachia:
Natural gas processed (8) (Mcf/d) 208,000 213,000 (2)% NGLs
fractionated (gal/day) 478,000 483,000 (1)% NGLs product sales
(gallons) 9,467,000 11,335,000 (16)% Michigan: Natural gas
processed for a fee (Mcf/d) 10,800 13,000 (17)% NGL product sales
(gallons) 2,261,000 2,600,000 (13)% Crude oil transported (9)
(barrels/day) 14,400 15,100 NA Footnotes: NA - Not applicable (1)
Represents sales at the Siloam fractionator. (2) Represents sales
from our wholesale business. Volumes are for the period of time
since the Company started the line of business in February 2004.
(3) MarkWest Energy Partners acquired its East Texas System in late
July 2004. (4) MarkWest Energy Partners acquired its Foss Lake (OK)
gathering system in December 2003. (5) MarkWest Energy Partners
acquired its Pinnacle gathering systems in late March 2003. (6)
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. (7) MarkWest
Energy Partners acquired its Arapaho (OK) processing plant in
December 2003. (8) Includes throughput from the Partnership's
Kenova, Cobb and Boldman processing plants. (9) MarkWest Energy
Partners acquired its Michigan Crude Pipeline in December 2003.
MarkWest Hydrocarbon, Inc. Financial and Operating Statistics Year
Ended December 31, 2004 2003 % Change Operating Data Marketing NGL
product sales (gallons) (1) 178,000,000 177,000,000 0.6%
Wholesale(2) NGL product sales (gallons) 42,154,000 NA NA MarkWest
Energy Partners Southwest: Gathering system throughput (Mcf/d):
East Texas System(3) 259,300 NA NA Foss Lake (OK)(4) 60,900 57,000
7% Appleby(5) 27,100 23,800 (4)% Other gathering systems(5) 17,000
20,500 (16)% Lateral pipeline throughput volumes (6) (Mcf/d) 75,500
32,100 91% NGL product sales (gallons): Arapaho (OK)(7) 45,273,000
2,910,000 NM East Texas System(4) 41,478,000 NA NA Appalachia:
Natural gas processed (8) (Mcf/d) 203,000 202,000 0.5% NGLs
fractionated (gal/day) 475,000 458,000 4% NGLs product sales
(gallons) 42,105,000 40,305,000 5% Michigan: Natural gas processed
for a fee (Mcf/d) 12,300 15,000 (18)% NGL product sales (gallons)
9,818,000 11,800,000 (17)% Crude oil transported (9) (barrels/day)
14,700 15,100 NA Footnotes: NA - Not applicable (1) Represents
sales at the Siloam fractionator. (2) Represents sales from our
wholesale business. Volumes are for the period of time since the
Company started the line of business in February 2004. (3) MarkWest
Energy Partners acquired its East Texas System in late July 2004.
(4) MarkWest Energy Partners acquired its Foss Lake (OK) gathering
system in December 2003. (5) MarkWest Energy Partners acquired its
Pinnacle gathering systems in late March 2003. (6) 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. (7) MarkWest Energy Partners acquired
its Arapaho (OK) processing plant in December 2003. (8) Includes
throughput from the Partnership's Kenova, Cobb and Boldman
processing plants. (9) MarkWest Energy Partners acquired its
Michigan Crude Pipeline in December 2003. 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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