Sanchez Production Partners LP (NYSE MKT:SPP) (“SPP” or the
“Partnership”) today reported fourth quarter and full year 2016
results. Highlights from the report include:
- A fourth quarter 2016 cash distribution on the Partnership’s
common units of $0.4310 per unit ($1.7240 per unit annualized),
which represents the fifth consecutive 1.5 percent increase since
the Partnership’s third quarter 2015 cash distribution on common
units for a 6.2 percent annualized rate of increase;
- Throughput volumes of natural gas for the Western Catarina
Midstream system for the fourth quarter and full year 2016
exceeded expectations at 120 percent and 128 percent, respectively,
of the “Minimum Quarterly Quantity” (“MQQ”) gathered for Sanchez
Energy Corporation (NYSE:SN) (“Sanchez Energy”) at Catarina;
- The Raptor Gas Processing Facility remains on time and on
budget and was recently approved to be upsized from 200 MMcfe/d to
260 MMcfe/d;
- Carnero Gathering Pipeline construction to the Raptor Gas
Processing Facility is now complete and further expansion is
underway aimed at interconnecting with Sanchez Energy’s Comanche
asset;
- The Partnership reported a net loss of $12.9 million and
Adjusted EBITDA (a non-GAAP financial measure) of $12.4 million for
the fourth quarter 2016; and
- Full year 2016 net income was approximately $19.2 million and
full year 2016 Adjusted EBITDA (a non-GAAP financial measure) was
$55.4 million.
MANAGEMENT COMMENTARY“During
2016, the Partnership made significant progress on our midstream
growth strategy,” said Gerry Willinger, Chief Executive Officer of
the general partner of SPP. “In July, we closed on the
acquisition of a 50 percent interest in Carnero Gathering, LLC, a
joint venture with Targa Resources Corp. (“Targa”) that owns the
Carnero Gathering Pipeline. Then, in November, we closed on
the acquisition of a 50 percent interest in Carnero Processing,
LLC, a joint venture, also with Targa, that owns the Raptor Gas
Processing Facility currently under construction in La Salle
County, Texas.”
“The Carnero Gathering Pipeline, which went into
service in 2016, currently delivers natural gas volumes for Sanchez
Energy to a natural gas processing facility located in Bee County,
Texas. Construction of the Carnero Gathering Pipeline to the
Raptor Gas Processing Facility is now complete. The Raptor
Gas Processing Facility remains on time and on budget and is
expected to go into service in the second quarter 2017 with initial
processing capacity of 200 MMcfe/d. Together, these assets
are expected to provide a stable stream of fee-based cash flow, and
-- together with the Western Catarina Midstream system -- form the
basis of our midstream growth strategy in South Texas.”
“Our prospects for growth have improved
considerably with Sanchez Energy’s acquisition of the Comanche
asset in South Texas. We look to expand both the Carnero
Gathering Pipeline and the Raptor Gas Processing Facility to be in
a position to accommodate natural gas production from Comanche. To
that end, a lateral off of the Carnero Gathering Pipeline is
underway aimed at interconnecting with the Comanche asset, and the
Raptor Gas Processing Facility was recently approved to be upsized
from 200 MMcfe/d to 260 MMcfe/d. We anticipate these
incremental projects will be fully operational in the third quarter
2017.”
“With these assets, we have successfully
transformed the Partnership to a midstream-focused master limited
partnership and, in the process, have significantly reduced our
commodity price exposure. Consistent with this strategy, the
Partnership continues to explore the possible divestiture of its
remaining oil and natural gas wells, leases and associated assets
and interests in Oklahoma and Kansas.”
OPERATING AND FINANCIAL
RESULTSThe Partnership’s revenue totaled $15.3 million
during the fourth quarter 2016. Included in total revenue for
the fourth quarter 2016 is revenue from the Western Catarina
Midstream system of $12.8 million and $7.0 million generated from
production activities. The balance of the Partnership’s
fourth quarter 2016 total revenue came from hedge settlements ($0.4
million) and a loss on mark-to-market activities ($4.9 million),
which is a non-cash item. For the full year 2016, the
Partnership’s revenue totaled $70.7 million.
Operating expenses during the fourth quarter
2016 totaled $32.5 million, which includes $3.4 million in
operating expenses related to the Western Catarina Midstream system
and $3.3 million in production operating expenses and production
taxes. For the full year 2016, the Partnership’s operating
expenses totaled $96.6 million. General and administrative expenses
during the fourth quarter 2016 of $5.9 million
includes $2.1 million in unit-based asset management
fees, which is a non-cash item. General and administrative
expenses for the full year 2016 of $22.9 million
includes $7.0 million in unit-based asset management
fees, which is a non-cash item.
On a GAAP basis, the Partnership recorded a net
loss of $12.9 million for the fourth quarter 2016. For the
full year 2016, the Partnership recorded net income of $19.2
million.
Adjusted EBITDA (a non-GAAP financial measure)
for the fourth quarter 2016 was approximately $12.4 million.
For the full year 2016, the Partnership generated $55.4 million of
Adjusted EBITDA. The Partnership’s calculation of Adjusted
EBITDA is discussed in further detail below.
LIQUIDITY UPDATEAs of Dec. 31,
2016, the Partnership had $153.0 million in debt outstanding under
its credit facility, which had a borrowing base of $215.1 million
and a commitment amount of $200 million. The reserve-based
lending and midstream components of the Partnership’s borrowing
base under the credit facility are scheduled for redetermination by
the lenders during the second quarter 2017. The Partnership had
approximately $1.0 million in cash and cash equivalents at Dec. 31,
2016.
HEDGE UPDATEFor the
period Jan. 1, 2017 through Dec. 31, 2017, the
Partnership has hedged approximately 1.1 Bcf of its natural gas
production at an effective NYMEX fixed price of
approximately $5.44 per MMBtu and approximately 365.3
MBbl of its crude oil production at an effective NYMEX fixed price
of approximately $61.30 per barrel.
COMMON UNITSThe Partnership had
14,153,061 common units issued and outstanding as of March 24,
2017.
DISTRIBUTIONSOn Feb. 9, 2017,
the Partnership declared a fourth quarter 2016 cash distribution on
its common units of $0.4310 per unit ($1.724 per unit annualized),
which represents the fifth consecutive 1.5 percent increase since
the Partnership’s third quarter 2015 cash distribution on common
units for a 6.2 percent annualized rate of increase. The
Partnership has also declared a fourth quarter 2016 distribution to
the holders of its class B preferred units equal to 208,594 common
units and a cash distribution of $0.2258 per class B preferred
unit.
Based on Adjusted EBITDA of $12.4 million, cash
interest expense of $1.6 million and maintenance capital of $0.6
million, the Partnership generated $10.2 million in cash available
for distribution.
CONFERENCE CALL INFORMATIONThe
Partnership will host a conference call at 10:00 a.m. Central Time
(11:00 a.m. Eastern Time) on Friday, March 24, 2017 to discuss
fourth quarter 2016 results.
To participate in the conference call, analysts,
investors, media and the public in the U.S. may dial (844) 824-3837
shortly before 10:00 a.m. Central Time (11:00 a.m. Eastern Time)
. The international phone number is (412) 317-5161.
Callers should request the “SPP 16Q4 Conference Call” once reaching
the operator.
A live audio webcast of the conference call and
the earnings release will be available on the Partnership’s website
(www.sanchezpp.com) under the Investor Relations page. A
replay will be available approximately one hour after the
call through March 31, 2017, at 10:59 p.m. Central
Time (11:59 p.m. Eastern Time). The replay may accessed by
dialing (844) 824-3837 (U.S.) or (412) 317-5161 (International),
and referencing the replay passcode: 10102989.
ABOUT THE PARTNERSHIPSanchez
Production Partners LP (NYSE MKT:SPP) is a publicly-traded limited
partnership focused on the acquisition, development, ownership and
operation of midstream and production assets in North
America. The Partnership owns an oil and natural gas
gathering and processing system located in the Eagle Ford Shale in
Dimmit, Webb and La Salle Counties, Texas. The Partnership
also currently owns producing reserves in the Eagle Ford Shale in
South Texas, the Gulf Coast region of Texas and Louisiana, and
across several basins in Oklahoma and Kansas. The Partnership
previously announced and continues to explore the possible
divestiture of its remaining assets and operations in Oklahoma and
Kansas.
ADDITIONAL INFORMATIONAdditional information about
SPP can be found in the Partnership’s documents on file with the
U.S. Securities and Exchange Commission (www.sec.gov) and in the
“Investor Presentation” available on the Partnership’s website
(www.sanchezpp.com).
The Partnership anticipates that it will file
its Form 10-K with the U.S. Securities Exchange Commission on or
about March 27, 2017.
NON-GAAP MEASURESWe present
Adjusted EBITDA in addition to our reported net income (loss) in
accordance with GAAP in this news release.
Adjusted EBITDA is a non-GAAP financial measure
that is defined as net income (loss) adjusted by (i) interest
(income) expense, net, which includes interest expense, interest
expense net (gain) loss on interest rate derivative contracts, and
interest (income); (ii) income tax expense (benefit); (iii)
depreciation, depletion and amortization; (iv) asset impairments;
(v) accretion expense; (vi) (gain) loss on sale of assets; (vii)
unit-based compensation programs; (viii) unit-based asset
management fees; (ix) distributions in excess of equity earnings;
(x) (gain) loss on mark-to-market activities; (xi) commodity
derivatives settlements applied to future positions; and (xii)
(gain) loss on embedded derivatives. For a reconciliation of
Adjusted EBITDA to Net Income (Loss), the most directly comparable
GAAP measure, see the tables at the end of this release.
Adjusted EBITDA is a significant performance
metric used by our management to indicate (prior to the
establishment of any cash reserves by the board of directors of our
general partner) the distributions that we would expect to pay to
our unitholders. Specifically, this financial measure
indicates to investors whether or not we are generating cash flow
at a level that can sustain or support a quarterly distribution or
any increase in our quarterly distribution rates. Adjusted
EBITDA is also used as a quantitative standard by our management
and by external users of our financial statements such as
investors, research analysts, our lenders and others to
assess: (i) the financial performance of our assets without
regard to financing methods, capital structure or historical cost
basis; (ii) the ability of our assets to generate cash sufficient
to pay interest costs and support our indebtedness; and (iii) our
operating performance and return on capital as compared to those of
other companies in our industry, without regard to financing or
capital structure. We believe that the presentation of
Adjusted EBITDA provides useful information to investors in
assessing our financial condition and results of operations.
The GAAP measure most directly comparable to Adjusted EBITDA is net
income. Our non-GAAP financial measure of Adjusted EBITDA
should not be considered as an alternative to GAAP net
income. Adjusted EBITDA has important limitations as an
analytical tool because it excludes some but not all items that
affect net income. Adjusted EBITDA should not be considered in
isolation or as a substitute for analysis of our results as
reported under GAAP. Because Adjusted EBITDA may be defined
differently by other companies in our industry, our definition of
Adjusted EBITDA may not be comparable to similarly titled measures
of other companies, thereby diminishing its utility.
FORWARD-LOOKING STATEMENTSThis
press release contains, and the officers and representatives of the
Partnership and its general partner may from time to time make,
statements that are considered forward–looking statements within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. These forward-looking statements are
subject to a number of risks and uncertainties, many of which are
beyond our control, which may include statements about our:
business strategy; acquisition strategy; financing strategy;
ability to make, maintain and grow distributions; the ability of
our customers to meet their drilling and development plans on a
timely basis or at all and perform under gathering and processing
agreements; future operating results; future capital expenditures;
and plans, objectives, expectations, forecasts, outlook and
intentions. All of these types of statements, other than
statements of historical fact included in this press release, are
forward-looking statements. In some cases,
forward-looking statements can be identified by terminology such as
“may,” “could,” “should,” “expect,” “plan,” “project,” “intend,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,”
“pursue,” “target,” “continue,” the negative of such terms or other
comparable terminology.
The forward-looking statements contained in this
press release are largely based on our expectations, which reflect
estimates and assumptions made by our management. These
estimates and assumptions reflect our best judgment based on
currently known market conditions and other factors. Although
we believe such estimates and assumptions to be reasonable, they
are inherently uncertain and involve a number of risks and
uncertainties that are beyond our control. In addition,
management’s assumptions about future events may prove to be
inaccurate. Management cautions all readers that the
forward-looking statements contained in this press release are not
guarantees of future performance, and we cannot assure any reader
that such statements will be realized or the forward-looking events
and circumstances will occur. Actual results may differ
materially from those anticipated or implied in the forward-looking
statements due to factors listed in the “Risk Factors” section in
our filings with the U.S. Securities and Exchange Commission and
elsewhere in those filings. The forward-looking statements
speak only as of the date made, and other than as required by law,
we do not intend to publicly update or revise any forward-looking
statements as a result of new information, future events or
otherwise. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on
our behalf.
Sanchez Production Partners LP |
|
Condensed Consolidated Statements of
Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Dec. 31, |
|
Twelve Months Ended Dec. 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
($ in thousands) |
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Oil, liquids, and gas
sales |
|
$ |
7,402 |
|
|
$ |
11,264 |
|
|
$ |
44,493 |
|
|
$ |
51,923 |
|
|
Gathering and
transportation sales |
|
|
12,842 |
|
|
|
11,725 |
|
|
|
53,972 |
|
|
|
11,725 |
|
|
Gain (loss) on
mark-to-market activities |
|
|
(4,928 |
) |
|
|
3,109 |
|
|
|
(27,780 |
) |
|
|
4,780 |
|
|
Total
revenues |
|
|
15,316 |
|
|
|
26,098 |
|
|
|
70,685 |
|
|
|
68,428 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Lease
operating expenses |
|
|
3,063 |
|
|
|
4,536 |
|
|
|
14,981 |
|
|
|
19,988 |
|
|
Gathering
and transportation operating expenses |
|
|
3,299 |
|
|
|
2,176 |
|
|
|
12,478 |
|
|
|
2,176 |
|
|
Cost of
sales |
|
|
36 |
|
|
|
126 |
|
|
|
328 |
|
|
|
595 |
|
|
Production taxes |
|
|
330 |
|
|
|
396 |
|
|
|
1,167 |
|
|
|
1,792 |
|
|
General
and administrative |
|
|
5,918 |
|
|
|
5,449 |
|
|
|
22,901 |
|
|
|
23,655 |
|
|
Unit
compensation expense |
|
|
322 |
|
|
|
(9 |
) |
|
|
1,941 |
|
|
|
2,454 |
|
|
Exploration costs |
|
|
- |
|
|
|
1,866 |
|
|
|
- |
|
|
|
1,866 |
|
|
(Gain)
loss on sale of assets |
|
|
- |
|
|
|
- |
|
|
|
219 |
|
|
|
(111 |
) |
|
Depreciation, depletion and amortization |
|
|
12,975 |
|
|
|
5,486 |
|
|
|
33,799 |
|
|
|
14,536 |
|
|
Asset
impairments |
|
|
6,337 |
|
|
|
39,196 |
|
|
|
7,646 |
|
|
|
123,860 |
|
|
Accretion
expense |
|
|
226 |
|
|
|
317 |
|
|
|
1,127 |
|
|
|
1,099 |
|
|
Total
operating expenses |
|
|
32,506 |
|
|
|
59,539 |
|
|
|
96,587 |
|
|
|
191,910 |
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
(income): |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
1,548 |
|
|
|
1,767 |
|
|
|
5,093 |
|
|
|
4,207 |
|
|
(Gain)
loss on embedded derivatives |
|
|
(4,590 |
) |
|
|
9,982 |
|
|
|
(47,794 |
) |
|
|
9,982 |
|
|
Earnings
from equity investments |
|
|
(1,246 |
) |
|
|
(78 |
) |
|
|
(2,382 |
) |
|
|
(81 |
) |
|
Other
expense (income) |
|
|
- |
|
|
|
(640 |
) |
|
|
(50 |
) |
|
|
(589 |
) |
|
Total
expenses, net |
|
|
28,218 |
|
|
|
70,570 |
|
|
|
51,454 |
|
|
|
205,429 |
|
|
Income (loss) before
income taxes |
|
|
(12,902 |
) |
|
|
(44,472 |
) |
|
|
19,231 |
|
|
|
(137,001 |
) |
|
Income
tax expense |
|
|
- |
|
|
|
52 |
|
|
|
- |
|
|
|
55 |
|
|
Net income (loss) |
|
|
(12,902 |
) |
|
|
(44,524 |
) |
|
|
19,231 |
|
|
|
(137,056 |
) |
|
Less: |
|
|
|
|
|
|
|
|
|
Preferred
unit paid-in-kind distributions |
|
|
- |
|
|
|
(456 |
) |
|
|
- |
|
|
|
(1,425 |
) |
|
Preferred
unit dividends |
|
|
(9,625 |
) |
|
|
(7,418 |
) |
|
|
(39,375 |
) |
|
|
(7,418 |
) |
|
Preferred
unit amortization |
|
|
(3,960 |
) |
|
|
(7,424 |
) |
|
|
(24,340 |
) |
|
|
(8,919 |
) |
|
Net income (loss)
attributable to common unitholders |
|
$ |
(26,487 |
) |
|
$ |
(59,822 |
) |
|
$ |
(44,484 |
) |
|
$ |
(154,818 |
) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
12,429 |
|
|
$ |
11,908 |
|
|
$ |
55,396 |
|
|
$ |
17,049 |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per unit prior
to conversion (1) |
|
|
|
|
|
|
|
|
|
Class A
units - Basic and Diluted |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(0.38 |
) |
|
Class B
units - Basic and Diluted |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(0.31 |
) |
|
Weighted Average Units
Outstanding prior to conversion (1) |
|
|
|
|
|
|
|
|
|
Class A
units - Basic and Diluted |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
48,451 |
|
|
Class B
units - Basic and Diluted |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,879,163 |
|
|
Net loss per unit after
conversion (1) |
|
|
|
|
|
|
|
|
|
Common units - Basic
and Diluted |
|
$ |
(3.34 |
) |
|
$ |
(19.95 |
) |
|
$ |
(9.55 |
) |
|
$ |
(50.10 |
) |
|
Weighted Average Units
Outstanding after conversion (1) |
|
|
|
|
|
|
|
|
|
Common units - Basic
and Diluted |
|
|
7,941,890 |
|
|
|
2,999,194 |
|
|
|
4,658,970 |
|
|
|
3,071,587 |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Amounts adjusted for 1-for-10 reverse split completed August 3,
2015. |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanchez Production Partners LP |
|
Condensed Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31, |
|
Dec. 31, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
$ |
14,765 |
|
|
$ |
32,901 |
|
|
|
|
|
|
Oil and natural gas
properties, net of accumulated |
|
|
|
|
|
|
|
|
|
depreciation, depletion, amortization and impairments |
|
|
222,820 |
|
|
|
227,054 |
|
|
|
|
|
|
Other assets |
|
|
302,120 |
|
|
|
211,345 |
|
|
|
|
|
|
Total
assets |
|
$ |
539,705 |
|
|
$ |
471,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
$ |
9,443 |
|
|
$ |
9,012 |
|
|
|
|
|
|
Long-term debt, net of
premium, discount and debt |
|
|
|
|
|
|
|
|
|
issuance
costs |
|
|
151,322 |
|
|
|
104,909 |
|
|
|
|
|
|
Other long-term
liabilities |
|
|
19,205 |
|
|
|
213,441 |
|
|
|
|
|
|
Total
liabilities |
|
|
179,970 |
|
|
|
327,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine equity |
|
|
340,366 |
|
|
|
172,111 |
|
|
|
|
|
|
Partners' deficit |
|
|
18,592 |
|
|
|
(28,173 |
) |
|
|
|
|
|
Total partners'
deficit |
|
|
18,592 |
|
|
|
(28,173 |
) |
|
|
|
|
|
Total
liabilities and partners' capital |
|
$ |
538,928 |
|
|
$ |
471,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sanchez Production Partners LP |
|
Reconciliation of Net Income (Loss)
to |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Dec. 31, |
|
Twelve Months Ended Dec. 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
($ in thousands) |
|
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Net Income (Loss) to |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(12,902 |
) |
|
$ |
(44,332 |
) |
|
$ |
19,231 |
|
|
$ |
(137,056 |
) |
|
Add: |
|
|
|
|
|
|
|
|
|
Interest
expense, net |
|
|
1,548 |
|
|
|
1,767 |
|
|
|
5,093 |
|
|
|
4,207 |
|
|
Income
tax expense |
|
|
- |
|
|
|
1 |
|
|
|
- |
|
|
|
55 |
|
|
Depreciation, depletion and amortization |
|
|
12,975 |
|
|
|
5,238 |
|
|
|
33,799 |
|
|
|
14,536 |
|
|
Asset
impairments |
|
|
6,337 |
|
|
|
40,974 |
|
|
|
7,646 |
|
|
|
125,726 |
|
|
Accretion
expense |
|
|
226 |
|
|
|
317 |
|
|
|
1,127 |
|
|
|
1,099 |
|
|
(Gain)
loss on sale of assets |
|
|
- |
|
|
|
- |
|
|
|
219 |
|
|
|
(111 |
) |
|
Unit-based compensation programs |
|
|
322 |
|
|
|
134 |
|
|
|
1,941 |
|
|
|
2,454 |
|
|
Unit-based asset management fees |
|
|
2,081 |
|
|
|
937 |
|
|
|
6,984 |
|
|
|
937 |
|
|
Distributions in excess of equity earnings |
|
|
1,504 |
|
|
|
- |
|
|
|
2,568 |
|
|
|
- |
|
|
(Gain)
loss on mark-to-market activities |
|
|
4,928 |
|
|
|
(3,110 |
) |
|
|
27,779 |
|
|
|
(4,780 |
) |
|
Commodity derivatives settlements applied to future
positions |
|
- |
|
|
|
- |
|
|
|
(3,197 |
) |
|
|
- |
|
|
Gain on
embedded derivatives |
|
|
(4,590 |
) |
|
|
9,982 |
|
|
|
(47,794 |
) |
|
|
9,982 |
|
|
Adjusted
EBITDA (1) |
|
$ |
12,429 |
|
|
$ |
11,908 |
|
|
$ |
55,396 |
|
|
$ |
17,049 |
|
|
(1) To supplement our
financial results and guidance presented in accordance with U.S.
generally accepted accounting principles (“GAAP”), we use Adjusted
EBITDA, a non-GAAP financial measure, in this annual report. We
believe that non-GAAP financial measures are helpful in
understanding our past financial performance and potential future
results, particularly in light of the effect of various
transactions effected by us. We define Adjusted EBITDA as net
income (loss) adjusted by: (i) interest (income) expense, net,
which includes interest expense, interest expense net (gain) loss
on interest rate derivative contracts, and interest (income); (ii)
income tax expense (benefit); (iii) depreciation, depletion and
amortization; (iv) asset impairments; (v) accretion expense; (vi)
(gain) loss on sale of assets; (vii) unit-based compensation
programs; (viii) unit-based asset management fees; (ix)
distributions in excess of equity earnings; (x) (gain) loss on
mark-to-market activities; (xi) commodity derivatives settlements
applied to future positions; and (xii) (gain) loss on embedded
derivatives. |
Sanchez Production Partners LP |
|
Operating Statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Dec. 31, |
|
Twelve Months Ended Dec. 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
Net Production
in MBOE: |
|
|
|
|
|
|
|
|
|
Total production
(MBOE) |
|
|
261 |
|
|
|
374 |
|
|
|
1,133 |
|
|
|
1,428 |
|
|
Average daily
production (BOE/D) |
|
|
2,841 |
|
|
|
4,063 |
|
|
|
3,096 |
|
|
|
3,913 |
|
|
|
|
|
|
|
|
|
|
|
|
Average Sales
Price per BOE: |
|
|
|
|
|
|
|
|
|
BOE Net realized price,
including hedges (1) |
|
$ |
30.58 |
|
|
$ |
36.98 |
|
|
$ |
40.24 |
|
|
$ |
35.18 |
|
|
BOE Net realized price,
excluding hedges (2)
|
|
$ |
29.22 |
|
|
$ |
27.77 |
|
|
$ |
22.11 |
|
|
$ |
20.92 |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Excludes impact of mark-to-market gains (losses) |
|
(2)
Excludes all hedges, the impact of mark-to-market gains
(losses). |
|
PARTNERSHIP CONTACT
Charles C. Ward
Chief Financial Officer
Sanchez Production Partners GP LLC
(877) 847-0009
General Inquiries: (877) 847-0008
www.sanchezpp.com