Republic Midstream Announces Agreement with Penn Virginia Corporation to Construct and Operate Crude Oil Gathering System
Jul 30 14
ArcLight Capital Partners, LLC announced that Republic Midstream, LLC executed agreements with Penn Virginia Corporation to construct and operate a crude oil gathering system, a central delivery terminal complex and an intermediate takeaway pipeline to serve Penn Virginia's prolific acreage position in the Eagle Ford Shale. The long-term, fee-based transportation agreements with Penn Virginia are supported by minimum volume commitments and a dedication of acreage covering the areas served by the gathering system. ArcLight has committed $400 million to Republic Midstream, which will be managed by two of ArcLight's experienced midstream portfolio companies, American Midstream Partners, LP and JP Energy Partners LP. ArcLight currently expects to offer each company the right to purchase 50% of Republic Midstream after the commencement of operations. The gathering system will initially consist of 180 miles of gathering and trunk lines located in north-central Gonzales and western Lavaca counties, which will deliver gathered volumes to a 144-acre central delivery point (CDP) in western Lavaca County capable of storing and blending crude oil volumes. The intermediate system will initially consist of a 12-inch, 30-mile takeaway pipeline with initial capacity of 80,000 barrels per day that will receive crude volumes via pipeline and truck at the CDP and deliver batched volumes to major long haul takeaway pipelines. The CDP and intermediate system are being designed to serve multiple market outlets and to accommodate various crude oil specifications from both Penn Virginia and third parties. Penn Virginia is currently operating five rigs in areas served by the gathering system with over 200 developed wells and over 1,300 remaining drilling locations in the acreage dedicated to Republic Midstream. American Midstream will perform construction, operations and general management services for Republic Midstream. American Midstream currently owns and operates a gas gathering and redelivery system serving Penn Virginia in the same area in which the crude oil gathering system will be constructed. In addition, an affiliate of American Midstream's general partner is currently constructing a full-well-stream gathering system for another Eagle Ford producer in Gonzalez County.
Penn Virginia Corporation Reports Unaudited Consolidated Earnings and Production Results for the Second Quarter and Six Months Ended June 30, 2014; Provides Production and Earnings Guidance for the Second Half of 2014; Revised Earnings and Production Guidance for the Full Year of 2014 and 2015
Jul 30 14
Penn Virginia Corporation reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2014. For the quarter, the company reported total revenues of $139,361,000 against $109,655,000 a year ago. Operating loss was at $91,636,000 against operating income of $3,240,000 a year ago. Loss before income taxes was $157,500,000 against $39,120,000 a year ago. Net loss applicable to common shareholders was $105,870,000 or $1.59 per basic and diluted share against $27,163,000 or $0.43 per basic and diluted share a year ago. Net cash provided by operating activities was $32,633,000 against $84,136,000 a year ago. Capital expenditures- property and equipment was $190,776,000 against $143,346,000 a year ago. Net loss applicable to common shareholders, as adjusted was $4,342,000 or $0.07 per diluted share against $10,944,000 or $0.17 per basic and diluted share a year ago. LBITDAX was $58,635,000 against EBITDAX of $57,548,000 a year ago. Adjusted EBITDAX was $94,997,000 against $83,137,000 a year ago. Capital expenditures were $170 million, a decrease of $12 million compared to $182 million in the first quarter of 2014. Operating income was $26.3 million for the quarter, excluding a $117.9 million impairment related to the sale of Mississippi assets. This was $11.4 million higher than the $14.9 million reported in the first quarter, excluding a gain on sale related to the Eagle Ford gas-gathering system sale. The improvement in operating income was driven by higher product revenues, lower exploration expense, lower DD&A expense, and lower share-based compensation expenses, offset by higher direct operating expenses.
For the six months, the company reported total revenues of $329,226,000 against $192,853,000 a year ago. Operating loss was at $19,952,000 against operating income of $281,000 a year ago. Loss before income taxes was $124,011,000 against $64,292,000 a year ago. Net loss applicable to common shareholders was $88,367,000 or $1.34 per basic and diluted share against $45,271,000 or $0.77 per basic and diluted share a year ago. Net cash provided by operating activities was $99,193,000 against $129,751,000 a year ago. Capital expenditures- property and equipment was $350,580,000 against $229,319,000 a year ago. Net loss applicable to common shareholders, as adjusted was $13,187,000 or $0.20 per diluted share against $21,327,000 or $0.36 per basic and diluted share a year ago. EBITDAX was $79,036,000 against $105,811,000 a year ago. Adjusted EBITDAX was $188,801,000 against $143,474,000 a year ago.
The company reported production results for the second quarter and six months ended June 30, 2014. For the quarter, the company reported total crude oil, NGL and natural gas production of 1,983 MBOE against 1,748 MBOE a year ago. Production in the second quarter of 2014 was approximately 21,800 BOE per day, compared to approximately 21,100 BOE per day in the first quarter.
For the six months, the company reported total crude oil, NGL and natural gas production of 3,885 MBOE against 3,175 MBOE a year ago.
For the second half of 2014, the company expects capital expenditures to range between $410 and $456 million. Adjusted EBITDAX is expected to be $251 to $296 million.
For the full year 2014, the company expects capital expenditures to range between $762 million to $808 million, which is an increase of $155 million to $167 million from previous guidance. Depreciation, depletion and amortization is expected to be in the range between from $36.00 per BOE to $37.00 per BOE. Adjusted EBITDAX, which includes the cash impact of derivatives, is expected to range between $425 and $500 million. The primary drivers for the increase in capital expenditures guidance are the addition of the seventh rig in August and the eighth rig in September. For adjusted EBITDAX, the company reaffirmed previous guidance of $440 million to $485 million.
For the second half of 2014, the company expects production to range between approximately 5.0 and 5.3 MMBOE. Oil production is expected to range between approximately 3.1 and 3.4 million barrels of oil. The company remains confident that it will deliver significantly-higher production levels in the second half of this year and into 2015 and beyond.
For the full year 2014, the company expects production to range between approximately 8.8 and 9.2 MMBOE. This represents a decrease of between 7 and 290 MBOE from previous guidance, excluding approximately 260 MBOE of production from Mississippi assets, the sale of which the company expects to close on July 31, 2014. Oil production is expected to range between approximately 5.3 and 5.6 million barrels of oil. This represents a decrease of between 400 and 550 MBOE barrels from previous guidance and is due primarily to delays in the timing of completions during the first half of 2014 resulting from operational complexities associated with pad drilling and completions. First half production was 3.9 million barrels equivalent, second half guidance is now approximately 5 million to 5.3 million barrels. This implies growth in total 2014 production of 30% to 35% over 2013 and a 54% to 62% growth in oil production alone. At the midpoint in guidance, the company would expect 58% oil production growth in 2014 over 2013 and 32% growth in total production.
For the full year 2015, the company has increased preliminary guidance for production growth over 2014 to approximately 45% for oil and approximately 35% overall.
The company also increased guidance for 2015 adjusted EBITDAX growth over 2014 to between 35% and 40%. The company estimates capital expenditures will be around $750 million to $800 million, with drilling and completion spending at $710 million to $750 million. From midpoint of 2014 guidance, that would put adjusted EBITDAX for 2015 at around $620 million to $640 million.