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|Sanchez Production Partners Reports First Quarter 2017 Operating and Financial Results|
“Our activity and results during the first quarter 2017 reflect the transitional nature of our business during the first half of this year,” said
“In keeping with our strategy of focusing on our midstream activities, we recently signed an agreement to divest our remaining operated Oklahoma production assets for
“With the transformation of the Partnership’s business focus now complete, SPP intends to change its name to 'Sanchez Midstream Partners LP' in early June 2017. We believe this name is more in keeping with our strategy and focus on midstream activities, as these midstream investments are expected to provide at least 80% percent of our fourth quarter Adjusted EBITDA.
“Given the transitional nature of our business during the first half of this year and having yet to realize the full financial benefits of the midstream capital projects in various phases of completion, we expected this to be a challenging quarter. Throughput volumes of natural gas on the Western Catarina Midstream system for the first quarter 2017 were lower than expected prior to the addition of 14 new horizontal wells at
“We believe our prospects for sustainable midstream growth have improved considerably with Sanchez Energy’s acquisition of the
OPERATING AND FINANCIAL RESULTS
The Partnership’s revenue totaled
Total operating expenses during the first quarter 2017 totaled
On a GAAP basis, the Partnership recorded a net loss of
The Partnership had approximately
For the period April 1, 2017 through Dec. 31, 2017, the Partnership has hedged approximately 0.8 Bcf of its natural gas production at an effective NYMEX fixed price of approximately $5.45 per million British thermal units and approximately 263 thousand barrels of its crude oil production at an effective NYMEX fixed price of approximately $61.40 per barrel.
The Partnership had 14,282,221 common units issued and outstanding as of
Based on Adjusted EBITDA of
CONFERENCE CALL INFORMATION
The Partnership will host a conference call at
To participate in the conference call, analysts, investors, media and the public in the U.S. may dial (844) 824-3837 shortly before
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 May 22, 2017, at 10:59 p.m. Central Time (
ABOUT THE PARTNERSHIP
Additional information about SPP can be found in the Partnership’s documents on file with the
The Partnership anticipates that it will file its Form 10-Q with the
We 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; (xii) (gain) loss on embedded derivatives; and (xiii) other non-recurring items. 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.
This 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