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|Sanchez Midstream Partners Reports Second Quarter 2017 Operating and Financial Results|
“During the second quarter 2017, we focused on completing the successful transformation of the Partnership to a midstream-focused master limited partnership,” said
“The Raptor Gas Processing Facility, a 50 percent joint venture with
“In conjunction with our focus on midstream activities, we continued to divest certain of our non-core production assets in the second quarter 2017. In
“Given the transitional nature of our business during the first half of this year, during which a number of key projects were in various phases of completion, we fully anticipated the first half of 2017 would be challenging in terms of our use of capital and financial results. That being said, throughput volumes of natural gas on the Western Catarina Midstream system for the second quarter 2017 increased approximately 12 percent when compared to the prior quarter and were 19 percent above the minimum commitment level under our gathering agreement with Sanchez Energy. As Sanchez Energy’s drilling plans call for an additional 32 wells at Catarina in the second half of 2017, we currently anticipate growth in volume on the Western Catarina Midstream system during the remainder of this year.
“More importantly, Sanchez Energy’s acquisition of the
OPERATING AND FINANCIAL RESULTS
The Partnership’s revenue totaled
Total operating expenses during the second quarter 2017 totaled
On a GAAP basis, the Partnership recorded net income of
The Partnership had approximately
For the period July 1, 2017 through Dec. 31, 2017, the Partnership has hedged approximately 0.5 Bcf of its natural gas production at an effective NYMEX fixed price of approximately $5.45 per million British thermal units and approximately 169 thousand barrels of its crude oil production at an effective NYMEX fixed price of approximately $61.48 per barrel. More information on the Partnership’s hedge positions can be found in the SNMP Investor Presentation posted at www.sanchezmidstream.com.
The Partnership had 14,602,148 common units issued and outstanding as of
Based on second quarter 2017 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.sanchezmidstream.com) under the Investor Relations page. A replay will be available approximately one hour after the call through Aug. 22, 2017, at 10:59 p.m. Central Time (
ABOUT THE PARTNERSHIP
Additional information about SNMP can be found in the Partnership’s documents on file with the
We present Adjusted EBITDA, a non-GAAP financial measure, in addition to our reported net income (loss), the most comparable GAAP financial measure, 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) acquisition and divestiture costs. 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. For a reconciliation of Adjusted EBITDA to net income, the most comparable GAAP financial metric, please see the tables below.
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; the Partnership’s well-positioned assets in the
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