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|Sanchez Midstream Partners Reports Third Quarter 2017 Operating and Financial Results|
“As Targa recently announced, expansion of the Raptor Gas Processing Facility from 200 MMcfe/d to 260 MMcfe/d of processing capacity was completed after the end of the third quarter 2017. We anticipate that the utilization of the higher capacity will positively impact the Partnership’s fourth quarter 2017 operating results. More importantly, with the SECO Pipeline and the Raptor Gas Processing Facility expansion project now complete, the Partnership has funded the vast majority of its 2017 capital spending and expects to generate free cash flow in the fourth quarter 2017.
“In conjunction with our focus on midstream activities, we continued to divest certain of our non-core production assets in the third quarter 2017. In
“Given the transitional nature of our business in the early part 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 resources and financial results. While we have successfully completed several projects and divestitures since the middle of this year, the third quarter 2017 was not without its challenges. Operationally, we faced unprecedented levels of rainfall and flooding along the
OPERATING AND FINANCIAL RESULTS
Total operating expenses during the third quarter 2017 totaled
On a GAAP basis, the Partnership recorded net income of
The Partnership had approximately
Based on third quarter 2017 Adjusted EBITDA of
CONFERENCE CALL INFORMATION
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 Nov. 21, 2017, at 10:59 p.m. Central Time (
ABOUT THE PARTNERSHIP
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. Cash available for distribution is defined as Adjusted EBITDA less cash interest expense; distributions on preferred units; and maintenance capital. For a reconciliation of Cash available for distribution to Net Income (Loss), the most directly comparable GAAP measure, see the tables at the end of this release.
Adjusted EBITDA and Cash available for distribution are significant performance metrics 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, these financial measures indicate 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 and Cash available for distribution are 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 and Cash available for distribution provides useful information to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to Adjusted EBITDA and Cash available for distribution is net income (loss). Our non-GAAP financial measures of Adjusted EBITDA and Cash available for distribution should not be considered as an alternative to GAAP net income (loss). Adjusted EBITDA and Cash available for distribution have important limitations as analytical tools because they exclude some but not all items that affect net income. Adjusted EBITDA and Cash available for distribution should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA and Cash available for distribution may be defined differently by other companies in our industry, our definition of Adjusted EBITDA and Cash available for distribution may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. For reconciliations of Adjusted EBITDA and Cash available for distribution to net income (loss), the most comparable GAAP financial metric, please see the tables below.
The forward-looking statements contained in this press release are largely based on our expectations, which reflect estimates and assumptions made by the management of our general partner. 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. 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.