Keyera Corp. Announces First Quarter 2013 Results

CALGARY, May 7, 2013 /CNW/ - Keyera Corp. (TSX:KEY)(TSX:KEY.DB.A), announced 
their 2013 first quarter results today, the highlights of which are included 
in this press release. The entire earnings release can be viewed by visiting 
Keyera's website at or, to view the MD&A and financial 
statements, visit either Keyera's website or the System for Electronic 
Document Analysis and Retrieval at 

    --  Keyera delivered strong results in the first quarter of 2013
        and announced a number of new growth initiatives.
    --  Earnings before interest, taxes, depreciation and amortization
        (1,2) ("EBITDA") were $97.8 million in the first quarter of
        2013, 67% higher than the $58.5 million posted in the same
        quarter of 2012.
    --  Net earnings for the first quarter of 2013 were $23.4 million
        ($0.30 per share), compared to $33.9 million ($0.46 per share)
        in the same period in 2012.
    --  Distributable cash flow(1,2) was $83.3 million ($1.07 per
        share) in first quarter 2013, 76% higher than the $47.2 million
        ($0.64 per share) recorded in the same period last year.
    --  Keyera's Gathering and Processing business delivered stable
        operating margin(3) of $39.9 million in the first quarter of
        2013 compared to $39.0 million in the same quarter last year.
        In the NGL Infrastructure segment, operating margin(3) was
        $29.0 compared to $26.0 in the same quarter of 2012. Marketing
        operating margin(3) was $23.9 million in first quarter of 2013,
        or 89% higher than the $12.7 million posted in first quarter of
        last year.
    --  Work on a number of growth projects continued in the quarter,
        including the South Cheecham rail and truck terminal, the Hull,
        Texas rail and truck terminal, a raw gas gathering pipeline,
        the de-ethanizer at Fort Saskatchewan and the new turbo
        expander at the Rimbey gas plant.
    --  Subsequent to the quarter, Keyera announced $210 million of
        growth initiatives at the Simonette gas plant, including a new
        90-kilometre sour gas pipeline into the Wapiti area of Alberta
        and plant modifications that will enhance processing capability
        and add 100 million cubic feet per day of processing capacity.
    --  In April, Keyera, in conjunction with Plains Midstream Canada
        ULC, began soliciting producer interest in the construction of
        a jointly owned liquids pipeline system in northwest Alberta.
    --  Total growth capital investment was $59.0 million in the first
        quarter 2013, of which $3.9 million was acquisitions.  Keyera
        has reviewed its spending profile for 2013 and now expects its
        2013 growth capital investment, excluding acquisitions, will be
        between $400 million and $450 million.(4)

(1) See "Non-GAAP Financial Measures" on page 36 of the MD&A.

See page 30 and 31 of the MD&A for a reconciliation of
(2) distributable cash flow to cash flow from operating activities and 

    EBITDA to net earnings.

(3) See note 18 to the accompanying financial statements.

(4) See "Capital Expenditures and Acquisitions" on page 28 of the MD&A
    for further discussion of Keyera's capital investment program.
                                         Three Months Ended March 31,

Summary of Key Measures                                              

(Thousands of Canadian dollars, except       2013                2012
where noted)

Net earnings                               23,445              33,870

  Per share ($/share) - basic                0.30                0.46

Cash flow from operating activities       136,688             105,413

Distributable cash flow(1)                 83,285              47,189

  Per share( )($/share)                      1.07                0.64

Dividends declared                         42,074              37,421

  Per share( )($/share)                      0.54                0.51

  Payout ratio %(1)                           50%                 79%

EBITDA(2)                                  97,848              58,468

Gathering and Processing:                                            

Gross processing throughput (MMcf/d)        1,237               1,227

Net processing throughput (MMcf/d)            980                 966

NGL Infrastructure:                                                  

Gross processing throughput (Mbbl/d)          115                 107

Net processing throughput (Mbbl/d)             40                  39


Inventory value                           144,263             164,010

Sales volumes (bbl/d)                     116,800              99,000

Acquisitions (including business            3,907             247,079

Growth capital expenditures                53,116              23,653

Maintenance capital expenditures            2,007               1,671

Total capital expenditures                 59,030             272,403
                                                      As at March 31,
                                             2013                2012

Long-term debt (4)                        625,966             475,310

Credit facilities                          80,000             235,000

Working capital surplus(3, 4)            (93,851)           (178,382)

Net debt                                  612,115             531,928

Convertible debentures( 4)                —              14,219

Net debt (including debentures)           612,115             546,147

Common shares outstanding - end of         78,013              76,620

Weighted average number of shares          77,862              73,276
outstanding - basic

Weighted average number of shares          78,381              74,069
outstanding - diluted


(1) Payout ratio is defined as dividends declared to shareholders
    divided by distributable cash flow.  Payout ratio and distributable
    cash flow are not standard measures under GAAP. See page 30 for a
    reconciliation of distributable cash flow to its most closely
    related GAAP measure.

(2) Beginning in the first quarter of 2013, Keyera excludes unrealized
    gains/losses from commodity related risk management contracts in
    the calculation of EBITDA.  These non-cash gains/losses have been
    excluded because management believes it provides a better
    reflection of the financial performance of the business in the
    current period.  The comparative amount has been adjusted to
    reflect this change. EBITDA is defined as earnings (excluding
    unrealized gains/losses) before interest, taxes, depreciation,
    amortization, accretion, impairment expenses and any other non-cash
    items such as gains/losses on the disposal of property, plant and
    equipment.  EBITDA is not a standard measure under GAAP.  See
    section titled "EBITDA" on page 31 of the MD&A for a reconciliation
    of EBITDA to its most closely related GAAP measure.

(3) Working capital is defined as current assets less current

(4) Included in the calculation of working capital for Q1 2013 are
    current liabilities related to the $52,500 of unsecured senior
    notes due on August 26, 2013 and $9,212 of convertible debentures
    due on December 31, 2013.
    Message to Shareholders

Keyera had a successful start to 2013, delivering solid results in the first 
quarter and continuing to advance a number of new growth initiatives. 
Continued drilling in those areas of the Western Canada Sedimentary Basin 
where the gas is rich in NGLs has contributed to Keyera's high level of 
activity in all business segments. Increasing liquids-rich gas production is 
resulting in new business opportunities at Keyera's gas processing facilities, 
as well as generating increasing demand for fractionation, storage and 
marketing services for the NGLs removed from the raw gas stream. In this 
current business environment, the value of our integrated facilities and the 
extensive complement of services we offer provides us with opportunities to 
grow our business and deliver value to shareholders.

Keyera's fee-for service businesses delivered solid results again this 
quarter, as did the Marketing segment. EBITDA was $97.8 million in the first 
quarter of 2013, an increase of 67% from the same quarter last year. 
Distributable cash flow increased 76% to $83.3 million ($1.07 per share) 
compared to the same quarter last year. Dividends to shareholders totaled 
$42.1 million ($0.54 per share), resulting in a payout ratio of 50%.

In the first quarter, Gathering and Processing operating margin was $39.9 
million, a slight increase compared to the same period in 2012, and the second 
highest result in Keyera's history. Producer activity resulted in growing 
throughput at certain Keyera gas plants in the quarter. Repairs completed at 
the Simonette and Strachan gas plants in the quarter reduced operating margin 

In the Liquids Business Unit, operating margin in the NGL Infrastructure 
segment was $29.0 million, a 12% increase compared to the first quarter last 
year. Increased demand for offloading and handling services at ADT, as well as 
incremental fees from our diluent handling agreement with Imperial Oil, were 
the main contributors to the increase.

The Marketing segment generated strong operating margin of $23.9 million in 
the first quarter, an increase of 89% compared to same quarter last year. A 
return to more normal winter weather contributed to solid propane results this 
quarter compared to the same quarter last year. Iso-octane sales volumes and 
margins were also higher than last year.

Producers continued to focus on liquids-rich drilling in the first quarter of 
2013, often within the capture area of Keyera plants. Most of their focus is 
on production from the Glauconite, Cardium, Montney and Duvernay geological 
horizons. Gross throughput at our gas plants increased 3% in the first 
quarter, to 1,237 million cubic feet per day, compared to the fourth quarter 
of 2012. Throughput was higher at the Minnehik Buck Lake, Strachan, Caribou, 
Nordegg River and Brazeau River gas plants. This higher throughput was offset 
somewhat by lower throughput at the Simonette gas plant, due to curtailment of 
volumes and maintenance work on the sulphur facilities.

In December and May, we purchased newly constructed gathering pipelines which 
deliver gas to the Strachan and Minnehik Buck Lake gas plants. Producers in 
these areas had gas waiting to be processed, which resulted in an immediate 
increase in throughput at both facilities. In January, we commissioned a new 
turbo expander at the Strachan gas plant to increase plant reliability and 
sustain high liquids recovery levels. Detailed engineering and procurement of 
long lead items is underway at the Rimbey gas plant, where we are expanding 
the plant's capability by installing a turbo expander.

In April, we announced plans to build a 90-kilometre pipeline from our 
Simonette gas plant to the Wapiti area of Alberta. NuVista Energy Ltd. has 
entered into a long-term processing agreement to underpin construction of the 
pipeline and we are currently talking with other producers in the area who 
might be interested in securing capacity on the line. We are also planning to 
enhance Simonette's processing capability by adding 100 million cubic feet per 
day of capacity and adding condensate stabilization facilities.

Also in April, we announced we had entered into an arrangement with Plains 
Midstream Canada to solicit producer interest in the construction of the 
Western Reach Pipeline System in northwestern Alberta. The proposed pipeline 
is anticipated to be 570 kilometres in length and would consist of two 
pipelines dedicated to NGL mix and condensate service. The proposed pipeline 
route would travel through some of the most prospective geological areas being 
developed in western Canada today, including the Montney and Duvernay zones.

With increasing liquids production in western Canada, many producers are 
interested in securing NGL fractionation capacity in the Edmonton/Fort 
Saskatchewan hub. In connection with the long-term processing agreement at 
Simonette, NuVista also signed long-term agreements for fractionation and NGL 
marketing services. In addition, demand for diluent in Alberta drove increased 
storage activity at Fort Saskatchewan and higher rail traffic at our Alberta 
Diluent Terminal in the first quarter.

Construction of the South Cheecham rail and truck terminal is well underway. 
Pipelines have been installed, tanks constructed and track for the rail laid. 
Completion of the terminal is still expected in the second half of 2013. There 
continues to be significant interest in the terminal by other oil sands 
producers and refiners.

Iso-octane was delivered to customers in the Gulf Coast via rail throughout 
the first quarter and we continue to be pleased with customer interest. Some 
potential new customers will need to make modifications to their facilities in 
order to receive iso-octane by rail. However, based on our initial success in 
moving volumes by rail into new markets, we are optimistic about our ability 
to increase the utilization level of Alberta EnviroFuels throughout the 
remainder of 2013.

At Fort Saskatchewan, our twelfth cavern is complete and is awaiting 
regulatory approval before being put into service. Work on the brine pond will 
continue through the summer and is scheduled to be put into service later this 
year, and our thirteenth cavern is currently under development. Detailed 
engineering is underway for our de-ethanizer project, long-lead items have 
been ordered and fabrication of major equipment is underway.

The combination of newly announced projects and a review of the timing of 
projects already underway have resulted in an update to Keyera's capital 
investment forecast. We now anticipate our 2013 capital investments will be 
between $400 and $450 million, excluding acquisitions.

May 30(th) marks Keyera's tenth anniversary as a public company. Our vision 
when we went public was to provide our shareholders with stable and growing 
cash flow per share. I'm proud to say that we have delivered on that 
objective, and we have provided our shareholders with a compound annual growth 
rate of 7.5% in dividends per share. Looking forward, I am confident that we 
have the right mix of people, assets and opportunities to continue to deliver 
value to shareholders.

On behalf of Keyera's directors and management team, thank you for your 
continued support.

Jim V. Bertram
Chief Executive Officer
Keyera Corp.

Certain statements contained in this document contain forward-looking 
statements. These statements relate to future events or Keyera's future 
performance. Such statements are predictions only and actual events or 
results may differ materially. The use of words such as "anticipate", 
"continue", "estimate", "expect", "may", "will", "project", "should", "plan", 
"intend", "believe", and similar expressions, including the negatives thereof, 
is intended to identify forward looking statements. All statements other 
than statements of historical fact contained in this document are forward 
looking statements.

The forward looking statements reflect management's current beliefs and 
assumptions with respect to such things as the outlook for general economic 
trends, industry trends, commodity prices, capital markets, and the 
governmental, regulatory and legal environment. In some instances, this 
document may also contain forward-looking statements attributed to third party 
sources. Management believes that its assumptions and analysis in this 
document are reasonable and that the expectations reflected in the forward 
looking statements contained herein are also reasonable. However, Keyera 
cannot assure readers that these expectations will prove to be correct.

All forward looking statements involve known and unknown risks, uncertainties 
and other factors that may cause actual results, events, levels of activity 
and achievements to differ materially from those anticipated in the forward 
looking statements. Such factors include but are not limited to: general 
economic, market and business conditions; access to capital and debt markets; 
operational matters, including potential hazards inherent in our operations; 
risks arising from co-ownership of facilities; activities of other facility 
owners; access to third party facilities, competitive action by other 
companies; activities of producers and other customers and overall industry 
activity levels; changes in gas composition; fluctuations in commodity prices 
and supply/demand trends; processing and marketing margins; effects of weather 
conditions; availability of construction crews and materials; fluctuations in 
interest rates and foreign currency exchange rates; changes in operating and 
capital costs, including fluctuations in input costs; actions by governmental 
authorities; decisions or approvals of administrative tribunals; changes in 
environmental and other regulations; reliance on key personnel; competition 
for, among other things, capital, acquisition opportunities and skilled 
personnel; changes in tax laws, including the effects that such changes may 
have on unitholders, and in particular any differential effects relating to 
unitholder's country of residence; and other factors, many of which are beyond 
the control of Keyera, some of which are discussed in this document and in 
Keyera's Annual Information Form dated February 14, 2013 filed on SEDAR and 
available on the Keyera website at

Proposed construction and completion schedules and budgets for capital 
projects are subject to many variables, including weather; availability and 
prices of materials; labour; customer project approvals and expected in 
service dates; regulatory approvals; and macro socio-economic trends. As a 
result, expected timing, costs and benefits associated with these projects may 
differ materially from the descriptions in this Document. Further, some of the 
projects discussed in this document are subject to securing sufficient 
producer/customer interest and may not proceed if sufficient commitments are 
not obtained.

Readers are cautioned that they should not unduly rely on the forward looking 
statements in this document. Further, readers are cautioned that the forward 
looking statements in this document speak only as of the date of this document.

Any statements relating to "reserves" are deemed to be forward looking 
statements as they involve the implied assessment, based on certain estimates 
and assumptions, that the reserves described can be profitably produced in the 

All forward looking statements contained in this document and accompanying 
documents are expressly qualified by this cautionary statement. Further 
information about the factors affecting forward looking statements and 
management's assumptions and analysis thereof, is available in filings made by 
Keyera with Canadian provincial securities commissions, which can be viewed on 
SEDAR at   

about Keyera, please visit our website at or contact:

John Cobb, Vice President, Investor Relations and Information Technology  or 
Julie Puddell, Manager, Investor Relations, Telephone: (403) 205-7670 / Toll Free: (888) 699-4853, 
Facsimile: (403) 205-8425.

SOURCE: Keyera Corp.

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CO: Keyera Corp.
ST: Alberta

-0- May/07/2013 20:00 GMT

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