EV Energy Partners Announces First Quarter 2014 Results and Utica Midstream Expansion

 EV Energy Partners Announces First Quarter 2014 Results and Utica Midstream
                                  Expansion

PR Newswire

HOUSTON, May 12, 2014

HOUSTON, May 12, 2014 /PRNewswire/ -- EV Energy Partners, L.P. (NASDAQ: EVEP)
today announced results for the first quarter of 2014 and the filing of its
Form 10-Q with the Securities and Exchange Commission. In addition, EVEP
announced an expansion of the Utica East Ohio ("UEO") midstream services
complex in Ohio and provided an update of EVEP's commodity hedge positions,
which includes additional crude oil hedges entered into in March 2014, as
presented at the end of this release.

Utica Midstream Expansion

UEO announced plans to increase its nameplate processing capacity to 1.0
billion cubic feet per day (Bcf/d), up from its current nameplate capacity of
800 million cubic feet per day (MMcf/d). UEO is a joint venture owned 49
percentby Access Midstream Partners, L.P., 30 percentby M3 Midstream LLC and
21 percentby EVEP.

Additional capacity is needed to meet new commitments from existing customers
Chesapeake Energy Corporation, Total Gas & Power North America, EnerVest,
Ltd., and new customer, American Energy - Utica, LLC, an affiliate of American
Energy Partners, LP. UEO also willagree to provide gathering, compression and
dehydration services for American Energy - Utica. The new long-term agreement
between UEO and American Energy - Utica includes a 145,000-acre area of mutual
interest, installation of 50 miles of gathering pipeline and compression
services.

Plans for the UEO expansion include the construction of a second processing
train at the Leesville, Ohio, facility and extension of an existing
high-pressure pipeline from UEO's Harrison Hub to Cardinal Gas Services' (CGS)
Archer Compression Facility in Harrison County. Additional services also
areplanned at Harrison Hub, including downstream liquids interconnects and
expanded propane and butane storage.

First Quarter 2014 Results

Adjusted EBITDAX for the first quarter of 2014 was $56.1 million, a 15 percent
increase over the first quarter of 2013, and a 4 percent increase over the
fourth quarter of 2013. Distributable Cash Flow for the first quarter of 2014
was $28.6 million, a 31 percent increase over the first quarter of 2013 and a
7 percent increase over the fourth quarter of 2013. The increases in Adjusted
EBITDAX and Distributable Cash Flow, which are described in the attached table
under "Non-GAAP Measures," are primarily due to increased production and
increased EBITDAX from midstream investments.

Production for the first quarter of 2014 was 10.8 Bcf of natural gas, 265
MBbls of oil and 550 MBbls of natural gas liquids, or 174.7 MMcfe/day. This
represents a 6 percent increase over first quarter 2013 production of 165.2
MMcfe/d and a 2 percent increase over fourth quarter 2013 production of 170.5
MMcfe/day. The increases in production are primarily due to drilling activity
and acquisitions completed during the fourth quarter of 2013.

EVEP reported a net loss of $6.3 million, or $(0.14) per basic and diluted
weighted average limited partner unit outstanding, for the first quarter of
2014. Included in net loss were the following items:

  o$16.8 million of non-cash losses on commodity and interest rate
    derivatives,
  o$4.5 million of non-cash costs contained in general and administrative
    expenses,
  o$2.3 million of payroll tax related cash costs contained in general and
    administrative expenses associated with the annual vesting of phantom
    units during the first quarter which will not be incurred during the
    second through fourth quarters,
  o$1.5 million gain on the sale of oil and natural gas properties, and
  o$0.3 million of dry hole and exploration costs.

For the fourth quarter of 2013, EVEP reported a net loss of $50.2 million, or
$(1.06) per basic and diluted weighted average limited partner unit
outstanding. For the first quarter of 2013, EVEP reported a net loss of $46.6
million, or $(1.08) per basic and diluted weighted average limited partner
unit outstanding.

"We are very pleased with our operational performance and results for the
first quarter of 2014, as well as the continued ramp-up in our Utica midstream
operations and planned future expansion at the UEO midstream services
complex," said Mark Houser, President and CEO.

Quarterly Report on Form 10-Q

EVEP's financial statements and related footnotes are available in the first
quarter 2014 Form 10-Q, which was filed today and is available through the
Investor Relations/SEC Filings section of the EVEP website at
http://www.evenergypartners.com.

Conference Call

As announced on May 5, 2014, EV Energy Partners, L.P. will host an investor
conference call on May 12, 2014, at 9 a.m. Eastern Time (8 a.m. Central).
Investors interested in participating in the call may dial 1-877-941-6009
(quote conference ID 4682361) at least 5 minutes prior to the start time, or
may listen live over the Internet through the Investor Relations section of
the EVEP website at http://ir.evenergypartners.com/events.cfm.

EV Energy Partners, L.P. is a master limited partnership engaged in acquiring,
producing and developing oil and natural gas properties. More information
about EVEP is available on the Internet at http://www.evenergypartners.com.

(code #: EVEP/G)

This press release may include statements that are not historical facts which
are "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These statements include information
about the sale of our Utica Shale assets, our midstream investments and
expansion plans, future plans, our reserve quantities and the present value of
our reserves, estimates of maintenance capital and other statements which
include words such as "anticipates," "plans," "projects," "expects,"
"intends," "believes," "should," and similar expressions of forward-looking
information. Forward-looking statements are inherently uncertain and
necessarily involve risks that may affect the business prospects and
performance of EV Energy Partners, L.P. Actual results may differ materially
from those contained in the press release. Such risks and uncertainties
include, but are not limited to, changes in commodity prices, changes in
reserve estimates, requirements and actions of purchasers of properties
(including the Utica Shale), changes in the metrics and procedures used to
value midstream assets, exploration and development activities in the Utica
Shale and elsewhere, the availability and cost of financing, the returns on
our capital investments and acquisition strategies, the availability of
sufficient cash flow to pay distributions and execute our business plan and
general economic conditions. Additional information on risks and uncertainties
that could affect our business prospects and performance are provided in the
most recent reports of EV Energy Partners with the Securities and Exchange
Commission. All forward-looking statements included in this press release are
expressly qualified in their entirety by the foregoing cautionary statements.

Any forward-looking statement speaks only as of the date on which such
statement is made and EVEP undertakes no obligation to correct or update any
forward-looking statement, whether as a result of new information, future
events or otherwise.



Operating Statistics
                                                Three Months Ended March 31,
                                                2014             2013
Production data:
 Oil (MBbls)                                  265              263
 Natural gas liquids (MBbls)                  550              503
 Natural gas (MMcf)                           10,836           10,267
 Net production (MMcfe)                       15,725           14,864
Average sales price per unit: (1)
 Oil (Bbl)                                    $ 94.21          $ 93.47
 Natural gas liquids (Bbl)                    33.49            30.38
 Natural gas (Mcf)                            4.68             3.20
 Mcfe                                         5.98             4.89
Average unit cost per Mcfe:
 Production costs:
 Lease operating expenses                     $ 1.61           $ 1.76
 Production taxes                             0.22             0.20
 Total                                        1.83             1.96
Asset retirement obligations accretion expense  0.08             0.09
Depreciation, depletion and amortization        1.67             2.07
General and administrative expenses             0.78             0.85

(1) Prior to ($5.3) million and $12.3 million of net hedge (losses) gains and
settlements on commodity derivatives for the three months ended March 31, 2014
and March 31, 2013, respectively.





Condensed Consolidated Balance Sheets
(In $ thousands, except number of units)
(Unaudited)
                                             March 31, 2014  December 31, 2013
ASSETS
Current assets:
 Cash and cash equivalents                 $ 9,515         $ 11,698
 Accounts receivable:
 Oil, natural gas and natural gas liquids  48,350          37,661
revenues
 Related party                             8,166           2,873
 Other                                     193             1,111
 Derivative asset                          5,640           13,543
 Other current assets                      5,789           6,916
 Assets held for sale                      -               8,012
 Total current assets                      77,653          81,814
Oil and natural gas properties, net of
accumulated
depreciation, depletion and amortization;
March 31,
2014, $595,947; December 31, 2013,         1,825,432       1,829,062
$569,770
Other property, net of accumulated
depreciation
and amortization; March 31, 2014, $796;
December 31, 2013, $754                     1,223           1,259
Long–term derivative asset                   23,822          29,088
Investments in unconsolidated affiliates     301,221         254,978
Other assets                                 7,319           8,782
Total assets                                 $ 2,236,670     $ 2,204,983
LIABILITIES AND OWNERS' EQUITY
Current liabilities:
 Accounts payable and accrued liabilities  $ 49,679        $ 46,876
 Derivative liability                      7,016           3,348
 Liabilities related to assets held for    -               2,155
sale
 Total current liabilities                 56,695          52,379
Asset retirement obligations                 101,061         99,133
Long–term debt                               1,046,319       980,297
Other long–term liabilities                  959             1,241
Commitments and contingencies
Owners' equity:
 Common unitholders - 48,572,019 units
and
 48,349,080 units issued and outstanding
as of
 March 31, 2014 and December 31, 2013,
 respectively                              1,044,066       1,083,718
 General partner interest                  (12,430)        (11,785)
 Total owners' equity                      1,031,636       1,071,933
Total liabilities and owners' equity         $ 2,236,670     $ 2,204,983





Condensed Consolidated Statements of Operations
(In $ thousands, except per unit data)
(Unaudited)
                                                         Three Months Ended

                                                         March 31,
                                                         2014       2013
Revenues:
 Oil, natural gas and natural gas liquids revenues     $ 94,074   $ 72,669
 Transportation and marketing–related revenues         1,265      1,033
 Total revenues                                        95,339     73,702
Operating costs and expenses:
 Lease operating expenses                              25,395     26,094
 Cost of purchased natural gas                         970        743
 Dry hole and exploration costs                        318        417
 Production taxes                                      3,523      2,916
 Asset retirement obligations accretion expense       1,187      1,354
 Depreciation, depletion and amortization              26,212     30,833
 General and administrative expenses                   12,298     12,622
 Impairment of oil and natural gas properties          252        5,169
 Gain on sales of oil and natural gas properties       (1,484)    -
 Total operating costs and expenses                    68,671     80,148
Operating income (loss)                                 26,668     (6,446)
Other (expense) income, net:
 Loss on derivatives, net                              (22,995)   (27,514)
 Interest expense                                      (12,072)   (12,829)
 Other income, net                                     54         187
 Total other expense, net                             (35,013)   (40,156)
Loss before income taxes and equity in                   (8,345)    (46,602)
income of unconsolidated affiliates
Income taxes                                             255        (177)
Loss before equity in income of unconsolidated           (8,090)    (46,779)
affiliates
Equity in income of unconsolidated affiliates            1,837      198
Net loss                                                 ($ 6,253)  ($ 46,581)
Net loss per limited partner unit:
 Basic                                                 ($ 0.14)   ($ 1.08)
 Diluted                                               ($ 0.14)   ($ 1.08)
Weighted average limited partner units outstanding:
 Basic                                                 48,537     42,556
 Diluted                                               48,537     42,556
Distributions declared per unit                          $ 0.772    $ 0.768





Condensed Consolidated Statements of Cash Flows
(In $ thousands)
(Unaudited)                                              Three Months Ended

                                                         March 31,
                                                         2014       2013
Cash flows from operating activities:
 Net loss                                              ($ 6,253)  ($ 46,581)
 Adjustments to reconcile net loss to net cash flows
provided by operating activities:
 Asset retirement obligations accretion expense        1,187      1,354
 Depreciation, depletion and amortization              26,212     30,833
 Equity–based compensation cost                        4,503      4,485
 Impairment of oil and natural gas properties          252        5,169
 Gain on sales of oil and natural gas properties       (1,484)    -
 Loss on derivatives, net                              22,995     27,514
 Cash settlements of matured derivative contracts      (6,158)    11,439
 Equity in income of unconsolidated affiliates         (1,837)    (198)
 Distributions from unconsolidated affiliates          -          48
 Other                                                 176        644
 Changes in operating assets and liabilities:
 Accounts receivable                                   (15,064)   (4,527)
 Other current assets                                  (931)      (27)
 Accounts payable and accrued liabilities              9,154      11,351
 Other, net                                            (120)      (119)
Net cash flows provided by operating activities          32,632     41,385
Cash flows from investing activities:
Final settlement of purchase price of oil and         -          7,998
natural gas properties
 Additions to oil and natural gas properties          (23,145)   (21,136)
 Prepaid drilling costs                                (2,032)    -
Proceeds from sale of oil and natural gas properties  7,315      -
Investments in unconsolidated affiliates              (44,424)   (68,345)
 Distributions from unconsolidated affiliates          18         23
Net cash flows used in investing activities              (62,268)   (81,460)
Cash flows from financing activities:
 Long-term debt borrowings                             66,000     85,000
 Contributions from general partner                    154        334
 Distributions paid                                    (38,696)   (33,838)
 Other                                                 (5)        -
Net cash flows provided by financing activities          27,453     51,496
(Decrease) increase in cash and cash equivalents         (2,183)    11,421
Cash and cash equivalents – beginning of period          11,698     7,486
Cash and cash equivalents – end of period                $ 9,515    $ 18,907



Non-GAAP Measures

We define Adjusted EBITDAX as net loss plus equity in income from
unconsolidated affiliates, EBITDAX from unconsolidated affiliates, income
taxes, interest expense, net, cash settlements of matured interest rate swaps,
depreciation, depletion and amortization, asset retirement obligations
accretion expense, loss on derivatives, net, cash settlements of matured
derivative contracts, non-cash equity compensation expense, impairment of oil
and natural gas properties, non-cash inventory write down expense, dry hole
and exploration costs, and gain on sales of oil and natural gas properties.
Distributable Cash Flow is defined as Adjusted EBITDAX less cash income taxes,
cash interest expense, net, realized losses on interest rate swaps, and
estimated maintenance capital expenditures.

Adjusted EBITDAX and Distributable Cash Flow are used by our management to
provide additional information and statistics relative to the performance of
our business, including (prior to the creation of any reserves) the cash
available to pay distributions to our unitholders. We believe these financial
measures may indicate to investors whether or not we are generating cash flow
at a level that can sustain or support an increase in our quarterly
distribution rates. Adjusted EBITDAX and Distributable Cash Flow are also
quantitative standards used throughout the investment community with respect
to performance of publicly-traded partnerships. Adjusted EBITDAX and
Distributable Cash Flow should not be considered as alternatives to net
income, operating income, cash flows from operating activities or any other
measure of financial performance or liquidity presented in accordance with
GAAP. Adjusted EBITDAX and Distributable Cash Flow exclude some, but not all,
items that affect net income and operating income and these measures may vary
among companies. Therefore, our Adjusted EBITDAX and Distributable Cash Flow
may not be comparable to similarly titled measures of other companies.



Reconciliation of Net Loss to Adjusted EBITDAX and Distributable Cash Flow
(In $ thousands)
(Unaudited)
                                                    Three Months Ended

                                                    March 31,
                                                    2014        2013
Net loss                                            ($ 6,253)   ($ 46,581)
Add:
Equity in income from unconsolidated affiliates     (1,837)     (198)
EBITDAX from unconsolidated affiliates             3,634       302
Income taxes                                        (255)       177
Interest expense, net                               12,072      12,828
Cash settlements of matured interest rate swaps     877         865
Depreciation, depletion and amortization            26,212      30,833
Asset retirement obligations accretion expense      1,187       1,354
Loss on derivatives, net                            22,995      27,514
Cash settlements of matured derivative contracts    (6,158)     11,439
Non-cash equity compensation expense                4,503       4,485
Impairment of oil and natural gas properties        252         5,169
Non-cash inventory write down expense               54          -
Dry hole and exploration costs                      318         417
Gain on sales of oil and natural gas properties     (1,484)     -
Adjusted EBITDAX                                    $ 56,116    $ 48,604
Less:
Cash income taxes                                   27          44
Cash interest expense, net                          11,467      12,226
Realized losses on interest rate swaps              877         865
Estimated maintenance capital expenditures (1)      15,176      13,581
Distributable Cash Flow                             $ 28,570    $ 21,888

(1) Estimated maintenance capital expenditures are those expenditures
estimated to be necessary to maintain the production levels of our oil and gas
properties over the long term and the operating capacity of our other assets
over the long term.





Summary of New Hedge Positions (since February 28, 2014)
Period                     Index    Swap Volume          Swap Price
Crude                               (MmmBtus/Mbbls)
2015                       WTI      365.0                $88.48
Hedge Summary Table (as of May 9, 2014)
                                    Swap               Swap
Period                     Index    Volume             Price
Natural Gas                         (MmmBtus/Mbbls)
2Q 2014                    NYMEX    9,900.8              $4.72
3Q 2014                    NYMEX    10,009.6             $4.70
4Q 2014                    NYMEX    10,009.6             $4.66
2015                       NYMEX    36,317.5             $4.94
2016                       NYMEX    10,980.0             $4.17
Crude
2Q 2014                    WTI      382.2                $89.78
3Q 2014                    WTI      380.3                $91.50
4Q 2014                    WTI      377.2                $93.73
2015                       WTI      1,095.0              $89.56
Interest Rate Swap Agreements       Notional Amount    Fixed Rate
                                    (in $ mill)
April 2014 - July 2015              110.0                3.315%



EV Energy Partners, L.P., Houston
Michael E. Mercer
713-651-1144
http://www.evenergypartners.com

Logo - http://photos.prnewswire.com/prnh/20130415/DA94198LOGO

SOURCE EV Energy Partners, L.P.

Website: http://www.evenergypartners.com
 
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