HOUSTON, TX–(Marketwired – Feb 16, 2016) – Midcoast Energy Partners, L.P. (NYSE: MEP)
2015 HIGHLIGHTS
- Exceeded the top-end of previously communicated full year 2015 adjusted EBITDA and distributable cash flow guidance.
- Full-year 2015 adjusted EBITDA and distributable cash flow of $104.1 and $73.4 million, respectively; distribution coverage of 1.12x.
- Achieved over $70 million of annual operating & administrative cost reductions in 2015.
- Extended reach and enhanced capabilities of East Texas system with Eaglebine investments and Beckville plant start-up.
- Enhanced business focus and efficiencies with divestiture of certain non-core assets.
- Commodity-based cash flows are greater than 90 percent hedged for 2016.
- Distribution agreement in place with sponsor to support 1.0x coverage through 2017. (1)
Midcoast Energy Partners, L.P. (NYSE: MEP) (“Midcoast Partners” or “the Partnership”) reports adjusted EBITDA and distributable cash flow for the three months ended December 31, 2015 of $26.6 million and $16.5 million, respectively. Full-year 2015 adjusted EBITDA and distributable cash flow were $104.1 million and $73.4 million, respectively.
“We are pleased with MEP’s solid financial and operational performance in 2015. We have executed a number of actions to strengthen our underlying business and have made significant progress advancing our strategic initiatives. Midcoast took early action in late 2014 and 2015 to establish a more sustainable cost structure aligned with current operational levels, and we exceeded our target by reducing annual operating and administrative expenses by over $70 million. Additionally, the divestiture of certain non-core assets has enhanced the Partnership’s focus on our core gathering and processing business,” said C. Gregory Harper, president for the Partnership.
“Our industry remains in a weak commodity price cycle, which is expected to persist well into 2016. We anticipate low commodity market fundamentals to continue to weigh on our producer customers’ drilling programs, which we expect will result in lower volumes on our natural gas and NGL systems. As such, our adjusted EBITDA and distributable cash flow outlook for 2016 is expected to decrease compared to 2015. Our hedging program has been effective in securing greater than 90 percent of forecasted commodity-based cash flows for 2016 at weighted average hedge prices well above current market levels. Our team remains focused on executing on our strategic priorities and attracting and securing new low-risk business to our systems. These near to medium-term challenges highlight the importance of having a strong sponsor to provide support, if needed,” Harper continued.
“Our sponsor, Enbridge Energy Partners, L.P. (“EEP”), took action in July 2015 to support 1.0 times coverage through 2017, if needed. For the fourth quarter, we maintained the cash distribution consistent with the prior quarter to preserve cash flow and enhance the Partnership’s financial flexibility. We anticipate minimal growth capital expenditures for 2016 and expect to build upon our successful cost management initiatives executed in 2015. We intend to pursue additional opportunities to further reduce operating costs, commensurate with activity levels, and to rationalize other non-core assets. Collectively, the actions taken by MEP and those announced by our sponsor, are expected to enhance our competitiveness and position MEP to respond as commodity market fundamentals improve,” added Harper.
2016 Business Outlook – We expect full year MEP Adjusted EBITDA and distributable cash flow to be between $55 and $75 million and between $25 and $40 million, respectively, and coverage of 1.0 times with sponsor support.
