Noble Midstream Partners Reports Second Quarter 2018 Results HOUSTON
Noble Midstream Partners LP (NYSE: NBLX) (Noble Midstream or the
Partnership) today reported second quarter 2018 results. The
Partnership’s results are consolidated to include the non-controlling
interests in the Partnership’s development companies (DevCos) retained
by Noble Energy, Inc. (Noble Energy) as well as Greenfield Midstream,
LLC’s (Greenfield Midstream) 45.6% ownership of Black Diamond Gathering,
LLC (Black Diamond Gathering); however, certain results are shown as
“attributable to the Partnership,” which excludes the aforementioned
non-controlling interests retained by Noble Energy and Greenfield
Midstream. Noble Midstream believes the results “attributable to the
Partnership” provide the best representation of the ongoing operations
from which the Partnership’s unitholders will benefit.
Second Quarter Highlights Include:
-
Net Income of $44 million, or $37 million attributable to the
Partnership
-
Adjusted EBITDA1 of $64 million, a 10% increase over the
first quarter of 2018
-
Adjusted EBITDA1 attributable to the Partnership of $49
million was in the upper half of guidance but down 9% on sequential
basis due to the previously indicated fresh water activity shift from
the Colorado River DevCo (100% owned by Partnership) to the Green
River DevCo (25% owned by the Partnership)
-
Declared a 20% annual increase in distribution per unit to $0.5348,
with a distribution coverage ratio1 of 1.8x
-
Combined gathering and sales volumes for oil, gas and produced water
were up 30% versus the first quarter of 2018
-
Increased total gathering dedicated acres in the DJ and Delaware
basins by 5% to ~ 580,000 acres
“We achieved significant milestones during the quarter, including the
continued build-out of our customer base and the completion of four
major projects. All five Delaware Basin CGFs and the DJ Basin gathering
system at Mustang are online for Noble Energy, while the Advantage
Pipeline expansion is complete. This provides significant capital
efficiency and a long future growth runway,” Terry R. Gerhart, Chief
Executive Officer of Noble Midstream stated.
1 Adjusted EBITDA, DCF and Distribution Coverage Ratio are
not Generally Accepted Accounting Principles (GAAP) measures.
Definitions and reconciliations of these non-GAAP measures to their most
directly comparable GAAP reporting measures appear in Schedule 4 of the
financial tables which follow.
Other Recent Highlights:
-
Noble Midstream entered into a $500 million three-year unsecured term
loan facility. Funds were used to repay borrowings on the revolving
credit facility
Recent Commercial Agreements with Noble Energy
Noble Midstream today announced the following agreements with Noble
Energy:
-
Establishment of full-field midstream service commercial terms with
Noble Energy for the Green River DevCo, 25% owned by Noble Midstream,
servicing the Mustang development area. Commercial terms include
revised fees to reflect the change to a spec gathering system from a
central gathering facility (CGF) as well as the use of enhanced
completions for fresh water delivery
-
Establishment of a minimum fresh water delivery volume threshold in
Wells Ranch (Colorado River DevCo, 100% owned by NBLX). The three-year
volume commitment commences in 2019 at 50 thousand barrels of water
per day (MBw/d) and increases to 60 MBw/d beginning in 2020
-
Noble Energy provided Noble Midstream an incremental dedication for
oil transportation from the Wells Ranch CGF to Platteville following
expiration of an existing third-party contract at year-end 2020. The
contract term will extend 10 years following expiration of the
existing arrangement
-
Noble Energy has assigned Noble Midstream its option to acquire up to
15% ownership in the EPIC NGL pipeline, which will transport NGLs from
the Delaware Basin to the Gulf Coast. The option expires in early
February 2019
Second Quarter 2018 Results
Combined oil and gas gathering and sales, produced water gathering, and
fresh water delivery volumes were consistent with or above guidance
ranges for the second quarter.
In the gathering business, oil and gas gathering volumes of 192 thousand
barrels of oil equivalent per day (MBoe/d) were up 15% compared to first
quarter 2018 volumes and reflect a full quarter of contribution from
Black Diamond. The Partnership realized sequential growth in oil and gas
gathering throughput growth at the Blanco River and Laramie River
DevCos. Produced water gathering throughput was up 84% from the first
quarter of 2018 due to the increase in wells coming online in the
Delaware Basin over the past several quarters.
Average fresh water delivered in the second quarter was 23% above the
high end of guidance at 160 MBw/d but down 5% versus the first quarter
of 2018. The Partnership delivered water to three completion crews on
dedicated acreage in the DJ Basin, a similar level compared to the first
quarter of 2018.
Second quarter investment income of $4.1 million is primarily comprised
of approximately $1 million from the Partnership’s minority ownership in
White Cliffs Pipeline LLC and approximately $3.1 million from the
Partnership’s 50% ownership in the Advantage Pipeline, L.L.C.
Net income of $44 million in the quarter exceeded guidance. Depreciation
and amortization increased compared to the first quarter due to the
amortization of intangible assets related to customer contracts that
were acquired during the Partnership's acquisition of all of the
outstanding limited liability company interests in Saddle Butte Rockies
Midstream, LLC and certain affiliates (collectively, Saddle Butte);
however, depreciation and amortization came in below guidance.
Adjusted EBITDA1 was $64 million in the second quarter, or
10% above the prior quarter, while Adjusted EBITDA1 attributable
to the Partnership was down 9% from the first quarter to $49 million due
to the previously announced customer activity mix shift to the Green
River DevCo (25% owned by the Partnership) from the Colorado River DevCo
(100% owned by the Partnership). Quarterly adjustments to earnings
include approximately $1.3 million in transaction expenses associated
with the Saddle Butte acquisition.
In the second quarter, cash interest expense attributable to the
Partnership was $4 million and maintenance capital expenditures
attributable to the Partnership totaled $4.8 million, resulting in DCF1
attributable to the Partnership of $40 million and a distribution
coverage ratio1 of 1.8x.
Blanco River DevCo
Oil and gas gathering volumes at Blanco River DevCo were up 47% compared
to the first quarter of 2018. The Partnership connected 26 wells during
the quarter. Combined oil and gas gathering capacity in the Delaware
Basin now totals 115 MBoe/d from five CGFs, including 90 thousand
barrels of oil per day (MBbl/d) and 150 million cubic feet of gas per
day. The Billy Miner II CGF began operations in April 2018, and the
Collier CGF was completed in mid-May 2018. Planning is currently
underway for oil, gas, and produced water gathering services for a
third-party in Reeves County. Services for approximately 13,000 acres
dedicated to Noble Midstream Services will be provided through the
Blanco River DevCo, with the first well anticipated in the third quarter
of 2018.
Trinity River DevCo
Strong customer demand continued at the Advantage Pipeline system in the
second quarter, with quarterly volumes of 105 MBbl/d up 19% from the
first quarter of 2018 and up more than three times compared to levels at
the time of the acquisition close in April 2017. Expansion of the
Advantage Pipeline nameplate capacity to 200 MBbl/d from 150 MBbl/d was
completed in July. For the compression segment, new build installed
horsepower totaled 18,000 at mid-year.
Green River DevCo
Noble Midstream completed the oil, gas and produced water spec gathering
system for Noble Energy’s Mustang development in the DJ basin in June
and connected five wells to the system at the end of the quarter. Noble
Midstream delivered fresh water to two completion crews in Mustang
during the quarter.
Laramie River DevCo
Oil gathering and sales volumes, were up 31% compared to the first
quarter of 2018. Black Diamond Gathering reported its first full quarter
of throughput contribution in the second quarter of 2018 of 58 MBbl/d,
representing a 5% increase since the end of January 2018. The
Partnership connected a combined 103 wells during the quarter on Black
Diamond's gathering system and the Partnership’s wholly-owned third
party gathering system. Noble Midstream delivered fresh water to one
completion crew in the Laramie River DevCo during the quarter.
Colorado River DevCo
Colorado River oil and gas gathering volumes were flat compared to the
first quarter of 2018 at 93 MBoe/d despite a 65% sequential decline in
well connections due to strong sustained well performance. Fresh water
delivery volumes declined to almost zero as Noble Energy focused
completion activity at Mustang in the Green River DevCo.
Capital Expenditures
Organic capital expenditures in the second quarter totaled $155 million
and came in at the midpoint of guidance. Capital attributable to the
Partnership of $71 million was within 1% of the high end of guidance.
Gross and net capital by DevCo is as follows:
|
|
|
|
|
|
2Q 2018 Capital Expenditures (in millions)
|
DevCo
|
|
Basin
|
|
NBLX Ownership
|
|
Gross
|
|
Net
|
Laramie River *
|
|
DJ
|
|
100%
|
|
$
|
30
|
|
$
|
23
|
Blanco River
|
|
Delaware
|
|
40%
|
|
$
|
92
|
|
$
|
37
|
Trinity River
|
|
Delaware
|
|
100%
|
|
$
|
3
|
|
$
|
3
|
Colorado River
|
|
DJ
|
|
100%
|
|
$
|
—
|
|
$
|
—
|
San Juan River
|
|
DJ
|
|
25%
|
|
$
|
1
|
|
$
|
—
|
Green River
|
|
DJ
|
|
25%
|
|
$
|
29
|
|
$
|
7
|
Total Organic Capital Expenditures
|
|
$
|
155
|
|
$
|
71
|
Acquisition Capital Expenditures
|
|
$
|
—
|
|
$
|
—
|
Total Capital Expenditures
|
|
$
|
155
|
|
$
|
71
|
* Includes capital expenditures for Black Diamond, which is 54.4% owned
by Noble Midstream.
Quarterly Distribution
On July 26, 2018, the Board of Directors of Noble Midstream’s general
partner, Noble Midstream GP LLC, declared a second quarter cash
distribution of $0.5348 per unit, a 20% increase from the second quarter
2017 and 43% above the minimum quarterly cash distribution. The second
quarter distribution is payable on August 13, 2018, to unitholders of
record as of August 6, 2018.
Second Half and Full Year 2018 Guidance
2018 guidance, including third and fourth quarter details, for capital,
volumes and key financial metrics can be found in the table below.
We anticipate continued gathering volume growth throughout this year as
new projects as well as customer activity increases in the DJ begin
contributing to results. Oil and gas gathering and sales volume is
anticipated to grow 21% in the second half of 2018 above the first half
average. Produced water gathering volumes are also expected to continue
to set records as the average volume in the second half is expected to
nearly double compared to the first half average. Second half 2018 fresh
water delivery volumes are expected to be 31% above the first half
average, with the Partnership delivering fresh water to five completion
crews on dedicated acreage compared to three in the first half of the
year.
Full year 2018 gross oil and gas gathering and sales volume is
anticipated to be 194 to 204 MBoe/d down from 200 to 235 MBoe/d,
primarily reflecting year to-date actuals as well as our Sponsor's
expected Delaware Basin activity changes later this year. Based on
strong year to-date performance, we are raising full year 2018 fresh
water delivery volume guidance to between 180 MBw/d and 200 MBw/d from
130 MBw/d to 190 MBw/d. We are adjusting produced water gathering
throughput guidance to between 91 MBw/d and 99 MBw/d from 80 MBw/d to
110 MBw/d.
Full year 2018 EBITDA attributable to the Partnership is anticipated to
be $215 million to $225 million, compared to prior guidance of $215
million to $235 million, with EBITDA attributable to the partnership
increasing 13% in the second half of 2018 compared to the first half of
the year. The second half of 2018 financial guidance is highlighted by
DCF coverage of 1.9x to 2.1x in both the third and the fourth quarter.
Full year 2018 coverage has been adjusted to 2.0x to 2.1x from 1.9x to
2.1x.
The Partnership has revised its gross capital guidance to approximately
$530 million to $550 million from $500 million to $535 million, while
capital attributable to the Partnership remains $270 million to $285
million. Over 70% of 2018 capital attributable to the Partnership was
spent in the first half of the year completing major projects for our
customers. The revised capital guidance reflects new customer additions
in the DJ and Delaware Basins as well as higher spending on
infrastructure for Noble Energy at Blanco River DevCo and Green River
Devco, partially offset by lower capital expenditures at Laramie River
DevCo.
|
|
|
|
|
|
Guidance
|
|
|
|
|
1Q18
|
|
2Q18
|
|
3Q18
|
|
4Q18
|
|
FY 2018
|
Gross Volumes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Gathered (MBbl/d)1
|
|
135
|
|
158
|
|
165 - 180
|
|
180 - 195
|
|
160 - 167
|
Gas Gathered (MMcf/d)
|
|
191
|
|
206
|
|
210 - 230
|
|
225 - 245
|
|
208 - 218
|
Oil and Gas Gathered (MBoe/d)1
|
|
167
|
|
192
|
|
200 - 218
|
|
218 - 236
|
|
194 - 204
|
Produced Water Gathered (MBw/d)
|
|
47
|
|
86
|
|
100 - 115
|
|
130 - 145
|
|
91 - 99
|
Fresh Water Delivered (MBw/d)
|
|
168
|
|
160
|
|
190 - 230
|
|
200 - 240
|
|
180 - 200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financials ($MM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$39
|
|
$44
|
|
$43 - $47
|
|
$54 - $59
|
|
$181 - $191
|
Gross Adjusted EBITDA2
|
|
$58
|
|
$64
|
|
$65 - $70
|
|
$77 - $83
|
|
$265 - $275
|
Net Adjusted EBITDA2
|
|
$54
|
|
$49
|
|
$55 - $59
|
|
$57 - $62
|
|
$215 - $225
|
Distributable Cash Flow2
|
|
$47
|
|
$40
|
|
$46 - $50
|
|
$48 - $53
|
|
$181 - $191
|
Distribution Coverage Ratio2,3
|
|
2.3x
|
|
1.8x
|
|
1.9x - 2.1x
|
|
1.9x - 2.1x
|
|
2.0x - 2.1x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Capital, Excluding Acquisitions
|
|
$249
|
|
$155
|
|
$71 - $80
|
|
$55 - $66
|
|
$530 - $550
|
Net Capital, Excluding Acquisitions
|
|
$128
|
|
$71
|
|
$40 - $50
|
|
$31 - $36
|
|
$270 - $285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Further details with respect to the second quarter results and guidance
can be found in the supplemental presentation on the Partnership's
website, www.nblmidstream.com.
1 Includes crude oil sales volume
2 Results “attributable to the
Partnership” exclude the non-controlling interests in the DevCos
retained by Noble Energy. Adjusted EBITDA, Distributable Cash Flow and
Distribution Coverage Ratio are not financial measures calculated in
accordance with Generally Accepted Accounting Principles (GAAP). For
definitions of these non-GAAP measures, see Schedule 4 of the financial
tables which follow.
3 Assumes 20% annualized distribution
growth
Conference Call
Noble Midstream will host a webcast and conference call today at 10:00
a.m. Central Time to discuss second quarter 2018 financial and
operational results and updated 2018 guidance. The live audio webcast
and related presentation material is accessible on the ‘Investors’ page
of the Partnership’s website at www.nblmidstream.com.
Conference call numbers for participation are 877-883-0383, or
412-902-6506 for international calls. The passcode number is 1915404. A
replay of the conference call will be available at the same web location
following the event.
About Noble Midstream Partners
Noble Midstream Partners LP is a growth-oriented master limited
partnership formed by Noble Energy, Inc. to own, operate, develop and
acquire domestic midstream infrastructure assets. Noble Midstream
currently provides crude oil, natural gas, and water-related midstream
services in the DJ Basin in Colorado and the Delaware Basin in Texas.
For more information, please visit www.nblmidstream.com.
This news release contains certain “forward-looking statements”
within the meaning of federal securities law. Words such as
“anticipates”, “believes”, “expects”, “intends”, “will”, “should”,
“may”, “estimates”, and similar expressions may be used to identify
forward-looking statements. Forward-looking statements are not
statements of historical fact and reflect the Partnership’s current
views about future events. No assurances can be given that the
forward-looking statements contained in this news release will occur as
projected and actual results may differ materially from those projected.
Forward-looking statements are based on current expectations, estimates
and assumptions that involve a number of risks and uncertainties that
could cause actual results to differ materially from those projected.
These risks include, without limitation, our customers’ ability to meet
their drilling and development plans, changes in general economic
conditions, competitive conditions in the Partnership’s industry,
actions taken by third-party operators, gatherers, processors and
transporters, the demand for crude oil and natural gas gathering and
processing services, the Partnership’s ability to successfully implement
its business plan, the Partnership’s ability to complete internal growth
projects on time and on budget, the price and availability of debt and
equity financing, the availability and price of crude oil and natural
gas to the consumer compared to the price of alternative and competing
fuels, and other risks inherent in the Partnership’s business, including
those described under “Risk Factors” and “Forward-Looking Statements” in
the Partnership’s most recent Annual Report on Form 10-K and in
other reports we file with the Securities and Exchange Commission. These
reports are also available from the Partnership’s office or website, www.nblmidstream.com.
Forward-looking statements are based on the estimates and opinions of
management at the time the statements are made. Noble Midstream does not
assume any obligation to update forward-looking statements should
circumstances, management’s estimates, or opinions change.
This news release also contains certain non-GAAP measures of
financial performance that management believes are good tools for
internal use and the investment community in evaluating Noble
Midstream’s overall financial performance. Please see the attached
schedules for reconciliations of the non-GAAP financial measures used in
this news release to the most directly comparable GAAP financial
measures.
This release serves as a qualified notice to nominees and brokers as
provided for under Treasury Regulation Section 1.1446-4(b) that 100% of
the Partnership’s distributions to foreign investors are attributable to
income that is effectively connected with a United States trade or
business. Accordingly, the Partnership’s distributions to foreign
investors are subject to federal income tax withholding at the highest
effective tax rate. Nominees, and not the Partnership, are
treated as withholding agents responsible for withholding on the
distributions received by them on behalf of foreign investors.
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|
|
|
|
Schedule 1
|
Noble Midstream Partners LP
|
Revenue and Throughput Volume Statistics
|
(unaudited)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Colorado River DevCo LP
|
|
|
|
|
|
|
|
|
Crude Oil Gathering Volumes (Bbl/d)
|
|
65,289
|
|
|
53,763
|
|
|
65,910
|
|
|
49,025
|
Natural Gas Gathering Volumes (MMBtu/d)
|
|
217,202
|
|
|
158,216
|
|
|
212,551
|
|
|
152,355
|
Produced Water Gathering Volumes (Bbl/d)
|
|
20,829
|
|
|
12,609
|
|
|
18,537
|
|
|
10,841
|
Fresh Water Delivery Volumes (Bbl/d)
|
|
1,116
|
|
|
113,824
|
|
|
51,219
|
|
|
93,935
|
Gathering and Fresh Water Delivery Revenues — Affiliate (in
thousands)
|
|
$
|
39,236
|
|
|
$
|
44,730
|
|
|
$
|
91,510
|
|
|
$
|
80,941
|
|
|
|
|
|
|
|
|
|
San Juan River DevCo LP
|
|
|
|
|
|
|
|
|
Fresh Water Delivery Volumes (Bbl/d)
|
|
—
|
|
|
20,067
|
|
|
—
|
|
|
37,759
|
Gathering and Fresh Water Delivery Revenues — Affiliate (in
thousands)
|
|
$
|
(779
|
)
|
|
$
|
7,946
|
|
|
$
|
(332
|
)
|
|
$
|
20,463
|
|
|
|
|
|
|
|
|
|
Green River DevCo LP
|
|
|
|
|
|
|
|
|
Crude Oil Gathering Volumes (Bbl/d)
|
|
108
|
|
|
—
|
|
|
54
|
|
|
—
|
Natural Gas Gathering Volumes (MMBtu/d)
|
|
172
|
|
|
—
|
|
|
87
|
|
|
—
|
Produced Water Gathering Volumes (Bbl/d)
|
|
236
|
|
|
—
|
|
|
119
|
|
|
—
|
Fresh Water Delivery Volumes (Bbl/d)
|
|
112,379
|
|
|
—
|
|
|
67,437
|
|
|
—
|
Gathering and Fresh Water Delivery Revenues — Affiliate (in
thousands)
|
|
$
|
17,888
|
|
|
$
|
—
|
|
|
$
|
21,332
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Blanco River DevCo LP
|
|
|
|
|
|
|
|
|
Crude Oil Gathering Volumes (Bbl/d)
|
|
21,506
|
|
|
—
|
|
|
17,978
|
|
|
—
|
Natural Gas Gathering Volumes (MMBtu/d)
|
|
48,743
|
|
|
—
|
|
|
44,248
|
|
|
—
|
Produced Water Gathering Volumes (Bbl/d)
|
|
59,682
|
|
|
—
|
|
|
42,927
|
|
|
—
|
Gathering Revenues — Affiliate (in thousands)
|
|
$
|
9,018
|
|
|
$
|
—
|
|
|
$
|
15,776
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Laramie River DevCo LP
|
|
|
|
|
|
|
|
|
Crude Oil Gathering and Sales Volumes (Bbl/d) (1)
|
|
70,761
|
|
|
—
|
|
|
61,787
|
|
|
—
|
Natural Gas Gathering Volumes (MMBtu/d)
|
|
1,970
|
|
|
—
|
|
|
1,489
|
|
|
—
|
Produced Water Gathering Volumes (Bbl/d)
|
|
5,665
|
|
|
—
|
|
|
5,222
|
|
|
—
|
Fresh Water Delivery Volumes (Bbl/d)
|
|
46,379
|
|
|
50,326
|
|
|
45,132
|
|
|
25,302
|
Gathering and Fresh Water Delivery Revenues — Third Party (in
thousands)
|
|
$
|
54,446
|
|
|
$
|
3,666
|
|
|
$
|
87,028
|
|
|
$
|
3,666
|
|
|
|
|
|
|
|
|
|
Trinity River DevCo LLC (Delaware Basin)
|
|
|
|
|
|
|
|
|
Natural Gas Compression Volumes (MMBtu/d)
|
|
30,468
|
|
|
—
|
|
|
25,632
|
|
|
—
|
Gathering Revenues — Affiliate (in thousands)
|
|
$
|
582
|
|
|
$
|
—
|
|
|
$
|
967
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
Total Gathering Systems
|
|
|
|
|
|
|
|
|
Crude Oil Gathering and Sales Volumes (Bbl/d)
|
|
157,664
|
|
|
53,763
|
|
|
145,729
|
|
|
49,025
|
Natural Gas Gathering Volumes (MMBtu/d)
|
|
268,087
|
|
|
158,216
|
|
|
258,375
|
|
|
152,355
|
Barrels of Oil Equivalent (Boe/d)
|
|
192,034
|
|
|
74,047
|
|
|
178,854
|
|
|
68,558
|
Produced Water Gathering Volumes (Bbl/d)
|
|
86,412
|
|
|
12,609
|
|
|
66,805
|
|
|
10,841
|
Natural Gas Compression Volumes (MMBtu/d)
|
|
30,468
|
|
|
—
|
|
|
25,632
|
|
|
—
|
Gathering Revenues (in thousands)
|
|
$
|
98,216
|
|
|
$
|
32,328
|
|
|
$
|
169,920
|
|
|
$
|
60,737
|
|
|
|
|
|
|
|
|
|
Total Fresh Water Delivery
|
|
|
|
|
|
|
|
|
Fresh Water Delivery Volumes (Bbl/d)
|
|
159,874
|
|
|
184,217
|
|
|
163,788
|
|
|
156,996
|
Fresh Water Delivery Revenues (in thousands)
|
|
$
|
22,175
|
|
|
$
|
24,014
|
|
|
$
|
46,361
|
|
|
$
|
44,333
|
(1)
|
|
Includes crude oil gathering volumes as well as crude oil that is
sold to customers and transported on our gathering systems.
|
|
|
|
|
|
|
|
|
Schedule 2
|
Noble Midstream Partners LP
|
Consolidated Statement of Operations
|
(in thousands, except per unit amounts, unaudited)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Midstream Services Revenues
|
|
|
|
|
|
|
|
|
Crude Oil, Natural Gas and Produced Water Gathering — Affiliate
|
|
$
|
46,871
|
|
|
$
|
32,328
|
|
|
$
|
89,895
|
|
|
$
|
60,737
|
|
Crude Oil, Natural Gas and Produced Water Gathering — Third Party
|
|
$
|
9,767
|
|
|
$
|
—
|
|
|
16,337
|
|
|
—
|
|
Fresh Water Delivery — Affiliate
|
|
19,074
|
|
|
20,348
|
|
|
39,358
|
|
|
40,667
|
|
Fresh Water Delivery — Third Party
|
|
3,101
|
|
|
3,666
|
|
|
7,003
|
|
|
3,666
|
|
Crude Oil Treating — Affiliate
|
|
979
|
|
|
1,169
|
|
|
1,934
|
|
|
2,436
|
|
Crude Oil Sales — Third Party
|
|
41,578
|
|
|
—
|
|
|
63,688
|
|
|
—
|
|
Other — Affiliate
|
|
—
|
|
|
272
|
|
|
—
|
|
|
591
|
|
Other — Third Party
|
|
601
|
|
|
—
|
|
|
1,489
|
|
|
—
|
|
Total Revenues
|
|
121,971
|
|
|
54,117
|
|
|
219,704
|
|
|
104,431
|
|
Costs and Expenses
|
|
|
|
|
|
|
|
|
Cost of Crude Oil Sales
|
|
40,012
|
|
|
—
|
|
|
61,451
|
|
|
—
|
|
Direct Operating
|
|
18,393
|
|
|
14,293
|
|
|
35,541
|
|
|
25,694
|
|
Depreciation and Amortization
|
|
16,371
|
|
|
2,472
|
|
|
27,700
|
|
|
4,921
|
|
General and Administrative
|
|
4,980
|
|
|
3,452
|
|
|
15,422
|
|
|
6,194
|
|
Total Operating Expenses
|
|
79,756
|
|
|
20,217
|
|
|
140,114
|
|
|
36,809
|
|
Operating Income
|
|
42,215
|
|
|
37,566
|
|
|
79,590
|
|
|
71,288
|
|
Other (Income) Expense
|
|
|
|
|
|
|
|
|
Interest Expense, Net of Amount Capitalized
|
|
1,681
|
|
|
100
|
|
|
2,714
|
|
|
367
|
|
Investment Income
|
|
(4,091
|
)
|
|
(1,641
|
)
|
|
(6,959
|
)
|
|
(2,706
|
)
|
Total Other Income
|
|
(2,410
|
)
|
|
(1,541
|
)
|
|
(4,245
|
)
|
|
(2,339
|
)
|
Income Before Income Taxes
|
|
44,625
|
|
|
39,107
|
|
|
83,835
|
|
|
73,627
|
|
State Income Tax Provision
|
|
183
|
|
|
—
|
|
|
257
|
|
|
—
|
|
Net Income
|
|
44,442
|
|
|
39,107
|
|
|
83,578
|
|
|
73,627
|
|
Less: Net Income Attributable to Noncontrolling Interests
|
|
7,858
|
|
|
7,515
|
|
|
7,633
|
|
|
17,693
|
|
Net Income Attributable to Noble Midstream Partners LP
|
|
36,584
|
|
|
31,592
|
|
|
75,945
|
|
|
55,934
|
|
Less: Net Income Attributable to Incentive Distribution Rights
|
|
1,134
|
|
|
92
|
|
|
1,953
|
|
|
92
|
|
Net Income Attributable to Limited Partners
|
|
$
|
35,450
|
|
|
$
|
31,500
|
|
|
$
|
73,992
|
|
|
$
|
55,842
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Limited Partners Per Limited Partner
Unit — Basic and Diluted
|
|
|
|
|
|
|
|
|
Common Units
|
|
$
|
0.90
|
|
|
$
|
0.98
|
|
|
$
|
1.87
|
|
|
$
|
1.75
|
|
Subordinated Units
|
|
$
|
0.90
|
|
|
$
|
0.98
|
|
|
$
|
1.87
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Limited Partner Units Outstanding — Basic
|
|
|
|
|
|
|
|
|
Common Units
|
|
23,686
|
|
|
16,127
|
|
|
23,684
|
|
|
16,015
|
|
Subordinated Units
|
|
15,903
|
|
|
15,903
|
|
|
15,903
|
|
|
15,903
|
|
Total Limited Partner Units
|
|
39,589
|
|
|
32,030
|
|
|
39,587
|
|
|
31,918
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Limited Partner Units Outstanding —
Diluted
|
|
|
|
|
|
|
|
|
Common Units
|
|
23,700
|
|
|
16,137
|
|
|
23,699
|
|
|
16,024
|
|
Subordinated Units
|
|
15,903
|
|
|
15,903
|
|
|
15,903
|
|
|
15,903
|
|
Total Limited Partner Units
|
|
39,603
|
|
|
32,040
|
|
|
39,602
|
|
|
31,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 3
|
Noble Midstream Partners LP
|
Consolidated Balance Sheet
|
(in thousands, unaudited)
|
|
|
June 30, 2018
|
|
December 31, 2017
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
Cash and Cash Equivalents
|
|
$
|
16,202
|
|
|
$
|
18,026
|
|
Restricted Cash
|
|
—
|
|
—
|
|
37,505
|
|
Accounts Receivable — Affiliate
|
|
25,631
|
|
|
27,539
|
|
Accounts Receivable — Third Party
|
|
20,085
|
|
|
2,641
|
|
Crude Oil Inventory
|
|
3,314
|
|
|
—
|
|
Other Current Assets
|
|
3,896
|
|
|
389
|
|
Total Current Assets
|
|
69,128
|
|
|
86,100
|
|
Property, Plant and Equipment
|
|
|
|
|
Total Property, Plant and Equipment, Gross
|
|
1,331,831
|
|
|
706,039
|
|
Less: Accumulated Depreciation and Amortization
|
|
(58,414
|
)
|
|
(44,271
|
)
|
Total Property, Plant and Equipment, Net
|
|
1,273,417
|
|
|
661,768
|
|
Intangible Assets, Net
|
|
326,485
|
|
|
—
|
|
Goodwill
|
|
111,145
|
|
|
—
|
|
Investments
|
|
81,234
|
|
|
80,461
|
|
Deferred Charges
|
|
3,056
|
|
|
1,429
|
|
Total Assets
|
|
$
|
1,864,465
|
|
|
$
|
829,758
|
|
LIABILITIES
|
|
|
|
|
Current Liabilities
|
|
|
|
|
Accounts Payable — Affiliate
|
|
$
|
2,951
|
|
|
$
|
1,616
|
|
Accounts Payable — Trade
|
|
136,196
|
|
|
109,893
|
|
Other Current Liabilities
|
|
5,605
|
|
|
2,876
|
|
Total Current Liabilities
|
|
144,752
|
|
|
114,385
|
|
Long-Term Liabilities
|
|
|
|
|
Long-Term Debt
|
|
530,000
|
|
|
85,000
|
|
Asset Retirement Obligations
|
|
15,576
|
|
|
10,416
|
|
Other Long-Term Liabilities
|
|
2,466
|
|
|
3,727
|
|
Total Liabilities
|
|
692,794
|
|
|
213,528
|
|
EQUITY
|
|
|
|
|
Partners’ Equity
|
|
|
|
|
Limited Partner
|
|
|
|
|
Common Units (23,762 and 23,712 units outstanding, respectively)
|
|
667,830
|
|
|
642,616
|
|
Subordinated Units (15,903 units outstanding)
|
|
(151,256
|
)
|
|
(168,136
|
)
|
General Partner
|
|
1,134
|
|
|
520
|
|
Total Partners’ Equity
|
|
517,708
|
|
|
475,000
|
|
Noncontrolling Interests
|
|
653,963
|
|
|
141,230
|
|
Total Equity
|
|
1,171,671
|
|
|
616,230
|
|
Total Liabilities and Equity
|
|
$
|
1,864,465
|
|
|
$
|
829,758
|
|
|
|
|
|
|
|
|
|
|
Schedule 4 Noble Midstream Partners LP Reconciliations
of GAAP Financial Measures to Non-GAAP Financial Measures
Non-GAAP Financial Measures
This news release, the financial tables and other supplemental
information include Adjusted EBITDA, Distributable Cash Flow, and
Distribution Coverage Ratio, all of which are non-GAAP measures which
may be used periodically by management when discussing our financial
results with investors and analysts.
We define Adjusted EBITDA as net income before income taxes, net
interest expense, depreciation and amortization, transaction expenses
and unit-based compensation. Adjusted EBITDA is used as a supplemental
financial measure by management and by external users of our financial
statements, such as investors, industry analysts, lenders and ratings
agencies, to assess:
-
our operating performance as compared to those of other companies in
the midstream energy industry, without regard to financing methods,
historical cost basis or capital structure;
-
the ability of our assets to generate sufficient cash flow to make
distributions to our partners;
-
our ability to incur and service debt and fund capital expenditures;
-
and the viability of acquisitions and other capital expenditure
projects and the returns on investment of various investment
opportunities.
We define Distributable Cash Flow as Adjusted EBITDA less estimated
maintenance capital expenditures and cash interest expense.
Distributable Cash Flow is used by management to evaluate our overall
performance. Our partnership agreement requires us to distribute all
available cash on a quarterly basis, and Distributable Cash Flow is one
of the factors used by the board of directors of our general partner to
help determine the amount of available cash that is available to our
unitholders for a given period. We define Distribution Coverage Ratio as
Distributable Cash Flow divided by total distributions declared. The
Distribution Coverage Ratio is used by management to illustrate our
ability to make our distributions each quarter.
We believe that the presentation of Adjusted EBITDA, Distributable Cash
Flow, and Distribution Coverage Ratio provide information useful to
investors in assessing our financial condition and results of
operations. The GAAP measure most directly comparable to Adjusted
EBITDA, Distributable Cash Flow and Distribution Coverage Ratio is net
income. Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio should not be considered alternatives to net income or
any other measure of financial performance or liquidity presented in
accordance with GAAP. Adjusted EBITDA, Distributable Cash Flow and
Distribution Coverage Ratio exclude some, but not all, items that affect
net income, and these measures may vary from those of other companies.
As a result, Adjusted EBITDA, Distributable Cash Flow and Distribution
Coverage Ratio as presented herein may not be comparable to similarly
titled measures of other companies.
Noble Midstream does not provide guidance on the reconciling items
between forecasted Net Income, forecasted Adjusted EBITDA, forecasted
Distributable Cash Flow and forecasted Distribution Coverage Ratio due
to the uncertainty regarding timing and estimates of these items. Noble
Midstream provides a range for the forecasts of Net Income, Adjusted
EBITDA, Distributable Cash Flow and Distribution Coverage Ratio to allow
for the variability in timing and uncertainty of estimates of
reconciling items between forecasted Net Income, forecasted Adjusted
EBITDA, forecasted Distributable Cash Flow and forecasted Distribution
Coverage Ratio. Therefore, the Partnership cannot reconcile forecasted
Net Income to forecasted Adjusted EBITDA, forecasted Distributable Cash
Flow or forecasted Distribution Coverage Ratio without unreasonable
effort.
In addition to Net Income, the GAAP measure most directly comparable to
Adjusted EBITDA and Distributable Cash Flow is net cash provided by
operating activities. Adjusted EBITDA and Distributable Cash Flow should
not be considered alternatives to net income, net cash provided by
operating activities or any other measure of financial performance or
liquidity presented in accordance with GAAP. Due to the forward-looking
nature of net cash provided by operating activities, management cannot
reliably predict certain of the necessary components of the most
directly comparable forward-looking GAAP measures, such as future
impairments and future changes in working capital. Accordingly, Noble
Midstream is unable to present a quantitative reconciliation of the
aforementioned forward-looking non-GAAP financial measures to net cash
provided by operating activities. Amounts excluded from these non-GAAP
measures in future periods could be significant.
|
|
|
Schedule 4 (Continued)
|
Noble Midstream Partners LP
|
Reconciliations of GAAP Financial Measures to Non-GAAP
Financial Measures
|
|
|
|
Reconciliation of Net Income (GAAP) to Adjusted EBITDA and
Distributable Cash Flow (Non-GAAP)
|
(in thousands, unaudited)
|
|
|
Three Months Ended June 30,
|
|
|
2018
|
|
2017
|
Reconciliation from Net Income (GAAP)
|
|
|
|
|
Net Income and Comprehensive Income (GAAP)
|
|
$
|
44,442
|
|
$
|
39,107
|
Add:
|
|
|
|
|
Depreciation and Amortization
|
|
16,371
|
|
2,472
|
Interest Expense, Net of Amount Capitalized
|
|
1,681
|
|
100
|
State Income Tax Provision
|
|
183
|
|
—
|
Transaction and Integration Expenses
|
|
1,280
|
|
—
|
Unit-Based Compensation
|
|
393
|
|
206
|
Adjusted EBITDA (Non-GAAP)
|
|
64,350
|
|
41,885
|
Less:
|
|
|
|
|
Adjusted EBITDA Attributable to Noncontrolling Interests
|
|
15,691
|
|
8,005
|
Adjusted EBITDA Attributable to Noble Midstream Partners LP
(Non-GAAP)
|
|
48,659
|
|
33,880
|
Less:
|
|
|
|
|
Cash Interest Paid
|
|
4,030
|
|
593
|
Maintenance Capital Expenditures
|
|
4,772
|
|
2,951
|
Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)
|
|
$
|
39,857
|
|
$
|
30,336
|
Distributions (Declared)
|
|
$
|
22,306
|
|
$
|
16,089
|
Distribution Coverage Ratio (Declared)
|
|
1.8x
|
|
1.9x
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by Operating Activities
(GAAP) to Adjusted EBITDA
|
and Distributable Cash Flow (Non-GAAP)
|
(in thousands, unaudited)
|
|
|
Three Months Ended June 30,
|
|
|
2018
|
|
2017
|
Reconciliation from Net Cash Provided by Operating Activities
(GAAP)
|
|
|
|
|
|
Net Cash Provided by Operating Activities (GAAP)
|
|
$
|
59,469
|
|
$
|
42,302
|
|
Add:
|
|
|
|
|
|
Interest Expense, Net of Amount Capitalized
|
|
1,681
|
|
100
|
|
Changes in Operating Assets and Liabilities
|
|
228
|
|
(826
|
)
|
Transaction and Integration Expenses
|
|
1,280
|
|
—
|
|
Change in Income Tax Payable
|
|
183
|
|
—
|
|
Other Adjustments
|
|
1,509
|
|
309
|
|
Adjusted EBITDA (Non-GAAP)
|
|
64,350
|
|
41,885
|
|
Less:
|
|
|
|
|
|
Adjusted EBITDA Attributable to Noncontrolling Interests
|
|
15,691
|
|
8,005
|
|
Adjusted EBITDA Attributable to Noble Midstream Partners LP
(Non-GAAP)
|
|
48,659
|
|
33,880
|
|
Less:
|
|
|
|
|
|
Cash Interest Paid
|
|
4,030
|
|
593
|
|
Maintenance Capital Expenditures
|
|
4,772
|
|
2,951
|
|
Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)
|
|
$
|
39,857
|
|
$
|
30,336
|
|
Distributions (Declared)
|
|
$
|
22,306
|
|
$
|
16,089
|
|
Distribution Coverage Ratio (Declared)
|
|
1.8x
|
|
1.9x
|
|
|
|
|
|
|
|
|
|
|
Schedule 4 (Continued)
|
Noble Midstream Partners LP
|
Reconciliations of GAAP Financial Measures to Non-GAAP
Financial Measures
|
|
Reconciliation of 2018 GAAP Guidance to 2018 Non-GAAP Guidance
|
(in millions, unaudited)
|
|
|
2018 Guidance
|
|
|
3Q18
|
|
4Q18
|
|
Full Year
|
Reconciliation from Net Income (GAAP) to Distributable Cash Flow
(Non-GAAP)
|
|
|
|
|
|
|
Net Income and Comprehensive Income (GAAP)
|
|
$43 - $47
|
|
$54 - $59
|
|
$181 - $191
|
Add:
|
|
|
|
|
|
|
Depreciation and Amortization
|
|
18
|
|
19
|
|
65
|
Interest Expense, Net of Amount Capitalized
|
|
4
|
|
4
|
|
11
|
Unit-Based Compensation
|
|
0
|
|
0
|
|
2
|
Transaction Expenses
|
|
—
|
|
—
|
|
7
|
Income Tax Provision (Benefit)
|
|
0
|
|
0
|
|
0
|
Adjusted EBITDA (Non-GAAP)
|
|
$65 - $70
|
|
$77 - $83
|
|
$265 - $275
|
Adjusted EBITDA Attributable to Noncontrolling Interests
|
|
10
|
|
20
|
|
50
|
Adjusted EBITDA Attributable to the Partnership
|
|
$55 - $59
|
|
$57 - $62
|
|
$215 - $225
|
Less:
|
|
|
|
|
|
|
Maintenance Capital Expenditures and Cash Interest Paid
|
|
9
|
|
9
|
|
34
|
Distributable Cash Flow
|
|
$46 - $50
|
|
$48 - $53
|
|
$181 - $191
|
Distribution Coverage Ratio
|
|
1.9x - 2.1x
|
|
1.9x - 2.1x
|
|
2.0x - 2.1x
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180803005127/en/ Copyright Business Wire 2018
Source: Business Wire
(August 3, 2018 - 7:00 AM EDT)
News by QuoteMedia
www.quotemedia.com
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