Chesapeake Midstream Partners, L.P. announced financial results for the 2010 fourth quarter.
The results include the Partnership’s acquisition of the Springridge gathering system from Chesapeake Energy Corporation, which closed on December 21, 2010. In addition, the Partnership reaffirmed its 2011 outlook and capital program.
Net income for the 2010 fourth quarter totaled $89.9 million, an increase of $39.2 million versus the 2009 fourth quarter. The Partnership’s adjusted ebitda for the 2010 fourth quarter was $115.6 million and distributable cash flow was $96.7 million. Financial terms are defined on page 3 of this release. Fourth quarter results include operations of the Springridge assets from the closing of the acquisition on December 21, 2010 through the end of the year as well as associated transaction costs. DCF for the 2010 full year resulted in a 1.15 coverage ratio as compared to the minimum quarterly distribution.
Total throughput for the 2010 fourth quarter was 151.1 billion cubic feet (bcf) of natural gas or 1.642 bcf per day, an increase of 6% from the 2009 fourth quarter throughput of 1.550 bcf per day. The increase is the result of 427 new wells connected to the Partnership’s gathering systems during 2010 (excluding wells added as a result of the Springridge acquisition) and new Springridge volumes. Revenue for the 2010 fourth quarter was $162.5 million, an increase of 51% from 2009 fourth quarter revenue of $107.4 million. Revenue includes $56.8 million and $7.7 million from the Partnership’s minimum volume commitments (“MVCs”) in 2010 and 2009, respectively. Revenue for the 2010 fourth quarter increased 6% excluding the impact of MVCs.
The Partnership invested approximately $59.8 million on capital expenditures during the 2010 fourth quarter, including maintenance capital expenditures of approximately $17.5 million. Maintenance capital expenditures consist primarily of well connect costs required to replace natural declines in gathering volumes.
J. Mike Stice, Chesapeake Midstream Partners’ Chief Executive Officer, commented , “I’m pleased to announce our operating and financial results continue to be in line with our projections. The implied 2010 full-year coverage ratio was 1.15, right on target for our business model. We were able to close the Springridge acquisition before the end of the year and more importantly, to fully integrate the system’s operations so we are prepared to deliver immediate volume growth in 2011. Throughput on the Springridge system during the first two months following the acquisition has exceeded our original expectations, confirming the attractiveness of this premier growth asset.”
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Source: Chesapeake Midstream Partners, March 2, 2011;