EV Energy Partners Announces First Quarter 2013 Results

HOUSTON, May 10, 2013 /PRNewswire/ -- EV Energy Partners, L.P. (Nasdaq: EVEP) today announced results for the first quarter 2013 and filed its Form 10-Q with the Securities and Exchange Commission.  In addition, an update of EVEP's commodity hedge positions, which includes additional natural gas hedges entered into since March 31, 2013, is presented in the Hedge Summary Table at the end of this release.

First Quarter 2013 Results

Adjusted EBITDAX for the quarter was $48.5 million, a 25 percent decrease over the first quarter of 2012 and a 30 percent decrease versus the fourth quarter of 2012.  Distributable Cash Flow for the quarter was $21.8 million, a 37 percent decrease over the first quarter of 2012 and a 43 percent decrease versus the fourth quarter of 2012.  The decreases in Adjusted EBITDAX and Distributable Cash Flow, which are described in the attached table under "Non-GAAP Measures," are primarily due to decreases in realized gains on commodity derivatives and lower average sales prices per unit for natural gas liquids and crude oil.

Production for the first quarter of 2013 was 10.3 Bcf of natural gas, 263 MBbls of crude oil and 503 MBbls of natural gas liquids, or 165.2 Mmcfe/day.  This represents a four percent increase from first quarter 2012 production of 159.5 Mmcfe/day and a one percent decrease from the fourth quarter 2012 production of 166.3 Mmcfe/day.

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.  Included in net loss were $38.3 million of unrealized losses on commodity and interest rate derivatives, $0.7 million of non-cash realized losses related to terminated interest rate swaps, $0.4 million of dry hole and exploration costs, $5.2 million of non-cash leasehold impairment charges, $0.1 million of non-cash deferred income taxes and $4.5 million of non-cash costs contained in general and administrative expenses.  Also contained in general and administrative expenses were $3.2 million of payroll related cash costs associated with the annual vesting of phantom units during the first quarter which will not be incurred during the second through fourth quarters of 2013.

For the first quarter of 2012, EVEP reported a net income of $28.6 million, or $0.69 per basic and diluted weighted average limited partner unit outstanding.  Included in net income were $11.7 million of unrealized gains on commodity and interest rate derivatives, $0.6 million of non-cash realized losses on commodity derivatives, a $1.2 million non-cash charge to lease operating expense related to oil in tanks purchased in connection with 2011 acquisitions, $2.2 million of dry hole and exploration costs, a $0.6 million impairment charge primarily related to non-core assets sold during the quarter, $0.6 million of non-cash deferred income taxes and $4.3 million of non-cash costs contained in general and administrative expenses.  Also contained in general and administrative expenses were $1.8 million of payroll tax related cash costs associated with the annual vesting of phantom units during the first quarter and $0.2 million of acquisition related due diligence and transaction costs.  For the fourth quarter of 2012, EVEP reported a net loss of $9.9 million, or $(0.23) per basic and diluted weighted average limited partner unit outstanding. Included in net loss were $9.6 million of unrealized losses on commodity and interest rate derivatives, $1.2 million of non-cash realized losses on commodity and interest rate derivatives, $1.1 million of dry hole and exploration costs and $4.0 million of non-cash costs contained in general and administrative expenses.  Also recognized during the fourth quarter were $16.7 million of impairment charges primarily related to the write-down of certain oil and natural gas properties to their fair value due to the effects of declining natural gas prices on expected future net cash flows.

Mark Houser, President and CEO, said, "We had strong operating performance through a tough winter.  Our Barnett Shale results were excellent, our Utica midstream investment is progressing with start-up of initial processing and fractionation at UEO expected this June, and our Utica acreage sale process is proceeding."

Quarterly Report on Form 10-Q

EVEP's financial statements and related footnotes are available on our first quarter 2013 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 3, 2013, EV Energy Partners, L.P. will host an investor conference call Friday, May 10, 2013 at 9:00 a.m. Eastern Time.  Investors interested in participating in the call may dial (877) 941-9205 (quote conference ID 4618219) 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://www.evenergypartners.com.

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

(code #: EVEP/G)

(Logo: http://photos.prnewswire.com/prnh/20130415/DA94198LOGO)

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, future plans 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.

Non-GAAP Measures

We define Adjusted EBITDAX as net (loss) income plus income taxes, interest expense, net, realized losses on interest rate swaps, depreciation, depletion and amortization, asset retirement obligations accretion expense, non-cash realized losses on derivatives, unrealized losses (gains) on derivatives, non-cash equity compensation expense, impairment of oil and natural gas properties, non-cash inventory write down expense, and dry hole and exploration costs. 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. These financial measures 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.

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

SOURCE EV Energy Partners, LP