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Press release from PR Newswire

PVR Partners Announces Second Quarter 2013 Results and Declares Cash Distribution

Wednesday, July 24, 2013

PVR Partners Announces Second Quarter 2013 Results and Declares Cash Distribution

09:00 EDT Wednesday, July 24, 2013

RADNOR, Pa., July 24, 2013 /PRNewswire/ -- PVR Partners, L.P. (NYSE: PVR) ("PVR") today reported financial and operational results for the three months ended June 30, 2013.  In addition, PVR declared a quarterly distribution of $0.55 per unit.

(Logo:  http://photos.prnewswire.com/prnh/20110224/PH54022LOGO )

Second Quarter ResultsSecond quarter 2013 highlights and results, with comparisons to results for the second quarter of 2012 ("last year") and the first quarter of 2013 ("last quarter"), included the following:

  • Adjusted EBITDA of $76.1 million as compared to $57.0 million last year and $76.0 million last quarter.
  • Distributable Cash Flow ("DCF") of $49.0 million as compared to $32.9 million last year and $49.9 million last quarter.
  • Average daily natural gas throughput volumes of 1.7 billion cubic feet per day ("Bcfd") as compared with 0.9 Bcfd last year and 1.6 Bcfd last quarter.

Adjusted EBITDA and DCF are not Generally Accepted Accounting Principles ("GAAP") measures.  Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow.

Quarterly Distribution

The Board of Directors of PVR GP, LLC, the general partner of PVR, declared a quarterly distribution of $0.55 per unit payable in cash on August 14, 2013 to common unitholders of record at the close of business on August 7, 2013.  This distribution equates to an annualized rate of $2.20 per unit, which is unchanged from the distribution paid with respect to the first quarter of 2013 and represents a 3.8% increase over the distribution paid with respect to the second quarter of 2012.

Management Comment

"Our second quarter results were consistent with our first quarter performance, and significantly ahead of last year's second quarter results," said Bill Shea, President and CEO of PVR's general partner.  "However, results for the second quarter were below our expectations primarily due to producers delaying well connections in our Eastern Midstream operations.  Some wells originally scheduled for connection in the second quarter have been delayed until later this year resulting in lower second quarter throughput volumes.  These delays have negatively impacted our 2013 revenue projections and we have adjusted our 2013 guidance to reflect the financial impact on our full year results.

"Our continued belief in the long-term prospects for our Eastern Midstream operations is supported by strong results from the wells that have been drilled and completed within our areas of operations, the continuing level of drilling activity within the region, and the overall scope and scale of the future drilling plans communicated by producers," continued Mr. Shea.  "However, changes in producers' detailed schedules can materially impact volume and revenue growth on a quarter to quarter basis.  Based on the revised well connection schedules most recently provided by producers, we expect total average daily Eastern Midstream throughput volumes at year end will be in the range of 1.6 to 1.8 Bcfd."

Eastern Midstream Segment Results

The Eastern Midstream Segment reported second quarter 2013 results, with comparisons to second quarter 2012 results and the first quarter of 2013, as follows:

  • Adjusted EBITDA of $38.1 million as compared to $17.7 million last year and $37.7 million last quarter, primarily due to the continued development of internal growth projects and the acquisition of Chief Gathering LLC.
  • Quarterly average throughput volumes of 1.3 Bcfd as compared to 0.5 Bcfd last year and 1.2 Bcfd last quarter, reflecting growth on PVR's existing systems, as well as the acquisition and expansion of the Chief Gathering systems.

Midcontinent Midstream Segment Results

The Midcontinent Midstream Segment reported second quarter 2013 results, with comparisons to second quarter 2012 results and the first quarter of 2013, as follows:

  • Adjusted EBITDA of $14.9 million as compared to $12.7 million last year and $15.7 million last quarter.
  • Quarterly average throughput volumes of 382 MMcfd as compared to 453 MMcfd last year and 391 MMcfd last quarter.  Second quarter 2012 volumes included approximately 52 MMcfd attributable to the Crossroads system that was sold on July 3, 2012.

Coal and Natural Resource Management Segment Results

The Coal and Natural Resource Management Segment reported second quarter 2013 results, with comparisons to second quarter 2012 results and the first quarter of 2013, as follows:

  • Adjusted EBITDA of $23.1 million as compared to $26.7 million last year and $22.7 million last quarter.  The year-over-year decline was primarily due to decreased coal production and pricing.
  • Coal royalty tons of 6.9 million tons as compared to 7.8 million tons last year and 6.4 million tons last quarter.
  • Coal royalties revenue of $23.2 million, or $3.37 per ton, as compared to $29.2 million, or $3.76 per ton last year and $23.0 million or $3.56 per ton last quarter.

Second quarter 2013 coal segment revenue included a $2.3 million one-time recognition of forfeitures of minimum payments from a lessee declaring bankruptcy.

Capital Investment and Resources

We invested $110.9 million on internal growth projects in our midstream businesses during the second quarter of 2013, of which $97.5 million was invested in the Eastern Midstream Segment.

On May 9th, PVR closed a $400 million offering of Senior Notes.  The net proceeds from the offering were used to repay a portion of the borrowings outstanding under PVR's $1.0 billion revolving credit facility.  As of June 30, 2013, we had borrowings of $457.5 million under our revolving credit facility, with remaining borrowing capacity thereunder of $532.1 million after adjusting for outstanding letters of credit.

Expansion Projects Update

The development and build-out of important growth projects in the Marcellus, Utica, Cline and Mississippian Lime continued during the second quarter of 2013.

  • Construction of the new "Severcool" compressor facility and central delivery point on the Wyoming County trunkline was completed and began operation during June.  Completion of these facilities added 85 MMcfd of firm volume commitment to the Wyoming trunkline beginning July 1, 2013.
  • The new interconnection into the Wyoming trunkline for Carrizo Oil & Gas and Reliance Group began service during June.
  • The second phase of the new Lycoming gathering system, for which Inflection Energy is the primary shipper, was completed and began service in the second quarter.  Work on additional phases of this system continues.
  • Completion of 13 new well connections in the Eastern Midstream Segment during the second quarter.
  • Construction of the initial phase of our gathering system in Greene County, Pennsylvania has been completed.  Volume on the system during the second quarter averaged 12 MMcfd.
  • Early phase development work continues on a proposed new trunkline and gathering system in the Utica shale.
  • Completion of 52 new well connections in the Midcontinent Midstream Segment during the second quarter.

Financial Guidance for 2013

Based on current expectations, management has updated its Adjusted EBITDA guidance for 2013.  Full year 2013 Adjusted EBITDA for the Eastern Midstream Segment is now expected to be in the range of $160 to $185 million and the Midcontinent Midstream Segment is now expected to be in the range of $60 to $70 million.  Adjusted EBITDA for the Coal and Natural Resource Management Segment in the range of $75 to $85 million remains unchanged.  Management now anticipates that full year 2013 maintenance capital expenditures will be in the range of $13 to $15 million.  PVR's expectation for full year 2013 internal growth capital in the range of $350 to $400 million remains unchanged.

PVR's financial guidance is based on numerous assumptions about future events and conditions and, therefore, could vary materially from actual results.  These estimates, including capital expenditure plans, are meant to provide guidance only and are subject to revision for acquisitions or operating environment changes.  Adjusted EBITDA is a non-GAAP measure; reconciliations of non-GAAP measures to GAAP reporting measures appear in the financial tables which follow.

Second Quarter 2013 Financial and Operational Results Conference Call

A conference call and webcast, during which management will discuss second quarter 2013 financial and operational results, is scheduled for Wednesday, July 24, 2013 at 2:00 p.m. Eastern Daylight Time.  Prepared remarks by members of company management will be followed by a question and answer period.  Interested parties may listen via webcast at http://www.videonewswire.com/event.asp?id=94745 or by logging on using the link posted on our website, www.pvrpartners.com.  Participants who would like to ask questions may join the conference via phone by dialing 800-860-2442 (international 412-858-4600) five to ten minutes before the scheduled start of the conference call (reference the PVR Partners call).  An on-demand replay of the webcast will be available on our website shortly after the conclusion of the call.  A telephonic replay of the call will be available through July 31 by dialing 877-344-7529 (international: 412-317-0088) and using conference playback number 10030534.

******

PVR Partners, L.P. (NYSE: PVR) is a publicly traded limited partnership which owns and operates a network of natural gas midstream pipelines and processing plants, and owns and manages coal and natural resource properties.  Our midstream assets, located principally in Texas, Oklahoma and Pennsylvania, provide gathering, transportation, compression, processing, dehydration and related services to natural gas producers.  Our coal and natural resource properties, located in the Appalachian, Illinois and San Juan basins, are leased to experienced operators in exchange for royalty payments.  More information about PVR is available on our website at www.pvrpartners.com.

******

This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b).  Brokers and nominees should treat one hundred percent (100.0%) of the Partnership's distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business.  Accordingly, the Partnership's distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

******

This press release includes "forward-looking statements" within the meaning of federal securities laws. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Partnership expects, believes or anticipates will or may occur in the future are forward-looking statements.  These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Partnership's ability to control or predict, which could cause results to differ materially from those expected by management. Such risks and uncertainties include, but are not limited to, regulatory, economic and market conditions, our ability realize the anticipated benefits from the acquisition of Chief Gathering LLC, the timing and success of business development efforts and other uncertainties.  Additional information concerning these and other factors can be found in our press releases and public periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2012 and most recently filed Quarterly Reports on Form 10-Q.  Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof.  We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:  

Stephen R. Milbourne

Director - Investor Relations

Phone: 610-975-8204

E-Mail: invest@pvrpartners.com

 

PVR PARTNERS, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - unaudited

(in thousands, except per unit data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

Revenues

    Natural gas

$ 103,111

$ 63,127

$ 190,825

$ 137,754

    Natural gas liquids

93,470

102,130

193,978

219,924

    Gathering fees

25,886

11,149

48,802

18,612

    Trunkline fees

21,653

10,255

42,754

16,647

    Coal royalties

23,223

29,231

46,174

62,390

    Other

6,122

7,020

14,343

14,002

         Total revenues

273,465

222,912

536,876

469,329

Expenses

    Cost of gas purchased

167,074

140,833

325,282

306,297

    Operating

17,150

14,040

32,520

29,943

    General and administrative

13,172

10,999

26,957

23,043

    Acquisition related costs

-

14,049

-

14,049

    Impairments

-

-

-

124,845

    Depreciation, depletion and amortization

46,113

28,456

90,899

52,309

        Total expenses

243,509

208,377

475,658

550,486

Operating income (loss)

29,956

14,535

61,218

(81,157)

Other income (expense)

    Interest expense

(26,326)

(15,511)

(50,004)

(25,328)

    Derivatives

846

8,676

405

3,725

    Interest income and other

1,032

109

1,126

225

Net income (loss)

$ 5,508

$ 7,809

$ 12,745

$ (102,535)

Earnings (loss) per common unit, basic and diluted

$ (0.21)

$ (0.07)

$ (0.38)

$ (1.39)

Weighted average number of common units outstanding, basic and diluted

95,947

83,786

95,927

81,543

Weighted average number of Class B units outstanding

23,136

10,572

22,879

5,286

Weighted average number of Special units outstanding

10,346

5,116

10,346

2,558

Other data by segment:

Eastern Midstream:

    Gathered volumes (MMcfd)

612

336

598

273

    Trunkline volumes (MMcfd) (1)

698

120

671

106

Midcontinent Midstream:

     Daily throughput volumes (MMcfd)

382

453

387

448

Coal and Natural Resource Management:

    Coal royalty tons (in thousands)

6,893

7,776

13,339

15,881

(1) Trunkline volumes include a significant portion of gathered volumes.

 

PVR PARTNERS, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS - unaudited

(in thousands)

June 30,

December 31,

2013

2012

Assets

    Cash and cash equivalents

$      13,923

$        14,713

    Accounts receivable

132,669

133,546

    Assets held for sale

-

11,450

    Derivative assets

425

-

    Other current assets

5,368

5,446

        Total current assets

152,385

165,155

    Property, plant and equipment, net

2,124,764

1,989,346

    Other long-term assets

840,661

844,208

        Total assets

$ 3,117,810

$  2,998,709

Liabilities and Partners' Capital

    Accounts payable and accrued liabilities

$    144,551

$     197,034

    Deferred income

4,548

3,788

    Derivative liabilities

46

-

        Total current liabilities

149,145

200,822

    Other long-term liabilities

30,400

35,468

    Senior notes

1,300,000

900,000

    Revolving credit facility

457,500

590,000

    Partners' capital

1,180,765

1,272,419

        Total liabilities and partners' capital

$ 3,117,810

$ 2,998,709

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited

(in thousands)

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

Cash flows from operating activities

Net income (loss)

$       5,508

$         7,809

$       12,745

$   (102,535)

Adjustments to reconcile net income (loss) to

    net cash provided by operating activities:

    Depreciation, depletion and amortization

46,113

28,456

90,899

52,309

    Impairments

-

-

-

124,845

    Commodity derivative contracts:

        Total derivative gains included in net income

(846)

(8,676)

(405)

(3,725)

        Cash receipts (payments) to settle derivatives for the period

32

(3,605)

(190)

(7,246)

    Non-cash interest expense

1,830

1,579

3,482

2,628

    Non-cash unit-based compensation

844

1,519

2,108

3,557

    Equity earnings, net of distributions received

2,349

186

3,674

(555)

    Other

(1,064)

(51)

(3,068)

(698)

    Changes in operating assets and liabilities

(29,159)

(3,742)

(4,223)

62

         Net cash provided by operating activities

25,607

23,475

105,022

68,642

Cash flows from investing activities

    Acquisitions

12

(850,747)

(2,334)

(850,943)

    Additions to property, plant and equipment

(120,903)

(99,621)

(259,349)

(174,994)

    Joint venture capital contributions

-

(5,100)

(10,200)

(11,700)

    Proceeds from sale of assets

-

-

11,964

-

    Other

290

330

1,872

640

         Net cash used in investing activities

(120,601)

(955,138)

(258,047)

(1,036,997)

Cash flows from financing activities

    Distributions to partners

(52,786)

(41,265)

(105,521)

(81,683)

    Net proceeds from equity offering

-

577,962

-

577,962

    Proceeds from issuance of senior notes

400,000

600,000

400,000

600,000

    Proceeds from borrowings, net

(242,500)

(185,000)

(132,500)

(109,000)

    Cash paid for debt issuance costs

(8,658)

(18,589)

(9,537)

(18,589)

    Other

(112)

-

(207)

-

         Net cash provided by financing activities

95,944

933,108

152,235

968,690

Net increase (decrease) in cash and cash equivalents

950

1,445

(790)

335

Cash and cash equivalents - beginning of period

12,973

7,530

14,713

8,640

Cash and cash equivalents - end of period

$     13,923

$        8,975

$       13,923

$         8,975

 

 

PVR PARTNERS, L.P.

CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited

(in thousands)

Three Months Ended

Six Months Ended

Guidance Range

June 30,

June 30,

Full Year 2013

2013

2012

2013

2012

Low

High

Reconciliation of Non-GAAP "Total Segment Adjusted EBITDA" to GAAP "Net income (loss)":

Segment Adjusted EBITDA (a):

    Eastern Midstream

$ 38,090

$ 17,659

$    75,781

$      27,620

$ 160,000

$ 185,000

    Midcontinent Midstream

14,926

12,684

30,630

25,007

60,000

70,000

    Coal and Natural Resource Management

23,053

26,697

45,706

57,419

75,000

85,000

        Total segment adjusted EBITDA

$ 76,069

$ 57,040

$ 152,117

$    110,046

$ 295,000

$ 340,000

Adjustments to reconcile total Segment Adjusted EBITDA to Net income (loss)

    Depreciation, depletion and amortization

(46,113)

(28,456)

(90,899)

(52,309)

(180,000)

(190,000)

    Impairments on PP&E

-

-

-

(124,845)

-

-

    Acquisition related costs

-

(14,049)

-

(14,049)

-

-

    Interest expense

(26,326)

(15,511)

(50,004)

(25,328)

(95,000)

(100,000)

    Derivatives

846

8,676

405

3,725

-

-

    Other

1,032

109

1,126

225

-

-

        Net income (loss)

$ 5,508

$   7,809

$   12,745

$   (102,535)

$ 20,000

$ 50,000

Reconciliation of GAAP "Net income (loss)" to Non-GAAP "Distributable cash flow":

Net income (loss)

$ 5,508

$ 7,809

$   12,745

$   (102,535)

Depreciation, depletion and amortization

46,113

28,456

90,899

52,309

Impairments on PP&E

-

-

-

124,845

Acquisition related costs

-

14,049

-

14,049

  Derivative contracts:

  Derivative gains included in net income

(846)

(8,676)

(405)

(3,725)

Cash receipts (payments) to settle derivatives for the period

32

(3,605)

(190)

(7,246)

Equity earnings from joint ventures, net of distributions

2,349

186

3,674

(555)

Maintenance capital expenditures

(4,150)

(5,351)

(7,814)

(8,448)

Distributable cash flow (b)

$ 49,006

$ 32,868

$   98,909

$      68,694

Distribution to Partners:

Total cash distribution paid during the period

$ 52,786

$ 41,265

$ 105,521

$      81,683

Reconciliation of GAAP "Net income (loss)" to Non-GAAP "Net income as adjusted":

Net income (loss)

$   5,508

$ 7,809

$   12,745

$  (102,535)

Impairments on PP&E and equity investments

-

-

-

124,845

Acquisition related costs

-

14,049

-

14,049

Adjustments for derivatives:

Derivative gains included in net income

(846)

(8,676)

(405)

(3,725)

Cash receipts (payments) to settle derivatives for the period

32

(3,605)

(190)

(7,246)

Net income, as adjusted (c)

$   4,694

$ 9,577

$   12,150

$    25,388

(a) Segment Adjusted EBITDA, or earnings before interest, tax and depreciation, depletion and amortization ("DD&A"), represents net income plus DD&A, plus impairments, plus acquisition related costs, plus interest expense, minus derivative gains and other items included in net income. We believe EBITDA or a version of Adjusted EBITDA is commonly used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the natural gas midstream and coal industries. We use this information for comparative purposes within the industry. Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income.

 

(b) Distributable cash flow represents net income plus DD&A, plus impairments, plus acquisition related costs, plus (minus) derivative losses (gains) included in net income, plus (minus) cash received (paid) for derivative settlements, minus equity earnings in joint ventures, plus cash distributions from joint ventures, minus maintenance capital expenditures. At management's discretion, a fixed amount of $1.8 million per quarter in 2013 and $1.3 million per quarter in 2012 has been included in maintenance capital for well connects. Distributable cash flow is also the quantitative standard used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of publicly traded partnerships. Distributable cash flow is presented because we believe it is a useful adjunct to net cash provided by operating activities under GAAP. Distributable cash flow is not a measure of financial performance under GAAP and should not be considered as an alternative to cash flows from operating, investing or financing activities, as an indicator of cash flows, as a measure of liquidity or as an alternative to net income. For comparative purposes, prior year amounts exclude replacement capital expenditures.

 

(c) Net income, as adjusted, represents net income adjusted to exclude the effects of non-cash impairment charges, one-time charges related to acquisitions and changes in the fair value of derivatives. We believe this presentation is commonly used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies in the natural gas midstream industry. We use this information for comparative purposes within the industry. Net income, as adjusted, is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income.

 

 

PVR PARTNERS, L.P.

QUARTERLY SEGMENT INFORMATION - unaudited

(in thousands)

Eastern Midstream

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

Revenues

     Gathering fees

$          25,003

$            9,385

$         47,141

$         14,304

     Trunkline fees

21,653

10,255

42,754

16,647

     Other

(1,218)

1,484

(560)

1,646

        Total revenues

45,438

21,124

89,335

32,597

Expenses

     Operating 

2,875

1,189

4,855

2,087

     General and administrative

4,473

2,276

8,699

2,890

     Acquisition related costs

-

14,049

-

14,049

     Depreciation, depletion and amortization

23,462

8,394

46,106

10,455

       Total expenses

30,810

25,908

59,660

29,481

Operating income (loss)

$          14,628

$          (4,784)

$         29,675

$           3,116

Midcontinent Midstream

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

Revenues

     Natural gas

$        103,111

$          63,127

$       190,825

$       137,754

     Natural gas liquids

93,470

102,130

193,978

219,924

     Gathering fees

883

1,764

1,661

4,308

     Other 

403

928

1,546

1,545

        Total revenues

197,867

167,949

388,010

363,531

Expenses

     Cost of gas purchased

167,074

140,833

325,282

306,297

     Operating 

10,574

9,251

20,928

20,478

     General and administrative

5,293

5,181

11,170

11,749

     Impairments

-

-

-

124,845

     Depreciation, depletion and amortization

15,054

11,700

29,960

25,307

       Total expenses

197,995

166,965

387,340

488,676

Operating income (loss) 

$             (128)

$               984

$              670

$      (125,145)

Coal and Natural Resource Management

Three Months Ended

Six Months Ended

June 30,

June 30,

2013

2012

2013

2012

Revenues

     Coal royalties

$          23,223

$          29,231

$         46,174

$         62,390

     Coal services

848

1,391

2,009

2,630

     Timber

1,686

1,354

3,118

2,873

     Oil and gas royalties

692

505

1,347

1,188

     Other

3,711

1,358

6,883

4,120

        Total revenues

30,160

33,839

59,531

73,201

Expenses

     Operating 

3,701

3,600

6,737

7,378

     General and administrative

3,406

3,542

7,088

8,404

     Depreciation, depletion and amortization

7,597

8,362

14,833

16,547

       Total expenses

14,704

15,504

28,658

32,329

Operating income

$          15,456

$          18,335

$         30,873

$         40,872

 

 

PVR PARTNERS, L.P.

DERIVATIVE CONTRACT SUMMARY - unaudited

As of June 30, 2013

Average

Volume Per

Day

Swap

Price

Crude oil swap (WTI)

 (barrels) 

(per barrel)

Third quarter through the fourth quarter 2013

500

$94.80

Natural gas swaps (1)

 (MMBtu) 

(per MMBtu)

Third quarter through the fourth quarter 2013

5,500

$3.823

Our exposure profile with respect to commodity prices depends on many factors, including inlet volumes, plant operational efficiencies, contractual terms, and the price relationship between ethane and natural gas.

We anticipate operating our plants in "ethane rejection" for the remainder of 2013. Under this operational mode, we estimate that for every $1.00 per MMBtu change in the natural gas price, our natural gas midstream gross margin and operating income for the remainder of 2013 would change by $7.8 million, excluding the effect of the natural gas hedges described above, and all other factors remaining constant. The natural gas hedges described above would reduce the net impact to $6.8 million.

Similarly, for every $5.00 per barrel change in crude oil prices, with all other factors remaining constant, and excluding the effect of the 2013 crude oil derivative described above, we estimate that our natural gas midstream gross margin and operating income would change by $1.4 million. The crude oil hedge described above would reduce the net impact to $0.9 million.

For every $0.10 per gallon increase in the price of ethane with all other factors remaining constant, we estimate that our gross margin and operating income will decrease by $1.6 million while operating in ethane rejection. Finally, for every $0.10 per gallon increase in the price of other NGLs with all other factors remaining constant, we estimate that our gross margin and operating income will increase by $1.3 million.

(1) The natural gas swaps settle against the monthly index price reported in Inside FERC's Natural Gas Market Report for Southern Star Central Gas Pipeline (Texas, Oklahoma, Kansas), which has historically tended to be settled at a lower price than the Henry Hub national benchmark. A significant portion of our physical gas sales are also priced using this reported monthly index.

 

PVR PARTNERS, L.P.

OPERATING STATISTICS

($ Amounts in 000s)

 Three Months Ended

 Six Months Ended

 June 30,

 June 30,

2013

2012

2013

2012

EASTERN MIDSTREAM

Volumes (MMcfd)

    Lycoming Trunkline

340

120

338

106

    Wyoming Trunkline

358

-

333

-

Total Trunkline Volume

698

120

671

106

    Lycoming Gathering

238

138

230

115

    Wyoming Gathering

189

145

190

132

    East Lycoming Gathering

122

44

120

22

    Bradford Gathering

52

7

50

4

    Greene Gathering

12

2

8

1

Total Gathering

612

336

598

273

Total Throughput

1,310

456

1,269

379

Total Trunkline Fees

$         21,653

$         10,255

$         42,754

$         16,647

Total Gathering Fees

$         25,003

$           9,385

$         47,141

$         14,304

Trunkline Fees / Mcf

$             0.34

$             0.94

$             0.35

$             0.86

Gathering Fees / Mcf

$             0.45

$             0.31

$             0.44

$             0.29

MIDCONTINENT MIDSTREAM

Volumes (MMcfd)

Panhandle System

328

351

334

343

Crossroads System (1)

-

52

-

55

Crescent System

31

24

29

23

Hamlin System

6

7

6

7

Total Processing Systems

365

434

369

428

Arkoma System

9

9

9

10

North Texas System

8

9

8

10

Total Gathering Only Systems

17

19

18

20

Total All Systems

382

453

387

448

Total Gathering and Processing Fees, Net(2)

$         30,390

$         26,188

$         61,182

$         55,689

Fees Per Mcf

$             0.87

$             0.64

$             0.87

$             0.68

(1) Crossroads System was sold July 3, 2012

(2) Processing fees include revenues from natural gas,  natural gas liquids and gathering fees less cost of gas purchased

COAL PRODUCTION

Coal royalty tons by region (000s)

Central Appalachia

2,784

3,476

5,401

7,544

Northern Appalachia

1,231

1,100

2,007

1,898

Illinois Basin

658

962

1,329

2,099

San Juan Basin

2,220

2,238

4,602

4,340

Total Tons

6,893

7,776

13,339

15,881

Total Coal Royalties

$         23,223

$         29,231

$         46,174

$         62,390

Average Coal Royalty per ton

$             3.37

$             3.76

$             3.46

$             3.93

 

 

SOURCE PVR Partners, L.P.

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