View all news

EQT Midstream Partners Announces 2015 Financial and CAPEX Forecast

12/08/2014

PITTSBURGH--(BUSINESS WIRE)--EQT Midstream Partners, LP (NYSE: EQM), an EQT Corporation (NYSE: EQT) company, today announced its 2015 financial and capital expenditure (CAPEX) forecast. Adjusted EBITDA is expected to be $330 - $345 million and distributable cash flow is expected to be $280 - $295 million. The adjusted EBITDA, distributable cash flow and CAPEX forecasts do not include impacts of potential acquisitions. See the Non-GAAP Disclosures section for information regarding the non-GAAP financial measures in this news release.

Distributions:

EQT Midstream Partners, LP (Partnership) forecasts quarterly distribution increases of a minimum of $0.03 per unit per quarter through at least the end of 2016. The 2015 distribution per unit is expected to be at least 22% higher than the 2014 distribution per unit.

Capital Expenditures & Contributions:

The Partnership forecasts 2015 growth CAPEX and capital contributions to Mountain Valley Pipeline, LLC, to be approximately $380 - $410 million and ongoing maintenance CAPEX to be approximately $30 million.

2015 Growth Projects

Ohio Valley Connector ($120 - $130 million CAPEX in 2015)

The Ohio Valley Connector (OVC) is a 36-mile pipeline that will extend the Partnership’s transmission and storage system from northern West Virginia to Clarington, Ohio – at which point it will interconnect with the Rockies Express Pipeline and the Texas Eastern Pipeline. Construction is scheduled to begin in Q3 2015 and the pipeline is expected to be in-service by mid-year 2016. The OVC will provide approximately 1.0 Bcf per day of transmission capacity and is estimated to cost $300 million in total. The Partnership has entered into a 20-year precedent agreement with EQT Corporation for a total of 650 MMcf per day of firm transmission capacity on the OVC.

Mountain Valley Pipeline ($75 - $85 million capital contribution in 2015)

As previously announced, the Partnership will assume EQT Corporation’s interest in Mountain Valley Pipeline, LLC, a joint venture with an affiliate of NextEra Energy, Inc. The 300-mile Mountain Valley Pipeline (MVP) will extend from the Partnership’s existing transmission and storage system in Wetzel County, West Virginia to Pittsylvania County, Virginia. The Partnership expects to own a majority interest in the joint venture and will operate the MVP – which is estimated to cost a total of $2.5 – $3.5 billion, with the Partnership funding its proportionate share through capital contributions made to the joint venture. The 2015 capital is primarily related to environmental and land assessments, design work, and materials.

The joint venture has secured a total of 2 Bcf per day of firm capacity commitments at 20-year terms, and is currently in negotiation with additional shippers who have expressed interest in the MVP project. As a result, the final project scope, including pipe diameter and total capacity, has not yet been determined; however, the voluntary pre-filing process with the Federal Energy Regulatory Commission (FERC) began in October 2014. The pipeline, which is subject to FERC approval, is expected to be in-service during the fourth quarter of 2018.

Equitrans Transmission Expansion Projects ($50 million CAPEX in 2015)

The Partnership will invest approximately $25 million in 2015 to complete the East Side Expansion project for Antero Resources. The expansion will add 100 MMcf per day of transmission capacity by mid-2015.

In 2015, the Partnership will also begin several multi-year transmission expansion projects to support the continued growth of the Marcellus and Utica development. The projects include pipeline looping, compression installation, and new pipeline segments, which combined are expected to increase transmission capacity by at least 1.0 Bcf per day. The Partnership expects to invest a total of $400 million, with approximately $25 million expected during 2015. Approximately 400 MMcf per day of capacity is planned to be in-service during 2016, with the remaining capacity coming online by year-end 2017. Upon completion of the expansion projects, the Equitrans transmission capacity will exceed 4.0 Bcf per day.

Gathering Projects ($135 - $145 million CAPEX in 2015)

The Partnership will install approximately 30 miles of pipeline and 200 MMcf per day of compression capacity in the Jupiter Gathering System (Jupiter). Jupiter is supported by a gathering agreement with EQT Corporation that includes 10-year firm capacity reservation commitments on the available compression capacity. Jupiter compression capacity is expected to be 575 MMcf per day by year end 2014 and will grow to 775 MMcf per day in the fourth quarter of 2015. The Partnership expects Jupiter-related CAPEX of approximately $100 million in 2015.

In 2015, the Partnership will also invest approximately $40 million in gathering infrastructure for third-party producers. The gathering infrastructure will primarily support Range Resources’ production development in eastern Washington County, Pennsylvania.

Liquidity:

As of November 30, 2014, the Partnership had $125 million of cash and $750 million available under its revolving credit facility.

Year-end Earnings Information:

The Partnership intends to release full-year 2014 earnings and host a live webcast for security analysts on February 5, 2015. The webcast will be available at www.eqtmidstreampartners.com and will begin at 11:30 a.m. ET.

NON-GAAP DISCLOSURES

Adjusted EBITDA and Distributable Cash Flow

As used in this news release, adjusted EBITDA means net income plus net interest expense, depreciation and amortization expense, income tax expense (if applicable), non-cash long-term compensation expense and other non-cash adjustments (if applicable), less other income, capital lease payments and Jupiter adjusted EBITDA prior to acquisition (if applicable). As used in this news release, distributable cash flow means adjusted EBITDA less interest expense, excluding capital lease interest and ongoing maintenance capital expenditures, net of expected reimbursements. Distributable cash flow should not be viewed as indicative of the actual amount of cash that the Partnership has available for distributions from operating surplus or that the Partnership plans to distribute. Adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management and external users of the Partnership’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, use to assess:

  • the Partnership’s operating performance as compared to other publicly traded partnerships in the midstream energy industry without regard to historical cost basis or, in the case of adjusted EBITDA, financing methods;
  • the ability of the Partnership’s assets to generate sufficient cash flow to make distributions to the Partnership’s unitholders;
  • the Partnership’s 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.

The Partnership believes that adjusted EBITDA and distributable cash flow provide useful information to investors in assessing the Partnership’s financial condition and results of operations. Adjusted EBITDA and distributable cash flow should not be considered as alternatives to net income, operating income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA and distributable cash flow have important limitations as analytical tools because they exclude some, but not all, items that affect net income and net cash provided by operating activities. Additionally, because adjusted EBITDA and distributable cash flow may be defined differently by other companies in its industry, the Partnership’s definition of adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

The Partnership is unable to provide a reconciliation of its projected adjusted EBITDA and projected distributable cash flow to projected net income or projected net cash provided by operating activities, the most comparable financial measures calculated in accordance with GAAP, because of uncertainties associated with projecting future net income and changes in assets and liabilities.

About EQT Midstream Partners:

EQT Midstream Partners, LP is a growth-oriented limited partnership formed by EQT Corporation to own, operate, acquire, and develop midstream assets in the Appalachian Basin. The Partnership provides midstream services to EQT Corporation and third-party companies through its strategically located transmission, storage, and gathering systems that service the Marcellus and Utica regions. The Partnership owns 700 miles and operates an additional 200 miles of FERC-regulated interstate pipelines; and also owns more than 1,600 miles of high- and low-pressure gathering lines.

Visit EQT Midstream Partners, LP at www.eqtmidstreampartners.com

Cautionary Statements

Disclosures in this news release contain certain forward-looking statements. Statements that do not relate strictly to historical or current facts are forward-looking. Without limiting the generality of the foregoing, forward-looking statements contained in this news release specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Partnership and its subsidiaries, including guidance regarding the Partnership’s projected adjusted EBITDA and projected distributable cash flow; projected distributions per unit, including quarterly increases; capital expenditures; capital budget; organic transmission and gathering business growth; infrastructure programs (including the timing, cost, and capacity resulting from transmission and gathering projects); the timing, cost capacity and expected interconnections with facilities and pipelines of the Ohio Valley Connector (OVC) and Mountain Valley Pipeline (MVP) projects; the ultimate terms, partners and structure of the MVP joint venture; and liquidity and financing requirements, including sources and availability. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Partnership has based these forward-looking statements on current expectations and assumptions about future events. While the Partnership considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond the Partnership's control. With respect to the proposed pipeline projects, these risks and uncertainties include, among others, the ability to obtain regulatory permits and approvals, the ability to complete the projects on time, the ability to secure customer contracts, the availability of skilled labor, equipment and materials. Additional risks and uncertainties that may affect the operations, performance and results of the Partnership's business and forward-looking statements include, but are not limited to, those set forth under Item 1A, "Risk Factors" of the Partnership's Form 10-K for the year ended December 31, 2013, as updated by any subsequent filed 10-Qs. Any forward-looking statement speaks only as of the date on which such statement is made and the Partnership does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

Information in this news release regarding EQT Corporation and its subsidiaries, other than the Partnership, is derived from publicly available information published by EQT.

Contact:

EQT Midstream Partners analyst inquiries please contact:
Nate Tetlow – Investor Relations Director, 412-553-5834
ntetlow@eqtmidstreampartners.com
or
EQT analyst inquiries please contact:
Patrick Kane – Chief Investor Relations Officer, 412-553-7833
pkane@eqtmidstreampartners.com
or
Media inquiries please contact:
Natalie Cox – Corporate Director, Communications, 412-395-3941
ncox@eqtmidstreampartners.com

Categories: Press Releases
View all news