QR Energy Announces Third Quarter 2011 Results and Outlook
(firmenpresse) - HOUSTON, TX -- (Marketwire) -- 11/14/11 -- QR Energy, LP ("QRE" or "QR Energy") (NYSE: QRE) announced today its operating and financial results for the three months and nine months ended September 30, 2011.
Announced $577 million acquisition of conventional assets in focus areas from sponsor effective October 1, 2011; added supplementary commodity and interest rate derivative contracts; subsequently increased fourth quarter 2011 distribution by 15% to $0.475 per unit; $1.90 per unit annualized
Adjusted EBITDA of $22.0 million, a 6.3% increase from the second quarter
Distributable Cash Flow totaled $15.9 million, a 10.4% increase from the second quarter
Third quarter Distribution Coverage Ratio of 1.1x; nine-month Distribution Coverage Ratio of 1.1x
Reported third quarter average production of 5,145 Boe per day, composed of 59% liquids (oil and NGLs), was negatively impacted by 166 Boe per day of downward changes to prior period accrual estimates; third quarter production was also negatively impacted by approximately 175 Boe per day, largely from power outages in West Texas and unscheduled downtime in non-operated Gulf Coast properties; both issues have since been resolved
Average production of 5,328 Boe per day for the first nine months of 2011
Realized prices including commodity derivatives of $94.03 per barrel of oil and $6.47 per Mcf of natural gas
Net income of $51.9 million, primarily due to unrealized derivative gains
Chief Executive Officer Alan L. Smith commented, "We continued to execute upon our strategy of generating stable cash flows from our operations in the third quarter. Our properties continue to perform as expected with solid results from our Permian and Ark-La-Tex areas. We are also excited to have closed on our accretive purchase of $577 million of assets from our sponsor on October 1, which allowed us to increase our fourth quarter distribution by 15%. During this period of economic uncertainty and commodity price volatility, we are pleased to have a majority of our production hedged through 2015. We expect that our commodity hedges will contribute to continued stable cash flows for QR Energy."
Revenue was $28.7 million; realized sales prices excluding commodity derivatives were $88.23 per Bbl of oil, $4.56 per Mcf of natural gas and $56.18 per Bbl of NGLs
Oil and natural gas production was 72% hedged
Total production expenses were $10.9 million; LOE and workover expenses of $8.6 million were negatively impacted by approximately $1.7 million of changes to accrual estimates associated with prior periods. Excluding the effect of accrual estimate changes, LOE and workover expenses were $14.12 per Boe in the third quarter; average LOE and workover expenses for the first nine months of 2011 were $14.74 per Boe
GAAP G&A was $4.1 million; $600,000 was due to acquisition legal and advisory fees
Maintenance capital expenditures were $3.1 million; total capital expenditures were $5.8 million
Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio are non-GAAP measures. Please see the reconciliation to the most comparable measures calculated in accordance with GAAP in the "Non-GAAP Reconciliation" section of this press release.
On November 11, 2011, QR Energy paid a cash distribution attributable to the third quarter of 2011 of $0.4125 per unit for all outstanding units. This represents an annualized distribution of $1.65 per unit.
On October 4, 2011, QR Energy announced that it will increase its cash distribution attributable to the fourth quarter of 2011 by 15%. The cash distribution of $0.475 per unit for all outstanding units is payable on February 10, 2012 to unitholders on record as of January 30, 2012. This represents an annualized distribution of $1.90 per unit.
As of October 1, 2011, the notional volumes and prices of QR Energy's commodity derivative contracts were as follows:
The fourth quarter 2011 guidance set forth below is subject to all cautionary statements and limitations described below and under the "Forward-Looking Statements" section of this press release. In addition, estimates for QR Energy's future production volumes are based on, among other things, assumptions of capital expenditure levels and the assumption that market demand and prices for oil and natural gas will continue at levels that allow for economic production of these products. The production, transportation and marketing of oil and natural gas are extremely complex and are subject to disruption due to transportation and processing availability, mechanical failure, human error, weather, and numerous other factors. Estimates are based on certain other assumptions, such as well performance, which may vary significantly from QR Energy's assumptions. Operating costs, which include major maintenance costs, vary in response to changes in prices of services and materials used in the operation of properties and the amount of maintenance required. Operating costs, including taxes, utilities and service company costs move directionally with increases and decreases in commodity prices and QR Energy cannot fully predict such future commodity prices or operating costs. Capital expenditures are based on current expectations as to the level of capital expenditures that will be justified based upon the other assumptions set forth below as well as expectations about other operating and economic factors not set forth below. The guidance set forth below does not constitute any form of guarantee, assurance or promise that the matters indicated will actually be achieved. Rather, the guidance simply sets forth QR Energy's best estimate today for these matters. Estimates are based upon current expectations about the future and based upon both stated and unstated assumptions. Actual conditions and assumptions may change over the course of the year.
Based upon current estimates, QR Energy expects the following operating results for the fourth quarter and full year of 2011:
QR Energy's financial statements and related footnotes are available in the 10-Q for the quarter ended September 30, 2011, which QR Energy filed with the Securities and Exchange Commission today. The 10-Q is available on QR Energy's Investor Relations website at or on the Securities and Exchange Commission website at .
QR Energy will host a webcast and conference call today at 10 a.m. central time to discuss these results.
Interested parties may join the webcast by visiting QR Energy's Investor Relations website and clicking on the webcast link or the conference call by dialing (888) 510-1768 or (719) 325-2430 five minutes before the call begins and providing the passcode 2841076.
The webcast will be available on QR Energy's Investor Relations website for 14 days following the call.
QR Energy, LP is a publicly traded partnership engaged in the acquisition, production and development of onshore crude oil and natural gas properties in the United States. QR Energy is headquartered in Houston, Texas. For more information, visit QR Energy's website at .
This press release may contain forward-looking statements within the meaning of the federal securities laws. QR Energy believes that its expectations and forecasts are based on reasonable assumptions. No assurance, however, can be given that such expectations and forecasts will prove to have been correct. A number of factors could cause actual results to differ materially from the expectations and forecasts, anticipated results or other forward-looking information expressed in this press release, including risks and uncertainties regarding future results, capital expenditures, liquidity and financial market conditions, insufficient cash from operations, adverse market conditions and governmental regulations. For a more complete list of these risk factors, please read QR Energy's filings with the Securities and Exchange Commission, which are available on QR Energy's Investor Relations website at or on the Securities and Exchange Commission website at .
Please see related footnotes in the 10-Q, as filed with the Securities and Exchange Commission.
Please see related footnotes in the 10-Q, as filed with the Securities and Exchange Commission.
QR Energy defines Adjusted EBITDA as net income plus interest expense (including realized and unrealized gains and losses on interest rate derivative contracts) unrealized losses on commodity derivative contracts, depletion, depreciation and amortization, accretion of asset retirement obligations, impairments, and general and administrative expenses that are allocated to us in accordance with GAAP in excess of the administrative services fee paid by our general partner and reimbursed by us, less interest income and unrealized gains on commodity derivative contracts.
QR Energy defines Distributable Cash Flow as Adjusted EBITDA less cash interest expense (including realized gains and losses on interest rate derivative contracts) and maintenance capital expenditures, the capital required to maintain QR Energy's production for five years, on average.
QR Energy defines the Distribution Coverage Ratio as the ratio of Distributable Cash Flow per outstanding unit (including subordinated units and general partner units) to the actual cash distribution payable per outstanding unit.
Adjusted EBITDA, Distributable Cash Flow and the Distribution Coverage Ratio are used by management of QR Energy to provide additional information related to the performance of QR Energy's business, such as information regarding the cash available to pay distributions to unitholders, and related to its liquidity, such as the ability of its assets to generate cash sufficient to pay interest expenses. In addition, Adjusted EBITDA, Distributable Cash Flow and the Distribution Coverage Ratio are quantitative standards used by external users of our financial statements such as investors, research analysts and others to assess QR Energy's performance and liquidity without regard to capital structure. Adjusted EBITDA, Distributable Cash Flow and the Distribution Coverage Ratio are not presentations made in accordance with GAAP. Because Adjusted EBITDA, Distributable Cash Flow and the Distribution Coverage Ratio exclude some, but not all, items that affect net income and are defined differently by different companies in our industry, our definitions may not be comparable to similarly titled measures of other companies. Adjusted EBITDA, Distributable Cash Flow and the Distribution Coverage Ratio have important limitations as analytical tools, and you should not consider them in isolation, or as a substitute for net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP.
Taylor B. Miele
Investor Relations Specialist
(713) 452-2990
Cedric W. Burgher
Chief Financial Officer
(713) 452-2200
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Datum: 14.11.2011 - 11:00 Uhr
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