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Regency Energy Partners LP (Nasdaq: RGNC), (“Regency” or the “Partnership”), announced today its financial results for the second quarter ended June 30, 2011.
Regency’s adjusted EBITDA increased by approximately 40% to $103 million in the second quarter of 2011, compared to $74 million in the second quarter of 2010. This increase was primarily attributable to the acquisitions of an interest in the Midcontinent Express Pipeline (“MEP”), Zephyr Gas Services, and an interest in the Lone Star Joint Venture, which was partially offset by lower hedge pricing in 2011 compared to 2010.
“Regency delivered strong results in the second quarter of 2011, fueled by our acquisition activity over the last year and volume growth in south and west Texas in our Gathering and Processing segment,” said Mike Bradley, president and chief executive officer of Regency.
“In addition, during the quarter we announced three organic growth projects; a significant expansion of our gathering system in south Texas, as well as the construction of a new fractionation facility and the construction of a natural gas liquids pipeline through the Lone Star Joint Venture, which will strengthen our positions in the Eagle Ford Shale and Permian Basin,” continued Bradley.
REVIEW OF SEGMENT PERFORMANCE
Adjusted total segment margin increased approximately 8% to $99 million for the second quarter of 2011, compared to $92 million for the second quarter of 2010.
Gathering and Processing – The Gathering and Processing segment provides wellhead-to-market services to producers of natural gas, which includes gathering raw natural gas from the wellhead through gathering systems, processing raw natural gas to separate NGLs from the raw natural gas and selling or delivering pipeline-quality natural gas and NGLs to various markets and pipeline systems.
Adjusted segment margin for the Gathering and Processing segment, which excludes non-cash hedging gains and losses related to the Gathering and Processing segment, was $53 million for the second quarter of 2011, compared to $55 million for the second quarter of 2010. The decrease was primarily due to lower realized commodity prices.