Regency Energy Partners LP (NYSE: RGP), (“Regency” or the “Partnership”), announced today its financial results for the second quarter ended June 30, 2012.
Adjusted EBITDA increased 12% to $115 million in the second quarter of 2012, compared to $103 million in the second quarter of 2011. The increase in adjusted EBITDA was primarily due to a $13 million increase in gathering and processing adjusted segment margin related to volume growth in south and west Texas and north Louisiana; and $5 million primarily related to the Lone Star Joint Venture that was acquired in May 2011; partially offset by a $5 million increase in operation and maintenance expense primarily due to increased volumes across the business segments.
In the second quarter of 2012, Regency generated $71 million in cash available for distribution, compared to $71 million in the second quarter of 2011. Also in the second quarter of 2012, net income increased to $29 million, compared to $15 million in the second quarter of 2011.
“Regency had a solid second quarter, largely due to increased volumes in south and west Texas and in north Louisiana associated with additional Cotton Valley drilling, as well as continued benefits from our acquisition of an interest in the Lone Star Joint Venture,” said Mike Bradley, president and chief executive officer of Regency.
“Drilling activity in liquids-rich plays remains our primary growth driver and construction of our primarily fee-based projects in these areas is progressing as planned. We expect this organic growth to generate new opportunities as it begins coming online in 2013,” said Bradley.
REVIEW OF SEGMENT PERFORMANCE
Adjusted total segment margin increased 12% to $111 million for the second quarter of 2012, compared to $99 million for second quarter of 2011.
Gathering and Processing – The Partnership provides “wellhead-to-market” services to producers of natural gas, which include transporting 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. This segment now includes the Partnership's investment in Ranch JV, which processes natural gas delivered from the NGLs-rich Bone Spring and Avalon shale formations in west Texas. In June 2012, the Ranch JV’s refrigeration processing plant became operational.