This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

QR Energy's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: QRE

Additionally, during the course of today’s discussion, management will refer to adjusted EBITDA, distributable cash flow and the distribution coverage ratio as important metrics for evaluating QR Energy’s performance. Please note these are non-GAAP financial measures. They are reconciled to their most directly comparable GAAP measures in this morning’s press release.

Now, I will turn the call over to our Chief Executive Officer, Alan Smith.

Alan Smith

Well, thanks, Taylor, and good morning, everyone. We appreciate you taking the time to join our call and look forward to updating you with our second quarter results.

Overall we really deliver strong operational and financial results in the second quarter. Even with the volatility that has been present in the marketplace with lower commodity prices and the third-party downturn, we really deliver a solid distribution coverage ratio of 1.3 times for the quarter.

We continue to remain focused on our core strategy of top-notch execution on our existing asset base while strategically sourcing and closing accretive acquisitions that provide growth for QRE.

Over the past nine months we have nearly tripled the size of the company which is also led to an 18% increase in our quarterly cash distributions. Our robust commodity hedge portfolio continues to give us confidence in the stability of our cash flows even in periods of commodity punctuation as we saw this quarter.

On the acquisition front, we closed the $225 million Prize Petroleum acquisition on April 20, as planned. The Prize assets added approximately 1,200 BOEs per day or 9% to our daily production and we welcome our new team members who are busy implementing new artificial lift projects and upgrading facilities to further increase our production.

As a result to this acquisition, we increased our quarterly cash distribution by 3% this quarter, therefore, tomorrow’s distribution will be $48.75 per unit. Last month we significantly increased our available liquidity by completing a $300 million bond offering, which we utilized to pay down our bank rollover. This gives us approximately $330 million of available liquidity with risk to peruse accretive acquisitions.

Our operations team continues to execute well on the field. We produced 14,505 BOEs per day in the second quarter which included only a partial quarter of the assets acquired from Prize. Production was within our guidance range and was a 7% increase from the first quarter even though we experienced some third-party down time from force majeure events during the quarter which impacted production by approximately 175 BOEs per day.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs