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

These risks are discussed in our annual and quarterly reports filed with SEC. Please note, that on this call, we will use the terms gross margin, EBITDA, adjusted EBITDA and total distributable cash flow. These are non-GAAP financial measures and we’ve provided reconciliations to comparable GAAP measures in our news release. In addition, a reconciliation of adjusted EBITDA to net income for our operating segments can be found in the Investor Relations page of our website under events.

With that, I’ll turn the call over to Bruce Northcutt, our President and CEO.

Bruce Northcutt

Thank you, Doug, and good morning to everyone on the call. I’d like to begin this morning with a high level review of the second quarter followed by an update on our Eagle Ford Shale strategy, including the expansion projects that are currently underway. I’ll then turn it over to Carl to review our financial results for the quarter and to discuss the 2013 guidance included in our earnings release. Following Carl’s comment, I’ll introduce two new executives who joined Copano this past month and we’ll take your questions at the end.

In the second quarter, total distributable cash flow increased $6.2 million or 19% from the first quarter of 2012 to $39.5 million. This increase is primarily due to Texas segment gross margin improving by $3.8 million, driven by better performance at our Houston Central complex. With the modifications we completed in mid-April, the new cryo (inaudible) has been exceeding our original performance expectations, and for the quarter, our overall actual recovery rates at Houston Central including our lean oil plants were better than contractual rates.

In addition to better overall performance at Houston Central, total volumes from the Eagle Ford Shale increased 62,000 MMBtu per day or 14% from the first quarter of 2012. Increased rich gas volumes and the cryogenic modifications completed at Houston Central in April increased NGL production by over 12,400 barrels per day or 56% from the first quarter.

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