MarkWest Energy Posts Net Profit

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On March 2, 2009, MarkWest Energy Partners L.P. ( MWE) reported a net profit in Q4 FY08, benefiting from a derivative gain of $340.70 million. Net income was $180.14 million, or $3.14 per unit, compared to a loss of $25.59 million, or $1.12 per unit, in Q4 FY07. The quarterly results beat the consensus estimate of $0.06 per share.

Total revenue more than tripled to $567.76 million from $147.62 million in Q4 FY07. Southwestern revenue slumped 23.7% to $115.80 million, on lower gathering systems throughput volumes from Foss Lake, Oklahoma, Appleby, and other Southwestern regions, along with declining NGL product sales from Arapaho, Oklahoma. Revenue from the North East plummeted 22.5% to $65.14 million, hurt by a 1.7% decline in processed natural gas from Appalachia and an 8.0% drop in crude oil transportation for a fee. Meanwhile, Gulf Coast revenue plunged 33.5% year-over-year to $12.96 million.

During the fourth quarter, MWE and Range Resources Corporation began the initial phase of Pennsylvania's first large-scale gas processing infrastructure, with the launch of a mechanical refrigeration processing plant in Washington County. MarkWest is currently constructing 30 million cubic feet per day (MMcf/d) and 120 MMcf/d cryogenic processing plants, which is expected to commence operations by Q2 FY09 and Q1 FY10, respectively. Also, MarkWest and NGP Midstream & Resources L.P. formed a joint venture to construct and operate natural gas midstream services to support producers in the Marcellus Shale.

Recently, MWE paid a dividend of $0.64 per unit for Q4 FY08.

For FY09, total revenue surged 95.2% to $1.34 billion from $685.76 million, while net income stood at $208.07 million, or $4.04 per unit, compared to a loss of $39.36 million, or $1.72 per unit, in FY07.

Looking ahead to FY09, MWE forecasts distributable cash flows to range between $160.00 and $200.00 million, while projecting capital expenditure to be $200.00 million.

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