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» Regency Energy Partners LP Q1 2010 Earnings Call Transcript
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With that, I will turn the call over to Byron Kelley, our President and CEO.Byron Kelley Well, good morning to each of you and thank you very much for joining us. As always, we’re pleased to have the opportunity to visit with you and share with you the results of not only our second quarter results but some of the exciting activities around our business in general. It was an exciting quarter for Regency Energy Partners. It was a quarter led by solid financial performance from our business segments. It was a quarter that we saw a turning demand for compression services. It was a quarter for us that had significant acquisition activity that actually changed the landscape of our company. And then it was a quarter that involved additional work that actually led to the announcement this morning on the Zephyr acquisition. So, exciting times for us. A lot going on, we got a lot to cover this morning. So we’ll get right to it. I’d like to begin with a little more detail some – around some of our most recent highlights. On May the 25th as you recall Energy Transfer Equity acquired Regency’s general partnership, interest from affiliate at GE Energy Financial Services and ETE has a proven track record of supporting ETP and reaching investment-grade and have been quite clear in their support of our objective of reaching investment-grade metrics, as well, and very supportive in our storing our distributable cash flow from the company. Also in the quarter, we completed two additional acquisitions that significantly increased our scale and increased our fee based business mix. First acquisition, we acquired approximately 7% of the Haynesville Joint Venture from affiliate of GE Energy Financial Services for $92 million, bringing our total ownership into the joint venture to just under, 50%.
And then the second acquisition we acquired 49.9% interest in the Midcontinent Express Pipeline from ETE and its affiliates for $26.3 million Regency common units. MEP is a high-quality 500 mile interstate pipeline that extend from the Southeast corner of Oklahoma across Texas, North Louisiana, Central Mississippi and into Alabama.The assets have access the higher growth production regions in the Barnett, Bossier, Fayetteville, Haynesville and Woodford Shale, as well as, the Bossier sand and Granite Wash formation. That system is fully described in existing contracts have an average term of nine years remaining. With addition of these two acquisitions, we also adjusted our EBITDA guidance and we change that range in 2010 to a range of $310 to $340 million versus a previous range of $255 to $285 million. And then another major event, we're also very excited about this morning's announcement, that we have executed on a very much subject to the necessary regulatory approvals and closing process to acquire Zephyr Gas Services of Houston for approximately $185 million in cash. Upon closing of this transaction in addition to our existing transportation, gathering, processing and compression services, we will now have a high-quality treating service option in our portfolio. With this full line of services, we believe we'll be able to provide an unmatched set of high-quality service offerings to our customers from warehouse to the market. We expect that Zephyr will contribute to our 2010 results but the impact will be dependent upon the date of transaction close as such we will not be making any modifications to our guidance for this year. And I’ll provide a few more details later on the acquisition as we move through the presentation. Read the rest of this transcript for free on seekingalpha.com