News Column

Southcross Energy Partners, L.P. Reports First Quarter 2014 Financial and Operating Results

May 23, 2014



By a News Reporter-Staff News Editor at Energy Weekly News -- Southcross Energy Partners, L.P. (NYSE:SXE) ("Southcross" or the "Partnership") announced first quarter 2014 financial and operating results. First Quarter 2014 Highlights Adjusted EBITDA in the quarter of $12.5 million, slightly above the Partnership's prior guidance

Acquired pipeline assets near Corpus Christi, Texas that are expected to be accretive to distributable cash flow in 2014

Commenced construction of the Webb Pipeline to extend Southcross' rich gas system to the western region of the Eagle Ford

Completed a follow-on equity offering of 9.2 million units with net proceeds of approximately $144.7 million

Exercised an option under Southcross' credit agreement to revert the facility size, borrowing rates and certain financial covenants back to their original terms First Quarter Results Southcross' Adjusted EBITDA (as defined below) was $12.5 million for the three month period ended March 31, 2014, compared to $4.5 million for the same period in the prior year.

"First quarter 2014 results were in line with our expectations," said David Biegler, Chairman and Chief Executive Officer of Southcross' general partner. "As we move forward, we are focused on expanding our pipeline system and capturing new gas supply. Our Webb Pipeline construction is ongoing and when completed will reinforce our position as a key midstream link between the prolific Eagle Ford area of rich gas production and the growing Corpus Christi market for natural gas and natural gas liquids."

Gross operating margin (as defined below) totaled $27.2 million for the three month period ended March 31, 2014, compared to $18.9 million for the same period in the prior year. Net loss was $1.3 million for the three month period ended March 31, 2014, compared to $6.4 million for the same period in the prior year.

Processed gas volumes averaged 246,422 MMBtu/d during the three month period ended March 31, 2014, an increase of 3% compared to 239,757 MMBtu/d during the same period in the prior year. NGLs sold during the three month period ended March 31, 2014 averaged 14,329 barrels per day, an increase of 41% compared to 10,152 barrels per day for the same period in the prior year. Processed gas volumes during the three month period ended March 31, 2014, were approximately 8% less than fourth quarter 2013 volumes and sales volumes of NGLs were approximately 13% lower than fourth quarter 2013 volumes as a result of a previously-disclosed third party contract transporting our rich gas volumes that was not renewed during the quarter. Capital Expenditures Growth capital expenditures for the three month period ended March 31, 2014 included spending for our Webb Pipeline and totaled $9.7 million, compared to $48.5 million for the same period in the prior year. Capital and Liquidity On February 5, 2014, Southcross completed a public equity offering of 9,200,000 additional common units and received a corresponding capital contribution from its general partner to maintain its 2.0% interest. The net proceeds from the public offering were $144.7 million, which Southcross used to reduce its outstanding debt. As of March 31, 2014, Southcross had $170.9 million in outstanding debt. Southcross was in compliance with all of its debt covenants as of March 31, 2014. Cash Distributions and Distributable Cash Flow On April 25, 2014, Southcross announced that it would pay on May 15, 2014 to all unitholders of record on May 9, 2014 a cash distribution of $0.40 per common unit for the three month period ended March 31, 2014. Southcross also announced that it would pay on May 15, 2014, to all Series A convertible preferred unitholders of record on May 9, 2014, a distribution of $0.40 per unit, paid in-kind in the form of additional Series A convertible preferred units.

Distributable cash flow for the three month period ended March 31, 2014 was $8.5 million, compared to $2.0 million for the same period in the prior year. Conference Call Information Southcross will hold a conference call on Wednesday, May 7, 2014, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss its first quarter 2014 financial and operating results. The call can be accessed live over the telephone by dialing (877) 705-6003 or, for international callers, (201) 493-6725. The replay of the call will be available shortly after the call and can be accessed by dialing (877) 870-5176 or, for international callers, (858) 384-5517. The passcode for the replay is 13581342. The replay of the conference call will be available for approximately two weeks following the call.

Keywords for this news article include: L.P., Oil & Gas, Natural Gas, Southcross Energy Partners L.P.

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Source: Energy Weekly News