Penn Virginia Resource Partners L.P.
(
PVR
) reported fourth quarter 2011 pro forma earnings of 23 cents per
limited partner unit, down 11.5% from the year-ago earnings of 26
cents per limited partner unit. The partnership's quarterly
earnings were below the Zacks Consensus Estimate of 33 cents.
Penn Virginia's 2011 pro forma earnings were $1.45 per limited
partner unit compared with 97 cents per limited partner unit
reported in fiscal 2010. The reported earnings were in line with
the Zacks Consensus Estimate.
Total Revenue
Penn Virginia's total operating revenue of $287.8 million for
the fourth quarter increased 17.3% from $245.4 million reported in
the year-ago period, driven by higher average royalty rate per ton
and increase in revenue of the Natural Gas Midstream segment
attributable to higher volume generation from both Marcellus and
Panhandle Systems. The reported quarter revenue was lower than the
Zacks Consensus Estimate of $328.0 million.
The partnership's total revenue for 2011 was $1,160.0 million
versus $864.1 million in the prior fiscal year, reflecting a growth
of 34.2% year over year. The revenue was below the Zacks Consensus
Estimate of $1,197.0 million.
Segmental Results
Coal and Natural Resource Management Segment
: Revenues at this segment improved 17% year over year to $44.5
million, primarily driven by higher average coal royalties per ton.
The rise in coal royalty revenue in the quarter resulted from a 19%
increase in coal royalty tons sold. The Middle Fork assets that
were acquired in January 2011 contributed 0.3 million tons of coal
production and $2.0 million in coal royalties to fourth quarter
2011 results.
Operating income for the Coal and Natural Resource Management
segment increased 18% to $25.4 million from $21.6 million in the
prior-year quarter.
Natural Gas Midstream Segment
: Revenue from this segment in the fourth quarter was $242.3
million versus $204.8 million in the year-ago period, reflecting a
growth of 18.3%. System throughput volumes, during the quarter,
increased 49.4% from the comparable period last year to 595 million
cubic feet ("MMcf") per day. The increase was the result of new
business on the Marcellus Systems where volume increased to 156
MMcf per day from 22 MMcf per day. There was an increase in volumes
on the Panhandle System as well, to 341 MMcf per day from its
earlier output of 245 MMcf per day.
Financial Update
Penn Virginia continues to manage its financial position well,
ending the year with $459.0 million remaining under its revolving
credit facility and cash and cash equivalents of $8.6 million.
Cash from operating activities for the December quarter added up
to $48 million. Distributable cash flow ("DCF") for the quarter was
$36.7 million.
Penn Virginia spent roughly $106.4 million for internal growth
projects in the quarter, including $49.5 million in the Marcellus
Shale.
Cash Distribution
The Board of Directors of the general partner of Penn Virginia
declared a quarterly cash distribution of 51 cents per unit, paid
on February 13, 2012 to unit holders of record as of February 6,
2012. The distribution equates to an annualized rate of $2.04 per
unit, representing a 2.0% increase from the prior quarter and an
8.5% increase from the fourth quarter of 2010.
Project Expansion Update
Marcellus System
: The construction of both Phase II of Marcellus Lycoming System
and the dehydration unit of Marcellus Wyoming System are expected
to be complete in February 2012. As a result, average daily volumes
from the Wyoming System will increase from approximately 120 MMcfd
to approximately 154 MMcfd.
Panhandle System
: The Phase I expansion of the Antelope Hills plant with a capacity
of 60 MMcfd is expected to start operations in March 2012. The
Phase II expansions with a volume of 60 MMcfd is expected to be
completed by the middle of 2012.
Guidance
For 2012, Penn Virginia expects EBITDA to come in the range of $260
- $280 million. Distributable cash flow, replacement capital and
net of maintenance for the year is expected to be in the $160 -
$180 million range.
Penn Virginia expects to invest approximately $200-$250 million
in internal growth capital in 2012, likely to be spent on well
connections and capacity expansions on Marcellus and Panhandle
Systems.
At the Peer
Penn Virginia Resource Partners' peer,
Peabody Energy Corporation
(
BTU
), announced earnings of 98 cents per share for the fourth quarter
of 2011, missing the Zacks Consensus Estimate of $1.31.
Peabody's fourth quarter revenue was $2.25 billion versus $1.79
billion in the prior-year quarter. The reported revenue failed to
surpass the Zacks Consensus Estimate of $2.31 billion.
Radnor, Pennsylvania-based Penn Virginia Resource Partners L.P.
manages coal and natural resource properties as well as natural gas
gathering and processing businesses. The partnership's coal
properties are located in Central and Northern Appalachia, Illinois
and San Juan Basins.
Penn Virginia Resource Partners L.P. currently retains a Zacks
#4 Rank (short-term Sell rating).
PEABODY ENERGY (
BTU
): Free Stock Analysis Report
PENN VA RESRC (
PVR
): Free Stock Analysis Report
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