General | Quarterly / Earnings Reports | Third Quarter (3Q) Update

CONE Midstream Debuts Strong 3Q Results Post IPO

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   |    Thursday,October 30,2014

CONE Midstream Partners LP reported financial and operational results for the three months ending September 30, 2014. 

Because the closing of the initial public offering of CNNX occurred on September 30, the net financial and operating results attributable to CONE Midstream during third quarter 2014 are for a one day period.  Since reporting measures for a single day results are insufficient to communicate a full understanding of the historical business activity of CONE Midstream's predecessor, unless otherwise indicated the reporting measures discussed in this news release reflect the unallocated total activity of CONE Gathering LLC, the midstream joint venture formed by CONSOL and Noble Energy that owns the Partnership's general partner and that is the predecessor to CONE Midstream.  Reporting beginning with fourth quarter 2014 will include net financial and operational measures attributable to CONE Midstream, excluding CONE Gathering's non-controlling interests.

Highlights of third quarter 2014 results include:

• Net income of $19.3 million, up 87% compared to $10.3 million in third quarter 2013 (last year), and up 48% compared to $13.0 million in second quarter 2014 (last quarter).
• Average daily throughput volumes of 778 billion Btu per day (BBtu/d), up 88% compared to 413 BBtu/d last year, and up 28% compared to 608 BBtu/d last quarter.
• EBITDA⁽¹⁾ of $21.1 million, up 77% compared to $11.9 million last year, and up 44% compared to $14.7 million last quarter.
• Distributable cash flow (DCF) of $19.5 million, up 76% compared to $11.1 million last year, and up 40% compared to $13.9 million last quarter.

John T. Lewis, Chairman of the Board and Chief Executive Officer of CONE Midstream GP LLC, the general partner of the Partnership, commented: "We are pleased with our operational and financial results for the quarter, which demonstrate the continued rapid growth of our business. Volume throughput, operating income, EBITDA and DCF for the third quarter exceeded our expectations.  The strong volume growth came primarily from 37 new well connections completed during the quarter."

Quarterly Distribution

The Board of Directors of CONE Midstream GP LLC will declare the first quarterly cash distribution for the Partnership following the conclusion of the fourth quarter 2014.  As stated in the final prospectus for CONE Midstream's  initial public offering, the Partnership will not make a cash distribution for the period from July 1, 2014 through September 29, 2014 (the day prior to the closing of the offering).  The amount of the cash distribution declared with respect to the fourth quarter 2014 will be adjusted to reflect the additional day (September 30, 2014) from the closing of the offering to the start of the fourth quarter on October 1, 2014.

Capital Investment and Resources

CONE Midstream's single day allocated third quarter 2014 share of total investment in internal growth projects at the three development companies in which it holds controlling interests was approximately $225 thousand. CONE Gathering's total internal growth capital investment at the three development companies in which CONE Midstream holds interests was $62.5 million, with individual development company totals as follows:

• Anchor Systems (Development Company 1): Investments totaled approximately $25.0 million and were primarily directed to continued expansion of the gathering system, increasing station compression and stabilization capacity in the Majorsville field, additional well connections in the North Nineveh area, and expansion of compression capacity at Mamont Station.
• Growth Systems (Development Company 2): Investments totaled approximately $3.8 million and primarily funded the connection of two well pads in Barbour County, WV, and permitting work related to the Tygart Valley Pipeline.
• Additional Systems (Development Company 3): Investments totaled approximately $33.7 million and represents CONE Gathering's largest single quarterly capital investment to date.  The capital investment on the Additional Systems supported new production from the Oxford and Shirley systems and projects in the Pennsboro, Moundsville and ACAA project areas that are anticipated to result in wet gas volume throughput growth in these areas in fourth quarter 2014.

CONE Midstream's single day respective share of maintenance capital expenditures for third quarter 2014 was approximately $17 thousand.  CONE Gathering's maintenance capital expenditures in the aggregate for all three development companies in which the Partnership holds interests totaled $1.6 million.

As of September 30, 2014, CONE Midstream had no borrowings under its $250 million revolving credit facility.