EX-99.1 2 nblx-20161231xearningsrele.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
nblxupdatedlogoa05.jpg
  
 
NEWS RELEASE
 
 
 
 
 
 
 
February 13, 2017

Noble Midstream Partners Reports Fourth Quarter and Full Year 2016 Results

Houston - Noble Midstream Partners LP (NYSE: NBLX) (“Noble Midstream” or the “Partnership”) today reported fourth quarter and full year 2016 financial and operations results.

Fourth Quarter Highlights include:
•
Net Income of $35 million, or $25 million attributable to the Partnership
•
Net Cash Provided by Operating Activities of $38 million
•
EBITDA1 of $38 million, or $27 million attributable to the Partnership, an increase over the prior year quarter of 22%, or 16%, respectively
•
Increased the Partnership’s first full quarter distribution to $0.3925 ($1.57 annualized), a 4.7% increase from the minimum quarterly distribution
•
Distributable Cash Flow (“DCF”)1 attributable to the Partnership of $25 million, resulting in DCF1 coverage of 2.0x, based on the first full quarter distribution
•
Ended the year with $57 million in cash on hand and an undrawn $350 million credit facility
•
Record oil and gas gathering volumes of 64 thousand barrels of oil equivalent per day (MBoe/d), up 5% from the prior year quarter
•
Produced water gathering and fresh water delivery volumes of 11 thousand barrels of water per day (MBw/d) and 125 MBw/d, respectively

“I’m very pleased with the continued strength of our business, leading to an increased distribution in our first full quarter since our IPO while maintaining very strong coverage,” stated Terry R. Gerhart, Chief Executive Officer of Noble Midstream.

“This distribution increase commences our 20% annual distribution per unit growth objective, significantly accelerated from the IPO expectation. Driving the increase is the continued strong performance across all segments and activity acceleration in both the Delaware and DJ Basins.”

1 EBITDA and DCF are not Generally Accepted Accounting Principles (“GAAP”) measures. Definitions and reconciliations of these non-GAAP measures to GAAP reporting measures appear in the financial tables which follow.
1

Unless otherwise noted herein, all results included in this release reflect the results of our predecessor for accounting purposes, for periods prior to the closing of our initial public offering (“IPO”) on September 20, 2016, as well as the results of our Partnership, for the period subsequent to the closing of the IPO. We refer to certain results as “attributable to the Partnership,” which excludes the non-controlling interests in the development companies (“DevCos”) retained by Noble Energy, Inc. (“Noble Energy”). We believe the results “attributable to the Partnership” provide the best representation of the ongoing operations from which our unitholders will benefit.

Fourth Quarter 2016 Results

Oil and gas gathered volume for the quarter averaged 64 MBoe/d, an increase of 5% over the prior year quarter. Produced water gathered volume for the quarter averaged 11 MBw/d, an increase of 26% over the prior year quarter. Fresh water delivered for the quarter averaged 125 MBw/d, or 262 MBw per equivalent well, two and half times the fresh water per well rate in the prior year quarter.

In the fourth quarter, 28 equivalent wells, normalized to 4,500 lateral feet, were connected to our gathering systems, and 41 equivalent wells were completed. Equivalent wells connected and completed were below our guidance range due to timing shifts in late December; however, per well results continue to exceed initial expectations.

Fourth quarter revenues were $48 million and total operating expenses were $14 million, resulting in operating income of $34 million, an increase of 23% from the prior year quarter. Fourth quarter investment income of $1.0 million represents the Partnership’s 3.33% ownership in White Cliffs Pipeline LLC, which has been reclassified from revenue to other income retrospectively. Net income for the quarter was $35 million, or $25 million attributable to the Partnership, or $0.80 per limited partner unit. Net cash provided by operating activities was $38 million in the fourth quarter.

EBITDA1 was $38 million in the fourth quarter, or $27 million attributable to the Partnership, an increase of 16% increase over the prior year quarter, driven by increased gathering and fresh water delivery volumes. Attributable to the Partnership in the fourth quarter, cash interest expense was $0.2 million and maintenance capital expenditures totaled $2 million, resulting in DCF1 of $25 million and a DCF1 coverage ratio of 2.0x.

Capital expenditures in the fourth quarter totaled $19 million, including the following:
•
$11 million in the Laramie River DevCo primarily for the crude oil transmission line expected to come online in the third quarter 2017 for the Partnership’s third party customer in the DJ Basin
•
$2 million in the Blanco River DevCo on engineering design work and long lead items for the first Central Gathering Facilities (“CGF”) in the Delaware Basin to be placed in service in late second quarter 2017, and the second is expected to be in service by the end of 2017
•
$4 million in the Colorado River DevCo primarily on well connects in East Pony and Wells Ranch

As of December 31, 2016, the Partnership had $57 million in cash on hand and an undrawn $350 million unsecured revolving credit facility.

Fourth Quarter Distribution

On January 26, 2017, the Board of Directors of Noble Midstream’s general partner, Noble Midstream GP LLC, declared a fourth quarter cash distribution of $0.4333 per unit. The distribution is comprised of $0.3925

2

per unit with respect to the fourth quarter 2016 and $0.0408 per unit with respect to the 10-day period following the closing of the Partnership’s IPO on September 20, 2016 through September 30, 2016. The $0.3925 per unit distribution, the Partnership’s first full quarter distribution since its IPO, represents a 4.7% increase over the Partnership’s minimum quarterly distribution of $0.375 per unit. The distribution is payable on February 14, 2017, to unitholders as of February 6, 2017.

Full Year 2016 Financial Results

For the full year 2016, the Partnership reported revenue of $161 million and operating expenses of $48 million, resulting in operating income of $113 million. Net income for the full year was $86 million, including $28 million of income taxes prior to the Partnership’s IPO. Net income attributable to the Partnership for the post IPO period was $28 million, or $0.89 per limited partner unit.

2016 capital expenditures totaled $33 million, or $25 million attributable to the Partnership.

Conference Call and Supplemental Information

Noble Midstream will host a webcast and conference call on Tuesday, February 14, 2017, at 1:00 p.m., Central Time, to discuss fourth quarter and year end results, 2017 guidance, and the previously announced joint venture with Plains All American Pipeline, L.P. Conference call numbers for participation are 877-883-0383, or 412-902-6506 for international calls. The passcode number is 9134791. The live audio webcast and a replay will be accessible on the ‘Investors’ page of the Partnership’s website at www.nblmidstream.com. Presentation materials are available at the same location on the Partnership's website.

About Noble Midstream Partners LP

Noble Midstream is a growth-oriented Delaware master limited partnership formed by Noble Energy to own, operate, develop and acquire a wide range of domestic midstream infrastructure assets. We currently provide crude oil, natural gas, and water-related midstream services for Noble Energy in the DJ Basin in Colorado. Our areas of focus are in the DJ Basin and the Delaware Basin in Texas. For more information, please visit www.nblmidstream.com.

Forward Looking Statements

This news release contains certain “forward-looking statements” within the meaning of federal securities law. Words such as “anticipates”, “believes”, “expects”, “intends”, “will”, “should”, “may”, “estimates”, and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect the Partnership’s current views about future events. No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, Noble Energy’s ability to meet its drilling and development plans, changes in general economic conditions, competitive conditions in the Partnership’s industry, actions taken by third-party operators, gatherers, processors and transporters, the demand for crude oil and natural gas gathering and processing services, the Partnership’s ability to successfully implement its business plan, the Partnership’s ability to complete internal growth projects on time and on budget, the price and availability of debt and equity financing, the availability and price of crude oil and natural gas to the consumer compared to the price of alternative and competing fuels,

3

and other risks inherent in the Partnership’s business that are discussed in its most recent registration statement on Form S-1 and in other reports on file with the Securities and Exchange Commission (“SEC”). These reports are also available from the Partnership’s office or website, www.nblmidstream.com. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Midstream does not assume any obligation to update forward-looking statements should circumstances, management’s estimates, or opinions change.

Non-GAAP Measures

This news release also contains certain non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Midstream’s overall financial performance. Please see the attached schedules for definitions and reconciliations of the non-GAAP financial measures used in this news release to the most directly comparable GAAP financial measures.

Contacts:

Chris Hickman
VP, Investor Relations
(281) 943-1622
chris.hickman@nblmidstream.com

4

Schedule 1
Noble Midstream Partners LP
Affiliate Revenue and Throughput Volume Statistics
(unaudited)

 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
Colorado River DevCo
 
 
 
 
 
 
 
Crude Oil Gathering Volumes (Bbl/d)
45,263

 
47,809

 
45,236

 
33,977

Natural Gas Gathering Volumes (MMBtu/d)
145,752

 
102,804

 
132,147

 
86,103

Produced Water Gathering Volumes (Bbl/d)
11,022

 
8,746

 
10,592

 
5,198

Fresh Water Delivery Volumes (Bbl/d)
76,190

 
57,838

 
64,306

 
30,746

Gathering and Fresh Water Delivery Revenues — Affiliate (in thousands)
$
36,504

 
$
31,100

 
$
132,161

 
$
72,641

 
 
 
 
 
 
 
 
San Juan River DevCo
 
 
 
 
 
 
 
Fresh Water Delivery Volumes (Bbl/d)
48,560

 
20,532

 
22,423

 
21,234

Fresh Water Delivery and Water Services Revenues — Affiliate (in thousands)
$
10,471

 
$
3,270

 
$
17,272

 
$
10,498

 
 
 
 
 
 
 
 
Green River DevCo
 
 
 
 
 
 
 
Fresh Water Delivery Volumes (Bbl/d)
—

 
—

 
7,498

 
—

Fresh Water Delivery and Water Services Revenues — Affiliate (in thousands)
$
(95
)
 
$
—

 
$
4,728

 
$
—

 
 
 
 
 
 
 
 
Total Gathering Systems
 
 
 
 
 
 
 
Crude Oil Gathering Volumes (Bbl/d)
45,263

 
47,809

 
45,236

 
33,977

Natural Gas Gathering Volumes (MMBtu/d)
145,752

 
102,804

 
132,147

 
86,103

Produced Water Gathering Volumes (Bbl/d)
11,022

 
8,746

 
10,592

 
5,198

Gathering Revenues — Affiliate (in thousands)
$
26,848

 
$
21,409

 
$
94,160

 
$
56,042

 
 
 
 
 
 
 
 
Total Fresh Water Delivery
 
 
 
 
 
 
 
Fresh Water Services Volumes (Bbl/d)
124,750

 
78,370

 
94,227

 
51,980

Fresh Water Delivery Revenues — Affiliate (in thousands)
$
20,033

 
$
12,961

 
$
60,001

 
$
27,097



5


Schedule 2
Noble Midstream Partners LP
Consolidated Statements of Operations
(in thousands, except per unit amounts, unaudited)
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
Revenues
 
 
 
 
 
 
 
Crude Oil, Natural Gas and Produced Water Gathering — Affiliate
$
26,848

 
$
21,409

 
$
94,160

 
$
56,042

Fresh Water Delivery — Affiliate
20,033

 
12,961

 
60,001

 
27,097

Crude Oil Treating — Affiliate
1,281

 
1,438

 
5,371

 
4,403

Other — Affiliate
303

 
295

 
1,192

 
295

Total Revenues
48,465

 
36,103

 
160,724

 
87,837

Costs and Expenses
 
 
 
 
 
 
 
Direct Operating
9,108

 
5,781

 
29,107

 
16,933

Depreciation and Amortization
2,414

 
1,935

 
9,066

 
6,891

General and Administrative
2,503

 
413

 
9,914

 
2,771

Total Operating Expenses
14,025

 
8,129

 
48,087

 
26,595

Operating Income (Loss)
34,440

 
27,974

 
112,637

 
61,242

Other (Income) Expense
 
 
 
 
 
 
 
Interest Expense, Net of Amount Capitalized
266

 
1,807

 
3,373

 
4,595

Investment Income
(1,017
)
 
(1,203
)
 
(4,526
)
 
(4,621
)
Total Other (Income) Expense
(751
)
 
604

 
(1,153
)
 
(26
)
Income (Loss) Before Income Taxes
35,191

 
27,370

 
113,790

 
61,268

Income Tax Provision (Benefit)
—

 
10,509

 
28,288

 
23,226

Net Income (Loss) and Comprehensive Income (Loss)
35,191

 
$
16,861

 
85,502

 
$
38,042

Less: Net Income Prior to the Offering on September 20, 2016
—

 
 
 
45,990

 
 
Net Income Subsequent to the Offering on September 20, 2016
35,191

 
 
 
39,512

 
 
Less: Net Income Attributable to Noncontrolling Interests Subsequent to the Offering on September 20, 2016
9,826

 
 
 
11,054

 
 
Net Income Attributable to Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016
$
25,365

 
 
 
$
28,458

 
 
 
 
 
 
 
 
 
 
Net Income Subsequent to the Offering on September 20, 2016 Per Limited Partner Unit — Basic and Diluted
 
 
 
 
 
 
 
Common Units
$
0.80

 
 
 
$
0.89

 
 
Subordinated Units
$
0.80

 
 
 
$
0.89

 
 
 
 
 
 
 
 
 
 
Average Limited Partner Units Outstanding — Basic and Diluted
 
 
 
 
 
 
 
Common Units — Public
14,375

 
 
 
14,375

 
 
Common Units — Noble
1,528

 
 
 
1,528

 
 
Subordinated Units — Noble
15,903

 
 
 
15,903

 
 
 
 
 
 
 
 
 
 
EBITDA Attributable to Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016 (Non-GAAP)
$
27,370

 
 
 
$
30,655

 
 
 
 
 
 
 
 
 
 
Distributable Cash Flow of Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016 (Non-GAAP)
$
25,303

 
 
 
$
28,383

 
 

6


Schedule 3
Noble Midstream Partners LP
Reconciliations to Distributable Cash Flow (Non-GAAP)
Non-GAAP Financial Measures
This news release, the financial tables and other supplemental information include EBITDA and Distributable Cash Flow, both of which are non-GAAP measures which may be used periodically by management when discussing our financial results with investors and analysts. The following presents a reconciliation of each of these non-GAAP financial measures to their nearest comparable GAAP measure.

We define EBITDA as net income before income taxes, net interest expense, depreciation and amortization. EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:
•
our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure;
•
the ability of our assets to generate sufficient cash flow to make distributions to our partners;
•
our ability to incur and service debt and fund capital expenditures; and
•
the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We define Distributable Cash Flow as EBITDA less estimated maintenance capital expenditures and cash interest paid. Distributable Cash Flow is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash on a quarterly basis, and Distributable Cash Flow is one of the factors used by the board of directors of our general partner to help determine the amount of available cash that is available to our unitholders for a given period. We calculate our Distributable Cash Flow (DCF) coverage ratio as Distributable Cash Flow for a given quarter divided by the aggregate amount of distributions declared in respect of such quarter. The DCF coverage ratio is used by management to illustrate our ability to make our distributions each quarter.

We believe that the presentation of EBITDA and Distributable Cash Flow provide information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to EBITDA and Distributable Cash Flow are net income and net cash provided by operating activities. EBITDA and Distributable Cash Flow should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Distributable Cash Flow exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and Distributable Cash Flow as presented below may not be comparable to similarly titled measures of other companies.

EBITDA and Distributable Cash Flow should not be considered as alternatives to GAAP measures, such as net income, operating income, cash flow from operating activities, or any other GAAP measure of financial performance.



7


Schedule 3 (Continued)
Noble Midstream Partners LP
Reconciliations to Distributable Cash Flow (Non-GAAP)

Reconciliation of Net Income (GAAP) to Distributable Cash Flow (Non-GAAP)
(in thousands, unaudited)
 
Three Months Ended December 31,
 
2016
 
2015
Reconciliation from Net Income (GAAP) to Distributable Cash Flow (Non-GAAP)
 
 
 
Net Income and Comprehensive Income (GAAP)
$
35,191

 
$
16,861

Add:
 
 
 
Depreciation and Amortization
2,414

 
1,935

Interest Expense, Net of Amount Capitalized
266

 
1,807

Income Tax Provision
—

 
10,509

EBITDA (Non-GAAP)
37,871

 
$
31,112

Less:
 
 
 
EBITDA Attributable to Noncontrolling Interests
10,501

 
 
EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)
27,370

 
 
Less:
 
 
 
Maintenance Capital Expenditures
1,892

 
 
Cash Interest Paid
175

 
 
Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)
$
25,303

 
 
Distributions (Declared)
12,484

 
 
Distribution Coverage Ratio (Declared)
2.0

 
 

 
Year Ended December 31,
 
2016
 
2015
Reconciliation from Net Income (GAAP) to Distributable Cash Flow (Non-GAAP)
 
 
 
Net Income and Comprehensive Income (GAAP)
$
85,502

 
$
38,042

Add:
 
 
 
Depreciation and Amortization
9,066

 
6,891

Interest Expense, Net of Amount Capitalized
3,373

 
4,595

Income Tax Provision (Benefit)
28,288

 
23,226

EBITDA (Non-GAAP)
126,229

 
$
72,754

Less:
 
 
 
EBITDA Prior to the Offering on September 20, 2016
83,780

 
 
EBITDA Subsequent to the Offering on September 20, 2016 (Non-GAAP)
42,449

 
 
EBITDA Attributable to Noncontrolling Interests Subsequent to the Offering on September 20, 2016
11,794

 
 
EBITDA Attributable to Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016 (Non-GAAP)
30,655

 
 
Less:
 
 
 
Maintenance Capital Expenditures
2,097

 
 
Cash Interest Paid
175

 
 
Distributable Cash Flow of Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016 (Non-GAAP)
$
28,383

 
 
Distributions (Declared)
13,782

 
 
Distribution Coverage Ratio (Declared)
2.1

 
 

8


Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Distributable Cash Flow (Non-GAAP)
(in thousands, unaudited)
 
Three Months Ended December 31,
 
2016
 
2015
Reconciliation from Net Cash Provided by Operating Activities (GAAP) to Distributable Cash Flow (Non-GAAP)
 
 
 
Net Cash Provided by Operating Activities (GAAP)
$
37,878

 
$
8,390

Add:
 
 
 
Interest Expense, Net of Amount Capitalized
266

 
1,807

Changes in Operating Assets and Liabilities
(137
)
 
20,746

Change in Income Tax Payable
—

 
164

Stock Based Compensation and Other
(136
)
 
5

EBITDA (Non-GAAP)
37,871

 
$
31,112

Less:
 
 
 
EBITDA Attributable to Noncontrolling Interests
10,501

 
 
EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)
27,370

 
 
Less:
 
 
 
Maintenance Capital Expenditures
1,892

 
 
Cash Interest Paid
175

 
 
Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)
$
25,303

 
 
Distributions (Declared)
12,484

 
 
Distribution Coverage Ratio (Declared)
2.0

 
 

 
Year Ended December 31,
 
2016
 
2015
Reconciliation from Net Cash Provided by Operating Activities (GAAP) to Distributable Cash Flow (Non-GAAP)
 
 
 
Net Cash Provided by Operating Activities (GAAP)
$
118,451

 
$
69,394

Add:
 
 
 
Interest Expense, Net of Amount Capitalized
3,373

 
4,595

Changes in Operating Assets and Liabilities
4,673

 
(1,254
)
Change in Income Tax Payable
—

 
164

Stock Based Compensation and Other
(268
)
 
(145
)
EBITDA (Non-GAAP)
126,229

 
$
72,754

Less:
 
 
 
EBITDA Prior to the Offering on September 20, 2016
83,780

 
 
EBITDA Subsequent to the Offering on September 20, 2016 (Non-GAAP)
42,449

 
 
EBITDA Attributable to Noncontrolling Interests Subsequent to the Offering on September 20, 2016
11,794

 
 
EBITDA Attributable to Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016 (Non-GAAP)
30,655

 
 
Less:
 
 
 
Maintenance Capital Expenditures
2,097

 
 
Cash Interest Paid
175

 
 
Distributable Cash Flow of Noble Midstream Partners LP Subsequent to the Offering on September 20, 2016 (Non-GAAP)
$
28,383

 
 
Distributions (Declared)
13,782

 
 
Distribution Coverage Ratio (Declared)
2.1

 
 

9


Schedule 4
Noble Midstream Partners LP
Consolidated Balance Sheets
(in thousands, unaudited)

 
December 31,
2016
 
December 31,
2015
ASSETS
 
 
 
Current Assets
 
 
 
Cash and Cash Equivalents
$
57,421

 
$
26,612

Accounts Receivable — Affiliate
19,191

 
13,250

Other Current Assets
380

 
83

Total Current Assets
76,992

 
39,945

  Property, Plant and Equipment
 
 
 
Total Property, Plant and Equipment, Gross
311,045

 
273,722

Less: Accumulated Depreciation and Amortization
(31,642
)
 
(22,789
)
Total Property, Plant and Equipment, Net
279,403

 
250,933

Investments
11,151

 
12,279

Deferred Charges
1,813

 
2,161

Total Assets
$
369,359

 
$
305,318

LIABILITIES
 
 
 
Current Liabilities
 
 
 
Accounts Payable — Affiliate
$
1,452

 
$
4,735

Accounts Payable — Trade
12,501

 
18,356

Current Portion of Capital Lease
4,786

 
—

Ad Valorem Tax
1,187

 
990

Other Current Liabilities
430

 
164

Total Current Liabilities
20,356

 
24,245

  Deferred Tax Liability
—

 
13,140

  Asset Retirement Obligations
5,415

 
3,612

Other Long-Term Liabilities
683

 
782

Total Liabilities
26,454

 
41,779

EQUITY
 
 
 
Parent Net Investment
—

 
263,539

Partners' Equity
 
 
 
Limited Partner
 
 
 
Common Units — Public (14,375 units outstanding as of December 31, 2016)
311,872

—

—

Common Units — Noble (1,528 units outstanding as of December 31, 2016)
(3,534
)
 
—

Subordinated Units — Noble (15,903 units outstanding as of December 31, 2016)
(36,799
)
 
—

Noncontrolling Interests
71,366

 
—

Total Equity
342,905

 
263,539

Total Liabilities and Equity
$
369,359

 
$
305,318



10