Sanchez Production Partners reports net loss for Q4

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12 April 2016, Oil, Gas

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Total revenues for the fourth quarter ended December 31, 2015 were $26.1 million, compared to $32.05 million for the same quarter ended December 31, 2014.

Net loss attributable to common unitholders for the year ended December 31, 2015 was $154.82 million, compared to a net income attributable to common unitholders of $9.5 million for the year ended December 31, 2014.

Total revenues for the year ended December 31, 2015 were $68.43 million, compared to $77.27 million for the year ended December 31, 2014.

"Despite a number of significant headwinds, we executed a plan to transform SPP in 2015 and exited the year with a well-positioned master limited partnership and arguably one of the most compelling investment opportunities in the energy space," said Gerald F. Willinger, CEO of SPP's general partner. "On the heels of completing a challenging conversion process, we successfully closed and financed two significant transactions in 2015. The first involved the acquisition of escalating working interests in producing assets in the Eagle Ford Shale from Sanchez Energy for approximately $85 million. The second involved the acquisition of Western Catarina midstream assets from Sanchez Energy for approximately $345 million.

"The Western Catarina Midstream Transaction resulted in a step-change in our business model and an asset base that is expected to generate approximately 60% of its Adjusted EBITDA from midstream activities this year. As a result of these transactions, we successfully restructured the Partnership's balance sheet, expanded our bank group and hedging capabilities, developed a strategic relationship with Stonepeak Infrastructure Partners, and initiated our first distribution on common units in November 2015. With the contribution of the Western Catarina Midstream Transaction beginning to impact our operating results in the fourth quarter 2015, we then increased our distribution by 1.5% in February of this year.

"As we close the books on 2015, we are excited about the opportunities that lie ahead. Given our liquidity position, the strength of our balance sheet, distress in the industry stemming from lower commodity prices, and a right of first offer and line of sight to $800 million in assets owned by Sanchez Energy, we see significant opportunities to grow the Partnership over time. We believe our results in 2015 are a testament to the benefits of strong sponsorship and a committed team. Building on these results, we currently forecast Adjusted EBITDA to range between $54 million and $60 million in 2016. At the midpoint of this range, we currently project common unit distribution coverage of 2.3x, which is quite good relative to what we see across our sector. We look forward to meeting new challenges this year, and in the years ahead, always with an eye toward creating value for our unitholders."

Source: MarketLine

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