Rice Midstream Partners Announces 2017 Capital Budget and Guidance

02/22/2017

CANONSBURG, Pa., Feb. 22, 2017 /PRNewswire/ -- Rice Midstream Partners LP (NYSE: RMP) ("RMP") today announced its 2017 capital budget and guidance. Estimated capital investments and financial guidance include:

  • Capital budget of $315 million to further develop gas gathering and water services assets
  • Forecasted gathering throughput of 1,315 - 1,380 MDth/d, a 34% - 40% increase over 2016 throughput
  • Anticipated water volumes of 1,300 - 1,450 million gallons  
  • Forecasted 2017 annual distribution growth of 20%

Commenting on the 2017 RMP capital budget and guidance, Daniel J. Rice IV, Chief Executive Officer, said, "We believe Rice Midstream Partners is unique in that it combines the low capital requirements resulting from strong asset concentration with high throughput growth attributable to its core footprint and technically-leading customers. We think this is reflected in our 2017 capital budget and throughput projections. In addition, Rice Midstream Partners has line of sight to become one of the largest Appalachian Basin gas gathering providers by 2020 in terms of throughput, assuming its acquisition of Rice Midstream Holdings' Ohio gas gathering systems. We believe this throughput growth potential, combined with relatively low capital requirements and 100% fee-based contracts, will allow us to generate some of the best-in-class returns in the midstream MLP space in the coming years."

2017 Capital Budget

We plan to allocate our capital investments according to the table below:

2017 Capital Budget ($ in millions)

Gas Gathering and Compression

$

255

Water Services

$

60

Total Capital Expenditures

$

315




Estimated Maintenance Capital

$

18

We expect to invest $315 million in capital expenditures during 2017 consisting of $255 million to develop gas gathering and compression assets in Washington and Greene Counties and $60 million to expand our water services assets in Pennsylvania and Ohio. Our capital budget is focused on supporting the significant, expected future growth across approximately 100,000 additional acres that was acquired by or dedicated to RMP in 2016. This significant expansion was primarily achieved through the Vantage Energy acquisition and the previously renegotiated midstream agreement in western Greene County.

Rice Energy today announced its 2017 capital budget in a separate news release, which is available on www.riceenergy.com.

2017 Financial Guidance

We are unable to provide a projection of full-year 2017 net income and net cash provided by operating activities, the most comparable financial measures to Adjusted EBITDA and distributable cash flow, respectively, calculated in accordance with GAAP. We do not anticipate the changes in operating assets and liabilities to be material, but changes in depreciation expense, accounts receivable, accounts payable and accrued liabilities could be significant, such that the amount of net cash provided by operating activities would vary substantially from the amount of projected Adjusted EBITDA and distributable cash flow. In addition, we are unable to project net income because this metric includes the impact of certain non-cash items that we are unable to project with any reasonable degree of accuracy without unreasonable effort. Please see the "Supplemental Non-GAAP Financial Measures" section of this news release.

We anticipate 2017 Adjusted EBITDA(1) to be within a range of $185 - $200 million and DCF(1) to be within a range of $160 - $170 million. We expect to increase our annual distribution by 20% while maintaining an average DCF coverage ratio(1) of 1.35x - 1.45x over the course of the year. Our 2017 guidance is based on the key assumptions in the table below:



2017 Guidance

G&A ($ in millions)

$

25

-

$

30





Adjusted EBITDA(1) ($ in millions)






Gas Gathering and Compression

$

145

-

$

155

Water Services

$

40

-

$

45

Total Adjusted EBITDA

$

185

-

$

200


% Third Party


15%

-

20%







Distributable Cash Flow(1) ($ in millions)

$

160

-

$

170

Average DCF Coverage Ratio(1)


1.35x

-


1.45x

% Distribution Growth

20%








Operating Statistics






Gathering Throughput (MDth/d)

1,315

-

1,380

Water Volumes (MMGal)

1,300

-

1,450



1

Please see "Supplemental Non-GAAP Financial Measures" for a description of Adjusted EBITDA, distributable cash flow and DCF coverage ratio. 

 

About Rice Midstream Partners

Rice Midstream Partners LP is a fee-based, growth-oriented limited partnership formed by Rice Energy Inc. (NYSE: RICE) to own, operate, develop and acquire midstream assets in the Appalachian basin. RMP provides midstream services to Rice Energy and third-party companies through its natural gas gathering, compression and water assets in the dry gas cores of the Marcellus and Utica Shales.

For more information, please visit our website at www.ricemidstream.com.

Forward Looking Statements

This release includes forward-looking statements that are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than historical facts included in this release, that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as, forecasted gas gathering and water volumes, revenues, Adjusted EBITDA, DCF and DCF coverage ratio, distribution growth, and distributable cash flow, the timing of completion of midstream projects, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, market conditions, references to future success, references to intentions as to future matters and other such matters are forward-looking statements. All forward-looking statements speak only as of the date of this release. Although we believe that the plans, intentions and expectations reflected in or suggested by the forward-looking statements are reasonable, there is no assurance that these plans, intentions or expectations will be achieved. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements.

We caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to our gathering and compression and water services businesses. These risks include, but are not limited to: commodity price volatility; inflation; environmental risks; regulatory changes; the uncertainty inherent in projecting future throughput volumes, cash flow and access to capital, and the timing of development expenditures of Rice Energy or our other customers. Information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our Forms 10-K, 10-Q and 8-K. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Supplemental Non-GAAP Financial Measures
(Unaudited)

Adjusted EBITDA, distributable cash flow and DCF coverage ratio are non-GAAP supplemental financial measures that management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess the financial performance of our assets, without regard to financing methods, capital structure or historical cost basis; our operating performance and return on capital as compared to other companies in the midstream energy sector, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing or capital structure; our ability to incur and service debt and fund capital expenditures; the ability of our assets to generate sufficient cash flow to make distributions to our unitholders; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We define Adjusted EBITDA as net income (loss) before interest expense, depreciation expense, amortization of intangible assets, non-cash equity compensation expense, amortization of deferred financing costs and other non-recurring items. Adjusted EBITDA is not a measure of net income as determined by GAAP. We define distributable cash flow as Adjusted EBITDA less cash interest expense, and estimated maintenance capital expenditures. We define DCF coverage ratio as distributable cash flow divided by total distributions declared. Distributable cash flow does not reflect changes in working capital balances and is not a presentation made in accordance with GAAP.

We believe that the presentation of Adjusted EBITDA, distributable cash flow and DCF coverage ratio will provide useful information to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA and distributable cash flow are net income and net cash provided by operating activities, respectively. Our non-GAAP financial measures of Adjusted EBITDA and distributable cash flow should not be considered as alternatives to GAAP net income or net cash provided by operating activities. Each of Adjusted EBITDA and distributable cash flow has important limitations as an analytical tool because they exclude some but not all items that affect net income and net cash provided by operating activities. You should not consider Adjusted EBITDA, distributable cash flow or DCF coverage ratio in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA, distributable cash flow and DCF coverage ratio may be defined differently by other companies in our industry, our definitions of Adjusted EBITDA, distributable cash flow and DCF coverage ratio may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.

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SOURCE Rice Midstream Partners LP

Julie Danvers, Director of Investor Relations, (832) 708-3437, Julie.Danvers@RiceMidstream.com