uploads/2015/03/SW-processed-volumes.png

MarkWest Energy’s operating income grows in Marcellus and Utica

By

Updated

Operational highlights

In the previous part of this series, we took a look at the operational highlights for the Marcellus and Utica segments of MarkWest Energy Partners (MWE). In this article, we will cover operational developments in MWE’s Southwest business and the operating income for all four of the company’s segments.

MWE is one of the top five holdings of the Alerian MLP ETF (AMLP). The company makes up about 7.7% of the ETF.

Article continues below advertisement

Southwest

  • The partnership commenced operations of a fourth processing plant at its Carthage complex in Panola County, Texas, in December. The new plant, which has an initial capacity of 120 million cubic feet per day, supports production from Anadarko Petroleum Corporation (APC) and other producers in the Haynesville Shale and Cotton Valley formation. With the completion of the new facility, the Carthage complex is now producing 520 million cubic feet per day.
  • MWE, Anadarko, and DCP Midstream Partners (DPM) will share a 45% ownership interest in Panola Pipeline Company, LLC, a wholly owned subsidiary of Enterprise Products Partners (EPD). The 181-mile Panola Pipeline originates in Carthage, Texas, and transports NGLs (or natural gas liquids) to Mont Belvieu, Texas.
  • The partnership also announced the execution of a definitive agreement with Newfield Exploration (NFX) “to support the development of resources in the Cana-Woodford.”

MarkWest expects its Southwest segment’s processed volumes to increase by about 12% in 2015.

Segment-wise operating income

The Marcellus segment reported operating income of $139.9 million, which is 56.4% higher than the prior year’s operating income of $89.5 million. Increased processed volumes aided this growth.

For the Utica segment, operating income was $16.6 million compared to a loss of $0.6 million in 4Q13. This growth came as a result of significant volume growth and increased plant utilization.

The Southwest segment’s operating income decreased from $66.3 million last year to about $65.9 million in 4Q14. This was likely the result of lower gathering system throughput in southeastern Oklahoma, where throughput declined to 397,800 million cubic feet per day from 405,100 million cubic feet per day in 4Q13.

The Northeast segment’s operating income was down by about 39% to $18.1 million from $29.8 million during the same quarter last year. Lower levels of processed and fractionated volumes brought about this result.

Advertisement

More From Market Realist