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EV Energy Partners in 2Q15: Disappointing Operating Results

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EV Energy’s revenues

EV Energy Partners (EVEP) saw its 2Q15 revenues more than halved YoY (year-over-year). Its revenues fell to $44.4 million, down from $89.36 million in 2Q14—the result of lower crude oil (USO), natural gas prices (UNG), and NGL (natural gas liquid) prices, as well as lower overall production.

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Revenue drivers for EVEP

Excluding hedges, EVEP’s average realized sale prices for natural gas, crude oil, and NGLs (natural gas liquids) fell from $4.16 per Mcf (million cubic feet), $98.84 a barrel, and $30.36 a barrel in 2Q14, to $2.27 per Mcf, $52.84 a barrel, and $15.09 a barrel in 2Q15, respectively. The combined average sale price per unit declined from $5.54 per Mcfe to $95  per Mcfe during the same time frame. Lower average NYMEX prices explain the decrease in average realized oil and natural gas prices.

EVEP’s total production decreased in 2Q15, from 15,920 MMcfe (million cubic feet equivalent) to 14,818 MMcfe in 2Q14—mostly because of reduced natural gas production. EVEP’s average daily production decreased from 174.9 MMcfe per day to 162.8 MMcfe per day during the same time frame.

EV Energy’s adjusted EBITDAX

EVEP’s adjusted EBITDAX (earnings before interest, taxes, depreciation, depletion, amortization, and exploration expenses) declined marginally by 1.7% YoYin 2Q15, from $54.3 million to $53.4 million. The partnership’s adjusted EBITDAX declined mainly due to lower production and lower realized commodity prices.

Peer comparison

EVEP’s peers Legacy Reserves (LGCY), Memorial Production Partners (MEMP), and Atlas Resource Partners (ARP) saw 2Q15 revenues decline by 8.8%, 20.4% YoY, and 11.4% YoY, respectively.

EVEP constitutes 0.58% of the Guggenheim Insider Sentiment ETF (NFO).

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