MarkWest Energy Partners LP (MWE)

[MiamiGent]

MWE MarkWest Energy 2Q Net Surges on Derivative Gains
BY DJ Realtime News 4:44 PM ET 08/02/2012

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MarkWest Energy Partners L.P.'s (MWE) second-quarter profit more than doubled as the natural-gas processor posted a surge in gains from derivatives, masking a decline in other revenue.

MarkWest, a master limited partnership, has posted mixed results over the past year as its hedging activity alternatively strengthened or erased its earnings.

The company had reported steady revenue growth in its Southwest segment. In the latest period, revenue from the Southwest segment, its biggest top-line contributor, decreased 20% as operating income fell 14%.

Its Northeast segment, while less consistent, has benefited from strong exposure to the Marcellus shale region of Pennsylvania. MarkWest in May agreed to acquire Keystone Midstream Services LLC for $512 million, giving it increased processing capacity in that region. In the second quarter, its Northeast segment posted a revenue decline of 22%, and operating profit also fell 22%.

Chief Executive Frank Semple said the midyear core results have been strong, despite a significant decrease in processing margins and natural-gas liquid prices during the latest quarter.

The company posted a second-quarter profit of $186.9 million, or $1.47 a unit, up from $78.4 million, or $1.03 a unit, a year earlier. The latest period included $136.1 million in derivatives gains, up from $40.6 million a year ago.

Revenue rose 11% to $446.1 million. Excluding derivatives impacts, revenue fell 14%.

Analysts polled by Thomson Reuters recently expected earnings of 40 cents a unit, with revenue of $351 million.

MarkWest's common units closed Thursday at $51.20 and were mostly unchanged after hours. The equity is down 7% so far this year.

Write to Kristin Jones at [e-mail]

(END) Dow Jones Newswires
08-02-12 1644ET