EV Energy Partners cuts dividend by 35%
Master Limited Partnership EV Energy Partners (Nasdaq: EVEP) will lower its quarterly distribution from $0.77 to $0.50 per share.
EVEP declared a cash distribution attributable to the fourth quarter of 2014 of $0.50 per unit, or $2.00 on an annualized basis, for all of its outstanding units. The distribution will be payable on February 13, 2015, to unit holders of record at the close of business on February 9, 2015. This distribution represents a $0.274 per unit reduction over the prior quarterly distribution. Using recent forward strip prices ($2.85 per mmbtu for natural gas and $52.50 per barrel for crude oil) and the midpoint of 2015 guidance estimates, EVEP estimates a distribution coverage ratio of over 1.15x for 2015. Guidance for 2015 does not include the effects of a potential sale of EVEP's Utica East Ohio (UEO) midstream investment or additional sales of Utica Shale or Eagle Ford formation rights, and subsequent reinvestment of proceeds in long-life producing oil and gas assets, which EVEP believes would have a positive effect on future results.
"In response to the speed and depth of the decline in commodity prices, we are significantly reducing our E&P capital budget for 2015 by approximately 40% versus 2014 and are lowering our common unit distribution. In addition, with the completion of the initial processing, fractionation and storage buildout in our UEO midstream investment and the sale of our interest in the Cardinal Gas Services gathering business in the fourth quarter of 2014, our 2015 midstream capital expenditures are expected to decline by approximately $100 million versus 2014. As we actively pursue monetization alternatives for UEO during 2015, we believe these steps are appropriate to preserve liquidity and financial flexibility during this period of low commodity prices. Our decision to reduce the common unit distribution was difficult, but we believe this is the appropriate strategic measure to generate long term value for our unitholders given the current environment," said John Walker, Executive Chairman.
Source: EV Energy Partners, L.P.
EVEP declared a cash distribution attributable to the fourth quarter of 2014 of $0.50 per unit, or $2.00 on an annualized basis, for all of its outstanding units. The distribution will be payable on February 13, 2015, to unit holders of record at the close of business on February 9, 2015. This distribution represents a $0.274 per unit reduction over the prior quarterly distribution. Using recent forward strip prices ($2.85 per mmbtu for natural gas and $52.50 per barrel for crude oil) and the midpoint of 2015 guidance estimates, EVEP estimates a distribution coverage ratio of over 1.15x for 2015. Guidance for 2015 does not include the effects of a potential sale of EVEP's Utica East Ohio (UEO) midstream investment or additional sales of Utica Shale or Eagle Ford formation rights, and subsequent reinvestment of proceeds in long-life producing oil and gas assets, which EVEP believes would have a positive effect on future results.
"In response to the speed and depth of the decline in commodity prices, we are significantly reducing our E&P capital budget for 2015 by approximately 40% versus 2014 and are lowering our common unit distribution. In addition, with the completion of the initial processing, fractionation and storage buildout in our UEO midstream investment and the sale of our interest in the Cardinal Gas Services gathering business in the fourth quarter of 2014, our 2015 midstream capital expenditures are expected to decline by approximately $100 million versus 2014. As we actively pursue monetization alternatives for UEO during 2015, we believe these steps are appropriate to preserve liquidity and financial flexibility during this period of low commodity prices. Our decision to reduce the common unit distribution was difficult, but we believe this is the appropriate strategic measure to generate long term value for our unitholders given the current environment," said John Walker, Executive Chairman.
Source: EV Energy Partners, L.P.
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