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Noble Midstream Partners Raises Third Quarter 2017 Guidance; Schedules Third Quarter 2017 Earnings Conference Call

HOUSTON--(BUSINESS WIRE)-- Noble Midstream Partners LP (NYSE: NBLX) (“Noble Midstream” or the “Partnership”) today increased third quarter 2017 guidance as a result of the successful startup of the Partnership’s two recent growth projects, the first central gathering facility (“CGF”) in the Delaware Basin and the oil and produced water gathering system for the Partnership’s third-party customer in the DJ Basin, as well as continued strong well performance from Noble Energy, Inc.’s (“Noble Energy”) Wells Ranch and East Pony areas.

New third quarter 2017 guidance for oil and produced water gathering, fresh water delivery, Net Income, EBITDA, Distributable Cash Flow (“DCF”), and DCF coverage ratio reflect an increased range above the high end of the previous guidance range.

Third Quarter Guidance Highlights:

  • Net Income increased to $42 - $43 million
  • EBITDA1 increased to $45 - $49 million, or $43 - $47 million attributable to the Partnership, a mid-point increase of 24% and 27%, respectively
  • DCF1 attributable to the Partnership of $37 - $40 million, resulting in a DCF coverage ratio1 of 2.2x - 2.4x
  • Oil and gas gathering volumes anticipated at 92 - 97 MBoe/d, approximately 15% above the prior guidance
  • Produced water gathering and fresh water delivery mid-point volumes raised 30% and 52%, respectively, above the prior guidance mid-point

“I’m pleased with our teams’ execution while successfully bringing online two projects core to our near and long-term growth,” stated John Nicholson, Chief Operating Officer of Noble Midstream. “We are encouraged by the performance of our systems in both basins and believe we can begin to de-risk our throughput outlook and timing on our 2018 growth projects.”

Billy Miner I CGF
Blanco River DevCo (NBLX ownership: 40%)
Noble Midstream’s first CGF in the Delaware Basin, with a nameplate oil, gas and produced water capacity of 10 MBbl/d, 20 MMcf/d and 15 MBw/d, respectively, received first production from Noble Energy’s Monroe wells in late July. As a result of the strong well performance and plans for additional wells to be tied into the facility, Noble Midstream completed a debottlenecking project with minor facility modifications in late August increasing oil, gas and produced water throughput capacity to 15 MBbl/d, 30 MMcf/d, and 30 MBw/d, respectively. Additionally, crude oil from the Billy Miner I CGF began flowing to the Advantage Pipeline in late August.

DJ Basin Third-Party Gathering and Fresh Water Delivery
Laramie River DevCo (NBLX ownership: 100%)
Noble Midstream began gathering oil and produced water for its third-party customer in the DJ Basin in August, and have connected four pads to its system. Volumes are exceeding the Partnership’s initial expectation as September oil throughput is anticipated to average 14 - 15 MBbl/d.

Laramie River DevCo fresh water delivery and produced water gathering are also above expectations as a result of fresh water per well demand consistent with second quarter levels and completion activity in July. As previously announced, completion activity reductions did not occur until August, whereas the prior guidance assumed activity reductions for the full third quarter.

Noble Energy’s Continued Strong Well Performance in the DJ Basin
Colorado River DevCo (NBLX ownership: 100%)
The gathering segment in Colorado River DevCo is again expected to surpass the previous forecast with continued strong well performance in Wells Ranch and East Pony. Oil and gas gathering is expected to grow more than 10% above the second quarter. Additionally, third quarter fresh water demand per well has been consistent with the recent enhanced completion trend, averaging approximately 260 MBw per equivalent well (normalized to 4,500’ lateral length) in Wells Ranch and approximately 115 MBw per equivalent well in East Pony.

Third Quarter 2017 Guidance Detail

Third Quarter 2017 (E)

$ in millions

Current Guidance

Prior Guidance

% Change to Mid-Point

Volumes, Gross

Oil Gathered (MBbl/d)

68 - 72

56 - 62 19%
Gas Gathered (MMcf/d) 142 - 148 130 - 144 6%
Oil and Gas Gathered (MBoe/d) 92 - 97 78 - 86 15%
Produced Water Gathered (MBw/d) 25 - 27 18 - 22 30%
Fresh Water Delivered (MBw/d) 170 - 180 100 - 130 52%

Financials, Gross

Net Income

$42 - $43

$33 - $36 23%
EBITDA1 $45 - $49 $35 - $41 24%

Financials, Attributable to the Partnership

EBITDA1

$43 - $47 $32 - $39 27%
Distributable Cash Flow (“DCF”)1

$37 - $40

$27 - $33

28%

DCF coverage ratio1 2.2x - 2.4x 1.6x - 1.9x 28%

Third Quarter 2017 Earnings Call

Noble Midstream will host its third quarter 2017 results webcast and conference call at 1:00 p.m., Central Time, Tuesday, October 31, 2017. The Partnership plans to issue third quarter results and updated full year 2017 guidance, including supporting presentation materials for the conference call, after market close on the previous day.

The live audio webcast and related presentation material will be accessible on the ‘Investors’ page of the Partnership’s website at www.nblmidstream.com. Conference call numbers for participation are 877-883-0383, or 412-902-6506 for international calls. The passcode number is 9665376. A replay of the conference call will be available at the same web location following the event.

About Noble Midstream Partners

Noble Midstream Partners LP is a growth-oriented master limited partnership formed by Noble Energy, Inc. to own, operate, develop and acquire domestic midstream infrastructure assets. Noble Midstream currently provides crude oil, natural gas, and water-related midstream services in the DJ Basin in Colorado and the Delaware Basin in Texas. For more information, please visit www.nblmidstream.com.

Forward Looking Statement

This news release contains certain “forward-looking statements” within the meaning of federal securities law. Words such as “anticipates”, “believes”, “expects”, “intends”, “will”, “should”, “may”, “estimates”, and similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect the Partnership’s current views about future events. No assurances can be given that the forward-looking statements contained in this news release will occur as projected and actual results may differ materially from those projected. Forward-looking statements are based on current expectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, without limitation, Noble Energy’s ability to meet its drilling and development plans, changes in general economic conditions, competitive conditions in the Partnership’s industry, actions taken by third-party operators, gatherers, processors and transporters, the demand for crude oil and natural gas gathering and processing services, the Partnership’s ability to successfully implement its business plan, the Partnership’s ability to complete internal growth projects on time and on budget, the price and availability of debt and equity financing, the availability and price of crude oil and natural gas to the consumer compared to the price of alternative and competing fuels, and other risks inherent in the Partnership’s business that are discussed in its most recent annual report on Form 10-K and in other reports on file with the Securities and Exchange Commission. These reports are also available from the Partnership’s office or website, www.nblmidstream.com. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Noble Midstream does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change.

Non-GAAP Financial Measures

This news release includes EBITDA, DCF and DCF coverage ratio, each of which are non-GAAP measures that may be used periodically by management when discussing our financial results with investors and analysts. The following presents a reconciliation of each of these non-GAAP financial measures to its nearest comparable GAAP measure.

We define EBITDA as net income before income taxes, net interest expense, depreciation and amortization. EBITDA is used as a supplemental financial measure by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

  • our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure;
  • the ability of our assets to generate sufficient cash flow to make distributions to our partners;
  • our ability to incur and service debt and fund capital expenditures; and
  • the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We define DCF as EBITDA less estimated maintenance capital expenditures. DCF is used by management to evaluate our overall performance. Our partnership agreement requires us to distribute all available cash on a quarterly basis, and DCF is one of the factors used by the Board of Directors to help determine the amount of available cash that is available to our unitholders for a given period. We calculate our DCF coverage ratio as DCF for a given quarter divided by the aggregate amount of distributions declared in respect of such quarter. The DCF coverage ratio is used by management to illustrate our ability to make our distributions each quarter.

We believe that the presentation of EBITDA, DCF and DCF coverage ratio provide information useful to investors in assessing our financial condition and results of operations. The GAAP measure most directly comparable to EBITDA and DCF is net income. EBITDA and DCF should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and DCF exclude some, but not all, items that affect net income or net cash, and these measures may vary from those of other companies. As a result, EBITDA and DCF as presented below may not be comparable to similarly titled measures of other companies.

EBITDA, DCF and DCF coverage ratio should not be considered as alternatives to GAAP measures, such as net income, operating income, cash flow from operating activities, or any other GAAP measure of financial performance.

Financial Guidance GAAP Reconciliation

Third Quarter 2017 (E)

$ in millions

Current Guidance

Prior Guidance

Net Income

$42 - $43 $33 - $36
Add: Depreciation and Amortization 3 - 5 2 - 4
Add: Interest Expense, Net of Amount Capitalized 0 - 1 0 - 1
Add: Income Tax Provision - -
Add: Unit-Based Compensation 0 0

EBITDA

$45 - $49 $35 - $41
Less: EBITDA Attributable to Noncontrolling Interests 2 3 - 2

EBITDA Attributable to NBLX

$43 - $47 $32 - $39
Less: Maintenance Capital Expenditures & Cash Interest 6 – 7 5 - 6

Distributable Cash Flow of NBLX

$37 - $40 $27 - $33

DCF coverage ratio

2.2x - 2.4x 1.6x - 1.9x

1 EBITDA, DCF and DCF coverage ratio are not Generally Accepted Accounting Principles (“GAAP”) measures. Definitions and reconciliations of these non-GAAP measures to their most directly comparable GAAP reporting measures, see “Non-GAAP Financial Measures.”

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Noble Midstream
Chris Hickman
VP, Investor Relations
(281) 943-1622
chris.hickman@nblmidstream.com

Source: Noble Midstream Partners LP