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January 2, 2013
18:32 EDTAMIDAmerican Midstream Partners provides Q4 udpate
American Midstream Partners provided an update regarding certain items that affected the fourth quarter 2012, including the impact of Hurricane Isaac and the turnaround of the Bazor Ridge processing plant, among other items as more fully described below. "We had several exciting developments in the fourth quarter, including the completion of the initial gathering system for Silver Oak in the Woodbine as well as significant progress on other commercial opportunities that we hope to announce soon," stated Brian Bierbach, President and CEO. "We also had several events during the fourth quarter, mostly one-time and short-term in nature, that will negatively affect our financial results for the quarter. These items are mostly behind us, and we remain enthusiastic about our backlog of expansion opportunities as we head into 2013." The items impacting the fourth quarter of 2012 include: As previously disclosed, the financial impact of Hurricane Isaac is expected to exceed $2M, of which approximately $1M was incurred in the third quarter 2012 and the balance incurred in the fourth quarter. A portion of this amount related to foregone cash flows resulting from production curtailments immediately following the hurricane, and the remainder resulted from costs incurred to repair the damaged assets. The Partnership is insured for named windstorms on the affected assets after a $1M deductible. As previously disclosed, the Partnership completed a scheduled turnaround of its Bazor Ridge processing plant in eastern Mississippi. The turnaround took longer than anticipated as a result of unscheduled repairs and upgrades that slowed the turnaround process but are expected to deliver long-term, improved efficiencies at the plant. The Partnership estimates the financial impact of the turnaround in the fourth quarter was approximately $1M. As previously disclosed, the Partnership saw a decline in volumes on one of its offshore pipeline systems during the third and fourth quarters as a result of a producer completing work on one of its platforms. The Partnership continues to work with this producer to return volumes to historical levels, although the contract terms may change for a portion of the volumes going forward and a change in contract terms may have a material negative impact on financial results. While the Partnership expects the volumes to return to recent historical levels during the first quarter of 2013, the reduced volumes during the fourth quarter of 2012 resulted in an estimated financial impact of approximately $1M. During the fourth quarter, the Partnership executed a separation agreement with a former officer of the Partnership that resulted in a one-time charge of approximately $0.5M. Also during the fourth quarter, the Partnership obtained a waiver of the leverage covenant on its $200M credit facility for the quarter ended December 31, 2012.
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