PIPELINES / Koch Q1 Results
KOCH PIPELINES CANADA, L.P. ANNOUNCES FIRST QUARTER 1998 RESULTS
CALGARY, May 20 /CNW/ - Koch Pipelines Canada, L.P. today announced the
financial results for the three months ended March 31, 1998.
Distributable Cash amounted to $16.1 million ($0.22 per unit), after
taking into account non-cash depreciation, capital expenditures, the capital
and pipeline inspection expenditures prepaid at the time of the initial public
offering, and reserve for future distributions. Net income for the period
totaled $1.3 million ($0.02 per unit). The initial public offering of the
Partnership closed on November 27, 1997. Consequentially, comparative
financial results for the quarter are not presented.
Operations
Combined, the systems had an average volume throughput for the first
quarter of 308,400 barrels of oil per day, up from the 1997 average daily
throughput of 306,400 barrels per day.
Although management has not identified any material shut-ins along the
Partnership's systems resulting from the current low oil price environment,
growth in throughput volumes expected from development activity has not
occurred as quickly as originally forecast.
The combined average daily throughput volumes were 310,000, 312,400, and
303,200 barrels per day during January, February, and March, respectively. The
March throughput volumes declined from January and February levels due, in
part, to weather related factors and maintenance work at some field production
sites connected to the Partnership's pipelines. In addition, line integrity
testing on the Interprovincial export pipeline led to scheduling difficulties
and temporary restrictions in March.
The Partnership's management still believes the 1998 forecast
distributable cash to be achievable over the remainder of 1998. However, as
the year progresses, management will monitor the impact of the oil price
environment on the Partnership's financial position. Management will strive
to mitigate possible adverse impacts on cash distributions by maintaining a
strong focus on the Partnership's operating cost structure while continuing to
meet the high level of service the Partnership's producer and shipper
customers expect.
Based on current information, the General Partner anticipates that
approximately 60% of the previously forecast 1998 cash distribution will be
considered taxable, and approximately 40% will be considered a return of
capital. The actual allocation of income subject to taxation will depend on
several variables, including the amount of capital spending by the partnership
throughout the year, and the actual performance of the business.
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Koch Pipelines Canada, L.P.
BALANCE SHEET
As at
(thousands of dollars)
March 31 December 31
1998 1997
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(unaudited) (audited)
ASSETS
Current
Cash $ 11,882 $ 1,085
Accounts receivable 14,059 16,486
Prepaid expenses 362 343
Instalment receipts due 150,000 150,000
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176,303 167,914
Deferred capital and pipeline inspection
expenditures 18,973 25,234
Capital assets 654,170 660,388
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$ 849,446 $ 853,536
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LIABILITIES AND PARTNERS' EQUITY
Current
Distributable Cash payable $ 16,104 $ 5,124
Accounts payable and accrued liabilities 11,859 12,076
Note payable 150,000 150,000
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177,963 167,200
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Partners' equity
Class A units 343,998 351,607
Class B units 327,485 334,729
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671,483 686,336
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$ 849,446 $ 853,536
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Koch Pipelines Canada, L.P.
STATEMENT OF PARTNERS' EQUITY
Quarter ended March 31, 1998
(thousands of dollars)
(unaudited)
Limited Partners General Partner
Class A Units Class B Units Total
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Partners' equity, beginning
of period $ 351,607 $ 334,729 $ 686,336
Net income for the period 641 610 1,251
Distributions (8,250) (7,854) (16,104)
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Partners' equity, end of
period $ 343,998 $ 327,485 $ 671,483
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Koch Pipelines Canada, L.P.
STATEMENTS OF OPERATIONS
AND DISTRIBUTABLE CASH
(thousands of dollars, except per unit amounts)
Quarter Period from
ended March formation to
31, 1998 December 31,
1997
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(unaudited) (audited)
REVENUE $ 21,262 $ 8,437
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EXPENSES
Operating 6,284 1,949
Pipeline inspection 602 -
General and administrative 801 501
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7,687 2,450
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Income before the following deductions 13,575 5,987
Depreciation 12,042 4,073
Management fees 282 120
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Net income for the period $ 1,251 $ 1,794
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Add (deduct)
Depreciation $ 12,042 $ 4,073
Capital expenditures (5,831) (4,795)
Capital and pipeline inspection
expenditures prepaid by the Partnership 6,261 4,766
Reserve to be funded by (used for) future
distributions 2,381 (714)
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Distributable cash for the period $ 16,104 $ 5,124
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Per Class A and B unit amounts
Net income $ 0.02 $ 0.02
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Distributable cash $ 0.22 $ 0.07
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Koch Pipelines Canada, L.P.
STATEMENT OF CASH FLOWS
(thousands of dollars)
Quarter Period from
ended March formation to
31, 1998 December 31,
1997
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(unaudited) (audited)
OPERATING ACTIVITIES
Net income for the period $ 1,251 $ 1,794
Depreciation 12,042 4,073
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Cash flow from operations 13,293 5,867
Net change in non-cash working capital 2,191 (4,753)
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Cash 15,484 1,114
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INVESTING ACTIVITIES
Acquisition of pipeline assets - (689,666)
Additions to capital assets (5,824) (4,795)
Reduction in deferred capital expenditures 5,659 4,766
Reduction in deferred pipeline inspection
expenditures 602 -
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Cash provided by (used in) investing activities 437 (689,695)
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FINANCING ACTIVITIES
Partners' capital contributions - 689,666
Instalment receipts due - (150,000)
Note payable to General Partner - 150,000
Partnership distributions (16,104) (5,124)
Net change in non-cash working capital 10,980 5,124
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Cash provided by (used in) financing activities (5,124) 689,666
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Increase in cash during the period 10,797 1,085
Cash, beginning of period 1,085 -
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Cash, end of period $ 11,882 $ 1,085
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>>
Koch Pipelines Canada, L.P. is a limited partnership that owns and
operates four feeder pipeline systems located in Alberta and Saskatchewan.
Totalling approximately 2,450 miles in length, these systems comprise one of
the largest crude oil feeder pipeline businesses in Canada.
The Partnership's Class A units trade as instalment receipts on The
Toronto Stock Exchange under the symbol KPC.IR. The second instalment of $4
per unit is due on November 27, 1998.
-30-
For further information: Koch Pipelines Canada Ltd., General Partner of
Koch Pipelines Canada, L.P., David W. Fesyk, President and Chief Executive
Officer, (403) 716-7651, Fax: (403) 716-7440 email: fesykd@kochind.com, D.
Mark Alenius, C.A., Vice President, Finance and Chief Financial Officer, (403)
716-7660, Fax: (403) 716-7440, email: aleniusm@kochind.com |
