American Midstream Grows in Permian, Bakken, Eagle Ford in Third-Quarter 2014, Expects 2015 Capex Up to $120 Million

---

Researched by Industrial Info Resources (Sugar Land, Texas)--American Midstream Partners LP (NYSE:AMID) (Denver, Colorado), a leading provider of midstream services for natural gas in the U.S. Southeast and Gulf Coast regions, looked toward ongoing developments in the Permian Basin, Bakken and Eagle Ford shales, and the Gulf of Mexico in third-quarter 2014 as the company's profits took a hit. Strong results from newly acquired systems failed to offset the effects of lower throughput volumes in the Gathering and Processing segment. The company reported net losses of $2.46 million, down from losses of $2.73 million in third-quarter 2013.

Industrial Info is tracking $280 million in projects related to American Midstream's plans to enlarge its role in the Eagle Ford Shale. Through an option agreement, executed in August, American Midstream will have the right to acquire a 50% interest in Republic Midstream LLC at the beginning of its operations in mid-2015. Republic Midstream itself agreed in July to build a 170-mile crude oil gathering system, a 144-acre storage and blending crude oil terminal, and a 25-mile intermediate takeaway pipeline in the Eagle Ford Shale.

View Project Report - 300177656 300177623 300177636 300177628

Republic Midstream currently is held by an affiliate of Arc Light Capital Partners LLC, which controls American Midstream's general partner.

Total revenues stood at $70.31 million, a 9.31% decrease from the same period last year. Although American Midstream's Lavaca System, which was acquired in January, saw stronger activity, overall throughput volumes on the company's Gathering and Processing segment systems were lower. The High Point System, which gathers natural gas from areas in and around southeast Louisiana and the Gulf of Mexico, boosted results in the Transmission segment.

Last month, American Midstream acquired onshore gathering and processing company Costar Midstream LLC for $470 million. The company holds significant assets in the Permian Basin and Eagle Ford Shale. Also in October, the company announced that it was planning to replace and update a natural gas pipeline that runs from Winnsboro, Louisiana, to Natchez, Mississippi, called the "Natchez Line." Earlier in August, American Midstream acquired the Main Pass Oil Gathering System, which consists of about 98 miles of crude pipelines from four platforms offshore southeast Louisiana.

Capital expenditures totaled $28.1 million for the quarter, which included $1.4 million for maintenance capital, compared with $4.3 million in third-quarter 2013, which included $2.2 million in maintenance capital.

"It's important to note that our third-quarter results were impacted by seasonal factors, as expected, including lower demand within our Transmission segment, specifically at AlaTenn [in northwestern Alabama] and Midla [in Louisiana]; higher operating costs, as we conduct work on our systems, demonstrating favorable weather in the third quarter; and offshore producer maintenance, ahead of the hurricane season," said Steve Bergstrom, the executive chairman, president and chief executive officer of American Midstream, in a conference call.

Growth capital expenditures, which do not include maintenance projects, are expected to be between $75 million and $80 million for full-year 2014, largely attributable to development projects in the Bakken Shale and Permian Basin; the Lavaca System; and the development of the Harvey terminal, acquired last December. Growth capital expenditures are expected to be between $140 million and $150 million for full-year 2015, which includes the same factors plus the Natchez Line.

"We expect the majority of the remaining expansion capital in 2014 to be allocated to the Lavaca System; the Costar development project; construction of a new pipeline on our High Point System; and the development of the Harvey terminal, including the deepwater ship dock," said Dan Campbell, the senior vice president and chief financial officer of American Midstream, in the conference call.

Adjusted EBITDA is expected to be between $46 million and $48 million for full-year 2014, and to grow to between $110 million and $120 million for full-year 2015, when Republic Midstream and other acquisitions are expected to yield results.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.