DCP Midstream Partners Reports 13% Drop in Net Profit, Maintains 2015 Growth Capex at $300 Million

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Researched by Industrial Info Resources (Sugar Land, Texas)--DCP Midstream Partners LP (NYSE:DPM) (Denver, Colorado), a midstream master limited partnership in the natural gas and natural gas liquids (NGL) gathering and transportation markets, reported first-quarter 2015 net income of $69 million, down nearly 13% from $79 million in first-quarter 2014. Operating revenues totaled $568 million, down 47% from more than $1 billion a year earlier.

Wouter van Kempen, chief executive officer of DCP, said during a conference call that earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $162 million during the quarter, from $138 million a year earlier.

DCP maintained its plans for $300 million in growth capital expenditures (capex) this year, and $50 million to $60 million in maintenance expenditures.

Industrial Info is tracking 27 active DCP-related projects worth $1.7 billion. This includes 14 projects, with a combined value of nearly $1.5 billion, which are in the planning stages, where plenty of factors could alter their timing or outcome.

During the first quarter, DCP entered into a joint venture to expand the Panola NGL pipeline, which runs from Carthage to Mont Belvieu in Texas. The expansion includes adding 60 miles of new pipeline and increasing capacity from 50,000 barrels per day (BBL/d) to 100,000 BBL/d. In addition to DCP, the joint venture comprises Panola pipeline operator Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas), Anadarko Petroleum Corporation (NYSE:APC) (Houston) and MarkWest Energy Partners LP (NYSE:MWE) (Denver, Colorado). Construction would kick off in third quarter 2015, with completion in first-quarter 2016. Industrial Info is tracking four Panola expansion projects, which have a combined value of $220 million.

For related information, see February 26, 2015, article - DCP Midstream Benefits from Eagle Ford, DJ Basin Assets in 2014, Puts 2015 Growth Capex at $300 Million.

Also during the quarter, DCP began construction of its fee-based, low-pressure Grand Parkway gathering system in the Denver-Julesberg Basin. The $55 million project is expected to be in-service by the end of 2015.

In addition, the Keathley Canyon deepwater natural gas-gathering system in the Gulf of Mexico was placed into service. The 405 million-standard-cubic-foot-per-day (MMSCFD) pipeline system is part of a joint venture that is 40%-owned by DCP and 60% by Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma).

Adjusted first-quarter EBITDA for DCP's Natural Gas Services segment decreased to $121 million during the quarter, from $124 million a year earlier, the company reported, reflecting lower commodity prices, despite higher volumes and growth from fee-based plants.

The company's NGL Logistics segment's adjusted EBITDA increased to $39 million, from $17 million in the first-quarter of 2014, reflecting growth and increased volumes.

The Wholesale Propane segment reported $23 million in adjusted EBITDA, up from $13 million in the same period of 2014.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five 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.