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Penn Virginia Resource Partners L.P. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 29, 2011 04:49PM
Penn Virginia Resource Partners L.P. (PVR) filed Quarterly Report for the period ended 2011-06-30. Penn Virginia Resource Partners L.p. has a market cap of $1.92 billion; its shares were traded at around $27.02 with a P/E ratio of 23.5 and P/S ratio of 2.2. The dividend yield of Penn Virginia Resource Partners L.p. stocks is 7.1%. Penn Virginia Resource Partners L.p. had an annual average earning growth of 14.8% over the past 10 years.
Highlight of Business Operations:
During the six months ended June 30, 2011 and for the year ended December 31, 2010, we incurred $6.6 million and $4.6 million of direct costs associated with the Merger. The aggregate costs of $11.2 million were charged to partners capital upon the effective date of the Merger in 2011. At December 31, 2010, the $4.6 million of costs incurred at that time were included in other long-term assets on the consolidated balance sheet, and were transferred to partners capital upon the effective date of the merger. Cumulative costs incurred and paid during the three and six months ended June 30, 2011 are reported under the caption Cash paid for merger in the financing activities section of the consolidated statement of cash flows. No merger costs were incurred in the three or six months ended June 30, 2010.
In June 2011, we acquired a 20 MMcf/d processing facility and gathering system within our Panhandle system for approximately $11.4 million. Approximately $20 million of additional capital is planned to be spent to increase the capacity of this plant. This acquisition and expansion will provide incremental processing capacity to accommodate the increased drilling activity in the Granite Wash and allow for additional system optimization and benefits system pressures.
During the six months ended June 30, 2011, we incurred net borrowings of $172.0 million to fund our coal and natural resources and natural gas midstream acquisitions and to finance the natural gas midstream capital expenditures. We also paid $6.6 million of direct costs incurred related to the Merger in 2011, and $3.7 million and $8.7 million of debt issuance costs for the six months ended June 30, 2011 and 2010. During the six months ended June 30, 2011 and 2010 we paid cash distributions to our unitholders of $64.8 million and $60.8 million.
Revolver. On April 19, 2011, we entered into an amended and restated secured credit agreement increasing our borrowing capacity under the Revolver from $850 million to $1.0 billion and extending the maturity date until April 19, 2016. The interest rate under the Revolver fluctuates based on the ratio of our total indebtedness-to-EBITDA. As of April 19, 2011, interest is payable at the base rate plus an applicable margin ranging from 0.75% to 1.75% if we select the base rate indebtedness option under the Revolver or at a rate derived from LIBOR plus an applicable margin ranging from 1.75% to 2.75% if we select the LIBOR-based indebtedness option. We incurred $3.7 million of debt issuance costs related to this amendment. As of June 30, 2011, net of outstanding indebtedness of $580.0 million and letters of credit of $1.6 million, we had remaining borrowing capacity of $418.4 million on the $1.0 billion Revolver. The Revolver is available to provide funds for general partnership purposes, including working capital, capital expenditures, acquisitions and quarterly distributions. The weighted average interest rate on borrowings outstanding under the Revolver during the six months ended June 30, 2011 was approximately 2.8%. We do not have a public rating for the Revolver. As of June 30, 2011, we were in compliance with all of our covenants under the Revolver.
Senior Notes. In April 2010, we sold $300.0 million of Senior Notes due on April 15, 2018 with an annual interest rate of 8.25%, which is payable semi-annually in arrears on April 15 and October 15 of each year. The Senior Notes were sold at par, equating to an effective yield to maturity of approximately 8.25%. The net proceeds from the sale of the Senior Notes of approximately $292.6 million, after deducting fees and expenses of approximately $7.4 million, were used to repay borrowings under the Revolver. The Senior Notes are senior to any subordinated indebtedness, and are effectively subordinated to all of our secured indebtedness including the Revolver to the extent of the collateral securing that indebtedness. The obligations under the Senior Notes are fully and unconditionally guaranteed by our current and future subsidiaries, which are also guarantors under the Revolver.
As of June 30, 2011, our remaining borrowing capacity under the $1.0 billion Revolver of approximately $418.4 million is suffic
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