EV Energy Partners (EVEP) Revises Q4 Outlook; Guides FY15

EV Energy Partners (NASDAQ: EVEP) announced the following on Monday:

Revised Production Guidance for Fourth Quarter 2014 and Guidance for Full Year 2015

Fourth quarter 2014 production is expected to average approximately 171 mmcfe per day, or down approximately 2.7% from third quarter levels. During the quarter, production in West Virginia was down on average by 1.9 mmcfe per day due to a compressor change-out program by the operator.

Guidance for 2015 is presented below. As previously noted, E&P capital expenditures have been reduced to between $55 million and $65 million, as compared to approximately $100 million for 2014, and EVEP's 21% share of midstream capital expenditures is $26 million to $32 million. In addition, 2015 guidance does not include any incremental results from a potential reinvestment of approximately $33.8 million of like-kind exchange proceeds from the previously announced Eagle Ford formation rights sale that closed in the fourth quarter of 2014.

EVEP expects its 2016 UEO EBITDA to increase by approximately 50% over 2015 guidance as throughput and operations continue to grow.

Update on Utica East Ohio and Utica and Eagle Ford Acreage

In December, UEO completed and brought on line its fourth processing train and third fractionation facility, both of which were on time and on budget. Volumes continue to increase and there is a significant inventory of drilled and completed wells scheduled to be turned inline.

On the third quarter earnings call, the Partnership stated plans to monetize its 21 percent interest in UEO during 2015. EVEP is accelerating that process and would expect to utilize proceeds from a sale to reinvest in long-life, producing oil and gas properties. Management believes that such a sale and reinvestment would result in a significant increase to EBITDAX, borrowing base and liquidity.

EVEP had also communicated plans to market portions of its Utica acreage and Eagle Ford formation rights beginning in early 2015. Given the current commodity price environment, that process will likely be delayed. However, EVEP is exploring alternative structures with third parties to provide additional capital to drill undeveloped acreage and increase cash flow.

Credit Facility and Liquidity Update

As of December 31, 2014, outstanding borrowings under the credit facility were $531 million. In addition, the partnership has $33.8 million in proceeds from the its fourth quarter 2014 sale of Eagle Ford formation rights which, if not employed in a like-kind exchange for producing oil and gas properties, would be used to further reduce credit facility borrowings. The current borrowing base under the credit facility, which was reaffirmed in November 2014, is $730 million.

The Partnership is working with its bank group to amend its credit facility to include, among other things, an extension of the facility for five years, as well as an extension of its senior secured debt to EBITDAX covenant. Additional details will be available once the process has concluded.

Hedge Portfolio

Below is a summary of EVEP's current hedge portfolio.

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