USD Partners LP Announces First Quarter 2018 Results
Houston, TX - USD Partners LP (NYSE: USDP) (the “Partnership”) announced today its operating and financial results for the three months ended March 31, 2018. Highlights with respect to the first quarter of 2018 include the following:
Generated Net Cash Provided by Operating Activities of $8.1 million, Adjusted EBITDA of $13.5 million and Distributable Cash Flow of $11.0 million
Reported Net Income of $6.6 million
Increased quarterly cash distribution to $0.3525 per unit ($1.41 per unit on an annualized basis), representing an increase of 5.2% over the first quarter of 2017
Ended quarter with $203.4 million of available liquidity and distribution coverage of approximately 1.2x
“Customer activity at our Hardisty origination terminal has ramped up substantially over the last several months and current market demand exceeds the available capacity at the terminal,” said Dan Borgen, the Partnership’s Chief Executive Officer. “Given the current market dynamics and the increased support from the Canadian railroads, we and our general partner are actively negotiating with current and new potential customers to extend the terms of our existing take-or pay agreements as well as evaluating a potential expansion to meet near-term demand. The recent success we had filling the remaining capacity at our Stroud terminal with crude originated at our Hardisty terminal simply validates the significant value our network can provide.”
This year, as oil sands production facilities have returned to normal operating levels and new production capacity has come online, Western Canadian Select, or WCS, crude oil supplies have begun to exceed available pipeline takeaway capacity. As a result, WCS spreads in relation to key benchmarks have discounted to levels approximately double the 2017 average. During the first quarter of 2018, apportionment levels on the largest heavy crude oil export pipeline system from Western Canada to the U.S. reached approximately 50% (representing the percentage of barrels nominated that were not shipped due to pipeline capacity constraints) and inventory levels built to historic highs as barrels not shipped were added to tank storage capacity. Furthermore, customer activity at the Partnership's Hardisty origination terminal increased substantially as strategically-located rail capacity has provided an export outlet for growing oil sands production.
In the second quarter of 2018, the WCS spread to West Texas Intermediate, or WTI, crude oil has tightened from over $25 to $15-$20 per barrel as seasonal maintenance at certain major oil sands production facilities has temporarily reduced the supply of crude oil to the market. Additionally, Canadian railroads have begun to facilitate increased shipments of crude oil unit trains, which has alleviated some of the congestion out of Western Canada. Despite growing railroad capability, including the Partnership’s expectation that the railroads will be able to service the full capacity at the Partnership’s Hardisty terminal by the end of the second quarter, we expect spreads to again discount to levels reached earlier in the year as production facilities complete seasonal maintenance and new production continues to ramp to full capacity throughout 2018.
The following information was filed by Usd Partners Lp (USDP) on Monday, May 7, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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Ticker: USDP CIK: 1610682 Form Type:10-Q Quarterly Report Accession Number: 0001610682-18-000065 Submitted to the SEC: Tue May 08 2018 4:20:41 PM EST Accepted by the SEC: Tue May 08 2018 Period: Saturday, March 31, 2018 Industry: Railroad Switching And Terminal Establishments