April 25, 2013 [4-Traders] - NuStar Energy L.P. announced that first quarter distributable cash flow from continuing operations available to limited partners was $54.7 million, compared to 2012 1Q distributable cash flow from continuing operations of $51.1 million. Construction on second rail Car off-loading facility at St. James terminal has begun.
First quarter earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations was $91.6 million compared to first quarter 2012 EBITDA of $106.3 million.
“Recent growth in the Eagle Ford Shale region and the sale of 50% of our Asphalt Operations in the third quarter of 2012 contributed to improved distributable cash flow results during the quarter,” said Curt Anastasio, President and Chief Executive Officer of NuStar Energy L.P. and NuStar GP Holdings, LLC. “We expect our 2013 distributable cash flow results to be higher than last year.”
In regard to the first quarter performance Anastasio said, “Our pipeline segment continues to benefit from several internal growth projects completed in the Eagle Ford shale region during the past couple of years and the December 2012 crude oil asset acquisition from TexStar.
Throughputs on our Eagle Ford crude oil pipeline systems increased by 55% compared to the first quarter of 2012, however these increases were partially offset by lower throughputs on some other pipelines as a result of turnarounds at some of our customer’s refineries.”
Anastasio then added, “Internal growth projects completed at our St. James and St. Eustatius terminal facilities in 2012 and during the first quarter of 2013 benefited our storage segment. However, these internal growth project benefits were more than offset by reduced demand for storage at several of our terminal facilities and the impact of the turnarounds and operating issues I mentioned earlier.”
Anastasio then commented on the company’s fuels marketing segment by saying, “Primarily as a result of weak demand for bunkers and fuel oil, coupled with increased competition in the Caribbean, our fuels marketing segment generated a loss during the quarter.”
Addressing the recent strategic transformation of the company Anastasio stated, “Beginning in the first quarter of 2013 NuStar has less exposure to margin-based operations than we have had in several years. This reduced margin-base exposure should lead to less volatile distributable cash flows in the future.”
Internal Growth Project Update
“Early in the first quarter we placed a total of 1.7 million barrels of new storage capacity in service at our St. Eustatius and St. James, Louisiana terminal facilities,” said Anastasio. “We continue to work on a pipeline project for ConocoPhillips and continue to lay crude oil gathering lines that will supply additional crude oil volumes to our Eagle Ford crude oil pipeline system. All of these projects are expected to contribute to 2013 storage and pipeline segment results.”
Anastasio went on to say, “NuStar recently began the construction of a second rail-car offloading facility at our St. James terminal with Great Northern Gathering & Marketing, LLC being a major customer. This facility should be operational and contributing to our storage segment results in the fourth quarter of 2013.”
Full-Year 2013 Outlook
Commenting on the earnings outlook for 2013, Anastasio said, “We continue to expect the EBITDA results for all three of our segments to be higher than last year.
Our pipeline segment should benefit from our Eagle Ford Shale region internal growth pipeline projects completed in 2012 and later in 2013 as well as from the crude oil assets acquired from TexStar.
The storage segment is projected to benefit from the completion of the two rail car offloading projects at our St. James, Louisiana terminal and the recent completion of the storage expansion projects at our St. Eustatius terminal and our St. James, Louisiana terminal.
Our fuels marketing segment’s 2013 results should improve over the remainder of 2013 and as compared to 2012, primarily due to higher earnings in the bunkering and heavy fuel oil operations.”
Anastasio then said, “These higher 2013 segment results should also lead to higher distributable cash flow and an improved coverage ratio for the year.”
With regard to capital spending projections Anastasio added, “NuStar expects to spend $400 to $425 million on internal growth projects during 2013, primarily on projects in the Eagle Ford Shale, while our reliability capital spending should be in the range of $35 to $45 million.”
