(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
(NASDAQ Global Select Market) |
Number | Exhibit | ||
99.1 | |||
104 | Cover Page Interactive Data File (formatted as Inline XBRL). |
RATTLER MIDSTREAM LP | ||||
By: | Rattler Midstream GP LLC, its general partner | |||
Date: | February 18, 2020 | |||
By: | /s/ Teresa L. Dick | |||
Name: | Teresa L. Dick | |||
Title: | Chief Financial Officer, Executive Vice President and Assistant Secretary |
Exhibit 99.1 |
• | Q4 2019 consolidated net income (including non-controlling interest) of $51.6 million, consolidated adjusted EBITDA (as defined and reconciled below) of $71.0 million |
• | Board of directors of Rattler's general partner approved a cash distribution for the fourth quarter of 2019 of $0.29 per common unit ($1.16 annualized), up 16% from the initial annualized distribution |
• | Q4 2019 capital expenditures of $54.2 million |
• | Q4 2019 average produced water gathering and disposal volumes of 895 MBbl/d, up 6% over Q3 2019 and 164% over Q4 2018 |
• | Q4 2019 average sourced water volumes of 478 MBbl/d, up 25% over Q3 2019 and 137% over Q4 2018; 26% of total sourced water volumes in Q4 2019 was sourced from recycled produced water compared to ~10% for full year 2018 |
• | Q4 2019 average crude oil gathering volumes of 99 MBbl/d, up 11% over Q3 2019 and 63% over Q4 2018 |
• | Q4 2019 average gas gathering volumes of 104 BBtu/d, up 14% over Q3 2019 and 125% over Q4 2018 |
• | Entered into a 50/50 joint venture with Amarillo Midstream, LLC ("Amarillo Midstream"), a portfolio company of ArcLight Capital Partners, to operate a gas gathering and processing system and construct a new 60 MMcf/d cryogenic natural gas processing plant in Martin County for Diamondback's acreage acquired from Ajax Resources |
• | Rattler and Oryx Midstream, a portfolio company of Stonepeak Infrastructure Partners, through their newly created joint venture OMOG JV LLC ("OMOG"), acquired Reliance Gathering, LLC (now known as Oryx Midland Oil Gathering LLC) |
• | Full year 2019 consolidated net income (including non-controlling interest) of $185.7 million; up 195% from full year 2018 |
• | Full year 2019 consolidated adjusted EBITDA (as defined and reconciled below) of $264.7 million; up 151% from full year 2018 |
• | Full year 2019 capital expenditures of $241.8 million |
• | Full year 2019 average produced water gathering and disposal volumes of 806 MBbl/d, up 186% over full year 2018 |
• | Full year 2019 average sourced water volumes of 416 MBbl/d, up 65% full year 2018 |
• | Full year 2019 average crude oil gathering volumes of 85 MBbl/d, up 80% over full year 2018 |
• | Full year 2019 average gas gathering volumes of 85 BBtu/d, up 117% over full year 2018 |
Rattler Midstream LP Guidance | |
2020 | |
Rattler Operated Volumes (a) | |
Produced Water Gathering and Disposal Volumes (MBbl/d) | 950 - 1,050 |
Sourced Water Volumes (MBbl/d) | 400 - 475 |
Oil Gathering Volumes (MBbl/d) | 100 - 110 |
Gas Gathering Volumes (BBtu/d) | 100 - 120 |
Financial Metrics ($ millions except per unit metrics) | |
Adjusted EBITDA | $350 - $400 |
Equity Method Investment EBITDA(b) | $40 - $60 |
Operated Midstream Capex | $200 - $225 |
2020 Equity Method Investment Contributions(b) | $135 - $150 |
Total Remaining Equity Method Investment Contributions(b) | $170 - $185 |
Depreciation, Amortization & Accretion | $45 - $60 |
Annualized Distribution per Unit | $1.16 |
(a) | Does not include volumes from the EPIC, Gray Oak, Wink to Webster, OMOG and Amarillo Rattler joint ventures |
(b) | Includes EPIC, Gray Oak, Wink to Webster, OMOG and Amarillo Rattler joint ventures |
Rattler Midstream LP | |||||||
Consolidated Balance Sheets | |||||||
(unaudited, in thousands) | |||||||
December 31, | December 31, | ||||||
2019 | 2018 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash | $ | 10,633 | $ | 8,564 | |||
Accounts receivable—related party | 50,270 | 18,274 | |||||
Accounts receivable—third party | 9,071 | 1,849 | |||||
Sourced water inventory | 14,325 | 9,200 | |||||
Other current assets | 1,428 | 4,209 | |||||
Total current assets | 85,727 | 42,096 | |||||
Property, plant and equipment: | |||||||
Land | 88,509 | 70,373 | |||||
Property, plant and equipment | 930,768 | 415,888 | |||||
Accumulated depreciation, amortization and accretion | (61,132 | ) | (28,317 | ) | |||
Property, plant and equipment, net | 958,145 | 457,944 | |||||
Right of use assets | 418 | — | |||||
Equity method investments | 479,558 | — | |||||
Real estate assets, net | 98,679 | 93,023 | |||||
Intangible lease assets, net | 8,070 | 10,954 | |||||
Other assets | 5,796 | — | |||||
Total assets | $ | 1,636,393 | $ | 604,017 |
Rattler Midstream LP | |||||||
Consolidated Balance Sheets - Continued | |||||||
(unaudited, in thousands, except unit amounts) | |||||||
December 31, | December 31, | ||||||
2019 | 2018 | ||||||
Liabilities and Unitholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 147 | $ | 100 | |||
Accrued liabilities | 76,625 | 51,804 | |||||
Taxes payable | 189 | 11,514 | |||||
Short-term lease liability | 418 | — | |||||
Total current liabilities | 77,379 | 63,418 | |||||
Long-term debt | 424,000 | — | |||||
Asset retirement obligations | 11,347 | 561 | |||||
Deferred income taxes | 7,827 | 12,912 | |||||
Total liabilities | 520,553 | 76,891 | |||||
Commitment and contingencies | |||||||
Unitholders' equity: | |||||||
Limited partners member's equity—Diamondback | — | 527,125 | |||||
General partner—Diamondback | 979 | — | |||||
Common units—public (43,700,000 units issued and outstanding as of December 31, 2019) | 737,777 | — | |||||
Class B units—Diamondback (107,815,152 units issued and outstanding as of December 31, 2019) | 979 | 1 | |||||
Accumulated other comprehensive loss | (198 | ) | — | ||||
Total Rattler Midstream LP unitholders’ equity | 739,537 | 527,126 | |||||
Non-controlling interest | 376,928 | — | |||||
Non-controlling interest in accumulated other comprehensive loss | (625 | ) | — | ||||
Total equity | 1,115,840 | 527,126 | |||||
Total liabilities and unitholders’ equity | $ | 1,636,393 | $ | 604,017 |
Rattler Midstream LP | |||||||||||||||
Consolidated Statements of Operations | |||||||||||||||
(unaudited, in thousands, except per unit data) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Predecessor | Predecessor | ||||||||||||||
Revenues: | |||||||||||||||
Revenues—related party | $ | 112,612 | $ | 45,226 | $ | 409,120 | $ | 169,396 | |||||||
Revenues—third party | 8,919 | 3,013 | 24,324 | 3,292 | |||||||||||
Rental income—related party | 1,401 | 700 | 4,771 | 2,383 | |||||||||||
Rental income—third party | 1,891 | 2,072 | 7,890 | 8,125 | |||||||||||
Other real estate income—related party | 114 | (551 | ) | 379 | 228 | ||||||||||
Other real estate income—third party | 371 | 1,043 | 1,189 | 1,043 | |||||||||||
Total revenues | 125,308 | 51,503 | 447,673 | 184,467 | |||||||||||
Costs and expenses: | |||||||||||||||
Direct operating expenses | 29,930 | 9,058 | 106,311 | 33,714 | |||||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 16,604 | 14,484 | 62,856 | 38,852 | |||||||||||
Real estate operating expenses | 680 | 501 | 2,643 | 1,872 | |||||||||||
Depreciation, amortization and accretion | 10,538 | 7,304 | 42,336 | 25,134 | |||||||||||
General and administrative expenses | 4,986 | 590 | 12,663 | 1,999 | |||||||||||
Loss on disposal of property, plant and equipment | 1,528 | 9 | 1,524 | 2,577 | |||||||||||
Total costs and expenses | 64,266 | 31,946 | 228,333 | 104,148 | |||||||||||
Income from operations | 61,042 | 19,557 | 219,340 | 80,319 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (401 | ) | — | (1,039 | ) | — | |||||||||
Loss from equity method investments | (5,634 | ) | — | (6,329 | ) | — | |||||||||
Total other income (expense), net | (6,035 | ) | — | (7,368 | ) | — | |||||||||
Net income before income taxes | 55,007 | 19,557 | 211,972 | 80,319 | |||||||||||
Provision for income taxes | 3,403 | 4,245 | 26,253 | 17,359 | |||||||||||
Net income after taxes | $ | 51,604 | $ | 15,312 | $ | 185,719 | $ | 62,960 | |||||||
Net income before initial public offering | $ | 65,995 | |||||||||||||
Net income subsequent to initial public offering | $ | 119,724 | |||||||||||||
Net income attributable to non-controlling interest subsequent to initial public offering | 39,136 | 90,922 | |||||||||||||
Net income attributable to Rattler Midstream LP | $ | 12,468 | $ | 28,802 | |||||||||||
Net income attributable to limited partners per common unit - subsequent to initial public offering: | |||||||||||||||
Basic | $ | 0.27 | $ | 0.64 | |||||||||||
Diluted | $ | 0.27 | $ | 0.64 | |||||||||||
Weighted average number of limited partner common units outstanding: | |||||||||||||||
Basic | 43,700 | 43,622 | |||||||||||||
Diluted | 43,700 | 43,622 |
Rattler Midstream LP | |||||||
Consolidated Statements of Cash Flows | |||||||
(unaudited, in thousands) | |||||||
Year Ended December 31, | |||||||
2019 | 2018 | ||||||
Predecessor | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 185,719 | $ | 62,960 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for deferred income taxes | 26,253 | 5,845 | |||||
Depreciation, amortization and accretion | 42,336 | 25,134 | |||||
Loss on disposal of property, plant and equipment | 1,524 | 2,577 | |||||
Unit-based compensation expense | 5,208 | — | |||||
Expense from equity method investment | 6,329 | — | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable—related party | (65,032 | ) | 17,625 | ||||
Accounts receivable—third party | (1,212 | ) | (1,849 | ) | |||
Accounts payable, accrued liabilities and taxes payable | 34,299 | 61,139 | |||||
Other | (17,231 | ) | — | ||||
Net cash provided by operating activities | 218,193 | 173,431 | |||||
Cash flows from investing activities: | |||||||
Additions to property, plant and equipment | (241,786 | ) | (164,876 | ) | |||
Contributions to equity method investments | (336,601 | ) | — | ||||
Proceeds from the sale of fixed assets | 18 | — | |||||
Net cash used in investing activities | (578,369 | ) | (164,876 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings from credit facility | 463,000 | — | |||||
Payments on credit facility | (39,000 | ) | — | ||||
Distribution equivalent rights | (751 | ) | — | ||||
Debt issuance costs | (4,310 | ) | — | ||||
Net proceeds from initial public offering—public | 719,377 | — | |||||
Net proceeds from initial public offering—General Partner | 1,000 | — | |||||
Net proceeds from initial public offering—Diamondback | 999 | 1 | |||||
Distribution to General Partner | (21 | ) | — | ||||
Distribution to public | (14,858 | ) | — | ||||
Distribution to Diamondback | (763,191 | ) | — | ||||
Net cash provided by financing activities | 362,245 | 1 | |||||
Net increase in cash | 2,069 | 8,556 | |||||
Cash at beginning of period | 8,564 | 8 | |||||
Cash at end of period | $ | 10,633 | $ | 8,564 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest paid | $ | 2,707 | $ | — | |||
Supplemental disclosure of non-cash financing activity: | |||||||
Contributions from Diamondback | $ | 456,055 | $ | 171,557 | |||
Rattler Midstream LP | |||||||
Consolidated Statements of Cash Flows | |||||||
(unaudited, in thousands) | |||||||
Year Ended December 31, | |||||||
2019 | 2018 | ||||||
Predecessor | |||||||
Supplemental disclosure of non-cash investing activity: | |||||||
Increase in long term assets and inventory due to contributions from Diamondback | $ | 456,055 | $ | 171,557 | |||
Change in accrued liabilities related to property, plant and equipment | $ | 4,176 | $ | 2,693 |
Rattler Midstream LP | ||||||||
Pipeline Infrastructure Assets | ||||||||
(unaudited, in miles) | ||||||||
(miles) | Delaware Basin | Midland Basin | Permian Total | |||||
Crude oil | 104 | 44 | 148 | |||||
Natural gas | 148 | — | 148 | |||||
Produced water | 257 | 217 | 474 | |||||
Sourced water | 26 | 71 | 97 | |||||
Total | 535 | 332 | 867 |
Rattler Midstream LP | |||||||||||
Capacity/Capability | |||||||||||
(unaudited) | |||||||||||
(capacity/capability) | Delaware Basin | Midland Basin | Permian Total | Utilization | |||||||
Crude oil gathering (Bbl/d) | 180,000 | 56,000 | 236,000 | 42 | % | ||||||
Natural gas compression (Mcf/d) | 135,000 | — | 135,000 | 70 | % | ||||||
Natural gas gathering (Mcf/d) | 150,000 | — | 150,000 | 56 | % | ||||||
Produced water gathering and disposal (Bbl/d) | 1,576,500 | 1,732,300 | 3,308,800 | 27 | % | ||||||
Sourced water (Bbl/d) | 120,000 | 455,000 | 575,000 | 83 | % |
Rattler Midstream LP | |||||||||||
Throughput and Volumes | |||||||||||
(unaudited) | |||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
(throughput) | 2019 | 2018 | 2019 | 2018 | |||||||
Crude oil gathering volumes (Bbl/d) | 98,725 | 60,581 | 85,164 | 47,338 | |||||||
Natural gas gathering volumes (MMBtu/d) | 104,169 | 46,196 | 85,283 | 39,252 | |||||||
Produced water gathering and disposal volumes (Bbl/d) | 894,693 | 339,110 | 806,078 | 281,916 | |||||||
Sourced water gathering volumes (Bbl/d) | 478,232 | 202,177 | 415,939 | 252,118 |
Rattler Midstream LP | |||||||||||||||
(unaudited, in thousands) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Reconciliation of Net Income to Adjusted EBITDA: | |||||||||||||||
Net income | $ | 51,604 | $ | 15,312 | $ | 185,719 | $ | 62,960 | |||||||
Depreciation, amortization and accretion | 10,538 | 7,304 | 42,336 | 25,134 | |||||||||||
Interest expense, net of amount capitalized | 401 | — | 1,039 | — | |||||||||||
Interest expense (income) related to equity method investments | (156 | ) | — | 1,005 | — | ||||||||||
Depreciation related to equity method investments | 1,443 | — | 1,636 | — | |||||||||||
Non-cash unit-based compensation expense | 2,219 | — | 5,208 | — | |||||||||||
Other non-cash transactions | 1,528 | — | 1,528 | — | |||||||||||
Provision for income taxes | 3,403 | 4,245 | 26,253 | 17,359 | |||||||||||
Adjusted EBITDA | 70,980 | $ | 26,861 | 264,724 | $ | 105,453 | |||||||||
Less: Adjusted EBITDA prior to the IPO | — | (100,743 | ) | ||||||||||||
Adjusted EBITDA subsequent to the IPO | 70,980 | 163,981 | |||||||||||||
Less: Adjusted EBITDA attributable to non-controlling interest | (50,508 | ) | (116,685 | ) | |||||||||||
Adjusted EBITDA attributable to Rattler Midstream LP | $ | 20,472 | $ | 47,296 |