Noble Midstream Partners Reports Fourth-Quarter and Full-Year 2020 Results

Rhea-AI Summary

Noble Midstream Partners LP (NASDAQ: NBLX) announced its fourth-quarter and full-year 2020 results, reporting a net income of $40 million and net cash from operating activities of $85 million. The Partnership gathered 286,000 gross barrels of oil and gas per day and significantly reduced flaring intensity by 53%. For 2021, guidance includes net income of $155-$185 million and free cash flow of $185-$220 million. Additionally, Noble Midstream received a non-binding acquisition proposal from Chevron for its publicly-held common units. A conference call is scheduled for today to discuss results and guidance.

Positive

• Fourth-quarter 2020 net income of $40 million and $85 million in net cash from operating activities.
• 2021 guidance projects free cash flow of $185 to $220 million and adjusted net EBITDA of $360 to $395 million.
• Gathered 286,000 gross barrels of oil and gas equivalent per day.
• Successfully reduced flaring intensity by 53% year-over-year.
• Initiated discussions regarding a non-binding acquisition offer from Chevron.

Negative

• Affiliate oil and gas gathering revenue decreased by 5% sequentially due to natural field declines.
• Operating expenses increased to $149 million due to higher fresh water delivery volumes and maintenance costs.
• Investment income losses of $9 million occurred related to ramping in the EPIC and Delaware Crossing Pipelines.

Noble Midstream Partners LP (NASDAQ: NBLX) (“Noble Midstream” or the “Partnership”) today reported fourth-quarter and full-year 2020 financial and operational results. The Partnership’s results are consolidated to include Noble Midstream’s 54.4% ownership of Black Diamond Gathering, LLC (“Black Diamond Gathering”). References to Equity Method Investments pertain to Noble Midstream’s equity interests in joint ventures that are not wholly-owned by the Partnership.

Certain results are shown as “attributable to the Partnership,” which exclude the noncontrolling interests in Black Diamond Gathering retained by Greenfield Midstream. Noble Midstream believes the results “attributable to the Partnership” provide the best representation of the ongoing operations from which the Partnership’s unitholders will benefit.

Fourth-Quarter 2020 and Recent Highlights

• Generated $40 million Net Income Attributable to the Partnership, $85 million Net Cash Provided by Operating Activities, and $95 million in Adjusted Net EBITDA^1,2
• Self-funded $7 million in net organic capital expenditures and $23 million in equity method investments
• Gathered 286,000 gross barrels of oil and gas equivalent per day (Boe/d) and 146,000 barrels of produced water per day (Bw/d)
• Delivered 89,000 Bw/d fresh water as producer activity resumes across the Partnership’s dedication areas
• Transported 768,000 gross (170,000 net) barrels of oil per day (Bbl/d) across intermediate and long-haul pipeline equity interests
• Reduced flaring intensity in the Delaware Basin 53% and overall volume of unintentional releases by 90+% year-over-year

2021 Investment Program and Operational Guidance

• $155 to $185 million in Net Income, $360 to $395 million in Adjusted Net EBITDA^1,2 and $185 to $220 million in Free Cash Flow¹
• Total capital investments of $80 to $110 million, including net organic capital expenditures of $65 to $85 million
• 275,000 to 305,000 Boe/d of oil and gas gathering volumes and 120,000 to 140,000 Bw/d of produced water gathering volumes
• Leverage of 3.6x to 4.0x Net Debt to Trailing Twelve Months (TTM) EBITDA¹

Robin Fielder, Chief Executive Officer of the Partnership stated, “Noble Midstream exited 2020 with five additional liquids transmission projects in-service while achieving material operating and capital cost savings during the year. These accomplishments, coupled with the resumption of completion activity late in 2020, position the Partnership for enhanced capital efficiency and returns. Our 2021 capital program is focused primarily on short-cycle investments, and we expect to generate material free cash flow and reduce leverage.”

		4Q20
Gross Volumes		Actuals
Oil and Gas Gathered (MBoe/d)		286
Produced Water Gathered (MBw/d)		146
Fresh Water Delivered (MBw/d)		89
Financials (in millions)
Net Income Attributable to the Partnership		$40
Net Cash Provided by Operating Activities		$85
Adjusted Net EBITDA1,2		$95
Distributable Cash Flow1		$74
Net Debt to Trailing Twelve Months Adjusted Net EBITDA1		4.1x
Organic Capital, Excluding Equity Investments		$7

Operational Momentum into New Year

Fourth-quarter 2020 revenues totaled $207 million, up 11% sequentially, due to an increase in fresh water delivery revenue and third-party crude oil sales. Affiliate oil and gas gathering revenue of $76 million and third-party oil and gas gathering revenue of $18 million both decreased 5% sequentially due to natural field declines.

Operating expenses for the fourth quarter totaled $149 million with $26 million in direct operating expenses. Direct operating expenses increased sequentially due to higher fresh water delivery volumes and one-time maintenance costs. The Partnership achieved more than $20 million in annual, overall direct operating cost savings, with roughly half sustainable at current activity levels. Investment income losses were $9 million, related to costs associated with the continued ramp in the EPIC and Delaware Crossing Pipelines.

The Partnership reported fourth-quarter 2020 Net Cash Provided by Operating Activities of $85 million and Adjusted Net EBITDA^1,2 of $95 million. For the year, the Partnership generated $377 million in Net Cash Provided by Operating Activities and $393 million in Adjusted Net EBITDA^1,2, above the midpoint of 2020 updated annual guidance range.

For the fourth-quarter 2020, maintenance capital expenditures and cash interest expense attributable to the Partnership totaled $7 million and $6 million, respectively, leading to $74 million Distributable Cash Flow¹ attributable to the Partnership.

Noble Midstream invested $7 million in fourth-quarter net organic capital expenditures with full year 2020 net capital of $63 million, below the lower end of the updated annual guidance range. Net equity method investments during the quarter totaled $23 million, including $17 million for EPIC Y-Grade and $5 million for EPIC Crude. For the year, net equity investment capital equaled $239 million.

Completion Activity Returned to Both Basins

In the Partnership’s wholly-owned DJ Basin assets, oil and gas gathering volumes averaged 154,000 Boe/d, down 10% sequentially, and produced water volumes averaged 29,000 Bw/d, flat sequentially. Noble Midstream connected 9 affiliate wells and 12 third-party wells in the DJ Basin. Fresh water delivery volumes averaged 89,000 Bw/d, and the Partnership delivered fresh water to 19 affiliate wells in the quarter. DJ Basin net capital expenditures totaled $0.9 million.

Black Diamond oil gathering throughput volumes averaged 66,000 Bo/d, excluding marketing volumes of 19,000 Bbl/d. Black Diamond connected 22 wells across 3 customers, totaling $1.6 million in fourth-quarter net capital expenditures.

In the Delaware Basin, quarterly oil and gas gathering throughput was 66,000 Boe/d, down 8% sequentially, and produced water gathering volumes were 117,000 Bw/d, down 7% from the third quarter. The Partnership connected 8 affiliate wells and had Delaware Basin net capital expenditures of $4.5 million.

Equity Method Investment Pipelines In Service

The Partnership averaged gross throughput of 768,000 Bbl/d (170,000 net) across its intermediate and long-haul transmission systems. Fourth-quarter equity method investment volumes and cash flows decreased sequentially due to an operational closure at the EPIC marine terminal.

Fourth-quarter 2020 Saddlehorn throughput averaged approximately 164,000 Bo/d. The 100,000 Bbl/d expansion has been completed in the first-quarter 2021. Volumes on the Advantage Pipeline system averaged 65,000 Bo/d, sequentially flat compared to the third-quarter 2020. Delaware Crossing averaged 18,000 Bbl/d in gathering and transportation volumes.

Fourth-Quarter Debt Reduction and Quarterly Distribution

As of December 31, 2020, the Partnership had $456 million in liquidity and $1.6 billion in total debt. During the quarter, Noble Midstream reduced its total debt balance by $35 million.

Noble Midstream’s current debt obligation of $500 million matures July 31, 2021. The Partnership is evaluating refinancing options with Chevron to address this obligation.

On January 22, 2021, the Board of Directors of Noble Midstream’s general partner, Noble Midstream GP LLC, declared a fourth-quarter cash distribution of $0.1875 per unit, flat versus third-quarter 2020.

2021 Outlook Highlighted by Growth in Free Cash Flow¹ Generation

Noble Midstream is reinstating oil, gas, and produced water volume guidance and estimates 2021 gross oil and gas gathering and sales volumes of 275,000 to 305,000 Boe/d and produced water volumes of 120,000 to 140,000 Bw/d.

In 2021, Noble Midstream anticipates 250 to 300 affiliate and third-party well connections in the DJ and Delaware basins. The Partnership anticipates 50 to 60 Chevron-affiliate well connections, including 45 to 55 connections in the Mustang Integrated Development Plan Area in the DJ Basin.

Third-party connection activity is anticipated to ramp up in 2021 with more than 175 well connections in the DJ Basin and 10 to 15 connections across multiple operators in the Delaware Basin. The Partnership anticipates connection activity to be first-half weighted in 2021 with more than 30 connections on wholly-owned dedication areas and more than 60 connections on Black Diamond dedication areas in the first-quarter 2021.

Noble Midstream is anticipating 2021 total capital expenditures of $80 to $110 million, including the EPIC Crude marine terminal construction and EPIC Y-Grade raw NGL line to Sweeny, Texas, associated with the BANGL joint venture.

The Partnership anticipates the midpoint of its Net Income Attributable to the Partnership to be $170 million with 2021 Adjusted Net EBITDA^1,2 of $360 to $395 million. At current activity levels, the Partnership estimates a range of $185 to $220 million in Free Cash Flow¹ generation in 2021.

Net Debt to TTM Adjusted Net EBITDA¹ expectations are anticipated to be 3.6x to 4.0x.

		2021 Guidance
Financials (in millions)
Net Income		$155		$185
Adjusted Net EBITDA 1,2		$360	-	$395
Free Cash Flow 1		$185	-	$220
Net Debt to TTM Adjusted Net EBITDA1		3.6x	-	4.0x
2021 Organic Capital		$65	-	$85
Equity Method Investment Capital		$15	-	$25

Noble Midstream Receives Non-Binding Chevron Offer to Acquire Outstanding LP Units

On February 5, 2021, Noble Midstream Partners received a non-binding proposal (the “Proposal”) from Chevron Corporation (“Chevron”) to acquire all of the publicly held common units representing limited partner interests in the Partnership not already owned by Chevron and its affiliates.

The Board of Directors of Noble Midstream GP LLC (the “General Partner”), the General Partner of Noble Midstream, has delegated authority to its conflicts committee to negotiate the terms of the proposed transaction on behalf of the unaffiliated Noble Midstream unitholders, as is customary in similar transactions. The Proposal is subject to the negotiation and execution of a definitive agreement, as well as approval by the Board of Directors of the General Partner. There is no assurance that any such approvals will be forthcoming, that such definitive agreement will be executed, or that any transaction will be consummated.

Conference Call

Noble Midstream will host a webcast and conference call today at 9:00 a.m. Central Time to discuss fourth quarter and full year 2020 financial and operational results as well as 2021 guidance. The live audio webcast and related presentation material is accessible on the ‘Investors’ page of the Partnership’s website at www.nblmidstream.com. Conference call numbers for participation are 877-883-0383, or 412-902-6506 for international calls. The passcode number is 8383676. A replay of the conference call will be available at the same web location following the event.

¹ Adjusted Net EBITDA, Free Cash Flow (FCF), Distributable Cash Flow (DCF), Distribution Coverage Ratio and Net Debt to TTM Adjusted Net EBITDA are not Generally Accepted Accounting Principles (GAAP) measures. Definitions and reconciliations of these Non-GAAP measures to their most directly comparable GAAP reporting measures appear in Schedule 4 attached hereto.

Noble Midstream does not provide guidance on the items used to reconcile between forecasted Adjusted Net EBITDA, FCF, DCF, Net Debt to TTM Adjusted Net EBITDA or Distribution Coverage Ratio and Net Cash Provided by Operating Activities due to the uncertainty regarding timing and estimates of certain of such items. Noble Midstream provides a range of such Non-GAAP financial measures to allow for the variability in timing and uncertainty of estimates of such reconciling items. Therefore, Noble Midstream cannot reconcile forecasted Adjusted Net EBITDA, FCF, DCF, Net Debt to TTM Adjusted Net EBITDA or Distribution Coverage Ratio to Net Cash Provided by Operating Activities without unreasonable effort. See Schedule 4 for further information.

² “Net” is equivalent to “attributable to the Partnership”.

About Noble Midstream

Noble Midstream is a master limited partnership originally formed by Noble Energy, Inc., and majority-owned by Chevron Corporation to own, operate, develop and acquire domestic midstream infrastructure assets. Noble Midstream currently provides crude oil, natural gas, and water-related midstream services and owns equity interests in oil pipelines in the DJ Basin in Colorado and the Delaware Basin in Texas. Noble Midstream strives to be the midstream provider and partner of choice for its safe operations, reliability, and strong relationships while enhancing value for all stakeholders. For more information, please visit www.nblmidstream.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the federal securities laws. Words such as “estimate,” “anticipate,” “believe,” “project,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “on schedule,” “on track,” “strategy” and other similar expressions may be used to identify forward-looking statements. Forward-looking statements are not statements of historical fact and reflect Noble Midstream Partners LP’s (“Noble Midstream,” “we,” or “our”) current views about future events. Our forward-looking statements may include statements about our business strategy, our industry, our future profitability, our expected capital expenditures and the impact of such expenditures on our performance, the costs of being a publicly traded partnership and our capital programs. In addition, our forward-looking statements address the various risks and uncertainties associated with the extraordinary market environment and impacts resulting from the COVID-19 pandemic and the actions of foreign oil producers (most notably Saudi Arabia and Russia) to maintain market share and impact commodity pricing and the expected impact on our business, operations, earnings and results. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Noble Midstream does not assume any obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.

Forward-looking statements are not guarantees of future performance, are based on certain assumptions, and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and difficult to predict, that could cause actual results to differ materially from those projected. These risks include, without limitation, changes in general economic conditions, including without limitation the impacts of the COVID-19 pandemic; our customers’ ability to meet their drilling and development plans; competitive conditions in the Partnership’s industry; actions taken by third-party operators, gatherers, processors and transporters; the demand for crude oil and natural gas gathering and processing services; our ability to successfully implement our business plan; our ability to complete internal growth projects on time and on budget; the ability of third parties to complete construction of pipelines in which Noble Midstream holds equity interests on time and on budget; the price and availability of debt and equity; the availability and price of crude oil and natural gas to the consumer compared to the price of alternative and competing fuels; risks associated with the change in ownership of our General Partner; and other risks inherent in the Partnership’s business, including those described under “Risk Factors” and “Disclosure Regarding Forward-Looking Statements” in Noble Midstream’s 2019 Annual Report on Form 10-K and in subsequent reports that we file with the U.S. Securities and Exchange Commission (SEC).

Non-GAAP Financial Measures

This news release also contains certain non-GAAP measures of financial performance that management believes are good tools for internal use and the investment community in evaluating Noble Midstream’s overall financial performance. Please see the attached schedules for reconciliations of the non-GAAP financial measures used in this news release to the most directly comparable GAAP financial measures and for the reasons why management believes non-GAAP measures provide useful information to investors.

No Offer or Solicitation

This press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the transaction or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Additional Information and Where You Can Find It

In connection with the proposal that Chevron made for a business combination transaction with Noble Midstream, subject to further developments and if a transaction is agreed, Chevron and Noble Midstream may file one or more registration statements, information statements, consent solicitation statements, proxy statements, prospectuses, or other documents with the SEC. INVESTORS AND SECURITY HOLDERS OF CHEVRON AND NOBLE MIDSTREAM ARE ADVISED TO CAREFULLY READ ANY REGISTRATION STATEMENT, INFORMATION STATEMENT, CONSENT SOLICITATION STATEMENT, PROXY STATEMENT, PROSPECTUS, OR OTHER DOCUMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION, THE PARTIES TO THE TRANSACTION AND THE RISKS ASSOCIATED WITH THE TRANSACTION. Any definitive information statement, consent solicitation statement, or proxy statement, if any when available, will be sent to security holders of Noble Midstream in connection with any solicitation of proxies or consents of Noble Midstream unitholders relating to the proposed transaction. Investors and security holders may obtain a free copy of such documents and other relevant documents (if and when available) filed by Chevron or Noble Midstream with the SEC from the SEC’s website at www.sec.gov. Security holders and other interested parties will also be able to obtain, without charge, a copy of such documents and other relevant documents (if and when available) from Chevron’s website at www.chevron.com under the “Investors” tab under the heading “SEC Filings” or from Noble Midstream’s website at www.nblmidstream.com under the “Investors” tab and the “SEC Filings” sub-tab.

Participants in the Solicitation

Chevron, Noble Midstream and their respective directors, executive officers and certain other members of management may be deemed to be participants in the solicitation of proxies and consents in respect of the transaction. Information about these persons is set forth in Chevron’s proxy statement relating to its 2020 Annual Meeting of Stockholders, which was filed with the SEC on April 7, 2020, and Noble Midstream’s Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on February 12, 2020, and subsequent statements of changes in beneficial ownership on file with the SEC. Security holders and investors may obtain additional information regarding the interests of such persons, which may be different than those of the respective companies’ security holders generally, by reading the consent solicitation statement prospectus statement, or other relevant documents regarding the transaction (if and when available), which may be filed with the SEC.

Schedule 1
Noble Midstream Partners LP
Revenue and Throughput Volume Statistics
(unaudited)
		Three Months Ended December 31,						Year Ended December 31,
		2020			2019			2020			2019
DJ Basin
Crude Oil Sales Volumes (Bbl/d)		18,458			10,935			16,964			9,354
Crude Oil Gathering Volumes (Bbl/d)		153,020			190,216			174,644			182,121
Natural Gas Gathering Volumes (MMBtu/d)		521,154			531,559			503,794			476,605
Natural Gas Processing Volumes (MMBtu/d)		40,959			47,712			41,511			50,039
Produced Water Gathering Volumes (Bbl/d)		28,532			37,122			35,190			39,629
Fresh Water Delivery Volumes (Bbl/d)		88,945			125,823			91,886			164,524
Delaware Basin
Crude Oil Gathering Volumes (Bbl/d)		46,906			59,671			54,347			49,842
Natural Gas Gathering Volumes (MMBtu/d)		147,539			200,491			166,032			155,155
Produced Water Gathering Volumes (Bbl/d)		117,299			181,581			138,449			148,886
Total Gathering Systems
Crude Oil Sales Volumes (Bbl/d)		18,458			10,935			16,964			9,354
Crude Oil Gathering Volumes (Bbl/d)		199,926			249,887			228,991			231,963
Natural Gas Gathering Volumes (MMBtu/d)		668,693			732,050			669,826			631,760
Total Barrels of Oil Equivalent (Boe/d) (1)		285,656			354,675			314,866			322,312
Natural Gas Processing Volumes (MMBtu/d)		40,959			47,712			41,511			50,039
Produced Water Gathering Volumes (Bbl/d)		145,831			218,703			173,639			188,515
Total Fresh Water Delivery
Fresh Water Services Volumes (Bbl/d)		88,945			125,823			91,886			164,524

Schedule 2
Noble Midstream Partners LP
Consolidated Statements of Operations
(in thousands, except per unit amounts, unaudited)
		Three Months Ended December 31,							Year Ended December 31,
		2020				2019			2020				2019
Revenues
Gathering and Processing — Affiliate		$	76,412			$	92,985		$	328,411			$	337,086
Gathering and Processing — Third Party			17,892				22,381			78,654				76,645
Fresh Water Delivery — Affiliate			15,515				10,765			57,834				77,566
Fresh Water Delivery — Third Party			67				4,196			7,680				12,591
Crude Oil Sales — Third Party			93,455				57,938			281,205				189,772
Other — Affiliate			788				790			2,947				3,183
Other — Third Party			3,136				1,710			7,894				6,958
Total Revenues			207,265				190,765			764,625				703,801
Costs and Expenses
Cost of Crude Oil Sales			89,626				56,173			270,678				181,390
Direct Operating			25,844				27,763			92,387				116,675
Depreciation and Amortization			26,969				25,396			105,697				96,981
General and Administrative			6,545				11,789			24,721				25,777
Goodwill Impairment			—				—			109,734				—
Other Operating Expense (Income)			(28	)			—			4,698				(488	)
Total Operating Expenses			148,956				121,121			607,915				420,335
Operating Income			58,309				69,644			156,710				283,466
Other (Income) Expense
Interest Expense, Net of Amount Capitalized			6,643				4,734			26,570				16,236
Investment Loss, Net			8,684				12,720			34,891				17,748
Total Other (Income) Expense			15,327				17,454			61,461				33,984
Income Before Income Taxes			42,982				52,190			95,249				249,482
Income Tax Expense			196				796			383				4,015
Net Income			42,786				51,394			94,866				245,467
Less: Net Income Prior to the Drop-Down and Simplification			—				1,692			—				12,929
Net Income Subsequent to the Drop-Down and Simplification			42,786				49,702			94,866				232,538
Less: Net Income (Loss) Attributable to Noncontrolling Interests			2,878				10,306			(39,165	)			72,542
Net Income Attributable to Noble Midstream Partners LP			39,908				39,396			134,031				159,996
Less: Net Income Attributable to Incentive Distribution Rights			—				—			—				13,967
Net Income Attributable to Limited Partners		$	39,908			$	39,396		$	134,031			$	146,029
Net Income Attributable to Limited Partners Per Limited Partner Unit — Basic
Common Units		$	0.44			$	0.65		$	1.49			$	3.09
Subordinated Units		$	—			$	—		$	—			$	3.86
Net Income Attributable to Limited Partners Per Limited Partner Unit — Diluted
Common Units		$	0.44			$	0.65		$	1.49			$	3.08
Subordinated Units		$	—			$	—		$	—			$	3.86
Weighted Average Limited Partner Units Outstanding — Basic
Common Units			90,173				60,431			90,165				40,083
Subordinated Units			—				—			—				5,795
Weighted Average Limited Partner Units Outstanding — Diluted
Common Units			90,201				60,454			90,167				40,105
Subordinated Units			—				—			—				5,795

Schedule 3
Noble Midstream Partners LP
Consolidated Balance Sheets
(in thousands, unaudited)
		December 31, 2020				December 31, 2019
ASSETS
Current Assets
Cash and Cash Equivalents		$	16,332			$	12,676
Accounts Receivable — Affiliate			55,011				42,428
Accounts Receivable — Third Party			45,615				44,093
Other Current Assets			8,093				8,730
Total Current Assets			125,051				107,927
Property, Plant and Equipment
Total Property, Plant and Equipment, Gross			2,074,790				2,006,995
Less: Accumulated Depreciation and Amortization			(315,441	)			(244,038	)
Total Property, Plant and Equipment, Net			1,759,349				1,762,957
Investments			904,955				660,778
Intangible Assets, Net			245,510				277,900
Goodwill			—				109,734
Other Noncurrent Assets			2,331				6,786
Total Assets		$	3,037,196			$	2,926,082
LIABILITIES, MEZZANINE EQUITY AND EQUITY
Current Liabilities
Accounts Payable — Affiliate		$	3,713			$	8,155
Accounts Payable — Trade			65,723				107,705
Current Portion of Debt			501,856				—
Other Current Liabilities			10,323				11,680
Total Current Liabilities			581,615				127,540
Long-Term Liabilities
Long-Term Debt			1,109,652				1,495,679
Asset Retirement Obligations			41,572				37,842
Other Long-Term Liabilities			4,006				4,160
Total Liabilities			1,736,845				1,665,221
Mezzanine Equity
Redeemable Noncontrolling Interest, Net			119,658				106,005
Equity
Common Units (90,174 and 90,136 units outstanding, respectively)			823,470				813,999
Noncontrolling Interests			357,223				340,857
Total Equity			1,180,693				1,154,856
Total Liabilities, Mezzanine Equity and Equity		$	3,037,196			$	2,926,082

Schedule 4
Noble Midstream Partners LP
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures

Non-GAAP Financial Measures

This news release, the financial tables and other supplemental information include Adjusted EBITDA, Adjusted Net EBITDA, FCF, DCF, Net Debt to TTM Adjusted Net EBITDA and Distribution Coverage Ratio, all of which are non-GAAP measures which may be used periodically by management when discussing our financial results with investors and analysts.

We define Adjusted EBITDA as net income before income taxes, net interest expense, depreciation and amortization and certain other items that we do not view as indicative of our ongoing performance. Additionally, Adjusted EBITDA reflects the adjusted earnings impact of our equity method investments by adjusting our equity earnings or losses from our equity method investments to reflect our proportionate share of the EBITDA of such equity method investments. We define Adjusted Net EBITDA as Adjusted EBITDA less the portion attributable to noncontrolling interests. We define Net Debt to TTM Adjusted Net EBITDA as Total Debt less cash and cash equivalents divided by the TTM Adjusted Net EBITDA. Net Debt to TTM Adjusted Net EBITDA is an annualized leverage ratio used by management to assess our ability to incur and service debt and fund capital expenditures.

Adjusted EBITDA and Adjusted Net EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, industry analysts, lenders and ratings agencies, to assess:

• our operating performance as compared to those of other companies in the midstream energy industry, without regard to financing methods, historical cost basis or capital structure;
• the ability of our assets to generate sufficient cash flow to make distributions to our partners;
• our ability to incur and service debt and fund capital expenditures; and
• the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

We define FCF as Net Cash Provided by Operating Activities before working capital less total capital expenditures, non-controlling interests and before equity distributions. DCF is defined as Adjusted Net EBITDA plus distributions received from our equity method investments less our proportionate share of Adjusted EBITDA from such equity method investments, estimated maintenance capital expenditures and cash interest paid.

FCF is used by management to evaluate our overall liquidity and DCF is used by management to evaluate our overall performance and liquidity. Our partnership agreement requires us to distribute all available cash on a quarterly basis, and FCF and DCF are factors used by the board of directors of our general partner to help determine the amount of available cash that is available to our unitholders for a given period. We define Distribution Coverage Ratio as DCF divided by total distributions declared. The Distribution Coverage Ratio is used by management to illustrate our ability to make our distributions each quarter.

We believe that the presentation of Adjusted EBITDA, Adjusted Net EBITDA, FCF, DCF, Net Debt to TTM Adjusted Net EBITDA and Distribution Coverage Ratio provide information useful to investors in assessing our financial condition and results of operations. The GAAP measures most directly comparable to Adjusted EBITDA, Adjusted Net EBITDA, Net Debt to TTM Adjusted Net EBITDA, DCF and Distribution Coverage Ratio is net income, and net debt to net income and net income to distributions as ratios. The GAAP measure most directly comparable to FCF is Net Cash Provided by Operating Activities, but due to the inability to accurately forecast working capital changes, we cannot reconcile FCF without unreasonable effort.

Adjusted EBITDA, Adjusted Net EBITDA, FCF, Net Debt to TTM Adjusted Net EBITDA, DCF and Distribution Coverage Ratio should not be considered alternatives to net income or any other measure of financial performance or liquidity presented in accordance with GAAP. Adjusted EBITDA, Adjusted Net EBITDA, FCF, Net Debt to TTM Adjusted Net EBITDA, DCF and Distribution Coverage Ratio exclude some, but not all, items that affect net income, and these measures may vary from those of other companies. As a result, Adjusted EBITDA, Adjusted Net EBITDA, FCF, Net Debt to TTM Adjusted Net EBITDA, DCF and Distribution Coverage Ratio as presented herein may not be comparable to similarly titled measures of other companies.

Noble Midstream does not provide guidance on the reconciling items between forecasted Adjusted Net EBITDA, FCF, Net Debt to TTM Adjusted Net EBITDA, DCF or Distribution Coverage Ratio and their most directly comparable GAAP reporting measures due to the uncertainty regarding timing and estimates of these items. Noble Midstream provides a range of such information to allow for the variability in timing and uncertainty of estimates of such reconciling items. Therefore, Noble Midstream cannot reconcile forecasted FCF, Net Debt to TTM Adjusted Net EBITDA, DCF or Distribution Coverage Ratio without unreasonable effort.

Schedule 4 (Continued)
Noble Midstream Partners LP
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
and Distributable Cash Flow (Non-GAAP)
(in thousands, unaudited)
		Three Months Ended December 31,							Trailing Twelve
		2020			2019				Months
Reconciliation from Net Income (GAAP)
Net Income		$	42,786		$	51,394			$	94,866
Add:
Depreciation and Amortization			26,969			25,396				105,697
Interest Expense, Net of Amount Capitalized			6,643			4,734				26,570
Proportionate Share of Equity Method Investment EBITDA Adjustments			25,781			6,330				82,363
Goodwill Impairment			—			—				109,734
Other			988			7,328				6,531
Adjusted EBITDA (Non-GAAP)			103,167			95,182				425,761
Less:
Adjusted EBITDA Prior to Drop-Down and Simplification Transaction			—			4,593				—
Adjusted EBITDA Subsequent to Drop-Down and Simplification (Non-GAAP)			103,167			90,589				425,761
Less:
Adjusted EBITDA Attributable to Noncontrolling Interests			8,315			17,202				32,835
Adjusted EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)			94,852			73,387				392,926
Add:
Distribution from Equity Method Investments Attributable to Noble Midstream Partners LP			5,260			1,480
Less:
Proportionate Share of Equity Method Investment EBITDA Attributable to Noble Midstream Partners LP			13,087			(7,247	)
Cash Interest Paid			6,415			9,772
Maintenance Capital Expenditures			6,612			7,011
Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)		$	73,998		$	65,331
Distributions (Declared)		$	16,917		$	62,004
Distribution Coverage Ratio (Declared)		4.4x			1.1x

Schedule 4 (Continued)
Noble Midstream Partners LP
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures
Reconciliation of Net Cash Provided by Operating Activities (GAAP) to
Adjusted EBITDA (Non-GAAP) and Distributable Cash Flow (Non-GAAP)
(in thousands, unaudited)
		Three Months Ended December 31,							Trailing Twelve
		2020			2019				Months
Reconciliation from Net Cash Provided by Operating Activities (GAAP)
Net Cash Provided by Operating Activities (GAAP)		$	85,219		$	95,106			$	376,629
Add:
Interest Expense, Net of Amount Capitalized			6,643			4,734				26,570
Changes in Operating Assets and Liabilities			2,817			(5,261	)			16,144
Equity Method Investment EBITDA Adjustments			8,436			(8,729	)			7,664
Other			52			9,332				(1,246	)
Adjusted EBITDA (Non-GAAP)			103,167			95,182				425,761
Less:
Adjusted EBITDA Prior to Drop-Down and Simplification Transaction			—			4,593				—
Adjusted EBITDA Subsequent to Drop-Down and Simplification Transaction			103,167			90,589				425,761
Less:
Adjusted EBITDA Attributable to Noncontrolling Interests			8,315			17,202				32,835
Adjusted EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)			94,852			73,387				392,926
Add:
Distribution from Equity Method Investments Attributable to Noble Midstream Partners LP			5,260			1,480
Less:
Proportionate Share of Equity Method Investment EBITDA Attributable to Noble Midstream Partners LP			13,087			(7,247	)
Cash Interest Paid			6,415			9,772
Maintenance Capital Expenditures			6,612			7,011
Distributable Cash Flow of Noble Midstream Partners LP (Non-GAAP)		$	73,998		$	65,331
Distributions (Declared)		$	16,917		$	62,004
Distribution Coverage Ratio (Declared)		4.4x			1.1x

Schedule 4 (Continued)
Noble Midstream Partners LP
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures
Calculation of Net Debt to Trailing Twelve Months Adjusted Net EBITDA
(in thousands, unaudited)
		December 31, 2020
Revolving Credit Facility, due March 9, 2023		710,000
Term Loan Credit Facility, due July 31, 2021		500,000
Term Loan Credit Facility, due August 23, 2022		400,000
Finance Lease Obligation		2,063
Total Debt		1,612,063
Less: Cash and Cash Equivalents		16,332
Net Debt		1,595,731
Trailing Twelve Months Adjusted Net EBITDA		392,926
Net Debt to Trailing Twelve Months Adjusted Net EBITDA		4.1x

Schedule 4 (Continued)
Noble Midstream Partners LP
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures
Reconciliation of 2021 GAAP Guidance to 2021 Non-GAAP Guidance
(in millions, unaudited)
		2021 Guidance Range
		Full Year
Reconciliation from Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
Net Income (GAAP)		$	155		-	$	185
Add:
Depreciation and Amortization		105				110
Interest Expense, Net of Amount Capitalized		36				32
Proportionate Share of Equity Method Investment EBITDA Adjustments		92				101
Other		2				2
Adjusted EBITDA (Non-GAAP)		390				430
Less:
Adjusted EBITDA Attributable to Noncontrolling Interests		30				35
Adjusted EBITDA Attributable to Noble Midstream Partners LP (Non-GAAP)		$	360		-	$	395

 

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FAQ

What were the financial results for Noble Midstream (NBLX) in Q4 2020?

Noble Midstream reported a net income of $40 million and net cash provided by operating activities of $85 million for Q4 2020.

What is the 2021 financial guidance for Noble Midstream (NBLX)?

Noble Midstream expects net income of $155 to $185 million and free cash flow of $185 to $220 million in 2021.

Did Noble Midstream (NBLX) announce any acquisition proposals?

Yes, Noble Midstream received a non-binding proposal from Chevron to acquire all publicly held common units not already owned by Chevron.

How much oil and gas did Noble Midstream (NBLX) gather in Q4 2020?

The Partnership gathered 286,000 gross barrels of oil and gas equivalent per day in Q4 2020.

What was the impact of operational costs on Noble Midstream (NBLX) in Q4 2020?

Operating expenses rose to $149 million in Q4 2020 due to higher fresh water delivery volumes and maintenance costs.