The largest portable propane cylinder exchanges
Business
The company owns crude oil pipelines, storage facilities, supply and logistics assets and refined products terminals across the Midwestern US. It also focuses on NGL distribution and sales, operating one of the largest portable propane cylinder exchanges in the US. For the six months ended June 30, 2014, it had nearly 20,000 barrels of crude oil per day in throughput (from none during the 1H13) and 2,700 Mgal/day of refined products (down from 2,800). JP Energy sold 42,000 barrels of crude oil/day (down from 51,000) and 199,000 Gal/day of NGL and refined products (up from 182,000).
JP Energy Partners LP is controlled by the energy investment firm ArcLight Capital (51% post-IPO stake), which made a $100 million equity commitment in 2011. JP Energy has made numerous acquisitions, including Wildcat Permian (October 2013), Parnon Gathering and Parnon Storage (August 2012), Falco (July 2012) and Heritage Propane (June 2012). For the first half of 2014, its largest customers were Glencore (37% of revenue), Chesapeake Energy Marketing (15%) and Phillips 66 (12%).
Financials
Revenue fell 12% to to $866 million for the six months ended June 30, 2014, primarily due to lower crude oil sales related to increased competition. Adjusted EBITDA dropped by half to $12 million during the 1H14 as crude oil supply and logistics faced unfavorable market conditions related to blending crude, partially offset by gains in crude oil pipelines and storage. The company also discovered a noncompliance with standard quality control that needed to be addressed.