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Investment bringing profits for MarkWest Energy Partners

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By Pam Kasey - email

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MarkWest Energy Partners L.P. on Feb. 27 reported profit of $38.1 million for the fourth quarter of 2012, $0.22 per share, up from a loss of $74.1 million or $0.87 per share a year ago.

Profit for the full year came in at $220 million, or $1.69 per share, up from $61 million or $0.75 per share in 2011.

Denver-based MarkWest is a publicly traded master limited partnership.

MarkWest provides midstream services for natural gas, natural gas liquids and crude oil. It is the largest processor of natural gas in the Marcellus Shale and the largest processor and fractionator of natural gas in the Appalachian Basin and maintains operations in southern West Virginia in its Northeast Segment and in northern West Virginia in its Liberty Segment.

The company invested nearly $2 billion in 2012, primarily in the Marcellus and Utica shale business units, according to Chairman, President and Chief Executive Officer Frank Semple.

Among capital projects completed in 2012 and highlighted in the earnings media release were the 200 million cubic feet per day, or MMcf/d, Sherwood I processing facility and associated gathering and compression that went online in Doddridge County in October; the 200 MMcf/d Mobley processing facility that started operation in Wetzel County in December; and, in the Utica Shale, the completion as part of a joint venture of a refrigeration facility at the Cadiz complex in Ohio in November.

Growth following from those investments shows up particularly in the operating results for the Liberty segment, which includes facilities in southwest Pennsylvania and northern West Virginia. There, the company saw the volume of natural gas processed increase from 324 MMcf/d in 2011 to 496 MMcf/d in 2012. Natural gas liquids fractionated grew from 11,800 barrels/day to 24,900 barrels per day, and natural gas liquids sales rose from 241 million gallons to 394 million gallons.

The company expects to invest between $1.5 and $1.8 billion in 2013 on additional capital projects that are supported by long-term, largely fee-based contracts, Semple said. In West Virginia, that includes completion of Sherwood II and Sherwood III cryogenic processing plants, totaling 400 MMcf/d, mid-year, and another 200 MMcf/d of processing at Mobley by the end of the year.

MarkWest shares trade on the New York Stock Exchange under the symbol MWE.

Trading, which has ranged from the mid-$40s to over $60 over the past year, closed at $55.87 on Feb. 27 before the earnings release.

The company will host a conference call and webcast on Thursday, Feb. 28, at noon Eastern Time to review its fourth quarter and full year 2012 financial results. Interested parties can participate in the call by dialing (800) 475-0218 and using passcode "MarkWest," and can access the webcast at the investor relations section at www.markwest.com.