Crestwood 2015: $2.3B Paper Loss, Marcellus Pipeline Volumes Up

Houston, TX-based Crestwood Midstream, which these days calls itself Crestwood Equity Partners, operates midstream businesses in multiple shale resource plays across the United States, including the Marcellus. Crestwood is engaged in gathering, processing, treating, compression, storage and transportation of natural gas, among many other activities. Crestwood owns the facility along the shore of Seneca Lake in New York where they want to convert a depleted underground salt cavern into a propane storage facility–something that protesters frequently get arrested for opposing (see Criminals Arrested Blocking Crestwood Seneca Lake Facility). Yesterday Crestwood issued their fourth quarter and full year 2015 update. The distressing news is that Crestwood lost $2.3 billion for the year. But let’s put that in context. Almost all of it was a paper loss. Of the $2.3 billion lost, $821 million was for depreciation of assets, and $1.4 billion was “goodwill impairment”–meaning the overall perception of the company’s value took a hit. In 2014 Crestwood lost just $10 million. We suspect the true money-out-of-pocket loss for Crestwood in 2015 was closer to $100 million, not nearly as bad as it seems at first. Below is a portion of the update, including a couple of Marcellus pipeline updates from the company…

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