MWP Markwest Hydrocarbon,

DENVER, Nov. 7 /PRNewswire-FirstCall/ -- MarkWest Hydrocarbon, Inc. (AMEX:MWP) (the "Company") today reported net income of $10.0 million for the three months ended September 30, 2006, or $0.83 per diluted share, compared to a net loss of $5.7 million, or $0.48 per diluted share, for the third quarter of 2005. The Company also reported net income of $10.7 million for the nine months ended September 30, 2006, or $0.89 per diluted share, compared to a net loss of $5.8 million, or $0.49 per diluted share, for the same period in 2005. "We had another outstanding quarter as a result of MarkWest Energy Partners' distribution growth and strong operating cash flow performance from our NGL marketing business," said Frank Semple, President and Chief Executive Officer. "The partnership has increased distributions per unit 18.3% through the first three quarters of 2006 and is well positioned for future growth. Our NGL marketing business experienced record margins as a result of the strong frac spread environment and approximately 70% of our sales are now hedged through the second quarter of 2007." The Company declared a quarterly cash dividend of $0.28 per share of its common stock for an implied annual rate of $1.12 per share to be paid on November 21, 2006, to shareholders of record as of November 9, 2006. This quarterly cash dividend represents an increase of $0.04 per share over the previous quarter's dividend. The Company reports its operations under two business segments, MarkWest Hydrocarbon Standalone ("Standalone") and MarkWest Energy Partners (the "Partnership"). MarkWest Hydrocarbon's share of net income attributable to MarkWest Energy Partners (net of the eliminating entry for non-controlling interest in net income of consolidated subsidiary) was $3.5 million in the third quarter of 2006, up from $0.6 million in the third quarter of 2005. For the nine months ended September 30, 2006 the Company's share was $10.2 million, up from $1.9 million for the same period in 2005. A key element of MarkWest Hydrocarbon's activity is the cash distributions it receives on its ownership interest in MarkWest Energy Partners, L.P., which consists of approximately 2.5 million limited partner units, its 2% general partner interest and its incentive distribution rights. MarkWest Hydrocarbon received $5.7 million in distributions in the third quarter of 2006, which represents an 84% increase over the $3.1 million received in the third quarter of 2005. The Standalone business segment consists of the Company's natural gas liquid (NGL) marketing activities for our NGL's extracted primarily at MarkWest Energy Partners Siloam facility; the management of our keep-whole contracts in Appalachia and a wholesale propane marketing business. For the three months ended September 30, 2006, our Standalone segment reported net income of $10.0 million, an increase of $15.7 million when compared to the $5.7 million of net losses for the same period in 2005. This result is summarized as follows: * We reported an unrealized gain of $10.3 million for the mark-to-market of our 2006/2007 derivative instruments related to our Standalone operations, compared to none in 2005. The revaluation of our long-term shrink obligation increased revenue by $1.7 million in the third quarter of 2006 compared to a $7.5 million decrease in 2005, resulting in a $9.2 million positive impact to the quarter-over-quarter comparison. Both of these items are non-cash adjustments. * Our realized frac spread improved significantly compared to the prior year (approximately $0.50 per gallon in 2006 vs. approximately $0.20 per gallon in 2005). This was slightly offset by a 0.8 million gallon decrease in frac spread sales. The net effect was a $6.3 million positive impact on segment net income. * Selling, general & administrative expense increased by $3.4 million. Non-cash compensation expense accounted for $2.4 million of this increase. * Income tax expense increased $8.3 million, which is primarily a function of our 35% tax rate applied to the $23.9 million pre-tax increase in net income. The Company will host a conference call November 8, 2006, at 2:00 P.M. MST to review its third quarter 2006 earnings. Interested parties can participate in the call by dialing the following number approximately ten minutes prior to the scheduled start time: (800) 218-0713. A replay of the call will be available through November 15, 2006 by dialing (800) 405-2236 and entering the following passcode: 11074131#. To access the webcast, please visit our website at http://www.markwest.com/. MarkWest Hydrocarbon, Inc. (AMEX:MWP) controls and operates MarkWest Energy Partners, L.P. (AMEX:MWE), a publicly traded limited partnership engaged in the gathering, processing and transmission of natural gas; the transportation, fractionation and storage of natural gas liquids; and the gathering and transportation of crude oil. We also market natural gas and NGLs. This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect our operations, financial performance and other factors as discussed in our filings with the Securities and Exchange Commission. Among the factors that could cause results to differ materially are those risks discussed in our Form 10-K for the year ended December 31, 2005 as filed with the SEC. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." MarkWest Hydrocarbon, Inc. Statement of Operations (in thousands, except per share amounts) Three months ended Nine months ended September 30, September 30, 2006 2005 2006 2005 Revenues: Revenues $183,516 $171,673 $610,985 $451,779 Derivative gains / (losses) 22,721 (1,048) 8,406 (1,761) Total revenue 206,237 170,625 619,391 450,018 Operating expenses: Purchased product costs 108,220 145,876 406,245 362,929 Facility expenses 14,656 12,082 42,577 32,327 Selling, general and administrative expenses 19,069 7,913 43,506 25,140 Depreciation 8,126 5,025 23,282 14,761 Amortization of intangible assets 4,029 2,098 12,072 6,288 Accretion of asset retirement obligations 24 116 75 137 Total operating expenses 154,124 173,110 527,757 441,582 Income (loss) from operations 52,113 (2,485) 91,634 8,436 Other income (expense): Earnings (losses) from unconsolidated affiliates 1,067 (999) 3,240 (9) Interest income 264 271 1,106 841 Interest expense (9,583) (4,980) (31,425) (13,273) Amortization of deferred financing costs and original issue discount (a component of interest expense) (6,121) (557) (7,805) (1,651) Dividend income 112 101 327 289 Miscellaneous income 3,978 65 7,737 300 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes 41,830 (8,584) 64,814 (5,067) Income tax benefit (expense) Current (3,283) -- (2,854) -- Deferred (2,105) 2,868 (3,001) 2,900 Income tax benefit (expense) (5,388) 2,868 (5,855) 2,900 Non-controlling interest in net income of consolidated subsidiary (26,438) 28 (48,255) (3,591) Net income (loss) $10,004 $(5,688) $10,704 $(5,758) Net income (loss) per share: Basic $0.84 $(0.48) $0.90 $ (0.49) Diluted $0.83 $(0.48) $0.89 $ (0.49) Weighted average number of outstanding shares of common stock (December 31, 2005 adjusted to reflect May 23, 2006 Stock Dividend, see Note 2): Basic 11,956 11,872 11,933 11,859 Diluted 12,015 11,872 12,021 11,859 MarkWest Hydrocarbon, Inc. Segment Income (Loss) (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Three months ended September 30, 2006: Revenues: Revenue $53,223 $ 149,987 $(19,694) $ 183,516 Derivative gains 10,051 12,670 - 22,721 Total revenue 63,274 162,657 (19,694) 206,237 Purchased product costs 40,150 81,816 (13,746) 108,220 Facility expenses 5,099 15,505 (5,948) 14,656 Selling, general and administrative expenses 5,991 13,078 -- 19,069 Depreciation 221 7,905 -- 8,126 Amortization of intangible assets -- 4,029 -- 4,029 Accretion of asset retirement and lease obligations -- 24 -- 24 Income from operations 11,813 40,300 -- 52,113 Other income (expense): Earnings from unconsolidated affiliates -- 1,067 -- 1,067 Interest income 34 230 -- 264 Interest expense (60) (9,523) -- (9,583) Amortization of deferred financing costs and original issue discount (a component of interest expense) (55) (6,066) -- (6,121) Dividend income 112 -- -- 112 Miscellaneous income 8 3,970 -- 3,978 Income before non-controlling interest in net income of consolidated subsidiary and income taxes 11,852 29,978 -- 41,830 Income tax expense (5,388) -- -- (5,388) Non-controlling interest in net income of consolidated subsidiary -- -- (26,438) (26,438) Interest in net income of consolidated subsidiary 3,540 -- (3,540) -- Net income (loss) $10,004 $29,978 $(29,978) $10,004 MarkWest Hydrocarbon, Inc. Segment Income (Loss) (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Three months ended September 30, 2005: Revenues: Revenue $56,859 $130,835 $(16,021) $ 171,673 Derivative (losses) (781) (267) -- (1,048) Total revenue 56,078 130,568 (16,021) 170,625 Purchased product costs 57,789 98,874 (10,787) 145,876 Facility expenses 4,802 12,514 (5,234) 12,082 Selling, general and administrative expenses 2,591 5,322 -- 7,913 Depreciation 254 4,771 -- 5,025 Amortization of intangible assets -- 2,098 -- 2,098 Accretion of asset retirement and lease obligations (1) 117 -- 116 Income (loss) from operations (9,357) 6,872 -- (2,485) Other income (expense): Losses from unconsolidated affiliates -- (999) -- (999) Interest income 191 80 -- 271 Interest expense (30) (4,950) -- (4,980) Amortization of deferred financing costs and original issue discount (a component of interest expense) (61) (496) -- (557) Dividend income 101 -- -- 101 Miscellaneous income 47 18 -- 65 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes (9,109) 525 -- (8,584) Income tax benefit 2,868 -- -- 2,868 Non-controlling interest in net income of consolidated subsidiary -- 77 (49) 28 Interest in net income of consolidated subsidiary 553 -- (553) -- Net income (loss) $(5,688) $602 $(602) $(5,688) MarkWest Hydrocarbon, Inc. Segment Income (Loss) (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Nine months ended September 30, 2006: Revenues: Revenue $217,503 $448,770 $(55,288) $610,985 Derivative gains 2,397 6,009 -- 8,406 Total revenue 219,900 454,779 (55,288) 619,391 Purchased product costs 184,781 258,791 (37,327) 406,245 Facility expenses 15,574 44,964 (17,961) 42,577 Selling, general and administrative expenses 13,102 30,404 -- 43,506 Depreciation 820 22,462 -- 23,282 Amortization of intangible assets -- 12,072 -- 12,072 Accretion of asset retirement and lease obligations -- 75 -- 75 Income from operations 5,623 86,011 -- 91,634 Other income (expense): Earnings from unconsolidated affiliates -- 3,240 -- 3,240 Interest income 397 709 -- 1,106 Interest expense (212) (31,213) -- (31,425) Amortization of deferred financing costs and original issue discount (a component of interest expense) (105) (7,700) -- (7,805) Dividend income 327 -- -- 327 Miscellaneous income 160 7,577 -- 7,737 Income before non-controlling interest in net income of consolidated subsidiary and income taxes 6,190 58,624 -- 64,814 Income tax benefit (expense) (5,719) (679) 543 (5,855) Non-controlling interest in net income of consolidated subsidiary -- -- (48,255) (48,255) Interest in net income of consolidated subsidiary 10,233 -- (10,233) -- Net income (loss) $10,704 $57,945 $(57,945) $10,704 MarkWest Hydrocarbon, Inc. Segment Income (Loss) (in thousands) MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Total Nine months ended September 30, 2005: Revenues: Revenue $174,733 $ 323,579 $(46,533) $ 451,779 Derivative (losses) (1,347) (414) -- (1,761) Total revenue 173,386 323,165 (46,533) 450,018 Purchased product costs 159,340 233,521 (29,932) 362,929 Facility expenses 15,723 33,205 (16,601) 32,327 Selling, general and administrative expenses 8,653 16,487 -- 25,140 Depreciation 1,088 13,673 -- 14,761 Amortization of intangible assets -- 6,288 -- 6,288 Accretion of asset retirement and lease obligations 1 136 -- 137 Income (loss) from operations (11,419) 19,855 -- 8,436 Other income (expense): Losses from unconsolidated affiliates -- (9) -- (9) Interest income 631 210 -- 841 Interest expense (91) (13,182) -- (13,273) Amortization of deferred financing costs and original issue discount (a component of interest expense) (183) (1,468) -- (1,651) Dividend income 289 -- -- 289 Miscellaneous income 244 56 -- 300 Income (loss) before non-controlling interest in net income of consolidated subsidiary and income taxes (10,529) 5,462 -- (5,067) Income tax benefit 2,900 -- -- 2,900 Non-controlling interest in net income of consolidated subsidiary -- 76 (3,667) (3,591) Interest in net income of consolidated subsidiary 1,871 -- (1,871) -- Net income (loss) $(5,758) $5,538 $(5,538) $(5,758) MarkWest Hydrocarbon, Inc. Segment Balance Sheet (in thousands) September 30, 2006 MarkWest MarkWest Hydrocarbon Energy Consolidating Standalone Partners Entries Consolidated ASSETS Current assets: Cash and cash equivalents $6,201 $30,599 $-- $36,800 Marketable securities 7,056 -- -- 7,056 Receivables 13,454 86,485 (5,862) 94,077 Inventories 42,306 3,993 -- 46,299 Fair value of derivative instruments 4,329 5,947 -- 10,276 Other current assets 9,077 4,344 -- 13,421 Total current assets 82,423 131,368 (5,862) 207,929 Property, plant and equipment, net 2,940 514,819 -- 517,759 Investment in and advances to other equity investee 13,170 59,596 (13,170) 59,596 Fair value of derivative instruments -- 3,236 -- 3,236 Other long term assets 3,087 352,955 -- 356,042 Total assets $101,620 $1,061,974 $(19,032) $1,144,562 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $25,399 $122,928 $(5,862) $142,465 Fair value of derivative instruments 1,677 1,724 -- 3,401 Deferred income taxes 627 -- -- 627 Current portion of long term debt -- -- -- -- Total current liabilities 27,703 124,652 (5,862) 146,493 Long-term debt -- 479,654 -- 479,654 Deferred income taxes 6,352 679 (543) 6,488 Non-controlling interest in consolidated subsidiary 710 -- 442,596 443,306 Fair value of derivative instruments -- 522 -- 522 Other long-term liabilities 21,460 1,244 -- 22,704 Total liabilities 56,225 606,751 436,191 1,099,167 Total stockholders' equity 45,395 455,223 (455,223) 45,395 Total liabilities and stockholders' equity $101,620 $1,061,974 $(19,032) $1,144,562 MarkWest Hydrocarbon, Inc. Segment Balance Sheet (in thousands) December 31, 2005 MarkWest MarkWest Hydrocarbon Energy Eliminating Standalone Partners Entries Consolidated ASSETS Current assets: Cash and cash equivalents $863 $20,105 $-- $20,968 Marketable securities 6,070 -- -- 6,070 Receivables 38,922 117,978 (11,361) 145,539 Inventories 37,513 3,554 -- 41,067 Other 9,453 6,861 -- 16,314 Total current assets 92,821 148,498 (11,361) 229,958 Property, plant and equipment, net 1,737 492,961 -- 494,698 Investment in and advances to other equity investee 6,668 182 (6,668) 182 Other assets 3,014 404,452 -- 407,466 Total assets $104,240 $1,046,093 $(18,029) $1,132,304 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $43,247 $133,088 $(11,361) $164,974 Fair value of derivative instruments -- 728 -- 728 Deferred income taxes 362 -- -- 362 Current portion of long term debt -- 2,738 -- 2,738 Total current liabilities 43,609 136,554 (11,361) 168,802 Long-term debt 7,500 601,262 -- 608,762 Non-controlling interest in consolidated subsidiary 508 -- 300,507 301,015 Other long-term liabilities 12,641 1,102 -- 13,743 Total liabilities 64,258 738,918 289,146 1,092,322 Total stockholders' equity 39,982 307,175 (307,175) 39,982 Total liabilities and stockholders' equity $104,240 $1,046,093 $(18,029) $1,132,304 MarkWest Hydrocarbon, Inc. Operating Statistics Three months ended Nine months ended September 30, September 30, 2006 2005 2006 2005 MarkWest Hydrocarbon Standalone: Marketing Hydrocarbon frac spread sales (gallons) 22,103,000 22,871,000 80,615,000 85,433,000 Maytown sales (gallons) 11,275,000 10,132,000 32,226,000 31,051,000 Total NGL product sales (gallons) 33,378,000 33,003,000 112,841,000 116,484,000 Wholesale NGL product sales (gallons) 4,052,000 14,815,000 39,115,000 41,574,000 MarkWest Energy Partners: Southwest: East Texas Gathering systems throughput (Mcf/d) 393,000 330,000 371,000 313,000 NGL product sales (gallons) 42,015,000 38,362,000 117,912,000 88,958,000 Oklahoma Foss Lake gathering systems throughput (Mcf/d) 86,000 81,000 86,000 73,000 Arapaho NGL product sales (gallons) 19,553,000 14,506,000 57,586,000 46,180,000 Other Appleby gathering systems throughput (Mcf/d) 34,000 38,000 34,000 33,000 Other gathering systems throughput (Mcf/d) 18,000 16,000 20,000 16,000 Lateral throughput volumes (Mcf/d) 111,000 126,000 84,000 90,000 Appalachia: Natural gas processed for a fee (Mcf/d) 198,000 188,000 200,000 197,000 NGLs fractionated for a fee (Gal/day) 453,000 396,000 451,000 426,000 NGL product sales (gallons) 11,275,000 10,132,000 32,226,000 31,051,000 Michigan: Natural gas processed for a fee (Mcf/d) 7,300 6,500 6,500 6,700 NGL product sales (gallons) 1,501,000 1,391,000 4,344,000 4,447,000 Crude oil transported for a fee (Bbl/d) 14,600 14,100 14,600 14,100 Gulf Coast: Natural gas processed for a fee (Mcf/d) 125,000 NA 125,000 NA NGLs fractionated for a fee (Gal/day) 1,097,000 NA 1,090,000 NA DATASOURCE: MarkWest Hydrocarbon, Inc. CONTACT: Frank Semple, President and CEO, or Nancy K. Buese, CFO, or Andy Schroeder, VP Finance & Treasurer, all of MarkWest Hydrocarbon, Inc., +1-866-858-0482, or fax, +1-303-290-8769, Web site: http://www.markwest.com/

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