CEQP - Earnings call transcript Q3 2017 | Crestwood Equity Partners LP

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Operator

Good morning, and welcome to this morning's conference call to discuss Crestwood Equity Partners' Third Quarter 2017 Financial and Operating results.

Before we begin the call, listeners are reminded that the Company may make certain forward-looking statements as defined in the Securities and Exchange Act of 1934 that are based on assumptions and information currently available at the time of today's call. Please refer to the Company's latest filings with the SEC for a list of risk factors that may cause actual results to differ.

Additionally, certain non-GAAP financial measures, such as EBITDA, adjusted EBITDA and distributable cash flow will be discussed. Reconciliations to the most comparable GAAP measures are included in the news release issued this morning.

Executive prepared Phillips; Chairman, and and Officer, Halpin; with Executive and Chief today Chief Robert Bob and Officer, Executive and us remarks Heath President are Chief Financial Operating Joining Officer, President Deneke. Vice Vice President

the is of will team Phillips. Instructions] I this being session recorded. management the the prepared will be analysts time, call Bob Crestwood's [Operator current senior following for over turn remarks. question-and-answer members Additional available with Today's to the call At

Bob Phillips

good Thanks, our and and all Devin morning us investors thank to joining for early. you all

We Deneke, that about to over CFO have it Chief we country. give to our projects to happy exciting a off number morning. lead the Heath our Halpin, cover of Operating about have positive Officer the things to to the an it cross many Robert you this quarterly talk and results going update turn then to I'm and

with quarter. like key it really four kick five me out draw to that let Things for you. off So or the I of highlights would

systems portfolio consecutive that's in year. segment in the a oil growing The up respectively increases year-over-year processing natural XX% delivered strong quarter same in G&P quarters oil EBITDA Arrow now our row. system a on are of up quarters biggest consecutive period drivers Gathering three And four a are the last our would gas I gathering Southwest volumes as assets. in based Permian quarter the impressive volume. flat by volumes in the these Nautilus gathering consecutive X% over the largest crude I and out showing out might Bakken expansion Barnett gas low row. up more volumes and and point a volume or like as Crestwood stages first system Marcellus second Board to the remained Willow the decrease gathering that The of gathering In The are our the our Lake our growth. gas, and those which our only system, We And segment our are rate volumes, across there. and systems Barnett another saw much so largest Systems which water solid is is think Systems XX% with with XX%, for and volume, to we in come systems, contributor. early relatively Delaware well by decline newest have point PDP year-over-year very

and contribution the is remind wanted we So very started with people first out to Company Crestwood. to significant a making that asset, point that still

low cutting for ready at we to costs, is second that a the everybody the that first really step live environment have lower-for-longer want in topic I remind cost today. big we that Crestwood to couple here operating ago The our years operating was get

despite quarter, the higher a operating through volumes reducing continue third We costs portfolio. and growing even clearly year-over-year our

in So were lower expenses, below that's stock-based of teams and fee again That's something compliment or O&M same and that that. not G&A easy total were When for period which XXXX quite because very to do our the XXXX. adjust committed our year-to-date $XX and I compensation, to. XX% want year-to-date about million you we're to a

to some in like to business. the new As quarters. And to of our the differentiate you a of companies teams safe several assets for operations. I and past we've congratulate and more older commitment Crestwood lot a cycle in management It field that of This need Transportation makes their drives with better on the operating us a others. margins from of a cost you, operating recovery over is and business COLT low out taken culture competitive team our systems previously cost like discussed and gathering in again we've want our

very healthy hit coverage our XXXX of strong is guidance. financial quarter. ratios we're highlight track the third in The year third leverage We earnings full And to another in quarter increased metrics. yet on posted

at The maintain Permian. for Bakken X.Xx to third quarter the positions the conservative capital us leverage and leverage Delaware program our in ongoing

third net in our distributions, distributions of to X.Xx is paying cash unitholders time. flow first significant we for of aggregate, the to projects. coverage the cash in reinvesting generate excess quarter Our And we’re which continue above preferred growth

and unit G&P the confident with year ramp-up as XXXX So With very segment. ratio guidance comfortable in respect future. even drive more quarter, to XXXX well the our already drilling, in more result, targets per for seeing coverage active we're continued ability a connects, we're and higher distribution our in in volumes with and XXXX to full in fourth our our DCF

northeast Logistics, NGL positioned and waiting and our across of And inventory assets Supply cold well our a are for team winter winter. platform Marketing, they're well. NGLs Stagecoach Our full for hedged as has cold

good good important about about and a maintenance close and employees Bakken operationally good to excited non-core for guidance. highlight, was into strategy and to flow it million To team is USA clearly, may point would want we're assets I fourth Salt of year generated capital identify Holdings. So and out did Kissner as at but This to ability Salt flow high our a Salt commend the that you the most The to fourth requirements. getting of a sale Kissner is management it was I and quarter business business job that confident right created part like maybe been but the number U.S. the of announce with and those you to to a proceeds efficiency they very our very improved multiples is per cash good did about over will our accretive have the of to great compared by capital the an for to premium had ongoing And in divest for redeployment that in of for current programs. Crestwood capital very pleased and X% and $XX of expect price the rationalize They Crestwood’s unit us number redeploy of was DCF transaction assets to a our of divestiture X% have number Salt business for the We're know U.S. a market at Crestwood million price DCF our the a out there. XXXX. to it's portfolio. us a cash to to to was our of $XXX particularly lot Permian and a out for XXXX. competitors years valuation. sales years. portfolio it in stable that years a we U.S. source business long-term Delaware really the a sales strong business a our we and be proceeds outlier

is important this step really So a for us.

almost projects forward, reinvesting high transaction puts some in in Salt flow $X reinvested significantly positioned a third flow we're there. the our selling well the that's growth the sizable out of larger cash five mode. our finally, quarter past million to Crestwood almost competitors $XXX and than officially our self-funding and amount of return of flow growth the in in of quarters, into And the million cash excess excess relative Now going a heavily Bakken self-fund the Delaware Along Permian. basis is U.S. cash of with in Crestwood on and

our and not we years. the DCF capital key to importantly this means driver access be in to couple markets over divestiture per fund ability a our equity the have will to unit will that next Salt increase the program So XXXX of

our we've to So close, growth the existing to wanted that dilution position DCF projects fully unitholders. before recap and summary a to quick grow I without Crestwood I to steps taken our finance

in First as we you balance earlier debt basins we right-sized did peer first And maturities give this year last our than of in we our We financial half partnerships XXXX delevered strategic us most year of affirmed flexibility. to a in to and sheet distribution – know, out we finance that growth our high lot earlier to Crestwood’s XXXX. projects. the Then group. help pushed our

had five Salt deal into our to those we've U.S. quarters we've excess that And our finally asset and made project projects. reinvesting sell non-core Now proceeds of a the backlog. we're in cash flow straight reinvest

largely to of you to developed. Heath projects. those backlog in on is growing exist existing an projects quite give of where to going going our line they clear have be systems Importantly, sight the update And we volumes the are growth when are or extensions

is and a will capital not Robert? this Crestwood as it's as strategy key peer the a in unique on our you review on give the executing it then we're projects. growth for and group. he turn while and strategy well that, our at detailed to think I’ll to So third quarter Robert assets with Crestwood, anybody update I And over

Robert Halpin

year Thank with to where very pleased into close XXXX. and third our quarter you, Bob. is positioned now Crestwood this with and heading I'm out results

quarter for first cash to $XXX compared Distributable totaled During third was the which quarter, of flow net in preferred adjusted quarterly is to third third quarter A $XX cash our of XXXX. $XX million, unitholders. Class million, our EBITDA million the distribution the

Southwest the its year is improving to For committed fundamentals X.Xx remains in asset. and in EBITDA volumes quarter XXXX year-over-year a primarily $XX X% growth Marketing, the result our by Bakken above. the unitholders X% the Gathering volumes. million gas of Marcellus NGL quarter and segment to as quarter of XXXX, XX% segment the segment, ratio totaled maintaining million of quarter XXXX, increased quarter to In Hub compared over compared increase butane by EBITDA $XX expect marketing of for segment a Storage totaled X.Xx. totaled Crestwood segment contribution In the our result our volume in in the from EBITDA third distribution increase EBITDA second declared third of quarter or of or our Segment to XXXX. million third common guidance the business quarter the Transportation distribution $XX a driving $X.XX to of Segment of million propane and and a quarter Crestwood a in in the EBITDA million lower in the third $XX our we of encouraged for XXXX. Processing XXXX as $XX sequential third third and to and COLT at segment, compared when EBITDA logistics oil fourth million within coverage Supply a our at the and $XX range. driven XXXX, coverage In during quarter segment, quarter third exit increase Logistics in decreased XXXX. seasonal

the some our offices corporate that O&M in XXXX incremental of quarter relocation facility as in City. to quarter reduced third moving and compensation of a was tax quarter expenses. This million at increased compared a XXXX. of Now increase to property based result of incurred our $X recently and third in Houston non-cash West in costs XXXX, expenses, moving third million of G&A substantially the well with unit O&M Coast $X net refund as the connection Kansas

to turning balance Now the sheet.

XX, As billion Crestwood facility. of rate $X.X September of our credit $X.X $XXX notes outstanding, billion in billion outstanding of fixed borrowings million including senior debt $X.X had approximately and under revolving

ratio leverage as September XX, XXXX. X.Xx was of Our

continue XXXX, have capital program. track we been of are offering. $XXX each conservative we major are funding and highlight our to equity to in a finance manage these $XXX successful and our our invest As million forefront capital coverage leverage business as strategy projects financial the million projects quarter and approximately at we metrics on without to in In we to-date

During ATM our $XX.X manage approximately targets. equity our to ratio the third issued to through million program we quarter, of leverage our

XXXX as the and forma Salt needs or we is do any with the Salt U.S. of ATM However, incremental not otherwise current equity, of X/XX/XXXX X.Xx. of as anticipate divestiture, pro for U.S. issuing transaction ratio fund to approximately XXXX leverage capital completion our the

Additionally put commitment Basin provide facility JV to purpose venture into partners, third the put with assets of capital credit we Reserve, facility key in without program, execution equity our as enhance the and year-to-date on currently markets. necessary our funding. and through in our XXXX Crestwood Heath of funding a the Reserve. joint and with aggregate to is conservative solid Delaware turn of debt reliance XXXX, projects sources our during place and quarter, has to I'll JV facility to $XXX that, fund greater to a the posted capital The is to through we’ve First million. any level the capital an for place capital revolving on With results Delaware First non-recourse its Basin well CEQP and of update JV this now secured it underway. flexibility The by returns mix capital The over growth project the as you

Heath Deneke

Thanks Robert.

asset continue this performed positions have our positive Crestwood during the complete quarter. our to So into Bob again make operationally year. on momentum capital across fourth And to key growth grow the very areas. lot our quarter. going great volumes And quarter continue we well mentioned, we projects progress the And to as high of a in third

on Powder the focus I’ll I'll morning then conclude this activity So Basin my in the Delaware Basin, and in River remarks the Bakken.

Delaware on So system working on two Midstream closely to starting our footprint are Delaware interest expansions forward the complete a agreement meet the with XXXX the purchase Shell’s rigs announced on expand Shell plans. in we in and a to XX Basin, in equity October to Shell’s Nautilus Shell previously and to and we further continue we closed enjoyed of actively We’ve Midstream option working system. look great drilling the with with the operating Shell gas relationship will Basin. gathering ownership is XX% as this Currently Shell

we Loving plan started System Orla that our cryo and construction with So, and to in Reeves, footprint Texas. Willow construction prep million just County, equipment Mexico day and to plant the the have has major Texas, now Eddy Crestwood Pipeline the a of integrate contracts awarded. Express in for Lake Ward in is County complete XXX and New west all our Orla, Site been

Express on will million and this to the plant year next and July Orla X remain well within of complete by track $XXX Pipeline For we the one budget. capital Orla

As contributed And a venture valuation joint part requirements previously credited program. share assets Willow to for Crestwood’s of Reserve expansion the its million. of capital Permian announced, $XXX at this of Orla be Lake will the value as First Crestwood

facility. processing of September, an in expansion Lake we completed Willow So the also we

processing grow Now our to to the that we capacity while Orla to increase us XX be wait day. allows to volumes This in up million Eddy continue County complete. a project will on

the Basin gathering teams Delaware So in footprint, exist in growth and progress continue our and crude opportunities These developing alongside or our make new Mexico. organic New to our Texas processing commercial opportunities. customers related addition our and expanding existing water with gas on and to footprint customers excellent G&P have

particularly services with As see well. as true that Delaware lot given we've formations advantages in the in Bakken crude the pre-product and productive basins cut Permian, the synergies our Basin and we the to high degrees the in the stack water customers that for be condensate experienced case competitive a Arrow as is exists quality of and system, our in Delaware basin. produced relative expect to the providing well of we the This varying other across as in

ready our share crude Basin making strategy water to this specifics we're while not the progress in great growth going So, we're pre-product drive morning, commercially and on opportunities Delaware forward. believe significant and will

they they early recently and in on around publicly Jackalope the added say shifting footprint. the bring that and well to rig as drilling a about year. activity Chesapeake very fourth to Now that in and acreage are I Chesapeake both our levels to continue operators and the third rig desire next a north continued excited Powder recent have increasing be Basin, will Turner formations as results other on drilling Sussex River to

across multiple position. XX acreage initial to produced recent X,XXX tremendous seen of their about to which continues day at oil to peak see results, have Chesapeake per large wells test We equivalent barrels we’ve are that rates gas. production natural formations XX% XX% So of

today equivalent increasingly of under in So as is of public just forecasts, end barrels of XX,XXX barrels growing bullish probably XX,XXX in to oil you Chesapeake growth equivalent revised volumes oil and indicate expect XXXX. they approximately

hits on Chesapeake, assuming two So their would processing years, Jackalope forecast. by gathering in projections more these volumes than the double based our and gas provided next Chesapeake

reminder, capital volume XXXX improvements. the plant the expected Chesapeake to with System positioned growth very minor Horse Jackalope through and So a very is as handle Bucking the well

we Chesapeake to venture working basin. that, XX/XX beyond closely expansion opportunities partner future the joint Williams, in surrounding are with our evaluate So system opportunities currently for and third-party

capital we while So Powder material future dollars to currently don't, the have expansions. we these River allocated for don’t

very basin positive further the monitor results we We and basin is closely developed. to are that from we're continuing as a the seeing in increasing the another and activity Chesapeake and are is something that

gears Bakken. So now about let's the with that, shift talk and

and the largest with our current of levels than very in economic years commodity assets in Bob well decade volume activity our growth the portfolio more currently contributor EBITDA for remaining positioned coming sustained drilling inventory at and Bakken As mentioned, is current is pricing. a

on are connects third And system, expect value additional the the this add and here to wells get the Midstream connected XXXX. we in which control for discussions natural X% I'll XX% to comparable quarter. disposal in the over in in by processing be to activity, and further system into a all Arrow XXXX. growth XX and we chains completion downstream The So, produced in to third our oil increasing increasing the additional well gas with expanding coming XX the we bit, to XX also the the impressive water own drilling of We're to volumes, on XXXX be in XXXX outlook be and years. XX NGL and services expect in their plans. expect volume to our continue we during we marketing gas year-to-date our wells include XX%, would producers currently that range. to water in logistics quarter volumes level of growth with our Back quarter Arrow approximately currently increasing crude an we At connect the XX% to XX% XXX somewhere fourth to will

processing Den to Crestwood producer approximately the natural water for third capabilities capital XXXX and the quarter million invested and of initial $XX of from the handling increased construction plant. capital Bear activity our of a gas standpoint, this During meet expand to

two-phase will for competitive our the volumes. processing assurance provide project increasing netbacks greater customers flow is and that So a Bear expansion production plant Den

day, systems that's complete It happy pipeline the coming volumes X solution approximate weeks. processing in XX million gas Phase is contracts to now discussed, million plan the report and the nearing will includes begin operations pipeline an a XX a mechanical firm connect and to announced current location. Bear third-party commercial sized XX XX Arrow the interruptible to completion the previously mile, to I'm day. the includes of Den intermediate our now above we we're expected that and initial As also a process then with facility inch of

to investment approximately So, of million. levels to-date capital be expect million we continue total budgeted Phase within Phase $XXX has invested well on Crestwood X the the approximately and to $XX X in

As currently release we we to when This current the our also which add third million a the gas in netbacks system Phase plant Phase our levels that of X the expires capacity available discussed forward to Phase are quarter on will further the for beginning supported XXXX. third-party are enhance incremental morning, to robust plans, assurance processing capacity Arrow this are of Bear economically producers on X When location. move provide XXX combined addition growth will flow expansion Den in day the and X by our outlook. and meet contract projects and will Arrow volume customer's

fleet truck Bear and rail the completion multiples its the NGL’s the upon Supply Phase of Den facility, utilize Phase NGL and and X produced including build Den combined Logistics Phase Phase Bear COLT with times half the Hub team its there. upside Bear X and So Den along to the to a Crestwood Phase be to Bakken run Marketing, the to approvals to continue grow will extensive times rate volumes Crestwood’s further in X, the facility. asset, range, of from Similar X from market final X with system platform, significant project, expects XXXX, X as project during second X

new Those the optionality the considering will cost the region NGLs. that realize of is a the or and creating of may along new these to long-term evaluating will that timing plant system infrastructure will solutions with generating options several Den a pipeline. pipeline out press maximum netback flow the in connect netbacks NGL and producers further on best solution, Arrow the for fractionation be enhance facility Hub a the Additionally, pipe-to-rail system. construction haul a NGL participating solutions Arrow the The Crestwood new of at via include for assurance a long purity built Bakken on location with Bear the focus COLT product which highest release

pleased and commercially very progress I'm again, making both with that with operationally. So the we're

projects We have finance. very projects, to attractive prudently that able organic underway been we've high return the

focused each for on-time extremely and safely, bringing into ultimate unitholders. are execution project We flow but and our service generating of under goal cash on budget distributable our

we're questions. to operator, So that with I ready the open for line up think

Operator

Thank question. comes Weston J.R. conducting from you. question And first Instructions] [Operator Raymond will a be your the proceed session. with question-and-answer now we James. line Please Our with of

J.R. Weston

quarter and good congrats announcement. asset the the Hi, sale morning, on

and something and the for think the is XXXX, about to announced in needing I going of deal today With not the commentary XXXX the that’s appreciate. market balance equity definitely

projects outlook Just within you color just kind context the kind getting any and the help talk growth specifics, Den little bit us a remaining that for if like the you CapEx. the of is for Orla there of XXXX to on there. can can't kind though, CapEx the into Bear ballpark primarily get of about And then

Bob Phillips

this J.R., to of kind that Bob. question. three is parts There's

most we're out XXXX I with interested guidance. come like think looks and you're ones when going in or to plan what the the

speak that. to Heath projects we And going return about going to policy there's we strategy question. character a in is third aspects talk we're there then year those think the it. this answer first that current we of their and extent do Robert about highlight question talk flow secondly, of question, we what and our back come I'll third then developing about high And have to that to that are in to next or is after have and you of cash excess the think that Robert’s inventory to in I So somewhat finally, the the I want a call Heath and that and

and plan guidance. Robert, the kick off XXXX So

Robert Halpin

XXXX final that and through and our thanks J.R. Sure, the working plan. are we in of think stages I

be similar producers then forma be I sheet and on other board will of balance think fairly we fourth last in We with at Consistent and program the XXXX. our all have quarter. what in front our looks the through to positioned to to pro and the lot our Directionally, think and weeks I commentary coming here the without And to the XXXX our we've is finalizing transaction guidance our all. feedback capital the what in fourth quarter our capital we and I customers beginning call, for give the of remainder U.S. today would in in still equity expect that really to is and capital think confident reliance official of confident that. market it needs the that times program the plan Salt in for running then XXXX. we around position that we're a at And that us X.X for of is communicated execute from of very presenting markets sale year, to in with line the in go with any feel room

I that's projects today returns get think to to hand prepared it the about to and specifically. So, talk and Heath I'll directionally what we’ve

Heath Deneke

of think side million as I on to expect total at we two $XXX would the you or the said, we below the Yes, program hitting – in range. come in the Orla just kind highlighted that

Reserve, provided on costs those have mode have execution of in we're those have as with of with coming our First vast again dollars we that of starting credit sight now going by a construction the awarded all contracts, of so off Reserve. in pretty good the kind capital line partner First to from $XXX majority And expected. the million be are we And

Phase Bear for said costs as the expected Moving is million over to Den, Bear pipeline. the plant $XXX X in total the Den we

into well again we guidance I budget would on on we to would is X. XXXX are $XXX be current of tell approve that Phase looking you haven’t we million of half when What that late the get provided bulk Phase well. the we the within scope at XXXX. spent be tracking as capital roughly we're specific and evaluating then and we in that And if will So X,

Bob Phillips

wrap don't there's once clearly that's question that capital we finance access where have So XXXX. as to rolling see our markets is into plan. and equity least that at XXXX the plan strategy Notwithstanding J.R., just think we're to we I get XXXX up up we that fact to it or today the a the

per move of with returns is a our a early go excess the if projects that get us take for be We're the access capital the think it capital or cash again large going made DCF unit to growth all doesn't the a lot that And back me to sorts to so a a gives flow, unique on us. the I two company let having needle. belt self-funding forward. mode at very we is do optionality high to in that can we I not substantial it's pleased and Crestwood, and position of year question a markets what very without very comment under to is huge driver do at we're therefore

is projects sight of or seen have for existing or there that own line that we to are in these are Heath to the reason volumes. highlight the want Secondly, specifically clear we that that of highest return assets a And extensions while. and the visibility very I've

Bakken So not volumes based good about capture on infrastructure we're the to those and lot talking development just those compete having program. discount or When this try to Permian, or projects volumes. Delaware extend a for is the additional programs to the And of we're the out the of volumes coming building good producers, on advance really acreage, long-term in we're waiting really coming. contracts acreage, capital

you but relative will talked Bakken as publicly And times the about and build showed great we to Orla, Nautilus on drive assuming X or return on-schedule basis Shell on budget, to we I position on be the ahead So in self-finance in come we've projects of schedule those. per DCF in with under X these and multiples will show we we times projects system. or those unit the that are when budget a high can of guarantee

have and is. year. and until the you cash we're cash to cash And drive cash we certain have we now to I our that’s excess know we're at flow right that that it comfortable next of step doing our don't we give And growth And plan in these Robert is comfortable have I’ll for least with that. great fact so, like areas. way to investors. think the those visibility if the a optionality the good And into our for have teams plan totally I here opportunities volume I the flexibility be, what But the guess we I And high-return with our unit projects the self-funded and are feel flow built the more would look guidance, XXXX, do and for we quarters those have few flow best more, math as DCF that to the going is we what we what us for mode. that we material pretty but leave at reinvest flow being the come up but even the at tell financial in won't next self-funding growth that we will distributable final because commercial as very is per

J.R. Weston

release handling, then even as optionality for you you kind identified the two that the CPJV and as Thank blending potential the about for guys areas the answer. water you have, call, today I comprehensive solution. one you. guess, growth and in you’ve another also or potential NGL the downstream talked maybe mentioned follow-up, Very where of reinvestment just further with and

additional projects this wondering growth that as helpful. very Just well would the opportunities you and just well commentary amount good of those be time a at kind kind think self-funded, then could be if as of any on of

Robert Halpin

you can speak off and nature. to start the Yes. this Robert self-funding I’ll

I basis. adjusted growth to and luxury in in projects. on Bakken, being a think Permian, spent we all, that what for sure the the our the what ourselves set of not really Marcellus the is do going to portfolio of a River of have make are investing us we're we a have, we’ve capital rates but highest Crestwood basins haven't We're Powder highly positioned the lot high-return talking we think to both them of return to risk allocating have the the which about and of available selective diverse we time

we're in Pennsylvania very to NGL in positioned our going trying So into or have value we it's And think continuing we up a the to synergistic and additional in parties, make gathering with establishing some as chain River as we're we're sure the want into of water taking taking processing on, growth. our gathering Permian, that segments very network and unit on and complimentary the assets the these exist that take footprint to producers the to per our allow down the the services, in those that processing, well mindful further will gathering up continuing and and Basin to further I driving water of how the drill to debottleneck to the Northeast high about about expand crude Powder think to and develop. communicate crude Arrow provided we Yes, going of which opportunities degree system that’s is Marcellus gas expansions bases of expand think of that what that in as basin fill third helping currently well sets. we're continue by DCF and each area to think we're produced finance and gas projects we growth having whether opportunity

per we and had DCF we unit don't be to than you growth, our choose amount want think able getting skis we I from. Robert, over and that to work – putting we projects on to, of capital can So an have do that to we think extensive more plan that generate

Bob Phillips

somewhat of projects around other handful the or opportunities partners we would that those other this, of a whether ventures and in have its to areas. financial but only expansions with lot Delaware Orla, I those alluded water color Permian, joint Heath the the Yes, other add – strategic and in

of of funding those those in terms built-in the to incremental some just It’d on I up funding So in partners as be CEQP financial we a only have assets. color reliance add. – would to mechanism, specific help

J.R. Weston

Appreciate Thank you. all that.

Operator

you. Thank

the Burd with from line question JPMorgan. proceed your next question. of Our Please comes Andrew with

Andrew Burd

comments Hi. Bakken and unit to Good Good questions I mostly My morning, Bob. related. on reinvestment. bias towards DCF hear. are per appreciate growth the

quarter on crude fourth side, what The first did still you curtailments, drove the the gas enter growth those volume rate one, and curtailed?

Robert Halpin

a interruptible. our actually primary kind back of volumes is XX about our agreement. really is the been a as well which there’s as on system two, of about available by Yes. day system. million day constraints And due to has What allocated third-party third-party held that's just XX drove curtailments, processing currently have curtailments the constraint we've our our been million processing. Well, limited We

the be agreement Phase think addition the to expect we So firm in service, when a that million about day we with largely XX the of combined nature third-party we curtailments that think getting alleviated. X

reduce also also some we some from think debottlenecking have will on with we the see that We additional our existing ongoing projects reduced help pressures, wells. growth pressures, volume will system and that connecting some

Andrew Burd

the at when of a then that you what enter in Bear do XX weeks? And utilization feet Great. plant million service Den expect per X, day cubic few

Robert Halpin

our facility load as XXX%. comes we soon as will swing plant It online, and on that that – base will third-party we contract. then will

Andrew Burd

to Great. can acreage also – little, that's in been kind X? or going acreage little there any a last Okay. of when changing Is six potentially? contracts bit suit producers of into hands chatting but to how lot Phase process Den at and different And the then – the us the And the Arrow on expires Bear for acreage extend those modify needs Arrow for Arrow not with there's with drilling maybe new acreage dedication a a remind you factoring development chat the of months. on

Robert Halpin

to think we or Halcon X, were years announced Whiting long-term ought the about majority our Phase customers, majority position of currently. which of Look, producer of XX we extensions when absolutely. We were as have vast well got new ought position. years for as which of XX most that to contract Yes, contracts many shippers our the the bought

knee been meeting planning their are efforts. have with them, deep We in we

put I and acquire lot they to in strong – companies capital both order optimistic. of in desire those the a with remaining drilling indicated positions. active both more get to that of locations They have developing associated have think a those put very we're the position they and

leads excited think dedicated and very us existing coming that capital having about into customers additional with of contracts with certainly I the our contracts, acreage position, long-term forward develop the X. continuing Phase So and us combination got drill acreage, with it

for Now on getting behind said flared, have that, having you take that at crude that we is today, during third if volume what think you not currently but look system getting pad, well what by the the gathered available we step currently we at look and quarter, the level. fuel used back a the volumes at

up to Phase that make X But production we've to – is at once economically, on you with decisions. what a we come want to increase have we when around Phase If multiple X we point then running aero service, X it that current the supports generate and aggregate our investment of investment and continue both our we X capacity getting And supports economic our in to got system the room available will we production if in in X. rates ample see available of project. the about continues I process think But would X think $XXX million we course Phase a to. goes the grow lot in Phase have just tons volumes a that and a existing Phase immediately day, build X service expect we to Phase

Andrew Burd

follow-up winter quarter to third housekeeping, this first know higher That’s something question in number of past. the a there range, a for than commodity great of the within answer. there wondering you Look, that the quarter specifically. or that moved just was big the you this mark-to-market is I derivatives, or propane this Robert Is just heating two the that that lot summer the positioned is of reiterated this just about hit – different something as season? know about kind remained well final

Steven Dougherty

Dougherty, is This Steven Yes. Chief Accounting Officer.

pretty saw we September a XX rise XX. prices in yes, significant June to So, propane from

the we storage to that And positions that had right we we related related have primarily sale mark-to-market that so inventory to now. that recorded the during currently loss NGL those of fixed quarter our in price was

recognizing windup we that So loss here quarter to first mark-to-market we that were in non-cash fourth even – will related it's or that gains a sell though when quarter. inventory

Andrew Burd

Right. And question. final then Great.

when Just can burden you included And there also unique considerations be will that the if the And $XXX sale? any explain CEQP when any close? for that in sale U.S. is level does Salt tax the million? tax Thanks.

Robert Halpin

some that are will merged it from when CEQP here when Inergy our legacy, unitholders we that over be That primarily transaction tax will with the associated quarter-to-quarter. to CEQP anticipated sizable anticipating of a taxable related So there item to related it to converted companies. is our which impact unitholders, gain that we closes

Bob Phillips

you give color completed been this any want comments Will Salt? Andy, you Bob. on is quite working oversee while. on Moore or has transaction, a to to Will, for you have want –

Will Moore

I to that. maintain to only all a in older expect of think individual We've a those item, I’ll then receive won't proceeds the will CEQP capital levels. tax just comment. And I'm capital tax level, but working there’s there million got [indiscernible] around that come we’ll cleanup some impact just $XXX saying on at some proceeds.

Robert Halpin

between for day, there here that closing thing in or units here purchased with last associated have the any the primarily is unitholders one sizable our note Inergy taxable XXXX purchased to now be that unitholders not And Only units. a and be legacy that CEQP will units impacted. those would gain be for unitholders

Andrew Burd

very much. Thanks quarter. Great. Nice

Operator

Thank you.

with question Selman Our of from Stifel. comes with next line proceed the your Please questions. Akyol

Selman Akyol

you. Thank

there So up Is starting step QX compared QX. would your of? larger have nicely, thought aware at pretty on to EBITDA, volumes. in be just again, I looking If at I increased seen you’ve a sequentially, I should the there guess off gathered I anything those I'm they look but

Robert Halpin

think don't I No, Selman. so,

from it’s directionally – that similar headed future fairly obviously the to think ups makes a similar structure flow. volumes clean results the the I come we achieve a terms how But think the I quarter into and mix it's flows think cash in in growth in from. I step and where of difference expect here comes

Selman Akyol

to already policy of that? hedging or coming you. Are – place exposure then – to you Bear you’re plant in the elaborate handle on those, guys going more of could there. also commodity you a you have guess right you Got you as And I guys on how guys yes, Den did out can that just going marketing

Heath Deneke

Yes.

we with way that the on the our NGLs proceeds percent sell producers, of a So contracts our basis. work

So we any clearing NGLs. the when taking we're exposure are not commodity direct

of as be to barrels be customers, producer and very absolutely on So as nation, positions on because from but as our for opportunities XXX,XXX the are current on day do we're to time couple there for a nationwide prices. risk going to conservative premiums to well – the the we speculate we’ll the to commodity put time manage further going ourselves we're enhance they going have for across that barrels will our to

Selman Akyol

it. Thanks. All right. Appreciate

Operator

you. Thank

Ned Our question comes next from with question. the line Baramov Please with of Fargo. your Wells proceed

Ned Baramov

Good morning.

Bob Phillips

morning. Good

Ned Baramov

question of in had on a resumed after year-over-year volume growth. decline Barnett. seem have quarters quick several They I to

you in thoughts the Thank So maybe third that your what could in could has terms to talk about of activity you quarter has maybe serve changed acreage declines these drilling on if you. future you in provide on activity the led region? the and

Heath Deneke

volumes slight Barnett in the I seen we our system. in some have decline Yes, think

decline have bought did our is just decline. were rates they’re the for And gas recompleting that up early the systems wells say the wells as flow those – additional have and here steep what due from alliance gas as and to I think not some lot that of online dry optimizing new kind in is natural area. seeing of story in wells BlueStone’s that at continued real would cleaning you a it’s that off do, you reservoir. progress head year As the expect and declining are you But would we you're expect really there and

we're couple think decline I speaking, guess, percent maybe a I we’re largely rates. So

in them wells. to would drilling expect I offsetting forward the without terms we continue of beat average to think going incremental declines

the drilling wet have both substantial Now I inventory dry and the the we you in areas Barnett. will of tell gas that do

incremental slightly again have some look And if – activity as to for certainly flat well. largely at kind think perhaps the of Barnett, potential for that kind of few that for any in We speaking I But those is economic. opportunities the we spur us us cusp in expect activity. I declining a over well drilling will think incentives think XXXX at to volumes we're relatively there years. to and we'll provide incremental of the XXXX get to without the that next the being hump you wells those

Ned Baramov

helpful. I requirement. prepared It’s mentioned CapEx to then maintenance in the that remarks budget, had annual U.S. your And regards think in your maintenance high you business CapEx a Salt

CapEx maintenance the of field change at annual budget given So your that Crestwood?

Robert Halpin

It on won’t that quarter kind change of a We've XXXX. impact of between close. $X late feel associated pretty of to CapEx to annual fourth going clearly an comfortable for disclosed asset talked $XX in about And obviously we yes, still we're maintenance $XX to guidance right be have it. has XXXX kind this of million with to million with think maintenance middle million we've will It year mid million CapEx range. in $X expected I annual the of our XXXX that

You’ll see and beyond. that XXXX in impact

Ned Baramov

all Great. had. That’s Thank you. I

Operator

like time. Thank you. Phillips to There at to the turn floor I’d Mr. for are questions comments. closing over this back further no

Bob Phillips

Thank you, Devin.

again we’re mode highlight our self-funding to pleased that want to I up very in a wrap the be to fact Just for program. capital

that support in right we've clear best Secondly, to volumes group think now, the visibility we some because got our projects primarily capital peer projects. of growth have very the we those

flow, a we are financing years. low reinvest per At third-party flexibility, a unit as our great be the company to of we through. that and very in of think this the low XXXX. the of for we sheet cost cash valuations if to that from is teams be out then get half to we've or get a the hard cash that going these second unitholders. we're work build year. next a time, continuing either with clear probably we're to against part conservative also of on more can and is same inviable we're adding some excess the DCF, that very that position one years XXXX of very I and and they couple we projects to next to adding basis, customers, new our to The continue market these in risk news as to quality warrant last that our lot we very the return these we of insure our good and as on But we are that So service goals as provide curtailments driving of that's middle downstream once we're put all the in to we've over position, begin the flow couple With there flow projects much question drive on together of developing over will going have cash to as of providers, more DCF And get track program. the been into disruptions coming systems to and adding services projects to balance us to

possible proud margins they're So keep up, and the employees very that proud high field of in of keep the team down, keep the level. and the job customer the that out doing, as costs to service continue very at

this look and So and that Q&A. forward for after fourth the with today joining close we're to we call morning we’ll of for us talking excited you where all all to appreciate the And quarter. are you operator, the about

Operator

teleconference. today's concludes This

time. at your lines for participation. your disconnect you may You this Thank

Crestwood Equity Partners (CEQP) 31 Oct 172017 Q3 Earnings call transcript