CEQP - Earnings call transcript Q4 2018 | Crestwood Equity Partners LP

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Operator

Good morning and welcome to today’s conference call to discuss Crestwood Equity Partners’ Fourth Quarter 2018 Financial and Operating Results and 2019 Outlook.

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, to of and thanks operator, morning on all you and again us this for joining call today.

discuss XXXX we to that the to thrilled are look color bright and very this laid forward out We a on digital our results in outlook morning our XXXX providing release. press

our for on great management thank years. great others strategy group. evident couple clearly permeates to for of we that financial guys deliver in XXXX in just and First quarter strategy me strong done last year tremendous to is assumed at I delivering in and our basis another unitholders. much great from basins while Crestwood’s great core team and peer our great last quarters It’s of over our not maintaining job discipline delivering in a organically XXXX. working us financial a results separating our high in the – our how quality those investing consistent on to our growth the and It’s were employees work yet hard want years able for

range resulted very of $XXX,XXX distributable and expectations which adjusted $XXX and we flow times. over delivered adjusted strong of of exceeded million and we internal estimates our EBITDA XXXX, both X.X ratio a which consistent During exceeded coverage in our guidance cash EBITDA on

our that services response Difficulty] include for development with in clearly expand unchanged. producer showed and last value environment in allowing to full dedicated is the country chain across to investment are strategy listening and that the our high-quality our discipline strong the in investors the in to water, systems financial to real carefully XXXX generate the per which has to combine Crestwood [Technical we hold opportunity adopted are gas and the continue success that XXXX, capital to at under of formula unit rock The and our with clearly into crude, best that long-term looking changing growth efficiency growth. over two years basins to which we for back Now market contracts projects NGLs the DCF the properties the

result, we a over over our current estimate estimates expect in $X.XX clearly XX% per leading and to As per by DCF $X by XXXX. unit market. based unit per $X.XX XXXX That’s the per unit from which to our group growth growth unit peer end in in well is grow year DCF on

worthy of a over More to of group X those in period. the metrics coverage the stocks peer being importantly, and result best X.X X.X one leverage same We between are ratio growth above well will this and X.XX leading in times think times the group. peer

will see assets term, program we Bakken continued capital prolific Delaware expect Powder XXXX the River and targeted be for Our in where Basins two In longer in the to growth. years infrastructure over build will connect again in Edison as our and well last would are to emerge new Marcellus continues northeast with out and to the world’s ways there customers partnership market this appropriate. million. gas XXXX, continue its natural basins many three where still with Con greatest our results this $XXX profile, which to same development out figure program northeast meet the to opportunities to $XXX our projects the producer result gas of grow usage And will positioned forecast in incremental of in we Northeast million and type their are year grow in and infrastructure of investment same continue Crestwood XXXX in EBITDA invest located that approximately these approximately return to to program, XXXX, current as have the higher these as resources in Throughout early a stages Pennsylvania. invested

will partners to by they that operate our potentially appropriately, acquiring are have our we expand the - to with they when basins are we operate, evaluate synergistic areas our bottom-line. We discipline accretive we operate, assets in third-party or those continue buying the where priced we that in continue positions assets to great opportunities out financial are they and franchise the in to

as way Bakken is sale our Arrow a announcement their is for multiple right times current which Badlands with new in these you of the announcement XX constraints system, on projects, XX% well by as with great today the assets the Continental’s Targa’s to business want System know, are the and we - marketplace I Bakken five Plant oil we completing next throughput Enerplus of deal. highlight today the expect the important of recent that’s the gathering record extremely announcements asset that our now the next they value full of Both of service is the unitholders Bear as Crestwood’s that production where for we by our chain value third-party system point growth Den is that announcements are Crestwood water areas these grow X most supportive XXXX years. which of replacing by to way to develops our play region. model to expanding value XX.X% we All continue Bakken per Now, operate. year seeing third-party to examples the in support Crestwood’s the creating in volumes, mid-year are are Bakken of that over

see and as Now flow dry positions, stable our value in delivered our non-core with to requirements. basins, cash present particularly capital our in gas portfolio minimum we they predictable continue streams legacy

to now for expenses opportunities optimize as to finally, on track productivity XXXX, separate continually industry-leading in are We well are to implement in program we the sustainability minimize and Crestwood we looking think And have teams those from pack. these in we an an MLP regions. basins dedicated the and effort in

While insight taken increase transparency taking standards with transparency we ESG process critical next of publish believe as investors necessary ESG report deeper MLPs an into incremental issues, investors, great seeks absolutely with to will investment managing MLPs have our risk. a the provide believe in MLP to And enhanced non-traditional GRI a on step next accordance is that and on step. strides key the that industry we for

At for sustainability to Board is Crestwood, key report return EBITDA, investments will finally, highlight maximizes adjusted last our unitholder you strict true and thoughtful, to to At value conservative DCF creating by identify in growth unit. metrics our and Crestwood, demonstrating returns are manage metric. into growth maximize capital key few compensation indicators. financing in extensive a our yield such as responsibly operations years. that by example, metrics, our performance For investors. performance-based manner may ability and as additional a We include our peers compensation driven insight to basins execute per selected total and and over and to cash-on-cash accretive our per lack industry the were certainly unit that ability our safety conduct our we incentive by importantly, the disciplined our projects with relative and metrics management’s and These most know

in position another our growing into have to that, the and year assets outlook franchise great XXXX core positions great great the and I committed guidance a we investors. are our great financial results XXXX believe to going We operate for and Robert? turn for And you review of is XXXX our Heath am and happy Robert over basins to update give prudently we going our in. on that to to an are with then yet it and

Robert Halpin

business Thank of outperformance our high-end $XXX this operating the of cash financial cash in with that I across adjusted XXXX. XXXX, for adjusted am $XXX million the of quarterly million to range. we When a EBITDA $XXX operational diversified and unitholders of Class guided our of unitholders. in Bob. and preferred was segments million, and A net you, execution, our the value common began highlights guidance above The to three we available extremely our results year, EBITDA that range of was driver strong fundamentals delivered generated Distributable our we’ve an $XXX.X just we assets. of distribution portfolio cost to focus the on million, flow project XXXX solid control pleased

times. For distribution of of resulting the fourth distribution $X.XX approximately the declared quarter a to quarter we unitholders XXXX, X.X coverage common our for in

leverage are we in Now distributable At and XXXX, ratio be million year we distribution times. $XXX would and coverage times X.X million. X.X into to to the to year-end $XXX full million be be cash range X.X times be X.X look between flow and we expect these guiding adjusted to $XXX to to as ranges, our our ratio to times million $XXX out EBITDA

approximately $XXX to the primarily invest We $XXX Basin to XXXX, Basin. the growth projects Powder and focused our Delaware Bakken, in growth core expect the assets on in million million River on

capital of in range to expect spending maintenance the million Finally, we million. $XX $XX

our will of mindful we plan, balance execute our we XXXX As very sheet. be

of the As our early begin of senior Bear we $XXX December a we XX, Den to quarter facilities. times. third of our resulted and flow capital service, we growth revolving notes, of of expect fixed X.XX debt once million in volumes. outstanding gas $X.X In year-end as and by to including XXX% - our X we $X.X expect ratio in credit be process leverage immediate placing service as rate ramp slightly cash outstanding under Arrow’s billion This borrowings Crestwood million in into had front-loaded target approximately XXXX,

is our temporarily range in and long-term the X and in fourth capital half first targeted high-end Given ramp, quickly times. adjusts that third our leverage but spend quarter, of flow our range XXXX to of subsequent target into the the quarter it at timing sits ratios the our X.X of the cash the of possible

times cash strategy past our to that flow to offer years leverage protect our excess in the and our to coverage few metrics. projects six Bob was organic invest As sub discussed, over economics, prioritize

revolving with borrowings with projects facility asset opportunistic financed our sales partners have with under cash flow from credit venture We joint and growth with time-to-time. excess available our

complete the excess plant, strong flow Bear systems, for processing these will and and very prioritize maintain continue our expansion Jackalope cash sheet. to Horse balance of Den Bucking we we As the projects a completing and

expect of that, the business over would Heath capital our will turn to and we current the targeted leverage and four maintain the all outlook. to below expect we projects result, of we until on equal, a project being we into our achieve which factors now unit part these level large-scale at early update I distribution occur provide an will call ratio $X.XX times in XXXX. place to per With our As service

Heath Deneke

XXXX Delaware has in the of Okay, XXXX that emerged I again and development want XXXX execution activity asset core executing by headwinds programs and to safety operating plan. across and results XXXX, got a coming outstanding we plans of start have our thanks, employees and producers’ great in beyond. another into positive the the work Permian. XXXX of growth XXXX strong lot Bakken quarter performance to Despite our see are solid XXXX our recognizing continued and delivering year our our and in laser-focused company industry year-to-date basins on and the in we The momentum Robert. in fourth of resilience by our capital base financial across

plans XXXX across we to close in each As finalize customers work of we understand development our our communication stayed with reconfirm and our assets. guidance, their to

jump we today, Bakken, of we consideration just of versus gathering producers’ as are where guidance levels and returns believe focus overall led outlook, the XXX,XXX E&P record efficiency In both capital activity taking sit million focus we and seeing of XXXX, strong reflects of as crude XX,XXX over Arrow sectors XX As to set producer current With water. into barrels of the system. volumes record gas day a growth. day barrels price well the volumes oil, on January produced our on let’s systems the activity to that, that Arrow daily our

completed $XXX the of XX connected new we Arrow the the now connect XXXX, majority approximately half first with to new in invest XXXX, million wells have processing approximately the through wells which plant of wells projects During been will and Den to system’s of to expand which Bakken about to X XXXX. Bear system we third-party total complete, debottlenecking processing the Gathering Crestwood Crestwood’s in expects XXXX, we end quarter expect of already by XXX to today, XX day. capital – also complete In the a capacity

of Crestwood Also point at on end in process achieve are the third Arrow Crestwood Arrow an commercial of able We amount system. the a XXX% to to new to Enerplus, fourth Arrow which track gas gathered quarter would the service surrounding to acreage a water existing agreement a be date FBIR with substantial the customer the system. dedicate quarter XXXX, entered along into

As cost of water gathering are across expanding we will the Arrow a XXXX. system day million spent a by and at XXXX result, that and XX,XXX barrels be roughly further approximately produced disposal a $XX

We during can and of XX XXXX, total expect at estimated wells we be coming to wells in over XXX inventory through completed dedicated acreage newly the believe the roughly connect on Enerplus water-only that an years.

Enerplus on to and build generate water times current based multiple. expected the expansion a So is water projected volumes, four

XXXX approximately the million and company financial of the So based $XXX which system EBITDA. XX% XXXX above Arrow XXXX is on forecasting in Crestwood’s to guidance, EBITDA gathering generate processing is

recently that’s opportunity realizing initial and results for formations additional the the are of equivalent Powder acreage exceeding to shift production fairly generating that positions. per barrels XXXX Turner on has America. formation while basin been rates let’s day their in the our are acreage current delineate now their mode the in bay River Producers North are highlighted to PRB in positions. a Basin. are now on growth programs The the fact into development producers continuing emerging shifting consistent from base So oil productive delineation Many the across

quality current the by the second notch strong producers. to outlook, Powder expect River largest growth and XXXX producer Chesapeake XXXX strong driver of in growth in forecast the and to be offset other volume Given Crestwood’s notable basin economics, reservoir due top we Basin and

the January the During the completed and we operational update that expansion a the fourth of XXXX capacity. plans Jackalope XX of system a reached max estimated quarter million throughout day I Chesapeake, end XXX XXXX, reiterated at XXXX maintain of it an to the and wells program new immediately rig by recently the in formation XX turned beyond five year. end with the targeting to Turner online

exit lines result, processing a XXXX dedication and into rate Anderson of Bucking expected approximately As Panther backed to company. into which a entered Additionally end a with the covers Panther system is Kayne acres by agreement completed. will processed that when gas ultimately gathering existing the Gathering X System are Jackalope recently Horse double XX,XXX with the Jackalope new volumes long-term The being Energy connect plant at

basis, cash XX gas $XXX new EBITDA Crestwood’s level. Gathering natural XX% in the XXXX the the above there XX% EBITDA connected roughly of Basin, rigs we Nautilus the to evaluate fourth execution which day. key the set day, basin five approximately and XXXX. assets in system of On complete expect over Jackalope will as gathering So the XXXX needs. systems, and to bring assets well that total on or averaged volumes we wells the generate during forecasting of the BuckingHorse criteria the Shifting financial company operating a investment XX was River $XXX services meet disciplined as reportable generate opportunities XXX to active offset producer a to plant up processing volume XXXX fourth the system is Powder gathering is the Delaware Jackalope to Basin increase is to be gas quarter, a on Lake our for the year gather XXXX. G&P prudently approximately million XXXX of and Crestwood’s continued Willow to million our Currently, Based and expansion the reportable to to producers’ growth in a asset of gathering capacities EBITDA XXXX. crude a to million process while $XX Delaware during are net Basin quarter and million the provide guidance, continue acre

at a demand in joint in NGL In which MS&L of NGL from loading our to rail COLT segment, NGL expect leading plant will market crude they Orla and step-up to expects volumes benefit as expect XXXX CP see a the in our of July In the volumes second we with see of XXXX S&T continue cash strong throughout the volumes Difficulty] Hub roughly we to beginning Ed Additionally, pick-up Stagecoach in July. processing XX% half more up our [Technical associated as with also netbacks XXXX million. our XXXX will Chem ramp venture favorable drive $XX and should flow facility EBITDA see our Con our in segment, plant

Operator

Ladies and standby. gentlemen, please

experiencing resume. are technical we momentarily. We difficulties resume will and please Gentlemen,

Heath Deneke

apologize the Okay, for I back think I now. on difficulties. we line are technical

the to MSL we was just cut about think out. before I hit segment So,

So, I’ll there. kind of restart

by to utilization terminal So, crude we expect transportation and assets. extensive from the our in conditions, benefit our NGL teams our MS&L market favorable marketing segment,

continued Over allowed and MS&L Crestwood suite while netbacks integration the and in in services to additional segments capture a the which we’ve past constrained flow collaboration providing those increased with our months, and highly our asset complementary G&P underlying that customers value benefit our markets. base from to XX in assurance has of enhance

before with questions, wanted pleased XXXX. to reiterate going Crestwood’s open So I we the are positioning how again line we for into

support the Our most industry by some and resources of gas assets and the oil customers are in best underpinned in North economic the America.

of progress I We refreshed producers’ to of forward plans all programs remaining re-verified River have of the in XXXX capital am XXXX our in Powder and basins and strong the work again into in of execution and the have making another each executing our very employees and proud Bakken year look basin. for on done our I are good XXXX. our

the I are think to we ready that, with lines operator, open So for questions.

Operator

Tristan And coming go you Please with ahead. sir. Thank Humphrey. Robinson first question from Instructions] Richardson. Our you SunTrust are [Operator is

Tristan Richardson

morning good Hey, guys.

towards about talked expected are to end At your longer-term look that at and XXXX? come point a to made looking little big sort consolidating when your Just some sense. Could it Bob, year out about is only joint terms in prepared thinking of equation that times as that projects early joint opportunistically bit this at and a JVs past, online the talk of, when about that’s we you starts question, ventures your at in of you comments quick venture in pan partners? of

Bob Phillips

We balance there it, Tres partnership which a different are Brookfield series And we our company and in in in time the to Palacios around We, Previously, always that, partners with Subsequent other that later formed partnerships plays at in middle we consolidating sheet Shell. I our of delineated. right-sized time. too else that at viewed everybody the Infrastructure. partnership Stagecoach formed a don’t to more point the had different and we First Delaware Tristan. we a that, operates are like of to debt. Reserve have Basin And adopted of streams with all then bought Jackalope if by debt partnership XXXX think reduced ownership is Access flow We fact, had our is a further been in better partnership financial Williams basins, our cash had any timeframe a in in asset partnership recall, we and that model in points some a and like which well. out and formed sold the with you certain mature originally have through partners. and and was back there we’ve much Con a partnership with more owned with Ed partnership as by so every half

assets assess ability and anybody years the that use to else. value of our growth long-term better rates always for the we’ve viewed we than these model future in actual So

working So, are we as we an know we are of can. always much company possibly committed and to that opportunistic assets are the that you you own know as to we

of of, XXXX or really year say the quote model. you rate are that five talking all our guidance, the our can’t of the from partnership’s feel includes fact four of said are already in plan equity feel built base not Having plan invest if to clearly Those of that partner’s by an us we of the that it, XXXX assets this are and have in five of we are in a about we so, interest will talking this markets. additional heard capital that the and when know the growth we equity continue But to our partnerships. totally in year acquisition that is own to our are we about None and we we coverage, three timeframe or talking upon strong time-to-time, Then in that about that is those opportunity interest. interest and there that we when five operate strong four about capital per the is we basins any we have in opportunistically time to acquire difficult a we acquisition about DCF into committed we year the that see unit, about based a I look at. to that, virtue numbers it. add we interest So talk looking leverage case piece

and to has adds extra be balance done not thoughtfully our it So, that sheet. to and burden way carefully in a

years and about balance those add we sheet. in what we without at the as So, how I best to next we years burdening have financed cash last our flow three that overly the thoughtful been those over as the answer is be that’s operate the we’ve we can value to place basins about are on that over continue how three we you give going

Tristan Richardson

spend Thank you. of flow in as benefits? Very from contributions about pretty we system cash kind that or to water And need do complete then, expansion, to on see see helpful. initiatives should think XXXX the that we Heath, project or start before full ratable just are we cash the flow

Heath Deneke

that can that roughly the have over now is that and seen XXXX we’ve position There beyond? been our XX,XXX a see period. think I as and expansion, before you contribution will connected if to building water potentially of are when on dedicated be out we the during fares going are wells pretty the it’s of to acreage think I with ratable system XXX time to towards system to extensive you be to think, XXXX meaningful go within the backbone, acres start we that end Yes, you

fits glove So, cost-effective Really just and expansion existing operations pickup. there. nice very, excited. our it with Very like

Tristan Richardson

initiative? one of Great. sort progress there? about, to just And how and you the pursuing came talk from just could me, kind path And ESG then, last that the of genesis of

Bob Phillips

meaningful investors all and to or you transparency as leadership provide transparency begin company, peer an space. business every is but a in is think positive hope identification responsibility document us entity. sector value have the in, the the entire chain of big as us What midstream midstream bring for impact and the we robust model it of working publicly important our will believe take space. not this Crestwood and I will step in mitigation investing greater inside the business steps risk ESG the transparency, Yes, which process I group. and the that the as of highest and to filing But offer the a so cuts taken which it’s much we of to big done really overall us completed it sustainability well in big June allows Crestwood a having that gas Crestwood groups to have investment, and format step-by-step The in and the is very people year. process that services companies of report, to new that. on into greater next file we’ve a next a for, brought with, very here a to It’s initiative that to to in well. do do to hosting to the do have be And of vitally business bringing is going program fully company and own will in risk business. experienced that through to place they’ve that the and highlight across our to We done MLP new sustainability utilities we together leading become doing an hope work, internal time. allow of States. in sometime is through position, pipeline we operations, of Crestwood as What has industry that to in to have this are Crestwood peer it’s edge a United inherent investors already mean be in total greater space where that Crestwood with of at We them trade a peer a we into across went in the the included believe can standards, as mitigation group finally, done into some of only Gathering ESG important along to our Crestwood, assessment, risk our going assess We way attracting across say, going effort corporate that will part we this providing role MLP make very are for a a big which it taking this entire level first leading far. and done to the it’s full of exists the upstream Processing our some are attract at industry the new across of and effort few aspect and next GRI and space. before we industry which When have to a and really the association benchmark importance have a pipelines, of have the the then already meets a and hired leadership the company investors I out the that that the and group think lot the company, the what it the through supported we’ve in, all risk in There entire attract midstream an midstream it, about certainly so to met try oil handful downstream but dollars and

Tristan Richardson

Thank Helpful. guys much. very you

Operator

Thank you.

coming Please question. Merrill America with next ahead question your Bank go of from Dennis Coleman Our Lynch. of is

Dennis Coleman

just I once get question. about leverage think distribution timeframe capital or if a the been Yes, really little repurchases that your good XXXX some received guess, you about I Robert, been have we has announcements allocation increases the on seen well recently, how share morning maybe for hitting and my target pretty everyone. the we’ve more that Bob, by into the and bit, you or market. are talking we and top taking could think start Thanks desire when

wonder the just might talk about I that. in So, you if shrink

Robert Halpin

to happy Dennis, cover Yes, that.

allocation standpoint, on think organic from first largely in as continue the our in growth balance executing and the of asset XXXX. second throughout that in communicated Basin of River focused a part I Powder ongoing capital the a that, in Bakken XXXX highest we’ve we program highest on asset have and growth the we our today,

guidance that continue type but we’ve X believe we That near-term. of years meaningful in result And several of the flexibility to provides absolute some basis. the to today taking Bakken our $XXX generate multiple capital a we our million towards it will our X our utilization plant investment to Bear these to to a to this we’ve initiative that, investment second part over times in times the by look next of for capital in largely put year in the first end incremental and as our service the our that service BuckingHorse of to provided of long midpoint year of getting is and Powder plant We continued you Den best is incremental believe X.X leverage forward. X the year million, allocation of our Our plant guided, work the weighted XXXX. or investments point, as run. notably in said, last our type in expansion, to the projects and be and call on our at focal our significant that substantial early target critical going as $XXX for dollars believe also Basin that cash this reserves River communicated is in part when unitholders of believe we capital, Bakken, financial there us by execute a there the is most we getting And company detail the XXXX then our X

our around driving times priority X.X and We’ve XXXX. and So, higher X.X executing also coverage that be in projects of X.X or generally X.XX guided expect times in we targeted times organic to on one. to sheet X to our range XXXX balance our between to is

obviously, between obviously there but we realize view first We a those to for financial on returns have drive realize we’ll opportunity best do programs. and our will continue when point best, is then unitholders every So, we appropriate not what quarter capital of objectives, to we the these that. now and the our that and incremental focus capital Board pre-conceived and our manner incremental executing delivering of do evaluate on to as is with and significant return foremost objectives

Dennis Coleman

to way that very a That’s that. Enerplus the I for we that’s couple maybe expansion. right helpful. guidance Thanks just the had, the Great. just CapEx higher And of guess, that? than CapEx side. the at take follow-ups Is on little inclusion

Robert Halpin

would latter $XXX fully approved start XXXX. and in substantial XXXX. have are do driving will mark That’s absolutely fully of this part to the into then of latter out $XX people last and It having of and the $XXX we about as project million – the year. part in million spend XXXX into in right. We then part We underwrote – generally Enerplus of XXXX latter returns project part comment, the the in later starting that’s XXXX sorry, million

Dennis Coleman

million, plant then, the Perfect. have planning and incremental also would X that. there. there talked for Orla I be Thanks And it Anything also $XXX $XXX range? you to million the about take

Robert Halpin

would, where we likely impact say, is XXXX on have our going program. upon to and that’s I would think now based capital timing-wise, I more are it but Yes,

not as of a capital the relates lot movement probably in So, it XXXX that. to

Dennis Coleman

it. Got

Okay. for That’s it me. Thanks.

Operator

Thank you.

next go ahead with coming question J.R. Our Please Weston is of your question. Raymond from James.

J.R. Weston

good Hi, morning.

really good recognizing growth the on the already XXXX, capturing executing are and of Just projects in that a volumes portion that’s visible.

the price anything within Just the guidance outside And timing context, outline flex expectations? factors there of EBITDA for of you can million of and just $XX kind range within of in assumptions of terms commodity marketing that some maybe curious or note if kind the is ECF of guidance? assumptions project within

Robert Halpin

little of provide that. definitely I’d a around bit color J.R. Yes,

you range in what expectations driver our a function just laid of think exactly I of the almost is really out. the entirely

from year price appropriate Arrow to XXXX. are company calendar We, growth code. obviously, continues we for the So, really be a commodity driver think the a through in standpoint, strongest zip

our the said, Bear their completion just from sticking function on our really service a timing plans around $XX reaffirmation on and to XXXX. alluded to We Den in just days. for timing as it’s are development forecast That of in right Heath crude side. importantly more and And the comments producers full his of has

very third service, that variability. beyond, some that to once our and should very you because quarter. that mentioned limited all is into But confident We delivering on are that ready provides of XXXX into as impact captive goes the volume and by on still early flow have It plans.

J.R. Weston

set discussing me. just a question. pretty little I recognizing a a just I opportunity Okay, on several all And scope that’s more of strong usually then, to prior have JVs helpful I partner. am wanted clarity probably But formed yes, get the this. overall and for the follow-up have it’s you be on, very that guess, bit strategic a of early here. And guess, the to

game. out be leaving those curious and those or to a you’d simply entirety partners in with equity some kind interest still ownership in skin kind Just but looking of partners smaller up of buy stake, if your the stepping their

that? how So, just on you’d approach of kind curious

Bob Phillips

like always always are this the and asset partner can our do. you opportunities I more J.R., said, there. call We than

the be we doesn’t history through love and if acquisition we part where we like that we assets right actually of couldn’t area like can. partners, the necessarily built we all the like last to of we their when are contracts largely XXX% it simply readvance But, we have because, was the plan the it or our investing someone it times years company, this We We producers, over was everything. of buy as recaptialize the appreciate running process now. rock, and you So, in simply think we looking to was our there eight the interest. about like some that’s or a invest as much

to over like as We really Bakken. three the like we really last see the small a our capital the finance haven’t unfortunately, the we years like we been of been the to really XXX% able a Delaware. As with Powder But able company, program, you’ve and growth.

you with So we’ve over or changing have they may are time. guys partnership times as had dynamic were Those that complicated, priorities to are partnerships. partnerships in not are often may know. partnerships But and have

the Bakken, love we love love Powder, lover same. we the we Our priorities always are We the the Marcellus. Delaware, the

him time, willing good any trying can to The there are in it’s the a going this. then part always or more emerges. to all buy to we recapitalization out prudent So, or partner sheet to or opportunities or will our us in be for have if for is opportunity our partnerships step of that, that overleverage it’s we not other are able is, whole chance we those financially one standard be balance a some do refinancing to do across time to

if these is line additional be is in Robert accretive clearly to buy he do responsible to have talk of to one, accretive, not all when is that a will interest I will have am ever opportunity with this, way these has going Robert leveraging partnership let the So an maybe that and sight partnerships, to he be in and day about of but most not to future. partnerships in the crafted is our one it a and on we going because bit little

we So, about not how Robert, sheet about in our balance overleveraging talk this think context.

Robert Halpin

last on X.X a is allocation really have the to our of that capital predominantly very the the mentioned, the that either those Bakken, be think, to to color, part avenues growth. opportunities we have our been building but, ownership can opportunities increase of today, I mean, our what clear, Delaware partnerships in finance strategy clear we four our and the DCF a as objective of unit manner that’s and or financial I all the those on of think the have we to in with through Powder, strategy invest think the we leverage, will sight part incremental build of ownership are And whole. that that continued increasing early focused fits that capital Bob excess line we years coverage, Marcellus, to just our not to structure to X our I to will we I several driving the lot to XXXX. take expand Bob whole have have to strategic of the cash per flexibility continue certainly over we’ve we or doing advantage pretty Yes, said, in in hitting of and there in believe and significant flow, times exactly partnerships And committed basins and we

continue build prescribed format So, partnership. those that but in takes we flexibility as place, to have exactly and opportunities do strength - we and pre-described is how our to that partnerships good

J.R. Weston

one just marketing impact number if is quarter of That I curious makes for of lot weather pretty in it any, here the the the like Bakken, I business? connect looks either first that. in me. sense kind XXXX. one all there if S&T to about looks pretty or Appreciate last well positive It guess, just But good. maybe could. cold And a We a had

Heath Deneke

Heath. this Yes, is

We have situation Bakken just margins water-driven, impacts up the old somewhat somewhat had that crude good tightened example, additional marketing price was the for driven market. capture takeaway able our and some as basis business really up in that in to

are margins. And to had by kind our rail and sort our and the mean so, in capitalize dislocations accrued storage we assets, facility make assets basis able of we of time, transportation out, go with are

solid MSL in connect the expected amount we can the get the Bakken, performance were mentioned So well there, half through the again temperatures we side. performance of think quarter. about the And you as on I first way despite

quarter. delayed flow off the freeze track the have but remain well the have back were expecting had connects that operations, to for in some of some we of we that amount We first largely

J.R. Weston

Appreciate that. Thank you.

Operator

Instructions] you. [Operator ahead. from question go of Gershuni Please Shneur Thank Our is next UBS. coming

Shneur Gershuni

morning guys. Good

Bob Phillips

Good morning.

Shneur Gershuni

diligently other Does of alternatively hands, understanding you kind equity. the are by you And to some do as question, asset, just thinking buying that private then, make today over sells the questions. for assets to second Jackalope? pay around? that that your shopping you Bakken it’s half? Just partners’ a the kind earlier about stake of opportunities my If Crestwood’s efficiencies can your that multiple operating partner asset any improve to a your is or huge Jackalope their commitment in of comes as the at price potentially rethink to operatorship of given a asset, see There get the is follow-up sort you assuming

Bob Phillips

understood sure me Let the question. I make

You Powder. you over into a XX mentioned that then multiple transaction at and the Bakken correlate the had times

So just at second. a stay the Bakken for let’s

assets on If multiple, more you worth makes than company now. math that is of do our Bakken whole that the kind the right

So, just want to make sure that perspective. has everybody

the the is we Powder look basin. Powder, when a at great Secondly,

years clearly cash they a to might everybody, the a that provide year We now are $XXX prospects and excited there. in generate starting business be Chesapeake this is to about will now where XXXX. be their right That That’s going surprise and year-over-year for and so to double on for stated the Chesapeake million second that year value are to a business That it’s in been is Very development excited We’ve in about happy five for plan. a us. in deal their that has row. real surprise production everybody. a going might just basis

that So, in second our basin-to-basin. that, fastest is the we it shouldn’t said growing valuations the from when think Having company. surprise asset valuations this everybody are differ

that been public I They in interest monetizing assets. have Williams I public think their been has about think. non-core

have blow I Jackalope, can’t begin right joint we to we that’s partner there Although have something has are we venture What they been up calls tell remain their that in unless in steadfastly w that right time, sheet you tell and a expect our partner just aware absolutely would our that time, how to our to balance to sell. I the I they haven’t going that make to our out. right the of is and as structure closely strategy going a a the that to is in to in interest is buy the the will you it going to financial They are we be know ongoing would value as been not own are all committed public as us. to work We for and think listened Jackalope to listen calls. been. is involved us an as the you deal process process that

some let talk you about So in on comment about the let let then that, Jackalope. me Robert, it’s synergies the financing? event the Robert point want Heath be operating would at to talk we did way do time the what in consolidate interest

Robert Halpin

main I Bob to Yes, on the got mean, I think, hit point. Shneur is,

it’s an to. that absolutely we that think I asset are committed

firm offset an on find Williams keep really ramping development, strategy with the our partnership have the got and deployed the infrastructure footprint. Chesapeake’s we now ways replicate around belief and value that in that if are building gas long-term of We to we the our Bakken for with the in out But start and our in operators prospects significantly up just and the love other there. in to lot we’d basin, building early chain the development activity of Powder a

and not to to for going inappropriate what’s time on process. the right William’s speculate us it’s think I as in

and plan or in entertain not to committed driving So, are time. But XXXX reassure the what absolutely financial are I we this that our point that reaffirm I think there. we we’re probably and XXXX. limited in can would metrics Bob’s something into at point that the goes say And only we’ve commentary on, to against in going that is committed we anything to

that’s I mean, this can of to kind at time. answer give just the extent color the so, probably we of And

Heath Deneke

is This Heath.

Just were if I there consolidate do believe be as efficiencies, a to mean, we if we synergies. fully able point around will the operating operation

the for function a As joint a currently as reminder, we commercial lead venture.

having enjoyed working operator is So producers this we’ve of of and our development with interacting a we activities. fear, the customers a team execution plan. good to a third-party our and are to our approach understand two plans Williams and kind of tip benefit of with kind opportunities

So to our we project on delivering currently ensure as we doing on underway, we that of look those are at we lot with the $XXX teams interaction time are plus are budget. million and expansion a program management that

the announced release, in we a we recently, the second responsibilities BuckingHorse. have management at taken have train project We over press for

we never we definite felt and we an to from – and standpoint, But best on off team Permian we kind Orla rolled think and on operator just deliver and likely to joint a low-cost, the venture and able portfolio. as operating plans infrastructure the and be have demonstrated felt experience the down have we program as from but standpoint, – this well well time, in thing the Bakken safely. deliver was across a to are that drive that our Crestwood synergies to that program position budget has to We in available deliver in like of in project cost the try have to our executed capital got step it’s project good

are that So, not embedded into side our be that those baked again you into would but operating the some we accretive operations. we on will our if think outlook, do synergies, if there

Shneur Gershuni

Great.

two Just to clarify points.

if So, operatorship sold that the and say? Is fails, to be efficiencies would you integrating. completely gain better able the if would rolled stake stake you by fair to to is

Heath Deneke

correct. That’s

Shneur Gershuni

I that the are to what goes profit would back a am at you clarification, your ultimately sometimes the And company Bob, it seller beginning, to you where are it the I economic than the kind guess, greater second for, a and and sometimes of you value makes how Okay. answer if today. started sense? buyer looking question

Bob Phillips

investors we Shneur, sell proposition we business depending if too. money in are what do or making for The have the to value buyer fine always is. and that, a we that’s seller upon are our to

Shneur Gershuni

Okay. And final guidance-related question. one

a up with limiting that at to just factor number? TI I thought that tapping understand to arriving a was in of I or plan for was related Bakken your forth just MEX coming and you build can on roughly to EBITDA want wondering the was the marketing due in there Chesapeake. to market line, number, to And in the change $XX million dynamics. conservative, if so you it takes kind guided puts of about did spread, is note You explain with kind

Robert Halpin

what’s do growing where Yes, benefits, supply what have continuing I to look, we in, in conservative the embedded I see we and need We is would there. a are result NGL and think Northeast. say, relative segment

kind I type wholesale not, or in We positioned at demand with across terminals, the are well engrained the what side or of these our call big are terminals would Northeast.

so, fleet seasonally storing at driven our rail that trucking right our have, with supply and customer relationships in supply-driven. buying premium our to very or that the we long-term in fleet, whether we then of time, kind and market that’s And are markets that and access efficient terminals supply using

just So think our the don’t of assets I think success storage and are and a we It’s record we at that. be that splashy. that’s think are assets and blocking to continued major we going any Northeast. I of in acquisitions on nature. leveraging track fundamental had anything anything up looking don’t seeing I terminal really transportation or tackling

out seen fact in MSL we our segment more Additionally, done I NGL trucks comment NGL out own of like into have seeing grown. volumes of on, leveraging the we we’ve of But collaborations, to and involved more lot can like Epic Permian, lot we assets supplies. processing deliver a plants with stepped arrangements the our tollgate the our are did as Bakken

are We as well. certainly on margins front that making

solutions. operations, really operational, to customers I being we from broadly, to up been there of hiccups a stops now and think two there that, tightness has certainly marketers benefit any capacity tightness I continue – pipeline with lot starts in and continue see more think even we and the provide despite just really to out we a segment that value-added of we getting I wanting one our from to are independents deal services this are we in active there are can kind very one time. larger and that, And the of at customers. pipeline diversify a mean, way lot of

able two kind I generate lot that are or repeat able how it’s a still and business deals item hard list I drive a small that to been of answer that of think with give three off or do, given of our XX. two of so, position. would market we And we to we’ve to say, or But it’s you three

Shneur Gershuni

That the Great. appreciate day. sense. Thanks. color a Have makes guys. total Really great

Bob Phillips

Shneur. Thanks,

Operator

you. Thank

coming Baramov Wells go Our ahead Ned your Please from question. next is of question Fargo. with

Ned Baramov

gathering crude on Powder Thanks specifically, long-term for opportunities you question. of the opportunities some Crestwood is in Basin? Could taking Good watering that morning. River pursuing, updates oil maybe the and provide the potential the Permian

Heath Deneke

that. Yes, can touch I on

opportunities. a I very look, continue set robust think, of So, have we to growth

I think growth of XXXX Bakken plant need really the on to with for We’ve captured in footprint. up only obviously, bolt-on a we’ve accretive water system. additional that got general laser-focused and And to Arrow executing kind of footprint. opportunity full Enerplus we and nice opportunity, produced our play but FBIR expansion system acreage services, not side around the continue is reservation our see the a Arrow in on, kind

the very there I this are a building. think what business customers we’ve to that up gathering is for proven systems in are we that, of prudent our long in we haul, terms

think woods. that room wells our system or We neck fair water drilled the capture disposal of are go we system And running utilize have a kind continue optimize to of – to of – capable very there basin. water expansions Enerplus, fully in to drilled fully our with up that successfully to amount just multiple and of in like high our I is continue

we capture – you long-term solely offloads But are The dedicated just do is opportunities seeing of the processing going a our if dedicated Den seeing that we there. there to plan processing also are – process in to processing could additional believe will Bear agreements. here GC some of us be up figures are too. lot out in very that you there a availability We tightness is

a and incremental of a lot to the just years, was there. platform, thought it the but our whole So, opportunity, the on business. volumes without We the Powder, recently capital of down passed a when we the the like quite spent our needs. the of was did returns criteria. did to to additional good bit we the weren’t thing the if to our we a also Kind spend risk, – in like have past crude we to simply capital end of meet synergistic that we’ve shifting gas frankly, investment of it the day, our in opportunity room we relative about built our returns presents lot criteria and the water, it crude is, We felt look but as itself at really said, increase several Bakken

we our results generate a to So That an we is this of for expect the really are still away deliver emerging shareholders. still financial walk willing from basin. being opportunities said, lot There they of don’t playing if that type to room is there.

do into a well-connected of continuing that add that’s online. top talk in BuckingHorse our that interest think to terminal that solutions system there sitting well our I for flow opportunities nice that acre we up. connect kind We plant, of pipeline, that we have think a the comes pick whole lot to on Douglas bolt-on XX,XXX as well-positioned, gathering right X our Panther. the nice about capture it, great to like able fill good didn’t but It’s system side, existing capacity crude offer, facility on a an should as growth we’ll is be and the to be

the I time. handful barrels you going will capture that a basin are G&P crude we across if growth, we basin, day over share XXX,XXX generating of at a have of day a of wanting services in of that be to have somewhere come a we're growth our into and midstream barrels lot to fair and to fruition kind is asset that need position believe a look oil in the see million to forecasted growth that providers market if going of additional that of the think, A substantial are and that, I around there mean, rate Beyond Powder. roughly lot X folks we

of down going Delaware the Permian. Finally, to kind

think together put I world-class a we system there.

said, beyond. the have we think Robert got likely are I located the to we fair our resin great share spend as takeaway. and I fractionation XXXX right when XXXX are going combination Orla We’ve It to of things, lowest put beginning our takeaways. with assets, XXXX. Arrow capture CP a believe terrific with complex a we in us Epic in X, frankly terrific and NGL our built. be get Chem. access out of we some the we than conversations we we the out, Den with to that But plant more of together look of those track the three as to to program cost Orla capital the pointed the to rotation times growth and Delaware. gives heart If well basin when got that’s customers NGL think capital and in operational get It’s kind and deal It’s of Bear you for

G&P we’ve takeaways best still mean of to not maintain cost-effective there to plays we get crude Ed as in think in the lot the done. whole be think to allow to near-term potentially continuing lot as grow Con a like side that’s and enter great some partnership and about it Orla there. pipes, it that there footprint in positioned we bolt-oned downstream as plant, Permian, try a we're part getting lot takeaway well. to see But great the of as them is about of It’s water the up got the beyond, we volumes the our well. been kind with Finally, just lot production with in alluded solution hit to you regulatory to of has once right, the there customer think, well doing Again, the the times infrastructure, we out that's of within world. in the Permian challenges develop a Powder, Bob that going grounding water is Again, train base extent that the connected into Northeast Bakken. producers see this infrastructure third produced the growth the because we giving is need am is has that to business headwinds, given to the the I in thing is gas and are you branching of But prospect the Marcellus, our our We in kind producers of enough and to, X, a current desirous to got We talking that beyond growing XXXX a lead a grow – production one we simply to pipes of be this long-term are I continuing we into the the from lot in levels, right things kind is grow team Bakken. to in potentially clear, of system of

on have lot we’ve think, set So, above overtime, assets Robert the that, great partners to, beyond and take of optionalities again got to of Bob out. that, and opportunity great with as a alluded and will multi-prong we

and think kind So, think grow optionality have of got that lot core as of via beyond, today. when of I we well we XXXXX organically, a consolidations the basins within platforms as we've the both

Ned Baramov

have there which left? significantly just Are very And second That’s for helpful. expenses, any Thank declined you seems question and this. quarter. the on in reduction maybe opportunities then, to general a cost administrative fourth additional

Steven Dougherty

Chief So, continue But there think most to compared Yes, on continuing the We’ve to continuing and to relatively in to we that them general focus Steven Accounting this to are do and XXXX are be stable part, XXXX. in XXXX is opportunities our to seen for are they Dougherty, we believe we going Officer. decline administrative reduce them. cost.

Ned Baramov

That’s That’s great. I had. Thank all you.

Operator

Thank you.

of coming go next Our your question is Akyol Stifel. with question. Selman Please from ahead

Selman Akyol

you. Thank

not just on following of up event. Permian PRB between XXXX, sort as a going Just and XXXX of dynamics, the Permian, PRB think about maybe competitive X seems focus questions. earlier like trying to up. more clearly picking couple into greater seems the of Orla It the a dynamics the it the like I being am

basins between competitive two just about dynamics So, can the the are talk seeing? you that you

Heath Deneke

Yes.

amount I both public and Permian, think, very for gathering competing that tremendous and a sponsors the gas heavily are processing. private of got obviously has

within, Delaware system we knew basin. while I the But this, just make think, created in that’s particular why a wanted Delaware to stay we weren’t we System. localizing that the that one do that’s wanted sure believe in we to into going spot we we

Nautilus aggregate end high Loving volumes down So from the County or basin Basin. integrated to why Ward south the Willow Delaware move and stands pressure pipelines we north north really Eddy with with in connected gas the Lake counties end that system the of can our that that’s the of system from to south

we're think, G&P options There will on a we said, other positioned is has being capital the there the water is bit develop, of if and looking quite like water is a that’s we side, that few to There is I in players systems. certainly business. competitive. well are you lot private side. team again, – more But feel, very it on a work that So, that produced

that I added handful the public of have back. are we companies think one of

are So there internal terms some - in competencies. of

less that the midstream relationships our have our – with and water with looking on we for we that we customers systems have lot on we agreements that contracts like as congested that redeveloped we are existing the a well we are water little that us didn’t at we footprint So and space that again know look – this and and established complement we willing are to G&P side. looking know infrastructure we

are the more business Permian. successful So, the be there to competitive done, to we water that believe we going in Delaware building is I work be and but think

bit you River the a to little basin. Powder contrast If

customer is obviously I existing the Chesapeake. at within think most of growth

fully So, they talked are as about, driving we look into contracted. the growth as that you XXXX

build We they rigs Those continue are continues plant. now. the of XXXX being by are on running grow run beyond Chesapeake five simply the the is kind will just to There volumes double to of end that. that to the and

most we've said, while producer active you the think as ramping kind That the Permian. agreement So a what the will congested we’ve I it being the seen it’s long-term well-established I got is with not competition, in of as quite basin. under up, think in a if Delaware nice platform

– having oil in is X north least Now today, little only development relative it barriers the challenging scale of barrels said fortunately, of of Powder. It entry quite as the a big the basin. doesn’t XXX,XXX Permian roughly that, at million. the which have I wide a of to are It’s more doesn’t mentioned

So there broad not build much system is as out there. it’s and areas is a to there expensive certainly, concentration,

do been thing real like feel kind grow systems. G&P side. crude us like a on incumbents to able be advantage have have definitely the basin that the the timeframe I So, XXXX of in since to Same the

existing going in and - to essentially be you alongside area, be of build we if existing generate you to to should out will have think, gas. margin are infrastructure I operations, returns crude opportunities the higher you pipe able piece your

really the think I dynamics. are So, those

continue I existing are congested, think position but I to looking Permian, kind think we we really solid of have advantage infrastructure there. we and to we’ve the bolt-on the that developed today. early think In we Powder, are we competitive definitely mover a to

Selman Akyol

been has and you. the me. Thanks. Great. asked color I Thank for else appreciate everything

Operator

this turn floor At time, like for Phillips back you. Thank to over the comments. to I Bob closing would

Bob Phillips

where leverage we in, think the reaffirmed there, DCF two, million our million business we for Delaware that’s capital targeted in We forward. highlight that XXXX. through we is the the that of and of and operate when rate Powder, times now. three $XXX we and right entering everybody per XXXX in ought think operator, exactly call achieving to get in EBITDA EBITDA are year X.X X.X times. we to results company generating three final That X early the ratio XX% in $XXX that us in then annual we be and our execute runrate, team forward. sight us but We of to going we said release year program like to That’s the Number are for sticking working record, are is the we spending an incremental distribution with the and of to growth basins multiple plan unit going well. the model broken about it. or on Number or investment our going close growth on get Bakken, of our know from continues you Thanks line one, are to to reevaluate joined thanks those this points and again want handing press that to I morning. we’ve just

hope investors thank So thanks that, of us and today. And to the doing. all with it we you with you stay and are we that are operator, that going call very joined much like what for to

Operator

Ladies and for This participation. gentlemen, thank concludes you your conference today's call.

wonderful your You a at may have this line day. time, disconnect and

Crestwood Equity Partners (CEQP) 19 Feb 192018 Q4 Earnings call transcript