ET - Earnings call transcript Q4 2019

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Operator

Greetings and welcome to Energy Transfer's Fourth Quarter Earnings Conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Officer Transfer. Financial Chief Long, for Energy Tom Thank you, sir.

may begin. You

Tom Long

for Good Thank earnings welcome you McCrea I'm and afternoon senior Warren; to of by operator. joined call, us today also the thank other XXXX and Mackie quarter everyone you, Kelcy today. fourth Energy and the members joining management Transfer as see our well website. earlier you've had Hopefully, who here help to remarks. that issued slides are the we answer chance as prepared the to we team, this our release afternoon your questions after to press a posted

and will making on currently section based Act us. we reminder, a available meaning Securities XXXX. the of statements our of beliefs As to of Exchange information the be assumptions forward-looking as are within well These XXE certain as

EBITDA, refer financial are which distributable flow all or coverage non-GAAP also distribution to cash DCF, ratio, and I'll of measures. adjusted

this we website. XX-K You'll to measures on find our filed the our non-GAAP a expect our reconciliation Friday And XXst. of be

I'm year and and going full XXXX highlights. of quarter start a few to today fourth our with go ahead

above by year, operational across which top of the for came the over increase of is in was $XX.X generating the EBITDA and the For range an of our billion, and XXXX our segments XX% record record adjusted financial we driven guidance of majority results year.

X.XX adjusted We distributions also was reported resulted cash $X.X which billion of of as $X.X our record the and for of Transfer to flow DCF year times, attributable in Energy billion. coverage the partners after excess

of million. flow excess as the the of distribution which and approximately our X.XX growth after excess $X.X expenditures. partners for XX% coverage XXXX times; we billion, cash Energy of was Transfer resulted the The billion; of $X.XX Looking Adjusted flow attributable funded of fourth XXXX. quarter cash approximately in adjusted in quarter at capital to for and EBITDA of distributions generated DCF results $XXX

we several XXXX, fractionated of gas per transported barrels per MMBtus per natural XXX,XXX we NGLs. X.X gas of records day our liquids, or nearly In natural gas, million operational and liquids of day performance, as million X.X addition strong per financial oil natural over barrels in crude and set to XX.X barrels day of day million

Looking metrics at for XXXX. our EH&S

total or and hours. XXXX. XX than This TRIR rate recordable for Our worked X.X the incident over X.XX significantly average we was was of million industry better

as assets. of pleased accomplishments, reliability to speak extremely on the are focus We and which compliance investment with well the our these safety and in as environmental

several growth also a sixth the our During few. four Mont the strategic XXXX, acquisition J.C. West in including the Belvieu to we at Nolan fractionator service projects processing SemGroup Diesel into finalized pipeline, and placed and Pipeline, Texas Corporation of Express plants two name Permian

pleased fractionator also Coast. the I'm Belvieu our which seventh shipment total barrels brings Nederland fractionation our day. Mont We terminal on And from say completed our now at Gulf is to at over that per Mont natural Belvieu our XXX,XXX first gasoline to service, capacity in

at guidance looking for Now XXXX. our

to related XXXX, is headwinds EBITDA billion. and to crude expected $XX.X Our to adjusted billion gas obviously expected Compared $XX to we natural spreads. be some

taken the In terms longer renewals. contract precedence volumes existing front to of and assets. in expansion development going in from primary new in addition, now capital term. will and future The sustainable long around locking This right impact over contract ensure team's see of activities for flows certain cash we out center commercial roll-offs has

acquisition Frac short-term well year growth commitments several of contracts VI, contributions in exchanged J.C. well Frac much year the several for projects SemGroup, PE greater Permian, renegotiated Mariner For to new processing VII, example, from ramp-up relief. throughout full long-term as volume and like Red XX including the Bluff the offset as we Express. of Nolan, contributions as as increases as have these as projects from impacts X East, years related be to Helping recently with will extending earnings multiple out the other

XXXX, billion to organic assets. approximately approximately to For capital is our be our XXXX, capital to $X.X SemGroup. which approved including projects Post to growth related guidance include backlog previous from $XXX revised million expenditures expected billion the growth of $X.X billion are SemGroup $X.X the is now

incremental We to XXXX. as on we Long-term, will in expect which we rate per be billion backlog. be $X added evaluate cash the year to to But positive disciplined flow now to and reminder, raised bar additional as projects continue spend. profiles free run $X.X approximately this result believe in to be billion return CapEx a expect we we have starting our any will

annual closing, run the our look the we and rate businesses. already toward December companies combination integration engaged the acquisition of provides of crude teams connectivity in of million XXXX X, have Since synergies. recognizing have $XXX which and significant at been combination transportation and closed for assets two complementary on Energy of these Let's NGL these our projected fully Transfers SemGroup increased made we progress

HFOTCO. Starting rate with term plus financial $X B we called Transfers terminal, billion million proceeds annual were to us all The of call XXX. Loan SemGroup's the of into X-year used will at and high-yield formerly of in bring the LIBOR $XXX $X.XXX cost Houston million notes a Energy entered at This Loan to borrowing A effectively October, savings. Energy utilizing $XX immediately savings, billion outstanding lower the current over term Transfer,

we be leverage a which more Transfer's operational are efficiencies from Looking help are than assets. to recognize to drive and commercial of infrastructure toward Energy million and of our and to and $XX driven track cost, utilization increased savings annually on increased continue in by of headcount million efficiencies to ability $XX synergies we reduction achieving corporate at to expected approximately work operational

Basin pipeline connectivity, Channel portfolio we aspects reach increases access at Through the and now refining to to well DJ as and of and and complex expanded will expands for our our which well deepwater opportunities this acquisition, as James our Houston other presence Cushing the have St. access as Ship docks generate

In crude to per Coast inbound Nederland refineries. oil the provide oil X as Ted Houston well completion deliveries and XX-mile of addition, Collins of over Houston Gulf million will terminals, to and day for to pipeline approximately crude access as barrels the

It day of allow fully to expand our to also expected is Nederland per second per barrels export at we us barrel million plus ability Houston pipeline our and in capacity the barrels to will day. million X half begin operations The utilize X than which the have of to per XXX,XXX terminals XXXX. capacity of and initial to more expected are day commercial have over

to to allow us which and as export terminal, as service and to Moore the addition expand this more first will in well Houston Road the In pipeline quarter from year. is to in of expected existing barrels improve access be

developments growth Bakken projects latest the As other we'll with for capacity start on optimization.

further mentioned, forward have us Bakken to with for plans received capacity. to season the we As sufficient pipeline market the open move during system XXXX interest of optimize December

phase commitments optimization per have by during The received as the season. barrels based made above made shippers day commitments of be open that well pipeline initial of the capacity we on Bakken will its current current XXX,XXX already as

be over to this barrel time. permitted continue the X.X we position commitments And as customer in serve per day expect XXXX. in to capacity volumes demand the be efficiently will still Bakken capacity million and increase capacity system in received early of to in up We to grow service future, to

quarter. For XXX,XXX fourth Express nicely per to our Colorado up went to of and October PE pipeline ramped which service on into from an barrels Nederland the additional system in added day X City capacity expansion, Texas Xst full Permian the

utilizing VLCC our on And planned we our our will project, continue network from to significant pipelines of and Nederland discussions to this have accessible which terminal customers on is be project.

closer will we gets more FID, it specifics. to As provide

of into XXXX, our service NGL system the at initial Since ramp on up capacity have as Mariner continued Now MEX flows of the turning system. to expected. to the placing East end

enhance modifications in the These the additional to As through reliability of and MEX for the allow the to improved to a volumes onto as us reminder system allowed Marcus the quarter ethane expected. bring flows Hook completed fourth and facility. system October, modifications during we

underway pleased reach were agreement beginning the At year, allow we complete with have an to Pennsylvania. the the to us construction in projects that DEP this of will we

the Looking with to final of the completion in XXXX the first be phase service in ahead, late of now quarter is project, in which completed we are expected phase anxiously next the of awaiting XXXX.

ramp-ups In Mariner the volume meantime, system, of will for which on we this occur next the the tranche are excited East spring.

product. In for way NGL markets end throughput XXXX as most terminal addition, at expansion underway it will day accommodating for the expansion Hook provide growth incremental best are This provides efforts of Mariner Marcus of barrels by the approximately volume per the at the to with East. the customers reach XX,XXX capacity efficient

volumes commitments third-party new secure Hook. to working also to to additional Marcus are bring We

mentioned XX I expected is as full service fractionation is our be to Mont entire the As in days. Star assets for Lone Belvieu in utilization VII now at next the Frac complex and

to VIII capacity Frac will VIII, up of XX-inch, XXX,XXX XX-inch day day. to Express the million at remains barrels one Belvieu in of second quarter total per in addition, upon Frac XXXX. fractionation Fracs Mont be our day barrels be will In and XXX,XXX Both will schedule over per on service to Texas. south Lone Permian the growing add Express keep pipeline And of pipeline with per Fort our completion barrels over of Basin NGL XXX-mile from our capacity the Worth Lone Star capacity, expansion Star be frac

XXXX. of in expect to it to fourth quarter the service We continue be in

to assets the well. service Belvieu construction to capabilities project in also storage Nederland our continue expand will On day develop of our XXX,XXX XXXX. Mont at our be to underway expansion further our our quarter and Belvieu. This is Nederland expansion We is LPG per Mont at export integrate further in fourth capabilities and with LPG expected assets barrel progressing

to White NGL Oklahoma which this to from is Cliffs The Colorado of runs and Pipeline of XXXX. on began from conversion pipe, Platteville flowing volumes in crude December Cushing complete the service

ramp this expect volumes up to to continue pipeline We on

we constructing ethane and be as On continue Satellite fourth Gulf this quarter U.S. for to Petrochemical to new with a progress to construction to to Satellite, joint of in the export service ethane expect venture our on provide continues the Coast commercial for scheduled which year. the we ready terminal, are Orbit project

Now, our turning to Texas. in West plants processing

cubic at fourth Arrowhead million early quarter. day III the July near for per into which foot service capacity XXX operated plant, Our processing in went

full in commercial to be was In full into million per XXX mid-XXXX. services of in Permian we addition XXXX II the plant Basin foot it placed expect our January by processing and day cubic Panther

Bcf plant fully processing are we With X.X subscribed the more than of now Permian the completion capable this of is per day in which Basin.

well as Let's little primarily adjusted the ET's another our to of was growth billion, products quarter quarter at look compared due from as closer XXXX. to fourth consolidated $X.X the $X.X billion to NGL of take up oil EBITDA performance segment. record refined is quarter segment results. for and the a in fourth crude X% This operating

adjusted the due last X.XX for ET's the $X.X as DCF quarter, million compared was attributable Distribution for quarter year, partners up same to to fourth increase to primarily in adjusted EBITDA. $XX was billion the period the coverage times. the fourth

quarter In unitholders fourth as per on common January is Energy common unit This of February or XXXX, compared of distribution the annualized was the a third $X.XX to for basis. of business distribution per announced on quarter today X. of flat to close of $X.XXX record, Transfer the and an paid unit

record increase and segment, results Adjusted as segment million compared was by same million increased for terminal which EBITDA the volumes, volumes the to transportation with period products $XXX NGL refined The $XXX to our NGL quarter. to had increased due record and another as XX% to well last throughput. and Turning frac year. starting

the period NGL barrels joint mainly million barrels quarter X.X due pipelines compared venture on as our North volumes to per of well day to volumes and our for year, increased Texas in per the fourth volumes million as Permian the on same start-up X.X out last wholly-owned related day pipelines of increased the to of regions. assets and XXXX, on transportation Northeast our Basin higher pipeline to MEX

Fourth fractionated barrels per quarter day day volumes average per XXX,XXX last increased year. compared to barrels to XXX,XXX

driven adjustment. year. last oil for valuation increased to $XXX adjusted increase million segment, was a compared crude $XXX favorable inventory by the our same For million The period EBITDA to

year, to an and in volumes on barrels to million last increased barrels as through existing the Texas pipeline period record a Bridge due well transportation our day in approximately primarily the X.X million Bakken, Crude as barrels growth our Bayou per the day compared X.X pipelines. increase volume per to for same

day per the utilizing we Bakken fully capacity quarter, barrels During fourth the pipeline. XXX,XXX were the on

by and $XXX midstream $XX impacted the million. million midstream gas For offset was for EBITDA quarter of which results volumes prices, segment, were lower the NGL compared $XXX to adjusted by XXXX. fourth more million than throughput Higher

the Gathered at for Texas River year. MMBtus regions. to same compared period million Northeast increase North growth on gas System MMBtus volumes reached due Permian, a the record Ark-La-Tex day to per the the This was million last XX and volumes day Texas per in XX.X and higher South Ohio

interstate Moving into result Adjusted unconsolidated million, of to Rover service taxes final adjusted fourth segment. from $XXX EBITDA $XXX The to portions of XXXX. EBITDA million quarter from the primarily lower compared placing valorem the the affiliates. the higher and was of ad for was

MMBtus Transportation volumes were and higher the XX.X day out the due million volumes contracts per of per XX.X for compared Tiger new Haynesville the the from the on million day Shale period Rover last pipeline MMBtus same to addition of pipeline. year

Texas pipes well increased ramp-up due our Bluff volumes utilization contracts year. Red was on from optimization last as to to partially increased of from pipeline volumes decreased Phase In fourth the Express as $XXX Express. adjusted million to our the Bluff Texas intrastate revenues well lower million Reported $XXX intrastate new Red our as ramp-up offset to the by in activities X. of across due which were of transport primarily pipeline transport compared quarter segment, This fees higher primarily of EBITDA as

Now, at the let's update. CapEx look

Transfer For segments. and NGL XXXX, in ended the Energy Refined Midstream organic year and projects, December Products the growth on XXst, $X.X spent billion primarily

this CapEx. SUN Now, is and excluding USAC

$XXX $X.X expect NGL, earlier, of SemGroup. primarily the segment mentioned I billion, to year As to to for related Products, expenditures our XXXX, $X.X and full Midstream we including expand Refined in billion million

of liquidity total credit our billion our $X.X and XXst, were revolving our available position, X.XX credit XXXX, was facility. leverage as December approximately at ratio under the briefly, liquidity Looking for facilities times

fixed-rate senior billion well public XXXX, as In as January respectively. G Series of $XXX preferred of million $X.X of of Series perpetual redeemable $X.X a registered we cumulative completed and F billion a offering and notes reset units offering

partnership proceeds and a repay continue notes and times. a we senior rating the both to ratio target outstanding for four offerings purposes. use aggregate four from indebtedness of including to general We'll certain of to certain prepayment leverage agency half And

here Before opening solid record reiterate have I pleased are the and today, to a very call year up at overall, quarter questions to we to Energy delivered want your another that Transfer.

we expect flows predominantly from Looking environment. integrated fully cash ahead assets XXXX, to our the us help to and insulate fee-based weaker macro

us of flow help in excess continue to backlog which generate manner a We allow of our also balance our credit-friendly to expect to strengthen significant our business projects amount a further will cash fund sheet. organically growth and

crude SemGroup liquids addition The of and oil the footprint near and drive ramp-up expected assets the connectivity enhances which in significantly strengthens our well be is value spreads remain long-term headwinds of our and to as as projects execution capital capabilities offset our We new projects and focuses. approach while primary contract growth our narrowing and to safety continue and and from disciplined among renewals. project to

questions. Operator, we're lineup to for the open ready

Operator

line UBS. of Please proceed from first you. Thank your time, [Operator this question-and-answer conducting Gershuni At Shneur question. Our the with be comes Instructions] session. we'll question a with

Shneur Gershuni

good afternoon everyone. Hi

Tom, two clarify billion just to into $X run from said CapEx $X can jump mentioned previously? billion $X billion you the now I you'd you rate my that that to long-term is billion $X.X questions, Before down

Tom Long

is, we is Shneur just I is one Yes. evaluate of $X.X starting look number we billion. cetera. continue that very, about been from $X of here points conferences, at approved we basically and we're on, lot can XXXX that the et also in. the been know, the as billion I But very what open it obviously, there's fact to looked chime when a discussion. a is out you main -- projects in $X.X mean, billion, as of investor think really This But talking lot as at to Mackie out, saying probably that we've also,

So for, you just were clarification that what looking a is that? on

Shneur Gershuni

just looking was clarification. I Yes, the for

Tom Long

Okay.

Shneur Gershuni

the of on ongoing there In the any questions in volume of Mackie, step the had, reflective progress down wondering Is off, activity. terms to of made that a Kelcy recontracting crude sort two system? assets. that noticed to start is of if pipeline that had higher but maybe efforts Texas contracted I modest and you recontract rates, just the I

Mackie McCrea

that's Yes. crude amount right a our for right spent there's Mackie. of our time is Malott tremendous high kind Yes, team, and a priority reorganized now led by This We've now. of Jim partnership.

than competitors a are our little have we in bit different Houston We Nederland. now that, we have

As in the have We're about Tom project. VLCC developing statements, talked all a opening we the refineries.

is the all fill of want panic to our it wellhead market, in the a to and we're VLCC in offering out or So it project. wherever course delivering we're the what West they or to way or or a not because markets to Texas Cushing to from Bakken export it,

we optimistic project. six that to volumes we'll lot nine the and process are amount a And next then roll we VLCC yes, of to months. long a in So, substantial the over term, those over our support negotiating. extend We're expect of

Shneur Gershuni

Now, And makes a of follow-up Tom. that maybe question, as a lot sense.

that was January, recent of it a financings the realize were SemGroup-related in refinancing completed debt. I With the

that one say, should pref. you two components, component However, included I noted, a or

the rating of target the was prefs -- in equity well now Typically with for different to equity of you? part agencies just they've the get this as for that credit And the that from you are as credit leverage terms gets a looking or the agencies. or shared that closer the levels equity Does rationale of the lot actually using financing? for you that credit

Tom Long

answer is absolutely. short The Yes.

preferreds, the to a see cash achieve in over manner everything billion. a when trying we've obviously, flow, accelerated meaning year, you billion, order at distributions the right very I you'll that to above perpetual in add the that's those credit-friendly $X When $X.X little retained able deleveraging. to in you DCF think look be do the at these really been for

added gets $XXX the billion. $X.X that million You nearly that can $X.X to you see billion to

given basically that this equity no common can so to and funding So When were say it, you the no no at year, look -- we debt able no no we've we're so with -- growth. guidance you debt, the debt, fund equity for and it

Shneur Gershuni

Thank you very much. color. Perfect. right. the All Thanks. Appreciate

Operator

Our with question with of question. next Hammond proceed comes line your Please the Simmons Energy. Pearce from

Pearce Hammond

My thanks on taking latest or what my conversion C-corp UP-C conversion. an afternoon your Good for are thoughts questions. and is first

Tom Long

Long Tom is again. This

we continued we the cetera, We to think, I the know I lot radar once and of on a about screen have, And it. et that continue to evaluate this. again, conferences, it's talk with say

look we hearing C-corp currency are this investors In that hearing as is something our look we and the at feedback. at to other a As words, lot We're a we a have we market, XXXX of getting currency. of of a lot from appealing. option are

we're that. It will beneficial. to so, think be very going we to continue evaluate that something And is

Pearce Hammond

time have you're you a line do And evaluation? of kind like on thinking this that roughly

Tom Long

short in will of No, to we evaluating answer give answer tell XXXX here. question, are, But the No. it you through you to something that is out as it. that, your we again, I look once

So...

Pearce Hammond

then and production the XXXX Tom. or follow-up just as have return billion down it growth Okay. those how beyond, billion just in thresholds? with the less it E&Ps, a or the combination a CapEx And projects two do more et the of is there's for on to Is Thank of rate cetera? growth the lot U.S. higher discipline, that on for thresholds, you, higher return $X.X $X the slowing capital do do more is to to to is, much of with does industry

Mackie McCrea

that coming be This and the combination. projects about Tom We've is brought all on got these year on. up those statement throughout are opening talked NGL Mackie. year. to projects It's ramping going in projects all the last this we a

growing we've of that threshold up fast so of of said as that of assets our in right filling And but a even can set kind the mode kind probably as of – we've XX% have. we the focus we we're because now is the north

of out on the five years up four projects projects. new and on not we're processing or mean we return it's and And really capital meets doesn't ahead four, focusing on next fracs five rate with three, other our years the it's certainly right contracts those won't that assets over it and but But on were ago, plants more now. – importantly, a something that that focused as jumps synergistic terminate if project we're that spend built filling it threshold of more

Pearce Hammond

Thank you, Mackie.

Operator

of from with comes Our Pickering the proceed Holt. with Please question. your next Colton Bean question Tudor line

Colton Bean

Good afternoon.

from Permian the just the commercial it current to from you the that whether what So is up Eagle on this Could characterize announcement follow Ford? the afternoon. business or counterparty contribution be

Mackie McCrea

a it's structure negotiated. same couldn't We Yes theme roll it bit the that or to for of I contracts but more It that next kind me three because they had we're large of little this elaborate be anonymous player. can. And years. let excited we've is talking about off goes the type four about. And example, a

done now extended XXX,XXX over have out up years. increases tiering more importantly, And those around – XX the we've We up is to it XXX,XXX to a a XX to day day. what volume from

a day. In that, liquids XX,XXX XXX,XXX XX,XXX the around addition grow to in excess a of barrels day. will to or They barrels are

just we'll that off is to will it's we ability our excited taken keep from and roll to off. how contracts roll and short-term liberty on have assets gives the contracts and fill do renegotiate some both couldn't to yes, or existing this that as this place in have we off, And we we discounts the building more roll is going feel but if a full. So couple be the we'll of for some had expand us the at it next assets rates pain deal contracts work will what years the like contracts as those do we've

very that we're about So excited announcement.

Colton Bean

to – XXX,XXX third-party or from involve coming the incremental of that barrels processing on liquids, a that is just day And does Mackie up plants?

Mackie McCrea

to barrels two years. day a will today. the a over in day the a grow next to on three it of or approximately will T&F over day. or and and XXX,XXX XXX,XXX And XXX,XXX between excess approximately It's XXX,XXX – XX,XXX side, approximately barrels grow It liquids Mcf it's

Colton Bean

would that now building a guys realize side? is day, just that mostly P&L And be or full of that value XXX,XXX processing to kind that you is chain, out the Okay. barrels on

Mackie McCrea

didn't question. Yes. transport capacity. capacity, answer understand capacity We're existing utilizing liquid I any capital. It's not your built existing adding I'm I didn't and it. out. frac sorry. processing NGL We're

We facilities to are not gather gas but – and our this to capital field adding we're this some a the in out very is low extension. capital amendment

Colton Bean

And Got year-to-date it. helpful. you're That's just the very impact the earlier follow on of a the seeing Can comments global there from marketing down services, system on to on up it compression was services. maybe had like you decent step the what all then looks NGL spreads Mariner some and business? quarter-on-quarter in any terminal has whether in frame

Mackie McCrea

Mackie is again, This Yes. yes.

focus prices is If yes reason for and being of of that that terminal quarter you the Marcus over kind into we course the on decline butane gasoline. propane volumes did and historical almost had Hook, blending

price and There Northern heading in the skyrocketed. in York was were leaving barrels demand Northeast, even Mid-continent. Western the and Pennsylvania A west a in New of lot just the large

barrels lot of back. Marcus barrels coming Those the a So that show at didn't show Hook for quarter. up that up are typically

barrels And a of are Mariner the lines, our lot the move that demand-charged. through system

we're other Marcus we're other have point gaps one though ways in and teams already looking revenue. new even arrangements. Hook filling But our the those PES it in Hook terminal new and long-term already into There movements impacted down, has our still on receiving with assets with of out volumes – we deals Marcus Northeast. So is are are

Colton Bean

time. Appreciate That's it. the helpful. Got

Operator

Sachs. comes next the question. line Michael with from your question proceed with of Please Goldman Lapides Our

Michael Lapides

of in run rate think to Mariner that in quarterly A contributed of just I something a $XX Hey, actually. different is? Mariner for of the that different for couple your Can you about kind slightly what or two think talk little would normal should East the this run rate? about And then II Is the million. quarter capacity guys. that referenced to adder How how think will quarter Is -- normal million the that we II come bit of Xx questions and what higher a year? something East release we pipe? should similar due be the first size it that's $XX

Mackie McCrea

Yes.

we a elaborate may get but we now to that degree. into think right I think won't little those I details bit,

spoke if already earlier, in very will is have completed step by we Once As through our next committed and the volumes be demand -- the phase the completed. that with of optimistic Mariner not Hook. to then will we charges end we of earlier, through are have both year significant pipe that Marcus

So -- increase add we additional -- see a the complete we will once Mariner, revenue. and volumes, in substantial we'll

Michael Lapides

it. a question Satellite. Got just then And on

China may be conversations counterparty so extremely a the construction progress you not Your if if all Where in and has in potential export of in incremental good time about there with early. made even capacity bit are and effort on not process tad them the when? having or whether need they

Mackie McCrea

excited about We're going an partner They as be are. by great the said Chinese be that forward do they fourth what quarter. with a on Satellite to moving we do. time just ships we project. loading to couldn't It's They're outstanding more every we they're company. and track complete Well, say,

knowledge my had lot expanding about of really them out of with a haven't Nederland. dialogue in We

other our built year expanding excited the ships that the project But quickly in many interested focused but right to they completion. that crackers about on of we're export really Of hopefully for. they're now and loading conversations course, would and think coming up customers, getting end by we're with I any avenue accommodate signing be our any we certainly in ethane very additional excess with would or volumes

Michael Lapides

much it. Thanks guys Got appreciated.

Operator

the with of Our next from question question. comes your Wells Blum Michael line Fargo. with Please proceed

Michael Blum

everybody. Thanks

Bakken capacity pipeline just is expansion. question the First on

how will a sense initial have of early on at much phase have the said Do You be you in that capacity XXXX. point? you'll

Mackie McCrea

imagine, yet. know don't we Michael as you

We've an We sites. that need are We've secured very several approvals also finalize We're and county in the to working with Things parties. pump and are we along states the other state season. well. all agencies filings moving the filed still all met interested them. station the the we and open with middle third required all midpoint of with

North the from Dakota for approval go the to to barrels. to today certificate received X.X amend we fact In million the --

designing we'll if and season, are We don't do barrels million for we tremendous is up approval to there's know, this know we approval a reach seeking that of and going day. but open to we're in obtain amount X.X So interest. a what

best with four to to here going Midcontinent to seen to can the million the St. of nothing down to that We're Gulf we this or end compares next the far season. do. kind by etcetera level oil where the X.X -- option way years. so Coast optionality remains over coming etcetera, the barrels the be at the most all confident we'll what through James time, hit we of get five open It We're out

Michael Blum

And in Great. then relief in you guess those the up shipper comments on just short-term exchange you in I your happening customers on for I the from wanted Rover Northeast. about any relief of short-term for Are ask approach long-term general you Okay. Is contracts? anything having Northeast made and front? that to earlier

Mackie McCrea

-- some Permian on what extension inquiries we similar some I the Yes have we do our have -- Basin. an of to those described -- and in

customer. mean an -- project also returns executed extension We the NPV with I and for a us better

few And have part so, of numbers. that's next embedded our in over impact we the years. this It's

Michael Blum

Great. Thank you.

Operator

proceed Our line with Please of comes JPMorgan. Tonet with from question, question next Jeremy your the

Jeremy Tonet

at guide spreads seems Good I I EBITDA middle XXXX maybe just year. and my arguably billion of the last in afternoon. you some it tightened. XQ, in point it looking there. answer if for the And think on puts next had And like that that question the But the of XXXX up $X.X annualize I'm picks of XQ, part already kind of right of first

So of a benefit much there wasn't necessarily there. as

other I guess next projects just was it year because into of headwinds with benefit seems new of coming wondering the the in tailwinds nice online acquisition, or conservatism year built I have so what there. the year this SemGroup elements built guide of And you things and some some including like from full

Tom Long

Jeremy. Yes. this And is listen Long, Tom

prepared and at remarks As we components. XXXX my really it I've like look two was out said in

are further to detail, or down that contract equal amount if to to talk it's and rates the two you'd would about renewal we're spreads. they're looking of drill addition in But to So like I probably at – say, kind kind We're the happy contract those so. the the headwinds you further. maybe in of in

see in time, So we see still those look that to XXXX we at going that's that, and addition XXXX. not the level to at – spreads. are did get and at enjoy through I'm but – to that don't be – the spreads, not same still say to those trying they're

that out see I in the is hedge a press fourth had think worth little hedges. – of in where thing release the we some we that the benefit did that bit that you Now, even were noting And quarter. net the other break did the is of spreads

some of So the benefit we you XXXX we keep mind get that, that in did at look out too as enjoy of for don't quarter much necessarily see fourth that as in XXXX that that to either.

So.

Jeremy Tonet

positioning in of as to be a to wants run looking I And if could growth it. the direct some thinking for was appreciation. wondering pull how Kelcy of focus for are to competitive improving it seems lot about you provide when market I ET comments top far how kind priorities if And directions you're one I the just as question towards wanted for guess, looking ET Got think you looking best? like just different it top could. stock what I or

Kelcy Warren

Well, are interesting. the really pipelines Yeah.

on not money If deteriorating then you're assets spending eroding. you're you're those

And so just you can't stop.

right of Transfer on. Energy now blessed to We said will those pursue want high of we're have so return – to we just rate as And more projects. really take always Mackie than and

continue to So that. to we're do going

We M&A. at and know reality. like this market look it's the continue – I just to to We'll doesn't but continue will

now. doing at guided work a the job. We're always on get and continue M&A. We'll doesn't credit rating virtually Unfortunately fantastic circumstance. to on spot math committed was very Long an that unusual to to, we've SemGroup anything are to right the We're will way. very – look done. get that. Tom to the comfortably and we're agencies We our a in we metrics team well do been that our going

defensive And will focus that on is encroach defensive. a on our doing to be you, anything, very very we our tell then and we be continue margins. to right we'll protect don't finally, will competition assets allow to now market and but trenches erode because I have nobody's our This not where therefore

year. we Tom So it more to if going bit that be do to we're We're do. to doing going alternative definitive offer to this We're probably was. a that think as what I'll our C-corp keep -- probably Tom will going we and little than happen a I unitholders

that's also. of So plan part the I think

Jeremy Tonet

question. you Thank taking for my helpful. That’s

Kelcy Warren

you. Thank

Operator

the your Salisbury Jean Proceed AllianceBernstein. question. question next Ann of with comes Our from with line

Jean Ann Salisbury

Hi.

information fixed exposure exposure reduce would that before updated mentioned Can Oasis going materially give contracts forward? you fee have your your Oasis. start, You any on Waha XXXX to in which around remaining

Mackie McCrea

$X. but that X.X even exposure. today is that think at maybe it's kind are close above This at that had of to XX. is exposed spreads We fantastic It's golly month Mackie exposure, -- prop And Bcf again. markets a Sure. probably I

part contracts still coming are our other the do wide, is However, the of them to The also out not rate healthy have risk November hedge the right is good spreads on take to do to and of and one collapse. and of we and we long-term those probably large a XX-year are that strategy stuck year. the thing it's but some October, get contracts the this first later XXXX. one

degree a of capacity coming spreads long-term done risk this how we time more or going large spreads that agreements. But how the in, then more has settlement We're to goes year. that we on of built to well will as with and is sell very more kind have we and we've team And benefit I believe those -- on of strategized the on space.

Jean Ann Salisbury

the extensions. thank really on focus around And commentary contract for That's Thank you. helpful. then you the

disclosed extension. I of cost. One Would as to it's that confidence investors rate a peers it got cash see going not going of long-term they your for think range contract XX-year some crude you a recently the a pipeline for give willing crude rates that what capacity? of would give to range be you

Mackie McCrea

we to -- want into then most option rights. to storage Mariner Nederland we The sincerely. St. want example rate can Houston. a the to customers possibly from and will go export of get James pay go to that we There's And and and also certain from [ph] say, that for there's that Midland Houston mean I a bunch customers to really

the probably and to -- wise but pursue a so will for wouldn't we can price to we competitors be a on range So and of give pretty it'd those it's range kind public and this be we'll of we where many of us continue wide our a -- it's highest achieve call like our service.

Jean Ann Salisbury

Fair you. enough. Thank

Operator

question Our Stanley of Research. Please the Keith question. final proceed your comes from line with with Wolfe

Keith Stanley

way target? a four or way Hi times year-end thanks. guess Tom and to versus agencies I what was the would the the see it you half leverage rating at the four

Tom Long

varies Well, bit. staying slightly ventures to listen with agencies. you and once that We're -- above the that cetera, et X% got a so. that you've or again, can those that with much X.X% varies both the between then joint -- with between so But still the as probably see -- in when USAC, SUN consolidated

we of I are. give best you of kind So, can is range the do that where

So…

Keith Stanley

increasing like if to way near-term Okay. on more are not have kind at But it to because then get flat you asset it And feels you're now. just when this a target. best year, sales timeframe delever the XXXX, obviously, EBITDA debt is especially and funded your of is so looking

financial right So, just account for desire that are into outlook guess also how the XXXX here, a you for how And do sale and probably you think asset flexibility? more weighing bit softened market then the that has I about overall? asset taking now given sales

Tom Long

that Yes. done job a Listen done. the we've good we asset very sales think we've of

of got way ahead we it. think I out

we here that talked think really further take compression far the pretty as as If open you you that. we've from standpoint. been any ran currently, it can't I at about I look I your than now, questions right in what

anything clearly, like at As go we'll would you that's as diligent not year, anything but we said, stand. through assets we But with time. ahead like much far very very, talk on to very goes to be time to of And about -- currently the be continue as smart. that same front, where we just on that our the I front,

So--

Keith Stanley

you. Thank Okay.

Operator

like Tom Long session. question-and-answer does any gentlemen, today's conclude call for the this and And to remarks. I would over turn to closing Ladies Mr. back

Tom Long

Once you interest again today. time right. Thank today your calls and the do any that We really follow-up have. may joining and look All you. to all appreciate you thank forward for your we of of

Operator

This teleconference. concludes today's

have participation You time. day. and wonderful lines may now for your your a disconnect this at Thank you

Energy Transfer (ET) 19 Feb 202019 Q4 Earnings call transcript