Earnings call transcript Q4 2022

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Operator

Hello and welcome to CorEnergy's Conference Call to discuss Fourth Quarter 2022 Results. At this time, all participants are in placed on listen-only mode. The floor will be open for questions and comments following the presentation. [Operator Instructions]

I would now like to turn the call over to Matt Kreps, Investor Relations for CorEnergy. ahead. go Please

Matt Kreps

and and our Infrastructure Paul Q&A. Dave everyone joining all will be and for CEO Dave, will Accounting Thank and three operations Robert conference thank and call. CorEnergy Chris CFO; President Waldron, Trust Chairman; updates are for Huffman, With today's Chief and Officer. on you, provide Robert you Chris business me available Schulte, and today results

be who is would of investor Vice the part team. amazing Finance I and pleasure relations our like exit President has JT of Jeff to CorEnergy taking Debbie company. a years part with the the to our It's over Teeven, to joining of Hagen been also introduce a and I many many been an will integral role today. as be meet call roles of an for and you

Earlier this results a quarter published XXXX. release, fourth the press announcing morning we for

today. to file expect We our XX-K later Form

that during I'd forward-looking materially be remind statements are are subject the factors statements results update purely forward-looking statements actual in website. do Investor applicable that our filings We on historical could cause statements. are laws. protection under securities not the Relations presentation this the to our our like that and available from everyone the course forward-looking safe may of SEC. those in to Important available harbor differ discussed documents not the to the with the Those section of made

We with to and factors, complete part of reconciliations. numbers are those risk make encourage During reporting. this as related in certain reconciled GAAP non-GAAP we our reference non-GAAP to results you disclosures filings metrics review of all which the also will our call, our metrics,

Dave And with to over like would turn Please, to now that, ahead. call go Schulte. the I

David Schulte

period and Thanks for of Matt. of an everyone. a It's eventful morning, months Good change been couple CorEnergy.

to I begin the both will CFO as the as day-to-day Waldron as oversee serve by will our term. CorEnergy. including responsibility the to we're the executive and of introducing over new Robert want organizations responses, facing and streamlining We role, will on continue Robert our near President operations. Robert take for Crimson challenges discuss team. this increased the In as well MoGas

career He to decision with energy I has pipeline and valuable over a knowledge the expanding business finance since his a His California acquired active have long joined engineer, in business of the XXXX our me was as of offer President. and investors to facets two believe an has and and in it from as an executive. will been and sector diverse time. a years. CFO company in the uncertain Crimson experience has we benefit to professional, all Robert believe our been that greatly operations navigated as share times CorEnergy's as CFO Robert CorEnergy I asset the easy influence past Crimson, And role, the

these Officer I'm have excited began PWC. influence expand leader. has served both financial their been our leadership we would Prior like since enhance Chris strong his his colleagues Chris fortunate part at at senior role expand I career and private is our they that, a Company to company Huffman, leadership and years Chief and today a Chief he at as CorEnergy. as team an who Officer, accountant to also as the XX a will present Accounting E&P Accounting at for knowledgeable CorEnergy. of to report integral of such introduce XXXX.

comments will outlook. provide call the and the who over will then Robert? turn minutes of couple spend now our to operations, and Robert, a updating on financial I'll you Chris

Robert Waldron

team our new and and excited me by Dave the and from The about organization Board, the bottom, rest in top best-in-class humbled and support my CorEnergy to grateful a supporting I'm I'm CorEnergy group deep showing finance accounting future. of and as the Dave. the is Thanks confidence by including President. role

gas recent in MoGas surrounding the served quarter. natural predictable to St. that performance quarter The Turning operations the fourth from areas. saw continued Louis Omega and steady our

projects work the for We have MoGas in several Omega. and

Omega, on Leonard, Activities expected utility example, our mid-XXXX. gas system the we a notice is For system on Omega received project contract proceed local at delivery in to begin to for service are energy natural Fort the where base. the

system. that would to that are additional projects we long-term MoGas, add contracted support customer potential demand a division. evaluating project increasing For These to on revenue potential

third issues volumes to the Turning XXXX Crimson's On in assets. quarter. operational in fourth due which we the quarter that indicated into California, increased elsewhere our Crimson to call, our last continued

However, was this temporary we a noted increase.

and issues shifts as we The patterns, which to began experienced volumes February, level, have We unprecedented a disruption and which returned California been have we closer the will now continue supply operational lower in a have year XXXX indefinitely. in influencing QX, believe volume resolved are result. global believe still refiners volumes, ago, to third-party a

Pablo KLM expected service structure. shippers The KLM expected through in In is to volume XXXX shortly order thereafter. process the declines tariff the regulated protested filing on Crimson and first on resolved rate pipeline CPUC of of filed will the based with its The cost to by quarter pipeline SPB filing or increase and XXX% XXXX, Bay San XX% increase rate was in a proceed the offset on its be resolution XXXX.

with all being However, shippers we result are to matters could a always in open parties, resolution to earlier. which find to resolved acceptable our negotiating

investment transported to for continue critical link with pipelines fixed In we a long-term California, in are infrastructure, energy our Crimson customers. state's tariffs the under grade believe volumes operating

for been to fulfill when for we these assets time has While been believe challenging -- more has critical will last we challenging Crimson in more needs profitably planned, come. California had a year energy the decades

have transition Looking energy to the California. our significant untapped in assets value Crimson in future, the

in California. through the emerging we markets advancing new are challenges, we hydrogen readiness and as work capture Even carbon these sequestration our and present for

between we believe or provide asset an difficult storage and be today. impossible systems and replicate to of would rights large linkage prospective Crimson emission even Our reservoirs, a sources critical way carbon

market are working best We multiple these determine in opportunities. new forward to with parties the path

case by the by to possible climate emissions The in commercial California capture state. to $XXX direct XX% California federal to advantage reduction and capture COX legislation Plus for ton set also identified XXXX, better of take in carbon Air LCFS recent increased for and aggressive in it's any as a $XX carbon central of ton a Board ton a The their a capture. air is DCS $XX a in credit. Resources other and credits from than carbon cases, target. has The pillar many XXXX neutrality goals

to ESG the We report, initiatives. publish filing to our an progress XX-K updated ESG we make our intend on XXXX. progress of continue for Finally, update with

X been emissions baseline. reduced the highlights by the XXXX of X from include XX% Some and have Scope

and have oversight a have cybersecurity We of we wide-ranging and our system. implemented methane programs plan critical to emissions initiated an reduce board business XXXX, for by by XX% ESG estimated

With notable that, financials and Chris the other I'll turn it to over items. to address

Chris Huffman

so avenues cost of Since option are efficiencies. increasing do exhausted regulated, offset our Robert. only to and/or such But the the increase assets Thanks have always costs. as we we've we majority to improved other declining after tariffs volumes

increase on The company proposed QX, from announced previously XX% California increase Crimson tariff to KLM the a system on XX% plans file a XX% collecting XXXX. increase Southern We tariff and tariff system and Crimson the began date matters the on their until filings resolved. service California additional Southern and anniversary SPB fully systems an Crimson's collecting KLM XX% of again We increases. original cost are justifies all increase believe requested of on the in

compared we the believe to our system, than barrel most shipping for less our customers $X per economically on are routes at However, the our advantageous environment to and rates alternatives.

are from in reason rates our the not volume shifts for Our away our pipelines opinion.

million results. result of and quarter as from Omega steady was revenue the in improved million, quarter at an performance from Fourth a increase and Looking volumes $XX.X California. last $XX MoGas

operational less expect We California pipeline February with to issues third-party be volumes QX QX, in that been in a XXXX have during than XXXX XXXX. the occurred the addressed as

dividends. $X.X loss was and For adjusted negative the adjusted months $XXX,XXX. three ability had cover to XXXX, impacting of XX, December of million million, EBITDA net $X.X CAD our a ended we

management's to period dividends stock A paid. Series resuming accrued must preferred redeemable A not the common Board suspend redeemable company on and cumulative dividend As the Series X.XXX% payments. which accrue concurred with cumulative dividends are A any our dividends the such, Series dividends In to preferred will recommendation common CorEnergy's in equity. be during prior both preferred paid

to with continue current practice, as Board our to and on making the the It Consistent difficult our period resume through bring upon decision the payments business successfully is is will our practical. evaluate based as each dividend soon dividend goal data available. quarter, dividends this most payments

XXXX not EPS Audit company's XX-Qs the statement Committee error Crimson key on XXXX information. X, March earlier and XXXX over-allocation was in I arising XXXX, and To the restatement or XXXX for our of evaluation additional XX-K accounting to stock metrics and loss, our interests. including periods, had of management, for wrap to income, up company's for due would EBITDA company previously refer unfortunately, from you the preferred does or non-controlling its determined these our an after discussion CAD require including the with that adjusted net income company's disclosed net impact net The commentary, common no decisions, today adjusted on X-K filed affect and to declarations dividends.

year million. to not maintenance the $XX range $X XXXX We're be of adjusted to costs $XX introducing to are project These $XX million. the in of of million be capital Maintenance $XX $XX of throughout expected timing. to expenditures our uniform range million million the to EBITDA expected in to outlook million, expense inclusive due are

organization these to management corporate reduced bonus in we are $X.X XXXX. response The reduced the which conditions, in our senior corporate and management management salary charge restructuring in result a QX, in XX% to realignment, million took all case rate the impact G&A, payouts tough The expected market both our included streamline XXXX outlook filings. will of have is reduction. layers XXXX, QX, the In reduce incentive and of realigned XXXX structure, actions and a

including was availability. $XX Liquidity of undrawn cash million approximately revolver million million quarter end at $XX.X and of $XX.X

cash Our capacity. on credit facility utilization does restrictions place of revolver certain and

we February asset pursue to XXXX. in reduction us as to leverage maturity down QX, our defer step covenant credit XXXX from our and initiatives. ratios XXXX the additional announced debt provide will to XXXX, QX, previously the facility term This as and in monetization manage extend to time near Finally, well May maturities amended certain

this analysts you. call. we from At closing before covering will or our stockholders institutional time, take the Thank questions

Operator

At question-and-answer session. time, conducting we'll a [Operator this you. Thank Instructions] be

a Stifel. line have Akyol did we And coming from is from live. question Selman Selman, your

Selman Akyol

there you. use reduce to Thank update, debt. assets Can guess, monetization you in terms you're and -- initiatives potentially undertaken of that I morning. to the what any you've is at Good on looking

Robert Waldron

that. on Yeah. that. yet to We I'll announce anything Selman, take don't have

the of things breathing about is one As the you provide decrease little we first a company, about and covenants. think -- to our from the obviously, first leverage monetizing assets think more room

longer And we're as looking refinancing side. and nothing yet at announce so, as to there all term specific But projects. on well the opportunities asset monetization opportunities

Selman Akyol

about guess, that I by And think as facility Gotcha. your would become this May then, being I three of guess, year. I essentially Then, in extended, months. credit current

Robert Waldron

will. It

Selman Akyol

Okay. And sort thinking I those All be there you And said noticed you expenses. just expenditures lumpy. to gotten. then about incur you've how that us to your in terms anything to right. with of timing of But going help is expect they're

Robert Waldron

maintenance operating in and you maintenance an can the inside is MD&A expense, expense, separately. We has and which occurred our lumpiness lumpiness asset EBITDA, how in of section. disclosed then the it's that So, capital disclosure see

as So, actually it -- process will anticipate -- it's smooth was to hard year. to a we be. in We say exactly quarter-to-quarter But don't work really it try those. last out budgeting it's it them on lumpy XXXX hard to have of what so have that be won't and done to as to lot predict

Selman Akyol

that Okay. And be will when incurred.

your you having And last payout? When for do one Okay. me. guys anticipate

Robert Waldron

do have on date you that? the Chris,

Chris Huffman

have don't within March, we don't end a date the of We deadline days. go but the it which kind specific yet, XX of filing to would beyond expect our be

Selman Akyol

right. All it. Got

it Thank you very for does that think I much. me.

Robert Waldron

Thanks Selman.

Operator

Schulte Dave I And hand to Dave? to call you. now remarks. Thank some the closing for like would back

David Schulte

to a call. we great but day. moving free period, and to issues time Yeah. or today. IR we'll meeting you if Thank to forward contact arrange joining like you underlying This for Feel challenging team a and a is our updates all provide Thank a have us as resolve you'd are the appropriate.

Operator

Thank conference. today's you. conclude This does

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

CorEnergy Infrastructure Trust (CORR) 7 Mar 232022 Q4 Earnings call transcript