SNMP - Earnings call transcript Q3 2017 | Evolve Transition Infrastructure LP

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Operator

Good day, everyone. Welcome to the Sanchez Midstream Partners Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that today’s event is being recorded. I would now like to turn the conference over to Mr. Officer Midstream Financial Chief Ward, of Partners. Sanchez Chuck go ahead Sir. Please

Chuck Ward

Sanchez, us. and Chief this Pat Chief thanks morning With Officer. Executive President Operating for and our Good Willinger, joining me and Gerry morning Officer; our is

started, few third released morning we quarter Just XX-Q our this our will report we file we earnings later notes before and quick get XXXX today.

and is on include uncertainties. with www.sanchezmidstream.com. non-GAAP website. the The to performance. SEC, morning morning's unit which will forward-looking are in community The fully measures which documents the finally, also discussion website, use certain operating are available in better will third discussion on and These our risks help our our quarter described our more holders file available we on earnings this subject to And statements, report are financial investment understand our this

our release to to measures. reconciles measures non-GAAP is financial available earnings Gerry I Our now and that, on that appendix call includes over these over the with would GAAP an to Willinger. website And turn like

Gerry Willinger

quarter. Resources XX% conceived culmination of venture partnership's its first operations Raptor The successful operating reflect or Gas by the consistently Texas. planning at years Facility, quarter in of XXXX near in capacity strategic Processing XXXX, a results had Chuck. end third and Targa The was quarter with investment the Thanks, Corp. full of that South joint of its and was the

midstream stable we with the also in in form a in delivering Carnero midstream-focused Catarina of beginning quarter midstream assets, the partnership, flows fee-based strategy construction South master complete Western cash of During Midstream started markets These to dry stream and line growth Seco the of XXXX, the multiple transformation partnership. limited which system, and basis XXXX. our along provide Texas August our gathering South our a to the to third completed of wholly-owned gas Pipeline, Texas

Facility completed the capacity the quarter We XXX the from impact operating Gas expansion will of feet processing per third end of anticipate XXX million the the cubic recently feet fourth Processing the was results. day to after Raptor capacity positively quarter XXXX. cubic higher that of XXXX partnership's utilization of million Targa announced, of the As day per

of our the the remaining the oil for our and More approximately quarter of the complete, in the proceeds and certain Processing we of Raptor latest million. sale free Gas counterparties importantly, with closed of for $X.X gas hedges XXXX recently, majority Seco capital the Pipeline anticipation in sale sale, from project to cash spending assets the operated expects we of during of has now $X.X production production million the and expansion its XXXX in repositioned assets in More vast funded third on flow partnership fourth XXXX. the our the our divest the continued of In midstream of to focus of quarter activities, nonoperated XXXX, third with $X.X In certain net certain quarter closing we natural July in hedges. conjunction and those Texas assets production XXXX. we process closed approximately the In on million. Oklahoma received generate non-core

our totaling that $XXX margins impact commitments With lender anticipate which no midstream we our on sales borrowing based in will the the asset currently have from increase activities, is on million. operating capacity,

which in in of be in anticipated were of the challenging key business early financial the a year, projects various use of we transitional would the Given nature during first XXXX stages terms and fully of completion, number capital resources part – of our half this of capital our results.

our as Harvey since from XXXX, Eagle EBITDA $X.X million. to the along quarter have this we of as the challenges. not storms quarter first or faced Ford levels flooding quarter. rainfall since grown roughly the third approximately divestitures the and year, Gulf well of projects adjusted of Operationally, of flooding Notwithstanding, several we unprecedented the due Coast localized without late and in completed successfully have major was we XXXX While middle quarterly in its the Western by Hurricane XX%

the for With we the additional of forecast Raptor the expansion of coverage of the distribution quarter excess a Facility cash of fourth in and the Processing Seco flow one expected from completion Pipeline, XXXX. Gas currently ratio times the

Catarina our assets capture and come. anticipate through Texas midstream upside our Sanchez production Energy, the Comanche South to are strategically related positioned we greater operated years in assets Additionally, volumes to from to by facilities the and

Comanche midstream the to Western evaluate secure to over the the continue Ward. look now as their Energy Eagle capacity like they opportunities continue forward along with execute in from accommodate And and turn Ford. Sanchez call to production We I'd asset strategy Charles to additional to to growing to

Chuck Ward

Thanks, Gerry.

of production revenue Our revenue the the quarter to repositioning $XX.X and Pipeline mark-to-market Included third million in noncash totaled the for hedge partnership's for million. about loss $XX.X $X activities from in and about of system balance activities. in total of million revenue quarter from $X from million related the which $X.X million Seco Western XXXX XXXX, third August revenue came total includes Catarina Midstream is The on settlements, quarter million. $X.X a hedge XXXX and

in million, production-related Catarina Pipeline; operating and Seco the system totaled during the includes taxes. million $XX.X expenses again Midstream $X.X Western operating third expenses, the and related and to Our expenses million $X.X operating which quarter in

and compensation million administrative unit-based XXXX included items. expenses million fees, compensation which $X.X unit-based general both of in and noncash asset $X.X management of are and quarter Third

currently After have of maintenance was and million $X.X cash million Our more approximately than borrowing facility, elected little base $X.X million; $XXX in million million. adjusted a CapEx credit out we $XXX in distributions. interest, and outstanding generated debt preferred distributions, in backing $X has in amount. of excess in We available our amount million $XXX,XXX commitment for under in that an which a EBITDA third for the XXXX quarter $XX.X

a comprised reminder, borrowing production base a midstream parts: component. our and As of a two is component

our from and Gas flexibility Facility, capital Pipeline potentially adjusted to component process. borrowing additional in base, in its look to new Processing Raptor see the Seco we that increase growth. the the including providing of significant we expansion, the base expect EBITDA midstream and our is With of component The production to redetermination, upon our borrowing the update its completion with funding of semiannual currently us market continue contribution

with we'll for open of balance As the of our we about hedging the exposure back proceeds, details hedge In of reduction, included reduced later positions that the our to these yesterday's South Commodity quarter, this oil in The in Texas. noted gas. properties over to book resulting of in XX% forecast our resulting our received and year portion through Open questions. sale of volumetric of and previously, overview during about hedge some anticipation results, the With exposure of the the $X.X moderator now connection the target million to for we hedge for reflects book that in XXXX XX-Q the on Position today. call like the we'd turn will file Hedge line to be the

Operator

you. Thank

now begin with Matt And question-and-answer Schmid will be go first today Please questioner will our We Instructions] Stephens. [Operator ahead. the session.

Matt Schmid

But run-rate cost the contribution EBITDA on spend pipeline return maybe Seco what construction potentially the before third First, some ultimate on could or target the provide of even sort how much and that that? was was Pipeline, quarter. on know the of color the I you expected

Chuck Ward

guess million with, came a we Sure, construction in Matt. $XX about before, we Back – when S-X out had I cost total indicated range the the range.

year, one going I tagging with bit about target. over a And that'd year, be our last the the that $X.X of Again, rate a original our on still contribution adjusted little in to up the rate a quarters that we $X couple of examining But for to million of and back for issues per indicated the think got are guidance remains be remains to guidance the run million some Seco run for so we've three quarter. invoices EBITDA. also finished as we vendors. in

Matt Schmid

the just Okay, then mean, lower little like great. in broadly, at I a Sanchez encouraging on tests Ford. Comanche. Eagle are And Energy, developments looks there it you. at thoughts some thank more maybe

As you potential there, opportunities term? how growth thinking are that inventory grows about longer

Gerry Willinger

with million facility the we certainly, of Targa the expanding phase capacity Well, XXX million. growth Raptor opportunities XXX at by took to from first the

there'll daily basis. a that takeaway need continues as additional – capacity project for evaluating processing the are an and as for expect on Comanche we that be to We develop that

much what five will come with back need And we're better we now, we we to on look look that, years, number expect you so guys in the the when years, how XX how we we’ll we do – Right once it, scoping And out think looking years. for XX a takeaway like. exactly actually takeaway grow at fully much along capacity, volumes. processing the of exactly how process with

Matt Schmid

Great, I the Okay. thanks. helpful. That’s color. appreciate

Operator

Johnson ahead. And next Venturatos be the will go Georg today with Please questioner Rice.

Georg Venturatos

morning, guys. Good

Gerry Willinger

morning, Georg. Good

Georg Venturatos

part XXXX. I impressive are First, there, in I mentioning worth know of budget. to probably fall projects on and first nice see execution of so there a everything the growth think through lot online coming very time really here the

that. to mention just wanted So

Raptor, million a now, and Targa of reiterated. obviously XXX at announcement what terms with processing guys In to gas we’re know I the you few up ago weeks

the of fourth sense in to baked was better a what quarter. get to wanted Just

on kind that As can million? utilization you basis? run-rate a you to we north going of of contribution And from XX enter of do a coverage mentioned, where that on much one target; XXXX additional how you as million times get are be think XXX

Chuck Ward

the XXX Carnero Georg, million guidance I’ll Raptor year, $X.X we by million plant upon Raptor I Catarina provide, net kind start the interest, I the quarter, million was that to about forecast we guess XXX of and rate. out gave kind our that and based So back going that SNMP’s of a to and originally think which – for of to in would

if million million I’d a it’s about quarter. us So proportionate. $X.X to day, XXX pro a that believe we’re it love rata at gives

However, processing bit I on rates, lower rate the think little there. a Comanche the for

guidance, we a pro I than So kind the is portion. and would say probably and probably hair, that pretty forecast better we XXXX that’s very it max dial the guidance take get operating Targa a think this and $X.X the between things $X.X actually We’ll of million some do we those runs million break a year’s saw Comanche and like probably cost bad granular, quarter. the a But we when rata probably not – the there. so in bit little down portion what details you see Catarina it out lean, did for if I the rate.

Georg Venturatos

well, that. the had into as the talked can relative And may on just about a then on current guys XXX the you XXX tie XXXX Appreciate side Catarina rate gas day okay. Okay, for throughput at forecast to the million but any to run update million you this us range provide year?

Chuck Ward

end low the No, I fact, that at last in think, range I operational the on update, – we at of Thursday’s think were dailies.

think on let run balance We talk has I investor guides things SN to about – between SN talked different always certainly, their SN and about don’t and production Comanche. happening that Catarina front the and group. side manage their between want

we’ll And two regions, market then So guidance to with provides for we’ll and stick a obviously down pivot guidance well. still we’ll think important it’s SN off I – and for quarter. actually I as how of this future be the think to forecast that going good fourth break us XXXX, the it, in those the to provides range in between

Georg Venturatos

sense. And last makes for that me. Okay, one

midstream maybe kind to processing was are bit the remind do earlier, which touched on look a if the kind when and it capacity, side, comments, have. were you what excess But about targeted build just thing a of, you you as on on your to at got of you’ve Gerry’s little of side? multiples what doing strategically all good on – us transport thinking adding production, can you’re You when in

Gerry Willinger

that. complete build bit of when little were Yes, the place. five six ranging EBITDA run times all to and side, higher back The are buy we’ve sort rates if is things historically, multiple than on obviously, a and a been side, times of between are we in the stuff, construction

multiple are times a obviously, things same So things on little the do and times If five project, basis, and that we looking EBITDA a between buys it’s build lower times can looking higher. because of trends. follow it’s for and the pro we coming short All out at projects forma prefer in build something expand on six a get, own cash flow. we gate at our cycle a are to those bit the area

Georg Venturatos

makes that it, Got sense. Gerry. Thanks,

Operator

remarks. there any be questioners, closing over the the [Operator this Instructions] looks so would like And for Ward session. will question-and-answer conclude to further to Chuck to I conference no turn back

Chuck Ward

third discuss the you. again results. as Thank quarter Well, joining speaking soon look again and as everybody, conclude we you next to quarter we the next thanks with the us for present phase. We forward very

Operator

concluded. for attending And has Thank conference now today’s the you presentation.

may disconnect. You now

Evolve Transition Infrastructure (SNMP) 14 Nov 172017 Q3 Earnings call transcript