SNMP - Earnings call transcript Q2 2018 | Evolve Transition Infrastructure LP

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Operator

Good morning, and welcome to Sanchez Midstream Partners Second Quarter 2018 Earnings Conference. My name is Debby and I will be moderating today’s call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, today’s call is being recorded, and if you object to such recording, you may disconnect at any time. I would now like to turn the call over to Chuck Ward, Chief Financial Officer of Sanchez Midstream Partners. Mr. begin. may you Ward,

Charles Ward

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

get a started. XXXX Just report and XX-Q file morning plan this notes closes after quick before the earnings We our market second few released quarter to our we we today.

statements, the investment to better discussion operating financial is on turn release on we measures. The www.sanchezmidstream.com. the finally, call Also Our financial risks website, our non-GAAP this available now will community These earnings second to more during that, our morning performance. Willinger. quarter GAAP are to to use subject non-GAAP website And of with also And discussion available fully these documents XXXX on SEC, measures with which reconciliation include and and uncertainties. in I’d Gerry available forward-looking includes earnings to which are measures website. certain on that a our our morning’s understand are will the release unitholders this help described over our our note file our like

Gerald Willinger

for operating Thanks, second our adjusted expected to Chuck. continues its financial the by approximately midstream execute increased than to EBITDA The Despite EBITDA plan. quarter second compared lower throughput XXXX adjusted our Partnership on XXXX volumes and assets, quarter when XX% XXXX.

in of the result, by distribution quarter X.X was units distribution a $X.X available covered second approximately for million, our common As on our cash approximately XXXX which times.

needs benefits our provide facilitates venture, secures provides our an that greater marketers enhances solid stable, The agreements platform fee-based flow greatly ventures also expanded operating of execution capture The our in South JV other to previous with form transaction the Texas. to additional cash to is a third-party and series operated increase midstream producers we time joint a Sanchez to Targa, the Texas. of simplifies quarter, Partnership. over the and the services Energy strategy, expected efficiencies, and expands structure announced by and as joint During XX/XX of the are to South volumes, and the midstream joint Carnero Targa expected with Targa, of in venture

through Importantly, XXXX system with positioning growth continued a see come, the in additional South as in being Texas. volumes a to to put key expanded continue step the Accordingly, have capital. years Partnership, disciplined to ourselves for the in expected JV preemptively grow our position and Partnership we with in while Carnero the we

a Now XXXX. for at back Chuck financials to for look our the quarter second

Charles Ward

Thanks, Gerry.

Our revenue quarter totaled for XXXX the million. $XX second

settlements. amount, a on $XX activities, from which this is a balance little hedge about from result operated $X activities of and $X.X the non-cash on loss midstream a a million came loss about million about of $X.X For came was million items. under activities, was million production The mark-to-market

and $XX.X G&A portion mentioned million. our rate cash million, first, which more the in expenses the million results settlement in have has sold the distribution operating times. about million maintenance distributions $X.X about million Our our million we includes including compensation and in and related million midstream Targa, $X.X related distributions, about expenses for than quarter preferred our expenses the cash cash the second not of million than from a during credit ratio and management is distributions of was coverage CapEx, unit-based $XXX facility, base under out unitholder, operating less cash Oklahoma, $X generated our totaled million $X G&A under million, backing and for million JV for we $X our in during X.X $XX quarter $X.X quarter the guidance. expenses $X approximately Including which asset XXXX. fees, items. legal these for debt and adjusted Gerry for which totaled after line approximately Adjusted our below in and XXXX, in second, about a cash quarter $XXX of million borrowing unit-based number earlier, this our quarterly properties quarterly million to for $X.X and But in outstanding slightly $XXX,XXX EBITDA Also was number in the to We comp and both interest $X.X million for currently a with in production-related to which as non-cash – with that $XXX for items the commitments. $X.X – quarter taxes. for little million expense, first in one-time XXXX

times. we’d our quarter XXXX collateral coveraging �� the covering There’s of the hedge this million, our the positions commitment approximately line found to elected open change the As turn to of morning, currently overview results, press X.X amount noted $XXX second that the during and to like million midstream midstream of question – the to profile in over which release is approximately set hedge to base, details now moderator With our our borrowing by no are in be our resulting for XX-Q. questions. portion at $XXX Partnership’s the the

Operator

Johnson The Venturatos now at ahead. question will and question-and-answer Please session. comes our go Instructions] [Operator first from Rice. begin Georg We

Georg Venturatos

morning. good Hey,

Gerald Willinger

Georg. Good morning,

Charles Ward

Georg. morning, Good

Operator

My I lost apologies. Georg, you.

you again. go If back I’ll on would into the put queue, podium. you the

please. Okay, go ahead,

Georg Venturatos

on back we line? Are

Gerald Willinger

hear we Georg. Yes,

Georg Venturatos

about the JV Hey, Carnero you Gerry, Yes, guys. expansion. talked

to what in of cash Targa. to back have potential expectations could the initial and there, kind to elaborate But opportunities well partner longer-term? Just seems you really related the we wanted generation which there for set to release kind just see opportunity relative that obviously to assets fit to more if with of up silver capacity flow about spoken the on and continue were

Gerald Willinger

approximately processing a With up day to in from us Carnero of assets Comanche and the the SN set XXX as that to which Catarina operated there both capacity volumes well, interest into partners XXX bring are expanding we working have as other JV capacity well. approximately the JV, brought up Yes, that certainly. compression, volumes the the pipeline a day without SOX manage to in

So perform to at comes increase approach feel that go and system. come the we end now to acreage and XXXX, in those and volumes, volumes like as with dedicated as of that slightly are they’re to XXXX, we new volumes Comanche Catarina into the starting the just going volumes continue

benefit pipeline multiple set this up partners from over some because very spending those future, Oak, of and play starting the we’re a be for too. into as working interest the Comanche the to entirety the Comanche on through little the We near-term capital bit So of volumes volumes the the our at just growth the of view a acreage to processed little this do dedicated see of accept coming volumes system. to with while in Silver

Georg Venturatos

know volume get feel Got wanted update, thrown it. you at are year-to-date, guys I with range? I that for And we appreciate we had gas out to an comfortable least where still do just Catarina from the guidance that, Gerry. side, given

Charles Ward

a back-end of occur call, We the obviously, midpoint comfortable has feel SN with have is towards out with that obviously where But Yes, investment on years roll more [indiscernible] certainly discussing already a about this think, we Georg, is it is going very in continue Energy Hey, put formally. expects to we Catarina. that expected out on watch volumes, in Chuck through to in as like we listened I We’ve us out to here. it that our pivot bump Catarina the the think Sanchez volumes seems basis there what their I more stick at as the that quite guidance made that Catarina. of think, put of to and we and there. range well

Gerald Willinger

Yes.

in middle if six you of our know, you’ll it. months, through As annualize range year-end the write you the guidance

manage some So to we looking trying that volumes Catarina do growth through from of to and from and at coming guidance comfortable as we’re the Comanche. well inside potential feel forward additional level, be to going

Georg Venturatos

guys. Thanks, Perfect. requeue. I’ll

Operator

Jamie ahead. [Operator comes go from Please next Capital. with Instructions] Baron Stone The question

James Stone

as potential impact from expanded and result just how JV? additional a little impact about perspective? morning, a guys. and you that DCF may the the of And Good Can that what coverage for XXXX Targa in say, a third-party how talk is us, us volumes beyond? bit might And

Charles Ward

excuse have a obviously, expanded Carnero don’t XXX me, in we processing a to day But a look the the XXX XXX XXX at the capacity system capacity now. forward-looking a JV, a the when right XXX increased and from JV from to a beyond day, to day, I us day. XXXX, lines day this went through to

into our expect that’s And expansions potential the the right working now, and with and going for so partners other look – and volumes we that having going off look Comanche acreage Texas expansion we throughout roll South on forward. to interest coming commitments dedication drilling in those when system at

and potentially in displacement on plants, the Ford to we’ve think XXXX from As pipeline because of partners coming been the interest that of there’s area Ford, Eagle particularly the also out coming pickup, Eagle from we working volumes the to the not coming dedicated Permian. volumes, the acreage some just in Permian the volumes opportunity from only systems but of coming other displacement processing seeing and –

James Stone

going much [ph] that pipeline would like plant XXXX? into to going on do make] the the you capacity [And think of we exit the frame on just capacity our in excess to be what have based you’re utilization think things, to how year, you and where will

Gerald Willinger

going the same a into capacity as XXX at plant we XXXX, at – pipeline capacity that of full which capacity right means Excess day, Carnero JV. JV, Raptor operating at currently approximately were we’re the full level, approximate on

a an day day the the JV, the have portion on to a pipeline and the – in XXX incremental with JV another without Oak starts in compression a of plant. another pipeline it going we’re So Silver the XXX on day XXX

compression. are bring if Obviously, fill can those had we we through volumes both available up it. So to

James Stone

is bring theoretically all to beginning for available volumes And year? that the of of Okay. of the as through

Gerald Willinger

today, Well, for the of Correct. volumes. it’s available as

James Stone

Great.

up we into year? ex-Sanchez year showing And go into to so the see rigs start volumes say, the as the see would building I as expecting building, end we area, in volumes you should and next of

Gerald Willinger

into come expect rigs volumes to Eagle Ford, additional opportunity up we XXXX. the pickup As in some the

James Stone

But we’re in near-term, more the what it’s nothing is Okay. – in seeing it’s XXXX?

Gerald Willinger

at lot there. with look volume there. The in interest drill drill Sanchez other obviously, plans the work up see commitments through the near-term what in increasing. the we partners our and coming Catarina are out through a biggest and still as they working nothing volumes nothing, Comanche plan market picking driving today. in incremental we its we then things of the from system additional off in the still opportunity, roll But when And at Comanche, look Yes, their

beyond, the then the pickup outside partners So to as trying Eagle really into we look and volumes out interest in we’re Ford another XXXX and working areas.

James Stone

clearly, well. obviously, on and very concerned mean, us with I Could level what’s you our with – own we – have the to difficulty? lastly, you Sanchez’s what’s asked transportation what they Should – the market been just this of sort were going have of Georg and refresh has I And know as Okay. gotten about financial volumes sort performance agreements of a around just security Sanchez?

Gerald Willinger

Yes.

let Chuck I’ll I’ll follow-up. then and answer So

Charles Ward

Sure.

So field, contract. the Catarina phase land surrounding I’d It’s obviously field start running I of type gathering coming source splitting processing thing. Catarina the primary with, the with and three agreement and a of revenue gathering, midstream activity. our the which for Western That’s the is of obviously guess, level portion

in was – oil the downturn So contract promulgated of kind it post earlier the from ugliness pricing. was the

they used we investment. that did they So firm feel when that technology the divide the say, our we parties. Preferred, we We with when comfortable have between available made contract own does in as their very to the contract time before their at analysis that

as test? their recently there partners the just the working is who and aware, thought the how we that off contracts on we the that in about was in As agreements what’s market that The think Targa about place. JV market And those incremental and several own and I’d spring. I you’re a the that lot So are for a gathering agreements. on put when analysis all interest signed next say, what’s processing

examination that’s would I having robust is. structure, be. rate pretty So the that’s market long-term parties multiple of rate would study a what market pretty a current good what – the pretty of that’s agree rate say, to a

there, around Pipeline feel so – going the the on on there’s in firm all with the that, you premises. And that’s of the a pipe believe know, has back-end contract from falling construction gas ground, sitting the there a pipes which incremental dry that And neighborhood. legal a the there’s again we dedications them there’s, while acreage structures, comfortable different we value – structures more good as Seco then as

commitment the right So us. on currently daily we’re a the that because daily financials. publish of average That’s that’s volume inside there – now our tariff volumes we a with commitment that, reexamination to volumetric be

they markets to long that of And takeaway we’re the around to so It’s day the effective haul while currently in the – pretty we’re us. gas the to XXX on place the that noise coast built a there’s with – away markets to that at a capacity other have the the volumetric pipelines going Permian typical very commitment dry we it. are theoretical for And that with pipe opposed headed as we happy neighborhood, day some area. of XX day a that have from construction inside much a actually all available out gas dry

that like incremental in for there. we contract all around that volumes. structure And options so have the we like kind put the certainly those we We of place

that’s analysis bit I way to little of you. a for easiest think, do a So curve

Charles Ward

add level system I’ll of performance essence gathering benefit that Comanche by volumes. we more somewhat Catarina and disproportionately bringing in field Obviously, having just driven the that. Yes, field. versus do production in to by by But

and system as transcript – the in As to redoubling from Catarina. view, the well gathering benefits the some we is followed which as takeaway Energy earnings our call, we directly understand Catarina, looked its in Sanchez efforts

we And volume we some us, to so underpins that’s at like important our going when that forward. look that, and forecasts of feel

James Stone

big level disconnect surety your guys sustainability the and how of stock that market think is it’s clearly of you see the you Okay. I thinking and where mean, business pricing the distribution? and about very a the between your

Gerald Willinger

take we would the what’s conversions are for in CapEx projects felt that financial performance continue ignore it the taking that the time back as to and and cash account Certainly. cash and place. and was coverage distribution. that looked capital and level But to at appropriate on we and else remiss into mean, I holding it evaluate be this opportunistic X.X Board at And the distributions ratio we cash and quarter, among our at bit other little quarter some reserves, every specifically approach everything going us markets a that that, JV things. for related

conditions. So basis look it’s obviously quarterly are at on of something that we and a aware very market

James Stone

very I it. appreciate much. you Thank

Gerald Willinger

Thank you.

Operator

closing I session. Ward Chuck to turn This the back remarks. conference to concludes our question-and-answer like would over for any

Charles Ward

and Well, very again, we in joining for catching up again, you everybody, this forward look morning, thanks with us to soon again quarters. the coming

Operator

now you presentation. is for conference concluded. Thank today’s The attending

You disconnect. may now

Evolve Transition Infrastructure (SNMP) 9 Aug 182018 Q2 Earnings call transcript