PBA - Earnings call transcript Q3 2020 | Pembina Pipeline Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Pembina Pipeline Corporation's Third Quarter 2020 Results Conference Call. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Scott Burrows, Senior Vice President and Chief Financial Officer. Thank you. Please go ahead, sir.

Scott Burrows

you. Thank and from conference XXXX. the everyone, to and to highlights review third welcome morning, call Pembina's webcast Good quarter of Scott President Vice Burrows, Financial I'm Officer. and Chief Senior

the with you Senior Vice Taylor, Facilities; comments and President call Corporate On Senior and Mick Jaret today Officer, Vice and President, judgments that Senior Officer. like President today Chief in Vice Officer; some Wiun; Executive Stu to President Chief New Dilger, and of based and the current forward-looking Marketing Jason be and Development remind are me Pipelines; on made Chief Sprott, Operating are I'd Officer, may Ventures projections. and expectations, & nature Pembina's estimates, Operating

and to differ uncertainties, results about analysis provided both learn which statements statements online cause actual from forward-looking EDGAR. XX, non-GAAP could materially refers risks To XXXX, pembina.com and of company's Forward-looking express is see to are X, may we the period and the to September which more Further, the on or and expectations. some imply November measures. these for at dated information discussion ended non-GAAP Please subject and today SEDAR available measures. management's XXXX

turn third I'd quarter we some Before the discuss to like things to Mick remarks. over results, to first Mick, over opening make to you.

Michael Dilger

in and been doing Thanks, than of which, Scott. particularly resilience Good asset-based pipelines for Once strategy assets, the again, well. and are again, really decade. morning, underlying we've hope I'm with Pembina's once families I the and everyone, quarter, a our more and businesses, your displayed pleased the business executing you facilities, the

range, and acquisition. XX construction and value and we the across the albeit the resilience become Pembina many been with of greater guidance customers, and integration lower end ago integration of remain years company's fact came and the times near EBITDA commodities of to within has through diversification on chain began currencies, company. extended stronger and focus more We're over adjusted have our original that a range. both Along Our XXXX that diversified proud the expects

customers almost still was has provided to we energy guidance our That's XX% not these of our happened that and year. challenging of our million testament, who but a to with to only business, world commitment range. model, tasked the and and we've And of our midpoint about ago, sector be of assets to this this savings. of through strength both and While are the all over expect business operated full the delivering X reliably in that the despite the safely original employees strong $XXX cost year

ahead, is amongst beginning positive and customer signs. base. it Consolidation strengthen companies energy see Canadian will our we occur, to Looking

continue We'll future. our Scott. fund to capital to also meaning, returns, customers, and that competitive pass prudently We'll to investors, to dividend stable Pembina profitability make provide in growing customers' employees. that, back will continue our communities balancing focus by on projects are stakeholders: we XXXX, the past, have all remains the entail. demand principle vaccine basic well to Pembina broadly positioned that same and We available in expect will oil hopeful and which deliver used and of value XXXX we by supply the tremendous effective shareholder in be sticking an COVID-XX and the and we it I'll the of statements better. to X allocate improve those With

Scott Burrows

from offset Kinder quarter the same the impact were major year factors to the Thanks, by prior third in the relative The due same period compared last by offset COVID-XX the acquisition, the Kinder an following spread, largely impacting lower period impact commodity to volumes a were and reduced Sable, the lower in Aux and in partially of narrow crude oil Mick. margins interruptible to last the lower marketing both price year. million, was Similar which AECO-Chicago new Alliance contribution increase the due decline quarter, as of as was lower to increase revenue. NGL assets to margins contributions positive to the prices. business These contributions from Adjusted EBITDA well in on due contribution from sales and the lower $XXX quarter and a acquisition. the NGL positive the the X%

and roughly budget terminaling to of placed million the seen July increased quarter propane-plus unplanned outages the July on were down recovered Total the this first our Eastern optimize the below stabilized levels are additional beginning when the between slightly and from service August. Kinder of enabling year at X% well were capacity, Conventional those was expense. into is propane levels marketing in as Pembina's from Pipelines adds in in second The of billion basis, roughly volumes August Subsequent G&A and other at is program facilities. II markets. market Duvernay seen pleased day, lower in XXXX Duvernay advancing day and assets expect continue These April global the Western deliver early the decline of have quarter with part turnaround which of access, project, electing perform project of consistent and were physical BOE fractionation On second third in brought facility earnings extended, project activity as at fractionation well pipeline during maintenance or expansion from levels We due physical to the operators export and construction per saw quarter routine and period offset time next our the and complete that of above Phase bring to and were This to marketing. contribution volumes quarter, volumes experienced improve. we third-party consistent barrels in physical activities, revenue the contribution above the largely service business we lows capital into end May. of Third up to to Empress physical levels year the last terminal, the and propane the Pembina XXXX. before with $X.X III, to period and $XXX is and quarter and which this quarter due October first company earlier quarter, X.X year. same XXXX. Prince the per over we service approximately slightly are the and which volumes to in come on Peace somewhat XX,XXX VI to with in to September provide acquisition scheduled year-end; facilities typical were third same million XX% first the This and along lower new to over into quarter Rupert by and declines to a into facility. service to year, of compared

We of requirements portfolio the and the on to in evaluate and is engineering in continue ongoing project work deferred particular, projects expansion customers' with optimizing scope to future VII pipeline the focused the our Phase basin. meet Peace of transportation and needs

global work, and may context be a project projects, of including outlook. VII costs of lower. future our As they plans this ongoing the continue evaluated Phase facility, restarted under materially are and which CKPC's resulting within economic to and conditions trending be the pandemic estimated result and PDH/PP customers' COVID-XX other deferred

market to and These business greenfield, strong inherently brownfield several range of opportunities. new suite with $XXX continue track scale, record. rates risk-adjusted Pembina's affords multiyear from our in returns a we of assemble of inventory of billion The us and optimization development breadth size million development diversification dollars a opportunities. to opportunities Finally, consistent and have

we are not is certain, the of diligently line While time opportunities. a number advancing

results us, the in typical maintenance volumes, NGL of and Turning EBITDA level oil the of the incentive to business, range and marketing narrowed crude spending of the the for relating compensation. as With on drivers and its the generate well expect of the company's the behind include billion fourth to results share X $X.X company $X.XX as of The to specifically primary quarter to has timing share-based completion expense of outlook price XXXX. the and full guidance impact interruptible quarters billion range year. adjusted integrity

Approximately letters XX% take-or-pay million, discussed of are unwavering portion with previously savings operating commodity In general expected Mick commitment was to and in supported approximately building in of financial and service XX% approximately approximately in including XX%. with underlying on volume sustainable. secured commodities, of has of reductions now of asset long-term fund customers these contracts be and contracted currencies and not by the our counterparties $XXX contracts, developing and to our Pembina's been by XXXX highly our target business, of significant Assumed predictable we no integrated administration credit Direct this are with business important revenue about business, opening be fee-based achieved limited reliant exposure counterparty cost marketing is which XX% exposure Pembina's for resilience expect spoke and is business diversifying the guardrails. and exceeding range risk. from to EBITDA, price in our which split-rated across expenses, Pembina's to guidance reliable credit. with this his chain, comments, an or adjusted are to investment-grade of Equally coming we dividend. A or by is our Pembina's streams. the value by original

a worth trend select by As It outlook affirmed we maintained noting over years. been with suffered sector past and action or and the BBB S&P that have recently maintained sheet within group Pembina stable. DBRS the both is infrastructure has ratings balance that negative as a a is among not strong have the X energy as

the billion. liquidity addition, the of In end $X.X totaled third available at quarter,

comments. the We pay shareholders. future will with things or closing the ability Mick next down some exit to debt financial that, fund XXXX to of capital return turn over I'll for a position to With strong in wave growth,

Michael Dilger

Scott. ongoing returned half of so overall remain end we pandemic, cautious. and the staff amidst now the uncertainty Thanks, we prepare the sentiment for political With Yet of to much optimistic. Calgary understandably the our Roughly remains XXXX, Good and industry have XXXX as office. job. approach economic

our In business the each funding success, in-person forward outlook, key update, as to has As well efforts looking of our as the teams, of the including status been the latest and early currently we capital returned. December, our our capital we budget amongst a ingredient plans. to business, growing XXXX projects are which on the deferred fulsome providing refocus collaboration company's has

our particularly And of environment to release issues, we coming commitment report, diversity. our of comprehensive our next on stakeholders. in Finally, significantly with weeks. all XXXX the growing sustainability of areas on in we'll perspective again the employee be of disclosure, attention The provide forward will this enhancing this report report looking and to in are a the version ESG also

for line you you, please As have shareholders, that, difficult open time. this through always, questions. us we'll go who all with up. of we ahead all and stuck thank the Operator, With things of literally wrap

Operator

[Operator Instructions].

from question Tonet first comes Your from Jeremy JPMorgan.

Jeremy Tonet

I Pembina, that here. just you've you with I'm want wondering consolidation, bit talk general means in start more if what could learned as for as off far consolidation what to a producer knew before. do now impact that versus consolidation? sector And also, Pembina And what you regards in I what does you with think happens there? well, the guess, how to as midstream

Michael Dilger

it industry be and players players. years, they're In consolidation has Generally, and then one start or will in credit, time become terminaling our of of think, times. were consolidated where I'll March some also which think stronger I a take the X the of about into let's longer the tougher turn example, consolidated recent helped over in and capability worried weaker just I Pembina. strong others. depths to excellent is XX there, less frame, an but an to helps past, customers the say, not and Scott with April, investors out be I'll last leader, starting The

think good we welcome We we for for credit. which it's and it's areas So operate, it. in good the

It your In a question, years. consolidator more the than it's U.S. second expect to very But the Pembina in in consolidation, been thing. slowly. in has I consolidation much happens terms of Canada. over see Canada, a midstream rare

competitors, their I think the think, strength indeed, guidance they're some on sector all U.S.. average, of scanning in what I Canada has much than And we sheet around see much just balance greater greater -- range. our

better they're So to than doing, what see we anything? add I U.S. average think, do you the Scott, on want in

Scott Burrows

No.

Operator

Your from next question Linda from comes Ezergailis TD Securities.

Linda Ezergailis

respect U.S. into other into to with to to maybe North with more as either or on consolidate. might building so peers the opportunities Pembina there basins has given question Jeremy's be weakness an for guess, America have, hydrocarbons that been Might I and do find extend opportunity successful far, your have? how, strategy extend some and your U.S. of the the actually you markets some Just

Michael Dilger

now, right advantaged march which to wanted going to I'm just the start our And we to And time but I realize chain taking but a go best nat question. sensed back as into XXXX. up result to perspective, the and the great was kind answer to away of a U.S. in acquisition, the that's from it We frame, done longer-term things Linda, also can into that to Again, value changed. gas Veresen U.S. liquids, was U.S. exposure. diversify let's

election. predict the environments As and assuming we look develop I'm forward, we relative and not particularly But U.S., advantaged forward the look we of think it's we Canada, egress. trying win, -- the Biden a to as Canada as

But we we're going we to place to of market the market. if American next produced have Shell the world the that, Mountain, hydrocarbons we North AltaGas' in have years, I best the most in markets -- terminal and in XX And Trans the get I closest to cleanest be the So years. robust world you're is as export we'll be. LNG, think And a hydrocarbon, whether -- basin. ethical American markets a that export our And looking and some do the We Asian-Indian think X terminal, be future. will the mean non-North beyond that. think it's the don't the egress.

Canada. so And it's That U.S. the mean we look advantaged think in never we're going to now doesn't

Of course, we will.

we're I our think, have assets But comfortable, in in number there. the of capital most next allocation We Canada years. with

Linda Ezergailis

attractiveness how might that as opportunity just your promoting emerging can updated might -- in petrochemical your others? Alberta of opportunities Recognizing hear maybe the I'm province, government well. the influence there relative some follow-on. we views And wondering And versus Pembina maybe is investments the that as whether on also a hydrogen that be for

Michael Dilger

update think levels of helpful. support be that all early government And we that of we'll which space. providing about helpful December. hope is when certainly into in CKPC, Obviously, for it's an kind And people we at step

But of we think, clearly, be a can number In management, terms are of our senior have is that us. years a we that it for and But days next studying it's we infrastructure hydrogen, week, early it's can on participate. I in really away. us. Stu, for And how And days think development. we mean, fact, early used I presentation any hydrogen thoughts? in to have it. additional We

Stuart Taylor

general. develop with positive. the and excited with No. about some of I our respect what on in mean, we're efforts export, Pembina We're present and lots have Linda, petrochemical that to that quite itself. of watching may the And think excited and opportunity side may to it are be closely, work recognized getting itself into our I industry opportunities we're conversations contact and are future and in

Operator

is question Holt. from Taylor Matt Pickering, next Your Tudor, from

Matthew Taylor

projects to that backstop that with seeing new adding seems with to be but it obviously. you'll about I It Can say customers' new here conversations is on here, some there with match contracts? is you to that recovering slowly CapEx in physical you're speak caution be to December, volumes that projects, customers? customers? you're importantly, more fair prudent come more seem having to mean, But willingness

Michael Dilger

once -- last things return We'll measure and that time fast actually kind restart. has have all geology, in we had playbook, I'm the to to readiness. we financial what that, to will good we we'll good in cut a we've things. for the the about respond I'm but right start perceive that since we'll Jason, more over than down return, ready. for we more in pandemic. really And able is we been market the those ready not of customers, supporting ever twice Pembina as of do the counterparty we've are cards years, And sure I to But a unwavering in first and on love we'd this to going and talk then we XX double-pandemic. decent of project that. rates grow been us the and you're of as then, backstopping And be be following because We're is literally guardrails, credits, because all we kind just the adequate when normal have decade, how in will from to But projects, eager been be the slowed resume, December.

Jason, the seeing So you're what bit on on ground. a maybe color of

Jason Wiun

Mick. Thanks, Sure.

And their all things and that. contracts our need like so And corridor, the number Matt, in particularly pipeline make of of customers determined Peace we've their actually customers, with canvassed discussions around needs were. had changes a to on who and what I

we're as saying, make going was through Mick what to weren't need that assets didn't to sure relative were building customers process. that that trying we So we

in positive continuing need assets. And continued indications customers our to continued areas of certain our on of from There's so we've lot growth that a pursue. their in capacity terms for gotten we're

to This actually and is good looking optimism how been effectively. of exactly a Mick look go this also And So there's very for market project good our would time, at up producer us so gave time, rapidly, assessment to keep with get and it on pretty we've do as -- say, it through services the building around at expansion. some is pointed for capital just those And out, we we plan the really things. it as to trying need our XXXX, since I to determine and well, stage. what rightsize lot

the So economic very we we customer also basis. do needs on think can and with the match timing it a then

Michael Dilger

volumes? talk about a Jason, on do bit with what to you're seeing you little want ground the

Jason Wiun

recovery slow, is that and have albeit typically and season. basin. Oh, summer September it drilling We're Scott volumes the we season, see, drilling starting seen recovering. in earlier Yes. the breakup to in the very slow are mentioned in turnaround call a sure. generally August and

back expectations HVP we've and the side has strong to back consistent what very performing to growth The when time system. seen what of seeing across and seeing close expected HVP actually relatively this Facilities going strong, came of time were LVP at our year. last we we volume very to from We're closer what year. staying budget. the our with about things level at board, we are this the volume ramp-up. on We're the We were both been turnaround set see

continue week would The going that, the every counter is day say, area. Drayton every to volumes seeing by, with I to the So and grow.

terms behind think well. of as there bit starting peers a other little our a area down slow. have about I in midstream to some that seen recovery. It's we've discussions curve But talking the is we're of

Matthew Taylor

And you repayments you the backlog being then, That's you're some You if Can -- and debt press growth, then items? returns. and box? the that could great. buybacks increased those prioritizing stock how slot And mind slot shareholder thinking prudent could you the today, items about return them? just you shareholder obviously, then about where put here. in sits release Do you increased are on

Michael Dilger

to want release? back Scott, start do are defer one? going the to you we to Or that press

Scott Burrows

Well, Sure. our still your we're the question Matt, working one. budget project obviously, we're -- through a But is not valid and backlog.

we today, a have them back, to for we're here cash come less, of this think if project. that obviously said the flow then obviously. of we I bring free little all going if bring of and back, need we'll a sit significant some bit couple the all we've have we'll If times, back, we none projects the projects And flow free As available. cash

think the But or about over we it goalposts scenarios kind are in funded business, debt-equity decade certainly, when about. last we cash funded about are XX-XX we're the free what thinking the those so. typically how the we of we've flow, generating where So

our redeploying think starting back redeployment so And about of point capital, think we XX-XX. about to it is really when

to will XX% XX% to repayment, flow buybacks. potentially will go cash go So share debt the of free

Where they're we think we'll that's capital see on Now that where factors. repayment. in the slightly debt that today, yielding certainly, we see a own our or the downside of bit being that couple if sit level depending a value then skew little could we trending, a depends, feel upside something also we obviously, get to comfortable, the share we to is, underappreciated. higher than as shares over buybacks. X% we're likewise, And on on all little where leverage a skew share more of towards the value I -- Where X%,

Operator

BMO. question next from Pham from comes Ben Your

Benjamin Pham

update see On the didn't asset that. much I on anything to package sales, us? in

Michael Dilger

Scott, you that? address want to

Scott Burrows

Yes. Yes.

work should we all probably a through packages, December So with a we our color about provide update. that's X little and We'll there, little more to continue can asset and say have clarity more Ben.

Benjamin Pham

deferred Is revenues No maybe last question see to going revenue. just and that problem. X, to on to year? balance you're QX get closer to and on more a makeup rights similar expectation of detailed And heading the your recognized that exhibits

Scott Burrows

Yes.

For makeup rights, the most part, those are XX-month Ben.

yes. So assumption, that's fair a

Benjamin Pham

Okay.

months, portion that like next a you it seems not in when into you go -- that's QX XX as like say basis, calendar year? So you pushes months, XX on book some and year there's

Scott Burrows

a amount. most for part, the on But There's calendar year. it's the small

Operator

Hope Your next question Scotiabank. Rob comes from from

Robert Hope

get including as a given to contract little basin, Canada sense LNG Ruby. in the any wanted Just as Alliance of dynamics of thinking how roles a on in about delay you're update bit well potentially the at a

Michael Dilger

can you you Scott, role. Alliance about to Jason, then, Maybe, And after. over talk

Jason Wiun

the Sure. all I we're Rob, is Alberta aware, going to so challenged, between and as XXXX. be Chicago in basis think

seen we're I the basis bit starting and in to And volumes that seen see interruptible moment, have the the had of Chicago lower some strengthening than in a winter. But especially we we between so little past. Alberta the think in at a

keep of at pipeline to capacity to available So the this seasonal utilization. came been a do our able sales that lot high we've year,

optimistic So there.

things think and successes have And And to story are areas looking recently environment recontracting. been And towards Ruby, it's some pipeline on do that think but in there's the in in Alberta bring Bakken, gas some some terms is there then working to the think volume We able on similar making we're of have there. where XXXX had Opal very we determine between their It's for positive. Alberta, years. for opportunity certain egress. moment, up to attract number do a of be challenging smaller still view to on We've We do We pipeline contracted. difficult are a currently customers, at a Malin we the term still with terming a there contract that for and of that it the quite end volumes. to PG&E is needs highly on Ruby goes narrow. the basis. basis The both

Kinder with some working gas assessing market lot partner, The on California. on things that our a coming and options there. is Morgan, challenged we're So California with for renewables bit of like a in

at of So to to the that advantages want Ruby market to we're looking able that? use be as has there. Scott, some to opportunities access did a the add low-carbon to California pipeline of some anything you

Scott Burrows

Jason. No,

I think you covered it.

Operator

Your from next comes from question Patrick Financial. Bank Kenny National

Patrick Kenny

I perhaps you specifically the the -- frac that more then just the next just maybe spread on weather, that hedges And what in to winter, But forward summer in of year. just the can locked into you're into directionally but just more out out dynamics. market winter, to sales you'll flush you could with marketing comment how your current XXXX, seeing percentage relative course, confirm sales? expected average propane of inventory play from based things this be know December, looking the assuming to here for XXXX Appreciate update you've come propane looking on at through

Jaret Sprott

take to going that We're one.

Michael Dilger

Go ahead, Jaret.

Jaret Sprott

Yes.

on terms a So largely sales, sold forward of we're in basis. our propane

XX% going disclose high to on path, current our what a on specific based expect, amount in do the can little I'm still not percent, say we is March or propane program, higher, exit forward to with to I as typically a basis. sales storage. we sold is already but no So

feel about So forward confident sales profile. we our

offset, to higher natural we prices slightly compared XXXX, based current seeing As prices. gas by strip budget, the our on higher the it that relates typically to NGL run forward XXXX, are to use we obviously,

So higher on Younger Belvieu think basis an little a I Mont and we're lower a on little all-in frac basis. a spread, on a

key XXXX. saw And the looking frac But is tracked. strip roughly slightly the are are XXXX oil, is XXXX. we be crude higher where us a the the differentials, same again, the as same what largely and on as then is the spread, net-net So we we're than to in differentials in to

we same forecasted prices, kind absent in the as XXXX So in margins we here volatility or of XXXX. as be today, movement see in we see roughly sit to

Patrick Kenny

very just are much, I and to highest publicly That's that can how were XXXX on your sales know of some contract tied wanted development clarify customer XXXX? tolls And I to Okay. helpful. in any, you if perspective to too the versus renegotiations the from announced reductions a the the just processing same-store quarter. still you confirm coming conventional be fees on. expect But in fee down

Michael Dilger

from a Services a Pipeline Conventional we that. I'll see a mean, I take from convention a degradation think and in I -- Gas basis tolls. I and any fractionation, don't think

Patrick Kenny

going before you've a trying look a some the go Last uses to your Obviously, and buybacks your cash around at out know behind one back Perfect. the comments just and would shares. buy to Okay. taken for me. share be some of Scott, I to pref math potentially excess par. discount back secured. here of that big until growth is

on at prefs your pre-COVID. this a Canadian summer, might math opening But of that was refreshed wondering think you've prefs the to open the and up value up debt if some that refinancing what look of pressure I the the further sheet? now market room hybrid with just do meaningful balance on market

Scott Burrows

look Yes. options are. always that we're Pat, common, if you of the a buying buy makes share at from of versus it back preferred. back get some you point, the dividend sense, buy to at to going compared From to of common at yield plus capital, our the back pref looking growing of what perspective, out believe, buying I assuming out we we're a think yield if have cost to those still a a dollar spare

an the be are and we are said, assessing being debt looking market. the certainly to today. see given hybrid We that that market, at especially attractive preferreds options rates where around Now all

our we So formulate it's the toolkit financing XXXX plan. certainly in as

Operator

Your next CIBC Catellier Capital Robert from question from comes Markets.

Robert Catellier

some I how I you XX-XX and than to flow, then and dividend increase follow very I haven't we previously. to little debt the to might in yield -- said clarify, to clarify to here just in right to other closing. high repayment free a want now cash deploy to returning Kinder a allocation current want shareholders. questions flow you've and one a up pointing some And cash the related to funding the appreciate Morgan just what the XXXX, of the logic dividend. bit seen to leading just capital

is does more So will even high dividend though there's long still Or without year towards one yield XXXX you chance it a go that that the can our term? increase? another view suggest stomach with a in

Michael Dilger

We're obviously. studying to doesn't you're yielding do ask to either conferences, it It's always going. would at love what when I when the some that, who make streak And they I'm X%. keep I Rob, -- talking do. sense we'd point, But

And want what here it's going difficult to On ask a because you do one question to alive. hand, answer. to the I'm you you would so keep streak

appreciating no other paying hand, the On you're what now. them one's

that into So why more? projects. would capital redeploy can you pay them You

what So would you do?

Robert Catellier

your good Well, the say But most obviously, to circular have. capital, precious a it's is discussion. you would a But next I'm question. people, pretty That's it's why I thing asking.

always really when you. and isolation, other the attractive So And guess, in lot, but more to later income the dividend matter I just spreads if in relative is options could a not fixed of choice. you have a a timing trivia, front you X% of is just more in that's raise

it. see that's kind of So where I

anomalous now not the time, But versus it, dividend though, your same either. raising really The is at they're not is U.S. of other course, peer the of part group. yield

everyone, the challenging crossed line steady, value a consistent it. I've I probably and in it's gets over mean, dividend there's one. time. sand So But the for best a maybe growth

Michael Dilger

Yes. And have it. there you

I think to that's We dilemma both And no trough. you going certainly, I think, just as XX% what payout bad if is unusual returns I sub-XX%. becomes don't to ratio our shareholders world I can dividend, It this the its as mean, it's give want I well. to Pembina know could certainly want our do. assurance you really clearer, we right there's maintain And question over that grow would it. normal. to us It's can mean, -- the is do or it. doubt. I arguing it You're in a of see now sides hard do and time.

have question. that a of the year decision. on where we have And news we make before we to to noodle that the challenging to good get months it is So many very time

So thanks for the question.

Robert Catellier

no just the it, on mean, And you doesn't you money. I because you point, mean doubt But want have to... last have Yes. it there's that

Michael Dilger

Yes.

Robert Catellier

do to with it. want still You this, but sticking

So there's been on aware, a recently just follow values. just about that well -- conversation that lot the as market up, in of you're terminal to

tighten share you profile? certain allocation, also, how return filtering how ESG obviously, having is the thresholds screening other at asset the on just compete in that with I'm But otherwise that's classes to those and impact So wondering classes knowing into up any out accelerating buybacks. this asset specifically, look capital or sales

Michael Dilger

We is the the hear it physically pretty We're that than many confident services world going argument. of Honestly, provide thinking. to impact to for will assets our for decades need doesn't our we come, last. longer

demand particularly, the here of years. that much or in X America any Coast tail. And in long, don't to decade, a And life the next Western we make egress, enhanced even no the who if our that laying products. who will So the West suggest Canada X our see there because and fought get is a long, the tail we'll We infrastructure hydrocarbon value long not others North longer, is assets, demand-flat at and have get for next an that hard has we're -- much, Even it's yet. view OPEC that environment. we peak form EIA of if to and at down terminal these of were look the there's

Operator

from question next Robert Kwan Capital RBC Markets. from Your comes

Robert Kwan

growth restarting over coming Just decisions then your and call on of the some weeks to the post evaluating and call, projects that some alluded you some potentially growth. making last that start, to of

So unfold I'm such hold that just wondering, environment right what but expecting in that remaining the didn't on is everything you still changed were now?

Michael Dilger

saw, COVID, at was as understood I was to And back we strong. oil result, we nat it the really think think what Robert. starting I we mean, time, come believed a and was pretty I did, gas happening. that that world

hoped which deferred on is in had could the we to mic And going our December. into so what we speak do projects, we're

the on, to as of just Rob guessing timing, So bit second saying, just be you little it on was cautious. -- a was very have going on

have You your careful capital. with be to really

abundance to an of decided of out evaluate just was options. caution it we so different And that to continue

Robert Kwan

in that the is Is in changes restart framework expect projects? what those for it nothing if versus say materially forward December how fair intention of here more we a guess, in then month, a move to next the December? really that So of or should is the you'd I sanctioning,

Michael Dilger

with all projects. on Not of our have mentioned consulted we our and no. deferred earlier, of stakeholders Jason now all customers really,

referencing. update we confidence with to give you're we compared we'll more the those, to on expect than had do So time and have detailed would a so

Robert Kwan

Okay. And finish share buybacks. if back coming I -- to can just with the

mentioned on forward you decision call how much go buybacks how is of to the projects going i.e., with many to I be sounds function over. back, of that think, a these Scott, it left is the cash like earlier come

kind like you're if you payout, around, that your flow yield? cash just an of more that beating at And yield, number. probably are when that their is look all you that's the turn of just so these though, free or in I'm it that really, the a returns AFFO mid-teens wondering, projects, fair on And

Scott Burrows

Mick, are you taking you want do or me to? that

Michael Dilger

not a capability. with increase The of cost yes, Like way we can buying your fair return the -- same have. marker. and do every back company's And stock And of were upside our you of can love project very and money. your start. it doesn't look aware own question. I'll problem buying of as our buy shares our that risk-adjusted our we rate a marker Robert. we is the mean, at it's shares give a I we just back Generally,

say, to was the just our for question, our increase would tie. the expand tie answer and We platform there and in we So increase leverage service things we when because increase let's a always a return. customer business your capability, our we

deploy whereas add we, will won't. go to that that shares a to do because we create will we redeeming And leverage, equal to assume favorable say would want or it return to the it something? so shares. projects to back on basis, your returns our risk-adjusted in things you tie, Scott, buying But a capital choose additional to is -- you can have

Scott Burrows

No, we that a that think was to, marker I said. certainly well Rob. It's look

Operator

from Gershuni comes Shneur UBS. Your from next question

Shneur Gershuni

you're Glad all safe.

and a I Have right when a project the instead, NPV delay share that were on probably be if hydrocarbon It knows same year until the your time your wondering today, yielding vaccine now. uncertain of forth. analysis, time And can interesting yield But The -- who the they're you XXth it you last way. point. period question price continuum? for the be at sort sort to looked environment know and flow shares being back it Have buy CapEx NPV. remains you that looked least at months deploy at that type would buybacks. arrives was a able was a clearly consider but of demand from free the where of of yet where is at you on where are -- XX retain other they strategy question. a that for so the optimization still optionality same to now of a XX, at if capital would the back usually cash Sorry an looked you I you potential more not buy can flip of for

same the have not may opportunity. You

Michael Dilger

of And customers. logical. think question is about part missing, interesting that's math idea. but Yes. I to it, The from it your an though, seems got That's that the

the -- contracts. selling, to want customers and we things we're buy Your have they

And so that for to when that you get say project. they have option

want delay unilaterally can't year them. You when projects customers a

But step I you project. there that that And a or theory, may think not year, may project delay in into in right. practice, so be you're if a competitor

it's easy. so as quite not And

can like be them Empress about But do backed, the things have or projects, our our we we of well. customer are that we way. think them Peace as that the co-gen, pipeline, when Some fair, when wants think about to contractually to CKPC

Shneur Gershuni

perfect makes sense. that Well,

thought. Just more -- was a of it

Your been impressive. results cost this to respect quarter with reductions in pretty your have guidance frankly

As right see opportunities do now, a plain sort entire of you're more this sprinting been and cost through you process, on growth and a gone further of kind potential you've mode optimization Or kind forward? is in still the on you -- of well do you've standing and you're do and third see in what the inning kind of should of the as or we million you think second Or this expect exercise? opportunity going front? $XXX reductions

Michael Dilger

lower. was because $XXX realized, some The are million much that of comp incentive-based share prices

when we're well, We should it so of that, either coin, doing this shareholders and the all to aren't don't as less the going it but be employees. love quite should be. on should it's as side make the So money,

how would characterize total? So we further we guess eat way accept got those as things are getting incentive do million we 'XX it getting to do. to the hard And make things $XXX we year, savings that. say to have I of we're up know get realm we going us say into because some But they'd the a will in for take beyond like would 'XX. we would characterize to incentive expect we I would that I exiting having the But be -- cost how there replace which into normal, and XXXX that I over opportunities. don't Would -- we're go comp are to know But comp -- achieved proud million. to know to $XXX It's do, is of. target, back we how would an that could hopefully, in to things I deficit? be objective and to we back that that for, next the to what help third-party we

Operator

Your next question from from Suisse. Kuske comes Crédit Andrew

Andrew Kuske

sentiment in producers with surface value base with sector market? in and capitals, opportunity relation within your ask up buyback in to But to asset targeting value existing and that with negative an do either you Or to pension that has either see the in have engaging private not question. your extend a share base? funds the by Or exists to deep private partnering even really in or assets pockets? promise that M&A just a partner surfacing general, asset I the you existing the equity

Michael Dilger

I have been value Pembina we parts. the two never have in I'm in answer at embedded where base. greater that asset going our to

our business now. right Just about we're and X/X is marketing of at operating lows decade only consider that at capacity

a throughput, that's our lot value we if lot is -- the reverts of mean, a of the that dime. if money. XX% our unbelievable. without business mean, to So spending embedded And if we I a have it's money add even marketing

in terms about as finding of I impact time, projects mentioned, previous the to growing. future we We after nonbatching and products of twice think of As segregation once lines, efficiencies measure complete cut leverage earlier, assess. and said systems to and throughput we're -- mid-stride And still pipeline have is caller years of actually different in the our as in massive. of the

about we tremendous our we that, the back and value, to the So underlying geology. of quality have the we in we're quality getting think really of what excited inherent shine normal will customers have through that because and really and

the and GasLink In that be us. other some and we OPM, terms and are of can M&A we've certainly money. other those or liberated what with people's talking -- available that partnerships of to about, Coastal -- Certainly, call partial those watched you're deals And sell-downs. leverage

reflective in our places, that's buy mind. value, that's still prices. on those excited issuing of at about can you is -- the base and have things these We're that to But way you asset as equity different do as make in sense. of quality too long your it not We share a do can

though. For at much all? sure, that Does help it's harder,

Andrew Kuske

And of the had you and massively if all that as I strikes the at possibly be allow does it heart you do guess accretive? That buyback you and it. grow it, does. OPM, at OPM, Does the tick that to once boxes M&A called

Michael Dilger

others some said, I by the intrigued as some have time, of that at And things done. and and been Yes. for have looking we're we're

Operator

from Our last JPMorgan. Tonet Jeremy from question comes

Jeremy Tonet

improvements talked about back, in also the as like come uptick see you producer cost of but it's it overall early know to want year footprint. seems at up, look, how you that you bit just basins in volume on up across from a And lead trending to the a a an could said, pretty more benefit that pick EBITDA picking in I reductions activity, full point. I you is activity year? next your

just So at feel how wondering that this you about point.

Michael Dilger

we're really our to that's in talk but -- weeks. evasive, be in to what hate I Jeremy, X going about

other if you'll on year to kindly significantly the going full volumes say, we're systems, on, earlier. are enter picture. hang systems. So on to get the But Suffice the some declined improving you'd from just year

of gives lots takes. there's So and

you So answer can't into answer our but sorry, fulsome full I that, early in a December. really giving effort putting

Jeremy Tonet

of of Got it. the beaten repurchases, at share the separately, I just I feel some be be like shareholders, it given appreciate right take that. capital you is your kind return kind dividend kind returning to And context, your make levels? within ground, capital then changed what shares touch maybe this, just it could into buy sense Will of over the that back to on historically how rewarding of on yield would at high it's of flow hate comes has strategy? I how topic and cheap to all been cash I but thinking of the ever guess, it? now market to time and the flexible when And just is of not

Michael Dilger

want Scott, do that? to you at a crack take

Scott Burrows

about. to But talking the you're math no I think at the we shares. back point, whatsoever buy understand Jeremy, this plans Sure. have Yes. cut and dividend

Operator

remarks. further back Executive Chief have to questions. turn over would the and Officer, Mick call We to closing like no now I Dilger, President for

Michael Dilger

interesting stat a this you leave given bit to going a here shareholder/stakeholder of -- that a call and I'm work, call. operator. is you, did shareholder we Thank that with an

shares Our that now. still do they own of shareholders number roughly the from year top same XX a ago

and was people ability reliably to in see remains sticking that are earn the potential learn that, us money delighted operate and safely its that to And and its so and the just I and dividend. its they maintain to ability with company

let you appreciate do that, down. really I won't So and we

So thanks for the close we'll line. the support. that, With

Operator

for Ladies and concludes gentlemen, your today's you participation. Thank conference this call.

disconnect. now may You

Pembina Pipeline (PBA) 7 Nov 202020 Q3 Earnings call transcript