DKL - Earnings call transcript Q1 2024 | Delek Logistics Partners, LP

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Operator

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek Logistics Partners First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Rosy Zuklic, Vice President, Investor Relations. Please go ahead.

Rosy Zuklic

to Logistics welcome Earnings First and Call. Conference morning, the Partners Delek Quarter Good call Avigal Financial will Israel, today's on Participants include Reuven Sakazi, Delek EVP Odely EVP, Soreq, Spiegel, and and Chief Officer; SVP, Logistics. Operations; Joseph President;

our will business conference under securities risks may uncertainties outlook. These forecast. without statements reminder, including, statements regarding statements cause federal forward-looking to that call involve a as contain actual differ As guidance laws, limitation, this defined the and from results future and

information, please Form information, risk Form discussed quarterly more SEC, call. with the the The now the date. of For refer filed partnership factors release turn this the I'll statements respective on update in to recently along Avigal? most over opening annual report press with associated remarks. XX-Q or with the for XX-K partnership's speak to filed which report Avigal call the obligation as no on to assumes any forward-looking and

Avigal Soreq

Delek to We a the strong quarterly Partners Rosy. Permian from on position basin operation of pleased our with in and Thank reported I'm our operations consistent continued validates expectations started million the quarter. performance. strong Gathering This consistent strong We again has our performance $XXX EBITDA. exceed you, our Logistics our saw Basin. once exceeded Midland a Delaware first basis. the in

business. approximately with our Logistics business has Delaware back is focusing started third-party XX% Today, way Delek the XXXX, in a DKL. to a third-party something into EBITDA and evolved story. It in long bigger. classic in of the from as We drop-down have We Basins. come back Midland develop XXXX started

gathering on Our growth segment. been processing efforts have and focused

day built It's in has Basin. and system until has of of system acreage XXX,XXX per to contracted premier XXXX. now organically. Gathering this heart dedicated XXX,XXX Midland the barrels up Midland around Our assets the gathered We

asset midstream Midland that operation. growth engine provides It's an attractive a of our

system The built gas water this provides business. gathering and organically. business customers. Moving to inorganically and Delaware We Gathering our complete to the crude,

capital to significant and approved will maintain structure, Board consecutive quarterly I our for the growth distribution of and have delivering a $X.XX strength of strong will in Delek $XXX the system. record team speak executing improved Logistics XXth unit. strong it their to On equity May, The offering Reuven these successfully to has our the liquidity we We to to transactions. proud this. the Delek million. I'm debt unitholders. in increase Logistics opportunities financial in distribution our investors. improved confident approximately over ability In now our Reuven. We track to to our value feel per shown hand flexibility.

Reuven Spiegel

you, Thank Avigal.

growth debt pursue wanted our equity XXXX highlights, the and start Delek its I extending I investors in offerings. primary Logistics' float the improved color equity liquidity. increased to leverage and to on the improved plans to issuance the Before units, and new traded. the daily recent through The and increasing also volume a little financial financial ability of combination It debt attracting give

$XXX about increased we approximately these to mentioned, $XXX was prior This million Avigal As liquidity to million. transactions.

from the through ratio leverage the balance In of we improvement year. continued X.XX to reduced the to We in X.XX leverage pathway a ratio quarter. addition, the see last

to quarter on the Moving results.

X.XXx. and EBITDA ratio was cash Distributable quarter The of was was to same flow first coverage in 'XX. the $XXX.X period DCF compared $XX.X million million million the $XX

million in $XX due was compared $XX.X the year. was was for from Marketing primarily million quarter $XX.X For increase prior segment, quarter the 'XX. The and million Delek was Logistics first to first Basin compared and the Terminalling The increase in EBITDA quarter primarily the compared Gathering driven quarter of with million this compared million Permian the million throughput in higher Processing by first transportation $XX.X of assets. Wholesale and to Storage And with in utilization. of million in the in The the quarter $XX.X was first EBITDA investment quarter the Transportation and in with joint from $X.X rates. storage 'XX. $X.X pipeline mainly 'XX. in contributed quarter terminalling million $XX.X higher higher segment EBITDA lastly, was increase the venture

With in can The Moving in growth the the $XX was for on new call open connections Most namely Gathering for capital of to million. capital for the the and expenditures. first Delaware of projects, quarter program 'XX advancing was that, quarter systems. we questions. spend Midland the

Operator

first come the from of with Our will Instructions] question [Operator Citigroup. line Doug Irwin

Douglas Irwin

provide DKL with equity that. to a just going maybe recent opportunities little the growth maybe flexibility just increased of the and to forward. talk the Could this allow the context on just decision you that could more into and liquidity if then then I might bit a start just follow-up offerings. some wanted issue to And you

Or kind issued you recently equity the is today? of where balance with forward? Are any of As plans are more kind you offering. another going there to comfortable issue sheet shelf

Avigal Soreq

Thank can you, that. I and Reuven color Avigal. Doug, will start into more it's then add

team all Reuven improving improving our the and more get public availability So that units. we checks ratio, that his did leverage on float and actually It's boxes offering the need.

the many side. the So it to that checks on we great boxes activity operations enhance have

to the balance the So sheet operations side to a the enhance equity it's side. complementary action and side

to chunk that? that's On the offering want have obviously, best to words don't you I into many have, if good a practice the for offering of add Reuven, few we know that shelf reasons.

Reuven Spiegel

to acquisition June and we equity of on million high offering equity of million finance on yield has market XX, then closed $XXX we history The Bear $XXX XXXX, Yes. X issuance. we and a by that back the the communicated actually intend to

were the had the high-yield and at found to equity we the both be for and and and which last shut markets However, patient opportunity, issuance. look right time in time we equity down the issuance the right

of going opportunistic just the it. it to first outcome think we'll was the we XXX, one. couldn't go but the And happy Given first one, we're about I think be all with if I the way forward,

Douglas Irwin

may context talk set opportunity just some pivot forward Bear. you you're the And the then the seeing maybe follow-up, growth geared maybe for be if helpful then or talk to into how about just organic opportunity moving the Great. maybe maybe around forward? growth acquisitions about about the versus Delaware as a you could the towards Midland do X more GMP Could thinking business growth outlook. as moving you're additional That's and some just

Avigal Soreq

to question. answer. I start, that's then the I let finish Yes, will will Odely Doug, another great and

talk Permian market organically. We actually to that to the in inorganically know asset reasons. obvious future But and attractive, So we that that both well. the also ways, demonstrated think and developed it's easier as time to demonstrated the and we the our in the expectations Basin about can of. the asset Delaware are partners over proud very be we we exceeded developed too from DPG really And I do we something to

have record. we track a good So

a attractive doing in shareholders. to DKL we whatever around point doing both to unitholder, are we always we are We that but it, want that we is please? but Odely, also aggressive our are the are make sure to

Odely Sakazi

and It's Avigal, Odely. good you, to from hear you. Thank

something sense inorganic, that. accretive to makes and and we're to think I Avigal mentioned, always And on to do As the and be look going us. continue also for that opportunity, we opportunistic it on always obviously, that has

that. So we're always look going to at to continue

where the we are Midland you from continue Delaware and capital side, both organic location to as also both in opportunity significant a a definitely, the know, we the opportunity the growth see of On put and standpoint.

the board water DDG in across the we a to on side, X-Bear to Delaware our pretty side in focus lines the segments infrastructure the formula and acreage with that on from Delaware, X we much we is continued all that our all on specifically in producer there Specifically streams. acquisition on to need crude, the in location feel the on coined gas location that see where the all we're the have able a needed the and execute continue

think this opportunity an that look organic definitely to I continue very for streams. where area to growth on all going in it's we're continued needed a is

Operator

question Neal will line Your from next Truist come with Dingmann of the Securities.

Neal Dingmann

-- MVC your the Dorado? on update, with sit prospective where other most are you or Any or these you of how just, El contracts. extend contracts, continue of particularly then duration try looking other again, maybe talk just sort Tyler do you're to Maybe just the to other MVC about And at contracts?

Avigal Soreq

Yes.

So Neal, something that's renew and working this DKL to contract, the DKL intent that is it. of is

Neal Dingmann

any line And is negotiations? El there time for Tyler Dorado the or

Avigal Soreq

that requires DKL. conflict obviously, and DK So the committees between

process, understand this intention. but So is the the you

Neal Dingmann

Sure.

sort of to prior up the And boost lastly, Okay. kind to you in assets up another What of Bear up there guess question. be on And way. doing some advancing seem then assets? I you at do any you are bolt area? let bolt on the opportunities Is opportunities Or to need believe there? to maybe there? X ask of any what margins Are that kind me bolt-on to just there

Avigal Soreq

I'm before, do provide. our not to be can pretty as unitholders. is about that's opportunities in see said the gas the value area, water, in area the we for a I unique going the What the that talk margin. The we growth something I and elect to margin speak significant where and area. this is we will margin to service know to that accretive know how we proposition. crude, how to in see provide and Obviously, to We the that's demand going

unique strategic location. is area the in infrastructure a Our in

lot a and sense see long hesitate So the do which unitholders. have of as we something physical current synergetic it's make to with we accretive and to the if something asset, offering will not we is as

Neal Dingmann

Great to hear guys.

the I right strategy. think it's

Operator

call Avigal for questions further the We time. have now no to I hand closing back will at remarks. this

Avigal Soreq

partnership. thank I to thank in of unitholders to next thank want you. for I I next and our talk to our Board Directors their hard quarter. to continued I support. in customers to commitment And thank us, and in thank interest our So Thank and want trust their the work. employees you. to we'll for for their trusting our our want to for want

Operator

conclude will joining. call Thank you this our And all today. for

now may disconnect. You

Delek Logistics Partners (DKL) 7 May 242024 Q1 Earnings call transcript