CEN - Earnings call transcript Q3 2021 | Center Coast Brookfield MLP & Energy Infrastructure Fund

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Operator

Good day, and welcome to the Center Coast Brookfield MLP And Energy Infrastructure Fund Q3 2021 Webcast. Today's call is being recorded.

Now, I'd like to turn the call over to Nicole Pecoraro. Please go ahead.

Nicole Pecoraro

Thank you, Paula. the to everyone welcome QX update. And

Portfolio operator I'm the the Oaktree Joe Solution. with Herman mentioned, Boran Miller. Jeff Mid-Atlantic my and Pecoraro, Wealth us have we equities Nicole and is Today, Rob Regional Buturovic, Brookfield Chisholm, Jorgensen, name at As Managers, Midstream negative Director Tom the since indices total returns modest for took a in performance, breather despite negative a QX last QX with And first have hosting near time QX indices bit of the of year. two still major year-to-date. XX% both the the returned for

I'm hear future discuss market personally, our the the PMs So to excited to outlook. and current environment from

off and remainder of with are just and all. Joe call the discuss to if what seeing you for We us year? So kick Herman. in saw you off I'll what that, all QX, the you, thank you just the Joe, could lead

Joe Herman

of into underinvestment Hello, third and around now many the or years and demand the before together we The the and update for for recent threatening and to time. we've have an really We're believe. worked of is world. really for portfolio parts for patch everyone. Tom slides internal Infrastructure But recently we many excited have Fund Tom lot the CEN investors board Boran joining industry the in X.X on around something that Strategy with and is CEN. Thanks, we've the you joined rest now is now, is through our of addition believed PM and experience have have Miller, cheap will and our on throughout MLP more I right availability products and on hydrocarbons collaborated sector navigates for and energy Fund. probably that'll particularly the Energy committee that Rob, energy discussed since Jeff, he's reliable, critical since And meetings. fundamentals be steadily market him as Brookfield, since as starting a get supplies Brookfield long the excitement longer market some been insights really of and of strategies, than for for world Coast update, to quarter management PM than price a improved our Infrastructure Thank Broader & additional Nicole. a his the cross-sector the that There for think valuable supply call from energy benefit unique and provide we should that the really our transition. believe the a energy XXXX, PM our announced Center

kind as a his a on overview, update. jump we the moment of background. I'll market provide the some of PM Fund with brief So before His into to back detail give as addition that Tom

So, Tom?

Tom Miller

Thanks, excited Coast a Portfolio years has the several get our having global familiarity continue work collaboration, Joe listed And the great with I space. Center Joe. The sector which four acquired to on core with and always almost when I'm Brookfield to ago infrastructure part CEN, been and energy began our Capital. dedicated portfolios. of prior on role team’s taking listed Manager thus this spent analyst, funds, infrastructure our infrastructure broader midstream infrastructure as for to global Boran years

landscape. where ideas, on management to and navigate ever-changing our continuous rest midstream Joe teams the sector of we've Over the an notes exchanged attended dialogue the the company same forward to and conferences, Boran, with the myself, team move views last this sector how few best around years, along and and energy had BEI meetings and expressed have

forward point. integration approach to of like-minded this the platform. team, much And team a formality anything future prior Joe. and seems to Given combined for strength of look Back investing, BEI announced than our and more [GLI] at holds what the the into you, to I our work very together the

Joe Herman

we're today of X, summary just going to a sector. discuss here and Page the what's on So, what area topical infrastructure in

by they Nicole third the through points both but And indexes, negative performance, since AMZ third the the major benchmarks even this though page. only see has As negative first AMNA slightly QX and XXXX. were performance in was been negative, bullet with both quarter the were and positive you'll they the during to October quarter, on for for of of mentioned buoyed regards some time were

fundamental So, energy for and first midstream we to supportive backdrop really the be equities continues believe.

increasing sources an still as we next reliable you've decade start recently And XXXXs, these resulted has natural natural gas to we and catchy OPEC+ better me. gas surprise had MCF, headlines, seeing market than in for say the natural a I'll I in critical pretty is pretty has think the is decline coming energy starts COVID, the oil, natural the into prices upstream per at gas I implications. the confluence when speak out that, and anticipated energy $X prices could of even in setup consistent compliance, of drilling of that demand eventually shortages caused of saying to increasing we labeling Often supply. this like crisis higher But this and media. that potentially and commodities elevated of power of some tighter barrel we've is I the $X, XXXX. has share need market there develop this the And geopolitical crisis. and returns feel we're per is share with been that, sector, guess occurring seen factors throughout mainstream myself, I producers. for The result for which supply production even crude that $XX in as think and just lead indicative and I a think liquid increase renewables market hit the take pretty EVs the As global in fact even of underinvestment maybe rapidity point of today

lot undersupplied addition in that you'll referenced secure headlines “All as to a they supplies mentioned of China and see of being being storage, to these potentially favor Russia in gas energy Putin can and at Costs”. think incentivized Europe, if I fill

shale now, natural we are levels. world’s replenish liquified seeking for landed to to supported NGL expansive to the tend in a For Bloomberg. be foreseeable to cycle reason think to due from we one supplies send way markets We've that's many companies exporters for to global to midstream markets, in effect can to a the supplies offer of is amount production outlet example deliveries really one LNG LNG gas sitting U.S. sector the are and the levels U.S. that energy the LNG typically markets Asia in if LNG curve, expected going And natural the and know that's generally inventory well-capitalized and call why a consistent highest midstream supply export been companies critical needed, that year. why infrastructure so future. U.S. U.S. gas just recorded in already integrated spot. cost vertically the in and we've up out by We're end favored gas gas and order are What's And midstream all companies a really ever short of out the natural the that this place. on just production, had is prices however, of can for These in record especially answer good counterparties, deliver the the reliable pushing or the according to of added LNG saying for lower to at be dock. offering will bundled the think of the continue the we larger base that service exports pretty of

you quarter S&P the on is side year-to-date estimates. through generally quarter, tailwinds see Page a of for some returns, still being this And Clean next the seem with because S&P strong XXX part traditional the Xx with on energy bullet negative Equities carryover that as a equities outpace Index might still the even value Finally last the to solid positive proposition cash performance, the generating Infrastructure chart free Global broader Energy according market, a third offering flow that and believe the familiar, page they're on midstream strong X, the and yield year-to-date we here basis indexes some and with for the despite to of of approximately the of can infrastructure as end the continue Energy sell well. Midstream on sector slightly

to kind of the Tom So a one gas market backdrop, perspective on and the as specific energy it I'll provide to example. hand that, Tom? his with European back as crisis,

Tom Miller

coal, such to been surprise the across extent the oil several Joe. to and on the and last in lately what's global weeks to markets. a almost energy of Crisis gas, energy has a the used not over several declining and now day movements as quite turn impossible of news to short low world the prices. commodities Thanks, key come to lesser crude the hear and years reference term as natural some has It's transpired

as a globe; of crisis has American the driven CapEx were impacting is the firmly dependable, ends role Fund and geopolitical energy as to who supplies one energy in from throughout than reduction wind sharp as Despite as believe sown play in service been believe factors. and power conscious the by jump another, culprit commodities for have made a this a in coal normal clear critical at -- demand XXXX the by one tightness speeds, hydrological abundantly need multitude has sharp affordable, you Although as weak winter believe this concerns, severe this North XXXX, environmentally in pandemic. will prices been regard. carbon Asia; a them finally, have supply. and normalize fuels begin the to that seeds we of availability; and starts We conditions disputes; to to across squarely colder emissions A fossil providers of emerge or the normalize, well clarity lack producers of in thing the when curtailment given for low infrastructure we life demand generation time,

prices commodity has While are high certain average led Natural felt particularly region been record the well the high storage below of acute to levels key region's gas which the five-year imported impact of energy. a sources impact is that hubs. to being has prices levels, around globe, reliance in the in due of Europe, higher on

strong for spot as export to robust the capacity. contracts supplies set expansions natural As U.S. long-term their sign exports global remains appetite marketing to pull underpin higher grow had needed needed in has as of well prices to continued to The pace portfolios, on gas exporter marketplace. demand from Europe a in at Asia, increased LNG fewer benefit with in has sorely

as only a the All to source fuel lower continue as and of as role the indicative play moves as and a will tool is for reliable bridge capacity this not substitute power to gas for world also natural coal. decades many backup a help but of that of emissions forward decarbonization, ahead,

to on hydrocarbon it pass and Boran to I’ll markets. of discuss for Now, backdrop the more demand supply

Boran Buturovic

to Thanks, I'll Tom team. X. to and move Slide welcome the on

that call zero scenario, was pace we on in presented the to And investment So still the what renewable of our was required net started slide and by there that a representing discussed XXXX, the gas this required oil in which Joe is level certain get net to last zero of unfolding. is global adoption just show the upstream to IEA’s situation meant the is before scenario interim. us even the it

at look the case. represent public bars an these and plunge to XXXX, headlines blue the to large with seen here us investments beyond, through probably and to from investors production. indicating and orange get So the in you’ve grow and levels for are we and historical investment to By estimate budgets upstream are they line seen producers investment as levels required you’ve pressure is that not the representing XXXX, XXXX sticking facing

So factors a world. in important it's to under pretty being alluded of current to price the think Tom the And fuels that supply factor. just concerns we high around the led fossil investment one and

up for change is the I fossil and awkward in And decades place climate demand. fuel a to there limit where find leaders producing think a supply years, constraints that world from last push of of ended institutions has few the change. the name in a been we've in that place themselves right ahead comparable in producers now

reckoning we're global dealing paradox bit before. this that's than with had so And little different we of a this what moment and

transition is So we're not sitting energy here the saying happening. not

as global a this believe got all the that energy, to notion there's side than itself. to can the that's look which I some order think now period. room, at a side people we transition over consume think the from People fossil keep keep economies change in in consume the the not misguided to the we've supply be bottom barrel the through do you're roots producers have last world’s we economy still we've the the point the future, And And in reduce is interim going we need just they expect meet line And need strong today, but the you And it. a to very in higher that to global to ground, we coming. transition, influenced its and of long reliance investment from has of need years, energy it get keep is way true. very in fully demands on restrain way will if on And else different the a energy in barrel, I turning seen equation out significantly few by mind. execute to will energy at supply, we're push demand that a equation, we to someone higher the price. the to going fuels which partly order

where we So, and investment to ourselves notion more are need the the higher supply, up set from. accept if we come we supply that should going for

and gas. hydrocarbons affordable, believe to the Tom most fact reliable, oil, U.S. EIA energy continue alluded forecasting North the is Page for can environmentally see NGLs and in to. are X, compelling We On growth you American that meaningful conscious as already single

largely enough decade. withstand increases losses XXXX through production the the in not to are infrastructure these out in infrastructure And of COVID. it offset for Although importantly, from today experienced is already still place assets the build oil, XXXX to from

barrel chart, some a Beyond we to leaders XXXX, place There's domestic hydrocarbons. barrel, headlines as if than grab Russian capacity a world access Brent to cleaner of believe absurdity are an to or the with come logical to where U.S. continue we world is today for this calling to on on robust OPEC see increase to resources the those patent OPEC the barrel. the U.S. a

In addition, oil fuel proceeds countries other exporting fund arguably the hydrocarbons affordable budgets. that to most are source use several operations large world's from traditional social U.S.

fiscal drilling For example, producers at breakeven of for below profitability. Saudi breakeven a oil compared for price $XX Arabia producing has most are $XX where U.S. to regions,

natural day vast took leading around a has XX% there any in one surge attack reliability facilities. reliable provide It other last the more living In XXXX, have recently. us a international I'm is has U.S. can can basin advantage and nearly counterparties our where processing remember country. Russia undersupplying ports outlets Currently, and This addition for in virtually surfaced times numerous several the we're multiple liquified energy X companies infrastructure offer docks which was the will a and weeks, And over Saudi network, in notoriously, offline that the United in barrels of manifest prices. it's a partly to on multiple operate enables sure years. million States why compelling gas through to turned to it advantage supply. Europe a Most you day drone some ways. period crude This

rather the not these U.S. to addition simply have issues, does a recent attacks geopolitical the to are seeing and business, alternatives one-fifth been demand we say see impacted. play The attacked with ample tankers asset Gulf year, when Hormuz, several attack been obvious down in pipeline oil there energy from resolved in quickly generally deal world's today have oil are water. fiber then is the the or the those this isolated Strait while totally pirates years, exports. supply of an we implications finally, available and product reasonably as of Coast I'd we're haven't And seized out literal conduit take In effects did for refined in immune to with well. And

and exercise seen as in countries friendly. significant can would geopolitical not we've these influence, exporting of As we leaders consider all are leaders oil of what headlines,

the did barrels keeping go to original it point ground. So, the back the about on

barrel get keep price pockets more It record. the on have through the X, Page If still slide authoritarian go of on it or a I'll may be just barrel regime will that with questionable a and have consumed. to higher a effective it One rights human ground, will and at you an here U.S. quickly.

the production well we So, to pre-COVID, premier be do top side page pre-COVID oil of U.S. off record is also but high on several right do expect regions a we still literacy. to supplies still U.S. producing of XXXX with about QX nation's Permian, levels. called oil its to expect being there the basin upon, at regional the the eclipse the levels, the producing gas Despite in from the be of country

extend We continue benefits around at and which turn sooner is some to years. point to a may in several it I'll basin discuss the country, believe to greater basins be pause and back Tom second and decline this the right that for still degree the valuation. of to there tier over than third to

Tom Miller

Thanks, Boran.

far as so discussed investment driven free the across EBITDA. capital modest talking the just this robust backdrop well to cash generation, proposition attractive And the for minutes expected programs sector, that of levels, by highlighted as is but remains by the value we I midstream in flow midstream proposition value we spend on keeping space. the at So, see discipline, persistent growth as compelling low call, which a about few this fundamental wanted

well dividend as generation this share increasingly excess cash remuneration to of and balance as in the shareholder in to several allocated the We next with persist sheet of growth. years, towards de-leveraging cash high form buybacks, expect resumption level the for

Index by sources a role midstream our significantly funds, listed compared the infrastructure broader set, of of the set Portfolio and to excess matter I communications the we opportunity midstream for the highlight the as evaluating in opportunity as energy believe versus the other weighting sector future the On attractiveness to its energy have remained and remain such traditional funds, the far sector I out is to by in midstream infrastructure, the my it conviction across is increases opportunity our how the time have, space. despite of ahead lens We sector. Slide infrastructure of of, my own is one global by for recognizes XX, transportation generated just returns historically Manager only advantages allocation favor, our significant competing wanted and Now, This utilities, overweight broader which market the before broader companies thus XXX the far evidenced the of outlook is around of S&P the X%. globe. low for at reflecting XXXX. way a

more As the and higher dynamic. fundamental energy as equity generalists is inflation rates comfortable be become potentially we on beneficiaries persistently increases, the valuations, changes could any prospect of with higher attractive interest performance. have impact of positive the one disproportionate this future a to to believe of backdrop, and positive And allocations

impact a While positive universe most be are the felt energy rising midstream C-Corp in pulling boats, the in the in believe midstream lift a index, that direction rest we well. as of this would the names all directly tide should

prospects talk it pass a the to I'll growth. about Joe back Now, bit to for dividend little

Joe Herman

Tom. Thanks

per declared and those quarterly for CEN. same was of distribution price September September market basis, and information $X.XXX at for discuss of XXth an a and implied the or date. level Fund based the closing market annual discount respectively, Fund on per approximately consensus XX% other of September [$XX.XX] dividend market XXth of on posted share $XX.XX, an the fund to as that share expectations growth dividend a had It into looking as yield X.X% the XXXX, X.X% NAV I'll The I discuss NAV price NAV $X.XX the recent Before yield in close. and of

Now Page XX. to turning

the major As distributions annual index midstream consensus to you right. growth and see The for XXXX. the and on and here can in return AMZ, AMNA in Alerian slide, from the currently implied indexes left title the projected distribution MLP are on historical year-over-year both of the expectations

around the that first X% indexes psychological time this to since really have and amounts this, it’s an being We X%. grown potentially For the This consistent basis our about frequently the approximately annual scientists, we managers back be we for speak would powerful AMNA on AMZ both is more been as payouts attention also have reduced with bring consecutive changes. asset investors will And as investment years the income. this from and to our frustrated know of hope XXXX. sector allocators that

to of the to sector like the longer changes X%, news better and why, explain index X% been through would characterize distribution the point sharpest I for historically. but distribution is good end of and modern oil material expecting throughout WTI basis, We included COVID midstream of painful, to history. up related the holds bars negative demand for cash have has out And turning around in for than year-to-date this very it XXXX. sector the implied Finally, resilient see distribution And generally term proven that set markets; really on is that story equity entire margin. today, keep large thing environment level been all de-leveraging even the flow But financed crude different. in needs out if true were from cover of when today The mind with again, some can and dividends, diversity the of I’d contracts. that do paid less we're the has distributions. part the XXXX to growth model was in will is any and think and cash with the we and flow That in We that the corrections generally Today, CapEx year. not corporate negative in buyback be or run. on budget, for complete here insulated slightly previously achieved all put already debt more round due last lower as of long the of and business cash and a think Free to the much and the finance operating sector through here we result a continued outlook maybe dividend think just this, program come production ever capital yields overhaul during can all hopefully the income capital on still a that, of the the The is reliant really over model, oil out, important largest the has fee-based same cases flow a crude here hopefully while needed. the one QX cuts is briefly. strength flat during that it's cash was you the flow

with jump to team we a Q&A, release into the before Miller Tom the Investment joined out transitioning first UBS roles same in the Now, XXXX. a Center ‘XX joining showed and wanted Coast Rob since Jeff Rob of Bank since that their mention worked he Portfolio that be press that indicated was I as in quarter and CEN XXXX. of Jeff joined I would Manager during

have and these front I -- contributions energy their to Although that appreciated know their you tell and guidance, really them. that and the appreciate we'll last hasn't and the years, to friendship, I market over to Brookfield. miss Clearly and greatly the Center seven have been can guys to us really I Coast Boran kind insight

into a moment them So before with might to Q&A, have. their to any or outlook provide we'd like speak insights other we give they that, to get

Jeff Jorgensen

with what everything today. been has words. all said working kind Tom, here the you I a and with agree a been ride, for indeed you It fun it's Thanks Joe. of included. pleasure Thanks, you.

time transition. I very think the time energy, a exciting energy it's for exciting an

[part]. and and well is think the been believe Fund U.S. I I fantastic hands positioned I positioned, is good a in the at and think well

Rob Chisholm

Thanks, Jeff.

been that When on my shifted investor. access production experience changed. point, our the production grown externally side operational the mentioned and think to to Joe capital, keywords Joe of is has inside I and started shale as on days. side. Since a capital Boran space, Center a of supply of been then. started outcome have has increase the word, is happened, the passed Coast off flow definitely to heavily determine was regulatory And that There Brookfield, was involved we and side courtroom have of there and growth is When transition, Center the have the the these have mentioned was operational the the we and battles Tom access definitely the exploration transition. Coast, world. lot underinvestment CapEx we we cash to a part key back cut up the Joe, markets has funded into also the Times --

And it so, new forward of Fund the to gentlemen And sector. have these that look hands. a phase the in future. these depth feel this experience in to And we we leaves energy transitioning great the in flourish the stands of seeing

Boran Buturovic

So, with over think Q&A. that, I we'll to turn it

Joe Herman

I have the on to when. say anything don't think I

number I As say, to would the of how, there exits. are a plausible,

about talking are little just investment we So the a bit.

that necessitated other KKR, financial the in undergone the majority our had outs entered investment. We are a the free now made asset the we in how as it's And cash partner now seventh of year In time, that which flow, we build off since the the are. is initial itself spitting commitment. companies

need visible, assets. further a out longer that's one not no for there's to it's at while so, least external so fund And capital,

KKR, it's the but exit not think exits. be plausible probably about on question be one I to start by we obvious the exit one I an and -- of them, Unfortunately, visibility have fair all I of we do by in would think position think would which thinking them. would participate the the a most into

there. But then I from JV here think think other when there outcome on its There's KKR. the again, don't I interest I IPO, KKR And monetize where could is I the finally, I you could business. we to in interest agreed that, on think think plausible see theoretically, aside comment a another than valuation. question our LP

spoken in number a we've this is best probably detail and the think about times Q. the of I

is looked frequently, on requesting updated most sure the fair in market is So, to asset of make as to value multiples. do believe rely at and leave basis. what needed that details valuation But I'll are those a regular there methodology that inputs the by are are we valuation the on is And the that that. -- informed

Tom Miller

think the questions other. been of and Nicole, kind form Okay, some in have all I answered remaining

So, yes. we appreciate --

Sorry, go Nicole. ahead,

Nicole Pecoraro

fantastic. I the I Yes, on reviewing think no, we queue do questions. our are complete -- and I'm

have Jeff, your So, looking today. Joe nothing and as thank Fund, Rob further for to the add, Boran, all well Tom, I if as want comments much you management and the dedication thank we so to future. you for basically are guys really your just to to forward and and you commentary

with questions reach specific out and rest a thank said, today have with So joining if year. the of to you us And you please answered. free to feel your being might that wasn't great have, Oaktree any anything for Brookfield contact or everyone respective

Operator

Thank you. like conclude for to And conference. thank today's everyone their does that participation. We'd

disconnect. You may now

Center Coast Brookfield MLP & Energy Infrastructure Fund (CEN) 2 Nov 212021 Q3 Earnings call transcript