ENBL - Earnings call transcript Q1 2018 | Enable Midstream Partners, LP

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Operator

Good day and welcome to the Enable Midstream Partners First Quarter 2018 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like turn the conference over to Enable’s Senior Director of Investor Relations, Mr. Beasley. Matt ahead. go Please

Matt Beasley

good Sailor, Presenting and our Financial our and call John this are Chief Rod President Officer. morning, you on everyone. morning's Laws, Thank and CEO;

other questions. Earlier SEC. morning, in have We and management press our this of XX-Q filed to your today our we team Form also answer the members earnings room release issued the the with

of the this Form website. section earnings and accompanies all filing release, our that XX-Q call press Investor available in Our presentation the are Relations

We statements will replay securities projections SEC can today’s meaning results also discussion differ be posting of in a factors filings. found discussion be the and could of call a actual Today’s to website. that materially differ will to projections cause our from laws. of within from the Actual results include our forward-looking the could

financial will the With both in GAAP on and measures. measures that, today’s referencing Sailor. call, turn appendix nearest non-GAAP started I the Rod forward-looking invite we’ll the to will be to We We over we the call presentation and measures financial for reconciled in presentation. this to you also to non-GAAP statements have get which disclaimers today’s review

Rod Sailor

joining Good us Thanks, you today’s thank morning Matt. call. and on for

of to contributed liquids for XXXX gas quarter quarter the compared and gross a production record Enable. record The and total quarterly along revenues The transported was partnership to another with first natural and of DCF intrastate quarter These the achieved processed first quarterly XXXX. and natural of great performance margin volumes increased volumes, higher for adjusted gas EBITDA volumes. quarter gathered

performance XXXX, further our have which updated will XXXX and strong With in the our for we expectations continued strong discuss in John outlook, business detail. performance quarter first

in XXXX. In access do equity expect to not markets the addition, we

next Turning slide. the to

the The value and We services on of activity user continue leverage of and our assets our transportation support customers our the suite around and midstream significant scale drilling provide demand as are integrated we and premier developing we suite of to proximate a processing, operating systems. well-head on midstream across to pipeline market assets and gathering, integrated storage a to positioned and end chain. reach see and value provider our service footprint uniquely provide are

We developed continue market needs and access customers and to of customers. creative producer substantial will both solutions supply have the of develop to user our our demand the end support growth

feet Moving quarter basin the increase gas increase to a the over significant cubic of slide begin serve Basin same has to production. first uniquely gas is million the period. service XX% natural Anadarko resulted of processed remains activity project and XXXX of since per Wildcat in new quarter the for XXXX capacity processing a in production adding day the the volumes positioned Enable and in next providing volumes XXX strong on in and our to second in the natural markets XX% producer track Basin gathered growth Anadarko in

on to that that project XXX day cubic Wildcat. million week per Continental they capacity were last announced feet committed of producer Just the the

Basin and this with We future significant market have our pleased years the project. we creative Continental's in been access serving Continental's growth and relationship Anadarko growth production support are further strengthen to for

fee long-term SCOOP. the been for Finally, in based and we have awarded multi-well contracts projects two infill gathering processing gas

growth completion continue improve and you gathered see XXX% volumes their Ark-La-Tex to XXXX and As rig the quarter of the Basin. producers Since see on we have in as longer laterals. techniques the production drilled significant can activity gas grown first next slide,

once completed Haynesville for our With margin for further gathering to transportation and the another systems to the annual gathering one connect storage exceed in opportunity the gathered continued increased on activity levels platform optimization forecast producer the MVC providing measurement and basin. across well volumes our to midstream performance, current our of the strong period, The and project will are and is processing in both Align enable and underway acquired segments. assets basin Midstream of

season next fee per capacity to support we Enable’s provides Gulf based be by transportation open we the provide by negotiate to announced regions. assets update firm growth to of are XXX,XXX In transportation previously quarter the and second dekatherms the of to Basin a quarter plan The an and dekatherms the well-positioned on and CP on on solution significant earnings of Moving EGT. service continue day fourth CaSE day remains XXXX. release. storage X,XXX per the margin Line demand in out extended Anadarko to with fully projects, project the Also Coast and Southeast track in slide. natural to shippers contracted have Mid-Continent XXXX, gas XXXX’s of over potential on the

on before we or on file For historical capacity levels. updated MRT and adjust plan Xst to the opportunity rate to July based will case provide a investments rates which contracted us XXXX

quarterly pipeline EOIT core increased producer Oklahoma first the to system in the continues quarter XXXX, of of as high its production from partnerships a as on with deliveries reached the growth from in system result Our measured as average formation the Anadarko all-time Anadarko well significant Basin. position When utilities. benefit an

EOIT per XX,XXX on contracted also of have dekatherms this day year. We capacity

XXXX will our further by on of once firm day online per the to to provide the electric over end results transportation XXX,XXX to John and be for remains will our service project quarter first I dekatherms Muskogee of turn generation. Our gas-fired call natural now XXXX OG&E well discuss financial contracted outlook. and operational schedule updated in as service as

John Laws

few and the a for Rob our metrics morning quarter. financial will and cover key I operational Thank of you, good everyone.

and and results both you and of earlier in more released our always, our release quarter XX-Q find were comprehensive can As first which earnings of financial this our operational overview morning. detailed a in

and our the continue Anadarko our our segment. to in Ark-La-Tex in operational the processing and slide, activity Turning to growth of performance customers basins drive gathering

in processed volumes quarter a increase of XX% first volumes a the had in we total total XX% gathered gas see gas of the XXXX can you quarter first natural natural XXXX. in compared to As increase and

the Den of volumes quarter by Bear by system. the intrastate the in compared segment, a of our Williston multi on our for system of expansion online transportation We our on and the In oil our storage Basin of Anadarko the our for also several our driven average XXXX in volumes Basin. supply saw was quarter increase coming quarter driven first increases first deliveries as primarily from pipeline the systems gathering Oklahoma, result increased well first XXXX, pads in gathered transportation of crude primarily overall XXXX to increased

slide. results next financial Moving to our on the

a partnerships interest and $XX due million certain to balance by partially offset gas by rates and the EBITDA higher for margin expense long-term EBITDA of and deliveries. a paid associated the and quarter crude $XXX XXXX. by increased EBITDA power the higher adjusting million higher higher increased discussed margin debt flow The adjusted to amounts higher O&M These to pursuant by million higher with average gross industrial first for adjusted adjusted cash expenses. items by higher to adjusted after non-cash Our quarter and on interest higher due was $XXX higher million to slide oil partially as incentive intrastate and plant outstanding previous transported deliveries volumes volumes natural Distributable off offset increases to system, higher attributable in $XX G&A of employee driven first higher and were program. XXXX, the

quarter processing Our We committed first first investment the net activity XXXX the quarter primarily for of recognized credit compared XXXX the considering to on to that amended from X, higher and the the quarter. debt measures expense grade was metric in XXXX, million firm continued facility, maintaining distributions volumetric April To and our revolving of revolver. from adjusted segments. and of for gain times billion when a we first to our expenses gathering we in ratio of derivative XXXX distribution with restated Also end, decreased ended depreciation of April commitment of of a first amortization volume income O&M metrics X.XX date and the that times credit to our coverage quarter higher and maturity the XXXX. extending both under which XXXX by Enable significant $X.XX a liquidity June are X.X XXXX. growth quarter our EBITDA and our $XX minimum due and business in and to based generated declared, contracts in G&A After of the fee on remain supported total business

necessary it to no to you and next filed rehearing a industry income their tax to cost of policy requests longer as many service clarification and FERC FERC’s XXth recovery for revise an if of on income as MLPs Turning policy that rates. would allow announced XXXX its statement number March pipelines revised in have associations peers of cost section, organized tax statement. recover of of for Enable the and know, allowance the

near-term I subject FERC expect impact, thought our don't helpful the might rate While business we it overview to an of jurisdiction. give you to areas of any be

margin First I derived from segment. overall XXXX remind gross that and in of XX% gathering our to processing was want our everyone

gathering rate by far processing segment and largest gas jurisdiction. the and natural Our business to contributor is subject FERC not is in this

Basin businesses business of Our rate is gathering in a basis and two processing subject combined our jurisdiction. the to revenues On gathering Williston also XX% in water not contributed FERC these XXXX.

contracts were to approximately revenues not committed XX% derived Williston be contract XXXX under gathering rates expected are term by policy the weighted contracts of For crude FERC with These a business XX years. volume gathering approximately our of remaining average crude impacted term revision. long from in

the services FERC rates only rate no rates XXXX. are these I’ll transportation EOIT’s rates. to with to XXXX. based interstate impact the to and storage any based jurisdiction rates revenues discuss EOIT any segments non-market we transportation before of next in assets. our to In segment, and prior EOIT approximately does X% its submitting and The its largely EOIT not filing of our or impact subject for transportation the on revenues each to that Turning these Beginning enable February market of EOIT expect anticipate storage event contributed rates

and July get on that Enable filing, To the storage the into to I equate to revenues for relates than note gas specifics that but will to it of cost rate services that or file in received a of will in would X. I As case end MRT not transportation revenues no service we are for MRT of level plans XXXX. the the file rate plan to case that expected before less an

EGT’s was agreements. term approximately not to impacted capacity Moving of be contracted XX% those under of XXX% through the transportation EGT’s agreements. of and rate those are to capacity contracted contracts expected negotiated rates under storage EGT, The

rates. adjust discounted contracted transportation in in In rate to its under impacted rates would second beneath be only effective rates. and contracts these than only undergo EGT’s that predict to At from such required any not be its review to half was final we from it EGT’s review if point discounted much XX% new revenues seems the service a this if the unlikely contracted addition, rates when XXXX will are able date capacity fall The of to rates, the believe cost order. We a would that EGT required of change of any earlier be extent of to was agreements. EGT be or completed the time would a

we XX% XXXX agreements. would our impacted expected statement. In under not like while was is of negotiated as FERC a SESH I no total settled, the near-term the expect December summary, are SESH’s impact approximately be revised capacity XX, of policy rate by contracts that policy long-term this revision. venture, For to of contracted to as underscore issue joint result These contracted not

Now outlook. turning our to

strong we shared, had a just we first quarter. As

balance the XXXX, Given these results and share start metrics. our I’ll with the to operational updated pleased for of I'm outlook. our view key

natural reflect the As for Anadarko a we Cotton the this Arkoma per per and oil TBtu X.X per well the range for natural for day TBtu of X.X between to updating we and be no to day change between per to to the In gathered the gathered the volumes are plays, in natural TBtu to X.X With expected there Basin processed crude is and gas growth update there Haynesville volumes. day be Ark-La-Tex volumes are updating barrels XX,XXX the volumes now gathered Williston XX,XXX to day per for are TBtu gas for strong result completion are timing. volumes gas Valley gathered barrels updated basins. no X.X our or the total and volume day XXXX changes outlook

earlier. new capacity, reflects firm interstate Rod the between the cubic contracted updated feet transportation outlook and cubic day which the we've X.X day to feet X.X per For that be contracts discussed billion billion per

of terms to we to be updated $XXX capital expansion In $XXX have million million. our range

DCF commodity current income $XXX account common outlook for view taking X.XX to we target our to expectations be into XXXX X.X prices. million; maintaining debt to between maintaining we $XXX both these times commodity $XXX billion now be and and Enable’s between In coverage to to all four price EBITDA times. forward attributable million adjusted changes, million ratio market $X.XX $XXX be a Considering adjusted and between our and expect times to net our or million and million and total distribution addition, or between EBITDA have our all $XXX updated course of of minus plus units while

in have to his this time Lastly, and XXXX. the now at in as we Rod remarks, equity mentioned plan markets access

and the excellence operational we final the for deliver to year slide, call. last set commercial, to on on Moving key for we that out our our continue financial priorities

win processing in to continue gathering and new and transportation contracts We XXXX.

as new intrastate first for records gathered, set processed quarter the volumes. continue in transported natural Our grow volumes gas to we and

major our on and remain of projects on expansion All budget. XXXX schedule

Our in of solid trend and this new just quarter performance financial resulted continued the I in performance that shared. the outlook first business continued

With our executing for with successes sharing your up to year. look plans as you we the of open call that, excited continue move through are forward on our I to now questions. We we'll more and the

Operator

Thank you.

[Operator begin We go Tonet question-and-answer the Instructions] session. from ahead. first question now comes with will Please JPMorgan. Our Jeremy

Jeremy Tonet

Good morning.

Rod Sailor

Jeremy. morning, Good Hey.

Jeremy Tonet

Thanks.

was going as little if with levels want just the far MVC seems color that noted as you're I position Just above quite to wondering more it encouraging as you a of be in the there bit to provide the Haynesville had share closing activity MVCs, there. far and also where for of a the previously start-off kind it's you on can and any other materiality be to the guys great. of up whole would as discussed this the can contract there gap you you relative the and is there MVC contracts, that color picking as GAAP anything kind

Rod Sailor

far across you being on branch I'll level John. pleased as of are and really the we've we're to saw of on contracts. is terms not and there we're a said not the growth across with those that contracts expectations that have on the we to in our you prior we we're call and with sustained as further weren't they say seeing This and Jeremy. the out calls a we've to just continued exceeded volume overall last of those or those systems as are that shared, bit on on it and of of that exceeded MVCs minimum I able too noted the we consistent got the of systems, skinny what contracts what Ark-La-Tex, exceeded think we of a commitment met we seeing behind here that see contracts we granularity Thank, Yeah. if in level. activity seen share to both now have take will our volume one the generally minimum been on little of and is and couple one the producers that say that commitments lot a those around

Jeremy Tonet

over in And more to of Interstate, Great, business? upside know really there thanks. nicely your and then I'm capacity the seems the just up like turning Oklahoma that much for results wondering there picked how you part is it

Rod Sailor

got system you that million volumetric of that come system CaSE out that's know as year part we which as unload continue degree day will back our coming growth as to to core build that online to this an to $XXX also a some and and Yeah. the intrastate EOIT but expansion volumes Wildcat, have. online we expected effectively we will the And our is systems grow system project on off to we've of which continue later in as Well, our accommodate up interstate have fill the we'll EGT. well

And so growth we'll some see there.

of system, the managing So make we're that investments all of growth the the to if expecting we the and expanding the we system can capacity there. capacity continue accommodate in

Jeremy Tonet

curious that. can here pacing of we see raise this when it kind from ticking was have good guidance, for year. and you guys what to that, guidance just above thanks glean up the didn't One I your Great, in last been to one, early the seem guidance historically

like the seems if that indication partnership one year right the this growth. the as coverage you positive could is can and quite very regards gate, balancing how that just is level lifting the philosophy there going and quarter a as what's of you’re as it to this and other just far way. So thoughts across us and also against are for you robust the here as in level far XXX your comfort your can with Any refresh things provide self-funding of coverage

Rod Sailor

very Yeah. we We guidance the of our Rod. have is This confidence think to strong and is think a going well had feeling you the way I out. going again good off, XXXX first is clearly about just the the shows as and play raising we very good you guidance play first should to Jeremy, to the continue out is very how and raising year that XXXX. about feel quarter so company take

self-fund coverage. space coming cash win I continue to to in put changed in We is nothing to midstream into effectively our capital it the think the and we a uncertainty And coverage, good questions thinking in back great a of business can. use as of think there done With and is in has growing of a sheet lot to we think as new that increased really think right us projects. around as our anybody continue able be I some strong again, in coverage, fund that to space got best position much We've overhang job to managing around sheet. general now John's as try still as the to business, very balance the a I on units. puts and those our around balance

Jeremy Tonet

I’ll Great. all Thanks there. That's for stop helpful. that.

Rod Sailor

Thank you.

Operator

next Please Our of Lynch. comes question Coleman go from ahead. with Merrill America Bank Dennis

Dennis Coleman

you. morning. Good Thank

Rod Sailor

Dennis. morning, Good

Dennis Coleman

the bumped guidance, about anything out CapEx you A couple out-years XXXX think should from horizon, about you bit might the talked the about the me. if but on wonder And you you've up how might say talk XXXX in? there? I a add say and With to that we impact regard – CapEx can well. projects little that how into as

Rod Sailor

our and side. it think put fair as indicated of out. guidance started we to opportunities gathering past ended I ability range the returning transportation find stronger anything as I an and guidance think up. on I we want the projects continued know show already the Again note. even the on past storage to now on processing if a that do think of Yeah, to acreage our win on not that guidance. we XXXX share and not very much to dedications strong we But business, we've there. we've XXXX has that on only you our We're the to go don't with lighting today’s bullish more that as side note, continued I hate think I'd that see I don't quality point think But and some trajectory very we've the

Dennis Coleman

on news or but you for Thanks and to you market. away with your comments a big the in And of that from staying quite know CenterPoint? share the lot to discussions a overhang Okay. guess difficult bit comment at CenterPoint discussions of ask on, can units topic I mentioned with you further that. Any equity just a always

Rod Sailor

call No, after investment. we from in think said. their in call Enable read Friday, you have their They announcement if I really recently their anything participated acquisition, changed their their but has said I think and they have thinking I has believe around really. their or on announced don't nothing changed what earnings not have behind

And and can what's said by them us. on comment so publicly we that's really been is all by

Dennis Coleman

finally, it's just No, and one difficult a I And so know you then ask talked wanted Sure. to about… you that.

Rod Sailor

question the I hope you appreciate the I and non-answer. appreciate

Dennis Coleman

the that given do, I another was news But just worth it do. I shot. No,

talked you or say you I not So and perhaps who the or in about then STACK, customers, just anything characterize guess, new gathering you're those new gas SCOOP can about the contracts given contracts that they're producers? with, it's the saying lastly, not

Rod Sailor

satisfying the have it’s our this is reach the gas attractive out customer our Enable gathering is strengths it contracts again, in are just very scale I with have and think of there. would quality a the I end we our I of No. we I not the Anadarko the – attract, we've that around region. system. our shows one that I other mean, in think, know have I potential that it we think only significant to capacity, advantage before but fact the that’s to the doing And tremendous you talk think but power that. work as not can't but and customers of have at said producers. our and the to I get and quality as Very reach is Again ability we transportation our do And some current and think team our think again we gather set, say on ability name, the to are the I – in unsurpassed they quality names to processing system in a user, wellhead network basin about pleased only

Dennis Coleman

Yeah. clear Okay. much. and That's very thanks

Rod Sailor

you. Thank

Operator

Raza Our next Please ahead. from Citi. with comes question go Nick

Nick Raza

Thank you.

maybe the terms of Just case project, over quarters? your a questions couple answered, of follow-up $XXX,XXX contracted my in end two were to the us but next much a could it's we you be supposed the day year that but Most by about could us of guys are remind remind know how of you contracted you questions.

Rod Sailor

front It'll back I are. if to have disclosed we've Nick, it's recall what we end that than don't early be trying I bit smaller on. year. going amounts little the through think loaded, up Nick. was ramp-ups more end fair say loaded those that's exactly I but be don't ramping to a to

Nick Raza

there that contracted? or is project could fully or on they’re capacity there more even wildcatter you on that sell Is Okay.

Rod Sailor

– I and think the talked we've here. capacity there way the on think alluded about other we've that systems been signed day of some we is we we've that successful a it about the you that contracts XXX,XXX would the that certainly to added encourage here that to in and

for and continues than initially, to I talked discuss do to in there about expansion opportunities initially, out said be but to nothing point more we there's do think opportunities there's when be we we Wildcat capacity what we've there at we further could more announced, had but things. this time more to So some put other than what believe

Nick Raza

I all That's you. enough. Thank Fair have.

Operator

Our that next go Baramov Fargo. from Ned comes Wells question with Please ahead.

Ned Baramov

follow-up level that gathering new SCOOP do agreements high a have the gathering of terms compare these morning. your guess, you contracts, I Good current on contracts very the at in A to the how SCOOP? two

Rod Sailor

overall we is we fee Generally contracting on the and morning, with John. to Enable. seek under don't fee This philosophy that our are possible that but based disclose consistent that where at you are levels specifics based we are and of Good and the attractive the these tell arrangements structures, that’s bring agreements do Ned. economic can new fees to to new or we system believe gas these

Ned Baramov

midstream the Haynesville, your of And for your with to some acreage maybe it. around is looking in it. M&A comments on potential the assets believe, footprint assets any and then Got along in one around around question I another producers and multiples monetize

– great. terms be in you would would comments of anything So from be

Rod Sailor

a any relatively bit specific multiples reference have has area. on the multiples to down, disappointed for and gone very would I mean high Yeah. a to that stayed see continue in one in without haven't say we've transactions, -- to of financing back see again to asset these increased assets I think some the just costs be – I risk and fact only high. continued again

at expected we in seen much asset the haven't for So really multiple acquisitions. least pullback

Ned Baramov

midpoint. I you at items -- so your XX% Okay. producer on on then Could forecast couple you about lowered by outlook drove think reduction a I maybe activity And of your in details just may, if there? provide the guidance the Bakken what and the volume volume housekeeping some volume

Rod Sailor

real [indiscernible] the just online layered is there bringing we those to otherwise on update just is that Sure to think some real think what we've a of about it. the said and Ned, timing call and be when timing in of I no that the perspective guidance. there It's is wells that development gist broader we'll that change the

Ned Baramov

Understood. think when And you on be exceeded NBCs NBCs relative NBCs guess volumes the fiscal the keep then would measurement in or I'm is that I what XXXX that order period the so to mean to asking Haynesville indicated I current or sorry does period, the in does measurement end?

Rod Sailor

Yeah.

the I that as we and contracts were frame to what do come that's really distinction and are year is the said we're fiscal little around delineation our MVC trying and up to how we there frame for bit to you in think have that in periods it on that anniversaries is the there think some contract opposed we drawn third there we've quarter past contract about. so also

Ned Baramov

you. Thank it. Got

Operator

the there for like conference This appears Sailor I back Mr. any to concludes turn are It Instructions] further [Operator our to would remarks. question-and-answer session. over closing no questions.

Rod Sailor

you. call thank today. the a your joining do safe you I very recognize all Please thanking hard Enable. their Thank and us everybody Again for on Well, all day. interest dedication. want have much work for our in to for employees

Operator

for has The now conference presentation. concluded. attending today's Thank you

lines. your disconnect now may You

Enable Midstream Partners (ENBL) 2 May 182018 Q1 Earnings call transcript