ENBL - Earnings call transcript Q2 2018 | Enable Midstream Partners, LP

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Operator

Good day and welcome to the Enable Midstream Partners’ Second Quarter 2018 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [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. Matt Beasley. ahead. go Please

Matt Beasley

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

XXXX quarter Enable. The was another second of quarter of great performance for

placed production. gas natural adding growing Anadarko excited our premium our key of North one Wildcat are Resources a that into access processing is in we to significant to providing now project for Texas, Project customers, We report service Basin that capacity in June, markets with while Continental

the day quarter per million largest during or including capacity customer. also extended MRT's contracted We X transportation dekatherms over re-contracting with of

results. quarter XXXX. production adjusted for driven gathered natural achieved partnership the and higher second margin, gas compared volumes, quarterly the strong These producer activity gathered by EBITDA of volumes increased In volumes well and to oil gross quarter total natural crude contributed to addition, gas revenues, and and processed continued the record liquids DCF

newly his I an pleased Brewer, created slide, be his this Craig and XXXX. next functions couple With In Commercial effective commercial am promotion operations, early that, will cost-effective role, current want announce and seamless our I Officer Enable give of changes. on year-end Before to Executive will well-positioned continues from its to Operating plans Paul Chief Operations, ensure our company Paul announced move the our President creative, provide through to Harris, construction role January to to in a role to with safe on conjunction organizational update customers. XXXX. in I In to the X, Vice to Chief solutions retire consolidate continue the new of the this has organizational under engineering we Craig. transition. move, for a Officer,

the Turning slide. to next

uniquely the rig XX see gathering currently the systems. continue are leading serve STACK, we the growth. infrastructure, basin. SCOOP of a production since day first volumes to positioned Granite processed for Anadarko increase drove Sustained gathered XX same SCOOP in activity Enable gathering and in producer volumes quarter new wells processing the plays With the the strong gas natural rigs In Producers Wash. XX to period. XX% mentioned, there drilling in increase rigs connected rigs the the quarter and also gathered running expected day. to in one the in be the are record well natural peak quarter. the rigs XX And strong In XX is continue the XX has seen STACK natural to with XXXX cubic second process Anadarko volumes per gas gas achieve greater connected strong market there in flows rigs with gas currently than natural of I As in feet wells and over a X results and our activity and to Enable's Basin, basin million Enable and XX% results and well significant in the

returns Project at critical my processing, in As Anadarko its is service opening capacity, I per and in to and bringing Basin, illustrated operating providing for per uplifts our Resources contracted in July. Wildcat attractive remarks, fully take access now market a press in MMBTU just while $X.XX mentioned investors. in of the Wildcat significant Continental away last MMBTU highlighting and from this pricing week release Project June $X.XX

we new record XXXX, of their gas Basin. gas of grown Shale the performance. XX%, well declining completion Since next a continue according profitable on improved the to the other report price return a per from as have in Platts laterals. Analytics. see the most the Bakken Basin, has to crude basin basins gathered techniques breakeven record gathered additions contributed Global for activity in achieved the Den producers growth expansion, volumes. slide, as XX% Nesson of pads our and $XX an results volumes gathering we natural of Ark-La-Tex are Bear Recently, first of from gas a volumes Williston and with gathered in producer volumes announced internal production and improved Turning gathered commissioning Bear to Arkoma longer well drilled become quarter Basin, well as the announced gas quarter reversing crude result previously and to volume Strong system in natural the Ark-La-Tex In Den In the of the a US well. previously the quarterly and systems trend S&P contracts the rate at

storage segment Turning FERC's the of before cover recent to spend the income tax costs and the to for on I minutes on announcements quarter. on a I want few our recovery the highlights slide. the next transportation

I that our subset natural total of approximately storage First, represented margin, generate gross want segment which total you a margin. transportation XX% to FERC-regulated gas our remind gross and pipelines in XXXX of

cost view when that that that June rate the generated allowance a FERC's that from ownership, the on have with tax of revenues rate specific as allowance to filed calculated we MRT of service the ADIT, within to service of of when the suspension an matter. expected XX rate our effective now are June is at our On our proceedings, filing. general the FERC's likely policy to elimination we negotiated by on end, last portion substantial significant proposed, this refund, a XX, in for January re-file we allowance the July technical conference. to XX% tax indicated policy days. MRT change. rate we expected, less Commission's at context our its on the XXXX outcome revised arguments in directed subject also XX which other overall order further, final an our with bit rule corresponding to case expect point MRT of on of consistent the order elaborate that impacted MRT's did hearing the approximated cost allowance, extend week, Next, level corporate among issues X, to be recovery our To FERC's to in be contracts rate a of in The the of MRT suspended can without income Tuesday the case it of elimination things, and a procedures to near-term coupled for income Despite MRT's consider tax as statement. jurisdiction not assets would the suspension impact not received the announcement any from that the that XX To earnings income FERC's that tariff records settlement for We are indicating impact case rate discounted case subject tax their filing. a call, and and

the date the of of that to if any that quarter plan required its such No. be XXX-G a continue be would XX, believe As its rates FERC our and or EGT we XXXX. no order. it of the relates wholly are of much while when effective a rates, able earlier than owned to review subsequent the undergo file be later to of other than Form to second required filing to adjust to seems XXX-G, service would if it was pipeline final XXXX EGT will And rates asset, review cost we the only from EGT, unlikely complete any predict not interstate we to October new required

of great and The fully day per capacity to dekatherms new of to extended fourth almost the contracted for or to we move XXXX. quarter require the multiple firm providing planned transportation EGT's contracts customer not markets. dekatherms MRT, day day MRT's the contractual Let's X,XX,XXX solution, XXX,XXX with by the of with access on to XXX,XXX of solution dekatherms volumes per achieved another CP is grow levels. in of capital investment. over a with quarter customer, details Basin quarter. natural day capacity increase contracted extended Anadarko end field on at remains XX-year day its track capacity XXX,XXX to out dekatherms case existing XXXX, or contract second premium XXXX transportation In per starting on any for a do we capacity of of gas dekatherms the including in Line in the new demand contracted per largest additional second seven-year a capacity XXX,XXX that quarter, re-contracting, the on per On producer including EGT, Spire, project project,

overall increase of latest annual $XXX.X filing cost and service of of cost the cost current cost an established last $XX the that recent of system services, proposed and the an Our reflects capital. MRT updated of settlement rate demonstrates resolved service case structure The above case. approximately rate of MRT's capital and million investments service in million,

we based significantly mentioned, FERC's overall do the re-file when I of not to order. As the latest we service for expect change on cost

its Our system production well position from to as Oklahoma as increased Anadarko EOIT utilities. benefit with continues pipeline core

per firm under of service gas-fired to natural remains by provide OG&E once contract. of XX-year Our project the for end be on online, X,XX,XXX a electric and generation schedule day XXXX service dekatherms in will Muskogee transportation

the deliver final outlined the of to to on at my we Moving we priorities the beginning continue key slide, year. that

the with We was critical pipelines Wildcat play oil commissioning contractual the projects demand records quarterly gas contracts role connecting increase another quarter our crude achieved gas commercial budget. and and volumes. Project major results The natural several our strong reaffirming the XXXX continued and grow volume natural of volumes all supply we natural for second the with planned of continued milestones quarter signed in in quarter in schedule second and on the set for transportation of key major remain and gathering on as gathered, success. We combined to during and project our processed gas CaSE expansion two quarter,

at flow. started discuss and for adjusted premier or of delivering our I of and the performance our services be we X.XX accomplished. we cash our the pace distributable on will May expectations Our continued for We achieved very ratio that performance a the trend record attributable call net have balance of the our financial investors. a second units, our focused year, provided above call, times. momentum as by we proud the year-to-date that on operational that year off distribution to value the income over on remaining we John and financial and turn of midpoint of solid quarter outlook the on our We we to to results. coverage continue anticipate to common our to Based further EBITDA and will customers all for quarter plan now I'm to

John Laws

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

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

and slide. Ark-La-Tex our and to Customer performance our and Turning the drive segment. in basins operational gathering Anadarko well results activity processing volume to continue growth in

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

oil gathering quarter increases for recently several We our of crude XXXX, to expanded quarter second second by volumes primarily Basin online pads systems. also driven compared our coming the saw the in gathered on multi-well XXXX, Williston of

records was production natural natural higher natural transported in power and for NGL oil crude processed for of production As LDC recoveries and In increased increase increased off-system volumes gathered both The a quarter. higher customers we Rod our gas from of was and in gas and and mentioned, NGL result the increase gas result storage transportation. volumes processing, the ethane. volumes plant set our of usage segment, a transportation gathering,

Moving on to next financial slide. our results the

firm quarter non-cash by Louisiana. million Our higher adjusted adjusted items the $XXX to between partially new second G&A higher services slide, $XX Distributable EBITDA adjusting on due Carthage, to NGL in Texas by $XX offset volumes and by driven higher gross second and The increased O&M natural oil expenses. was XXXX. interest increased the capital rates million EBITDA, gross the by volumes quarter decrease higher in Perryville, of after margin higher transportation gas cash gathered and million by to higher by and higher $XXX adjusted and previous for along XXXX for increase with million expenditures. was due balance a margin higher The in flow offset higher outstanding contracts prices EBITDA offset and adjusted partially interest of discussed crude processed higher to the as with associated maintenance expense higher debt transportation

commitment we of the ended financial need X.X from a of to XXXX. debt revolver. generated quarter and times After to of total which continued with continue for distribution fee-based our our the our to ratio remain no time, in volume quarter the investment committed volumetric of measures the to compared equity supported have of business XXXX to second our by the the XXXX declared, this times contracts in X.XX and capital same EBITDA coverage distributions firm liquidity markets access to when metrics, maintaining second gathering both net objectives. that and adjusted Enable period for considering grade business To our significant We in in quarter processing the at XXXX. metric And meet growth and Our segments. unchanged are under income end, a we were minimum

up quarter. will or view above I reiterate of cash we and great to like on with our distributable net attributable common for call and that that, of And great be the midpoint to units, we balance we the Lastly, questions. had another that, the year, we outlook the quarter anticipate would open for our for With will adjusted provided your the EBITDA at income May that flow. call we now

Operator

will session. now begin Jeremy Morgan. [Operator comes Tonet Instructions] the from We JP question-and-answer first Our with question

Unidentified Analyst

guys. morning Good

Rod Sailor

Jeremy. Good morning

Unidentified Analyst

noted today? This of on you're expectations activity additional seeing Jeremy, provide is some is questions. top if scope the out actually. guidance drivers further for for the there as Rahul in for half revisions, just on couple any color Could there? levels your the release have And you quick given I producer press

John Laws

sure. Yes,

start the guidance. I'll So, with off

the well through behind a XXXX. of think I had substantial end here quarters the continued as balance the look midpoint XXXX growth two in year we had to the range. above halfway underpin economics volumetric to the us fundamentals we've great the to that excuse guide that the the one – year drilling to start on, – now, give relative me, and being as confidence to as upper of activity trajectories and XXXX relative And the we're of the the

as today look rest we So about the where feeling year. the sit of good we to

Rod Sailor

re-contracting first quarter, with system, you just we see to Rod, storage very above the our the to strong business recall what and we're and continued it side This activity last we we're guidance we the if guidance and again, that seeing of to Yes. gives raised happy gives across our the us transportation I'd of the revised that, is point midpoint confidence quarter. add at/or our on

Unidentified Analyst

cadence the well of in step press see, of second service elaborate to you half then on giving guys half of started like release would expected provide with kind XXXX? bulk basin I Got And details helpful. And any like year? the in quarter? Wildcat the can the this the connects back more of information on the some you be into you now, for up able volumes Anadarko also, you. placed That’s the the for

John Laws

we've Yes, I connection general. far not give to specific guidance too around as well think gone in

insight that that trying I terms daily million onto and seeing around a exceeding also think sharing in XX is what as the playing that that we're peak again was view color wells give the we were of that point come flows peak that strength day of to our and you, system are that and and confidence into with have seeing number make bit to here. of little that we our a it of of connected wells the we're to flows, our you the

for expecting the we've what meaningful provided the volumetric range addition we and So top in not what seen delta of that additions get our otherwise or seen, or change a continued rig growth we're from growth in outlook. to on cadence the well the experience but today of of we've

Unidentified Analyst

give finally, then if that into color volumes And are the can just Haynesville any additional MVCs? is there more you growing on

Rod Sailor

of talk activity quarters Haynesville continue we in again about with to a very to continuing. continued for and the continue system, producers have and there growth strong number our the we see would that Again pleased anticipate from

John Laws

we the Yes indicated levels the is which and volumetric increased our again it on contract. what call, where the said volume has one minimum we're on growth contracts as would similar and now commitment that we that so seeing we that's last exceeding minimum productions there, to be one of we fantastic – margin on and now increased the continuing, exceed volume commitment

Unidentified Analyst

That’s you. me. Thanks That’s guys. my for it Got taking questions. helpful from

John Laws

Thank you.

Operator

Lynch. with comes Dennis question America Bank next The of Merrill Coleman from

Unidentified Analyst

Good This in Dennis. morning, for is [indiscernible] guys. stepping

John Laws

Hey good morning.

Unidentified Analyst

a on question it's that Project operating mentioned on question, Rahul's capacity. follow-up Wildcat, you at now first My fully just contracted

would get to get if to can that and idea some wanted minimum with capacity Just debottleneck if be? – that there spending about you further and are more ways what

Craig Harris

do debottleneck in our to customers of that's the and items ways more Wildcat, efficient but means and intra out Craig our to have Wildcat our work basin. continue the volumes to find with just We get the order customers our entire customers to to Yes, on our system. interstate ability and of mean volumes this talk about not we'll we to Harris, is one move yes, I South

Rod Sailor

the needs basin Again, of ready one gas of Again, you've to markets they're of better to at to to Newfield and the price South getting we think to go it able end gas with get premium as product. the work have the CaSE very markets, get be. talk the wants uplift we things I about significant extremely our that getting customer again to of heard successful you've stand we're late to the continue of is out now day them customers' their proud that to pricing their been need talk heard Wildcat, and Continental and have to about to the where customers or through

Unidentified Analyst

Thanks for to Quick follow-up that. that.

the So fully what's contracted capacity, the number there?

Craig Harris

Wildcat The system. a day is XXX of million

Unidentified Analyst

when got see it. to was the be the or plant, to construction Okay, just that same XXXX, on And in it and need natural of construction you gas likely noted line, the the in-service Wildhorse for – mentioned you fees redemption although not are you… before needs continue processing on you the the could XX-Q, referring

Rod Sailor

we ready good involve just construction done place work. into have have plant volume Wildcat, need matter Yes, minimize of putting again, talking We're anything I construction that continued and proper is, we study haven't time you're significant about. feel to direction on in that it's the are capacity is the continue when to resume believe for Anadarko. said the really to but the else growth site And not is the it Wildhorse, shrink-wrapped, processing when we'll the in work, about correct, of about we the you a basin, and

Unidentified Analyst

it. Got

before more get one back in queue. Just I the

if lie be it meaningful is business, you. opportunities now would terms and the going that around and you what water can Thank some of color In there? get helpful forward gathering business how

Craig Harris

in seeing as our we're we pace. crude for that We a Bakken water just up, to the of at see water the well we that continuing as are are continue a go gathering in Bakken the And for continues to the continues and system about We it well well. volumes steady Bakken actually of production ramp-up, to water as by – so climb system crude expand the do in have talk to we ratio volumes expanding expansion the expand.

Rod Sailor

look And at we now so Bear continue to our opportunities Den times around that. we've system expanded three and

Unidentified Analyst

you thank so Great, much.

Operator

from comes T.J. with [Operator Schultz Instructions] The next RBC Markets. Capital question

T.J. Schultz

I remains handling rig customers support just the all for any your you with to there STACK? projects guess staying crude and is or first morning. obviously in Anadarko, crude or Good further the in activity strong, SCOOP need plans

Rod Sailor

objectives Yes, all to To-date, just to We'd Anadarko. we a a while. the of into accomplishing but to the handling that, Anadarko. midstream in get try providers I it in in more is love been of been would exposure exposure for get to services to successful our haven't has to that that that the bit say get – target one crude deeper provide of ours

T.J. Schultz

the year. able extend Okay, you case, moving contract you for rate I that good. rate just will And then Spire they not a this expires for capacity what may is you are after case guess be expecting into factor MRT, then so another to to with that that that something further? and potential extend

Rod Sailor

I said lateral their they always back some need capacity. of Louis when that think we that still St. we've anticipate gets will again some turn built,

filings rate consideration or comes a decide current When our service always make take another capacity, how that rate amend into southbound back, will turn they they transport, said, the newly into re-contracted file we'll need case capacity. still to capacity back they need we've again much on lateral to that to effect. they depending there'll be take decision still but We that some and into turn

you see filing cases on rate MRT. multiple So could us

T.J. Schultz

on sense. Okay, what then maybe percent overall makes And rates? are and EGT negotiated specifically then

Rod Sailor

I'm T.J. sorry? again, question the say you Can

T.J. Schultz

negotiated the for of looking percent? versus cost just I'm what service breakdown of rates rates,

Rod Sailor

last Yes, and so, on last get quarter number. that try the someone just to [ph] call, through provided we our

and agreements what we XX% I we on XX% discounted. was EGT, said that under that capacity when contracted was negotiated looked was another So then had at we think rate overall

T.J. Schultz

you. Thank perfect. Okay,

Operator

comes Baramov Fargo. with The Wells next from Ned question

Ned Baramov

for taking thanks Hi, the question.

is CapEx around Could others contract, Line opportunities maybe it. On such requirements talk indicated potential there you you for no CP transportation the your about assets?

Rod Sailor

if Craig he start Well, wants and to I I in, think can. can that fill

System to that handle and production both Anadarko expand now EOIT seeing our We in EGT we're the in the System and seeing our have Haynesville. are prolific the continued to

continue further as we to expand debottleneck The and you'll pipeline or see – on of flow in have or we creating it things calls, premier location a better is, systems, gas. it to either so to Craig and in number customers' to system growing around header changing us run opportunities. and we pipeline, Haynesville I after production that we've fill ways has think, more those the to team CP have that can our said at about move And look that Line continue all our potentially a use his hose talked ways patterns, that and ways at are be are actively looking system

Ned Baramov

then question thoughts distribution And on your my obligatory growth? on resuming maybe

Rod Sailor

use we've company continue the going. is where evaluate we and investors market, dollars continue those to look future distribution for we quarter to feel been, capital to and for opportunities, look that, sit think the balance every that here think company. that have said, us company cash flow best that needs, we capital significant believe the And keeping the clearly at it no, – Yes, balanced and inside cash and best fund inside to use is continue flow is we we'll and – sheet to growth and as again continued use our I where keeping our today organic we some of markets cash continued strength of that market growth the look distributable as we inside our continue the at is our do the to monitor we keep

Operator

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

Rod Sailor

in And just couple things. of you. Thank closing, a

of Have time thank has and for again his just call I to as Thank have leadership. and for reliable a Enable. to to committed set At great the many off leaves of dedication. While in And interest your and Paul he safe He Enable, the everyone to recognize team employees we'll today, for celebrate I for want their legacy ideals. want accomplishments and Paul his a And those thank we years are our the wanted many work standard before hard a call got you. on always, I day. high service. to operations

Operator

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

You disconnect. may now

Enable Midstream Partners (ENBL) 4 Aug 182018 Q2 Earnings call transcript