ENBL - Earnings call transcript Q1 2020 | Enable Midstream Partners, LP

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Operator

Good day, and welcome to the Enable Midstream Partners First Quarter 2020 Conference Call and Webcast. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Enable's Senior Director of Investor Relations, Mr. Matt Beasley. Mr. sir. begin, may you Beasley,

Matt Beasley

Thank you, everyone. good morning, and

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

To team today. But, only also have questions. travel, joining and of call phone we achieve the to members small your management the room a the group we the in other social distancing on have limit answer

issued our morning, we our Form with this release filed earnings Earlier and SEC. XX-Q the press

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

posting replay be also will the to today's site. We a of call

that will include to differ cause projections discussion materially of could actual can the meaning from differ our in be the factors securities from our Today's the SEC could statements Actual and filings. results forward-looking results laws. projections found within of discussion

also We invite and of we the for statements reconciled non-GAAP to be financial call, of both this today's financial presentation. non-GAAP measures appendix which will the measures forward-looking disclaimers have to the review today's GAAP referencing nearest presentation on measures. in you We

that, started, we'll will I the over With to Sailor. and call Rod turn get

Rod Sailor

thank joining you morning, us. Thanks, Good Matt. and for

cover the X, topics can on see You slide we this plan key to morning.

is employees, continuity Enable and vital to customers, always, providing live committed and work our health maintaining while As infrastructure and protecting we safety of the and communities where energy services.

U.S. see areas value has impacted the curtailed energy certain rig almost to in since starting across and we significant actions of result the which companies drop XX% to COVID-XX, production our taken in today from Saudi market significant impact time we and the U.S. include covering reductions Enable, current in chain. prices, March, have demand has resulted early and as Russia supply as plan count plays of spend to a the Arabia crude a are Second, dropped the on across by The environment well impacts footprint. as its

key and Enable balance market overall interconnected basins, systems. and asset operating gas, storage diversified from During times transportation and systems scale its believe gathering volatility, strong we our processing of natural with of benefits in sheet, significant portfolio

reducing Third, this and in committed we make as strong And needed expenditures environment costs. operating to by have quickly sure are capital Enable we further new beyond. our market XXXX to action responded to and remains

updates environment, despite we on continue execute several strategic the today. have our we business contracting challenging objectives to to Fourth, key project and share and

market we for year, call. important end it our has while updated updated share Finally, quickly, view outlook will XXXX. And know for John changed of is the provide the the an to the at

The next highlights COVID-XX. response our to slide

the to spread us coronavirus the objectives. in continue executing continuity our on business and U.S., our began As business program, operating quickly implemented to assets our allowing we

most guidelines, federal remotely. our social practices been and state field employees from work health local, for to the organizations, have implemented remotely, have working Following of and distancing recommendations functions and unable other and the we

testament and our to I work business COVID-XX-related dedication running no am a business pleased systems there impacts operation smoothly have critical the are of report to operations that to employees. functions, or been hard and

in mental and to multiple our offering And committed to recently families. wellbeing, physical promote To relief and make employees we support their resources hunger to we organizations footprint. across are donations our communities

the to slide. Turning next

announced a well as dramatic included actions of of XXXX. for the actions well price apparent, the challenges designed commodity capital deployed reduce declines business total reductions, reduction annualized capital As and expenditures should in to back the downturn the became which debt. result company million and to additional in and as which economic quickly approximately our implications of fund position significant $XXX basis, an cash be flow in costs XX% we distribution, on can These into

expenditures rental in of to unused result cost capital business From activity, and should materials as limiting a units. conditions a to committed opportunities turn further We're have reduction capital looking capital rental non-critical transportation and projects. gathering costs persist. total across contracted now we standpoint, actions and deferral are facilities, of of as identified replace supplies processing levels. units also is reducing lower as challenging storage fully and needed Enable rental market reduced fund while contracted to projects, compressor we underutilized units already for costs and and its projects long-term lower savings, idling equipment and our including certain with the And debt back equity efficient well-positioned taking are business we significant XXXX,

for As shale we Haynesville limited focused on more year, well producer the Anadarko Williston with system our and connects in new most expect at activity we be activity in Ark-La-Tex Basins. the the look the of balance will

we curtailments Given reflect significant the amount Williston crude some have the outlook our we anticipate production and of in the crude in prices, reduction and through declines Anadarko and demand to for updated associated in curtailment June. Basins, near-term

Enable the to slide. portfolio. diversified Turning continues benefit from to a asset next

transportation outlook expect Our market prices in stability by Haynesville natural contracts we environments. and for volatile customers, with Basin. in just and providing high-quality drill in I gas the With out the will producer and further anchored seeing Ark-La-Tex segment completing we storage in mentioned, a the firm Basin. to gas growing the are interest And wells Anadarko curve, during in is leaner producers increased continue more wells particularly shale complete plays, constructive as

cost very cost Enable from on is well-positioned competitive footprint long and gathering third-party the recent pricing Over operating both wellhead operating plays research, our Based perspective. producer profiles. a term, includes with

of unique moving many facilitate premium to offer producers that market production commitments producers, capacity markets. and hold our downstream also our solutions We to

key and highlights updates. contract several The next project slide

and certainty million $X we ongoing a on billings, pipeline's the on basis. XXXX First, operating recognized XXXX investments, million rate in a MRT’s $XX customers. estimate received to recovery on for case costs of and benefit FERC benefit onetime rates established We a ongoing MRT’s service for an rate approval revenue the related we return settlements. MRT These provide recently settlements system that on historical

XXth, to Our on FERC and Gulf We schedule. is an Run now assessment on the project project in conduct applications the and of $XXX capacity, at commitments, customer the per The FERC of $XXX develop million an per discussions, from approximately will approval, service Subject for late Bcf Bcf to filed Pass's and provide The X.X Pipeline certificate contracted appropriately commitment. of February million. current with XXXX. could accommodate into proceeding capacity project. ongoing cost day recently we meet approximately environmental capital commitment may which in we FERC Pass's filed day per both day application X.X scope estimate total meet capacity the will X.X filed to subscriptions for of scope anticipate estimated additional placing project Golden cost project Golden sized be the allow would still Bcf a approximately that

anticipated The and MASS project Southeast and on a XXXX fee-based schedule Our existing its backed is leverages firm for second gas Coast startup. access quarter remains agreement. also markets demand infrastructure Gulf Enable’s to provide project growing by markets transportation natural to emerging

renewed On of for day new the we and recently The XXXX approximately of capacity substantial per renewal effective contracted years contracting a Line CenterPoint capacity awarded Resources system. of front, utility recently EGT the majority customer XXX,XXX recently three-year term in per also CP. largest the date be X, is were the contracted nine capacity on Energy dekatherms with contracts will years, We April dekatherms the XXX,XXX recontracted Corporation. for day And starting for a from on XXXX. two EGT's EOIT the its

undivided recently EGT's on interest X/XXth Finally, and Bistineau opportunities, the the sale we of we continue to closed evaluate Storage Facility. asset optimization in

first discuss I updated our turn John XXXX results now will the over to quarter to outlook. call and

John Laws

Thank morning, everyone. you, Rod, good and

My for as XXXX. as and results at remarks updated outlook first XXXX quarter will financial cover our high an a level well operational

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

an net crude the the volume operational Arkoma in to gathered natural performance the growth and saw We by slide. increase driven lower condensate volumes in decrease Anadarko, of volumes in lower in We Ark-La-Tex Turning by gas in as result offset Anadarko Williston. the saw Basins Basin. a gathered and volumes the slight volume in of increases a gathered volumes overview

decrease to lower primarily gathered slight related the volumes. was Finally, transported volumes in

Turning results next slide. the to on the financial

considering $XXX capital partnership’s in quarter, EBITDA and the settlements. change the after fair offset made expansion long-term expenditures quarter flow the decline providing we non-cash cash driven that related commodity derivatives. approval non-cash was from rate was driven exceeded reduce flow by primarily lower of million, for by capital expenditures. declared, fully an adjusting adjustment maintenance by during declared gross $XX increase The by After in impairments adjusted the to margins income in lower for case funding of by segment Our and revenue FERC's DCF distributable lower items, decrease MRT pursuant of Enable’s net million additional quarter recognized in the driven plan to our distributions was incentive the and debt. cash value in distributions to increases processing for gathering including cash payments our The our slight

will I our now discuss next on updated outlook slide. XXXX

any a recognize Before cannot find or our mentioned, prices market the full activity I curtailments ourselves slide as dialogue when by some nor or the will to return with expect shown have demand may Rod customer curtailments. the our as Basins believe for we I outlook connected environment. been Williston balance duration that Accordingly, we key want we the occur, Anadarko systems, well the stabilize recent for we very know to volume wells reflects to will and of details, producer and primarily new expectations of And on we see over the Basin. in producers. as informed Ark-La-Tex extent while predict time, get some current in that into which and can predict in prices The our this commercial fluid year,

outlook oil production will X.X that gas natural per $XX of terms through day production approximately most June curtailments million curtailed see are on not and impact indications May. curtailments, of condensate for the TBtu month. beyond our and giving producers barrels And crude assumes day assumes production curtailments XX,XXX the the of we of per in approximate outlook an and while In May, extend

by distributable anticipated midpoint approximately rate, distributions while levels. April cash capital the will reducing allow early announced expansion increase in and fully That flows, flow us total considering our our will output. we distribution at actions At the to that of to $XXX current for the debt expenditures we million the fund exceed year expect cash retained

As I many different close our industry decades many emphasize even have served my through remarks, I challenges, cycles. though near-term assets that we're facing want customers to for

taking steps future. the the that confident in and now well position are both we are success Enable We for

turn now to will call over the I back Rod.

Rod Sailor

Thanks, John.

As we call, to emphasize today's want I few key up points. a wrap

the protecting and safety to First of and customers health committed most importantly, communities. employees, we are and

Second, demand-driven base scale, unique and built we the continue to a for long from of Enable benefit market term. transportation integrated storage solutions, firm contracts. systems, And is assets, strong significant diversified and

the and liquidity. strong, remains significant actions we Enable early announced and Third, flexibility April in financial create

for including continuing Enable beyond, environment. position Finally, the in to actions the capital scale will to and to the success business take necessary and XXXX Company expenses

remarks. your will That questions. And the concludes for we up open call my now

Operator

you, Thank sir.

question now first come Please ahead. the will question-and-answer the JP We go Morgan. of Jeremy begin from session. Tonet Instructions] And [Operator will

James Kirby

Hey. is James I taking for guys. Jeremy. This my Good morning, appreciate on questions. you

I with across the your few you're play portfolio. of seeing production in starting out terms the next appreciate guidance, how the updated months Just color

pieces are back segment guide? to what get end half moving your high into low of kind you the Looking half, where maybe year of terms G&P the versus end or the and second can the the in the of of

Rod Sailor

John Yes, extent and answer they to. I'll the Michael It's Rod. the or weigh James. to can in need start

very gas as we we the about look said see in I environment up. a slides, as to our around commentary half dry and think continue of setting think, it, we this back the we at XXXX, constructive

If is of saw a the we area, play. you in a recall, which gassier activity lot STACK

on focused they SCOOP. down moved As producers crude, into the

in it be the Our anywhere basin. the STACK, the SCOOP, in be along handle Anadarko system it activity, can be

on active we So, continue we for a be the Anadarko more if constructive opportunities to to producers of do in the a gassier some grilling see windows gas of environment. see some little

drilling. impacts crude on on really, the the more a increased and crude-directed going that to have On it's be I demand would think dependent side, highly to demand see price on drilling That's biggest where prices. Again, expect pullback producers the continue follow Haynesville. late. gas stronger we've their continuing we see to Again, from of to the producers in seen to plans demand

your increased that do some in of gassier and windows for to could gas I So, of would drilling potentially would that expect would that Ark-La-Tex positives the think around be price, the what a others the point we of in stronger the Basin. or Anadarko

transportation of the that ways is, to many nature to the find work the really our we them producers with on to system, molecules have get of one are absolute emphasize our points of given again, our tried to integrated continue we to gathering obligations remember, the best And fact customers available. market system, creative gas

you demand. think to to continued some and gas crude we need I So, environment, of need in see pickup constructive see

James Kirby

Thanks. Okay.

Rod Sailor

before say. anything John to Michael Just or have you I’ll leave, if check

John Laws

No, Rod.

I said think, you well. it

completion for just We I year. We we've been think the think building comments at standpoint the we rigs still work in to little going of the really balance a But, right? basins. think it, of just and some in the on have conservative a and the about the I end on maybe Rod's running. area think day, got from completions,

you conditions will our mean this to understand how described, through current and for Rod And environment prices. see the will and that what we're all the demand of way trying has if so, that some work rebound

there's see is think now into brought going to I on rig completions. forward being are the that opportunity drilled, being activity so an that wells

James Kirby

how touch you on to they've rating as I agencies wanted the just if on rating out I them. assume been that and watch. going just guys they've viewed any with there's -- have on reconnections But, you? put put conversations negative I then, the And positive. for think, S&P sensitivities a the

guys target And trying by conversations is get end? them? how there that are Just year you any with evolving to if leverage are

John Laws

Yes.

question. good think, I

with regular three the up on very had the of that to Xst agencies, in thereafter. the and of dialogue each we been April leading we've certainly So, announcements

a we and that X.XX sheet level I for little think extent have times, that last leverage year, look with are and a level. times from that balance harder take exceeding with the a they'll primary basis, look put a point an closed leverage us on agencies roughly bit. first into generally, that quarter, leverage a out X be this target the is, that overall crisis varies the to to under a X.XX maintained out X.X entering -- sustained as and -- But we strong we're pretty through range it begins we've or where the

to that through So, yes, we're feel as on well-positioned. of we strength we've taken top like as add XXXX. we that measures relatively well, The just continue to that march

Operator

Capital. have Danilo Next, we BMO Juvane of

Danilo Juvane

your talked pulling push levers Are further one actions is you My to what about that you're the extent makes prepared to terms being and you first the perhaps potentially about up prepared for is further In actions remarks, of further Rod. situations pursue there. actions, in specific there here? thinking necessarily any

Rod Sailor

question. the appreciate I

holds one And made point sure levers we But we'll we've the just of got as the look I we the financial to to or right those going April I to ultimate to are the on in be or table took we liquidity. above is, at them, on strengthen that levers see it. I think, ensure, what pull, give us I future continue a some the those of we and warrants the balance point forward, the think believe us. actions of other. lot climate appropriate pulling comment all think we sheet wouldn't and business wanted rate additional that to to flexibility depending pulled the And and that to and anything options

Danilo Juvane

Thank the Rod. you. quarter, little the looking it what now, we expected. for lighter And at helpful, a That’s than was bit O&M

cut forth. and You the so of identified savings announced when initiatives, cost host you dividend measures

quarter? $XX into any O&M Was in next year, for the on for think some indentified that. Just wanted I that of clarity million $XX million accelerated this year.

Rod Sailor

We'll through are execute taking in a the because cost not -- actions we identified million. of of But, we're around I some to of started we some the the a surprise all yes, continue. little quarter would year. reductions will some continue we'll actions $XX currently $XX think little next it me first activity-based. think got year. if million we of cost And taking go as again, we've those cutting And the on into more. we'll was again, bit and I on I that it carry over think And saw the address but,

could some depending of see we some around with go activity on some levels, of so of discussions And could some them having gas down. those We of see we're the dryer again, up go the areas.

Danilo Juvane

Thanks for back get Thank the you. color, I'll the Rod. in queue.

Operator

Next, we have Shneur UBS. Gershuni of

Unidentified Analyst

in Could please Any color on color which could morning. on Continental’s Anadarko, you Good wells would curtailments vintage the Agasha This Shneur. for focus be do calling more [ph] be impacted, wells? helpful. in they is more provide

Rod Sailor

our out us it their plans to curtailments. Continental be a sure given I'm I would that curtailments customers want us. appropriate don't level having what about Continental outlining think their we've the curtailments, be that and that around and any are. be will to think that. for to week, is talk point earnings of especially think But, system, for don't tried next the don't Yes. We've I they specifics get be I individual will of on I had into would large clearly part those appropriate and call

Unidentified Analyst

reduce Then, is in the about any Enable thinking Is the repurchased open strategy part debt debt so what year market? and it management far? of debt, has this to repurchases

John Laws

our We morning. Q this released

us to But could and have things there. be the you debt should number a front-footed there. we're disclosed we and have trade, and going specific at opportunity expect from look, is don't looking debt think But repurchases an any those anything strategies for on on different evaluate. So, that be opportunities don't comment investors in we I of in what how to may that evaluating Enable we'll should

Operator

Next have Wolfe Alexis Research. we Instructions] [Operator of Kania

Alexis Kania

questions. Two morning. Good Hey.

of the that to million. was a of on the the decide of see date we sure there's in process? that diameter ordering, balance year? a EBITDA basis use, that’s to question mentioned extensions which when the curtailments, to could of second pipe FERC to use think, curtailments, good $XX that is, of fair need kind you $XX I I ultimate you some and is a of the so monthly project those Is Is I'm kind the And sensitivity just again, probably impact of on kind assumption Gulf of the that think assumption a first during of there June the alike. we sizing extent for million Run. on would kind implications

kind additional was supply the kind volumes. about contracted for or I'm window to of of So, look what curious

Rod Sailor

Yes.

On $XX have to to in pointed our the the we that have sort curtailment of did in would basis appropriate to And to felt indicated there be curve May we question, referenced but again, clear, number of assume talking curtailments the and number are it -- taking given we the wanted that timeframe, a June. just for we the was we're take. producers very -- few just construct on and million May assumed be was Again, that and most June. guidance, we of the the June, to monthly

those slowly that would process so that decline, Gulf over decrease XX June. expect the filing past We're on number -- could curtailments wells You in on Run. are somewhat again, time, last should

depending that that yes, to And ultimate on there around, ultimately we is and need probably process some foremost the first size. plays a make so, decisions will out date how

has to favorable to other pipe since how we cost. Clearly, costs. come Today, escalations handle announced that's So, cost want us. and been we will to pipe down likely there be thinking and that continued the can we project, start some about

then, of been in And a So, exercise done. that project. an to interest of we activity we've to that set customers we've another now, that had firm right and need say potential seen gets pickup nothing. potential now, activity we're with around it slowed It's lot we date a haven't

finalize has that we commercial feel with during with forward subscribers our process a talk will and around move look, right regulatory So, phenomenal done making project. around job scope the to to and to They situation deadlines. team project. some need we it capacity have continue some purchases is still make that an our until up -- to an potential our crisp time or still you'd ongoing and and but move related expenditures we of as not around Probably all like, answer regulatory making ability some construction that and as

Operator

Moreen Gabe have we Mizuho. of Next

Gabe Moreen

basis in your absent that I sort things the headed appreciate the on expecting after maybe or XQ curious guidance a basis can Anadarko, you sooner volume volumes of to to to But, the of sort XQ of maybe moment. uncertain are see done the kind declines curtailments with just later XQ than are you highly speak rather you at drilling? base would XQ hopefully where in base

John Laws

moment. Hey. for of morning, sort you Gabe. John. fluid at Good the recognizing Yes. how question. appreciate the I are the things Thank do It’s And -- you're

on I connects think, is, real we're earlier as I the year. Anadarko the mentioned a at well little this bit in outset aggressive not

looking little say so, probably think, not And if But fluid year, sort a if than and QX-to-QX. you basis. of But, know and exactly short as guidance going the over here the the overall a number range. probably as volumetric be percent bit to through looking you specific an of also we've stop evolve think at year, here. decline it's specific and will we're out put of balance stronger the I I at a that It'd to to in -- on that you matriculate fair looking how just were giving continues things don't XXish were we inactivity I'm

Rod Sailor

we're some just in sort the in started might and in we've from -- that, when only wells they changes I third production, we've the And and producers Yes. reacting, in. our planned week customers again, most exercise that of to producers seen around shutting collapsed add of this shut seen crude price

that find -- that that our that a those will the production, continue think with to outlook about that that again, I activities but said of on to between again, they can think will well. lot that a price think construct, -- of We've made I shut But shut-ins. we what John make it there's And around based I little crude, best it's on we ongoing -- our in. is think think we mean, dynamic and to drilling And some where and to their going it's weighted does best on want very so, vary. that depending it the clearly, a see. heavily environment we activity it see value you towards are have we producers assumptions seen gas

I see think, will vary that wells on later. start it'll those in hopefully optimistic to May rather and of some we sooner coming than

Gabe Moreen

Rod. the Thanks, I uncertainty the of whole John. Thanks, truly exercise. appreciate And

Just want to clarify, of stab a kind John, when cross-basin that the XX-percentish Anadarko-specific you number, threw at the was number? out sort of or

John Laws

more of be That difficulty to That's the Yes. year. some bit necessarily encouraged by of gets these as this a that areas. gas of our the in was into not you see little converting activity because -- of in Anadarko. into well, rig continue some and of completions the expectations numbers for we the And giving drier activity

Gabe Moreen

kind been question Got creative I and of you've with past in terms been processing in where solutions projects think excess coming the then, capacity. basins is, second it. of some around And up there's

had the kind that bandied mentioned about, of solutions of your curious in I'm think capacity. of conjunction rationalizing or own cost about in compressors. just network You on with others, I whether saves plants even being Anadarko earlier some in

Just thoughts there. curious on your

Rod Sailor

much we've where with that we've were of in haven't I able as champion, think rationalizing to to do I it we and environment project. exercise in Yes. and continue think you. some about our had environment, Look, capacity success that, probably constricting I again, we've solutions Wildcat talked footprint I things to in And a Wildcat growing to processing thank those also. been first, look, But, a has think continued around our an been look. creative provide think, outside we'll

to areas that's there. the we're all use utilize peers think is frankly, ways activity, to We nothing to and find a assets. with It lot partner about. And out our ways use trying to think to seeing more continue to capacity where our we creative competitors there. announce something we're better in -- so, And that about

Gabe Moreen

Got it. Rod. Thanks

Operator

conclude Well, to for turn I remarks. call Sailor closing would Sir? now this will like our session. question-and-answer the over to back conference Mr. any

Rod Sailor

in work, safe on great to call I all thank I And our dedication for hard Thank hope and interest much. recognize a and focus you all And of the you continued for this Look, challenging healthy. day. I very your want on Please, during remain their everyone safety closing, in time. have Enable. employees

Operator

the And also sir you also today's the thank presentation. we today. to for you. now time we time, all for thank your of Thank conference this management rest may team attending and The you Again, disconnect. you, At has concluded.

Enable Midstream Partners (ENBL) 6 May 202020 Q1 Earnings call transcript