ENBL - Earnings call transcript Q3 2020 | Enable Midstream Partners, LP

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Operator

Good morning. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to the Enable Midstream Third Quarter 2020 Earnings Conference Call and Webcast. [Operator Instructions] Mr. Matt Beasley, Senior Director of Investor Relations, thank you, Mr. ahead. go please Beasley

Matt Beasley

our and good Sailor, Presenting and our Financial the social our and a only call group small John this are Chief joining distancing achieve To Rod call President release we phone Officer. travel, XX-Q other your to Form morning you of in questions. we on have everyone. But and issued management the Earlier have room also morning’s today. morning, Laws, our answer press earnings team limit Thank and filed the this SEC. the we members CEO on with the

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

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

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

Rod Sailor

thank you updates. few remarks business morning joining high and my a on like Matt. Thanks, with begin I X Good for us. would Slide to level

our year depressed the commitment all impact Pipeline, and now project. our has storage am to Earlier today’s sustainability we report Gulf the milestone production earnings anticipated. today, assessment pleased that In our FERC’s was the a this our to to to demonstrating segment, transportation back commodity inaugural recall at been business end production offline I that And share As with from sustainable Run we the you practices. received released highlights is you online. may we environmental last of shut-in plan key report from I call, transparency recently prices for and our less for that report due than from call. some

safety to Our local, our impacted to and state protocols in the safe we not place and has COVID-XX maintain remain recommendations federal monitor guidelines organizations. operations. health and continue and from reliable pandemic To-date, ability

our expected to cost have we in including I earlier driven base by reduce want distributions, will to net costs to of in market the of to we debt integrated to on in focused to took Finally, diversified this XXXX producer for operating performance slide. our highlights downturn to would transportation volume once our industry pleased perform our our weren’t million. adjusted previous half the ranges demand a next than assets, performing We benefit million, by unique lower to impairment response business to outlook can venture, expansion actions total investment have program, Due capital the $XXX $XXX upper allowing significant few for part Due of in that storage distributions anticipate continue of our systems, almost exceed our impacts joint the am DCF this firm decreasing and contracts. for us upper SESH year, we on structure. strong financial now our a outlook fund cash year the control, and we emphasize the XXXX and while EBITDA report seen and business the capital scale, again we in cover and it distributable I that for we aspects from fully that half remain If of curtailments expected solutions I flow. now the income. non-cash

structure cost includes and for positions, initiatives, savings Our progress organizational impact $XX implementing compression aligning fleet treater our producing operations current $XX million putting million eliminating retirements annualized rental and million our industry of select the of in for $X from environment, standby assets operations to plants open planned optimizing reduction crewless and by on including plants. the processing and in

discipline processing storage remain we focused to look projects transportation efficient contracted and and forward will and continue As contracted XXXX, and long-term projects. we on prioritize to capital capital gathering

have we Finally, not current challenges in commodity price this credit experienced have cycle. faced producers meaningful losses the during while environment, any some credit

infrastructure Pipeline the joint Gulf venture project to displacement Run to help energy slide, fuels higher supply should growing and a Pass by between turning of The XX-year the worldwide. LNG, commitment intensity LNG which project is Golden a key is Petroleum serving will Qatar backed add project support a Now, ExxonMobil. project LNG, global of the next Enable’s from The carbon markets.

week We scope that the schedule the customer assessment. FERC its given base. firm coming on environmental for We the and issued we finalizing believe and financing project in to the last just will continue project number have the a options anticipate continue the financing project’s plans to months demand-driven advance we project revenues strong and and of

firm next grade its benefit large the is segment Turning highlights to contracts storage our from investment the the segment to and transportation commercial fee-based slide, by and utilities. anchored on continues

XX,XXX has second On is we Our and for commitment X commitment our service per project per supply to X-year crucial firm or has we service southbound extended million The dekatherms XXX,XXX integrated backed construction system, project an placing is a project system, in downstream X.X contracting a in all mass project of average regulatory per for dekatherms day. is September, firm our link volume and day From we almost backed success received capacity dekatherms between contract have MRT day EGP in a and markets and have transportation serve with begun. quarter approvals required weighted as contracted On by XXXX. capacity. the and it of anticipate expansion the over of years. continue systems the X-year life by the

markets remains critical artery joint a serving despite Finally, southeast. with explorations, venture contract utility in recent our the Enbridge SESH

Turning processing and the highlights commercial slide. to on our next gathering

As the all should recently of opening both drilling Oklahoma DUC Basin our production On I footprint to natural County, significant back drilling between online hurdle currently and because Substantial X the due DUCs gathering our curves gas system systems, completed, depressed shale, economic an we forward Anadarko activity. reach in they increases experienced we built of and rigs gathering that Haynesville our an McLean shut-in Williston condensate with our into noticeable these lower oil drilling do not with the systems. approximately production and come inventory to seen system’s my and wells connected ability crude be increasing the was gathering continued active play remain provide degradation require extension to have be These we expected further Enable’s in completed no Anadarko that mentioned DUCs and system, with capital add producers In have to wells behind customers. wells. inventories been XXX benefit systems. both in new to support prices have Producers commodity investment. remarks, performance from on

I to results. John customer that and to over Basin added will completed turn new third to quarter connection pad X-well to a call a system now a discuss recently Williston our we customer. the Finally, for

John Laws

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

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

our performance across overview of all gathered gas in to shut-ins third as saw Anadarko producer basins, processed transported quarter. to decreases and result primarily of a that gathered, third inclusive quarter of volumes compared the basin in the our operational Turning ended volumes natural slide, lower the continued XXXX,

compared increased Our result as basin crude oil of in basin. offset production higher quarter Williston lower XXXX third of in a and the to Anadarko the condensate the production by volumes

financial third XXXX the margin net lower our of volumes third compared next as the revenues, of for and XXXX to results saw we of on primarily lower to prices. result the quarter quarter lower slide, gross a and income Turning

in and benefited by as income in impairment non-cash expense impacted While and as a capital DCF exclude DCF joint benefited non-cash primarily from lower exceeded expenses SESH expenses. Enable’s of expenditures for of interest distributions the the was changes maintenance volumes Adjusted in result quarter. earlier, third from investment our derivatives fair lower mentioned distributions were cash EBITDA funding our adjusted both quarter impacts DCF G&A lower also the venture. fully the O&M net expenditures expansion the lower $XX After for distributable and Adjusted quarter. value XXXX quarter Rod by third and million the declared prices interest compared and the expense by lower lower lower SESH. flow to our offset of income from declared, net considering of for EBITDA G&A lower and capital the O&M partially and

While execution this continued for Enable. was another of year some had challenges, has quarter this yet unexpected

debt our the third over the distribution cash have significant half DCF earnings excluding call of we mentioned and with back program upper half As EBITDA With our our and expect the business XXXX structure remain the levels investment, on non-cash to to optimizing we fully I turn first during will The Enable reducing in upper adjusted flows generated environment. now capital SESH the provided further of for to has our industry while quarter Rod. it would Rod earlier, range. call now and we aligning achieve outlook total and income of cost achieve impairment expected XXXX our to quarter net that, year the fund focused this

Rod Sailor

Thanks, John.

morning. sustainability mentioned As its issued opening my remarks, earlier I report Enable this inaugural in

can and customers, enablemidstream.com. to At history under practices and long efficient Sustainable of our operating a our website is business our You we in communities. at our deeply a sustainability report business Enable, partner the employees, responsible of across in part manner. embedded safe, find success section are mission investors of and the the have of

will and the commitment. our find just read partnership Enable continues uphold demonstrated to report, some you of that ways As you has

way, have support program recently to program, a the as STEM-focused twice of the operations partnerships, through conservation responders, educational community including pipeline minimize regulations. to winning threatened across and program build of vulnerable report’s Partner miles commitments by rights include status. Enable’s Beetle that emissions our Enable’s community commitments, to emissions Management inspection courts methane oil current Enable’s and for a XXXX endangered gas that award [indiscernible] was basketball Some participation Program our conservation efforts methane to species, American program from almost in The inspected Safety refurbish pipeline first required or of honoring initiatives. we made Enable’s down-listed our Vegetation the Burying including a along Integrated plan, in species industry highlights

support XX by employees also volunteer each Enable employees over In company-paid XX,XXX year. organizations community offering over volunteer We XXXX, including our recorded hours. hours XX,XXX company-paid hours,

I Finally, XXXX allowing or the to for Standards on welcome incidents our contractor our the sustainability work reported of Enable’s comparisons our midstream comprehensive XX SASB of this X our report Sustainability companies better in Board look contribute you a updating XXXX. standards note but our one contractor and to has report, safety initiative from with We that reduction performance. in journey. am aligned Accounting reporting on progress. We team’s helped voluntary feedback for proud step is inaugural your only forward of to on sustainability more

announced alternatives open for say to that is actions not they been there It interest or has will sponsor for has business published in formation. ownership related to wanted reported a by Enable. announced since us we its their possible are the up the speculation strategic considering review a to been CenterPoint the that commenting questions, time be sponsors. call management years options Since I on both Before that has respect with first our not over such review,

have the on case been to and we in comment has period, reports continue such As we declined today. over will that tradition that

your call We will open now the for questions. up

Operator

JPMorgan. [Operator Instructions] first Your question Tonet from Jeremy line comes of the from

open. line is Your

Jeremy Tonet

morning. good Hi,

Rod Sailor

Hey, good morning.

Jeremy Tonet

of as that level and on now leverage and here SESH the tenor think reduce or buy so concerned as leverage about then contract at there make just see debt all there the could, just Would Just want would updated of cheap is approaches make And and to with well, the at debt enough how for Is any wondering thoughts contract there? JV as helpful what if type would might take fed pipe to you kind re-contracting of your is you you sense what far to factors think into in? factors thoughts? the different these just start what just off how be impairment to sense? to about secure want discounting I

Rod Sailor

I a contract that first But into of again, to start with expect on it’s we sort or had discussions again, and re-contracting the will about enter we other Yes, and law. SESH question me still counterparties, Rod, excuse re-contracting. a with and large

So don’t really the I as think remarks, I because expect, vital market. Florida anything into is my to the continuing about other talk opening we to we think it’s appropriate growing sessions artery said, again than a transportation in piece

other again, have we to on to will little over we continued So that expect of value there. to talk part question. bit realize John it I maybe – turn about the to re-contracting a

John Laws

sure. it’s Jeremy, Yes, John.

there. Just to follow-up

in in that are all what timing rolled that things as relate to that’s September so, some that contemplate rules I a re-contracted really we but we of capacity do now basis the drivers those the require view early yet. of have of as might of how with know the contract re-contracting. and drove doing to place interpreted of those, at time that, think said believe just to the some that that timing. does impact. the accounting do alluded look And take not our rules the we really Rod we the accounting when midst of on to you And the was that impairment you And

to anything really relates those the here until that’s debt about As do the the notes it thought that SESH XXXX. we in not at mature level near-term, not anything with doing

Jeremy Tonet

you did you have rolled? re-contracted so guys as want just And portion that any far re-contracting, of it. be it the as – clarifying point Got far to

John Laws

the in are re-contracting. midst of We

We that. leave some of will are now midst and here things and it have we things done short-term some in the we re-contracting at that

Jeremy Tonet

really helpful. just seen strength far And natural want have as That’s there. and as what the on gas it. with we thinking is Got concerned some XXXX your more might to see strip say into ball ‘XX side, Thanks. the good crystal

levels that some like activity parts seems across it be of that So, your footprint. could could incentivize

are So, side you helpful? you footprint as as with even particularly what anything seeing Any on be producer can of rest share as would out the color far your gas well. the there, us or activities or in

John Laws

come I start in well. it’s as then will Yes, John, Jeremy, others here and may have

So, think dialogue do, been with think dry look, I there. have volumes trip to that that that we very interested have exposure, has in, very the I we those on that have observed we here certainly gas as quarter gas you particularly producers, in gas continues what continue just are have been last something are that to more the interested, exposure, that in [indiscernible] record we system our reported

we as for seen leaner encouraged be well or curve some a the what showing that to we is and strip go on the as have by these areas continue gas the of so And the some producers basis. in of forward drier gas activity

to the we support go and months. forward the economics see to a across continue DUCs that the of terms how those expect their season footprint have footprint I finalize and into of expect our they continue we over current running run our roll think rig plans to activity we producers in next basis, in as to in reported we look, we will Anadarko, but across So, wait here completing X their today, rigs activity, on and budget evolve here the couple and

Jeremy Tonet

Slide would opportunities any helpful. cost just am X, just or helpful? on reductions One ‘XX I about thoughts That’s think could And I it. you Got wondering into sustainability with, here. there, be last about that so if that just of I one, other thinking on talked

John Laws

we on April early progress made for have we that the really announced XXXX. in Jeremy, goals good

to the April. to there on track company in meet on and set goals track we objectives be expect early and We continue that for to ourselves had are the in

Jeremy Tonet

Got you. it. there. Thank stop will I

Rod Sailor

Thanks, Jeremy.

Operator

of Sunil Global. Your next from question comes from line the Seaport Sibal

line open. Your is

Sunil Sibal

Yes. Hi, thanks taking for my good guys morning, and question.

Are SESH there impact follow-up the restrictions distributions that from So, that just going debt the of from of to terms structure forward? should there the about thinking how entity? we you that on distributions receive SESH, any in would kind be

Rod Sailor

think the to the and free to function at restrictions the forward will a on about distributions a entity’s no of entity flow. go continue are be per basis There se cash

Sunil Sibal

Okay.

no restrictive back covenants are right? holding cash for there there, So

Rod Sailor

No, correct. that’s

Sunil Sibal

your Got which have question, a bit just then it. Permian, Thanks a consolidation is how broader probably of we any do that. to consolidation, do other fair accelerate for regard And Thanks. in you you for in seen in upstream asset could basins and comp view to position too, with mid the specifically then more Enable? see regard opportunities specifically, midstream with that

Rod Sailor

there smaller watching take upstream companies specifically I Rod. Again, E&P Look, in are well along been yes the we of capitalized less it’s footprint, a will Yes, consolidations. that. number our the we or some need I about on costs those would and Anadarko things. flow and consolidations would cash for not just be the strip, expect forward think to everybody think surprising based have and

surprises been system. not are seen anything we – our So of of on impact any we our on an today, that’s haven’t

you do consolidation, about continue will probably private the environment. and business But As starting side scale watch stating believe past we we and have the believe on and we the in again of consolidation, midstream and lead scale we midstream that likely that that midstream said in will the matter and side. with scope smaller talk some the some to scope players that to of matter

Sunil Sibal

Okay, got it. Thanks.

Operator

Moreen next comes question from line from Your Mizuho. the of Gabe

line open. Your is

Gabe Moreen

should to be question the maybe spend project? timeline versus through talk going and how with Run, walk volumes negotiations that? ‘XX we ‘XX Good that just then on us in how about thinking you there are capital discussions morning, can attracting potentially Quick guys. And beyond of third-party Gulf terms or about can you

Rod Sailor

Yes.

as but environment. to broken of like discussions, to I – the this a record, take to have discussions I muted. of potential number discussions have been continued we commercial with first sound relates it Those in have that relates it Again, counterparties to part will a question. As somewhat clearly hate

with plan to and have will along We our move we continued it. evaluate

potential We project don’t us add are number lead options down a scoping near financing to also proper of John, to both that if players anything? want of with in will and evaluating future. know you that I strategic financial the the

John Laws

of the and function of or we be late in think finalized CapEx with the I scope. as But and it’s in of capital right, way total have most date, said past not ultimately the expect No, pipe cycle. concentrated probably be Gabe, would of so would particularly half a will the long that’s Yes. start ‘XX quantum ‘XX that that early second a we that and of build

So capital, you that we kind in for of ‘XX show see I thinking and that majority would capital would opposed were ‘XX ‘XX, to that of of ‘XX. more expect up as

Gabe Moreen

you can so then, And things seeing side follow-up your it oil where of can outlook, Gulf if in what crews just trading are be from flat from terms into is the shifting just completion with Thanks. think there? to on curious TI here you completions, of there you the ‘XX

John Laws

Yes, really is which their and there mentioned, here expectation for too finalized producers hear process budgets, I won’t ‘XX, us important the into the going moment. at through as to the much from they get for are that

the a out the that we DUCs in you to are system. there that our what that’s there that of a you there of And of DUCs we we as Anadarko well think about substantial little intended bit show inherent the have each as think I reported how the in see are Bakken. number can of terms on is backlog do

a producers And are available. half all-in return bar out from in that available a price lower cycle there so, economics standpoint an for complete there that’s that’s ready and and inventory and commodity to

DUCs of the just and leave in online as So, we system there, add there the are we to out it it to moment ‘XX. capability terms terms for speak that out we relates at to in what’s unfortunately come volumes good need the inherent of that that to

Gabe Moreen

for any growth talk than on not Is out to might where reason ‘XX ‘XX, and end that ‘XX can but the should think things be there you to you ‘XX? CapEx growth on a And of CapEx think two-pronged John. for then about in you the different Thanks, EXCO probe front? again laid CapEx, up on side ranges in coming question

John Laws

won’t but Gabe, We on there. ‘XX, for comment thanks preface the

and expect spot up range terms and doing specifically on think, we will and the not Rod prioritized there, gathering spend have us that pointed to doing mentioned, system. capital we we around CapEx are a in capital have and that of XXXX arrangements volumes a good and projects are again but everything underway would you things that that our to transportation storage which those we show bringing that and producers committed we to optimizing have in are I that online with have be processing returning got the efficient

Gabe Moreen

Thank you.

Operator

the Baramov Instructions] line next comes Wells from question Your from [Operator of Ned Fargo.

open. is line Your

Ned Baramov

good Hi, taking morning. for Thanks question. the

so talk you ethane and Could maybe driven prior recoveries is a there? the it me. some of by from the system, part the I NGL also any from across presume higher across produced the recoveries, seems of function one ethane Just thoughts the about quarter but increase volumes volumes, your of system, increase this is processing

Rod Sailor

the to Yes, what think recoveries across strengthen, see ethane did of falloff, And of little recovery. into I it that’s may and we fourth we on the gas see our rejection out prices course of We see different the quarter. system, have into see of no, flex in the we you look really and ethane year, that’s have right. I relates recovery we that and have in and ability think plants seen that, system, seen bit a something think as ethane our but throughout quarter, see floating as higher to the something did of the E&P out some we I and

Ned Baramov

I Thanks. That’s all had.

Rod Sailor

Ned. Thanks,

Operator

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

Rod Sailor

Enable closing, I for call I everybody focus day. in Please challenging great the their safe joining and hard I healthy. and dedication times. continued the thank again and these all much you for all want a today. our call you Thank have employees remain recognize your to safety so work, hope us on on interest for on In during

Operator

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

You may now disconnect.

Enable Midstream Partners (ENBL) 4 Nov 202020 Q3 Earnings call transcript