Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello and welcome to the EnLink Midstream Q2 2023 Earnings Conference Call and Webcast. [Operator Instructions].

As a reminder this conference is being recorded.

It’s now my pleasure to turn the floor over to Brian Brungardt, Director of Investor Relations. Please go ahead, Brian.

Brian Brungardt

you. Thank everyone. morning, good And to EnLink's earnings of second quarter XXXX call. Welcome Officer. Jesse the Vice Executive Financial call on Arenivas, President today Chief Executive Participating Lamb, are Chief Ben Officer; and and Operating Walter Officer to Pinto, any the during session. questions President Executive and answer is in the Vice also room Q&A Chief

investors.enlink.com. We our also our markets replay website. yesterday, issued of and website be those and today's the earnings after release will made A on available materials at our call presentation close are on

will statements, Federal within that Laws. only forward-looking discussion undertake the meaning of The or speak no differ files. predictions to results may Today's results expectations and we date revise. include in projections including statements call, the differ materially of can Securities as update and obligation be and this press the Actual SEC of forward-looking cause of and could release, presentation found actual our to factors our from a discussion

measures. including Risk certain includes the release also comparable are call This press a other statements available our under our reconciliation in disclosures well release, in GAAP you financial a our press We these Factors. of heading those measures filings, our pertaining to measures as as in non-GAAP Definitions discussion of review and the made SEC the presentation. appendix to of cautionary and encourage

for the open remarks and Ben, Jesse call by and and today's start prepared the set with call remainder leave brief We'll answers. of of a then questions

With that, over the call to Jesse I now Arenivas. turn would like to

Jesse Arenivas

exciting have position transformation. XXXX of good another energy pace we discuss today adjusted results. and to as through ongoing year report in Thank to us an EBITDA are to at EnLink Thank the for second morning, you unique and everyone. time on you, a grow quarter joining record We're our Brian,

EnLink an as will cleaner has our energy this business. renewables. to midstream hydrocarbons we like well energy society, with synthetic sources industries hydrogen, utilize critical the to through solutions transition, of as continue sustainable this to takes of independence, a adding transformation, transportation to the achieve mix because believe these as business consider growth not what gas include enables it We world across while new us strength greenhouse energy America's the reduce emissions carbon offering our that combined while and traditional to provide products. energy modern products This transformation

midstream. future is This of the

We midstream service seeing today, exhibited for are results. quarter demand traditional strong our by as robust second

the over generated $X.XX $XXX which over results on place prior For strong midpoint adjusted million guidance EBITDA commodity prices. of growth achieve XX% to year. represents we the volatility EnLink pace despite just quarter the XXXX EBITDA, of These in of That's adjusted our billion. the

EnLink for through sustainable growth is well the positioned transformation. energy

to and transformation energy a services. include for the expect -- midstream continued growing We need traditional sources services and

investments and represent solar example, For new of the power wind majority generation. in power

record However, in natural the gas-fired the experienced fuel recently be during a generation ERCOT Texas, component in which to warm of -- fuel summer continues months the winter power of largest demand. mix

all on see X,XXX% simply depending need annual increase the over includes power as XX% generating outlook XXXX. scenario XX% through developments Said as the decades sources that sources XXXX. come. energy U.S. increase to could solar by additional much will our from by for EIA to of the This report, the expansion natural projects capacity latest gas According agency to renewable between will and significant

being cubic gas and by for incremental Gulf Coast LNG robust and Texas under per billion feet wave day This online or or a an nearly demand through XX XX day over grew expected in billion capacity today, feet EIA approved XXXX. day activity. another per cubic projects largest highlighted of LNG is Demand billion there's export pre-FID. construction, with to cubic Louisiana as Gulf export the of in natural of feet XX XX the last operation that increased cubic continue feet The to feet XXX% Along the X natural demand cubic States comes XX% approximately billion recently the with XX gas a over years. grow but day, driver day billion alone, per

Our well-positioned are energy transformation. to from the assets benefit

gas-oriented have customer needs that We our three to natural of large are G&P well diverse positioned systems meet the base.

extensive user Louisiana in an gas the demand have projects. end through we pipelines addition, natural attractive increased can meet In network that expansion of

existing opportunity Louisiana our the unique help as our transformation, leveraging this COX other an decarbonize network position part We significant EnLink, energy sector As provide a growth in of to view given industries. to energy pipeline for the has prospect transportation.

the Last transportation with is its compete definitive at agreement traditional that, midstream a year projects. attractive returns project XX-year with of first This ship-or-pay minimum kind agreement COX executed a we ExxonMobil. with

Industries, million atmosphere are X.X up along continued initial Nucor Mississippi per Emitter, the year are they up second signed excited We success into of ExxonMobil's that commercial about the they Industrial recently as metric CF COX COX industrial emitted signed today. Corridor. approximately Combined have their a with emissions tons customer being River

with compare We're generation look demand This impact COX generating cash valuations top flow constituents. attractive XXX while the for by industrial help sum attractive year and is continue of offers up, attractive the emissions many solid in and natural EnLink returns. it products. economic working to adjusted growth S&P a compelling NGL and seeing instances reducing forward gas favorably ExxonMobil that quartile others in We driving to to another investors strong To opportunity. meaningful of make record EBITDA, driven a

COX due in the offers addition, transformation to to EnLink In investors opportunity a unique our transportation business. participate energy

over an our and results. Ben overview turn financial to With that, operations provide our to of I'll it

Ben Lamb

And morning, Jesse. Thanks, good everyone.

XXXX in segment approximately came where unrealized expenses for the second operating of $XX.X Segment Permian, in included of of plant the quarter with profit and million start $X.X tied $X.X quarter Let's relocations, derivative profit to at million. million the losses.

record behind grew systems XX% quarter remained but sequentially, X% quarter. prior and the than XXXX unrealized natural OpEx a X% from volumes quarter relocation of Producer prior profit compared with and average the year segment volumes approximately quarter. plant for higher in higher the Excluding quarter derivative activity, decreased of driving to our XX% gathering activity gathered second first the gas robust, year XXXX

now we another with million. million Turning performance the the quarter results segment, XXXX seasonal $XXX.X of gains. $XX.X unrealized effects. quarter segment came derivative in in experienced along normal profit despite included the NGL to strong of of in solid gas at second Louisiana, Segment profit Segment for

segment second grew Excluding XX% profit sequentially, quarter. of activity XXXX, unrealized prior the the approximately impact quarter decreased the year of but XX% in derivative from

profit derivative gains. for of Segment $X unrealized to million included segment million up Oklahoma, of the XXXX. delivered we of $XXX.X Moving second profit quarter

derivative relocation quarter the and plant grew unrealized segment the in year activity sequentially grew and Excluding XX% profit prior from second OpEx of quarter. XXXX XX%

quarter average natural higher and the volumes XX% during resilient remained sequentially activity gas compared to higher X% quarter. driving gathering year the Producer prior

Oklahoma late near X be resilience We move headwinds seeing we're seeing completion and Operators in early fall XXXX. commodity impressed we said rigs some continue system. for and into despite XXXX in the That behind deferred we activity with the remain summer and prices. X months in term few the as see our to are active continue to to a being

and double the deferral quarter profit Despite to the profit million Segment impact losses. for activity, digit North with our volumes $XX.X for Texas, financial we adjusted included Wrapping unrealized EBITDA up this segment we have gathered seeing temporary was XXXX, and growth are accounted of derivative million. guidance. $X completion compared in of

prior XXXX derivative was quarter improvement third year acquisition in in driven The second unrealized sequentially XX% of quarter. the closed from the year profit XXXX. Excluding prior and the over segment activity quarter part grew grew the in by of X% the that

Natural to emissions prior gas our The quarter. reduce facility higher our in-service make COX store North were but from intensity. gathering capture customer previously to Separately, of compared announced progress sequentially year BKV continue X% Texas, largest we in with were solid to quarter volumes lower an fourth XX% and to this is project year. the Bridgeport progressing COX our date in permanently with the

line growth quarter adjusted million These year. and robust with another the representing prior expectations with drove were in solid over XX% $XXX our in EBITDA, results

billion. XXXX we in achieve guidance midpoint cash million. Free second quarter for flow second XXXX. expenses our distributions net $XX remain after EBITDA approximately pace adjusted $X.XXX million relocation to reiterating on the the were Expenditures plant the We of for approximately of at Capital EnLink are the range $XX of quarter and in to and came

spending, track including growth contributions investment EnLink, CapEx CapEx net our within $XXX plant million Total to of relocation costs, million. continues to maintenance guidance CapEx to $XXX XXXX and

positive a with be and a at the investment sheet in continue position times strong X.X one leverage and S&P very Moody's end remain and On grade at rated below of at the investment ratio at We S&P. a ample grade liquidity. the second of to with quarter side, Fitch notch balance we outlook

common represents an to unit which our we increase with capital per to plan quarter, investors, our distribution Consistent $XX.X of in unit return quarter capital allocation second the maintained the of second XXXX. over XX%

we $XX with common us program This repurchase of ahead pace unit $XXX the repurchase spent million program, remain complete approximately for Additionally, to puts million with unit our active second quarter. in XXXX. our

we common XX million last have the Over now months units. XX repurchased nearly

And in we over results Jesse. With of continue that, the quarter In back momentum of for delivered XXXX. the I'll rest team to the EnLink expect second turn the the it summary, solid year. to

Jesse Arenivas

of the placing on second our to Thank EnLink would XXXX you, the execution The EBITDA midpoint another well way solid EnLink. XXXX our for year adjusted Ben. record in achieve which team guidance, be delivered quarter as of

the may that, for call open now With questions. you

Operator

you. Thank

session. be now Instructions] poll will [Operator questions. for We please conducting a moment One while question-and-answer we

from coming is question first Reynolds Our from UBS. Brian

Your line live. is now

Brian Reynolds

just little Maybe the half midpoint? particularly XXXX, [indiscernible] you that the on how expectations, just everyone. morning, Thanks. more the from And given the to prepared growth into second with should region about rigs just good dropped commentary from to help secondly, Hi, Oklahoma remarks, three think a talk midpoint to guidance the four Permian meet touch in the about rig then JV. can in we EBITDA bit from

Ben Lamb

Hey, Yeah. it's morning, good Brian, Ben.

So, seasonal year. second that things. in a particular the is on business would the of is benefits the see in you picture, yeah, in I remind up, shaping NGL big half One the late couple way we

we so than to -- a always expect stronger have fourth in quarter have to And have quarter. third expect we

looks second did. quarter So the like quarter if the lot third don't a be surprised

Midland particular. Permian, a to the pretty business good gas the expecting in we're ramp In specifically in see

had we dedicated July, back If Midland rigs into by in XX producers. different you XX running operated acreage gas, look on

ramp the end And see a we into to do going year. the pretty so expect healthy of there

listen, as far mean, I early all. in Oklahoma about to As talk much XXXX, it's at XXXX

two, the maybe not producers is seen just seen delaying so to remarks, we've much also prepared into said to completions take the producers manage we in slowdown What one activity I budgets the what in fall a in gas little advantage the expand but we've of think what But to seeing haven't drilling I winter, we're seen from wells. natural off summer into is bit, that capital a contango market. the dropping

XXXX, when a at place to in speaking, commodity broadly see it's the you think, I setup to Oklahoma. look pretty continue for activity constructive

Brian Reynolds

switch 'XX. into Great, super helpful. needs, as then And capital look to just maybe we towards

really in to about whether good you they potential or update areas Midland basin, give build for and Thanks. on capacity just from whether for there'll talked to particularly continue basin. potential plants processing new You the have be growth, in an us Midland move the brownfield additional other can needs ability the

Jesse Arenivas

that said, on to announce service That Permian. we'll today in quarter second getting in I the in Plant We're don't the focused the capacity. the nothing addition in next additional side of Tiger have II think well, last capacity year. that Permian Yeah, that's Delaware on

think for we'll candidates good news good the that relocation additional to do is I And that plants likely the more. have have Permian. are it's we

step, another when that point. take this to So likely be at no relocation. it's But I decision most we think plant

Brian Reynolds

it super there. helpful. I'll guys. Great, leave Thanks,

Operator

you. Thank

Next question from from Citi. Dounis Spiro is coming

now Your line live. is

Spiro Dounis

Thanks, Good morning, everybody. operator.

FID get First incremental on your the for And project. next XX to the timing million CCS. more beyond extent per just you've to interest annum? question on Curious any thoughts that seen tons latest

Jesse Arenivas

said, look, Discussions robust it's we the are progressing at Jesse. Yeah, activity. quite Yeah, good think I as morning, moment. rapidly Spiro,

control. about talked said we have and Publicly expect FID seeing don't that at deal. are in outside say multiple we beyond Exxon we're day parties. very incremental diligently are I we optimistic progressing. just the are discussions the with part So other three worked investor we soon. that would Those XX Timing projects is some tough allies we the a these being we But

Spiro Dounis

helpful. Great,

Analyst tool question, Day, to Second of just turning the kind maybe that highlighted fact at sort that's back M&A, of for a been guys nice you you. the useful

market least deals. You've been some time like able multiple has it period low that at of sounds get high down. cooled to for pretty return a But

Just latest to your M&A maybe get some landscape here update and on thoughts.

Jesse Arenivas

very the basins, been We place Yeah, options, other They did. relocate. our in two We've be approach. we very of and low a are deals well optionality done like we've to well, with as cost a with. we cut compression lot last future multiples in facilities M&A consolidation right look, able out, to we'll disciplined the on said, relocate options and

like we So those.

do right, us. ahead cooled don't of We CCS off the to we got it's anything. need You're growth a feel bit. like We've

So we'll diligent, right synergistic I've about be the very for got. that's bolt-on. look And all

Spiro Dounis

All right. it for That's guys. the for me. time, Thanks

Operator

Thank you.

Next Praneeth from question Fargo. coming from is Satish Wells

live. now is line Your

Praneeth Satish

morning. Good Thanks.

least you good? you of up So Do one variability of then is all Exxon How at beyond much like multiple, you And initial get to some time that there five there's you're came or just might opportunities, deal this I year is of on deck, terms that where to expect kind agreement. that how that to CCS kind times if it to is returns? take of could peak in the EBITDA deal see economics? in be conceptually a Maybe from guess deals -- the multiple? deal a I with slide kind multiple on estimating elaborate the Exxon

Ben Lamb

it's hi Yeah, Praneeth Ben.

with that arrived we've So case times which $XXX the to in came five parties of first, could at looked up in that talked business have been publicly, not total Directors And we XXXX, in million of a an a business implies capital concrete couple multiple, honestly about average today, was we our how projects endpoint showed of we Exxon, Board the a how about, we that for other as able of to only with little that and right, $X.X investment at develop. at that multiple billion. above EBITDA the talk all counterparties development with haven't and but we that

all So been projects by same. the real there have not are that our engineering scoped team. They're

brownfield of Some ExxonMobil have has. them project more of the elements repurposing, like

Some elements new have build. of more

that's between And And they're business portfolio, multiple, five projects, now each not we entire so the way so the but not year a evolving all is see average much and we times one see. the to that individually it's across the expect XXXX.

Praneeth Satish

but trending we range? the the we Just still And helpful. at that is be CapEx, the not to the I tracking you balance the of just here kind the midpoint. to assume lower this Got are touch it, that's the high midpoint wanted CapEx reiterated but nitpicking, Should on puts the you CapEx? maybe kind end or range for takes of you're what are towards and that for should on consider year,

Ben Lamb

toward that fourth talked Yeah, the XQ. call. we're We've the particular, bit was year. for of case new quarter the the range. higher into Permian, the of That's next in end the we quarter. of little about forward second pull a the in into quarter early even That trending out not And in had

the EBITDA, on on lands at end our is which FCFAD. CapEx current adjusted a midpoint range the within expectations be bit of So on the to little for we're high range us going the

Praneeth Satish

right. All Thank you.

Operator

Instructions]. you. Thank [Operator

question Moreen Gabe next Mizuho Securities. coming Our is from from

Your line is live. now

Gabe Moreen

everyone. morning, Good

XX year getting compare think speak you this how hedges. to levels how had, you've juncture, to kind much just noted I you of aggressive At in might for with maybe this levels they hedging ‘XX? and can

Ben Lamb

our the in get take XX-Q don't go later say is I start be at. four too some let here. the that look to get filed in practice you today can want But detail hedging that There'll on in normal to deep notes Gabe. advance. And that Yeah, will quarters me a

business. up we has obviously for for is period, And XXXX natural almost natural on like available this quarter that were our [ph]. market well hedged hedged for that's over What being on the is the to we fully ended. served did fully for price so, year. we the in works gas even four-quarter observation us us price we our XXXX, top And year gas well before end the that the a gas market today XXXX And

this ordinary in not And risk more in managing done next year. for been have we've But XXXX. that course, into we But ‘XX. fairly were ‘XX, we the fairly in little for at coming same point, so, the the aggressive extent to aggressive, would

Gabe Moreen

can $XX return Thanks, capital a I about then the if I more million Ben. per little to maybe this think came talk And than into and bit quarter quarter.

there flexibility, Just to this willing to out particularly more what volatility stated $XXX market? in extent you be the above you have might there's go some for the If year? million if

Ben Lamb

an to to a pressure, repurchases the flexibility Well, of stock we we change there's to under quarter stock. $XXX in when $X.XX, came that good the like us in the at and parts fact that this I which opportunity today was doesn't the think in felt our second that. What did a average a But two did support is authorization for authorization. price lean and was step to we the is bit use the million quarter

picture see and look the on a the expand get back now, little our always board focused authorization to bit the just million year bit. can to right of authorization. we getting the ahead we're is up to But shaping year, progresses, end that running pace. as little closer as of and we year FCFAD go through Now how we $XXX We're a the

Gabe Moreen

implications to comfortable? will partner, with Do integrated, you're that the guess, more need market. having current business, see as you or how approach? just maybe get in question announcements of the bigger over different in COX. are players There's been weeks there a couple of a of last Thanks, Ben. And out positioning bit picture I whether on for themselves any little terms they the EnLink's CCS

Jesse Arenivas

way we're at very Yeah positioned. think Gabe. look we it the is, well It's good question, I

weighted in there. having State is work heavily across advantage corridor Louisiana, We've with we ExxonMobil. proven industrial of multiple emissions the pipes competitive can especially the Our

So has that we in doors opened close. think its more transaction

And I a take think going to think transaction. we got is see multiple than beyond hasn't we're to the [ph]. perspective. from we there's parties more changed. our position had pie just -- growing the XX we transportation it's feel we've so that solve options prior anything, like the I today we If to But

Gabe Moreen

Jesse. Thanks

Operator

our reached for floor I'd to or turn back further Thank any comments. closing like session. you. to end We management over of question-and-answer the the

Jesse Arenivas

Kevin call today thank continued morning. support. this call on and for Thanks, And the being facilitating your for everyone the

We interest we November. EnLink. quarter the great appreciate wish our look have meantime, in the And results a to with investment day. well, in we always third healthy As you and updating in forward stay and

Operator

That you. Thank does today's conclude and webcast. teleconference

You disconnect at this line your time. may

EnLink Midstream (ENLC) 2 Aug 232023 Q2 Earnings call transcript