ENLC - Earnings call 3 2023 | EnLink Midstream, LLC

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Operator

Greetings, and welcome to the EnLink Midstream Q3 2023 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Brungardt, Director of Investor Relations. Thank you, Mr. Brungardt, you may begin.

Brian Brungardt

Thank you, and good morning, everyone. Quarter Call. Third EnLink's to XXXX Earnings Welcome and Participating Executive President Officer; call today Vice and Arenivas, Chief are Jesse President Executive Dilanka Lamb, Commercial and on Financial Officer; Officer. the Chief Ben Chief Seimon, Executive Vice and Executive during and is questions also Operating Pinto, after yesterday, session. We Q&A our materials issued room Walter are release Chief answer the and closed the presentation to Officer, those on President Vice any the in our earnings website. markets call be made today's our will at investors.enlink.com. on of website replay A also available Today's and discussion of securities including will include forward-looking predictions the statements, expectations laws. meaning within the federal projections forward-looking and a that factors cause as we SEC The or press discussion of actual call, obligation could differ can and presentation results no our of files. our to in update this differ only be and speak undertake release, may found revise. Actual of the statements results to date from materially includes financial discussion non-GAAP pertaining certain This call also to measures. well the reconciliations our comparable presentation. We and and appendix Definitions filings, release of release you our as under SEC the disclosures heading those made of the other are including statements these our review GAAP to available of Factors. encourage and our press press in cautionary as Risk in measures measures turn questions with for call call and and Jesse, over Dilanka answers. With then brief I a and the today's start over prepared that, We'll now Ben the to of leave of set remarks to like call by Jesse the Arenivas. would remainder

Jesse Arenivas

you discuss third results. our everyone. Brian, Thanks, to and quarter morning, for joining today Thank us good XXXX

of seen diverse customers. We EBITDA. resilient, remain billion have another for to EBITDA, today, Despite on we that benefiting markets, our very midpoint pace record adjusted assets $X.XXX adjusted this of forecasted entered execution in from here solid commodity impressed achieve driving I'm sit a the year midpoint. of I the As the and the set volatility we've been year the

approach Permian our driven strong adjusted we volume. behind robust record quarter of our are another returns $XXX gathered by million investors. activity system, for quarter, generated and which of driving the EnLink's disciplined EBITDA, saw For execution

During importing by XX% see $XXX to a last XXXX, U.S. capacity our as board-authorized a for natural of million XXXX on witnessed have of and execute repurchased a According like Philippines the and X the early continue the Vietnam the countries: Since of we that Germany, over buyback and sources executed to our that years. countries half way, approximately natural Bcf in exports imported the discussed high XXXX, through consistent have import cleaner to are EIA growth units first $XXX update, that X% quarter, we Since in LNG newer have total, transformation, program XX.X of energy the it's call to signs million net began in year. of the growing hydrogen day number LNG global XXXX. Since with our hydrocarbons, last suggest month, continued expected the the became we've over our outstanding set LNG a set importers, regasification of the the our online export an came world end in growing and adding Sabine renewable countries the an time. Bcf day past for their buyback the meet is online to of LNG, or X XXXX to of energy of benefit compared increase to another gas, average or of while we activity. We will CCS increasing need unique the gas. Last to exporter XX end by the first of International announced complemented relying of a mix on continue X terminals in by Group LNG are particular, LNG first data expand pipeline months importing the that and on other X% start fuels. Antigua, U.S. of an energy traditional half record help position gas Nicaragua, energy will our In to which by first a Australia, energy Cyprus XXXX. of with from include unit threefold XXXX. the the for LNG by XX Said XXXX. natural end in a and of Pass demands. In XXXX, expected both

to with to reduce approach, up, how and global average XXXX. laws world addition, first the The a current largest an the a growth resources now adoption Bcf shortly, to be an an approximately emissions can is took COX Bcf day XX.X renewables renewable for In United in we fuel the emissions excited the exports reduction meet States and in over participant active solely U.S. regulations. the of nonfossil we're LNG the of spot recently energy-related exporter X their including EIA's half sufficient EIA the energy, In like back the the energy-related more cannot not transformation. increase but XXXX, [indiscernible]. According the energy global demand International the are Australia goals. To expected and emissions at global rely under examined Energy above require of on as nuclear to XXXX. will COX through most that outlook recent day than all Said cases, CCS energy of through sum increases, it

meters gas the of over COX of demand natural as efforts while local assets of to it an carbon our emissions provide markets, positioned to provide and turn overview uniquely own transportation Our our of business. With to supply update opportunities. gas commercial reduce an Dilanka well adding as -- export to both natural centers liquids to are that, I'll also our industrial through their

Dilanka Seimon

good and everyone. Jesse, Thanks, morning,

since ahead anticipated. that joined see than even set EnLink, opportunities I Over the several greater excited I I'm past months the is to originally

continues anticipated, in and the in our This to we investment the seen I an of the attractive includes which think as market represent Permian. have equity well aware progress pipeline, will demand-driven Matterhorn investment. is growth significant the

Beyond of NGL excited natural connection miles end the owns within suppliers I'm and over pipelines, for most critical X,XXX G&P our providing the between a gas and users. Louisiana systems, EnLink opportunities system.

the Storage owns Jefferson gas the facilities. Across at with system, Within significant are have we Bridgeline or currently gas as and Hub, Bcf evaluating. we Hub capability, Island XX Intrastate the storage nearby Sorrento Louisiana the storage system, expansion of system, which JISH storage natural business, EnLink and Henry as capacity Napoleonville well our approximately

leverage the the for credible ground. their ensure operations. also needed LNG also access in We projects attractive only market the users have are supply to service but existing considering growing our to not projects will assets These industrial

project an our projects this that, it we While will as environment, to high financial in disciplined Ben we clear remain see which to over will to terms turn operations opportunity an results. of and bar have provide and overview our I'll economics. With any of a

Benjamin D. Lamb

good and everyone. Dilanka, Thanks, morning,

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

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

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

derivative rate unrealized approximately most compared end of third assets sequentially prior agreed EBITDA. for sell of segment of impact Ohio activity, proceeds to of XXXX EnLink grew a gross the approximately quarter. Subsequent to Valley year in the Xx represents approximately noncore unchanged quarter of $XX the Excluding approximately and profit the valuation X% the million, was our quarter, at which River to run

and Moving of to approximately third $XXX.X losses. of million million of delivered profit profit derivative We to in plant relocations XXXX. quarter expenses Segment $X.X on quarter Oklahoma. operating the for unrealized million of included tied $X.X segment the

Excluding plant quarter. approximately activity, the flat prior from that in unrealized of XX% XXXX segment third was derivative relocation profit year quarter OpEx and sequentially the grew

quarter, rigs in active our third with saw acreage. remain the During operators we

for but still sequentially However, in call, saw defer activity compared we completion lower driving operators higher last months, few average X% the as a our we XX% prior discussed volumes gathering quarter. to gas natural year

quarter. Wrapping completion segment up profit resume As with was have these fourth derivative Texas, and anticipated, wells $XX.X activity of unrealized the of first expect Segment new from North the we $X.X the million. during included million losses. quarter production for profit seen see to

volumes gathering COX and lower the We our decreased activity, emissions segment a were XXXX profit and decreased quarter. Separately, of sequentially to project date of quarter in-service quarter. another were These in customer derivative $XXX lower expectations million the progress year the make year. Natural our and unrealized in fourth North with third announced compared prior solid COX we in from reduce project capture an gas previously facility. to year with XX% line sequentially to our from the Excluding Texas, continue drove of X% to permanently with prior EBITDA. Bridgeport intensity. X% largest quarter store adjusted progressing quarter BKV with is this and robust well in X% our This results

net plant quarter billion. Capital and contributions Free our relocation Total midpoint approximately to we of range CapEx, continues our million. cash EnLink third reiterating pace distributions for CapEx approximately maintenance $XXX of are flow $X.XXX in quarter for expenses of investment costs, third We million. the the growth guidance after million $XXX $XX within EnLink, expenditures, plant were track to the $XXX came at to the investment to million relocation guidance XXXX, contributions of adjusted to XXXX CapEx including net and and spending, EBITDA in remain achieve on XXXX.

positive the $X.XXX strong we We quarter, to the over maintained capital On the per of Moody's be at third grade outlook distribution with at represents return third of below leverage unit a in side, the XX% position and X.Xx investment S&P. with our notch quarter to sheet an continue we retain which very remain liquidity. to Fitch XXXX. end of and S&P quarter, Consistent the investment-grade at one plan ample a with a of our balance unit increase common capital and third allocation in investors, at ratio rated we

million $XXX our This with units. for repurchase common program common approximately have the million of active repurchased pace nearly quarter. million the end XX to remain complete we unit puts we us $XX program in ahead unit XXXX. with XXXX, Since spent Additionally, repurchase of third now our

anticipate currently too North customers, we in year, this by to anticipate activity modest stable to term, continue bullish it's year. the demand provide we solid and XXXX our year XXXX the and, to driven next momentum a In on natural expect to early Longer relatively we it a growth Similar beyond. North preliminary Jesse. XXXX, decline XXXX our on the discussions of the in with be expect therefore, Texas in be volumes in to summary, growth. With XXXX the and of that, largest of segment, guidance, and late While the Permian. We year. over back EnLink volumes in team Oklahoma based we're Texas in modest rest I'll results quarter gas for and third delivered Oklahoma turn will

Jesse Arenivas

as excited XXXX The Thank in we've questions. 'XX now XXXX, of for to adjusted way of and We're execution expect on into team may carry you future quarter open with EBITDA guidance. call us you, placing quarter midpoint that, to solid third well the built the our another for EnLink the the momentum Ben. beyond. With achieve our we delivered the

Operator

the conducting line [Operator question-and-answer Reynolds now session. be comes with of a from Instructions] Our first will UBS. We Brian question

Brian Reynolds

I 'XX. appreciate some growth remarks your prepared expectations moderate for around

So keep year. about clearly this maybe strong of about North rigs, Texas next JV need X year? a do going on effectively step outside just the a little we and But continues keep Oklahoma rigs flat further. many that percentage to assuming bit a of into bit the little next think to how dive as you more, the Dow/Devon strongest volumes to incentivize year Oklahoma in, with earnings Permian, exit system

Benjamin D. Lamb

flat. Yes. the Oklahoma and fact, that is volumes the gassy a Ben. keep In in -- part itself what fairly efficient in their That's dense, this need is very fairly Devon/Dow of is developments. close Brian, the JV field system, activity to by we to

very but nearly other beyond year, really, JV we growth will it's of at Devon/Dow activity itself the a business that whether degree that or the by So slight flat. see determine decline Devon/Dow keeps we're slight the next

Brian Reynolds

over spot the with Leverage past Great. the Maybe to agency Super for to in allocation some right rating helpful. a action pivot positive few capital minute. is months.

a $XX Just opportunities, going And potentially year-end? just to potentially the capital EnLink left. we million to distribution see million for about And XXXX one, to we or return looking authorization return quarterly could given cadence, should how buyback $XX of think ahead before forward? your has growth upsizing reauthorization a

Benjamin D. Lamb

Yes. you in the asked order I'll them. take those

ahead On the we be complete to a little buyback, million of we authorization you're right, the the need pace bit currently have. we are $XXX that on that to

also ORV morning, that fact before give of year. assets buyback the -- the that to proceeds some need announced the the and the both sale this noncore so us And of authorization we some potentially increase the end from

Now roll plan. We're into to yet, that the still talk through we to a team. year's or gone return just but we as capital may about haven't possibility, is Board working a it that it next

will XX% for at this But on to this at did Board that we course, be any of year. Expect year. don't next news distribution, looking have share the of terms point, distribution front. the an the In increase we

Operator

Our Spiro the next line with Citi. comes Dounis from question of

Unknown Analyst

This more there? Spiro. dealers the provide signed off, to when could time is could Chad line you see details expect we update any commercialization on And on an on just Starting progress? for CCS

Dilanka Seimon

it's Chad, Dilanka here.

as with value by our the most continue we with we've agreement gas progressing rights pipelines River into We acquired state pipelines. our me ] and for to our Exxon, On natural well for service. from them COX that side, Louisiana. [ to of cost the agreements land intend on work corridor COX of runs our new to start the saying imagers. tool the We use convert Let solution permit as most pipelines under to the and Mississippi of landowner providing we completed CCS relationship filed transformation

and our COX are experience progressing So design building process. in teams the significant things well, gaining are pipeline

our are Now say highly beyond engaged teams would with that, I that customers.

those Gulf other many just There's projects U.S. active with are publicly in we developing the of can projects discussions are that nothing this in on second. CCS Coast. We parties the share status

Unknown Analyst

just highlighted commercial believe LNG And some Louisiana in Understood. tied to that Okay. following opportunities storage. I up, demand, and you includes

this could these set regards meaningful opportunity about And in are how opportunities? how of thinking Just be to you timing CapEx?

Dilanka Seimon

Look, assets we attractive. in is I Louisiana, footprint quite cover our think the

on and industrial to But percolating LNG are gas the connected not projects you There are pipeline top. to to demand, expand existing storage, capability it's We the also demand. only delivery many but side. alluded have as there bolt-on to industrial opportunities to of expanding our to kind

touching we volatility and the If pull value is demand of you has gas seen levels a LNG resulted look that that at that from natural probably coming, kind in haven't decade. in storage of valuations,

we So that think attractive opportunity. near-term is an

We can think in portfolio that. our XX and have of today, Bcf we storage expand we about

to out But what studies of at Now that through thinking that we're and first the expect we scale, engineering can we the quickly gate. doing and to market. how be bring things one the of

Operator

line the question of comes Gabriel from Mizuho next with Our Securities. Moreen

Gabriel Moreen

extreme lower the much all think were don't Permian? by higher whether impacted in OpEx, And during I efficiencies, is, had heard I at I Permian. that. One on weather commentary quarter on the the X-parter you the

know don't relocation, on if a anything. And then as that far timing? the you that what I bigger on be? next just you picture might as latest So are cost And thoughts question, think do when plant your that and

Walter Pinto

heat can Walter. Ben question this expand on on the capacity. take I'll is Gabriel, and additional then maybe the

there ambient And all would last, in really Also, say temperature Texas. well. program Permian implemented field there. team of high excellence really the benefited significantly us it's I saw out we North would course, that lot programs our especially X operational But from and technology the years say, I strong in Of our reflection leadership compared basins, the asset a and our we to of our out of people and assets. a helped ran run we our

didn't temperature, well. on we end ran see any in So impact the high pretty but

Benjamin D. Lamb

several Delaware And be about year. plant for next This the on will you in year, Phantom adding another just expansion, pace plant that the Yes. year plant Basin. of Tiger I'll of Gabe, the a the by a on timing II last the start plant, been we've reminding years a

customer will watching additional next in don't are be I at I from expansion plant the XXXX. we to carefully as do when will step be. the this time Permian. But think in an so us develop to take there the right understand And our plans point, it's think

beyond. it's think I

worked announcement so today. great good When And extremely for got though, including we've because no existing does us. the more move the options plants has time it come, news is options, to well

it. done X times first we've The

Gabriel Moreen

And speak just just not then as could schedule, your far speak, out commodity levels? quick you exposure. aggressively hedging maybe so to relative what that how hedged but sensitive, where as of the presentation realize note maybe have down to I 'XX follow-up. year [ you're are, a ahead and if this did ] directly Can you I you're you're percentages to price

Benjamin D. Lamb

Yes, Gabe, bit. happy to expand little on that a

Day. And you'll gas first for certain of ahead and year. New natural be before we hedging quarters market this bullish to we're gas exposure same all a a it got in we in our of in we on by Year's position weak So gas ever late We're X substantially recall 'XX next that much in less very of feared year. what prices beyond, the might are XXXX the bit XXXX, we maybe but got

our once again, so we next And year. gas of exposure almost natural have hedged all for

Now fee-based as XX% anyway. out, you about point we are

in driver table. risk but of in on So for it's business, the row year we've take huge been to a proactive not our a off second trying the

Operator

Satish of Wells [Operator Fargo. Instructions] Our next question comes line from with the Praneeth

Praneeth Satish

up last on Maybe follow to question. just that

Is the for of first a quantify guess, it, EBITDA versus profile? I to any occur probably X you've prices 'XX from I at quarters higher 'XX% were in down on as potential, the hedging So just hedged would to much based you 'XX. step of way hedged what there understand how 'XX in

Benjamin D. Lamb

the Praneeth, in into XXXX. incorporate the to I XXXX at We prepared I say, What hedging mentioned we've though, don't is of being the XXXX have look, I modest fingertips. we compared giving the that that years. growth can in that see done number in my a preview year remarks that both

you're growth right, XXXX, the not than are at somewhat now a lower changes we hedged for that hedged in at company. the we were of for XXXX So trajectory prices way but

Praneeth Satish

Got it.

part other then And there, and maybe a on Okay. X of XXXX question comments here your here. kind

it, I Oklahoma? currently The first the flat. mentioned JV missed keep rigs is, unless acreage volumes on you enough that And guess, Devon/Dow are your in many running I how is to

I'm So in just guess I Oklahoma wondering XXXX. wouldn't grow why volumes

mentioned that of You expect stable kind you in in volumes 'XX. Oklahoma

So assuming in your run are rigs Devon/Dow effectively the acreage you kind guidance in 'XX? your of only

Benjamin D. Lamb

things Well, a few a there. to part take

First, I begin guidance want We're work to to give a for not through be to point. this budget as clear, XXXX look what you at like. giving sneak peek may we we're trying just the process

as right X think, low I is a one Oklahoma, of bit on of point. from Devon/Dow count the customer. this X a rigs, morning, another actually on That's specifically the Now system from Oklahoma and rig JV

and a on in pads on bit it the less of drill. sustained play much takes at multi-well depth, whether with being something other rigs We anywhere It a But little X. Devon/Dow rig to to that every more every you're is rig. they're or where generally pretty X maybe Oklahoma, have X equal year depends program averaged all time to from remember, not drilling drilling, in depends

close nature a keeping to or the will position. flat of of determine decline, a rest itself in of is us whether very Devon/Dow slight because in in slight activity, the by growth the activity XXXX. The very decline really slight So we're that

in perfect customers your do grow, the we point what XXXX, Oklahoma So question, clarity all yet won't are next don't may. why volumes on to year. have this going at November they of to But

Operator

of from Our the Tudor, Holt. Van Pickering and question comes Zack Everen next with line

Zackery Van Everen

Perfect.

guys a are at expansion? projects. storage circling just Are put greenfield Just rates brownfield to a at also looking close there? looking potential you Louisiana going actually greenfield the opportunities. of lot back to We've Are where conversation incentivizing getting projects you storage

Dilanka Seimon

already this have. with start backyard here. assets we Dilanka Naturally, in is we'll Zack, with our

But as market those bring we'd in the our to we as So the parallel, evaluate on not expansion at because expanding advantageous we'll very cetera. to and are of focused the particularly opportunities et we for third-party only in those existing there, moment, our look assets. well, first are term on in but focus capacity assets, also near here locations connectedness, but like the

So to pretty advantage already assets those there expanding are we're well some because connected.

Zackery Van Everen

track. it. Got That to Permian, the you pivoting mentioned sense. And on makes Matterhorn is

last line by, you expecting time of that. the seeing update maybe service? what on think to it, update anything is call it's in can I mid-'XX, there quarter Is is July a remember there I come into service

Benjamin D. Lamb

half on budget water bit what Well, much would I of tell you think team exactly and I think very point. it's second XXXX, a at to that in schedule the say this month white early but on

Operator

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

Sunil Sibal

call with of asset regard So I of ratings. sale. as we bit then And holders use first little terms around allocation you of well you the noncore forward? question as I clarity capital off, thinking could about think broader that capital of be mentioned in a on returning equity curious to should kind to some the your credit provide magnitude if going a How goals was proceeds? and

Benjamin D. Lamb

assets morning million most rate our obviously on a of about we Valley asset EBITDA. sold of modest-sized to asset. a this That's run $XX the Xx for of about Ohio River Well, and sale, valuation start that's proceeds gross

a EnLink XXXX. great not to XXXX it's While in business, and it's just core

find it for buyer than a for to time us. was it so it better And fit fit whom

of the will of use that leverage we terms maintain ratio. do thing the to first is In proceeds, the

second distribution. excess and me additional, cash And $XX of the so Brian's million million goes asset program. handle your first is $XX $XX the of to in or the question leave or sale, proceeds the does that perhaps we at talked million $XX with will million of million to just back what that may that allocation debt free a distributions Well, part repurchase beyond of previously, capital that I'll And go the higher revisit million unit fact reduction. But an remind the of opportunity authorization as kind We our in to the after $XXX go really there like the the has this also option and to Board question. Yes. repurchase unit here, $XXX size revisit to opposed about Brian. both flow an be but beginning year's again the as authorized

So while in remains the Board XXXX, it repurchase may expect you part the of a did distribution allocation adjustment, and to at look the for just significant our make capital an XXXX like see share should plan.

As we ago, pointed consistent out in that you think X% to equity a years the prepared just eliminated to we through investors. about go way we've a good reward the remarks, And our back outstanding buyback if of shares that, couple is this of opportunity.

Sunil Sibal

on some then we issues in other projects pipeline get COX regulatory seen pipeline states. some And Understood. have business, into COX

So could with regulators? I regulatory your other any regard what in impact you was have us we your discussions you if to curious of your with on seen process, update states seeing are or that

Dilanka Seimon

to I'm question. Yes, take it's that happy Dilanka.

our this. CCS Louisiana, year. based been I it's We've to now geologic have that recognize our this Midwest to the supportive our one about and been be political plan some doing a that the business environment largest in the seen. And North business in at of market environment, we regulatory on This Louisiana and apart. of growth has of presence, what for found these activities. it implications don't projects see moment with our of regulatory think We've the we challenges combined emissions important concentrations sites nearby America. any sequestration sets at existing supportive to the

progressing So far, things well. pretty we think are

So we any don't major headwinds there. see

Operator

the for to comments. Arenivas, no are further Jesse There at over I'd back to And you. questions time. Thank closing floor this CEO, turn like

Jesse Arenivas

morning, you on continued being for this the and your thank the everyone, Mia, call facilitating today for you, support. for and thank call

meantime, appreciate quarter investment stay the we EnLink, 'XX always, with look As and forward in your in updating full and fourth we wish interest you results great healthy, our well, February. a day. year we you have to and and In

Operator

today's This concludes teleconference.

this participation. for lines disconnect your now time. your you at Thank may You

EnLink Midstream (ENLC) 1 Nov 232023 Q3 Earnings call transcript