ENLC - Earnings call transcript Q2 2024

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Operator

Greetings. Welcome to the EnLink Midstream Second Quarter '24 Earnings Call and Webcast. [Operator Instructions] Please note, this conference is being recorded. At this time, I'll turn the conference over to Brian Brungardt. Brian, you may now begin.

Brian Brungardt

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

call turn Jesse, the We call call over then to with of start Jesse remarks questions set and by for open today's will the remainder prepared would I Dilanka like now brief and Ben the and a leave of answers. With Arenivas. that, to

Jesse Arenivas

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

buyback The volume X all return in execution was business. expectations outstanding or in, approach and and approximately solid free quarter, total our by in with first the million. XX% EBITDA, in to than going of taking normal weather service in of with $XX driven our to over of million temporary Louisiana we Tiger units These distributions of that investors, Permian. a plant to flow the and of the line years, generated after segment. repurchased $XX while to into more our results adjusted unit by our our drove shut capital outstanding than quarter For continuing our approximately were grow II in Consistent seasonality impacted million $XXX cash more we return little invest

find earlier CCS we project projects agreed have time, Pecan reassess Island for opportunities that ExxonMobil might reported year, we transportation EnLink. other previously we CCS to and that ExxonMobil of ahead the joint be Gulf COX to the As the Since this with along alternative Island expectation with prioritized Pecan Coast unable project. been the

agreement for value update We We are an to discuss to be we want give COX pursuing create impressed execution now business CCS provide when where for being team's slower to these can agreement. Island the fronts you the the multiple detail of our develop, highlights. more our a quick EnLink continue I financial unitholders. appropriate. Despite We'll plan but the later I to to some transportation on in value Pecan on by call,

Louisiana. in last project we natural meet demand assets about to this shifting market. and front, prior the night announced this supply of the and expansion gas talked evolving announcement We've commercial our the first storage third our new in represents On quarters market

to our relocation third relocated efficient this strategy On in Tiger broader we new service. capital online with an successfully the alternatives, brought significant operations savings represents on and Permian, approach, plant shorter II. build optimization front, with our Consistent the allocation processing period-to-end compared cost plant when

opportunities. outstanding. been a to we last announced the front, provide very where we've In of an B parts simplify to that, impact. With I'll Series our structure biggest over the the managing in our we night months several can balance active to turn sheet commercial it the proactive last significant the a our capital stock with Dilanka over On business update step reduction create on preferred short,

Dilanka Seimon

and everyone. morning, Thanks, good Jesse,

For several creating discussed and value how unitholders. demand shifting for the meeting our we we market and supply are of and gas Louisiana the quarters, have market needs the the last focused on

mentioned Louisiana phases. gas the last during the in we call, are I As approaching X opportunity

The well XXXX underway explorations and mostly first phase is now the is focused with team contracted on XXXX renewals.

work Louisiana. some in and results majority a we remains While seeing this financial be done, it captured to have in recent value, are of the large now we

projects. announced phase brings approximately Henry second leveraging this pleased to project the is We're River our Last to MMcf of The the quick-to-market we to Mississippi XXX a progressing assets project, drive opportunities corridor. which River of that execution capacity is attractive quarter, well. day very

another of deliveries of Pass previously additional project, capacity Both and, our therefore, in LNG operations result these expand projects export Venture commenced also Calcasieu facility. economics. through announced attractive to expanding We primarily such Global's compression

we have these continue of funnel Sabine, We our time. to and healthy are of done a our to the system and LIG capacity, see optimizations opportunities presently increased systems several increase rate flow marketing that of over Bridgeline and

demand brownfield very a very quickly, received which points. we and very excited Jefferson the Hub, excellent engineering to The is in opportunities. located progressed the Hub work JISH expansion phase interest. third disclosed near Henry is project well or longer-term Island had are We We connected Storage already at expansion the of regional announce supply and previously first market to for the of customer JISH, that and we responded

position We to increased Bcf our in injecting returns. we leverage total XXXX. our XX begin Louisiana projects, assets natural The expansion, our JISH gas to Bcf. mid-single-digit and cost storage to $XX low to approximately our capacity from will this project XX we Like gas as storage project nearly approximately other represents X attractive will gas With expect this million, today. expand multiples working Bcf to EBITDA generate we existing

Texas, gatherers encouraged largest and the the market, continues gas As financial an natural to in power Oklahoma our processors key Ben center we and the and our for around EnLink's Louisiana, of look up the operations set growth locations of for assets, where Permian forward, results. to new The of one and North us we it turn are I'll strong opportunities. With generation diversity our overview by that, assets gas. in are data in potential particularly we commercial to North Texas key over of provide

Benjamin D. Lamb

Dilanka, and everyone. morning, Thanks, good

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

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

gathering XX% higher than active quarter. higher prior X% and volumes mix of diverse the year during sequentially approximately producers Our remained were the natural quarter. Average gas

Delaware During came processing our provides much online our needed plant, relocated the quarter, third for in Tiger the capacity customers Basin. II, and

Louisiana. at of the to profit including quarter million XXXX experienced now effects in second of Turning $X.X performance, gas normal solid came unrealized seasonal for reflecting in the quarter We $XX.X another segment. Segment liquids of natural million, gains. derivative

XXXX The the by activity, seasonality the prior approximately both and activity. compared Excluding quarter segment XX% of sequential of result first in and profit approximately decreased the decreased sequentially decrease year weather-related in quarter impact derivative outsized the driven second quarter. reflects an unrealized X% to

including $X.X of unrealized profit $X.X of Moving XXXX, expenses We $XXX.X to gains. gross operating of plant relocations of million derivative second million million delivered Oklahoma. segment tied up approximately for quarter the to and

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

North were sequentially During operators volumes but segment including $XX.X gas Texas, natural the were second saw year acreage higher the with gathering million, on we quarter, our for of X% to unrealized losses. with prior compared quarter $X.X rigs X% million active remain the and derivative up profit average quarter. Wrapping was lower

reset. decreased sequentially prior in and year the activity, decreased of but quarter gathering of driven our to adjusted were Natural the volumes XXXX full higher previously derivative sequentially, drove These quarter the XX% solid million quarter, the XX% benefits segments $XXX lower the were compared Excluding mix. In of second gas asset diverse onetime unrealized year quarter. total, EBITDA. X% discussed impact by results prior our segment reflect profit in from the X% contract

We midpoint close guidance our billion adjusted billion to of $X.XX of tracking are EBITDA for $X.XX XXXX. year to the range full

million plant came quarter relocation expenses the second investment XXXX quarterly normal flow Louisiana $XXX the of NGL net winter quarter second fourth in anticipate business. the million. driven half our in give expenditures, Capital be after XXXX. strength don't to cash by Free will seasonal weighted were approximately contributions guidance, EnLink quarter, $XX we towards the and for we our in distributions at second While results

unit of distribution our the balance the a the quarter, represents a the liquidity. with leverage $X.XXXX Consistent a unit second X% continue and we per sheet of capital of the quarter, On XXXX. to plan, very in at second ample strong with be common end over ratio our position maintained increase allocation X.Xx retain side, in we of quarter we second which

unit active units the remain to of in $XX approximately end with XX outstanding. repurchased XXXX, program repurchase million spent million. Board approximately we total common authorization the Since quarter. of have common $XXX expanded the XX% the After Additionally, our quarter, units second we common now million our or with unit repurchase over

of team XXXX, sheet significant delivered Series through has about summary, a In Jesse. solid that, reduced half $XXX total, by our B we B balance turn of expect and to Series since balance for the stock the quarter results of beginning in I'll continue simplifying million towards of took preferred of over our we In the the step the of quarter, second EnLink back momentum the the it the purchase after the Lastly, preferreds. year. With XXXX. been rest to nearly the

Jesse Arenivas

may quarter in of you, ability execution showcased now you drive another diverse and that, EnLink business our that chain. With Thank Ben. The questions. open value value our areas the to integrated team delivered solid for multiple call of

Operator

our Praneeth question Wells from the [Operator Satish first Fargo. Instructions] with is line of And

Praneeth Satish

first compare the the So year it and second would in guidance. fairly a half. full at ramp EBITDA steep half just If turning the of results imply midpoint guidance, look to we against

kind of the you unpack the much drivers ramp? visibility of half? You mentioned how a it and of between is some could if lot towards have weighted further half And second just QX. first into you growth Maybe of

Benjamin D. Lamb

this unpack little Ben. bit. Happy a Praneeth, is to that

item few Tiger utilized. So moving parts. is and in it's One service already well May, a just placed the plant II we in

second expect first to the rate a higher the the for at we'll Permian half. So versus run in half be

have activity but JV expect we'll gas the to And that business, storage we'll where have then Matterhorn from fourth in is to small customers seasonality some the on we normal have same realize NGL expect we item, of the a quarter. business, in the fourth past some as that fairly Louisiana storage-related fourth some a in the I'd quarter. of also based quarter it mention our have deliveries also will the in timing quarter business. strongest of the this The been year our We be has just years. to contribution

those the we So all half. of for rate are half the higher saw run way you the first parts in of a that get than to second

Praneeth Satish

gears, Got helpful. wanted it. talk And in NGL switching That's contracts I about maybe Permian. the to your

is are being Our NGLs an that renegotiate around understanding the time. in transported to to and higher-cost per XXX,XXX NGLs These lower opportunity pipelines, EnLink there's barrels day over those on Permian. controls rates of Belvieu

Is some understand So summary? come an second, of maybe contract? so, line accurate time guess you question help first And I if for then guys? for off the when volumes us can opportunity is, you this an these is it the

Dilanka Seimon

Dilanka of NGL the market we one. we Permian, about have XXX,XXX barrels XX%. here. about take that that In I'll

So accurate. your XXX,XXX is number

the capacity this the next NGL and a to increase. weighted today, starts of to which expected capacity is pipeline X that is over range, to end probably expire towards pipeline X where time adequate capacity back have years, We

on to when it's at there. on various but say to I still capture much be the think out few capacity as But expirations specificity. years these I it's are lower build-out depending rates safe value is T&F early to clear, contract -- demand a think and relative will you executed are and average, at we some talk contracts the that too and they the we too able say, yet expect Given of recontract to rates, to not were in NGL

Operator

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

Spiro Dounis

off you as laid Dilanka, now across to Louisiana. got you've at phases with of start out, this projects all want X I sort point.

JISH curious, anything as XXXX. focused you've what few think next? really just phases And like Phase sounds I like But X. could specifically next of Phase I'm guess around there and X, other be you're sort Are the expect It on we you quicker in about even on already that to maybe should market? the so got projects hopper

Dilanka Seimon

Sure.

working think X I of in angles. kind we all phases, are various

quickly given turning recontracted, that we are think, expirations. first to attention I are 'XX our 'XX phase, mostly On the expirations the

hard So teams renewing on are working those.

we of as good newer X talking and on working of -- a the coming customers incremental our about type online. who are funnel that expansions, to On well projects existing kind deliveries are debottlenecking as connected Phase have are already we customers

the to from If about you industrials. through, and it's gas think were demand coming demand where basically power is LNG,

LNG Plaquemines and facilities LNG front, to we up, be of Venture the LNG, Global's those contracted on On projects, as top for there I think are will us volume to being what ramp opportunities are incremental more Pass they for. obviously And then X Calcasieu progressed. already have there that other projects bring

we quickly side, On demand incremental everyone with in think power I utilities for power generation. particularly seeing for reacting the plans incremental the And power generation. pretty Louisiana, understands gas-fired are the

take ammonia the of X of about of a MMcf around think and are XXX we close And of River sector, the these seems On the to are demand be to serve our well LIG, is from FID quite incremental of to we ammonia given and expected that and there. -- positioned demand like gas year. few industrial most being coming a tons projects the are most Bridgeline each I to million next chances X side, these the day them, systems corridor our

combination I of in X will perspective. X and a a Phase Phase buckets the think of So fill the from transport these,

at a on the engineering this recently On we development going the Napoleonville do our It's now storage expand the eyes in we've Or side, and storage as further more? did turn the in best do studies, of there. for next optimize we expansion our to solution we completed to be are we a expansion, mix are that JISH turning the expansion. sold between eyes we of announced expansion, phase capacity will the

Phase a and that come combination X storage more Phase will storage. X transport and think on these I it's buckets. So to But of fill

Spiro Dounis

I Great. there, color appreciate Dilanka. the

Second question, a CapEx. X-part one on

for I my look curious plant. end the II past that Tiger about up thinking by you're mentioned of need Ben, maybe need on the one just First math. ramping If how you another 'XX of that kind part, you quickly. next processing is at pretty cadence,

on CapEx into And directionally moving maybe sense Louisiana Can that. you're then thinking and want the just I update kind So to moving given of CCS, around of just projects these out some check you just pieces some maybe in. of us how moving about XXXX?

Benjamin D. Lamb

Ben. Yes, Spiro, this is

on first, right. plant, So you're next the

Tiger of We plant a year And roughly online a have said the in earlier, been a Permian. pace I in on as II we just May. brought

be also another in very relocation. would plant likely be and Next the Midland would plant very cost-effective likely Basin very

not this say are but announcing it I today, of point at watch the space. would We

may the for to that on customers in we decision progressing understand are making front well volumes, but make still with that near sure We future. towards our the outlook consultation have we in news that fairly

the devoted so capital of more going less reasonable roughly that what to be to to CCS in it's listen, offset we've picture on full you're But we same of think that because roughly the last have capital stay obviously that one about producers directionally, XXXX too term, our of I correct on probably Louisiana, capital, those say doing. terms think to things say pace to we near that been another In too the don't much early couple years. are today

Spiro Dounis

today. for there it leave I'll Great.

Operator

is with from Jeremy question Tonet next Our JPMorgan. the of line

Jeremy Tonet

just frame over everything maturing happening arrangements? want of bit and do innings support I type of the guess, we're This commercial to, here. still is that appreciate Tonet off early in market side, from a I But Jeremy JPMorgan. that what time more see, I you with CCS more is little to this I in just start guess, kind

Jesse Arenivas

Look, Jeremy. factor it's principles to industrial changed. to What's space mitigating It's be core Thanks, it is is our the -- Yes. said, on the we end changed we've Jesse. slower key mitigating -- as have the our we the are CCS, space. develop. not will -- not --

and happen. So metric going emitting we in in you, region, that growing. have the the to highest emitted just million me U.S., today And remind that's tons second XX let region

sequestration. nearby have We

in have ground. We the pipe

very So well we for feel the term. long positioned

public others. a multiple Just couple to with just timing, let Shell and remind the With have talked we've Those respect of you, parties and me discussions tough. been are it's we about, conversations ongoing. Oxy

and I think are still of moving emitters emitters focused process their we pace and are the reducing on They're counterparties. evaluating footprint. choosing the at their the still in the carbon of

feel to. term, really take positioned can't the speak longer timing, to we area. slower. well But advantage competencies So our we been of core very in It's

Jeremy Tonet

pivoting maybe it. to base the business just And Got Understood. here.

the remind saw came level after bolt-on expected and today, we us, exposure you guess, commodity acquisitions. quarter-over-quarter. and the I than in could recent there lighter curious of in business margins the with bit declines maybe if some The Permian in Barnett Just price the a

get kind new So Or for contracts? to these much commodity how price a feeling of just margins? trying to trying is a get there, sense, influence are just the

Benjamin D. Lamb

Ben. Jeremy, it's

XX% of hedged So we're we're layering in commodity-based, for fee-based, And already when year. well that next XX% this about all we're piece think you about year. very across hedges fact, in EnLink, and commodity for on

not So sensitivity. commodity of ton a

and is though, of where in Basin POP particularly we right, Permian, component side and where the that the gathering commodity Permian of have the sensitivity a have the primarily You're Midland we processing in agreements.

the that Permian a versus hedging. On factor North on a reset is of impact prior the the this Texas, about we quarter that quarter, margins, even first year impact, especially at net some impact of talked look you versus have seeing rate bigger does full last X-month the onetime it when or So not huge the call. quarter you're in

QX. in that of impact month X had we So

X-month a impact. see you Now

can relatively and see this with stable margins more point track closely from volumes. stay So to expect those forward, you

Operator

TPH. is Everen line question of Zach with from the next Van Our

Zackery Van Everen

the see I Perfect. time to to mentioned hope from Maybe any aren't line operating guys the fill? going Permian, you you or pipe, updates contributions all you start start kind know of give to for line the that can on just you Matterhorn. but service

Benjamin D. Lamb

Yes. This again. is Ben,

First, WhiteWater with do a great let happy an team Matterhorn me job We They our The investment with are Matterhorn. couldn't say runs investment. excellent project. in the we happier commercially. how be

far scheme in X-week of in was the fact. maybe very minor weather what the September. in of of to a to Hurricane that difference original plan the delay service pipeline we the toward but in the end as with be some related Beryl, grand a That's timing, As very expect August, of things, month

So that's the current financials some and seeing to the expectation, expect our so quarter. contribution we'll to fourth begin in

Zackery Van Everen

makes is growing comes relatively behind guys that online, pipe is you trapped an gas you. the Got a sense. the on And prices. that effect for Or have seems it guys you second just half weighted as not with follow-up really like cadence of will companies all the there sense other it fill kind now? seen it -- right see Do negative Waha the That a and is all on maybe Permian, that which When have of G&P do that. quick? from midstream you it ramp

Benjamin D. Lamb

fill I pretty Yes. to think quickly. it's going

As far as speaking for quickly. to very the pipe, I think it's fill going

of to before In to the for our ourselves. in this have really even basis basis began. very hedging terms X had protect we that exposures. Waha that year is year done mentioned earlier, we POP basis, I our Waha are exposure our of We Waha all exposure One proactive

it basin, oil-directed of can it. producer producer course, if not exposure, that as changes the an frankly, But imagine, is, sensitive second to in behavior. The is you

much So impact really prices. Waha had weak an haven't you're from right, we of

Operator

session. hand management concludes to you. closing I'll time, At back any [Operator Instructions] floor this the Thank for the our question-and-answer this remarks.

Jesse Arenivas

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

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

Operator

today's This will you. Thank conclude webcast.

Thank at day. wonderful have you for your participation, disconnect and a your You may time. lines this

EnLink Midstream (ENLC) 7 Aug 242024 Q2 Earnings call transcript