NBLX - Earnings call transcript Q4 2020 | Noble Midstream Partners LP

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Operator

Good day and welcome to the Noble Midstream Partners Fourth Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Park Carrere, General Manager of Investor Relations. Please go ahead.

Park Carrere

operator. you, Thank and quarter everyone, the Midstream Noble Good earnings welcome call. fourth XXXX Partners morning, to With to and CEO; me Fielder, and Robin today Tom review our Christensen, CFO. is results President

question-and-answer remarks, will prepared our Following hold a session. we

Here our announced Reuwer, Vice the and fourth website, results John Aaron press The quarter Upon release to supplemental also General Counsel. Corporate Investors well Business Senior guidance. participate XXXX section session President our the XXXX we on of same in location. today, This have and made Carlson, of year Development; question-and-answer morning full as later as be available nblmidstream.com. the slides filing and will are XX-K on we

our today's As a the non-GAAP and in contain for to cause the forward-looking non-GAAP our latest reconciliations I'll materially discussion as statements At to over well to time, factors those filings of forward-looking actual for news will turn SEC Robin. a results with call the differ this as releases financial reminder, may certain that latest list refer measures. statements. Please from

Robin Fielder

good everyone. Thank and morning Park you,

Noble we First, we'll guarantee a to the transaction unable Chevron I agreement Board about run general remaining to of potential acquire result. proposed the independent Board proposal Conflict that well to the business The of unit-holders. Directors would the on as to LP negotiate proposal to by no The terms the Midstream is comment transaction while and public unaffiliated this will There a is to usual. Midstream. of Committee subject the Board any units is transaction Noble the of has Partnership and ongoing And received partner. as of of continue delegated are negotiation the as our approval three execution that definitive of NBLX non-binding the like authority comprised from the address the members to behalf

year and these the reported our to times, goals. for of a this incredibly workforce, instituted protect company. adjusting our morning, accomplish our world of XXXX quickly what and dynamic swiftly operational health integrating In into efforts majority Corporation. development while unprecedented safety agreement In teams was am Year the proud program ground industry our I the and all we affiliate both to to in we and financial New we new to we first adapt the XXXX while business Turning affiliate procedures announcing successfully owner a DJ report hit our to of January, Basin. new were in happy running our our that Chevron with new commercial

business long-term additions comprise roughly of of the our Over nearly the and our Partnership years, XXXX, portfolio These and several key the cash cost their last couple has decisions equity placed We contribution pipelines. our we business, anticipate diversify stable structure, our improve into strengthen XX% expected impact. doubling environmental Since our year-over-year. enhance our in the provide have or to to minimize flows. made five are investment service to XXXX, added portfolio to earnings

roughly $XXX eliminating or plan. capital During original from XXXX, expenditures million our landscape, the changing of to we XX% responded market rapidly our

to and constructing to the expect safety cash In personal flow during million year, million Midstream efficiently and assets. backbone, in and annualized Noble while entities second which we to our a handful to We in nearly flow enabled addition the out business again quarter. of last first we in with process XXXX. had this we cut our and Along Noble with one saving our free operating these free grow operating generate the extensive At year ended Midstream, $XX and accomplished approximately more than of expense. all costs, cash XX% midstream accomplishments be our $XX of have gathering transformed actions commitment

Energy was performance of total, across made XX% releases couple decreasing reducing year since assets, accomplishments Permian XX% significant And last other XXXX, while parent Noble we and XX% tonnes with reduce disclosure eliminate Partnership. initiatives can impact the recordable or us XXXX of to Noble have volume of sustainability also well banner intensity and years, as the nearly enhanced accretive severity. into Midstream's in working incidents safety environment. year. Noble XXXX, health total Over carbon our environmental in gas are of report dioxide opportunities our lower a a equivalent and a upon ESG and number improvements XX,XXX the carbon Also, unintentional build for in that plans business reduction evaluating impact we to our spills. provide reduction metric our our with incorporate methane these that the as environmental projects from flaring this greater volumes disclosures Further, and reduce greenhouse than for In with Midstream's helped we

both in Basins Looking and acreage. fourth completion Permian saw customer dedicated We our across the back on quarter and crews DJ return activity.

New declines gathering And the well wells shorter-term customer despite a flat, arrest and momentum roughly year volumes XX% XXXX. quarter. well oil operational were XXXX, than Partnership helped into in The activity full and XX more provide connection to for during connected production connection reduction and activity. curtailments gas

basins connect infrastructure efficient gathering has to us well both feature Midstream transportation Noble capital. place XXXX. allowing accommodate and to the to in volumes, highly deploy Looking in

an Mustang inventory permit. years, price third-party growth as well have on most of federal anticipating in our next of gathering moderated activity of focused agreements, increase for This the not affiliate the Delaware land will foresee infrastructure area. are years. with good within acreage Basin Basin yet commodity the anticipate development large-scale the and our minimal significant year dedications, In to needs sight of When activity activity. in our support couple be we capacity well any Diamond few for well exposure Across with have line gathering systems coupled we our development to business, ongoing sufficient and connect our growth. uncertainty our long-term customers flat DJ Black activity have do as next connection our backlog in third-party higher approved on We a

activity heavily XXXX and development basin weighted. front anticipate we year, the be to half For

First expected is double be to levels XXXX. quarter quarter nearly fourth connection the from activity

Finally, leading, to all to over financial the Noble I to the solutions to presented. strength teams workforce will And their our several during now call the my gratitude for that, which our tirelessly With Tom reliable Tom, XXXX, discipline and the worked portfolio, operational enable deliver the I our while and entire very COVID-XX over want footprint, years, continued proud. I Midstream call and turn over and turn to the diversify in for last carbon express appreciation to all have challenges before to the excellence pandemic volatile safe overcoming many midstream Partnership should be the Christensen. they CFO, decrease dedication and

Tom Christensen

Thanks Robin.

during flat First, In and $XX our our sequentially able renewed new maintain of driven fourth performance delivery XXXX, we fourfold for to the quarters testament our which a acreage quarter a of EBITDA, last relatively EBITDA net excellent continued by activity increase to financial million our the was volumes. three team. were results. Adjusted on is freshwater in stable

spending we quarter, less This illustrates activity. to projects. million in producer spent flex fourth quarter our the spending capital consecutive our and third marks adapt During capital in on to capital ability organic to than organic $XX million changes $X

a half quarter Crude as $XX Additionally, these into of during strengthened the equity BANGL NGL EPIC major expansion terminal projects. the result, raw the the investment-related EBITDA to the related as of five fourth of method investments And back marine venture. XXXX well pipeline to fund the million year. saw we project has EPIC's invested as joint completion the in our

group to With underwriting have back came April a higher and greenfield Y-Grade we online operators throughput has in minimum volumes second its first individual Its volume through half the May volatile of grown the commitments fractionation barrels total expect investments. and Now half base this XXX,XXX EPIC of into the and XXXX. in online a ramped came expect to investor bringing day. dedicated continue market. little XXXX. July and into despite we completion XXXX, Crude in capacity to steadily dive crude a our fractionator in restarting volumes further year activity EPIC commissioned the in

day backed source As Saddlehorn has consistent is XXX,XXX was to a Pipeline completed which we producers completed It XXX,XXX for minimum by during Saddlehorn recently from which The our largest a Partnership. we incremental commitments no capital costs. barrels to volume high-quality investment made you Black the XXXX. it quarter. from through had first of has distributions the during expansion acquisition This its Diamond our may recall

our Delaware and positioning gathering the our in Wink This completed providing Crossing our Southern by Next during asset year. Basin footprint to further hub. the expanding the enhances Delaware access Mainline us was

acreage wellhead quality our Ranch simple the the transaction into Oil to flows, which competitive but January Chevron in with rates DJ water provide these this This operationally arrangement not now value new from dedication further a customers types Permian our well Cushing. to year. this structure transport announced their XX-year recently service a of Wattenberg Plathville. cost-effective we oil effect transported to from Wells leased of barrels. previously we subsidiary and made this went This a on one To Trunkline participate of midstream transportation the to the the of Partnership for can high-return allow enhance chain. provide Lastly, Partnership. only cash services projects also These offer the as highly as NBLX down to

have the these of proud in recent accomplishments team their to investments are service. are excited and We for

Now turning leverage. to liquidity and

quarter July the $X.X For million We per The the of debt distribution flat on $X.XXXX a in quarter XX partnership $XXX ended this our liquidity. has billion with held loan year. expiring $XXX in we fourth term million at unit. and

year. a term We pursue This solution fulsome this loan expect should will later as us approach refinancing we more duration a to pursue position well extension. a low-cost such shorter

asset we XXXX portfolio free flow. material During see to expect and generate our cash investment base

generate debt the In material fully and enough a to amount the down distributions fact of plan pay year. we to LP fund cash during

activity EBITDA operating to Now million. guidance. XXXX. costs due XXXX $XXX due the $XXX XXXX to moving midpoint anticipated on adjusted between XXXX This into to be to net slightly mix year-over-year is higher discretionary from and and at lower the deferrals is million project moving

approach acceleration producers budgeting currently customers weaker. take be of producers' we an was we major well activity To see late price year a more was without when measured to of pipeline commodity the to investment. environment guiding customer us since largely should slowdown by developing much which our to extent their recently This assets expect existing in the are capital many offset position full continue We contributions not assets to, support to that infrastructure our our investments. completed see the XXXX

half our capital development Chevron's to last trended focusing couple has approximately second capital to the roughly this down of $XXX includes of mentioned, during still million of total program million another area to As and million we of XXXX. the years total build out Even on generate next capital expect over year. cash spending activity. our Due year in we for $XX free $XXX Robin significantly anticipate the the $XXX million ahead trunkline the flow Mustang to

we of step-up in Year. $XX X.Xx EBITDA to the fourth XXXX freshwater delivery net This we volumes connections anticipate as average the sequentially. million gathering customers ground to due on first EBITDA. quarter quarter, the expect hit as in higher New net to well volume For In to million is debt-to-trailing the a adjusted running X.X XX-month $XXX as

slightly of in We flat compared business will of our XXXX lower half cause the this half to anticipate In well of trend perform relatively back the half back And XXXX. expect first to on the EBITDA we continues to acreage for summary, investment be our that environment. producer the weaker. XXXX to

for We and and on capturing focused focused while remain to cost discipline, to investors. on additional stewardship value environmental our business opportunities create remaining prudently operate continue our safety,

call one will for I made be I questions. we during With turn I call open that mention not Chevron. able over the to the before to by for offer the like Now, will discuss that would questions, Q&A, recently caveat,

Operator

Dounis We session. [Operator begin question-and-answer comes will Credit today from now Our the question first with Instructions] Spiro Suisse.

Spiro Dounis

Hey, good morning, everybody.

range? end I and like on it you more in the what is. seems And take could end have color to of this year somewhat going a the the producers of little of First what guys regardless question volumes bit of commodity the provide stone on low kind ask the it's that context in set guidance. hoping was high achieve I is to price

largest that variability you where the guidance? curious, of just pockets So in see

Robin Fielder

this Hi. anybody Thanks in. wants with else to I'll and start the question. see Good morning. hop if for

together commodity putting you back, As And last customers most we've late pointed we look of year. out, were our certainly price some seen their more budgets environment. as supportive

we went as looks So what one is hand say development we've the into approval. in them The thing what and plans in those in activity Board I'll our rolled we budget basically set have like for And existing with back well. need we that well facilities do demonstrated to we is year, last anything up. should we we're as certainly infrastructure need pull if ramp positioned can to and certainly our

a think in where will And of dependent in investment our the our as lot develop just is just this I on So just focus that plan areas. be changes those development DJ, is building continue Tom it to activity. row pointed of out large connections. we next well Most year. comprehensive as out That's

Spiro Dounis

it. Tom follow-up And to you mentioned. Got wanted something on I had

you can into guess if think I and range? I that was? just of you I'm we of what that costs of If sort XXXX. we're movement. that us out assume some a I'm much not done shifting driving and talked XXXX, where would EBITDA had downside not the I have the about costs expenses, shifting a was guess curious, – if normalized of had into give shifted sense XXXX sure how those to scenario not year-over-year

Tom Christensen

that It due to not range uptick it's so EBITDA just was that in impacted kind have way. of costs activity highlight clear cost-cutting suspenders a it it's so year. belt likely to shift, our in last structural just wouldn't I just the wanted more and the major a

Spiro Dounis

Okay. Got it.

quick if last one don't mind. Just you

you're of – well shape looks I targeting it half the front at It like looks I the the look is when XXX weighted. activity, you on XXX volumes to Just that connections. guess year. like throughout And think about

free that, sort little year spread is if the remarks look that Tom evenly think you the of a kind at to going year weaker. cash quarter, be I proportion flow of of be guidance that a for And back first we the seems all said to half actually think closing larger bit you than mentioned there of the I in out.

year? you biggest Just walk spending through us we of could what And batches the as the go where shape curious, the like if volume through, are? looks

Tom Christensen

Yes.

Certainly, think A what volumes out build significant trunkline are those And some is I sponsor I in in the color us, referenced front area. Mustang volumes Mustang. focused our of provided there. It related activity we'll see we of that from in the the some advance will piece I of to we'll flowing. laying there. big –

those We expect XXXX. in

too stronger what my certainly it, specific the around the So that's why script. you're half shape much But going the beyond second I in than see exact to first color of half. said can't provide

Spiro Dounis

Nice, Robin. Tom. weekend. good Have Understood. Thanks, a

Tom Christensen

You too.

Robin Fielder

Thanks, Spiro.

Park Carrere

Thanks, Spiro.

Operator

Our Jeremy next question JPMorgan. with comes from Tonet

James Kirby

Hi, good morning guys. It's James on for Jeremy.

Robin Fielder

Hi, James.

James Kirby

connection with -- XXXX Chevron I you DJ? is consistent there, in almost rig right of much same expect guess XX doing? what And you the it guess question It I Hi. Chevron maybe the one all do provide the running Do How between thought, looks Just, like you are basin are for that now. off here? to you the that some Spiro's and them XXXX. pretty or split is Can connections a like on for DJ Delaware for well looks guide. budgeted is

Park Carrere

is this James Park. Hi,

intermittent should through it the year. be think I

press If -- the release, detailed our of connection and tail is. but more count have you look you some out we lay Mustang in what kind for guidance

that I broad think to the connections year. remainder the Delaware going is be for of

James Kirby

Got it.

within your then is the was your was expeditions And looks connections strong of there. budget, a month part budgeting? Okay. that with it XX -- that January Is or pretty well post like

Park Carrere

the But Yeah, I what we quarter of quarter much laid into out is be, far. so. looks too we think will first can't what what dive like inclusive so

James Kirby

me. party And chart then had last pie previous activity. guys you In enough. decks the of for Fair slide Okay. third the one

going do portion of to forward larger third-party you verse given and XXXX, be just a activity to expect ahead weighting? pie Chevron that the Looking

Park Carrere

point. Yes, mostly at the

Robin Fielder

systems It Yeah, James we is larger pie on these of new our a including earnings this to is as well. some pipes venture some slightly joint more volumes as of Robin. continue bring for

So that slightly wedge growing is year-over-year.

James Kirby

Got there. I stop it. the questions. I’ll appreciate

Park Carrere

Thanks, James.

Operator

Energy. Cilan Ben with question [ph] our from comes next Simmons And

Unidentified Analyst

for today. thanks Hey, Yeah. my taking question

to really that looks Is thoughts But forward? allocation debt wondering would XXXX? for reduction cash Tom. and be what going what Thanks. then -- the your like look that for cadence primarily more on free flow we going in similar So one's QX? into And saw like this towards I'm what to this

Tom Christensen

Thanks, cushion us important providing good capital is distribution certainly Ben. behind the to and Yeah, protecting of from a that. allocation, safety

kind dollar near-term. of to also first in the on times or -- We balance focus to is certainly sheet three go going our the long-term debt hit targets really our

Unidentified Analyst

had. Thanks. right. I All That’s all

Operator

Sheth Amar comes Bellwood Our next question Partners. [Operator Instructions] from with

Amar Sheth

Hi. My Hope then a Can was to follow-up projects. And pipelines up well. I you’re to talk the progress well. getting guys about you as capacity? in the question there those pipeline had EPIC

John Reuwer

Reuwer John Yes. is here. This

are EPICs both largely complete now. So

As you the both and year looking our operations now capital us full from guidance, largely for projects. significant could are of to behind see forward investments we're

flat side, guided we the we're we're the on environment. to, there. Tom and price what seeing at year pipelines Y-Grade specifically, excited about have something On EPIC And us some Crude we see the side, more that But have different going full probably these to the pipelines alluded given a do as for in in bit EPIC commodity those growth our we're excited future. a projections forward, of now

Amar Sheth

opportunity we we Okay. question. do you are the relatively formal then, or not And a a I the I know to was offer transaction minority to to going on just offer vote made, a is -- want there be guess, once discuss transaction, given made? the offer recent And small wondering, an majority I are made if shareholder. an guys follow-up by shareholder. my But

Robin Fielder

appreciate Amar, in interest this. and question the your Hey, I

proposal and Committee. take-private Chevron a we evaluation mentioned to from quick X a Just delegated the February received Conflicts have recap, we as our before, obviously on

is in prepared our mentioned remarks, directors. I my three As independent

just well. comment And point. ongoing, a anything. complement we for this beyond us on anything it's conclude else reminder difficult there's as don't to that's guide of can you guarantee so, I And know transaction will that on really no as really and at that while

Amar Sheth

Thank opportunity will Okay. an But you. shareholders to minority not vote. be given you're if sure

John Reuwer

we can don't I think beyond that. comment

Robin Fielder

this off. Yes. We're process kicked getting just

Operator

concludes to call our over closing This I question-and-answer any back the like remarks. And for would Robin Fielder session. to turn

Robin Fielder

thank wanted And again you continued Have you, stay for please, Ely. safe help and weekend. just, just you out there. great say Thank to support. your a I Yes. all

Operator

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

disconnect. now may You

Noble Midstream Partners (NBLX) 12 Feb 212020 Q4 Earnings call transcript