ALTM - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Altus Midstream Company First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like Director conference go of now today, your ahead, hand Cassidy, Patrick Investor to would to the speaker sir. I Relations. Please

Patrick Cassidy

Altus XXXX and Company's conference afternoon, thank for us Good you call. first and financial on quarter operational results joining Midstream

begin financial overview Altus We performance and and the Midstream's CFO, Rodgers, with and Bretches; outlook. Clay Ben call will CEO an will by President, summarize our

call in remarks length, XX with allotted will for of remainder prepared Q&A. Our minutes the be the approximately

the to Relations refer Midstream also may call the found Investor during which presentation, our be website Altus can Remarks investor altusmidstream.com/investors. on at

conference certain most the Investor posted yesterday reconciliation non-GAAP A we can comparable today's Relations On between measures investor presentation website financial call, measures may in directly non-GAAP financial these found the differences the discuss on GAAP measures. noted. the previously and financial of be

today's Finally, will our views I'd and discussions reasonable based contain forward-looking everyone to on remind and assumptions current like expectations. that estimates

from to of However, the factors number materially located on is full investor a discuss actual presentation with our could results today. disclaimer website. A differ what cause we

turn I the over to will that, With Clay. call

David Bretches

first facing afternoon, provide the for thank the us. the On and an call we'll and we're highlight accomplishments during operating for Good update today, environment offer an on ahead. joining year key our you quarter, outlook

and would I light in efficiently of safely their like the operating First, to pandemic. to thank for the team commitment coronavirus Altus

adjust new focus monitor of these to concern, and Our closely we their top dedication accordingly. our challenges. safety, situation team is so as the practices continues operate to as and families, despite Their well that with our continue

that global gas ever is the and presented well to of than more has these demand The is an of meet positioned Altus have the economy has and put and pandemic supply before. news we COVID-XX headwinds. out balance good oil seen unprecedented challenge The for

debt upcoming We have no maturities.

free at point, cash XXXX Morgan's be Pipeline and November of start-up expect flow ample capital generating Kinder through early ongoing liquidity requirements needs, upon investment Permian and we which meet XXXX, to our our extends will foreseeable begin the provides revolver Highway Our to minimal. in

Our many G&P this downturn, priority Unlike of flow companies in position is and with other so. our a liquidity G&P we Altus confident provide to midstream assets cash strong ability has do a diversified and single-basin a to pipes are of assets, comprised long-haul stream. portfolio that through maintain

the price oil, assets volumes. commitments, Our and volume walk-up with natural supported environment, and a and perform acreage interests performance. NGLs gas continue we are These by mix are overall and commodity of current dedications low even in pleased to in well minimum their

than Express Morgan our rates which quarter. to I'll its supported higher by dedications. first start floor pipeline gas provide The Altus by more minimum discussing as which in major has in certainty highlights volumes Gulf projects. around own Coast GCX highlighted XX%, natural JV commitments, from is the four volume Kinder a pipeline, acreage contributor

commitments. Morgan's capacity volume Altus holds natural feet also an in interest with a equity billion gas pipeline per approximate supported by day, cubic Permian Kinder of also Highway, X.X XX% minimum

commence coronavirus, its expected update last quarter XXXX. the on first operator by construction of of challenge remains with service during still the the in Despite to PHP month. track confirmed was This early

Belvieu integrated contributions the on continued in its ability system Permian, Shin through Gulf quarter, Permian. to Enterprise with at to liquids EBITDA Mont its significant The to Products' provide entire natural directly Oak fractionation and gas and first This in storage the providing Enterprise's Altus. the E&P operated Coast Y-grade pipeline stable the advantages deliver steady facilities is companies to performance pipeline

Oil the drilling start-up. due X a to went smooth pipeline Permian activity. oil remain full-service The reduced April into with EPIC on challenged volumes in crude

from aggressively short-term and deals. business sourcing is revenue incremental adding and EPIC However, storage transport

gathering our production add High. processing to remain on process and we with to the focused volumes from I'll party In move to discussions, line business. on now we Alpine third previous on

new the can a is processing With takeaway volumes. customers' Coast. of Development, pursuing markets our be have We strengthened of deal actively that our distinctive product addition premium Business third-party bundled capability to along we the VP offer Steve with to capacity team move that Noe, Gulf

the The to current identified midstream of we upstream conversations. slowed many of engage the business. sides the in of we has with and market that these situation prospective have promising, continue Nevertheless, opportunities number of remain customers pace a both and

party of for business, to activity all we Alpine continue eliminated production. drilling indeterminate Apache's has addition In and third in to period time pursuing an Apache completion G&P process Alpine High High.

Waha Due to remain prices, differentials a NGL dynamic at basis continued High situation. [ph] in in volumes volatility Alpine

with work will accommodating provide to in his more Ben throughput. detail closely continue We Apache production remarks.

further by continues savings XXXX, our side. quarter operations team reduced the on fourth what to cost the is quarter of we quarter. primarily control, improved Our XXXX quarter by fourth first XX% have the focus within cost In X% from third on and over the OpEx

an ongoing providing of including cost, to bulk processing residue grid OpEx improvement. significant of reduce efforts As to the electricity Altus are at compression, needs example Diamond facility, power, the our converted all being

the cost continues benefit operating costs. look system to every another reorganization, Altus' and at structure are expense to we XXXX further our from taking in reduce

say on more We a that call. to in future will have

and flared were than its performance XX% exceeded X%. continued volumes Uptime during quarter. strong team less first The

first our maintained safety record also with no recordable incidents We quarter. during the

closing, Altus streams, diversified downturn liquidity strong healthy navigate current to and positioned through cash economic In is position. flow this its sheet balance successfully

continue focus again thank on operating ongoing third-party their We and in work. want hard cost team to bringing will I for to business, additional reducing our safely.

the Ben. that, to call turn with over I'll And

Ben Rodgers

Clay. you, Thank

comments reiterate safely for their operate Clay's thank uniquely efforts First commitment and I'd challenging to to our them extraordinary like efficiently these around team, and in foremost, and and times.

our is no company's derivative There first quarter. the issued of unrealized due to in the press in $XX including the related quarter embedded the in preferred volatility which end million Altus rates a loss, to interests, reflects net technical ultimate accounting a This embedded noted As million. the redemption $XX of to the units. loss, non-controlling reported release preferred primarily at impact price of yesterday, of units revaluation included an interest derivative

Excluding items, small quarter volumes day, million throughput generated Altus the per X% processing EBITDA with million. the averaged $XX.X cubic this for and feet compared Gathering first period. down XXX approximately and period adjusted of preceding other

reduced were The at Alpine March quarter volume XX% in primarily decline and low Approximately NGL Waha prices. is related gas. High, operator to some first activity curtailments volumes rich of voluntary due including to

low of additional seen we curtailments Given second through the the persistence of April, prices most quarter. have in

throughput basis is we environment. this and this dynamic As working on to with commodity price during volatile situation, manage Clay are Apache mentioned, a a daily

we production Based production a following volume of Altus on well deferral these we permanent the performance processed revenue a to past during profile believe year G&P loss. price a Apache Thus, curtailments, variances not signals. responds as commodity lumpy anticipate and to are

was $XX infrastructure Pipeline, the JV long-haul calls This the construction processing quarter JV $XX Capital the approximately crude Highway line two for in first included million beginning midstream and for under still of during pipeline remaining projects, at in projects were infrastructure Permian pipeline comprising capital and million. million. the quarter the year. investments for Capital our $X this gathering for ownership EPIC's

of guide quarter growth is share $XX proportionate how and XXXX first investments, to interests, capital capital we totaled gross million. our equity capital Including method which

to multiple uncertain many Access began Altus' industries, to position. cases, capital is across important strong it since for and, companies been so highlight in the challenging has pandemic liquidity

of Our first drawn facility has of credit like January, the at million this less November end $XXX was extends In facility quarter. and and XXXX the million was covenants. investment-grade to through $XXX expanded than

and We expect this sufficient capital will flow are comes cash be to online, than meet our positive. more we PHP until free needs

liquidity sales, represent be and to as Our certain an execute million. enhanced which $XX we estimated million $XX may further evaluate asset

discussed dividend distributions in our on depend factors, a implementing goal previously of XXXX, the will including have we ultimately economic environment. multiple While

and we now, For is a to a prematurely. ensure prudent liquidity, believe ample strong sheet dividend it have overpaying debt balance we manageable

projections extremely for the financial the XXXX global and dynamic. COVID-XX adjust on to The Our remains large the imbalance impacts basis economy, market Waha continues demand to of volatile. and supply, remain

million from million. XXX range remains cubic However, is million the for per to $XXX gathered at for $XXX Adjusted volumes million feet day. XXX year currently expected to for our range EBITDA to now, unchanged guidance

primarily in EPIC and impacted have Oak from reduced crude lower Shin NGL that the This guide the been Permian both reflects activity Basin. revision downward forecast by from pipelines previous

to Our Oak. there the primarily to revised, XX% improvement lower level JV in during for cash helps throughput. the no finance. EPIC with are included project offset DCF pipeline priority been Shin given in guidance, the Distributable previous cash flow G&P expectations distributions quarter first cost for In line also XXXX savings has due from year to

time. is capital this unchanged guidance Growth at

the in of directed remainder capital de second expect with year minimis more the than investments be of in We of G&P towards business XX% capital the our the year, half PHP. being to for

our account. capital guidance share done into reflects past, gross without have we As proportionate our in finance taking the project of

has the be is share that recent have lower only outlined. we the financing expect upsize of funding project's the Crude Therefore, our debt will funded than proportionate of capital the portion a EPIC overruns. of has gross that share JV and we project-level

As earnings XXXX. date schedule in in-service for first Morgan's PHP early an noted quarter in Kinder call, on remains

JV of of results. our four the to be projects all our and With pipeline contributing PHP, will start-up in-service

source a any into see Looking our capital execute further access ahead XXXX, plans. to to additional don't we need

fully And the our strength operating and cash. funded to pipelines. next strong of we be ability of pipelines underpinned Our is with will by generate in cash generate JV to all position and a our diversity year, JV

to the turn the operator now Q&A. over will call I for

Operator

you. Instructions] Our Thank Spiro from with comes question first Credit Suisse. Dounis [Operator

open. now is line Your

Spiro Dounis

cuts. extract a Yeah. be cuts? deliver realized can timing there when Thanks, you to around you cost like But guys. of think maybe more can you're where sense you Clay, details more on I'd with sounds like come provide off cost the that? looking light. And it start to to general might just so

David Bretches

XXXX, of between first Yes. third we I Spiro. in the really fourth the the of for cost XXXX. stated had and we previous my question, some good follow-on as savings had And and Thanks then quarter in quarter the the comments,

a to we the on where and sure out we brought plants coming costs. can make we those And reduce there. part as We mode look to of efficient year items operations continue debottleneck just and last for the it's of starting most from have debugging that

what better understand and They plants is do. the staff can trained. Our cannot

gains day. and So part more seeing it of just efficiency is efficient, getting every we're

have with gas, we also we our generated, is helpful very that been item now major residue residue fired a use an that and think been themselves all have generation. of a and mostly on-site. of we all that's our going compression is said, standpoint, the from conversion electricity compressors natural be that's that to expense is that reduction are gas-fired right With but electric plants - lot The

convert to our efforts power to compression greatly compression, that first made will in have we've operating to and cost. the electric quarter residue generated that our So the reduce from and we also and maintenance over on-site convert

So good we from to big going think a a standpoint. see an reduction. that OpEx plus as We that's be

today, in get the on in April, from I'm to quarter April June that a of of going in we the that once great of try and that compressors as quantify compressors the we quarters. we'll on, that but we've out we'll electric that and bring have see so and not in second May the lot deal a bugs benefit worked follow-on then expectation

that We think expenses that so can team big we areas the reduction, we mention we identified excited save has something getting do. a what and the that's better on line, going just the at that's down But about. we're not be to where to we're fact -

So not benefit where we EBITDA and quo we standpoint status is we as can go think just a area this from that's an stopped. improve, to We us We're an going mode. forward. haven't in

to that in that have the we'll projected. trying we not the that something our guidance. I upside And for That's will that something be and that's and reason part benefit EBITDA have think put upside not forward. We're that realize, of we

Spiro Dounis

of to on I move That's on But are encouraging Ben, guess sort you at bit. hear. shut-in your in here year, the guidance. any how gears earlier in Okay. Apache's point? explain go-forward, assessing the thanks this some risk the incremental the of comments curtailments Switching a for helps

pretty shut-ins you Obviously, to obviously But in well changes Permian. a relative I'm which widespread are the the calculus up gassier, NGLs about sure and have crude. held lot hearing guys generally

curious the So seem it. like it thinking just as is about you're would But high. maybe not how risk

Ben Rodgers

good Yes. question. It's a

is economic strengthening by in course work think High, I We of given NGL we rich And dynamic. And both of viability the prices. Alpine into with assess at the as six NGL Alpine a is four the a consideration Waha taken and Apache it it look that is Waha they both Waha over of we've play, mix And Apache. as price. the seen as that's well High as out it, each weeks. last the to at to gas well tied prices

think, frame kind And was low they've and time since recovered. so the down I $X.XX and March or got in NGL prices $X.XX got of depressed, when in to to propane ethane the mid-teens,

so unpredictable, just that made, to And to a but I we the going it and that all gets lead those curves lumpy the on point to volatile forward are just profile. very all it's know

is that ethane seamlessly. thing good out plants to recovery ability volumes good to are The rejection, The got nimble withstand down the pretty and integrated and there. up we've very ramp a team and either able ethane

first team effort. did it quarter. a So is team in job great the The a

deferral of loss revenue may well Apache came year recall opposed as well, see you on, as reason as remarks to in line coming too they to I in online the said there early in how we a as when my The from really unfolds. leading of curtailments curtailments which you to GCX think because mentioned the of that September. April, some I were some were kind just it is have there year that and a last that also were

And that cases, some throughout as the fourth curtailed. being when wells quarter, our rest in wells exceeded those those the from expectations met curtailed they so online, came then back of came and, were

we So Apache to revenue gas. came to that back that process and gather right as continue

say we'll that into be going reasons XXXX it from continue of deferral was it's because for was the So modestly one very Apache. our why of would it's lumpy guidance a with the XXXX. be I going to G&P moved business was work dynamic, that down to and revenue to slight it

that question. answers hopefully, So your

Spiro Dounis

it guys. does. the today, Be no, No, it. well. Really helpful. for That's time appreciate Thanks

Ben Rodgers

Thanks, Spiro.

too. You

Operator

any time. turn Thank am back showing to would further not now to for remarks. the this I you. call Clay [Operator Bretches over at Instructions] questions like I closing

David Bretches

Joel. you, Thank

want few Altus current I withstand end, to leave remains positioned market viable. a is you with financially we to Before well downturn and final thoughts.

We have no maturities. debt near-term

cash coming plans. diversified execute solid ample growth to portfolio from liquidity We flow projects a have and of our

practices and We've our cost threats confront to structure. by the reduce continue adjusted posed COVID-XX to

is challenges uncertain, opportunities. environment economic the While create

additional We have economic a new make that team in dedicated to sense. bringing volumes

Our operate team have been and outstanding. the facilities they

The basin, it Permian a resilient is and will back. come

transport and our by the there be and gas to of does, process economy. that As produce sectors safely it gather Altus will needed and all that oil customers is our

to our progress to forward. in I call. forward listening for with sharing you Thank look you going our Thank you.

Operator

concludes Ladies call. participating. Thank today's and gentlemen, conference this you for

You may now disconnect.

Kinetik (KNTK) 10 May 202020 Q1 Earnings call transcript