ALTM - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Altus Midstream Fourth Quarter and Full Year 2020 Earnings Results Call. [Operator Instructions]. I would now like to turn the call over to Patrick Cassidy, Director, Investor Relations. Please go ahead.

Patrick Cassidy

Good afternoon, and thank you for joining us on Altus Midstream Company's Fourth Quarter and Full Year 2020 Financial and Operational Results Conference Call.

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

minutes Relations financial Our which found in the prepared can allotted Remarks refer be may Q&A. website on On the for be Midstream to remarks approximately the call length the Altus at remainder will altusmidstream.com/investors. with of call also Investor during our XX call, investor presentation, measures. posted measures found reconciliation the financial we differences may website these conference most investor GAAP yesterday non-GAAP between certain today's Investor Relations the A previously discuss comparable presentation in the the be of non-GAAP noted. and on measures financial can directly

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

factors our results we located However, cause on presentation discuss a that, over the to A Clay. call differ what with full today. could number disclaimer is I will website. materially investor from turn of actual With the to

David Bretches

Ben fourth business. our our and its joining Adjusted our the distributable working year, results, an noting ESG and last area many XXXX, sets to An headwinds a our review guidance on improvement continued Altus relieved we behind I'll processing apparent in to our strong within not and on forward November processing for improved today through on reveal our in impacts and have will gathering thank a reassessed become move which XXXX, for and was came are of the performance, for full outlook in last highlights the can might above including analysts conference midpoint for and emerged. and of update in from this I and up performance, that at guidance adjusted looking successfully otherwise. is our views underrated Altus now XXXX. year's and us My venture provide follow that and our results. to last May you the and challenging are EBITDA the operations, circumstances will pipeline was to XXXX open weathered cash review of and on the flow EBITDA, up financial ahead. sell-side our guidance July XXXX joint questions or volumes they XXXX from year know accomplishments Despite businesses but subsequently gathering year us. afternoon, remarks call. as faced We the storm. and year Good aspect pandemic then outlook results quarter for many turned strengths any with that raised year, call DCF. all in who I'll weaknesses difficult certainly in

diversified asset results their combined optimize the performance, execution contributed base, improved team relentless to the the Our year. with members during by to Altus

Crude, the trade-off the the The start-up it the to CapEx year into our growth to were with the which dates PHP, able came This paired pulled primary this from reflects just Permian Oak of initiate in The pre-pandemic XXXX activity forward as eager shift XXX in drilling impacted operationally, and Basin guidance from we from assets, Permian continues had down particular, and expenditures Altus activity liquids $XXX where accommodate was strong a our in We range. end dividend pipeline PHP. only see Basin, lines, upside NGL year were are is expanding spending ago. annualized we X $X Delaware This reduced X in-service a We the binding EPIC levels XXXX, reason the for products year. recent a climb. JV have do asset. for GCX of midstream to as a contributions with service portfolio. of was All our of which is XXX, per to subscribed strength million, in of under long-term services the year and Our count capital over potential rig share some and this commissioning high for Highway and by fully the Shin been in pipelines PHP the accelerated commitments.

We are for business. third-party further commitments secure looking to

nearly expect consecutive throughout XXXX. reduced continue quarter, operating capturing we to cost are X/X, For Year-over-year, by the we expenses expenses. operating sixth down savings and

quarter spills. committed activity workforce over our Importantly, to managed a injuries our been with recordable all safety no we last our remain team X period. integrity, to asset fourth that the time considering nearly since injury, reportable great completing It's and no of has the environment, outcome, the and years

have transmission, effort. remain COVID-XX which We to To COVID-XX protocols addressed want and this to their have in related pandemic been the the in holidays were for acknowledge see did no Our of instances scheduled during known and we absences diligence place effective. employee-to-employee team the changes in labor. increased date, I contract ongoing with

focus strong benefits operating and compliance profitability. beyond and culture footprint. reducing We recognize ESG a competitive edge. on efficiency these environmental improving provides outperformance provides We continue to areas that our our Building in a

We've operators projects that work providers, facilities Altus of performance. new atmosphere. natural operate cleaner, features and of gas of of to to using to devices controlled natural that service and ESG best To instead of partner want frequency with number regulatory venting that plants more tankage air atmosphere. communities double highlight implementing Third pneumatically with all or with end, few are appreciate and employees positive the hundreds a the have these. efficient intensive safer, attributes. a at To vent older requirements. vapor leak highly all deserve midstream technologies want that parties gas the we implemented testing compressor to We best efficient compressor the executed with at stations on to the detection eliminates proactive and program stations recovery compressed use a which gas

blowdown of gas-fired maintenance policy engines with practices we a methane By use emissions. emissions best reducing predominantly designed use eliminate the of assets. initiated to compression, operations. year compression We the and follow procedures relying are electric limiting last our on electric-generated from overall optimize our to operations Our

generation Diamond related for cryo that power We flaring outages. the backup have power to facility reduces

benefited others. on from I'll decrease which to nearby handful partially the Finally, increased McDonald we our identify off-spec modified by natural some condensate viewing declines. we to move This and from production pandemic initial from staff working the conditions. and cryo continue we at volumes early the load from and EBITDA processing G&P price-related design new in phase volumes, a reduced fourth the outside at highlights. the the examples, drilling optimal fourth with lower providing was commissioning voluntary capturing sky the Observatory, quarter High compression night a and implement Earnings maintain offset PHP, third, Despite facility's plant. curtailments services help That now includes lighting is to of streams. setting new of the Diamond activity, which success quarter and electricity driven revenue that have had area processing Alpine in

for and are Multiple both entering ahead, economy momentum strengthening year. our I we am export. for have the we As products, by improving the domestically out, is oil rolling and demand vaccines with encouraged COVID-XX positive gas and look

in depleted growth. inventories beginning are activity and renewed replenish drilling will interest to see and fuel completion to necessary economic We that be

capture including G&P the our this Apache third-party year our High. business expanding of Alpine outside focus is volumes business, Our for with of

redeployment. to continue to We underutilized or assets, deals through whether seek optimize divestment

high while full for On dividend by the ESG to of all continuing year. front, XX%, contributing calendar our alternatives our XXXX by a priority. reduce the financing initiatives X to equipment unplanned service be pipes flaring and will in further preferred for first protecting Altus' remains JV blowdowns are will a be underway XX% equity and and year analyze

capital a first quarter, their the shareholders obligations first the environment month. are strong performance last especially dividend We an tough of growth Our at in will negligible and year. had see end next payment after

team Our challenge. is of to believe even And rose performance us. I ahead better an firmly the

over turn will I to the Ben. Now call

Ben Rodgers

In cover my for we're our thoughts provide ahead year remarks, addressing quarter balance Thank prepared and review the guidance full fourth performance XXXX financial preferred looking on at I of year you, the in will and and XXXX, for Clay. equity. sheet the the Altus' our how

issued noted net $XX yesterday, interest, full Adjusted Altus XXXX. capital million year EBITDA $XXX press release expenditures were reported approximately of income, for was in million. growth and including noncontrolling the the As million, $XXX

million year For and a $XX million was related quarter embedded interest, including $XX XXXX, noncontrolling an full million, which end gain to and XXX fourth for income, was preferred unrealized the of full for XX% technical were $XX respective units rich day, $XX period. volumes the EBITDA the expenditures Gathered the of a the quarter, fourth revaluation million. unrealized net per loss EBITDA year derivative which embedded was approximately includes Adjusted capital cubic our million. million in derivative the Adjusted reflects accounting gas. each of growth at $XX for feet approximately averaged

the day, gathered averaged presentation the to I'll the website for curtailments. in and release. year the also XXX with impacted rich million approximately by cubic fourth yesterday quarter per move on posted For fourth both also feet guidance, price-related view our earnings volumes quarter, gas. can Volumes news XX% now which the were you

prices. the capital metrics provided depending November. rolling Our will budgets stability with are still we operators update consistent all XXXX out guidance volatility flexed that of with noting or E&P are on commodity the in many be

last we adjust will as the activity their outlook did year, year impacts our we levels clearer. become As throughout and

is gas production some and uptick to noted, of the historic returning drillers from activity, we being operating as the pursuit oil that investors common to versus improve discipline prices and have given theme priority is seen sector's Clay and drilling While growth. in capital

there's Permian new view upstream G&P that this the Oak product JV Shin secure pipelines less we business, midstream among the and Similarly, EPIC in our from direct on have utilization Altus, business of Gulf are Basin as on conservative the move taking to capture a services. the of priority For Coast. impact third-party pipeline to urgency the a producers may

or third-party We Alpine completed with in be outlook. into DUCs expected its this an to have Apache current year. X business year online in completion to the has schedule for production later High, guidance, updated X is prospective more our At increase and potential event upside quarter liquids not factored and our G&P this either coming

Over we the DUC gain will next expected more production few around volumes. clarity months,

week's last well as on also freeze finalizing any Shin at from We effects our the impacts and as EPIC. business G&P potential Oak off volume are

changed, update DCF will XXXX in account call is of our quarter in hasn't maintenance earnings for G&P approximately note, growth capital for million capital May. we our during into We Guidance first taken guidance. provide $X an though expecting I would our business, which are

minimal relatively new. are anticipate pipes all we pipes, capital JV our maintenance these year as For this

until the at under sheet, quarter our As we million of which of balance mature XXXX. look fourth liquidity the have plenty doesn't $XXX revolver, we

streams at also are close now our share revenue preferred This momentum and to maintaining with today. forward Alpine annualized space funding the questions. We to dividend. I per contributions with We will and includes sheet the conservative the updating our business in considering ahead. the by to leverage alternative our upside can metrics call from equity of opportunities. while and objective a in positive look we're potential High, progress seeing to refinance we support multiple you alternatives open regarding additional remarks the completions any balance Clay's third-party year on echoing Operator, continuing related $X

Operator

[Operator Instructions].

comes Credit question from first Our with Suisse. Dounis Spiro

Chad Bryant

have opportunities price Chad off, the in prior you've third-party the year, with Spiro. or starting provided just gas seen for on consistent is I this for prospects strength conversations guess periods? fairly with messaging improved that we've This

David Bretches

time, careful. create is at this production. positive They thanks opportunities. some prices. We in their terms gas Ben producers remarks, the increase for Chad, his But alluded about prospects the of are this it's in to third-party around question. do very to and we're are some in Bretches, believe going out and in area same and want capital is get So Alpine prepared and there Clay that being the skis spending. over positive of to prospects don't And the

do there's some So here. opportunities we believe that

on of in that we right had later DUCs producers come the now. We're think not encouraged X the they are announced year, something scheduled and excited also what going more about DUCs, the But it's morning Five side. in I very for this throughput for by on so the beginning will with Apache possibly that conversations do sometime with the can to that are jump that something completion the that pleased call. the others. some their April, G&P in field for have spring, were

XXXX year third-party a when environment, have So with think prospects, terms we and the lot increase we few out in us, certainly of overall, EBITDA a our the able ahead of were do given third-party better better have commodity in to business some than XXXX, dig dirt I of of just a and didn't price get Even we prospects. business. that

expectations to better even able have We we'll this be do that year.

I this, gas gas associated on is help So definitely oil area. both the outright come think it well players that the something would again, as us price and in going just to gas, that's from as oil producers

Chad Bryant

really And okay. I just helpful. then Okay, guess follow-up. a That's

on one at looking objectives, method the Just equity? address on say it Or is that? to your more mentioned see the still you refinancing XXXX too horizon. is is preferred that refinancing preferred you or have you Do preferred to a of likely early that

David Bretches

too It's early. really Yes.

that - there year do we right so there our the the our You balance about additional you And have retained sales. kind can from almost of the $XX cash upside asset on can midpoint with at of guidance, the flow pages some those That's the could some of year. some as cash as presentation, investor sheet. million ended one past of of tell assuming assumes no well. be of talked midpoint DCF year this tell, the last on We've we our in

the the the early So kind early of still I as of IRR, all looking to we'll and cash, 'XX, have 'XX. kind of sorts too of timing crossover and a in we really before, now. mean some February is said alternatives. different and late MOIC that right of sitting and little we're have It's tell we're time, we've of bit perfect at

focus opening So we've you market, tell accessing it's other good to and up high-yield time, the back to leverage see manageable at companies our I'll got dividend. it's some also very be opening to terms. markets and our up, going that markets those other back but the - markets capital and protect keep is attractive

Operator

Carreker Our next Capital Advisors. U.S. question with James comes from

James Carreker

Apache that could there talked potentially they the to The Are have X down DUCs that road? to then the year, they that DUCs area? for potential And return is Alpine any all that them system? active there is rigs about on the High complete this more the

David Bretches

Alpine they that the X that as seen But is be remaining as Yes. not DUCs Apache They've add remains are they this but DUCs capital there dictated that that performing but that morning, James, will to those first that could be we're he going additional them that to to think this opportunity DUCs that. to so needs side perform some it's you positive bring any of on all it comment but and at that, need Clay. And quick. we after XXXX. is DUCs commented to of right hope just did It something to High. But now. future, mentioned G&P would add little in the an on go wells, would only additional certainly not Apache the a by color well, out Apache. develop us mentioned the the they on have the And in are for prepared has are and time, far well these for economics X I'll for for the Obviously, and very concerned. of bit Altus is Time real these be X DUCs or a before. to indicator tell business. definitely move will whether

James Carreker

to materialize Oak? what and leverage add? X on Shin year-over-year. back utilization? much it. more volumes of year what Got could then is that I for sense over you capacity beyond, XXXX flat guess talked the to your And the If do that of shifting half kind being Oak operating about how or Any Or Shin pipes, liquids implies

David Bretches

to kind freeze but not or material any impact don't just reiterate pipe-level look of as a week any It's be year-over-year detail. kind that to Yes. We've last assuming material flat of of we're James. ago. couple hard weeks I the full year provided say, impact, the Barring it's you going think from would that material at off I volumes.

utilization that monitor And at that oil, so just I that's to pipe. to the why have think we'll of continue $XX $XX,

I think upside that there's there. some

I DCF numbers using good for estimate, appropriate, what's guidance considered conservative think And for both and EBITDA. levels. we're which our is and that's a in

So ethane pipes increase the impact basin, for another I'm just is CX+ aware the up, all are price Shin rejection. all with are are NGLs. Gas not Propane NGL you the the up. entire hasn't sure that Oak, across experienced just ethane prices of kind prices and

last look barometer, of you consecutive seen we've few bit rejection little past kind that's potential any a from for definitely a of being even the growth as months. ethane the said, last a more but something additional was so But even at and of to in And year a Y-grade counterbalance that than on time there period system. as didn't

said, I is where And we it update be year. could color, the you we flat so all wrap We'll some are give that up, months that it upside being to but think, year-over-year more today, there appropriate when number. into X for

James Carreker

to And to the the term then time receiving potentially start what's loan? status latest what's Crude, investment? And EPIC of distributions line from over the that

David Bretches

So plenty from don't turn that perspective has so to loan you probably not on equity I in the here as from kind averaging it's that last we it term of But they much high the pre-COVID oil speak a We and runway is It you onerous near get the that tell line covenant that marked obviously, in production see time. had there for on year with in can pushed year, levels, issues term been that flows a that own been I the where can out XX% distributions think distributions too issued any but pushed assessment. XXs I a time. loan any loan. equity, make was as owner. WTI were And traded, and have that promising and it's so so looking material of XXXX, the can't beginning there. impact out think expecting was sitting of of for that X-year And be time publicly then your near-term do going more term at from out. XXXX at too last there - some quite an term we're

James Carreker

loan you there's Do the with plus Or debt? just overall don't know leverage other EPIC? balance? the have Or overruns, of cost do term some you have that? a And I debt just what's if

David Bretches

to us back we could term confirm of available let some to given kind are. - speak I that have know get I'd that, not you. that sure how publicly kind those I'm trades, loan - before just of to to needed of even but I the numbers

Cassidy we So and that. I up follow up. follow you to on maybe can Pat can

Operator

[Operator I'd like no for questions. the call to turn There over Clay remarks. CEO, are Instructions]. to closing further Bretches, back

David Bretches

our call about to Thanks, thoughts with today. everyone, I'd significant enter you to Altus Midstream. like momentum. with for listening the closing We following XXXX leave into

service. of All are pipes our in JV

are from completion is parties and at High, encouraging. prospects and activity related new Alpine third additional the for seeing We business

objective first noted lands. federal our returning had ongoing I week, throughout shareholders, positioned and assets note you. rules reliable XXXX. payment will capital to This our for weather, cash over and us I recent reminds do will And lands, our limits headlines generate dividend call. new deliver like is of month. free supports it the federal concerning to Operator, next that need Freezing While supply. federal we am of have activities Altus' that flow and on lastly, should to pleased Altus to turn concludes well operate on energy I resilient we not oil gas last

Operator

day. you have Ladies may does you. great gentlemen, disconnect. conclude the and this and a Thank Everyone, now program,

Kinetik (KNTK) 28 Feb 212020 Q4 Earnings call transcript