ALTM - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Altus Midstream Company First Quarter 2021 Earnings Call. [Operator Instructions]. I would now like to hand the conference over to your first speaker today, Mr. Patrick Cassidy. Please go ahead.

Patrick Cassidy

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

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

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

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

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

Clay Bretches

the able we and injured to Yesterday joining JV second we're especially and meet maintain and accomplished This other related with Good entered the during XXXX year. of four been first the our conference of pleased Altus the months this momentum track the to all positive into note of us afternoon call. issued the as advanced severe to our three quarter. the milestones year team service. all in and quarter February you to or the the with pipelines I'm and this Midstream's midpoints even challenges will earnings thank for few our on our performance last have of and We with for was we've today execution first quarter a business. first I freezing we weather November guided with we exceed release very

We free cash costs March. positive. Altus cash a seventh dividend unique also we the consecutive decreased achieved in its which paid Operating and midstream Altus quarter first in quarter our were first full flow is for competitor.

a backs West are long midstream premier recoveries. haul of the operate assets Permian drive pure improved We equity gas and the net play aligned this ESG with oil, natural the Texas. We interest increasing initiatives. transport gas, Basin that provide industry's company. These gathering Complementing four we and out processing Gulf efficient of and which pipelines more liquids art own on are product state in Coast cleaner, focus

execution of quarter event A We disrupted the freeze exceptional the our that further a day results February have a during as proven period. nine quarter JV major demonstrate. first operations our and the during over record was assets

our annual While note the and field guidance his negative expect result of impact broadly I a the adjusted that in harsh Ben as offset EBITDA address we no impacts storm. on but remarks guidance favorable unfavorable. crews, the speaking, the weather would will material facilities winter range testing

to As that contract option sell Altus power the fixed to noted previous us power shedload excess a in calls, has affords price back and grid. investor the

and of operators. the built and negative them During the temporary of lower operations. offset with assets four JV storm. sell and levels. pre-storm also facilities were the were quickly and of The back experienced processing to mitigate help pipes and newly and the from All expertise income are working the to the impacts throughputs storm, quality Altus these gathering crews that to storm was service incremental generating pipelines the power, able brought Impacts assets our

home. portion an want In operations with impressive High. complete to of on weather dealing this moving the is online processing during this while responding particularly and reducing related advantage some the lower to conditions chemicals, wells circumstances especially seventh work and and who of newly in I overtime conducted quarter five recognize is costs savings challenging month. accelerated flowing have did at harsh quarter, to at review, own our timing of quarter, job forward which essential start for of the the business I will begin the where pricing. keeping that individuals is we of this two this their to pre-bought which maintenance gathering back to business conditions. Before acknowledge incurred difficult take Apache given expenses the our were cost quarter at completed and burden more to scheduled by supplies pulled weather supported Alpine volumes schedule the Last wells the we addition decreased first many impressive year. Operating later A these consecutive

We costs. also lower benefited from contractor

fixed Our converting successful variable costs operations to teams cost. been our have many of very

the and equity party lower the though subdued is to environment operators with pursue well private as across Conversations public as This continue with business with both includes outside other compression E&P Alpine expanding for Delaware midstream Basin. somewhat other of levels sponsor. ongoing companies. We third are We're backed activity providing opportunities and High. and additional Permian our also the working services deals with identifying basin fields Apache in still

areas assets will to our our optimizing focus the to new continuing be our ahead and business, capturing the culture. Looking ESG strong year, build remainder of on

are drilling company which and support to strong products in activity a and cash free continue We significant should position Basin. to for Midstream in oil Altus Permian us gas meaningful are the capital generate that flow. increases will optimistic is in measured demand and the completion strengthen obligations behind road

of liquids at to becoming May from pipelines GMP on Atlus' potential both business Our straightforward dividend through per upside declared a of $X.XX of our share is shareholders and end week, of assets more utilization. payable increased the this Earlier June Directors with XX. record Board

provides yields among most midstream our assets gathering Our substantial I today. processing to Ben. the peers long haul over call support our one will the offers of and which for unique compared attractive combination turn dividend and of pipelines

Ben Rodgers

the performance February guidance for quarter, Altus XXXX. Thank remarks, you freeze financial prepared for will updated the the financial first Clay. my our I and of In including Midstream impact review

cubic accounting noted press $XX issued for Net of As net the derivative was including the a million. yesterday quarter income $XX during million of controlling Alpine at shutdowns approximately which curtailments offset XX% was Altus related which February. units $XX were rich which quarter. the were for weather income related an release two day interests the million derivative the EBITDA additional and in the Adjusted averaged capital the unrealized first including revaluation first our reflects of well the non-controlling Gathered in brought gas. feet $XX lower approximately All period. approximately for quarter. reported by per embedded interests related non by million were impacted for of technical preferred embedded volumes expenditures for were back online the partially hookups was weather the High loss million Volumes end to by the $XXX quarter quarter before growth

Our XXXX. gas on which initial first pipeline include from X, natural Permian the Highway contributions quarter January entered service the results also

distributions However, really month. lag didn't a

impacts of expect by steady shippers forward. results only fully going and two Both from and Erie. Coast which volume from we quarter's of PHP Gulf weather months reflect minimum commitments winter to one the supported contributions this was PHP, storm distributions Express lower them due So of are

Clay pipeline discussed. including like assets, maintaining they of all the did impacts across Across the fully commercial I'll the highlight $X.X We've by JV presentation system in are want operations to approximately updated operations financial negative risks in achievements imbalances our For income taxes volumes that an the four to commend was items. outlook the yesterday team impact flexibility of our move and Results excellent would storm pipes during EBITDA Altus investor preparation for lower contracting XXXX. posted website I for of and GMP Negative before million. an their offset the from to also guidance benefit and conditions and Altus net the field impact on was to necessary adjusted mitigate storm. before the provide from contract the and severe and were provided for our power outcome our to now job. to I strategies that the almost and immaterial. and our execution

Our $XXX and and effect Higher the XXX volume million upwards early to volumes GMP the our midpoint earlier. positive EBITDA. from a year. adjusted our million end now the have are Clay reflects two the This raising of million Therefore, day. outlook $XXX outlook of per High wells feet increasing range to has guidance quarter we new of for Alpine is five on for more million, low been encouraging online the adjusted $XXX that the cubic at to gathered the addition first brought XXX performance million wells during noted

of with our startup Highway, Permian Altus track Permian obligations are previous estimate million liquidity guidance our capital of $XX position. strong on has annual minimal. Following million. to we $XX a growth remain the And

Our need revolvers we of capital. through committed that access November foresee to XXXX no

Q&A. the on on our that dividend on balance preferred priorities with payout. our sheet to focus strong can to the move continue We prepared now supporting concludes We addressing Operator, and remarks.

Operator

line [Operator from your with comes today proceed with Spiro Instructions] the Suisse. question questions. of Please first Dounis Your Credit

Unidentified Analyst

this Hi, is for Spiro. on Chad

of can be about wondering based your few see mentioned Just any of potential that previously coming few off on opportunities in case starting projects like or But later prepared months? sounds months we believe next those you should next you've timing this Just I how some alluded we announced the in growth opportunities. those coming some It the to still remarks. Clay, year. being think may the

Clay Bretches

we'll a for the that some their we and Delaware activity year basin. greatly, lot of are operators believe as are but this are of the timing only than think going the the do from methane Yes. those second regard very just to do And that around starting growth believe Thanks that next and to standpoint, with at flaring A I two from feasible. year, months. last in of the the regard are half the Chad. of that regulatory that we'd the increase to half opportunities, mandates, in the to rather that well. into stem mandates going some XXXX of not will Altus something looking with see be benefit question, We

don't particularly the exist future. new a to we what you Altus that facilities, that something really helpful can with and additions a the think is that in to are on plant, So Permian in beneficial have that be lot that's We that ESG investor of state we structured some that way the the ads plant our of art to we the see other do the of are really great going presentation, in that many plants Basin. older fact

start we that when So these or coming that's especially to well seeing something to second into of from be XXXX going believe will with mandates regard Railroad we mandates as half a be flaring. as materialize XXXX, what Commission EPA,

think that's to So for us. create some opportunities going we

Unidentified Analyst

clear. then there sticking opportunities, smaller opportunities? that these That's provide any I maybe could significant spend Are look could Okay, projects complimentary guess CapEx? bit could sounds they're thanks. on And from growth but with just a what these of CapEx like is little there you kind in like of detail be kind the anything

Clay Bretches

cubic excess Yes. processing we to capacity, going cubic at talking the day system. our between to we what processing per we're per feet rich million plants, terms have CapEx million million is XXX When have right XXX be a through capacity take $XXX now we connection of day in look about we're of feet because CapEx in

We lean system of our over of XXX million capacity day feet cubic in capacity. per plenty have excess

it's ways either pipeline to gas, gas going lean that or other to gas bring just midstream opportunities to in So there rich in the really either area. or producers be is the if operators

capacity I we're excess your about is systems. gas talking and our rich guess, we talking What So lean capital doing have not expenditures. that processing in about we're answer gas to question, big utilizing

Ben Rodgers

very multiple mid digits attractive on of lot Yes. clarifying to we're and And single more of it what of as terms our a which of creative kind there one for will build in build the low seeing shareholders. multiples of that, a in of kind top of projects point well be are we think

Unidentified Analyst

the for Okay, clear. Thanks everyone. Thanks That's had. that's for that. I all time,

Clay Bretches

Thanks Chad.

Operator

question. next with Please Your from comes line Advisors. your of Instructions] Carreker with Capital the [Operator question proceed U.S. James

James Carreker

like Hi, question. guys, PHP the QX, Do happen as could have that contribution thanks look what in think just made you to we the about forward? for that going

Clay Bretches

around pipes James. noise to in specifically, specifics winter barring Qs including of Texas, it It's even in the of the PHP. beyond X any Not But storm there? to GCX flows quite frankly, haven't across as through kind from events other and I and in out QX it that. going mentioned, normalize have the of I disclosed force majeure fully impacting we imbalances, some many and expect because X

James Carreker

Okay.

in third had monthly not the mean, reflect imagine, even saying I that disclose be I earnings taking you'll it’s grossing it So that you're and distributions for a storm up but that the you've you payment, what got really would because still ongoing impact? up XX-Q will

Clay Bretches

That's right.

James Carreker

any Okay. production long two the on one Is flowing kind How have far? completed IP so rates indications are early those or of how any there been rates docks and month performing?

Clay Bretches

will as more the flowing. that results we their this of discussion have the and earlier Alpine from some already the year be five far and the that were completed about completed completed the been not and fact even even we morning two there on this as two about that mentioned script docks, the those have earlier Apache But call No, have been in they has High that and month any of them May of on will Apache. in they

comment expect Alpine Apache the High. that's we that will So of disclose something expect can in on that discussions not But information further to more ourselves. on have and some we

James Carreker

one plus that guidance. like I to docks asked of revision reason a the have completed seems throughput would maybe because is higher led the with just, I more QX, in Well, two bit little it five

that any what are those there So volumes? added would on other be things offset to going

Clay Bretches

Yes.

being as me conservative. our far it's question So let good this we're very and guidance, say as

is seeing baked performance and upside not of. the from of So in lot what docks a those you're there

will, try out seeing before guidance, in that in we're disclosure but not docks. that. But color provide the upside those of So for months to what the we in in of lot Apache front on standby you some a We'll make on more on you're ahead. that, if waiting that get baked is to

James Carreker

allude sale then that maybe Okay, your Is the like call, to to me, as Permian didn't it I for non-core and question final asset Apache High. their sound think related was but did understanding it on well? Alpine

Clay Bretches

That is correct.

James Carreker

Okay. Thank you.

Clay Bretches

James. you, Thank

Operator

Instructions] [Operator Clay at to call now the any there queue in this remarks. I for no are further back will Bretches turn And CEO time. closing questions

Clay Bretches

contributing on all more Signs call momentum party Thank you people was to of joint today. Altus get the vaccinated as improvement and with potential liquid following this for sectors. the our our out I'd you potential for and economic thoughts like closing listening We to business activity about to there are picks We significant leave GMP business, XXXX Midstream. our with volumes see entered up wells new pipelines. across third and increased utilization venture continues.

ESG optimism. the It associated Permian focus his of noted not upside have range a to be that include Basin solutions our operators midstream capability guidance with updated We on performance. a with does should

payment Lastly, over that XXXX. concludes it quarterly our to Altus will to dividend returning our is in call. second we month. achieve next its will well-positioned capital and deliver I you. operational objective of turn to financial shareholders. I goals am pleased This And our supports Operator

Operator

today's you your concludes this for call. Thank And participation. conference

You disconnect. may now

Kinetik (KNTK) 9 May 212021 Q1 Earnings call transcript