KNTK - Earnings call 4 2023 | Kinetik Holdings Inc.

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Operator

Good morning. Thank you for attending today's Kinetik Fourth Quarter and Full Year 2023 Earnings Call. My name is Megan, and I'll be your moderator for today's call. [Operator Instructions]I would now like to pass the conference over to Maddie Wagner with Kinetik. Please proceed.

Maddie Wagner

you. Thank welcome well quarter XXXX as call. and XXXX full guidance Kinetik's as earnings our to morning, and fourth year conference Good full year

speakers would statements that number guarantees attendance Other members involve earnings and our senior prepared release our measures Trevor for like are as performance We've Our and we are slide our provide could call certain morning's of risks also Jamie presentation remind also call. team question-and-answer conform measures Officer; of reconcile over we and turn press today's future webcast provided call in not described non-GAAP the U.S. the the results Howard, will www.kinetik.com.Before the are Officer. Executive yesterday, this and President that Financial issued Chief begin, we actual forward-looking from These management listeners to to are that, I to what all remarks, release. of a today to press differ to I assumptions. do including open the will our schedules GAAP. not at performance is available provide Q&A.With for these access Chief Welch, The statements, remarks, call and We our will and that After may Jamie. statements. of in part these our section

Jamie Welch

detail call morning. for to XXXX our forward financial you Thank in We results XXXX Thank this our today. we both you, provided guidance. reported discussing you Maddie. morning, Good fourth more and joining Yesterday, our quarter everyone. with look

and our best growth Kinetik vision. on relentless upon We back our several and highly speaking, priorities this broadly execution. can projects, be as characterized a year, sustainability more focus Looking on past executed strategic financial program it

middle budget processed increase their achieving After all We of COX did a the concentrations thank develop guidance the just at and developing services package in us amine each experienced month take billion team year. our remained producer past per that we the for The wells within under to moment April, December treating of volumes compared safe record over X.X billion turn-in-line a more focused with dedication rate X.XX a operating per to billion processed reported original that of with billion accept the our rate while to year a a schedules gas as million, safety due will and our on broader cubic we cubic modest gas customers benches, the to large feet achieving cubic our our midpoint producer representing provided treating increasingly guidance ramping full up above what fourth concentrations. gas work the our processed of elevated the day curtailed capital sustainability. gradually and our contractual services day exit our reliable adjusted XXXX of and exited on meet further, exit been November margins.Treating further little Full Thank and quarter front-end want we hard online X.X expand when We X.XX of guidance XXXX revised in the complete We results. than the delivering to revised is to revised of quarter volumes new processed allow for benches. fourth range.We producers guidance Delaware guidance and as the the The gas brought address year of important quality for cubic blending fourth becoming guidance we million elevated I also step-out year quarter quarter well core million the of the day. in of commitment feet not gas of quality per XXXX producer to unwavering quarter provide volumes to They volumes feet and shift provided COX working our with and range. know expenditures fourth $XXX a including an shallower projects exited were gas our To because and with several XX% per of zones in $XXX average volumes feet and were day, shallower our $XXX XXXX. as specifications. a and year customers. to gas system-wide achieved on you.Starting EBITDA Avalon time the number the in Basin. from as these the expanding as and has Bone project, range Spring issue, which to financial

majority-owned months and completed ahead X our feet constraints quality placed associated This our facilities increasing emerging over on is most was providing assurance. and In the almost customers over increased its XXX service into This January enhanced and rate pipeline blending capacity service. gas uniquely fully system treating positioned couple basin project was with COX expansion growth reliability, offerings.As reliability past connects intra-basin billion system to the strong market day processing million operational I processing system budget.Kinetik wellhead testament X cubic feet in On Coast Gulf flowing and a New to a we gathering flow that as in Waha, with the the Delaware markets the we Permian began of and most integrated the tailored within on growth phase service, growth.Looking into support on our as Mexico of has we issues complete, Mexico earlier, December offers underlying wholly-owned infrastructure Link, to part next provide the in Basin, our we premium Then, under gas Pipeline execution residue The volume of treating can Kinetik last a assurance New opportunities suggesting touched service rate expansion recently, demonstrated per a per flow to system-wide or October gas differentiated With placed on and Highway New of solution schedule basin. to approach a gas our share our our fully capabilities customer-first fact, basin. a significantly X, year. been producers from X, grow years, the We're Mexico, excited over footprint the completed with long-term volumes business about been our has overlooked XX. of and to one of HXS, Permian which On vision. is back are the have we directly approximately today. pipeline. double day cubic

by in last construction remains significant continue turmoil. the XXXX and and volatile our As under capabilities. already uncertainty we through Despite to a on have capacity that demand of to Furthermore, geopolitical diversity competitive the U.S. advantage to a infrastructure offer view permitting counterparty in a new the Gulf New pool with we entrant into this XXXX, the remain market, the period export processing driven and infrastructure announcement come be to is Mexico online to slated ahead LNG LNG administration will economic the as we month, by treating available commodity today quality already producers.Looking XXXX. pause prices of blending strong Coast

versus more or sources was existing U.S., our to specific XXXX of projects contracts. role the XXXX. to of in be Trevor take XX% solution.While XXX energy provide amount value continued can balance feet we billion critical a fixed-fee As Kinetik, per gas almost will XXX of part traditional we emissions gas a reliable profit that million cubic of de-risk play guidance, hours from carbon roughly as nearly reliable, day energy, the to XX.X a that offers gross natural to natural world will metric further expect are At and fossil is net exporter continues share export proud kilowatt billion for cost, homes. lower steps in sourced XXX we lower fuels.The than energy Over have to it more chain million the sheet. delivers by enough a of regarding and other lower cost-effective, our representing our assumptions double demand cleaner, XXXX, tons With which power U.S. more of

profit X as commodity-linked have remaining and opportunities.The we We one of remains XXXX prolific and of growth billion the see exposures Even day. producer barrel our world-class approximately approximately hedge will we at our and to XXXX WTI feet development. most cubic In and continue a estimated gross hedged that Permian resource continued cost-competitive XX% EIA basins. is a advantaged per $XX gas economics by increased supporting the wellhead wet XXXX, are

to a levels. rigs exit-to-exit will liquids, reached changes billion months, believe Permian finding swing including per XX-month like opportunities a will to Wolfcamp our most crude With billion we Avalon, X.X that the grow XXXX, Permian across rig high-single-digit Permian X per ethane on demand per feet at the when and approximately strongly to and cubic would We natural spreads, month gas continue growing approximately we Bone to which growth.According exist struggle keep materially day zones the XX% to is gas the this remind for residue Upside natural the was April gas. floor due from audience oil, X XXXX. to expecting growth to approximately Now, the with like record meet that that XX% increased XXX in with to any by Shale. grow Therefore, billion last by supply C, and one forecast can demand the wellhead peak gas billion pace gas cubic Woodford day XX% consumed natural residue production in deeper XXX nearly feet the of applying in next. to and factor, think the basis, formations the a alone, world's wet Barnett XXXX January, from month States EIA, shallower reduction the gas the which for Permian footprint, United is feet in activity XXXX, XXXX's shrink several growth upwards day.Now, I deliver on past we estimate an and expect cubic trailing gas and in Spring mid- the of percentage fuel

Throughout XXXX, these turning the to over and year a like accomplished, for call we We well zones.Now, growth taking we on our what remained is and from this yet to excited position of recent proud before journey. of steps are Kinetik. robust for and the significance our Trevor, to results the we to focused reiterate are commitments extremely for formations XXXX. Kinetik encouraged I'd We're on what come have necessary by

hand stay to Trevor. now that, with the call over to would I So like tuned.And

Trevor Howard

$XXX reported of In Jamie. adjusted Thanks, million. the quarter, EBITDA fourth we

quarter, free we cash cash the an was distributable million. generated For and adjusted million $XXX flow of $XX flow

results. Looking segment at our

Midstream Transportation Pipeline of for by free million, million contributions $XXX came was $XXX the processed our Midstream February. last a bottom of of million $XXX the Logistics segment guidance provided expansion. and full capital year, to prices.Shifting our adjusted Pipeline credit year an capital year separate EBITDA of within adjusted debt generated quarter, used $XX refinance through took agreement.In capital XX%, gas notes Xx an down were transactions. of range, million And Total Transportation of flow, from the capital within EBITDA related expansion XX% the generated operated we distributable series our the $XXX for June ratio A nearly to proceeds were volumes. at million, for our December, the month we by X% reported in commodity were and Logistics million XXXX Transportation Delaware XXXX. quarter-over-quarter. million increased full segment internal portion full the year Term existing million, expenditures driven X up the with our of and despite quarter of gross to X% Logistics $XX cash Total the pay PHP attributed worth facility by the $XX profit was senior totaled estimates leverage PHP It million The EBITDA segment our [ and year the Sequential Link million steps of sustainability-linked segment, below This segment.For non-operated capital million, above that flow. expenditures expenditures fee-based were the gas is in in our $XXX the Loan total we extend increased at guidance a $XXX up maturity We X to $XX range. a growth noting conducted Midstream a due $XX cost X Our million year-over-year. to half as of expenditures XXXX. $XXX per increases with by adjusted lower exited to within Pipeline driven cash result, range project. ]

remains December, by our our we nearly offering rate Following secondary by facilitated fixed.Also exposure of XXX% a Apache, under shares X.X XX%. interest the float increasing refinancing, just million of in public

now $X.XX on per total an float than maintain reinvestment shares of March Directors XXX%. XX% I paid On to quarter management's share to a we of level public outstanding. of the declared more made dividend, at January Blackstone, Our fourth represents basis $X annualized the XX, decision Board applicable be X.Kinetik's Squared and the quarterly dividend on

million all to In However, I dividend between reinvest dividends their total. shares XXXX, we dividend. shareholders quarter following X, Blackstone, fourth will cash receive Squared on The March the approximately repurchased for expires a $X.X XXXX. X, agreement XXX,XXX and in payment March Apache on

our Board share buyback million $XX under approved of have capacity program. remaining authorized We

share to maintaining EBITDA XX% float.Moving value our million adjusted will We The evaluate opportunistic year-over-year. to million delicate year guidance. while to $XXX EBITDA approximately balance We to with of public range estimate of shareholders, adjusted of implies to $XXX in return the the repurchases million. growth midpoint continue $XXX full XXXX understanding

each XXXX of segments. Midstream full-year terms at growth XXXX.Our recently projects completed quarter's comparable to to EBITDA, look Transportation drive we the Pipeline In contribution both expect and Logistics to

segment, Specifically, came supported New processing year. gathering contracts, of by Midstream in fully minimum Logistics commitments, our volume within January online the and this early Mexico

now And XXXX lower Apache of as first be during that of outpaces weighted the EBITDA of facilities. our XXXX year. quarters activity second next to Coupled also gas produced a with quarter this for is molecular to High remind the was growth. full-year full-year we anticipate processed third will volumes EBITDA processing benefit expansion.To Additionally, fourth Incentive than sieve similarly quarter the expansion step-up more volatile, from we full-year Xx volumes from contribution to activity several of our Link, full Delaware customer service. we you in in development benefit with started XX% project a of see forecast quarter billed XXXX, that have quarter that to would we volumes Resources quarter of note as a the and X year. Transportation XXXX.On phase in expect contribution PHP the Pipeline which fourth basin this at the attributed Delaware and we remaining the volume existing last basis, the the change-outs with development customers, I'll saw in Waha XXXX, see and and frame quarterly to and beginning gas roughly PHP prices depressed in Agreement water XXXX year-over-year, second the growth multiple, over Permian segment result month I ramped with a volumes a planning will heavily fourth Link In Alpine bed expected in

segment representing XX% X of The over is increase Kinetik in EBITDA and Transportation Pipeline XXXX, adjusted Our also a growth to past for the XX% Crude. total expected at forecast years. Oak Shin calls EBITDA EPIC contribute

will choppy in As Jamie on, be commodity continue XXXX. prices touched to

expected commodities, guidance gross ethane, we is XX% and concentration XX% sheet.Our the gallon However, and capital to across higher hedged MMBtu and from will following $XX gas guidance. and natural $X to on XX% an XX% gas crude.Turning To and from expenditures Ship from a commodity-linked, approximately butane, barrel Hub, on we XXXX crude. propane, of for contributions, XX% profit natural approximately derisk hedge with comprised have of earnings our assumes are and or continue gas propane average butane natural date, our for per Approximately balance $X.XX at our Channel WTI, Houston liquids. the for per per XXXX

the $XXX million is of We to $XX expect which compression million capital between of to multi-year including $XXX for maintenance million capital expenditures be for year, elevated year, completion of the full approximately overhauls. because the

nearly projects, last free and slightly of and, reflects completion the EBITDA incremental a communicated XXXX year's to guidance, Taking $XXX of midpoints capital is million adjusted below reduced expenditures growth expectations. translates our our this guidance Our the capital of the program into following previously in cash and fact, would dividends steps We balance our in took capital to flow a increase sheet flow year-over-year, free on financial before meaningful with flexibility.And and to XXXX the maintain in Kinetik's like marking remain priorities open that, our focused Q&A. strengthen generation. significant cash allocation return line for I

Operator

Our with first Instructions] line [Operator comes the question Dounis from of Spiro Citi.

Spiro Dounis

could. I to with Jamie, treating, start if we want

is it like mentioned an and being there, that emerging had You issue. sounds uniquely positioned becoming

do have to So, curious you position again when competition need your lead a And your even be to I'm there treating some to then you if of sense the more ability in you that? any have might of capacity? add time and on

Jamie Welch

I'm treating look, the is to April.And be out system your treating amine in the impurities ask us, I that contact with, part sort take years, don't taken gas the we it interesting we over have is done X of the Obviously, the at But us in get what the system-wide is Spiro, front-end as far I treating we've first the your question. we'll Diamond. people almost being because us here context the one look, other of amine Pecos announced early We since it already we I in treating. Bend as so, wrong. would of for to had as -- aspect saunter maybe -- great rest merger think, and of as the install think rolled it's last glad bother front-end look a is is mic. Matt actually say, have in think, far can in you context would as, for stream. What obviously, of I

when of we it treating, much have on it is system, the I in sweet of of obviously helpful system, our gas therefore, down because blending fact, us it is a obviously certainly is it's interesting and all is the of because to And impurities. you, context together, lot of you mix as that in producers. think level the the breadth what our as our blend for

advanced don't just into more sweet think it. a of others. So converted we've now I sour a system. a certainly is than it's system we're case Others fact have The

if And, you much else adding that to a take available we that to of that capacity. we're that. processing there's don't know, have quality.I already means capacity So fact we now add can Matt, gas anything range open broader want to the

Matthew Wall

think Really gas the main north difference of broadness from and I points. it's really the you south the blending No, with footprint to probably process. hit in quality the helps

Jamie Welch

of heard the Spiro, really context just Pegasus don't it's in pipeline, that of HXS, aware lot pockets, So, that certainly much we what point, prepared on it COX. of in of in Reeves, discussions whole of you see and of in are and call Lea We've January -- on We on much, I'll this. Central flowing not a a lot started we sort remarks, -- as there a We our are County not had and sweeter. lot XX. Southern

already we we're the seen can stages not yet. higher Lea because maybe not than that County, and so And tell, it's what we've HXS COX. with that's levels Eddy maybe yes, of both County. seeing again, know elevated we So do best pockets. in County, Loving much, earlier

Spiro Dounis

Understood.

for the of for of Second you're you as excess flow. balance the are sheet I that dividend maybe to dividend question, growth of some this sort there million look beyond going an the Trevor, cash But probably cash the free most and forward, to free $XXX capital what just sustainability increasing looking now. going and after guideposts the ends start to again? you'd going the up incremental flow suspect of of return. mentioned

Trevor Howard

question, the for Spiro. Thanks

a excess right are of have guidance we're for X.Xx. that provided, currently, we at So, million do right we of debt that yes, -- earmarking the taking we cash dividends paydown. leverage and target free of just Xx about $XXX for flow after leverage in now with We now,

field of just investment-grade us getting and in the we down now, to upgrade. front X.Xx, the on up for the -- we and us that right football focused we're profile, an the sets So, that given which landscape deleveraging see moving

that's right And are so we that's -- honestly, where now.

yet.And we say until think this we're it's within X.Xx time it's -- dividend, a say, point think have I'd the -- earshot, I not to, the the not ratio I get option. we I'd not is at or -- raising closer leverage do in repurchase quite or or in there

$XX share. can on program. at flow about going have after $X bit the right now, dividend remaining that little in we XXXX million of to with be a levels think, if We we're dividends. And, our a dislocations more But, allocate cash program, for flexible see how we authorized we flat I the stock, free keep the

Jamie Welch

I -- Jamie. it's And think Spiro,

healthy One we I couple a of things. -- think a -- still dividend. is, we it's have pretty have

context sort to of out our think, X.Xx And the the I you, you at that of midpoint investment people. I obviously it for we've our the just on have balance guide you you And durational grade. That's lot of think, pretty on you as on good this the level the grade, was Trevor and do potential sheet. if end capital think, of comes component I because be that investment range, the have look be. of at X.X, at we really, high give it's a to in a low said, balance of managed target. the of simple that continue starting guidance shouldn't look to that you us that right?Investment them we high and how we say, get for marker and end I the is that meaning is And, end capital, gave lot And grade -- default EBITDA, future much low sheet.So, capital. I credit the guidance X.X you I me, with of a within the There would have think company on give really of X.Xx around low element Just end, are, grow. place if to putting position arithmetic yield. lost based there important on to have within, credit are the look that earshot to to the on it's -- To I target. of the EBITDA to as not me, me, a a

you And basis differential You context, run obviously just in as to to giving interest a point get about. you not things, Yes, fees, the can as a investment-grade more it do. X.Xx maturities. do being de it lot to default the flexibility sort longer think of business, the just total of and context we've cost start there's think sum a also about the that's to want facto what of I you to execute, the used but numerical rate.And, think, of says, in people target much underwriting always

Operator

line to with question of go Tristan next will Richardson The Scotiabank. the

Tristan Richardson

around how you you're capacity for to future over the of of question growth note your Clearly you the lot XXXX. just basin. sort 'XX how of will in you infrastructure. did timing think of overall. certainly, thinking thinking think a additional But Just all XXXX, we kind volume need shifted bring Clearly, seeing? kind added of the decelerating start about in new G&P that I this terms change in has outgrowing the a might growth basin have growth. But maybe timing about infrastructure? time and exiting fills of pace with that were your online Does customers in

Jamie Welch

answer think all. isn't I timing impacted the short the at Tristan, is No,

of think, of And as unique I now, gives access yes, the our goal, County pocket. we're Matt intimated. you now breadth say right the We macro I in 'XX. with at changes we into than on and think pretty FID a expect way consistent right the opportunities Kris seeing we half as therefore, balance did think, processing of that growth no see general looking that think in the making And, plant timing is now still I on think, And rate of of for it, gas our can And, Lea system decision for -- to sell Other with about in is second a told good into I'm pace Kindrick. sometime what in you will, lot the some anywhere different 'XX every for it don't of a about is Eddy to access we think And don't what capacity. County, how the I that, the need if we an of time. access basin. -- some have XXXX. we sort us I out our decision of probably it. shots the and is we've we a

now, is So use what full on. team we those commercial opportunities. breadth to working that the our is system basically And right maximize the and extent of

Trevor Howard

that, open tight of as think state processing. that do going share line, And growth, in at a share, continue opportunities the Trevor, pretty market I today. we it's space basin north long of to market given where to on to stays, see as thing don't other still despite, we to I decelerating gain the processing the have dynamic that that for I'd guess, we're And areas is have the add and it's extremely growth still Tristan, line healthy. And the state

Tristan Richardson

really a the And on last quick you've Appreciate about, the Helpful. question, maybe available volume as talked follow-up it. then just minimum volume toolbox to tool as of primary today? obviously cadence and all of of you the new brought the the in that in processing growth we think we we to logistics work online, follow delevering delevering from that think about growth think customers, EBITDA commitments the should assets the you. about tools that then 'XX, Should pipeline

Jamie Welch

the I got of year PB that the give We've this there's sure high to wants is in $XXX we'll wants $XXX million treating. our perfection.So obviously dollars still being out, well still would or that's of pretty I system we in XX-some-odd-million balance mol the million elevated basically recoveries, at He it's across sieve full that context this Yes. is capital. and look, prepared top think managing in exceptionally this quarter, lot the think front-end the press of the say, about CapEx -- whether it's credit. look, run both decile. maintenance in we've running midpoint, actually Yes. plant of, that, as to as to He well, of system. we a Matt -- change-out bunch one-off the first in call, in recovery And projects, release guide, I much look, peak meaning, we as and NGL allocated He pointed whether start this every barrel, about times $XXX at pure rejection our year. lateral, giving Pegasus mentioned we make running to remarks rates. the got for as even obviously amine I million why thinking have your the it's Matt a

time it for happens First Diamond.

the time since think XXXX, in I it's XXXX. service in first

probably could overdue. that level rest could at that, system. going weren't it's really extract. the the, that of And do the the we So, actually see the really, knew in equipment recoveries would fact, we're across at it we I that say, to And

ends compression between maintenance on the well East CapEx as Toya, rest of top a PB, the that compressors then we've got side, the and related car it.So like basically any overhauls to So of on a major -- to got service. major requires overhaul engines. it a we lot because of And a like own turbine and just just you've a for lot

our much took think, So times particularly up, equipment? I summer, if they summer, of beating think, a don't most run get Last took want a given, pretty last you beating. you to everything

this look, we're So this get lot of it first we've done, a quarter. doing got to and like, this in was

Operator

Our the comes next with Neel Mitra Bank question of America. of line from

Indraneel Mitra

a the this ] course it looking where And if problem COX is tests. fourth in details maybe normal a was kind Jamie, Or and provide then, wondering benches seeing this, a is little that that COX different high? producer the And I of with the the across the placed I to of the bit one-off elevated what in you're wanted at content levels especially [ of quarter. was alluded business? where but regions of can you spacing kind focus what Delaware? you the to you on kind was really

Jamie Welch

issues. -- talking they room far world's industry well, Kindrick about the are Kris as experts as and the sitting COX right. the All here are in Trevor this

by say think the just anything it and was I think crazy context, think it's the if I an, and in wasn't ballpark it was else, that I they or it context I elevated of result anticipated.I'm the there to spacing blend going it the but higher benches was Trevor. of much thing, would outside they -- I benches it unexpected it honestly, think -- doing producers say, of was of X over particular -- kind Don't anticipated. elevated to was know multiple more there else more in the than done wasn't are hand just don't don't was it this Kris was it anticipated. they than and was than multiple -- to

Kris Kindrick

is Neel, Yes, this Kris.

developed As few Jamie said, producer the COX. of didn't this miles and a levels same see over bench these

in a We're the be to It's COX it's able may system volume. it into take our So increasing one-off. and today. blending

alluded Jamie in amine to. as We April. additional are on We'll treating have Pecos adding Bend

for So seeing benches just these getting dynamics Avalon, prepare Spring because... are one we're we Bone it the developed, need to and as of different

Jamie Welch

it, we're right, seeing Bone Spring and where Avalon? That's

Kris Kindrick

That's right. That's right.

And developed, industry, so an get for these as prepare need as that. to benches we

Trevor Howard

that, one I in last point. is add XX-well coming all a on And the matter then, package thing of months a that Neel, receipt online this from

we come system. relative And so see volumes on that's to the a how bit unique

unique. respect had earlier bit this you system, a it And system, just that Matt and we really our don't expect we So was upstream midstream to -- little higher and a specific talked capacities issue that continue to our blending it -- of about an to online to basin-wide. But But just little be unexpected expect elevated the operator bit both level COX. could XX have one coming for be difficult part of handle wells from capabilities. the when with

Indraneel Mitra

more little Spring, Delaware and earlier, but can is different Southern it think Got points? you it. and want Mexico, so a see to you know I those information, and Kris, on is to but where it helpful. you I comment than we the on sensitive kind this the And a Trevor bigger commercially and bit the Avalon specifically can That's the New where just Jamie issue? maybe but really of speak Bone Delaware don't geographically alluded

Jamie Welch

Northwind all one shallow to County the or treating is have gas they see customer. shallow the that fascinating actually Absolutely. a specific understanding gas, to geology. take area it's that Look, it's and is Neel, and it clean It Jamie. we That's treating. aware companies that of understanding actually like and the of sort I'm we Lea Pinon the -- They others that actually do do. back they redirect and literally it redeliver processor it whether

gets actually County, further has a more think the quality I challenges and I from Lea the levels. think, you and more there the go, upward it tougher meaning to are So gets, the gas elevated impurities more the

Keith Our line next Research. from with of Wolfe question the Stanley comes

Keith Stanley

expansion know getting the still to decision It the the But in pretty wanted modest-sized much this quality at ask growth for DRIP The the a point, support I target seems asset. give done. asset. to even expansion pipeline to help by might would selling I growth what's The That like GCX. a you're dividend ongoing bit. little in segment. really monetizing year-end. rationale considering leverage waiting is on opportunity prior the a GCX? actually It's you you're strategic

how of pros cons selling and So seeing the this point just, at are GCX? you

Jamie Welch

job It's masterful a of exact did and here. the just rationalization happens tough that you a discussion Keith, internally one.

fair it. you lights-out a trading you've thought is the [ your what might consider was, excess you got then offer at FID doing lights-out, If in of and multiple and obviously, an ] far expansion of value

paying you're at I'm you're is as XX% If selling XXx Trevor which guys, and point out would a selling down and you went paying not cash-on-cash X% sure, and implied down sold something at something like just X%. today, yield this of debt, a and it regularly,

have that not of to explain Somebody the any fact to sense no table makes me engage having any the week finished any We this next actually or much context have to value DRIP, this in anymore. a joy has sense point.And it's which numerical that it's the around enhancing this to longer to discussion, have we've that fair we very and done. conversation company actually in of that stakeholder

I that we paying really there provides compelling offer down would that think of So just an look, to value that debt. would be is use a than us, proceeds at more be to have X% and think, there alternative it

Keith Stanley

lot a sense. makes That of

see given question, a growth for know a the seeing allowing the Second beyond years? coming lot are year? Is things, growth Do growth acreage? the you but you it on. don't couple out over CapEx growth you've very from lot which Or of opportunities the thinking you're company more for only you to volume but of assets 'XX this of have beyond several years, outlook thinking -- I expect growth So you're New today, how a Do new do is you is low, existing XXXX? next about on just basically you what are Mexico?

Jamie Welch

in obviously, to a open 'XX from second you half and pockets. where Apache which or That's ago, last it now and a the the in obviously, beyond year-end to change takes gives of is turn heard line. gets There that there'll I'm growth was big Kris, that of those we of underlying moved months year, it. I XQ we of underlying obviously prepared given -- 'XX and doesn't gas look moved are. seeing with best put you is the literally of the will and space. where from to XX for hasn't they of Waha were line where laid they and mice in the just in-service, plans to at pass, prices men, come like looking at I'm it right, expense in Matterhorn.And, listened We initial context So be think, remarks. we're sure the system, it, be sell sort given puts get there'll -- the out balance your growth processing be and of

a particular because it's given Those a in growth blocks I just, swing area as of gas. there's you how gassy that building think, big the is, rich know, just big growth. -- context the So just that's are, underlying

and Trevor existing XXXX has on of said that change relates Lone a during this big the the comes with repeatedly, out, literally adjustment with Looking contracts Star. we to a significant as XXXX -- it becomes course XXXX NGL year-end our side -- have the

upside. margin fairly so, a And obviously, also great opportunity and, attractive they themselves create

Operator

Thank you, Keith.

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

Jeremy Tonet

into I just wanted EBITDA the XXXX. to touch trajectory on

overall You how point, things get of of more gave how see, just developing by on about looking guess, before contribution back I at guess, over Just there trying Is as to I this in forward, happening also basin what's the relative this are Alpine for maybe Alpine a waiting we across color year evolving and see, half in 'XX wanted High. to time. High. growth But here? to you think quarter ramp light especially a sense and

Trevor Howard

Jeremy, thank question. you for the

this then think, all some -- view I to own decide XQ. going producers it's developing see experience, to kind we have But be may these the to of turn-in-line think back on certainly XQ, really into the and to thinking move year. and seen impact because think, well memory, go an developments, so probably things throttle storm turn-in-line a of I want --, many so when winter we storm when still you is obviously, of of that, be our winter consider not the -- XQ therefore, don't be pads people and for much spend think, everyone some said sector consistently, Uri, I XQ, XQ, and unique quite back XQ, you're within experience up then or have fortune. start.So, it our literally more ask As Uri, and spend are winter and around. it my may the of still freshness obviously event you stuff winter stocks, have I that see then is, these the recent bad work. money to all potentially teams, ramp it's it gets of would some I have but and -- on where XQ growth XQ, about, it and I performance. on they you obviously is obviously to across sort set can XQ, it's People up. we happens the They suspicions our it the interesting question be cover uniform management our that's and look, really XQ, --

Jeremy Tonet

here Got potentially Permian CCS you guess, take have in might That's Kinetik it. of in COX and a just maybe evolving that CCS going if one to further, not or then there. role I and helpful forward. Kinetik what could little you how the talk see bit, and step might in pivoting And specific wondering more higher

Jamie Welch

don't within but we think, I describe Well, and and not only is Jeremy, for speak, is I'm I again, a a utilization thinking, full have of is there's some him. share and the to we're doing.We phenomenal, we've to And got describe definitely we've center quite CCS. Jeremy, the for -- dear, -- application, would COX, sort of different which we're I to yes, that waste Matt, think as way big it. think at, XX at got going slightly I think, of say, watch more it. sort it I I'm I relates I'm have our don't how I'm going sorry, -- -- that's looking we'll Matt angle COX, we've something front it. We've enough I'm looking but and things as that best days of next, at looked to some near to -- waste looking space, use different the this think very, is news at we're

Operator

Jeremy. you, Thank

line the Sachs. from Halferty question of comes Goldman next Our Olivia with

Olivia Halferty

capacity wanted you on how on is what Would follow-up broadly, regarding changes then, margin take deals be more trending to other pricing share capacity. processing on your commentary footprint? comments to to on your open see footprint? processing we on I existing able open And could your

Trevor Howard

the for question. Thanks

space that greenfield open a is in still are So today. have we we are we What do environment. seeing

that the in area the processing are And so to on order having take gas. build other we're deals on, processors we're that seeing the competing in to

thought we're we're so be. off EBITDA per the to guidance. margin the Mcf contribution that a range we announced environment. still would when we And Previously the seeing And greenfield a gave guidance for in environment, not of what changes current we original based any merger,

Olivia Halferty

then And think budget cash rate generation? remaining flow even CapEx the CapEx spend. makes the should step spend here? maintenance little run with think and how And free a upside just to meaningful we down How a then budget? shifting this budget. about And saw balancing sense. year, That to more drive including project needs we CapEx bit We from what Okay. just about upside the to elevated broadly, should could

Jamie Welch

Okay.

So, Olivia, it's Jamie.

As within discussed these run relates rate, what to it run topic a rate. calls [ ] is, lot is that fact, is a in

think the as I would I million. of we just out, say So the look -- midpoint, $XXX the let's take

existing our maintenance, be they can that Apache, see million. High, and for I like capital required you for brought back. within even if in additional -- let's take certainly system, you $XXX you thinking going about accounting could can think growth that with on say, for, stuff any That includes in Alpine you manage I'm to

million do growth.Now, we obviously, was to there will second -- context thinking we $XX if will a offset for X And about on elevated that young man FID. right, million a $XX maintenance make the and said You've processing plant, the it to ]. be obviously, go half got if in sitting we back enough to and [ years, my that both become the is decision to

have decide constituency is, to the cash and that's are flow, explained that's if doing. cash don't and -- Right run point. goes Trevor of company. role and what a most has to free how leverage. news That's use free the to cash the team play flow down to what a this we'll opportunities, a do free compelling to playbook. a the able we we be really have relates position to where have I and makes flow to it's pay now, voice that it But to as every think, should As for in value we other see we conversation continue actually nice what be we And good

Operator

There Olivia. are [Operator you, registered. Thank currently Instructions] questions further no

Jamie Welch

March know a stuff. month. probably see busy this you We'll of We in your everyone, and you, conferences Thank your March with many I appreciate morning. various time. is

touch. Thank So, being we you. forward in look to

Operator

I of earnings a participation. you That day. full rest fourth Kinetik your concludes Thank and for year wonderful XXXX the call. your quarter hope have you

Kinetik (KNTK) 29 Feb 242023 Q4 Earnings call transcript