KNTK - Earnings call transcript Q2 2024

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Operator

Good morning. Thank you for attending today's Kinetik's Second Quarter 2024 Results Call. My name is Jennifer, and I'll be your moderator today. [Operator Instructions] I would now like to pass the conference over to Maddie Wagner, Director of Investor Relations. Maddie, please proceed.

Maddie Wagner

you. Thank welcome Quarter and Call. Earnings Kinetik's to morning, XXXX Second Conference Good

our call speakers our in we Howard, yesterday, webcast and Officer. Welch, are attendance the our access to the available members and Financial Our at call. The Jamie www.kinetik.com. issued Officer; for President this today press are management senior team Chief are morning's Executive Chief slide today's Other also and of release for Trevor presentation

certain remind all statements Before our that I not could assumptions. of may will we not remarks, like to future We've Jamie. and non-GAAP section, in forward-looking performance begin, U.S. GAAP. reconcile do including over call guarantees After remarks, schedules part provide differ open measures will described call performance as and question-and-answer Q&A. With measures to release. We to prepared are that provided press involve and listeners the that, statements. These is would conform our that results statements I these a these to of turn risks we from the number will the what actual earnings of also our provide

Jamie Welch

everyone, following today. the you you Durango acquisition. share activities and Good joining our as for well call morning, this Thank Maddie. past quarter's you, update an I integration on morning, to pleased with am thank this results as provide

team in a efforts GCX Durango the few heat over done from First, I divestiture past tremendous integrating Battled acquisition, would both like Houston. Durango Beryl began in recovered assets. and job. personnel the the their our to as The Hurricane for and we has thank Permian months fantastic and team summer closed the

several highly the of the the closed long-term June, beginning customer strengthening the our County sheet X expanding June, our May, ultimately the you. In the expansion Basin, XXXX. diversifying followed Lea footprint gathering and and of transactions since balance organic beginning strategic at in GCX of strategic Durango merger first in-service into transactions, largest we and the our our base, acquisition, the thank the quickly divestiture, closed quarter. footprint vision. At advancing we end geographic at into of representing So announcements Kinetik's we northern Delaware our announced These

So operations for context, we and New had are ago, from of Delaware New a nearly year Mexico. our in Mexico XX% zero sourced Basin today, volumes

As over deals, processing. The expanded has for demand announcing treating I've capital has past both producers' been in team producers few the and current with months, are active are now the prospective we the to is growth commercial Mexico, excited and New that and see mentioned highly since up these investing much-needed opportunities Kinetik plentiful. very north customers keep and with

have II, double we items processing Kings at such, would sanctioned processing the Landing and critical capacity pre-FID which Kings long-lead path work As Landing for scope complex. the

large was will by accelerate We work and of This processing the offset and gas Landing. By acquisition, NVC and amendment, COX County Eddy an in and the acreage go year, of enables gathering, for new and serve This have the gas the that alongside customers in Lea County to margin. The increases with fourth business agreement existing one County. with this we into the effect services our in containing County in development quarter from gathering and is new natural Eddy with gas pressure Durango the the recently, that levels in and processing and long-term previously largest announced treating, Lea expanded Durango advanced strategic also our pressure gathering existing our the processing low entire in of developed northern which will an close expands quarters. digit nearly personnel. a our amendment, that of customer undertaking overall high significant acid streams we work $X a and at today, am a treating report Basin. In customers XXX-day system. More approximately integrate pleased scopes for injection subsurface May, for Delaware important and we HXS these X Kings represents May been region. Announced FID transition XX-year high assets Durango solution enhances plan of investment across to has multiple Delaware at seamless. permitting billion in-service formal and position timeline agreement Kinetik mid-single the to and adjusted our significantly that the to very EBITDA a well Durango's I low

have value, identified developed expansions a that begun improvements capacity facility includes and to upgrades Draw existing robust plan integration have the and at process maintenance, system We that generating have Dagger infrastructure complex. several processing already and we preventative

remains date Following in-service the projects. for I immediately million of we took next project management is capital well growth on year. XXX closing, all on an feet with maintenance schedule in that progressing over responsibilities Construction expected per day Landing and and April Kings cubic

We running in-service Kings are upon connectivity and mid-construction a also XX pipeline Landing the will improve system greatly Durango inch provide to that on hydraulics. across system

began operations and to Kinetik's elevate projects deferred environmental maintenance safety standards. we Additionally, to

new management We has and Kinetik function-based operations they the have of enjoying talented XX and the our employees structure team. also received welcomed team. been The over we from are feedback employees have to positive,

X.XX In X% response which in the pricing, volumes gas day. XXX cubic Waha to results. despite feet per billion million volume second day, year-over-year quarter, growth our of curtailments approximately averaged we Hub per processed feet wellhead cubic to representing Turning

new NVC-backed the expansion by price margins, commodity volumes quarter adjusted improved Lea Link. was This as in offset million, volume partially EBITDA X months gas and contribution a and County well from contributions Second curtailments over from the as year-over-year, of $XXX Delaware PHP and was of GCX. related only agreements increase XX% from reflecting

Durango context, for the adjusted contemporaneously to closed million. GCX, of second quarter increase So EBITDA sale with $XXX Kinetik's we if would almost

of attention to are prior upwards impressed we of our the as guidance impacts this detail GCX Durango by transactions. Trevor business, few more and in the over transactions, both well transactions past our process. And Their like as strength the to on over dedication and successful that, completion revising for XXXX and the will execution and to momentarily. I'm time, has discuss With underlying to now months. the integration the of hand swift Trevor. allowed focus call the with incredibly team's a to close I'd detail in resulted reflect our

Trevor Howard

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

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

XX% results, largely continued our marketing improved PHP margins, throughout capacity up expenditures from driven X% This the on our by segment increase volumes, quarter commodity of the $XX EBITDA GCX. X an segment, $XXX months Looking the to processed Pipeline that capital Midstream the gas benefit driven PHP in EBITDA with volume despite were and and Delaware expansion curtailments at our was Transportation segment Total quarter. Shifting up year-over-year, contributions by generated our Logistics of quarter, generated of $XX an wellhead from adjusted adjusted million only for Link million. contributions we year-over-year. million, and persisted the increased

leverage Our ratio leverage for at of our stands agreement X.Xx target our X.Xx. credit below

$XXX the expenditures acquisition outperformance both revising throughout earlier, EBITDA the half year successful year the over As point divestiture. the Durango of X% previous at our midpoint and full EBITDA capital estimate and million, midpoint. implies increase a adjusted the and are adjusted XX% we and of versus range million year-over-year to earnings in now the We completion guidance arrangement GCX XXXX guidance to XXXX at upwards reflect $XXX the the Jamie first growth mentioned of

high now volume Specifically, we teens. the within growth in gas the processed Midstream expect Logistics segment,

per inclusive are expectations growth cubic volumes feet of existing of approximately from new Our includes business, gas Durango's X and the Draw of Maljamar day processed which XXX Dagger million months facilities.

XXX existing day Kings of cubic feet of next Landing nearly to the with volume expect the Cryo in Durango per in-service year. We double million the April

the contractually for in County increase Additionally, will processing November. and margin begin treating, Lea in NVC gathering, expansion

will segment reflect the no longer Our following pipeline divestiture. contributions GCX from transportation

expect segment PHP will remainder throughout Link the experience benefits this from the growth year-over-year of we Delaware with full and continue expansion. to year, However, year the the strong

the modestly outlook the updated have of commodity We remainder our year. for

is for Gas prices, Kinetik's per approximately XXXX gross Our for of $X commodity $X.XX WTI, per is Ship or for and approximately following our ethane, natural propane XX% sourced associated profit butane, Liquids. Today hub, our primarily MMBtu gas remaining revised assumes Channel from expected per linked gallon the crude. directly at natural Natural guidance barrel Houston by with direct exposure XX% the equity influenced and volumes. XX% Currently, is which and components: gas commodity Approximately XX% $XX

of As call, a certain some of Durango acquisition with the retain of contracts, provisions the linked will forward. represent gross condensate. Therefore, profit Durango ownership during commodity our direct going WTI greater of we we contribution mentioned our announcement

II pre-FID associated and year. acid full Eddy to and integration long-term existing expenditures business. costs gathering and million Landing capital construction guidance. Lea for with growth Landing Durango an for for of now $XXX for and Turning and to processing amended This capital the million capital new injection maintenance the and our expenditures gas and associated to agreements well, Kings the Counties work We increase Kings capital I, in be the $XXX between reflects expect

projects increase of with driven $XXX new associated guidance roughly in the issuing context, New that For our remainder announced year since February. guidance of by full The Mexico CapEx been million is have in Durango. the XXXX capital increase is

trending approximately initial guidance costs. the in are included fact, budgeted In our projects XXXX CapEx below X%

scope have highly and tremendous approach. remain job construction teams Our operations done on optimizing reducing commercial costs where disciplined and focused We by so our far capital allocation possible. a

with our line us to return opportunities for value. And shareholder to are like up the that, which to open Our the aligned with to maximize I would priorities highest enables capital strategy, allocate Q&A.

Operator

the first Our question Fargo. Instructions] [Operator Wells Blum of line with comes Michael from

Michael Blum

talk just is Durango. CapEx, about maintenance? more $XXX that that I'm growth capital to color. in we million? think if of the that specifically What wondering related is that's you provide return, earning -- a Should $XXX in I to can wanted change as little million give a the

Jamie Welch

Michael. question, -- So good

capital, So obviously, allow we relates pipeline about volumes connected, for, to be in this backbone growth I. thought $XXX context. be it should of as capital Kings be which It to so the obviously It is includes used it Kings up additional system, the growth I. will XX-inch Landing that to, Landing talk across then is million will fill

long-lead for sanctioned of that Leading this items some we've path got and critical Kings pre-FID And II.

maintenance, amount. was it's sort of top the $X remedial about is bucket. There of maintenance probably on million -- going equivalent an that amount think I that is that. And of is probably to if So a

And relative $XXX pretty So -- bridge. would it's pretty like of -- think I'm sure -- honestly, everyone sort Michael, the that's increase, million, of small. about to $XXX and the the that's maybe the million,

spend, million, gross as course the the of conference has new over County into of So the think as County year, $XXX capital, the million. $XXX conference year this the for million good entire County started circuit $XX and $XXX next announcement, I we $XXX Eddy for is we million -- got listen, gone we've Lea through said, still, a spring, amendment, would the $XXX which think I with and where million life. We million, $XX That Eddy million said, little that's it $XX circuits number. a bit of XXXX. put

on million. I, you as now $XXX -- you looking that Think to are all guys as the pre-FID being add and midpoint take of Kings just right So original about, get then $XXX number some that million the growth spend. $XX $XX should And as Durango the well capital stuff range talked say, of the the for. your million. And million we've Landing sort that of for the

this cash And we positive. over making we We invested guidance dollar overall grow opportunity know, the for are sure had we have much incredibly free And when we at a we our were very it's we do business, we that are every very look As earning our year. making business. spend set you mindful sure focused to return sure the and exciting. agonizing -- for very, obviously time making clear is -- up which on flow so

Michael Blum

in-service? should you're a for it maybe plan about question. King we that you're Since timing but pre-FID, know I II, how could And calling then when think landing related be spending on

Jamie Welch

ordering that say are bunch completion is to box a long-lead switch from a there's a a kit gear, There any plant UOP items, cryo I associated items. there is of lot of it's not there inception processing new and are very from items. a X-year So decision transformers, just would on Honeywell. have is necessarily undertaking. there probably But in-service

that. you of think our do sort we at going to If the what out ahead So looking future -- beginning were to 'XX. into get wanted would an third be of of was of in-service we quarter of date,

Operator

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

Jeremy Tonet

Mexico New to kind little of to wanted Just a bit go more.

there. We've on Now opportunities just provide see be the could helpful. there. that you update that wondering equity consolidation if seen, what just Durango landscape, some more has if competitive private I could the landscape think, on bit settled, us, very guess, you would a you color I there, the And

Jamie Welch

Sure.

processing good, think, -- have So a and just any as to Delaware producers smaller But excited Delaware that incredibly they talked that quality are as over also see we that of about particular Ironically, think outlet. investors Northern the that is, shelf focus. like the New opportunity area not or just we've as And of got a somewhat lot talked we've it's probably there set a the peers, Northern that is we is forgotten see need shelf. your attention before very be the you in Basin, the that seems by with and would rock Mexico. hasn't and just to time positions but the I a it

a So is different have imagined. more set plentiful we said opportunity way, the could ever than

also As our out Landing very such, accelerated -- our Kings to that X imagined. And were forecast when have II decision-making will ever you we to because announced be we see has on we do Kings sooner be fully II, could Durango. now pre-FID than Jeremy, sold clear that Landing yes, the can in get we will as expenditures Kings wanting Landing on know,

EBITDA, It's will, we XXX said million in inlet the we May, static, $XX And people, processing as million, our increase and actual million, as you some also numbers. a it You that's we I. how of process that going Kings that $XX forward. And little April million from we've -- $XX EBITDA you of to feet Dagger talked you when that same-store call run. have on bring to back -- capacity. expand of can day to $XX expansion. on if sales, point announced from cubic million Landing XXXX are pretty relative also bit Kings Landing, Draw. We we rate to XXXX run almost million got a expand see We've $XXX We

at we latter think our margins, we've up some components, about I be for for what into cryo a there's less We've lot a work inlet to we'll add. XXX on quarter, million. low-pressure doing say, statement XXXX, go million even overall we of lack obviously and the there But than what there's that the will are of We very you work the will side. the a a lot NGL actually third smaller business. just we're the side. infrastructure, given connections there's to see next treating, high-pressure probably connects of on of the through idle I you'd typically part consistent producers, need on we'll see, an bring would today, on got out we takeaway And got $XXX and pretty that base residue that We'll then think capacity. And XXX of of quickly today get processing year, a of from have the feet day baseline cubic

do think a I opportunity -- I a we it's So -- pretty found excited phenomenal think couldn't just about. that a we've more be it's just

Jeremy Tonet

I on it to one the egress And you there touch want points brought to in of Permian as general. up relates

provide I certainly that was fades announcements. that of quarter. updated Permian How capacity? how you about given that recent kind much think do guess, just the that And thoughts year? away? would that when on having I'm capacity think the a wondering, Highway in Just having the think in And over also, help that, I of you help balance wondering,

Jamie Welch

investors from call. answer I think, in-service first. in in saw, last talked potential of Matterhorn yesterday's one I the the on Obviously, we if September, I'll -- about recall part So the

the is You you step a guys would it's I right in on I a it's -- were the to sure but But know that better not than think obviously call. direction. I'm because that big be panacea, And help. going it's

a the today, certainly $X.XX. that Negative still seen $X.XX, Waha. think vantage a from seen over favorite. But point -- but this last happier here, the could I period Kendrick And they that years, X customers table Gulf can I've Coast talk where not the where level was mean, around will week pricing. bit, from it's have looking this. call I recall very from weakness very, cannot of -- of little little ever around about with we don't in been volatility help is his a Anne? been Cricket, I $X.XX, I'm That's bit fan be have our we even Chris to able and which weakness I followed to Waha. I think negative other in negative are? Houston I because crazy. customers, our think have our going a Freeport, him reasons. The downs and September, Is I get have that's and I think, amongst But been PHP we consistently that mean, up they ship, the happy. of

think for one are us. continue. The Gulf it obviously, customers pricing. reason It's want Durango has all the Coast we I been, of differentiators that the

very And end price. EP so Delaware, where a been an up we Permian northern much benefit an there, and of to they've really starved the traditionally see opportunity focused up that give on the

Matterhorn. still think fades the we probably or negative. we're were still think and some X%, Matterhorn XX% we're but with to in-service negative. had evidenced, -- negative of yesterday net of I We now But you and that XX% obviously the So benefit negative as extent comment

customers our will happy So continue we lot lot gas, -- with Permian. are have for egress I need so a would more space and that we remain all to to continue have. more the we And and a certainly it's you the say solutions very

Operator

Richardson with of question comes next Tristan from Scotiabank. Our the line

Tristan Richardson

footprint, across base the New completion Durango kind this County better curious in seeing and business includes noted you're teens Is higher your what which -- of efficiencies, in Is Delaware? NVCs. seeing growth talk you growth high about you're the Mexico? across the base Can all just you the efficiencies the business? maybe Lea this GORs, in just outlook the Jamie,

Jamie Welch

of think So it this way.

should Mexico. think It the comes January our of XXXX. we earlier an on and telling massive like When obviously, that be now it's went out that to Durango from of did coming XX% Mexico. New because in I business. of lights Bingo. existing my was New infusion start? And gas commentary, a had it adds

talk base think so really I proudest the what thing see about going the and cubic some that are million you XXX of business, -- and had Alpine about investors something for company this to what's we High. feet engage we with day like I our other promise Alpine with can questions a and follow. prospect and is of for that would High, maybe long, the

of go staggering. And and our for -- X.XX right? over against of top that capacity, until you processing X will, we inlet that If day half That's Bcf of business. remember, you right? up, on we're is take total you just And year. a show day have X.X, really this Over our X.X doesn't of Bcf the a before if take Durango capacity. Durango, second pretty inlet

spectacular, see -- there's with impacting So nowhere It's pretty base landscape business say some it's we -- it's not and I has as New we our Mexico. not kind game-changing of been would what -- is near but think it's growth.

Tristan Richardson

the upgrade expansion deal? in some way line? -- to it opportunities? a you you in this of should Dagger about these X.Xx these you think maybe opportunities opportunities incremental days could Draw it -- And noticed opportunities, we that about noted small the it XXX to be XXXX, as of be the when Or that? part of then announced XX-ish these you first these talked And think is And seeing

Jamie Welch

about stair-step million think you the have have million, out when think I magnitude, at $XX base base, is Tristan, $XXX which as sold of laid the then that Eddy County right? year And do expansion we the it XXX I If the numbers like Kings our it the basis in $XX you out and we that I, as addition gives on million, Landing as represents part that that So lay inlet I think a Durango. because you of capital the you'll a gave of looks next you. XXX. far

paid that almost thought that's about You million million. Landing a is and $XX the of and would potential go add million with top. This on and going got you at yes, we and another you I another a returns And and setup about to stock add million, you the with of, I that bought thinking to million just $XXX then you've on about than $X-plus -- the outlined. that of that drive got math. EBITDA consideration, XXX, -- -- $XXX mean obviously how of is to We're do a basis -- with you're $XX then you Xx you hey, capital hundred that's total significantly cash Kings greater you've $XX deployed, basis million talking things II, about how simple

Operator

Our next the Dounis question of comes from with Spiro line Citi.

Spiro Dounis

the acid first start, question is just on to mix forward. going Maybe

Following some more like it that these going you acid now, towards G&P base. a swing really it's Durango coming to are of opportunities and sounds out

curious, you an appetite just profile? is that to keep so maybe integrated part pace your transport can so have that pipeline maintain on exposure And there

Jamie Welch

we've mentioned, decision like taking have we make, we we players obviously, as role to almost of right? have We with with Targa number But that interesting the is. think at projects obviously it our could for played have just look Spiro, same. forecast, a with -- -- much forces obviously you equity join -- an have have egress an think, could I as stake, about did more We and Blackstone. that

shorter receipt dated That time an see deploy XX it, cash to on to don't of other deployment on flow, cash intra-basin cycles X.X within consistently is capital. space basis. a frame much think make you are is start try I before conversion shorter or we we've flow XX words, months the time. months the what obviously, the in could whatever capital see and of deployment you we or or then been In telling on focused years

that opportunities immediate to really on scale, base the to they're We cash We're and smaller in be from business. duration to continues do really They flow, builds has other can business. contributor business. -- we Link NGL overall Delaware been that. So shorter something Kinetik for strong our obviously, as our we a help looking how see shorter a are -- and they it

So with we Kinetik are mindful Is uplift, and think, XXXX, we'd which going GMP again. of is as it started like forma in forward mix. up of, keeping obviously where life -- first a pro the that we build sort XX-XX, I the with for back merged to it maybe company

for we're opportunities allow So looking to balanced. to mix that that continue us keep

Spiro Dounis

to wanted free you I Second flow to cash positive. think just you're focused free Jamie, response to being in think earlier cash said about quickly how question, back to flow a question, highly and an outlook. the on go

with here? for you projects can all do think think easy lift. problem the durable these get we seems high-class but something a I obviously 'XX, to guess there. 'XX as from that's out basis over out multiyear of still coming, you like I That think have, sort a pretty

Jamie Welch

Yes.

we what you have forward, that, when with Spiro, Maddie time about got think I about this to I Trevor time. I and talked think, you right, Alex from look, going think and -- and we've

obviously, find meaning then is Eddy the probably and base capital growth, challenge next obviously, 'XX. obviously, can you several XX% the think overall growth, about the XX%, expansion, and going Durango. Our our think the Yes, business, that million. try to EBITDA legacy of say $XXX you've do. you've really do about is. hard to another double-digit which And And we County at it that $XX managing when it million I is of you've base rate. relative of got, out profile. We That -- then $XXX look business now, million, to about I XX% split, a think from midpoint, XX% 'XX standpoint, before, balance I $XXX where year-on-year years EBITDA I And heard business got for said capital would how topline the I an sort think manage to obviously, a think is deployment to company do I we're we million good see, to, really me the think

do can't forever. it You

that You such time. the changes and do in Durango we benefit. business some lots of obviously, and you going as XX that's benefit, strength full and when for base partial There's can happened it look the that in XX see add NGL you changes on. at of But things our the contract

And so we will and to us topline think think that capital about then allows obviously overall growth our how about deployment. that

So the release, see put we of this second still about free per flow cash -- the I share transaction. increase half 'XX, 'XX, it in do think as mentioned, think flow second cash we half you of in XX% press free positive forma as I pro in the of a result the Durango

it's blueprint. very think much I do the So

Operator

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

Keith Stanley

having little flow dividend target, when you. How have accelerating? about importance you you growth leverage a cash positive thinking Following up you a for of on are opportunities growth the company restart the bit of since for lot obviously, a free could but

Jamie Welch

on consistent dividend. very You're the

-- you You the price. get are

to shareholders. have on within growth our and a talked the length both we lot of you that capital and it standpoint can is that dividend, us believe growth wins. that the have I Honestly, we not and picture lost support a from on at manage had think everyone I at patient we look in so

think is you manageable. would think thoughtful as I to but you increase you be it the I we've to about, -- always exactly think So need said, as

would it is, so to I an term not nearer And as term, longer say, action.

Keith Stanley

you're the and or Second that, Durango question, whether through footprints, add of potentially transactions? how can what you just eventually for you? maybe And legacy connecting give on an Kinetik it importance about the building doing update would it's thinking

Jamie Welch

Really good question.

Lea into on then the either we every going And and give it if to existing how ultimately to into thinking So Pegasus to goes opportunity think County see connects we've about whether County, -- own Lea lateral, up commercial one we that opportunity to merit. an which that has we County, County. into that we're Eddy said think connect then ultimately how Durango its Eddy opportunities, is us stand and the whether about to

producers. We're sake engage will for not with just conversations the We in of to building. build going

compelling We the extent to that will that only proposition commercial a and underwritten warrants there's build the justifies connection.

Operator

comes next the question of Theresa with line Barclays. Our from Chen

Theresa Chen

on of give run and you forward? runway growth FID ties you and your how you Landing that an the does that opportunities rate about the II, can of that for Kings have in-service acreage? into CapEx additional the going outlook much view talk how Following given annual beyond And eventual basis

Jamie Welch

Theresa. overall are questions, Kings Landing we production support obviously a that sightline growth Delaware would a seeing up the shelf II development. I Northern and in say, would good the Really for

I've fascinating is the handicapped about on is As that the need side. really particular area at capacity. outset, you gas a by mentioned solution bit the [Indiscernible], processing that what's drill

And so a I challenging, for proposition very makes for producers. think, it

I sees weeks. and had earnest went FTC sight really, line over owning now, has process Does in we So a last beyond our think it's too the go sit into engagement it certainly that? some conversations the the X-plus early through sort us days tell. XX we I -- Admittedly, through of Durango. with on to engaged as II. we KL are X-plus But we here we customers. and in weeks started

I And we would X and got full. great really processing egress need really all we're And so tell you egress. Because can up outcome. of processing, They're the that a on of but we not comes the pretty NGL. And just there, as it's much Psencik capacity, is residue build right? Anne -- and one mentioned, It's things not telescopic form in you've focused pipelines. flavors,

challenges. some got You've

on are full got of and run. how those have just they EPNG, TW, of really you've There You they because you've challenges how EE. full are got each

into there's early the of I So lot that gone -- Landing, in think things of would some II. I a the, have early this of say, decisions on some analysis Kings

how If vernacular So a of I line we really it's really this over sit call is, it even feel apprised focuses is, because have we the about watch isn't space of on isn't it gas an in predicated gas as south we grows didn't and as difference -- TBD, make just the AI on nothing keep significantly all everyone in probably well sight Alpine as I that's High this know down there's means. with go growth me And is Alpine what my know, sort prices, on in seeing. The where and that see time, area. doesn't gassy stays a statement Alpine sort of on you're growth we there's of gas thing The like is makes all this company because thing when well, interesting High. If complete I you proudest what we and now anymore. it us. the to going that highly to High impact can

pretty and I interesting think subtle, for profound do whole. the pretty really change, not that's significant as So a company a

Operator

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

Indraneel Mitra

possible acquisition, Kings of kind understand should but we business to additions. that changed wanted I now have II thinking so Obviously, the with CapEx the or it has we listed Landing Durango rate how it's the much. other run about be

good going you is when G&P that understanding there put a try number are rate, spending that about some in should run we Just there things as constantly to think changing? the forward,

Jamie Welch

and was love think, it not obviously, it we're you be building ebbs it to obviously, necessarily a you're tell it And now. I'd has to I more, as cryo going that easy. that is, is flows. And

considering you -- That's and and size our a a on trough. at on the process to work a the -- pre-FID not And peak cryo. that's capacities of So -- be basis. we've more a probably -- -- might some a second that started necessarily of norm have that then processing company look would obviously sequential building you

XXX, it look, from Trevor our it. million at about and with -- we probably kind us if you of. $XXX careful But think I you've to year sort that's how think were going heard percentages, you as that as I you've $XXX you and think got think be this overall to So of to to relates about got very million something

any good. be pretty you $XXX would -- -- good that's and hard really million But would another. amount peak give I that I because know that's a think really sort but of apologize, it's be that's you know. think would don't one that's to -- think I range, be real a wide a do I thing, I you the precision really it's

that's As it our million. we connects looping, yes, well that's got said, some and business, business maintenance got that's compression. about base and it, got $XXX I our thought base And next some capital got year, in

which Durango, burden, So you've higher a Kendrick, way. which It's got more a mature, more I'm more smaller growth sense in goes built pretty a -- be, be the would looking big inch is pressure, the that lot number. mature and right, right? out. My XX should And at that base low long business but capital producers. There's is more business, more with it's

got $XX looping, $XXX think business just to a million, processing maybe the you've at I is for a on -- So just Durango, other capacity, you're if million like well-connects maybe for million -- $XXX once base given things. looking

Chris Kendrick

this Chris. Neel, is

that on much be I in the to up that higher don't too. we're Just in want group seeing margins Durango lost piggybacking too.

to invested a capital going there up dollar return So so. is higher amount,

Jamie Welch

it's if like dollar, you're XX margin, processing. in on And obviously that north. gathering, compression, there average in the that's looking about XX% Mcf, right, because at it's packaging have we increase like Yes, treating, up an a everything, you're our

of of that's gas spent they And -- Treating that a focuses time treating And is, treating. think, producers about dispersion of very for given attractive. know we've just so real, one I talking I obviously find. our the lot real quality very, the

Indraneel Mitra

still Southern it [indiscernible] you Delaware. around to is be Jamie, alluding Waha negative online. the probably in business the question that when and fact base will second is the My comes were

Matterhorn the basin, line curtailments, gas kind once year? line for Given that last oil are in any have lifts delayed growth any a seen in wells that in lot have such your of that of months in being see you XX-XX comes a that the that turned surge you roughly of and producers X

Jamie Welch

delayed Apache delayed as of I pause would sort everything. As on they don't just whole far have and but Alpine as that's far be because were they ones and been you that there's really want you prices, after would both weren't the I the story, And I -- sense rich I as you really an a us. to assess and acquisition. of impact is typical close the transaction [indiscernible] completions, think probably broad-based gas say, High, any of curtailments, lean. that think delayed because

materials, on activity. And see think We have indicated good service in fourth turn-in-line in volumes. quarter, Apache I as we'll high up the our to a continue we the obviously, full return to

is So obviously quarter. I second in financially amazing of on it end how weathered -- in business of made was which our I Durango, and was June the the because think And running the we at a that we look will had say, was the and the which through we And beginning GCX it deal, good the impact through between be June. that closing consensus. basis a we benefit -- that mismatch of pretty

we kind -- and of I X had pipeline estimate. of the only segment month transportation as out hit So consensus still well, yet we had the missing

Chris Kendrick

different this percentage noting, markets. Neel, their gas on is move customers and of too worth PHP to Chris. It's a gas our exposed are large

another exposed benefit to that aren't is Waha, which provide as our customers. they So we

we're majority seeing to why not of impact our customers. reason another So large a the

Operator

Koletas of our Instructions] Goldman question next the Jackie comes Sachs. [Operator line with from

Jacqueline Koletas

on to Just New Mexico. another follow-up wanted have

that uplift and able in you prior started on NVCs realize to So were your April to there system an May.

Just here? expect broadly, fourth from in to see the trending New from Lea do that County Mexico prior do you see more you to amendment And upside where new quarter?

Jamie Welch

will year. kind I new the amendment this it's on County the of Jackie, November think So NVC start, Lea of

job. anything before we've in sense you I treating been all elevated we've than and team benefit probably operations world. Great COX record even And really -- taken It's November. have we've else. broken relationship point. see discussion the So on the a so Wall more and nitrogen levels of really makes this about the obviously customer a and driven HXS. seen just phenomenal We've a Matt And done think won't a around

I So side. strong we've gate we've to out of what had the think, and a blending the really showing on really, do able -- been really a treating on

as I New far Mexico As it's here, think the from story. honestly,

some story. it's base, great suite. a with in if We've the got Mexico system the our think wrong, company, and provides customers. get the volumes financial and stair-step looking this great don't we've right? got But context its nice obviously story blendstock the given created, on that's growth mean, margin for is I New for I of changes you're that significant me

our finish will of April expected in-service day. see when what capacity year. we that so looks million like inlet Landing we I said, feet another X and XXX going And forward, be cubic as will Kings a next That

Dagger go We that to have to to We've We're Draw going cryo and about to move expect from pretty be that recompression it already quickly. XXX. going additional talked up there. we XXX XX-day some full moving we're

So think, that's there. going another I to blessing the be, for up producers

with with deploying for. looking right them what allocating nothing inlet and right see and with there that just we it you provide it's consistent how And than see, expansions. just is Mexico we -- be New if that capacity measure will -- the our So you obviously, on now. they're And capital. producers can just they're look at just it obviously more needed all to the whole services about The

Jacqueline Koletas

NGLs follow-up, own enough as your to as a -- think have time? you you over build as do so critical where your mass NGL grows, get you just to want a where grow processing And you'll your assets you'd

Jamie Welch

The things size short call long-haul we different targets, what when reality answer with I'll dealing you're one-offs the is, enterprises, the all their but relative into don't asset is such capacity. which pipeline it's Bellevue -- look, never of can between and about thinking do could an have the transfers, we would could -- as export basin aspire never we competing. contemplate things base -- we never the their obviously, to to not world, we We we've never done. -- think the It and we compete that of contractually, you just

service a of portion Oak. We obviously own is relationships. net Shin As NGL providers, far a have of which benefit. got great diversification as we a We've

and optionality think wallet. our just integrated customers. we participate beyond our give NGL the to value to think business. vertically into -- and that not So we going can But that get And that's beyond I that's no, we're chain

Operator

time. this no registered at There are questions

remarks. back call any the pass will for Jamie to Welch I So closing

Jamie Welch

the week. And really And as tell. see it probably business. back of can some straight Thank rest we'll excited then Day. summer. solid start the quarter, No enjoy Labor outlook doubt your fall really after really the you you, the you everyone. about in We're for excited, next of up we'll A

there reach you thank are out this if questions, any morning. time your So for and

Operator

today's Thank call. That concludes you your for participation.

may disconnect your lines. You now

Kinetik (KNTK) 8 Aug 242024 Q2 Earnings call transcript