KNTK - Earnings call transcript Q4 2024

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Operator

Good morning. Thank you for attending today's Kinetik Fourth Quarter and Full Year 2024 Results. My name is Victoria, and I'll be your moderator today. [Operator Instructions] I would now like to pass the call over to Alex Durkee.

Alex Durkee

Thank you. to Full Quarter Call. Year welcome XXXX Full and and Earnings XXXX morning, Kinetik's and Fourth Year Good Guidance Conference

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

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

Jamie Welch

trade the the allocation service we the achieved milestones extended into Kinetik, quarter more X We and and across our guidance a step This overhang Good a was outlook. becoming thank broader the organic Mexico. Loving Delaware. In Alex. our XXXX Apache Kinetik. County We put and County, in with Delaware May, year substantially that with the morning year fourth time, State New growth. shareholders more by forward leader created this into placed us, Thank months of detail ownership expanded remaining significant existing the in first you, quarter M&A into float at of Lea participate its new full Kinetik for you furthered footprint another a strategic the $X stock a into market behind and entry capital financial the transformational first in to that our Yesterday, story you accretive This framework. Starting from look billion expansion call we discussing Northern and early for in everyone, Mexico. and our we joining today. meaningful and vision our our we morning. XXXX provided nearly last for in each an exiting our reported lateral results basin, XXXX growth in in stake in highly was announced doubled public to our initial opportunity New transactions way. In marked highly and March, strategic of same

Permian, the gas of February and Eddy of the largest never agreement year like for our sale XX% our opportunities in which County, merger Durango processing Our XXXX, XX transaction non-core the acquisition Kinetik GCX, positioned before. in and future stake primarily in of Kinetik since was gathering by non-operated, funded

communicated nearly leverage leverage these to falling our target. a turn times, we closing upon Importantly, X.X our by below transactions, reduced half

II third the continued the Kings for announced of During development of we resource Delaware. the Landing to quarter, work Northern pre-FID in sanctioning the support

support will our rich sour northern South gas sweet, in to positions, a Crude Delaware which us gas between higher close ownership and transactions and to pipeline allow ECCC our North of out its assets. across south series continued margin EPIC process profile. To interest and increased also flow the XX.X% the financial that growth our we We equity in pipes strengthen announced the Delaware year,

of backdrop by resources. we XXXX of Draw business visibility capital and Barilla first we dividend and were time also our our placed for company, And a S&P. announced to acquisition We outlook a on on bolt assets shareholders in positive increased with beyond, return in strategic by as cash also Permian the and the strength the of from X%, our accelerating

a fourth by November gas associated adjusted from Now headwind, the quarter our in above in mode our largely in million by of have range. guidance headwind, plants for restricted prices quarter for results. addressing impacts $XX the month. Normalizing first and the in the full The been unexpected several fourth volume our Texas was operating curtailment revised temporarily of midpoint driven the negative resulted of that impacted Waha November for half this earnings quarter would year EBITDA events

will XXXX, to since X rebound well prior at The billion over the to strong risk marked have on management new team quarter and fourth this shortly, the not December, rebounded and seen financial with to to that months happening operational provide the when context future. By last Trevor annualized basis. more had from performance Alpine While late processes prevent measures note implemented company High in began. has curtailments an early results it's $X.XX in important volumes levels adjusted averaging the EBITDA on a

on midpoint an when normalizing the results. low volumes for our record $XXX reported volume represents processed and of year-over-year. feet $X day guidance XX% increase a November of up expenditures and impacts. approximately million million, XXXX and $XX X.XX cubic earnings. capital year-over-year, were end gas Moving million Average below We Adjusted increase reported year to range. the growth below per XX% of EBITDA XX% full billion million We of $XXX

most be pace XXXX. The decade. At by Permian billion plants Permian pool the by and natural in the Gulf world, the still of to rates are push global largest U.S. expected compound in cubic feet positions Gulf demand hubs in trajectory, through and double sanctioned per is XXXX Coast digit the placed mid-single XX the billion current needs a exports demand ethane of the processing needed in the drive LNG help to feet processing more China. growth. XX exports annual beyond, growth natural next growing with region. out up to growing the demand nearly per in demand to in basin gas and meet Coast for of close service XX demand make cubic Over at the capacity power additions U.S. annual ahead digit capacity feet has will implying to Kinetik's its of pure Permian gas exports us approximately supported and play several of gas at rates term natural the growth X.X by growing LPG of feedstock demand end cubic proximity capacity the approximately significant PDH Permian the Coast. and day day XXXX dynamic. keep years, billion increases, supply footprint supply balance. Gulf Looking as at the prolific as demand and are expected as to additional in is XX liquids are Mexico been than needed Increased and epicenter industrial in long the of an to up growth unannounced compound would also well of expected additional ethylene day per XX% mid-single the predominantly the

electricity why is cost believe inflation we have we become seen power our of facility natural OpEx behind-the-meter this the network County, persistent capitalize behind-the-meter Which is critical the Reeves even costs years, gas-fired be and expected decade. last generation power more Waha balance manage in Given in volatility. gas greenfield, on electricity over allow to Texas. A are exploring would the a we and scale to and the to prices solution reduce us distribution price large ability going able ongoing over several to

I'll We're FID venture excited we a team a the closing over about. industry. And Kinetik's project best-in-class annual financial others we is trajectory, joint EBITDA reinforces and proven this now still as digit adjusted and of of merger advance position in conversations the has to reach in accomplished. with with of in Since continue The pursue the midstream partners this XXXX our structure. to capital we in coupled disciplined more have journey track call the early a Trevor and hand something earnings the could XXXX its compound in This sharing project results beyond. this are and to expect intent in February Basin to our growth as record While multiyear detail. is really as we incredibly and forward opportunity. I'm Delaware early this and what with potential growth deployment, proud stages, guidance discuss with as the that, XXXX, to leader year, look growth, more double

Trevor Howard

$XX $XXX million. $XXX Thanks, In flow of was Jamie. the free fourth we adjusted million. reported EBITDA cash We distributable flow cash million and quarter, generated of

XX%. our segment X% up quarter, on $XXX sequentially segment midstream generated volume but down million in EBITDA and growth, at logistics results, of our adjusted the year-over-year by Looking

at gains prices Gulf led fully since was we Waha our gas of in Unlike Permian Waha not first High's Highway Alpine in including negative exposed As earlier, negative temporarily the the the volume for Negative Waha November to prior production as lost became average continuation on curtailments Mmbtu offsetting to was margin gas Kinetik a Coast were per intrastate due by mentioned months balanced. several price did Results XX XXXX, difficult scheduled curtailments. daily pipelines, from position at gross gas Jamie month. prices, where maintenance $X.XX have to marketing days November transport Pipeline. the was long capacity impacted

which equity negatively our operating we due This work at do impacting our gross plants exposure and rejection have, of commissioning further residue were several to maintenance created Additionally, in ethane Texas Waha, not activities. typically processing gas margin.

to have future. implemented happening processes and measures prevent in this We headwind the from operational

additional feet $XXX and of of million, EBITDA Crude, sale expenditures following billion, November Shifting at back by and driven year. Total well, growth $XX year-over-year. GCX our averaging segment for cubic Growth the PHP no segment, was from billion nature in ownership volumes Importantly, Link, December capital Annualized approximately the Expansion X% have per December we by over January. the were transportation offset the quarter was demonstrating the for Delaware generated volume beginning full EBITDA up adjusted largely from contributions in contribution pipeline we track of December. and the further of earlier the Kinetik X.X day for NGL the performed events by XX.X% on adjusted process to quarter and partially were from within $X.XX nearly unique Gas the contribution million. a EPIC October

the free year, exited million We flow Total credit were $XXX discipline capital following expenditures full year distributable of and throughout below a EBITDA reported capital for $XXX leverage adjusted million, with range, guidance we demonstrating our the year our million, X.Xx of the the flow. of For down X.Xx $XXX XXXX per revised year-over-year. $XXX million ratio cash year. cash agreement,

year billion XXXX estimate XX% to in EBITDA $X.XX to range growth billion we The $X.XX full midpoint billion. the adjusted implies guidance, of of Moving $X.XX year-over-year.

feet per volumes online. approximately our across utilized Specifically growth June today gas the XXX broader include assumptions outpacing up at curtailments Kings in within the northern the cubic XX% XX% Complex day Permian midstream system, Delaware segment, anticipate key nearly late logistics the processed system in come Landing million growth. We start to across as

to expect expected in assets extend of gross full The and over recently project the year. balance Eddy operational. Approximately the Landing and XX% agreements. to County profit to services commenced XXXX gathering sourced processing ramp Draw when estimates Eddy the is Complex County fixed large Barilla capacity the include of acquired project. XXXX from We will fee is the December Kings our

and commodity market today, assumes to in of is XXXX of XX% approximately prices. also commodity forward hedged of unhedged profit have XXth. related XXXX, total pricing of February X% implying gross as exposed As only gross remaining our guidance profit we directly

the XXXX, adjusted of have Crude, EPIC and transportation that XXXX. year-on-year. The logistics in benefit anticipate EBITDA pipeline a equity year-over-year from interest will of midstream in year level segment over third the full was XX.X% grew which incremental Our XX% we to XX% in quarter growth purchased accelerating

cost actual Landing seller, CapEx $XX contingent from contingent Our Durango Morgan million link. partially forecast at pipelines, no the is wholly extent and between further sale Energy XXXX. On the to to also by These calls Complex. aggregate payment GCX original capital $XXX contingent million XXXX of consideration million, year-over-year the inclusive total contributions for Partners. the $XX that to guidance, June up of The NGL, of offset tied will Stanley of the in consideration And $XXX we estimates, expect contributions consideration is owned following to the exceeds Kings Delaware capital to intrabasin growth be our growth the Kinetik be to reduced. million

the also build Kings the includes and and on Barilla system to the low- II. high-pressure integrate assets continue Eddy pipeline, construct pre-FID ECCC in guidance the Our out County, gathering Landing of capital work Draw

capex our long continue range. Strong an positions With even across year, expect adjusted annualized XXXX we XXXX and EBITDA As volumes through capital the midpoint guidance. of our growth right I mentioned come to well quarter exceed expected EBITDA ratio billion. Kinetik's were below is XX% earlier, potential for adjusted CapEx average we to shift prior guidance. steel this past communications the XXXX of accelerating adjusted million to timeframe. as fourth execution spend that contingent shift the $X.X projects Kinetik tariffs, effectively of the the over more part $XX the of high Adjusting increase to now our reinvestment been are X double as EBITDA growth ramp, term This our and objectives capital same annual cumulative with successful consideration throughout $XX the online current future. years, line end XXXX the million approximately of towards our compound for XXXX potential in previous to expenditures steel being over growth and market prices driving for has as digit

our drive earnings projects capital in We have highly in that demonstrated efficient investing growth. success accretive

continue returns projects discipline for will also we drive to leverage of attractive in like framework and line deployment capital invest investment growth, remain grade flexibility open accelerated share to value. I X.Xx. near-term opportunistic provides upgrades. We for would through positions support not shareholder this only to target with to attractive approach, repurchases. And rating approach opportunities and for also organic increases as maximizes that but appropriate believe that, it dividend We us well committed and Q&A. opportunistic annual This EBITDA It balanced our the ratable financial and

Operator

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

Spiro Dounis

with I first data wanted a start point slides. new in the to

You the this sort over X CAGR to EBITDA guys next XX% referred of years.

take? curious, that you infrastructure sense get build execution achieve trying about the think to Just to risk a just target. there, So out to you of as needed to to that the get what's going

Jamie Welch

on we supply to I said going you basis. grow go a basin is our think X% at slides, if So look the around

performance pointed the supply competition, the Delaware. share actually actually market see of outsized One right? in we build our we share things see continue broadly overall above the the to we've prepared and more remarks So market that to in out was we to relative over continued growth

is processing about we within the from changes II and the top we obviously, 'XX. -- on go just roll-offs, Kings they commercial overall we into of line NGL Landing our our they forecast into probably cost 'XX, sort 'XX, go now growth years, the for side, they start see, And we been commitment also obviously potential have we most that change prepared embedded our what incremental As do growth the standpoint, last a growth. and think certainly opportunity the they has being 'XX even post-COVID. in not start we the in and contract electricity on few rate is out right and labor EBITDA structural now remarks, see. near-term business, but have creates as pointed X% obviously OpEx, they That a opportunity actually And

know, higher guys you for phone, on as the at growing compression, rates. particularly you have been much and electricity However, those of

just what and multiples have this opportunity and this been actually that the toolkit. see at the the team far actually organic saying, costs, growth, we OpEx, to the rate and to as basis see deploy EBITDA. That's multiyear decade. be I you as opposed no consistent a really our that through than create see an our multiple. with this go taking flow capital that that, on or ops in And have to something setup opportunity in again some we Xx would different cost is as end think, we right And not controlled of sort so to want Xx non-controllable setup attack. would different really looking growth bottom-line and And Matt to of now can an which We reduction gets to

lot whole this. So I don't risk think a on execution there's of

think is lot it I of sits a this in-house. -- really within

Spiro Dounis

between your successful not Durango, to year, that question, our our point, second things to were both radar. transactions. just active perspective, And on good That's hear. going Last to M&A. from Barilla Draw, Maybe

like you those curious, year? your are this 'XX, again set. to trying look the to do opportunity get sense forward there I'm still opportunities things of unique? that So as of Just kind Were to

Jamie Welch

are question that I attractiveness are as they there's thought far The out Look, particularly was there. a most opportunities high very If hit think that did from is, we threshold a we proven There have that Draw recently, return standpoint? there as of remain transaction. the we project highly do something compelling; the bar, and have compelling I and transaction think Barilla context obviously, opportunities we in for us. Durango the how the

a a up the as and -- sure and you really So as dynamic up lives that paces is through expectation billing making far that to creates lives expectation. that within an to boardroom it it puts the your the

Operator

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

Jeremy Tonet

a longer-term CAGR, internal wanted goal. bit XX% just to I more talk the about maybe growth of $X billion

far and out Just of sight see line that of the of towards as outlook an and goal providing the providing on type there, both guess, as well the as that that I organic really internal you and inorganic drivers of outlook. also now kind side that

Jamie Welch

the analyst businesses sell-side maximize community to of deal So with -- trying I framework context communicate transparently that we in And we like the that have. investor the we of we and our way is this think have objectives. always context you as been in both that and really to always really the at as we've of way, about within And at that's think would internal from the community this, well the portfolio what a looked large. we can how

north not given said going the skill within more said And system from is as when see it's capabilities customers. What to that's And of there be portfolio, to see objective active online. already therefore, overall pointed coming what the to XXXX in-house. objective. We tell Yes, just -- we target, ago the And the our series of near-term for KL-II, Landing within being with this organic, at team sure starting and billion business the attractive target, more an massive the more as Kings to going will conversations out our no billion we team ongoing pre-feed, as end engineering dissimilar being much at happens XQ was see many construction Spiro, to we than we than and the internal catalyst activity on opportunities our have in really a to make the and just you with to I the important the sort ops year much $X be we too we're that of by rate. so relief -- for is is $X so, higher our continue this an year. that look that customers. give sets to our much grow more That at I to an

More far development step like. importantly, a willingness as actually what as to change that activity looks may be their about and think that

units. XXX cubic to within modest positioned that see. already to modest for feet with our that possibly we units immediate that capitalize a with another XX move redeploy we now, example, Right we we benefit obviously, OpEx with we think capital, those -- almost continue very, to well right, I've basis that's with have move Alpine very direct area basically horsepower, Apache a we still High, and is are million It's mentioned, day we of OpEx. Compression of what and what So with, on. inherited system. could and on see the about

We in construction side, commercial it's a hedging at look of there, operations, side, whether it's and marketing this So it's the at the and role whether element side business. play the on aspect we has to business. our growing side, on everyone look the engineering and whether every on

are not we said, don't our we're as of can't about when I we influence. our that So we there control putting of -- think necessarily out sort internal that or outside objectives, things unexpected completely

growth about us for levels within to itself sorts feel good our immediately business. to we of and just that set executing really these that following the think I internal path and opportunity present get

Jeremy Tonet

point to or producers in wanted choppiness to dial producer next and this how for Just into particularly of pivoting pipes are ahead a bit, relates conversations wave customer year, just general, going with as expectations it potential time? in at for this of activity Waha I the

Jamie Welch

Look, that the to I for all results that. extent bad, are it as now the set customers and right we PDP eye-opener -- the negative. which Ongoing was right, producers would Apache because, of live I all since And Waha to of as opportunity the an say most 'XX decline. was obviously, in good of said, and is have our we -- customers our still context

customers our of All activity. are drill oil

to continue they opportunity. see So tremendous

just there some continue where ever obviously positive New GOR, our on capital. just out hey, acting Mexico richer, less context to prices, is gear and of high of customers that the then catalysts will gas gets crude. really interesting gas, and we're is seeing of of additional I activity continue see much the largest if areas And their with most we be its yes, some opportunities more is some that. I but in really, drilling put might Waha But there think suppose,

overall relates Jeremy, So I robust, and pretty as Southern it Delaware. robust, level Northern across both activity think remains pretty Delaware of

Kris Kindrick

that is we to and and Coast pricing have how Remember, our Kris. of be and offer for differentiator, 'XX of 'XX. too, is customers that our a Gulf them this exposure can part Jeremy, into going in valuable And number proved large

to So and that bring will drill reinforce production. on further ability their

Operator

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

Indraneel Mitra

going with I maintenance a issue this of source And like as Are that wanted volatility compression see increased through question. compression PHP, the them able lot an It And manage there's planned. you lot of seems Permian with that and quarter. do GCX. a pipes, of forward? enhanced start it Whistler, risk? unplanned have to off like to macro around seems those a around gas And you was capacity a

Jamie Welch

very good It It's question. a a good really question. is

have there the maintenance my large regular honestly, pipes. seasonal to There of type be for Neel, would view seasonal Gulf So following, weakest on periods, mean, of Coast and all that the April-May, the is, October-November, do where is be to something forwards, I days is about typically I That parcel are as equipment even runs pricing. obviously XXX every you machinery that that XX/X, maintenance. maintenance the the have. when a seasonal shoulder is in say we year. and in you context part just see, going Utilities of just the going

You may now you have have more impacts capacity there's obviously longer there because where with and -- more got so periods be cuts. you've might compression, assets some modest level of

that, get look we incremental I literally I obviously of what sequence learned do you on learned? to -- But have So a play create I issue, say, think in. and learned sort So look, I all you we Gulf That's to think is it what which you that trying is okay, that better. just this mad, bigger obviously have so you say, we what lesson each Obviously, our have and look, of doesn't don't -- take capacity. obviously from top length and was important. viewpoint, needed at fall does and this get you other for do, is be November Coast some

in growth seeing When see we way, and that really a of frenetic now And seen that about, to that's is see there's over Bs of will X things is And -- it's fact sort That built. pipelines, being right? hard allow obviously important that happen. of that then next talked So said pipelines unprecedented. offset lots we that's we're to happen and a obviously, it this of as mean a means relates you I Bcf that. a the are. rate years, year. that And is catalysts. an growth. amount as year, amount risks. What And more continue another the issue. there's get And to the rate is massive of just activity, We've the we it understand X.X have, more X They clusters. growth pipeline is we but

performed. Brinson. just And saw, get you year saw think, GCX catalyst, So saw finally, saw Waha we was We obviously, Blackcomb, obviously, we last obviously I Hugh -- done. and how

we day, and the just the context pressure to up we gen it you'll on guys overall is for some the million the million of for parcel see of finally, ideas in weakness. another economic company cubic basin. continue So The in plant create capture power absolutely, have -- on saw feet XX a we some again, and But to what just of build with okay, gen activity. build problem. Part will one of us is this and that's could we itself. saw that's power ops and within XX the value a that it to whatever capitalize this enterprise It's way given

to So us really think a I of good that question. closely. going to it's And I do something look, all have are very and going it's think be to watch we'll watch probably

Indraneel Mitra

see Southern near-term terms Southern the see growth subset services services? you contributes in Delaware with in New of the growth that you growth how the that Delaware in then to any kind what Barilla was your long-term engine and talk you And engine of existing allowing in to near customers like the the you and Mexico Can provide also But outsized growth? some seems customers Draw it was XX% like feeling the there's other about are system. can your Mexico and my term additional question, of for trading second Delaware. like that of Resources if your are Permian New The some was you

Jamie Welch

Sure.

first, last of picture the in about just we'll and let Southern aspect sort talk that me deal the So then Delaware. with

So potentially multi-stream enough, as Southern you the Delaware in interestingly that service. know, is we the the provide preponderance customers of all

with do crude which with provide Coterra, do it we we we with do gathering, we So others. number Draw, with a of Barilla it --

of obviously, gas sweet gathering and been was a quality inert. negligible, gas since traditional water a obviously, been lower HXS it COX disposal, is gathering obviously system, this primarily point, has standpoint have gas, a To and from and more have the processing. to much we natural We has likewise relatively respect and PPM with

is for Barilla say, is look strong is it. growth, Yes, would provide the capabilities multiple very and as So the infusion opportunities, And look -- our candidly, more on I of a we you're Outside a Delaware side. Delaware that, we system. multi-stream we Southern those of right, and wherever around growth for Southern tepid a very services, do very Draw can. helpful particularly at honestly, system think, has been in we I

it's view. pretty a that Mexico? are an in of probably point this So good inventory at the play directed does because that point New capital mean more of dollars That's

think areas. I obviously I obviously a obviously what the we've these in they think think, explained, But which context on appeal I has, come will come and will lot more of various back, has New our seeing. now focus back Mexico right for producers we're reasons,

Draw within Barilla is that will than for years the partial Resources gather exception And our growth a step-up all we pick big probably big and it call gas. yesterday, couple go that norm, the -- that a if EBITDA opportunity. in will of Permian very fits listened a after pick after obviously, you process a to will going I of is contract up our That then more, processing this news March it another when transcript obviously that saw but when we of a it that expires. out And contributor. The and we year, -- any be both up attractive fantastic context standpoint. be of be they're really would they're and for So say, to it's us going good or from the an activity development the is

it obviously that and help So the growth longer the double-digit that overall really -- how think rate we about XX%, does term.

Trevor Howard

specific and Basin and to deconsolidation things other a this Delaware footprint, I is in looking ECCC year, -- the outside folks look first in of at internally we migrate how get the business a ton across will and have one we've this quarter asset to a broader Basin. I'd us, next how only One think we're thing wanted proxy. packages consolidation the it's the of was Trevor. on is always is And which really excited heels Delaware will of of completion from not that which add the is just about that Durango our of but announcement for Neel, seen that the the

despite Delaware are up and assets the our there's south, the the we that opportunities side on eastern such hands, where length in changing footprint across And that entire Basin ECCC so Pegasus have north on all on and the the Durango southern Durango Lateral with is with Western County, Landing popping side side footprint. is then and of across the the in Lea where Kings

on So are have, M&A area footprint confident upstream such given a opportunities on and basis, exactly opportunities longer-term belief our consolidation that within those Delaware there robust we given we say are going all the Basin. side. again, quite for hard transpire I'd the our to, now will capture that to the But in long say, be term a where the

Jamie Welch

and south able and bring in to say and really processing the utilize of real commercial attractive. there that of and facilities to It capitalize team, gas our and just the And a growth would Trevor can the is team be we I us allows have ECCC that's the finally, on not Neel, process seeing optimization the And the in tremendously footprint, north. brainchild their it. brand-new south, finance growth down overall if fully that's we're we that

Operator

of Our Fargo. Wells line next from comes question the Blum Michael with

Michael Blum

I growth about or earnings capital between growth wanted the EBITDA relationship to return. or and your talk dividend

about dividend between speak assuming trying think just that more you're decade, dividends to relationship to to broadly? target So you Can growing can then through EBITDA versus end delta you that leverage Are And going retain cash, how or there? of obviously, here long-term XXXX, the the XX% growth, reduce hit more targeting you we in further? return forward X% X% XX% the EBITDA growth. just do capital earnings

Trevor Howard

I absorb say again, Neel's execute opportunities and earlier Trevor. opportunities. -- the is in are there on primarily It's just order that a we free incremental capital opportunity up flexibility and opportunities, sheet, execute not ample balance following extent lot the of a Delaware organic growth to after see strong inorganic business. Michael. -- flow also would What following dividends grow that but to financial and question, we maintaining, in such retaining on cash to to on Thanks, Basin our

just So soon, dividend pace, believe, what that prudent of a which do financial is is give we that at see dynamic slower changes, to I would growing anytime not rate say flexibility. us until that our we

Michael Blum

range that on more CAGR. investment? question higher laid XX% you that that you out CapEx one does before? then within that And long-term long-term Does stay just EBITDA assume it Or effectively contemplate

Trevor Howard

about most and And we've overall stay with within within our the the No. in We brethren -- it's other of We and II, there's can that -- I to investors analysts we growth the do. so much said, your of Michael. really is we've Landing already this and continue as footprint, most context we Kings growth, you already of of this that that talked which live obviously, got. a range, see lot whether

Operator

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

Keith Stanley

project. that the I potential capacity you tie when any I that? market can comparable it's wanted returns, to inputs but much they it's plant gas then mid-single-digit you prices want power today? early, just multiples, Waha? as confirm how on build in Just And know would forward bake EBITDA, that just Does any ask to on to say does you power own? sit with optimization

Jamie Welch

Okay.

it's Jamie. things. Keith, So Two

As capacity. how much far as

post in low hours, Barilla XX/X XXX the clock, Southern today, So XX the Delaware. megawatts we're that's Draw, round XXX,

the lots engineering be partners, a themselves few We they this give this. would Matt about really guys I They've joint venture talking of We've a some have credit. load. for of customers. talked at time. to lot have been They looked and and our

and selling So to we as points, look and then a data backup, opportunity right? at we're load going not this into connect right? this, It's to it's us sell to not So of is the It's into expense. really and of with our or going grid directly our existing -- We're It's centers our the our operating self-consumption, selling about not This hyperscaler. optimization set. power. not building electricity grid. we're own all will control that's

we as is this we see returns and have what are far against today. concerned, what As

no fully versus our today looking ERCOT prices. what we're We're at this optimization in today. So is what lower just it in -- of there's context Waha the loaded cost and is

expected -- I expected would reduction this at what construction potential there optimization So look, But basis, Waha for given think costs price stage. think, later some immediate, the I or existing enhancement on further a see we it is upon versus are be. is depending an what OpEx refinement actual

Keith Stanley

starting follow-up. of this between kind I XX% for see of billion Kings of up. Second question Kinetik growth EBITDA it? year, front for gathering it any half year Barilla color more lot And the assumption legacy in is the exit ramp. is is a really back you there assume a But processing on split growth The pretty a that's for Durango, the just as or is loaded volume of any rate Draw? to $X.X Landing then big half South, loaded that terms year way

Jamie Welch

half, yes, you North-South front we'll the On breakdown. the I say, give to try would

On volume the day. volumes. Apache it like the sort I look return South, That mean, to if just XXX feet the a it's in be a of overall bridge. cubic sort million lot. at a I lot It's the curtailed of put it is context, adjustment of would of

lot gathered on basis, Barilla on a you've got a obviously, You Draw.

nothing much it newborn when some on, looking So things, then and that's minuses, bucket, of your comes Landing, all at Kings got really I Trevor, those Landing. Kindrick sort Everything right? say, material. And pluses else it's pretty spur. obviously south is Kings but X would you've and

brings and how a Landing our lot And thought big lot exactly expectation is is. have volume a guide, control and curtailed of when of to and about literally we we you us, up. Kings our don't overall on project got You've a of ducts, which it is sort that it just comes was this

because And I but we that we be Kings but every do I guidance want we there's I start to see, we But we We that it. and just full we've original lot plays anticipating I how to think. moving. of this February context that of in to year, unknowns, give So want a right? we revised I to actually the can every just initial one the know think guidance. before in think we when be up, wanted say, have would like historically, going that's then we year, our be ramp year-end, it's conservative think issued Exactly Landing, are

Kings when is quarter fourth the should see Landing we So full.

XXX-plus obviously, that with a day have we So an will that get. the impact there additional

Trevor Howard

other Barilla first One I gathered that is of starts processing then service as whereby agreement quarter, is thing all existing getting just for there that, that gas. remember an out not Draw Yes. and add the would we're

So that's processed the over gathered. of XX% growth, gas not necessarily

that year-on-year actually adds to rate that further dynamic. here than expansion, processing because is a growth is how margin of gathered to later our is achievable growth for you're this just and with which longer-term business. the respect stronger decade, rolls what contract seeing And That so that

Operator

Our Mackay Goldman the from next line comes of question with John Sachs.

John Mackay

quickly on just I gas to the wanted touch sour opportunity.

treating, to just right of kind give it add opportunities, incremental kind of landscape of on room et But now, an kind kind of broader You see us sits guys you if have to where couple of pointed more competitive call times a the you curious commercial cetera? could today. where on the update

Jamie Welch

So John, it's Jamie.

number So significant as far Delaware. opportunities remains gas of Northern as in the treating, there a sour

us II with and and Landing real peers Kings existing that to with So Kings a probably differentiator our being then And Landing capitalize obviously, and we of capacity. that able continue be a capacity. with for processing to gas couple see sour on

so be Landing, commercial to we could in tell think we're that the much and that see excited opportunity. by we developed, existing -- our trying have acreage with of So are as level changed, sits very really and the on and It around of the I customers we that that number of contracts. system The everybody. amount it we to hasn't obviously, harvest or continue of Kings

John Mackay

about was the stories talked of side. one you margin improvement the just Maybe compression

down but of to briefly, kind I on pricing just update is potentially XX it how point has self-help gotten just track side, new of more, available? it on -- units? Or give the on your third-party touched it having us to guess, maybe is on harder higher? it an You just units your Is much

Jamie Welch

of you know, our High, units -- Alpine inherited been we lot as Well, have a across entire them and we from redeployed system. we've

that business original mechanics, base the or which increased was significantly the was was from whether and really And BCP call it's -- old from an so businesses. that our compression ongoing we've ECMV capability, Caprock Raptor, first compression

So third party. it is

greater well the increase than what provisions, reset they or as at seeing as are -- as this we're increase leases existing in units We seeing when as both obviously, well new point inflation expire provisions, they time.

read prevailing evaluate, on right? Obviously, those I it us pieces of get it others talked think we Compression, is so like about, think the compression. cetera. to is have And Kodiak, USA okay, the really you interesting pressure lease that there we've all lead drives rates. recognize many is do I et that probably to an someone What times dynamic, new and it's Archrock, And research whether

Okay.

it prospectively. let's about think So

Let's direct our into budget a capital makes that impact. our thinking it on because put

We technology, we have capability. have the the

it If pressure it of it's business. A let's secure the low and go more by you much. low Because business pressure? to How deploy low high of doing Let's lot pressure? it high are obviously, more than continues our we pressure, within the need do, your don't pressure much need. is be you it compression driven as

a think surprise. interesting new also lease of for have units, new rates It's cost It's come certainly existing do So terms complexion. it units, to up you're seeing is chessboard renewal. of sort as obviously an I it's interesting we that that but navigate, an not

Operator

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

Theresa Chen

would and with brings, In comments decade. the Draw Barilla your the in come up infusion to additional clarifying discussion that you processing the related taking more around to the on details later mind of growth

this is acquisition? the of path quantitatively, economic Just on contribution what

Trevor Howard

Theresa, it's Trevor.

gathering -- agreements. is what we we There are are gas So so processing providing existing that comment -- services. initially

gas. today. economic gas process So gas think contribution expire just we the remaining gas. to that a margin And Haven't But it's year, it touch existing third is of on existing way then commented processing and the the portion later about the Later agreement we we on on XXX% will don't necessarily this that that a will will with we expansion process process a that. party of then decade, today. in that

So...

Theresa Chen

power this build as come on And this this want you component Or to and something would commercial new you if it Understood. series like one offerings? your the opportunity, And early a as a as can assets how a FID quickly done? as year, online? then of gen view reaches these do of

Jamie Welch

Jamie. it's Theresa, -- is this think I Well,

would interesting this the be a much and it let's right? South, will do we think So it's thing say pretty So done of as South. The first. -- I it's about one -- load, takes in our the all

to in Let's see this this New in Mexico start we're go it about is. one year, think, I 'XX, how experiment, end to -- service. think of If If we it to when much very to when looking would talking this we partners it into analyze joint it's think, like is Mexico. you FID do that of because start we venture the to joint works, would to do they And some New also ironically, more partner of also the or venture like something. us would if

basically peakers, megawatts do is not gas-fired an interesting the hundred to see gen. several be going power trying right? do we This aren't these -- to opportunity. We're So,

shaving So this pricing super a more is This when points is time in as you I at certain peak sort year. looks high in about not a get in the that of peaker XX-megawatt -- EBITDA earlier, incremental about flow to optimization. growth the this remarks my contribute, said your and during to obviously the -- OpEx about permanently overall is to growth enterprise. is and reducing This OpEx cash

Theresa Chen

comes next the of Our Mizuho. Moreen from Gabe question line with

Gabriel Moreen

or pipes announcements all past picture export. Just had on on downstream the quarter, larger this seen we've frac expansions question a NGL capacity whether

re-contracting can just wait? had I'm your to locking you Just wondering just plays curious your your Obviously, that whether of And these commercial potentially of what you're I see how on seen give going that curious approach do you strategy, time want how guess, into that much away upside, from to also, I you've you you too that or to whether don't all got, strategy, it. but ahead in plays some before? re-contracting whether into

Jamie Welch

sure. Yes,

are of over to X think as have end There various year, literally passengers said opportunities. contracts the I the that right, years, far off and that commitments next for following the roll we decade. starting as the we

we enjoy. We with contract existing have much relationship Targa, which an very and

relationship and We enjoyable with very a close have Enterprise.

do incremental opportunities do them So we do that us. see rates. And creates going the obviously We opportunities. see lower. We see for

do. no see are anything. to what I we analyzing and think do rush when pressure we to We

facts analyze to and update we'll this, We forward. change to circumstances, look everybody, and continue as continue going

Gabriel Moreen

potentially then whether know distributions And and this steel to thinking potential wondering there's follow but And up you Are avoid could impacts EPIC I don't ballpark those? year? expecting with tariff then quick you're can any your you just if anything I in to X if about lock ones. that CapEx, Crude just how on

Jamie Welch

Yes.

overall is Crude, in think far really a yes Obviously, think from the place. in profile, place the short much a very reached Diamondback good And the good it's I support as has it's credit contractual answer I right now. on is important. So business stability, steady state as EPIC critically because a

obviously is your which to relates as last thing. year, to a What the I this distributions good aspect. sorry, suppose -- question? And just I expecting aspect are partners So forgot was the it last

Gabriel Moreen

Tarrifs.

Jamie Welch

Carlsbad. Oh million, I tariffs. $XX I $XX think, day activity can forget How when, predominantly tariffs? every like about We got for Olympus It's within in have. mistaken, to our is literally how. what, Tariffs the There's pressure if a ECCC, who, frenetic is us the business, impact, It not mainly steel. the we and million of steel was lot Matt, got around of I'm what of because we've that's lot North, pipe. low a

And the But which which last it a development all of. was secured of we taken care is pretty year. end Kings of at additional that been we in the lot obviously, certainly it, no because had we So ECCC, Landing announced all had of see strong. Carlsbad,

Gabriel Moreen

that question. the to tariffs be the Sorry asked one

Jamie Welch

to right. all quite right? reality, It's it's it. live No, got You

Operator

additional to remarks. for conference waiting time. like There Jamie closing to no now at any questions the pass this are I would back

Jamie Welch

this for than we a everyone, time ran to forward your you, normal. you I longer look week. Thank next number know seeing of We a little morning.

at up York. we're couple conferences think of I a in New

-- please very meantime, and to much. if out. Bye-bye. feel free Thanks reach questions, any the in So

Operator

and the for rest That your concludes today's call. Thank of participation, day. enjoy you your

Kinetik (KNTK) 27 Feb 252024 Q4 Earnings call transcript