DTM - Earnings call transcript Q2 2022

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Operator

Good morning, ladies and gentlemen. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the DT Midstream Second Quarter 2022 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions]. you. Thank now Relations. over will Director Todd the Investor of turn I to conference Lohrmann, And

begin conference. may You your

Todd Lohrmann

Good morning, and welcome, everyone.

X harbor Before like we statements. on safe to to would presentation, Page statement remind you the get to read forward-looking started, reference of the I including the

the also presentation to to GAAP contained measures. Please non-GAAP Our to financial in references refer includes reconciliation the appendix.

President to it are David and the Executive Vice CEO; over Slater, Jeffrey turn now David and morning and President this I'll me start Joining call. to CFO. Jewell,

David Slater

observed Todd, and everyone, system public will review Haynesville our X quarter morning, performance. a discussing good and update joining. recently provide Phase an I'll commercial and our as key I for anniversary over Thanks, our company. and to thank reflect our start it our share turning then Then to by we other our development stand-alone on of X-year you details on Jeff initiatives second as major on projects results. today's some call expansion I'll accomplishments our financial financial before of

strong highly that, ability day achieve to by firmly expansion. X expansion Bcf is day. a result current way, capacity quarter, of The achieve day to in by with incremental expansion our XXXX X X to XXXX Phase on XX% a that a to Bcf on early I cubic excited represents a Gulf with and X, along economic putting out the is system of is Haynesville Phase outlook. Phase second and XXX of I'm a Coast. underpinned have announce capacity our had will export we performance a ability us markets its reached LEAP long-term track customers we feet on from timely that X and take-or-pay increments very fully X.X our a expanding on us for final investment Phase and to guidance, capacity our providing the confident million pathway running LEAP. LNG decision our ahead access attractive in add So efficient domestic low-risk LEAP, am of year-to-date plan, expansion our highlights commitments. This the to to

team can that which Phase us X.X achieve Bcf our first quarter X have their us. we day capacity growth the by system a continued like great synergies of of expansion, The the expect choosing to our past and the to example confidence Haynesville has will and the construction with in over for customers per the allow our excellent of XXXX. LEAP is I'd of year, We done work service full thank

the As day of a with to X LEAP part active compression, capacity discussions and with up that remain in would a be Bcf be can X we in and interested expanded looping customers expansion. reminder, Phase

secured across our anniversary to strong The take spin for execution moment public celebrated all we recently thank each our done. stand-alone effort to the I have growth come. X-year the as company have a a opportunities has of for numerous the work also they company. And great with the for the We years want beginning positioned collective to footprint to employee growth

our customers. company of out over with Again, top-rated Our XX Customer our the support recognition. customers achieving Midstream Service outcome team I proud week, I'd this have all total year business. Study. an participants past in of as relationships And for and for recognized to operational that the of thank like commercial am very strong were we the and are their the we our MASTIO of successes last

on all track, am schedule a remain to solidly happy our projects that Turning execution perspective. cost of to I the from growth both projects. report and

contract, long-term XX% customer new placed quarter, system's we capacity. expansion, under Stonewall second to in which a our a adds of approximately the representing the the service During system

We remain agreement advancing Stonewall continue VI a NEXUS, takeaway emissions business opportunity platform, opportunity issue. CCS as on our we as Louisiana application, only XXXX. by we the permit well In our rates. we capacity On of attractive net are X of to the NEXUS an at of will constraints represents file see in attractive significantly emerging part but as by under strong which Midwest to an long-term to LDC year. towards reduce our interest a Class out end This recently be Appalachia plan plan not for added investment our as another

deliver So in returns. and stable, the summary, to grow positioned company durable well is very

and to exposure, and direct we no high the take-or-pay and natural structured focused, long-term expect gas financials of and outlook. through domestic over to We cycles, pass our is Jeff many XXX% come. gas very resilient years now for contracts. portfolio natural quarterly you commodity be remain strong I'll to have walk level demand global to for through to it due to our We're

Jeffrey Jewell

year. the billion Union. both averaged day year for X.X second the by total segment the Blue gallery a at quarter, million, projects growth. expansion, utilization, second $XXX consistent of higher of was Operationally, by across a LEAP driven revenues quarter, gathering overall in the feet on Haynesville performance delivered was the expansion recognized results the cubic and the settlement driven with Pipeline in both In Gathering our in pipeline everyone. adjusted the supplier running morning, support good future strong and the high we segment With by second and higher favorable and the with of David, which which planned our on were onetime results impact revenue Stonewall our gathering in in-service Northeast segments. volume half driven will volumes our Thanks, systems were of second a quarter. EBITDA plan

performance to our $XXX ahead places EBITDA us plan, and strong million second quarter guidance reaffirming are Our adjusted we of million. $XXX of XXXX

closing ESG our We also outlook it on XXXX remarks. and David in details EBITDA. adjusted now program pass to are back for early more I'll confident highly over for our

David Slater

an manner. committed DTM, socially At we ethical, in Jeff. responsible sensitive Thanks, to operating and are environmentally

published we're encourage welcome I we sustainability highlights and where first you first the closing, great During any journey to which of report, review we stand on. the a our quarter, feedback. and your our of half executing we it, on currently been initiatives the In it's ESG some year. of second that

our open projects and year the about XXXX We to on our and commercial I'm XXXX guidance We excited progress for well questions. line XXXX track continued full growth deliver can on the very strong achieve are early deliver and outlook. now up momentum into that beyond. will also

Operator

Instructions]. [Operator

We will first with Tonet our Jeremy from take question JPMorgan.

Unidentified Analyst

guide, in of just out, performance out, guess end that This guide, running of obviously, is Steve towards double we I here. if the could your but versus looking if Jeremy you're kind that the onetime on starting XQ. jumping at just we was settlement first for top there half

guide, So and and wondering puts the run takes can through on volume just if the general? back just see the takes and guys you puts us half, exiting you in on how

David Slater

This Steve, for the Yes. thanks and is question. David.

just hit let's So the onetime settlement.

Just in relates the to for in for here and It periods, positive that's we've the time about color, year. quarter. settlement a we expenses $X original in million. reached previous That was plan second taken the

year, the So that's baked into sort guide Steve. for the of

in out series the us In And have back-end the that right half of I now. drive the laid will in ahead second we running into guidance of as previously the I terms expect that announced and growth earlier, what said of that projects comfortably deck that think come a gets service span. in that of plan we've we we're will year,

a plan. we're lift year. there's running the of And definitely half sit here So second ahead in of today, the the as we

Unidentified Analyst

it. Got

pivoting just guess I over then And Okay. to CCS.

you're You about while moving talking year. the Class VI towards later this

on wells the you on doesn't the thoughts after? input also to also that -- come And process? guys much Class with that before get before? that bill to in the guys VI, transferability thoughts on Just do you V Just your And CCS? new much if look laid has that even said doesn't that, and the around out know you economics your then to to wanted the any and wanted to improvements. get But to then just matter Is that. thought you. that into have that matter as I anything have would Would Class

David Slater

Yes. Sure.

fluid So based on happening what's Washington. this obviously is in

constructive saying very So and we're I'll on hearing. based optimistic by what we're start it's

know, think But devil constructive it's the pointed in and is details an I here. in the As optimistic definitely we direction. all

As we said earlier, our project structure. was viable under existing the XXQ

be structure improvements supportive our will to obviously that any to So plan.

terms Class right the around of V, just we're details In those to going the details Class of I steer now. think VI, publicly clear

there's lot I pulls everyone a lot this there's Louisiana appreciates, think, around and and when. movement of and ultimately primacy projects in of whether as a

move a doing going of before just say is have lot that the prepare we're the I'm the process will what can make being. right be I occur of filing a time focused high-quality for that work to what we're right now. end the now filing that's pushing through And the that and that no year. But with to so we're on regulatory filing it drama. leave So And it to

Operator

will with from Sachs. our We take question John next Goldman Mackay

John Mackay

Haynesville. Let's the start on

kind share now flattish Could quarter waiting gathering of a sits again kind down sit on and that expansion. that to Blue I were a little volumes on third you're to where even of now where detail that right little quarter. So volumes into a able we're this month if more we're know you Union share maybe just that?

David Slater

question. the John, thanks for

make a John. here, few So I guess just what, observations I'd

So EBITDA in was quarter. second up

need the though even was and that And a Obviously, just building high for volume as is facilities incrementally is incremental I larger, at X to we're drilling. things just were flattish. margins timed the producer both optimize timing level, parties. a together So think this those be to the

too of And have point, the volumes we facilities that confident highly seeing many in up across want into service half. second we year. are occurring get to in we're the to So the details call, recall, don't system. Appalachia I And second also but half are incremental coming here and your are showing that in expansions these the in on the

as So we into we're in our clicking is would seeing baked all expect and guidance. those as

we that through really and our ahead the guidance So our internal on sit year. of second the good half of we're to confident going plan we we as just feeling again, deliver today, are progress here as that very

John Mackay

one taking CapEx. on Maybe Okay.

guys reiterated the like. you you're So that but behind looks guide what running pretty full year far

what So year should I of about? share more how little still bit we don't slipping into half the think I second Or Is potentially? step-up? that anything full XXXX know guidance thinking could a about you just guess, if you're

David Slater

and second XXXX, we're heavy going door Yes, start as But sliding I the deliver you year. don't out the We projects a heavier year spend come one it's in capital a obviously around it's engineer to and the these John, the just the anything have I to out timed, sending but timing see half just of half this into in and the actually EBITDA. will just going of overall. same second to spend money make way want the less comment, that's

efficiency remarks service. a we synergies that bring here to alluded I because this pretty my quickly with rigorous X, see Phase into So have how that we're can at process going opportunities. some of X look capital to Phase in And we opening to

So as we execution. get off But again, diligently intact. that we capital all will completely of come be and more deeper peel EBITDA into bit little that a working to the to leave on

John Mackay

yet? Okay. you're couple to months does expansion you guess from mean Blue Maybe on, a that still when just Can now? don't half, clarification, is second saying one if any Or -- of of online just mind. add the you maybe just Union I

David Slater

Yes.

the play out now. point going at Blue -- that's For is in from time sitting prospective right that to Union, we're that

us. So in front of that's all still

gathering seen third have the quarter of here we come some We today. the in on sit here Northern as

of basically all end year. next So the it months, the over X the now on between comes and

Operator

[Operator Instructions].

question Michael with our take from next will Fargo. We Wells Blum

Michael Blum

bit for What's overall I duration talk And where about LEAP? contract expansion is just a of to you LEAP the that that wanted the duration little average the contract? announced. now

David Slater

So yes, X. bit a about talk just our little me Phase let

So number one, really it. we're about excited

ability tranches. think a good of and example scalable bring I our in timely bring market to it's it capacity to

discussions. engaged actively all of opening the details, alluded the Phase the and to X I terms in remarks, details we're In as in of also contract counterparty

So going counterparties all specifics But term. or what about this time, would share at is these take-or-pay term. I we're They're XXX% contracts. say all to are not long

capital entire of That all for X the commitments. long-term putting and of recollection contracts average the approximately existing not without duration contracts. across new is are My work the LEAP system. our years We includes to

So term system for is XXX% structures. the long under contracted contract take-or-pay

Michael Blum

there -- are talk takeaway? Other in for I kind that. Appreciate lot. like right incremental seems a just question. helps that been No, to now is Great. of months. multiple last related have It certainly dynamics question through if competitive in wanted announced -- you second few projects the Haynesville the the a could that

now? on land want maybe of are So how lay discuss how your trending right you if competitive projects could the get given returns to it and maybe just these is

David Slater

Sure.

talk So maybe and the get step a fundamentals back competitive for see we just into what I'll out then there. and about dynamics I'll minute and playing the

both fundamentals, situated strong on the demand LEAP around really there's other the on and side So supply side also projects. similarly around and

the reaction the the heard LNG And demand. all So producer making community increase announcements we we've definitely seeing all that drilling. by terminals up as they sign incremental are public are to

advantage terms we critical carbon-neutral these these So competitive significant America, the pursuing the LEAP to the it crow as And the we It's pathway. in water XXX connect time of think again, and XXX they're dynamics, the we is and wellhead X expansion a with that's because in of want I as expansion, expansions. what North announced project we're its kind to apart. for have a to say drivers believe element, to that other originally fundamental we're ground. flies, really a say, miles each in first I'd the matter. LEAP when in I'd announced we world

have So unique service market. that a of -- putting into we we're offering we kind the

We're differentiator. competitive a that's think scalable. I very

So a up nicely call, program. customers picking time X as couple the at just a we've fit of I'll manageable capacity their of over expansions, tranches what that you've into incremental with, seen drilling been last

our the delivery one. deliver We basin. delivery the we in system other a So have I in it that's takeaway flexibility competitive point another kind we And at multiple element just embedded think to And of not system. that lot points multiple of landscape. describes [indiscernible] inside have the points

we point of delivery existing and a optionality have have system already lot today. the we flowing So that's designed that's flexibility into

matters consistently we've we're as matter. price expansions to And do on at again, able inception. rates all the So of the from Obviously, those these that had well. system

mass comes I competitive clearly over tranches projects do together because today. an other all as critical of they we that to that they FID, to landscape, can can before of think need we that. do have smaller we again, projects the like don't So those need in just are it and announced We greenfield, some advantage hit the in

it's So strong exciting driving fundamentals very expansions. a market,

the goal conserve give our up in is make the from think future more us. them a And I strong we market expect there's sure with and -- our and value here. real I that will opportunity to pick our the customers share buy of proposition service they

Operator

with will from We Mosca Securities. question take our Robert next Mizuho

Robert Mosca

the maybe So staying just in Haynesville.

and them to X of Phase do do some distinct a compression in Just looping? X Mcf about wondering maybe for bar then try a you of most of Or expansion I expandable with beyond Can you bit -- buckets X is look with Phase that you context looking be at at -- you the to together? higher little expand is kind XXX in what's think of a the and that that's everything have looping. will expansion,

David Slater

The executing projects, we Bcf really on the on current are publicly we pursuing. definitely way looping/compression. we're we to feel announced at what X combo our we to extended the be what have runway great and question. have now still day a our We're Yes, construction looking optimizing based

mirror. The is is it, day. Robert, new rearview of the we us in have the would X describe that way is milestone a that now sort So before old I milestone Bcf

Robert Mosca

you picked Got that on an to contract. up And it. you switching That's helpful. really maybe additional NEXUS, said

long-term there capacity -- have Just capacity for you wondering maybe contracting? or left how much is

David Slater

Yes.

happy playing So we're really is NEXUS out. with how

Vector Storage contract, This what takes of just some this capacity extending announced up capacity contracted, X utility really XX shorter-term attractive long-term or interesting was been we've like said, X about Washington I the pair morning. their to and term capacity we that rate. which is capacity. at think, in here utility NEXUS that we element doing the another out the what real So also for rates. quarters, expanding last I do, The contracted and the with is to continue happy Midwest I'm this

not its example an pipelines. it's other of just great host producers, end-use -- serving this on it's locational based advantages serves interconnectivity to storage a a but market So directly and to regional and of need pipe its only

is of those step because on basin long-term this there's the is see work to shorter-term yes, continues our team strong so So contracts rolling additional The tight just contracts now. another on and kind coming for as we of demand those right a journey. and contracts long-term some

Operator

[Operator Instructions].

will We next Kania take question with our Research. Alex Wolfe from

Alexis Kania

thoughts interstate. if a initial wondering you're any Obviously, been doing just lot permitting had what proposals. was of I reform potentially these on you has

So any does of this any the extent kind a forward all upside you. for for done, options related of And pipeline Mountain on other note, and Valley kind opens I'm gets downside? up then have on also you, wondering maybe that if this and that to the moves implications maybe

David Slater

optimistic Yes. Sure. Reductions again, not to your We'll we're out part by the say question, I that first hearing start would the and question. Washington. attached Act. encouraged we're Good very with directly of what Inflation It's of

So a and running I it's separate parallel, pathway. believe,

out is, forward. And see then both discussion but the at we'll and can alignment the of closely a quite process, we So been where see language. Washington quickly and of watching moving high There's political that frankly, it of see and the to be a move for if lack I word, need to think need through to is to see a it action, it's there level the what we lot details. how really support better

So know again, has for together the working signals. I months. and been this very industry optimistic positive on

I If we seeing. plays you're we're what right. expect, out So again, very that encouraged think by as

put I the are pipelines. think expand and where strong of to applicable in table few there's on grow. Appalachia, it a it's some expansion opportunities, does in back think And more the community most terms potential producer desire to a options to I there

think Appalachia. interesting today project would pipe given this different I up basin hope that I'm ago end at going Valley much needs that sure projects other done. today X it that think that how I So the of Mountain service. than years impact not other of takeaway in dynamic in asset so The that done forward, an that all to it exact progress. opens capacity it's exists have can been progress. it the when gets has Transco The was I

I digest encouraging that. going I happy the ratio, the truly it a entire transpiring a So it's that. very but Washington But I about to ratio? think different is Is what's -- basin I will positive for and and ratio, and think very or think it we're different basin, it's one-for-one lower think more in supportive. come to on a we're

Operator

And David [Operator now further call questions Instructions]. at no are or for this to Mr. the Slater any over time. there I back would to closing remarks. additional turn like

David Slater

and Enjoy have joining much summer, a today. questions. you great thank and your Well, very Please your appreciate us stay certainly We day. for all safe. your interest

Operator

today's for you this thank your gentlemen, participation. and Ladies conference we call, and concludes

disconnect. now may You

DT Midstream (DTM) 3 Aug 222022 Q2 Earnings call transcript