Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. My name is Briana, and I will be your conference operator today. At this time, I would like to welcome everyone to the DT Midstream First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session [Operator Instructions].

the to turn of Lohrmann, now Relations. Investor will call Todd over Director I

your conference. begin may You

Todd Lohrmann

Good welcome, morning, and everyone.

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

Our references includes also non-GAAP financial presentation measures. to

reconciliation the the to adjusted financial at as updated definitions issuance investees. and EBITDA method contains are balances appendix from EBITDA equity and appendix pipeline, method modifying equity definition reflect non-GAAP our our Following the debt NEXUS details investees. to proportional successful The contained adjusted refer other full the to Please of of debt and GAAP we in EBITDA at well interest on the reconciliations as of calculation the measures. expense also our our

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

David Slater

morning, you results plan. that strong line everyone, business great quarter delivering Thanks, another Todd, our full segments with and with had I and for am are to we thank good both report pleased year joining. in

on call, growth be of confident and outlook in we towards guidance for As year year to range online. half I range we XXXX the early the today, expect second bring as I am our weighted year for projects communicated here end Standing our XXXX. full

locked committed Approximately customers. work no date our by budget major XX% remain performance costs. through for growth on like significant this commend contracts. our so ensure recordable the projects to a to All in-service to also dedication And firming excellent on derisking far to we and these spend they and as have the safety want capital progress costs overall and our with entire their up procurement year. construction incidents states our of completing growth key thanks been project projects meet our made in for projects employees quarter, of team schedule. activities I expected project these to for their the I'd big safety And give during

continuing the permit opportunity advance the following Louisiana, well by application Class of our to We VI EPA. are in the CCS acceptance

and VI proposal completed have a geological State Last to our evaluate the surveys the request seismic they opening comment support injection continue EPA characteristics grant to window We or application. wells. in announced a on public of over Friday, are Class primacy Louisiana's of

as and by very to state of we'll this Louisiana the We project towards final closely a the and are we continue the work both announcement decision. advance EPA encouraged with investment

want to on take activity our fundamentals I observations the share producer address a to and gas levels. natural moment

the footprint to our contemplated especially high We are and inventory constructive. remains are in gas fully by The drillable in very resource activity a well price term basins our long reductions environment. the in, we customer that locations. economic are X assets has response low announced Tier and see grown There long where guidance highly uncompleted inventory the served runway a Recently and significantly. rig was also reductions our on our in of DUC in operate view starting Haynesville, the to market with drilled well areas the

if facilities gas we for gas the next feed On the a running the demand of natural burn, Power quickly market. especially and demand accelerate could summer, return wave following year last the the side, potential record is of LNG increased well the LNG have is hot above export Freeport tightening is at power approaching. and levels, of new

dynamic in dry gas serving connectivity provides basins with footprint very this asset the Our market market. best advantages wellhead to two

to our business XX% centers increased today. from to serve close approximately demand segment pipeline in the durable pipelines of and Our growing XX% has XXXX and mix

our favorable add continue pricing growth rightsized a two and business are contracting environment. investments. producers backlog our recently complex, We organic into to our we to opportunities added system We our new on with to cycle, short Haynesville development of at focus storage

I'll and outlook. financials pass to through over to walk Jeff our it you Now quarterly

Jeff Jewell

the Thanks, David, and quarter, delivered first $XXX EBITDA good of we adjusted morning, everyone. In million. overall

revenues Pipeline at quarter. reflect results strong offset segment continued reduced Our storage complex our short fourth ventures, performance by pipeline strong and our joint a term following

and transferring Our billion our across the first with start the Northeast volumes segment, service for of the and conversion asset fourth feet except to the from X impact the quarter. Gathering averaged million day results quarter, Operationally, were $X Haynesville Pipeline following the gathering total the a both Michigan cubic in XX new line the approximately segment contract. the year gathering transport the in

be We driven our this half growth growth customer quarter is CapEx weighted projects. our to and volume made year, for organic expect gathering in-service de-risking the of as significant million timing expansion progress Growth we $XXX by the back activity. which projects was of

CapEx year our million $XXX million. We are growth of full range maintaining $XXX to

Our is our capital total, $XXX step of total The down spend XXXX. in XXXX is remains slated which inclusive growth committed organic implies million investment growth committed projects. in and capital approximately significant for a

be of grade very recently our organic free additional savings. ratio down the pay provide long sheet to credit will with term and expense DTM’s be committed This will from Funds of will being $XXX debt remain interest times up our May are balance and share this distributed we financing. approximately the at ceiling. liquidity to leverage of of growth We balance with We sheet X revolving results Overall, and transaction million. pleased million facility. strength our and in took the to new opportunity with our proportional NEXUS optimize further early transaction used issuance the $XXX investment pipeline, support

for EBITDA the on changes remarks. to not As base This Todd the modifying I'll guidance in over it any mentioned, we solely change now XXXX metric reflect X to The our reflects can and the guidance be to our our pass presentation. guidance. EBITDA updated found adjusted adjusted in impacts business. closing adjusted David our are Page does metric, earnings update which back EBITDA

David Slater

for in range about really and So guidance early feel for year XXXX our range XXXX. full we outlook summary, good our

been Our construction by significantly projects contracts. take-or-pay backed and derisked primarily are have

to will development the expect growth continue questions. for of We additional over now of and fundamentals yield year a inventory the the projects course improving that organic line opportunities. have healthy business up market We open can

Operator

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

Spiro Dounis

here term. natural of really But we when your guys to hasn't question, you near that an think outlook the degree, sounds some term. prices First you rigs just the like on curious impact changed sort mentioned if it have out, in think longer gas

are was an thing, LEAP of you point. And at expansion some Bcf a towards X so one pursuing I day know

maybe just a curious us and interest Just or if continuing now levels you customer expansion? you walk are could how thinking expansion ago potential the two that quarter through timing about that maybe on of versus

David Slater

continue really customers the of a with LEAP to on have next of dialog So expansion. series active we phase

As were. think like mid-XXXX expand our LNG of we and just of increments, And that one the X is offer what next approaching. sit we the advantages today, here bite-sized call we're and Phase X to ability X, I I'll 'XX is quickly in that 'XX, wave market

now. environment, incremental LEAP recognizing continue of weak a bit to in the we're a the interested capacity. Again, in customers have we think moment I cycle a of So in lot right just commodity

out And to half one most commitment. ready aware of when things customers self lined to that. are they're the next I of those and of incremental think make kind very go prepared

portion punched work. our So wave We the thing the feel of competitive really of we done to good expansion and large first same about call the in share, in the and the wave. We've able weight I will well above happen real position. we're what second a market I'll contract expect our

Spiro Dounis

question this the one. just Two methodology. part maybe new on Second EBITDA one, going to

be especially to I the will by outlook behind first, 'XX to not sort that little just we methodology, was flow a did now? little early? more a sort now preliminary that of reducing that as the guess, not between what that sort then way of that debt, reflect it or EBITDA bit think gap like Any keeping would cash thinking of like. interest the looks of the that bigger question, you're going of about second variable to too it bit it seem So part EBITDA this or was And have and JV that change the reason it levels,

Jeff Jewell

then help the So will I'll on and piece David first the take 'XX.

in debt So a so that's transparent we're obviously, being debt, the that it moved want we're that We as -- JV investment pink was just sort JV and you course, we a NEXUS, of to simple. simple. doing why it at trying method proportional was we've well what known we're for to that's JV reporting do to material just cost. able us, with it sure do. And being an so change rate do that of we're We pretty that a got. at got, we're it you like you've that's and to with can to And the material because able our And nonrecourse. got that rate finance tickled debt now. see again, that approach we're when And we really can the that level as make grade, lower

So that's of time. why the kind this we change at made

David Slater

maybe up second half. pick I'll Yes, on the

JV on at we briefly time comment it. right debt I'll pipe, in that NEXUS. that the contemplated always was the So of It put on evolution would level

really us is plan. the this So executing

puts there's quarter and is on and no forward-looking XXXX, takes this terms every In different. of guidance

typically our current confidence it's it refresh practice We XXXX XXXX and have XXXX. cycle. It puts end year hasn't year of current at that as guidance prompt on the and in our been we the view the bring our our takes into in and we'll changed

kind Spiro. of practice, just that's So our been

no there. So concerns

Operator

comes with next Fargo. from Blum Wells Your Michael question

Michael Blum

make -- sure term XX, On your want understand had I reiterate ceiling. I couple just Just things. X think couple Slide you times of leverage to ratio long a a I

a term wanted little just a would that So better. to slide above X below means if to of like is yourself times? a what back long really sight you go I that that in term line now, you is short -- have or that understand get that within that allow cap of Is reasonable time that amount good the or at times you bit hard X in

Jeff Jewell

Again, -- question. another good good very

you're right. So

times again, the commodity proportion, direct we're comfortable because the and with a that to so times, clear we high X Our flows X which term includes stable contracts, commitment cash long is degree got And exposure. have we're just is on demand of we've that. why no that

out. times. we X with how that's with But into the the feel how that that we years to temporarily we down able currently de-lever feel times, So are end X year. that going going plan, the to our we're be we play on mid-Xs of you're probably are to why that But several this be with to over at on going the spot next things good profile have, investment over

Michael Blum

And to just I then upside just you or in wanted in storage quantify, wondering are either how of uplift just the rates? terms increase maybe can rates. contribution ask much storage seeing rate in change, of you like if I'm about

David Slater

Michael, present we market the six just a itself months. we way storage five in we've had probably structured. portfolio, a capacity strong portfolio to actually amount really over rolling And the Yes, have of that seen our last just significant

higher So year rates perhaps renewing to doing excellent probably than storage a capturing just seen higher last XX% seeing in these contracts XX% quarter, are has that in market. number the rates. commercial the team of the here been job an we've and first We're

by encouraged really So that. we're

folks years the I ago, weak that think couple pretty can sort market out in a talked In storage about in weak that storage trough, in to terming was of it past. storage you the the intentionally were use term. say the I we and market. we of a were market, I'd we capacity have And if market

the So up storage think higher and our America, of it's materially inside in to to North market the function can advantage extent a as in that has here energy complex just we improved, and of we're term and looking that the a I business. volatility contract take out

have to the a bright moment. star portfolio. diversified a it's always And that's at in the So nice portfolio

Michael Blum

last for one And then me. just

you for dividend the quarter? Just this, I I but first apologize have declared if missed the

David Slater

We have coming be but not expect shortly. we will that

We later board have a this meeting week.

stay So tuned one. on that

Operator

Robert Mosca from Your comes next Mizuho. with question

Robert Mosca

the just Blue up you a So you of if couple provide you producers also, announced in years any new think on then back, was contracts color with And customers on some two could I wondering signed I those Haynesville. additional Union.

the wondering volume to, could in a and could update guess, you us I those or Just Haynesville to commitments the bond tenure if with potential headwind short term? expectations, on that respect and be

David Slater

customers. And strategic of on start new of wanted we a platform our was more the new objectives up think, customers the So it we signed on as little I over couple as that we to platform Haynesville last did, to and two bring one to you diversify know, years, bit.

two new the get contracts both details I'll private smaller type with customers, into producers They're they So other these to of the than producers. dedications can't just our I network. term long They're are. characterize

team it I me procurement the was for give a this network think the in commercial as to we see working a has these in that what network is really value to water Haynesville. the to encouraging wellhead new to observe a us wellhead have location. I'll call market been our network, customers LNG

to ready deal so of one saw really network they So they a speak. company, could lot to with plug into the they're in that just and go, where value

to But be the the come by the efforts team network grow that do encouraged diversify to network able the towards two just and continue the to So to just add on the we customers network. yes, of those the and we to year. counterparties end of expect and

Robert Mosca

And if those were those long maybe you’d kind a term of of agreements, contract signed on couple that or term short well? not contracts years just offload as I'm were back, sure more those

David Slater

now, system yes, Those on customers customers and their I just mind I'm recalling as longer actually them my the on the the Rob, would system. those are term still right on volume But on disclosed customers. in we system. characterize what growing they're

Robert Mosca

million I derisk, mean -- projects anything of and which or maybe specifically, then projects those you what that speak. which you so that in initially modeled committee And to whether $XXX above XX% about that budget? could relate to talk you're CapEx is seeing below for in

David Slater

as in the say the the open, So projects, let's cost. of related level. our just confident and just both We're is primarily XX% And that very the I'd the our north pointed open in to that’s highest south. all install been portion, at out, you capital, in on derisked/locked of capital start has the costs in. XX%

mechanical together, what it's, the and projects so of So are I'll all schedule. on putting running And speak. labor call, the it to

fabulous environment So out delivery can budget that a I sides to cost team from products has on hold in our hold deliver customers. done as my job our remarks, construction from for our all difficult sides a significant and schedule think called pressures the the and I with in we coming time all for these opening so coming very pressures schedule customers

we So maybe about I of now feel on represents derisking XX% really additional good some to the on side our just year, the And why gathering capital everybody, our about the this only guidance of commentary about remind business. just business good feel for our side. so

or have in waiting being and we are speak. start just to wells But that need I'll facilities there. those brought drilled the either expansion been online support as the be all and wells drilled doing the work we're here So are that on completed XX% to and of XXXX, drilled

our it of business that a to in of going which confidence of us lot what in one is XXXX. portion business, here our total terms gives we're piece just So in of deliver

Operator

question [Operator Wolfe Instructions] Your comes from Kania Research. Alex next with

Alex Kania

questions. Maybe two

just to And First, there just lot gas see the an environment? of when any what respect just FID of you're a just remind counterparties discussions a timing moving or how right activities, maybe the potentially of forward just EPA quick in hopefully talk to get you on respect the primacy Appalachian Haynesville sense may one, your could decision? line in is CCS. from maybe maybe one. maybe end get on you with being to time tone the producer hearing changes now Louisiana, the us there to just federal that up A but kind process you second with Can

David Slater

quoted Appalachia. start I'll that business. the just that previously terms gathering with Those of our I this supports percentages seeing covers total activity in we're our growth that year,

Haynesville. and Appalachia both reflects it So

customers perform to performing our continue expansions a of terms our we them general But about to expect more the comment continue we Appalachia. Appalachia, activity. would So see see in in we what to

line. probably occurring to seeing sense There's there's a it's public, Haynesville. Appalachia the same costs. that lot more the moderation -- now of a to over is continued drilling some summer I My bring heard the related will we're play in You've right that in that extent but back sense of not ship cost will of I the And think Haynesville the And inflationary of the is Appalachia. I here in Haynesville to fundamentals the that will out service in and the market their they that there sending here, view cost towards think, and think And that in in sector was end producers just little cost I there'll than a this that year. back be the also the half pressure the in is -- my support are second year. year the need acknowledgment itself the into signal I primarily ride half a the adjustment expect

strong We CAL-XX]. price still see signals in [CAL-XX, pretty certainly

and $X numbers producers I think in for into. in it's upward low drill XX, pretty basin $X ‘XX healthy either to in

of that's hope a market, So I what kind the that's hearing and level we're at in helpful. high

our said it the everybody it. we of Louisiana, question back CCS just pipe related XXXX. us to the we of from and sequester And we've capture our Haynesville, or sort own of for the in emissions end second Your kind project publicly the in capturing is involves for timing our to facilities will in project, remind will

to shift this all primacy with Louisiana Department that, project. the EPA Resources Louisiana. expectation at Natural with of some doing hand-in-hand the We've and three both the the in we're point, would components So working been

and do the sort planning from that the one that the done both to we're of day with to support has work fully application. and aware parties all us So in have tent been of been

letter So state know base ship. the we're to encouraged within week. CCS in by state Louisiana that base assuming working supportive their industrial and the is to look to the support last primacy very resource We their forward we the both with of state, and

Operator

comes with Robert question from Mosca next Your Mizuho.

Robert Mosca

a Just follow-up here. quick

the you decline address drove Just could in wondering quarter-over-quarter, if volumes Haynesville what that?

David Slater

more Yes, completions. timing Rob, it well just wasn't than the of anything

think phenomenon year. last a we had I similar

be first kind seems year. of tends little again, year our half I in the ramps and our a -- contemplated the the of we of the we fully our plan and it to to the half in pattern second lower, think of in tend customer. largest to was see the And guidance. be That

we're So very with QX. happy

on guidance year are our We for full track results. on based QX our

Operator

further are There David questions I at over back time. Slater, you. the no to this turn call

David Slater

appreciate the thanks, everybody, and EIC. certainly month I a in for we And Have day. joining seeing and interest, you forward of to great Well, later your us today. support many look at

Operator

conference concludes call. This today's

You may disconnect. now

DT Midstream (DTM) 2 May 232023 Q1 Earnings call transcript