DTM - Earnings call transcript Q1 2024

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

Operator

Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the DT Midstream First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Todd Lohrmann, Director of Investor Relations. ahead. go Please

Todd Lohrmann

welcome, and Good everyone. morning,

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

GAAP non-GAAP financial refer reconciliations appendix. Our preferences contained measures. the to in to Please the to

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

David Slater

good and thank everybody, morning, joining. Todd, Thanks, you and for

an on growth turning touch the the our close I'll update call, review provide construction our on fundamentals, it commercial results, on with today's to Jeff projects. our and activity before During to current market on latest performance financial financial outlook. then over some progress commentary I'll and

we're giving to in year off our full start great us in that, XXXX, plan. a So confidence with

reaffirming XXXX our We range adjusted adjusted EBITDA XXXX are guidance outlook range. EBITDA and our early

market, also probable make new with outlet organic compression provide remains AI-powered system, March. and a began up Utica Stonewall our The Appalachia, already to The will large commitment. on is capital was volumes part success. announce initial construction additional have upsized continue progress in Pipeline. our are year to cash capital flowing emerging. excited Stonewall expansion our become these contemplated our and conjunction highly project Ohio system both a company a fast-growing system capacity, expect we acreage incremental anchored This capital and volume new and dedication mainline the on plan the project Valley with free within we Mountain in In includes flow data center will projects Appalachia interconnect great setting dividends. Staying expansion. to the agreement new for an new of support Mid-Atlantic to on backlog after for of a as III which morning, gathering projects, we a our guidance. with And new teams as production a our XX-year our commercial investment-grade which This investment producer, Our our continued a includes which Phase region demand by load with minimum development, growth

production Utica revenues As reminder, delineates our diversifies price over under our are gathering period segment. in today's ramp protected expect executes contract we development and emerging to resource volume on an highly is fully to play. a further structure. as economic play XX- its our And this a liquids-rich and customer plan Ohio The take-or-pay environment XX-month

observing the to emerging expect to continue both as other increased well this We and region. from producers grow our basin in customer are drilling anchor activity as

Appalachia from Turning the to Haynesville.

between interconnect pleased directly greater interconnect We customers. day Bcf completion to provide position. strengthening of a expected Access Haynesville competitive the connecting project. system Giles will announce are the of lead LNG and This growth further our and the our strategic export to demand to optionality system new our X new approximately

our also Union additional increasing Haynesville ability diversify system. in our further offering Blue connection on access, supply area to was customers Carthage Our completed mid-April,

ability in efficient grow and budget. timely completed, active in Our We a customers remains for lead proven to the once to and serve Phase will discussions expansion basin schedule have and Phase LEAP III and day. remain Bcf to X.X in on of X ahead a our bring well total capacity system's expansion positioned the our And are manner.

starting of long-term have Coast prices, respond and rationally producers coming markets. strong short-term production for to the the is year demand Haynesville next the access there to acted Gulf While need to recognition

we the was continue project or the project test we first Class Louisiana. of results track exceeds successfully well. with geology, as our initial the half indicate site well and X our our XXXX. the In sequestration capture view carbon sequestration on to important in process the and meets spend. minimal our that Class development remain X Completing capital the milestone Early for drilled derisk test Turning to energy second we transition in quarter, platform and our an

EPA XX% of recent new announcement poised regulations capture plants, the this gas new emissions reduction Following from sequestration. COX capture market we for or a carbon mandating and are capitalize on to natural expanding of rapidly

capable source and and of sync Our approach methodical carbon a to establishes development capture first execution Louisiana providing carbon in projects and sequestration credible us proficiency complete underscores as our solutions. capture mover

to moment across our address to natural activity fundamentals producer want a I take Finally, and footprint. the gas market

call, year-end that on based The line producers' time, in XXXX was XX% our for weather. drilling our by winter included which of activity warm our this that the included wells at we've on XXXX observing in gas the are the the nearly As impacted price we remains commenced our point with environment guidance Haynesville, plans the to we And In for XX% in described the reflected our commenced Appalachia, plan. in on plan has drilling year. that wells on has of plan. XXXX was

XXXX demand closely earlier gas $X.XX the around the in LNG potential reflects prices monitoring to and response hot on power XXXX we're natural support increases developments support will our demand call 'XX growth. range, assets which the new center of Like gas and on remain the the growth rest production sector, for as ahead, in an of with in close believe $X and we to Looking on AI expanding we the data for demand. weather summer

on generation, While infrastructure days, and decades natural it's to come. it's gas gas need the the gas-fired emerging exciting natural development for still for power expected is an early supporting demand call increase as to natural

walk are financials Additionally, fueled see assets by now expected demand to centers to AI through power many Jeff to it you growth our serve deployment. I'll outlook. this regions our of quarterly the and that data over and pass

Jeffrey Jewell

from the and adjusted prior increase good million the EBITDA quarter. first quarter, of delivered a Thanks, everyone. In representing million, we $X David, $XXX morning, overall

Ohio overall higher LEAP, offset with on segment the Our reflecting were by XXXX reflecting in the revenue. Gathering short-term revenue million greater O&M in Utica ramp-up volumes per lower quarter, $X fourth the quarter gathering and results the averaged a were Haynesville with lower Pipeline results the the both line and contribution segment Operationally, total in day Northeast, feet firm line the cubic across in quarter. prior and billion gathering XXXX, first quarter approximately X.X than system. fourth from

planned environment that second EBITDA incremental new constructive as our contributions producer Our producers. and plan expected driven assume the timing the by XXXX are fourth projects financial of for quarter, well in due guidance expected increase lower Haynesville from a as maintenance and activity. in more market EBITDA the will third adjusted volumes be gathering to and Volumes in to quarters and and

that FID XXXX EBITDA XXXX If expect will our guidance, evaluate most our reduction. cash to range contemplated in XXXX projects mentioned, capital adjusted This and current outlook, new David confident committed increase As XXXX, in towards we XXXX in $XXX it are we reflecting $XXX reaching free the options with our positioning strong likely reflective in in our or increased million XXXX EBITDA adjusted we We've of excess will flow with our and from year prior reaffirming debt our reflect the deployed that in and early were spend $XXX flow committed for not incremental to within XXXX. in and of assets. to is accretive outlook will cash XXXX backlog guidance our continue do XXXX. reach to and already organic committed the view XXXX investments million and be FID growth approximately million our full projects

investment-grade are rating of credit forward committed preserving an meetings to and in with our May. strength achieving the early looking are We to sheet and our rating annual agencies the balance

our per dividend unchanged We first from the declaration remain now the closing pass it prior X% of adjusted remarks. long-term growth. I'll back per to EBITDA to dividend today, year, $X.XXX X% Finally, announced share, David also of we committed line over the in for to growing our quarter quarter. with

David Slater

Thanks, Jeff.

the we in our the guidance very of feeling in with XXXX for and XXXX. confident outlook So and are year early full are for year range summary, start pleased

'XX to continue projects on budget on with in of some track in and ahead XXXX. schedule, growth short-cycle contributions schedule and Our resulting meaningful growth investments running

disciplined Our achieving the investment-grade focus thoughtful X-year and an balance our our of approach plan and flow cash spending within rating. to capital over credit allocation with on remains

across asset footprint the located continue and to torque to our As build building now line portfolio, we questions. we significant look see investment strategically for integrated our program growth can upon. capital open with strong the and foundation opportunity up We a laying

Operator

first go Jeremy JPMorgan. We'll to [Operator at Tonet Instructions]

Jeremy Tonet

a good be relates to it kind with regards to of of commentary that some capacity and Just latent Nexus, how in DTM. start And with beneficial want there's centers specifically, of you seems like potentially a for to the it AI out data laid could there. as amount off

might think those if help this wondering could you types fruition, just kind to of us So when of come opportunities. through

David Slater

on of we're that centers and on a when are happening a turnaround especially that been grid the as inquiries, yes, and happening, a the couple next that terms is lot power under guess, demand question. for incremental lot to, years. of inbound in forecasting here very now of baseload network Midwest, up it's shows of the demand. seeing our is right cycle or Jeremy, are it's that's area. at And our where that everywhere. short when of demand. supply -- We've Mid-Atlantic you high-level you announce centers in generation up thanks capacity in the And a for I look in that, incremental alluded center These When investments popping market data view those terms in they're geographies. emerging to they

gas-fired to going fall load. it's So incremental serve predominantly generation that upon to natural

excited about So very we're it.

already to expect A I Southeast. that's lot generation the of regions. some also that's in more coming of and these drive the going think in I been Mid-Atlantic in incremental Midwest. announced it's region

and So supply the those looking are to those locations. demands that yes, for fuel those incremental make of those investments, so companies early we're to seeing looking signals

the to we around The segments, around like this morning for So be very as we're announcement is that Mountain feel demand. the and the fundamentals going favorable. I across with it's Stonewall visible optimistic. Valley. And more made on It's forecasted under market becomes Again, this Nexus, Vector. interconnect strong

expand. that's a couple a derivative a think on years the it's significantly I are in to going where seeing happening gas people Southeast call natural Mid-Atlantic of of ago, what's region,

signals fundamental we're now. So those coming but seeing across we're definitely bullish. early right dashboard the It's days,

Jeremy Tonet

to it together demand in does LNG for wondering there? facilities? guess, Can are there once very the understand help to That's it. Logistics dynamics. a And just Southern where pivoting you if [ maybe better LEAP Louisiana how helpful. gets there? it expansions that expansions bit Got connect future, LEAP ], needed export wondering from towards come I Just the system, over to just gas could get Giles the seeing go us Or And you're overall?

David Slater

Yes.

best the think is of I illustration that, Access the Jeremy, project. Giles

that's serve, will growth That coming. well X the demand service Agilis pathways that's is There's into call, that down incremental a been what now in numerous of directly a mile gas and why to new it's pipe lot so projects of in of that I'll couple Access for expanding Bcf have LEAP so Giles pipe. that's the an there. put complicated opportunity facilities. the those, a LEAP to with flowing incremental to that So LNG mile to serve of up demand gas was is these months. expanding some being for ability last us LNG the last place terminals, still interconnected get But that's new it's strategic the infrastructure is But opens very the interconnect significantly that's one at day

Jeremy Tonet

be it. focus. activity quarter in versus much quarter XX% looks helpful here. there. down Haynesville And first like It a just second quick I Got if could. one, might very That's Haynesville last

us type if you DTM? through, if holds, could that wondering pattern guess, has that Just of impact walk I on what

David Slater

Yes.

describe the just be question. full with answer that plan. taking our have start with that our actions there I'll can are good about lot completion our [ of has And the level 'XX public I we're on the Another a in that sharing delays And in And in would ] activity line year Jeff, Jeff producers but that. maybe Haynesville, said how are producers high you may thinking a expected at some plan. here, we in

Jeffrey Jewell

sure. Yes,

we the little of in way we also for then third guidance that and is a as producers. our as took a part that the prepared softness latest positioned information then year, quarter XXXX provided. we the in expecting first still we comfortable what into Jeremy, into provided. the quarter with And So XXXX towards going the end than is bit the in the point the built positioning is ourselves quarter, extra sort that guidance of And my the we're did in part lower are today, we're of volume have remarks seeing our quarter up range they're from here be the described when we've of fourth and we though second But to 'XX. XXXX we're of then themselves key that to picking the producer start very we fourth

Operator

next move at Hilferty Olivia We'll to Sachs. Goldman

Unknown Analyst

if of could in Phase of lines FID for III past you LEAP a expansions. to a XXXX need schedule Maybe generally, ahead IV the Could more us accelerate is that targeting looking schedule minute. a we walk to back time go would when you to the through line Can potentially maybe LEAP [Indiscernible] tracking been what project quarters. project you service? couple for ahead on to need us through how far or time would forward Phase see of of time the you the line? tracking and XXXX And walk has rough

David Slater

Sure, for Olivia, and question. thanks the

executing. I'll ahead Yes, the on is how has III construction with schedule right we're Phase So been of team We're the start project happy and running schedule had with expansion. very now. budget. And modestly a

that when of we'll But I'm say that are QX. can that disclosures on saying, with what QX expect stick current from at. in infer in our I'd additional that, come terms may In you in in, come we granularity to

low what environment. of are is rationally price terms producers with now right behaving the In very IV, Phase say I'll this commodity

QX You're expecting and pivot to here in the QX. market

here to of incremental now in year. going demand how assets, on able right been to torque positioned. and execute Haynesville lot this of last going building capacity the to be that expansions the we're required We've a under service over is serve our the There's eve seeing with So months. we're into the construction XX incremental later and

they are very pivot being feel market this commitment Producers an in turn. in in environment price rational see confident make where incremental we don't So until to our they positioning. low want the

working when financially those and turns are to incremental pivots expect participate in commitments. with closely and We and customers to fully market that a position make they're

leave at So I'll that. it just

Unknown Analyst

extent recent potential seen to on DTM versus to can And it. that opportunities what further read pursue have energy additional CCS? well pipeline further from share to you peers I And take public can then need couple to and do guess, you planned leading among see the maybe Do CCS any see opportunities, Class the helpful. details you share V capital into forward, so we a lower Got spend? And to would you results? for Super XX/XX/XX split CCS. what on on test that transition pivot carbon currently the for initial more we've of more gathering updates looking broadly the

David Slater

test current provide our color Sure. I'll Well, and with maybe out. more let's start how a around that project, little played well

as well the in were part tests we testing those drilling positive. did and very of formation the test So injection

and and above sequester expected. planning that all to as the favorable came and into back strata the formation logged entire also very below we're We that

development. the So approach capital results a And natural our this we're opportunity. everybody, and to taking just is it's that development we at methodical well. to gas have around pipeline development particular that derisking source with remind very test this expertise storage this of sync leveraging to that risk, pleased the we're from And development, this

doing the doing it the the COX plants capturing sequestration piping sequestration. we're injection So to permanent off and treatment the our site, well

market we're capture now, doing my all solution, market large all power need as that plants. approach from rational that I X expanding But remarks, clients to observing and EPA pieces. with new opening the well is sequestration This components. for right -- interest we're approach that as is X especially seeing So alluded a The emissions. is for inbound them. we're And the carbon industrial have proposing COX for rules, also gas-fired these is very in

opportunities, through is, areas rational it it our seeing our to thoughtful, geographic we're out a let's So position ability especially view do way do around very for business and go our for ourselves, in ourselves strategically, focus. days, but emerging. of our It's that third-party third-party prove own development, early

in again, Midwest that So region. CCUS, be believe and in looking many the country service be the geology it. would part northern these for that provide to counterparty And in the the those Louisiana to regions be will have of we that of a would great in customers are that good for

Operator

We'll move next to Citi. Spiro Dounis at

Spiro Dounis

cubic in I your being producers environment. curious just upsize just rational XXX price understand Maybe least to But competitor delayed. here very end that underwrite your million feet this back some pipelines the at to million David, IV. potential the range, if see of that towards LEAP on be a to you expansion Phase any go to that higher XXX of day might given point or

David Slater

down challenges a these There's Yes. is new Spiro, now. reality What for that's just there of playing said, you out of right lots greenfield projects. some

we're staying It's They're the demands in have we're what these we it So building are to price really truly that is very that is market. But weak construction. And real torque right really that to audience have unfortunate project are now doing under coming. we're the environment. this the backdrop, market close into segment the been few over that one And the of the down able here, there system. in months. projects capacity last expand remind to XX only or the just just

timely, we've early done, got fact, stuff getting most a in track in So cases. getting it great record done of

terms wave want of that to looking I a when on expansion. confidence at ride So uses in next of lot of the they're who market the

trying that. really leverage we're to So

that, million to but aspiration here. XXX opportunity that fair first looked in magnitude incremental going do we're And the numbers, coming, million? would our everyone's get that's going be share. demand of XXX just like of of the lot sees there's come think to come beyond the bite-size it's XXX I to at expansion think has we're upsize the a Can everyone I to nice chunks. so the My confident we

We the have do wellhead. to in incrementally to the all existing also to the ability upstream the expanding that the do And system. because have that ability we we're way

then is basin an expansions to integrated able ] treatment, all system we've the Our centers again, head we've able system, market to to [ the been been and do treatment well and serves. demonstrate, regional to treatment

So price their putting is environment making on final a this definitely feel pause optimistic, decisions. but just people

patient being execution. being we and we're good patient. a a believe record we great and optimistic, track of and We're So service have

Spiro Dounis

there, Helpful Got it. David. color

just to with is XXXX, I timing Stonewall the going end the of good maybe it sounds by question, underwritten interconnect Second like concern It for around bottlenecks at the MVP. some there know that that a of MVP. looks like chunk and is is MVCs.

And so phase-in be see actual Is to just XXXX. bottlenecks? this approach. curious going thinking in how flows volume any about a you're Do you

color any there. Just

David Slater

MVP Yes. the with I that's the played We it's what mean built we're gets to and Stonewall really morning. opportunity that system, for how announced we gathering out. exactly always and being view Appalachia it's if systems. completed, that it's this incremental that on doorstep of going And integrated happy unlock

perspective, interconnect for producers So will open from supply I will this that provide think shippers. compete a to all incremental diversity market. It up to those

is positive. believe So an across our whole we network, incremental

with environment, we firm by project. the this As alluded our commitments arrangement on returns in is that this to that realize are we'll have anchor confident backed significant we you so this that

the in comes right again, demand to terms when Mid-Atlantic view and In robust. service I likely think be the And the that is to utilized my really forecasted region strong expect now. we XXXX, in under how it again, and of

in those utilized, is not terms think day will we going financial contract the a embedded perspective, timing in from again, So economically, even charges firm ultimately X, it's protected issues of here we're be that with lower there on But to structure matter time some capacity to have I that utilization that a if tell. how may us. it's

Operator

at We'll move Wolfe Keith Stanley next to Research.

Keith Stanley

increase serve new up as proposed gas existing newly to see Wanted this Is follow pipeline data plants would do serve for and inquiries need to or data have you're the capacity. you that capacity. that centers you plants the mainly going gas-fired more on to that power centers, getting

And across your so of existing volume kind there's pipelines? increases gas

David Slater

playing will load, generation base I [Indiscernible]. to power gas-fired data back Keith, fleet believe that's trigger think, under is the phenomenon directly believe, the I centers we're higher demand much gas-fired forecasting these are right? I their in XX/X the market speaking, of in seeing I both is the And factored huge translate mean going demand powers already load why into is They which are the to personally load, load out, curve. incremental kind this to in are the base centers. through renewables pretty demand the utilization, a fleet. baseload generally

and of both it dimensions, fleet next the wave we're contemplated. on So [Indiscernible] to the capacity seeing be, being existing incremental

Keith Stanley

Got it.

just Louisiana base crossing recent pipeline your I Second kind went court in of wanted guess, the And I issue. the question, most favor. to decision, touch on

your of implications takeaway Or long-haul just see and now peers you One Haynesville FERC? this pipelines. should at how out? you topic, Do on play LEAP as at have been all pipelines could it thoughts argued for have any goes have this, that on certain how any depending other that on FERC regulated

David Slater

for There's been playing that drama, out last Yes. in basin has the the right, months. XX been tremendous

favorable impact. IV. expected. not That Phase positive us. I'll it ruling, doesn't we very It with said, It's Phase to I. particular our what It with being So impact not and impact start we're it's will did

of -- we're servitude servitude view interpretation right pursued the we and industry, that agreements. more of our those what's agreements long-term these the in for out So wrong and

all So to that continue and process play unfolding that's in the that, out. say courts I'll about still is will

have through rolling of Louisiana clarify of for activity future. to the the terms brings terms playing looking from then an best I'll our out to not basin is And level the us. all of some Haynesville the because that's market wellheads, the the it an a stepping the perspective, Mexico, onshore supportive reaches that's treats integrated use of this very system major Gulf the impacting and And where state system. that the you wellhead, In offshore pipes. to legislation in in we have integrated out drama our We're it's not system, at into gathers analogy we're in the that's of

than Our relationship wellhead that. integrated. almost treatment expansions. between and and there's no you last XX the have systems different seen as all LEAP a expansions It's one-for-one over are And months,

our issue had systems and never emerge this we've years, X So before. have over for operational been

I'm again, to the competitive step the process there's that back of not So that going analogy, leave until expect I can lots stop into it over but if and I'll net, the forth just and I don't will use going drama, always plays out, and there.

Operator

Robert We'll at go Mizuho next to Securities. Mosca

Robert Mosca

me. accelerations the may time X to accelerated for Just also Wondering and Mid-Atlantic is seems for outlook much Stonewall right increased you in little similar some a wondering like demand the potential into now? for CapEx there's of expectation Northeast, the It expansion the baked domestic line here. how your have think whether bit

David Slater

Yes.

maybe high Let referring you're level a to. me and talk at about just acceleration Appalachia that this

footprint, our I look that Utica we're at Appalachia, really bullish So look play. when I'd at Ohio say

incremental to I As seeing that activity up acreage. remarks, showing around alluded in opening we're my

So see continued we're potentially optimistic an to that acceleration growth growth there, there. we're of going

those on better timing impact I upstream the out, XX has think, and and this around with to that. Ecotrans an EQT is know get opportunities, plays clarity on market be if Stonewall. as there'll looking So I merger, over and we'll clearer. incremental at demand here upstream potential impact settle months I'll start an mid-Atlantic this XX Mountain Valley expansion. becomes out the The How to next

our centers. our is are constructive. constructive think out. fundamentals to earlier the supply all that and on the seeing looking this to around was again, That's, all that guess, on this I strong that basin, we're to It they on So my demand parts be now. plays And positioning the that and We're emerging. the into when then the But call footprint. I emerging in that's in will very out that right I side. seeing that the there's side certain demand we're all of pull of think asset the some fundamentals seem NEXUS. load I capacity outlook hydraulic look at alluded And both view fundamentals, asset play unlock

can And other advantage generators have footprint on that. and integrated piece to asset solutions nice We side. a use together customers all power and that take interconnected for producer of the both we for of

optimistic the out that very over that's to to we're portfolio. now the next of in going couple right So continue play years

Operator

Sibal Global We'll to move Securities. next Sunil at Seaport

Sunil Sibal

rating all, on previously, investment-grade the end early talked the to 'XX based think I just goal. agencies think think of kind of into you've Or the see few Do of should a time still the about 'XX that? months. you about previous of good And How acceleration is see, your a we in of first going credit ratings discussions kind was line year, So next line? on to an the as I time with about? trying line comments

Jeffrey Jewell

talking the to 'XX, few that's That's plan. been about for Yes, the you years. what so I later guys our think your at we've 'XX, original time line last

the have with It's -- to of meeting the week. We're meeting. first of up week all It's May. set be next going like rating agencies. we're annual of to So our first X

to more and deal and to this thing investment that done year. the that grade, very we'll gets from piece transaction being upgraded final positive is we're get So are that anticipating discussions, or of the clarity be about, the related talked in pulling it's outlook what when them accelerate that's like going even here up acceleration probably of either forward half Chesapeake those second to could like again, so positive think we maybe swim we've biggest

plan of kind is. So our what that's

plan. time as the the there to what get the would as and us merger accelerant Our as then plan according is far line we an see that

Sunil Sibal

then clarity And your latest the Northeast. X on Understood. in project

as this like of the producers but the demand, regard to fill see is just a up it up seems kind to the say, you incremental it of capacity? with do fact that So kind Or takeaway lining MVP. an

-- curious your how based on MVP kind month the or in I'm discussions, do you so? as So see just progressing how of volumes next comes online it

David Slater

of the for that online -- days everybody initial a thinking would more another about contracts just think Mountain if and I'd into expansion, think is longer pathway owners diversity another to term. talking provide project, some supply our take I'll of when it value to there serve online. incremental that one, be of say would the Valley say I'd again, I comes remind comes Valley is existing Mountain asset that amount an that in view for that this which but pathway in of early the demand Yes. is longer also diversity And the Sunil. But here expansion. I there XXXX supply

in both think the Hopefully, I in the one your answered it's the short other question. term So one actually term. that longer and

Operator

And now Q&A that the back will turn our does conference Slater session. closing to David for remarks. I over conclude

David Slater

Well, interest much we great day. a your up DT many in and a at for seeing of very the appreciate coming thank you Midstream, Have forward conference to EIC and us you in we today, look few certainly joining weeks.

Operator

this today's conference concludes for Thank call. And participation. your you

You may now disconnect.

DT Midstream (DTM) 30 Apr 242024 Q1 Earnings call transcript