Financial Data and Key Metrics Changes - In Q4 2024, adjusted EBITDA was reported at $237 million, with distributable cash flow of $155 million and free cash flow of $32 million [16] - For the full year 2024, adjusted EBITDA reached $971 million, representing a 16% year-over-year increase, and an 18% increase when normalizing for November impacts [11][19] - Capital expenditures for 2024 totaled $265 million, which was approximately $15 million below the midpoint of the guidance range [11][19] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $150 million in Q4, up 3% year-over-year but down 14% sequentially due to negative Waha prices [16][17] - The Pipeline Transportation segment reported adjusted EBITDA of $92 million, up nearly 9% year-over-year, driven by volume growth and contributions from EPIC Crude [18] Market Data and Key Metrics Changes - Average gas processed volumes for 2024 were 1.64 billion cubic feet per day, up 13% year-over-year [10] - The average gas daily price at Waha was negative $1.4 per MMBtu for the first half of November, impacting volumes and margins [16][17] Company Strategy and Development Direction - The company aims for a 10% compound annual growth rate (CAGR) in EBITDA over the next five years, focusing on both organic growth and strategic M&A opportunities [26][40] - Kinetic is positioned to capitalize on the growing demand for natural gas and liquids, with significant growth expected in the Permian Basin and Gulf Coast [12][13] - The company is exploring a large-scale gas-fired power generation facility to manage electricity costs and capitalize on natural gas price volatility [14][80] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was transformational, with significant M&A activity and organic growth, particularly in the Delaware Basin [6][9] - The company has implemented new risk measures to prevent operational headwinds experienced in November and expects a strong rebound in operational performance [10][17] - Management expressed confidence in achieving a 15% growth in adjusted EBITDA for 2025, with key assumptions including a 20% growth in gas processed volumes [19][21] Other Important Information - The company increased its cash dividend by 4%, marking the first return of capital to shareholders since its merger [9] - Kinetic's leverage ratio improved to 3.4 times, down 0.6 times year-over-year, reflecting disciplined capital management [19][24] Q&A Session Summary Question: What infrastructure is needed to achieve the 10% EBITDA CAGR? - Management indicated that they are seeing outsized market share performance and have structural changes that will create incremental EBITDA opportunities [26][27] Question: Are there still M&A opportunities in 2025? - Management confirmed that opportunities remain, but they maintain a high bar for attractiveness in potential transactions [32][33] Question: What are the expectations for producer customer activity in 2025? - Management noted robust activity levels across both Northern and Southern Delaware, with significant drilling capital being allocated to New Mexico [45][46] Question: How does the company manage risks associated with pipeline maintenance? - Management acknowledged the regular seasonal maintenance and emphasized the importance of having incremental length for Gulf Coast capacity to mitigate risks [51][54] Question: Can you clarify the economic contribution of the Barilla Draw acquisition? - Management stated that the initial phase involves gas gathering services, with processing expected to ramp up later in the decade, contributing to margin expansion [98] Question: What is the timeline for the power generation project? - Management indicated that if the project reaches FID this year, it could be operational by the end of 2027, with potential for further projects in New Mexico [100][102]

Financial Performance - Kinetik reported Q4 2024 net income of $16.2 million and full year net income of $244.2 million[3]. - Adjusted EBITDA for Q4 2024 was $237.5 million, with a full year total of $971.1 million, reflecting a 16% year-over-year growth[5]. - Total operating revenues for Q4 2024 reached $385.7 million, a 10.6% increase from $348.9 million in Q4 2023[23]. - Product revenue for the full year 2024 was $1.063 billion, up 29.2% from $822.4 million in 2023[23]. - Adjusted EBITDA for Q4 2024 was $237.5 million, compared to $228.0 million in Q4 2023, reflecting a 4.9% increase[25]. - Distributable cash flow for the full year 2024 was $657.0 million, a 15.6% increase from $568.5 million in 2023[25]. - Operating income for Q4 2024 was $23.7 million, down from $56.1 million in Q4 2023, indicating a decrease of 57.8%[23]. - Total operating costs and expenses for Q4 2024 were $362.0 million, compared to $292.7 million in Q4 2023, representing a 23.7% increase[23]. Capital Expenditures and Guidance - Kinetik's capital expenditures for 2024 were $264.5 million, below the low end of the guidance range[5]. - The company announced 2025 guidance for Adjusted EBITDA between $1.09 billion and $1.15 billion, indicating a 15% growth year-over-year[7]. - Kinetik's 2025 capital guidance is set between $450 million and $540 million, including $75 million of contingent consideration[7]. Debt and Leverage - The company achieved a leverage ratio of 3.4x and a net debt to Adjusted EBITDA ratio of 3.6x by the end of Q4 2024[10]. - Total debt as of December 31, 2024, was $3,530,370,000, compared to $3,457,000,000 in the previous quarter, showing an increase of 2.1%[28]. - Net debt (non-GAAP) stood at $3,526,594,000 as of December 31, 2024, up from $3,436,562,000 in the previous quarter, reflecting an increase of 2.6%[28]. - Interest expense for the twelve months ended December 31, 2024, was $217,235,000, compared to $205,854,000 in 2023, representing an increase of 5.5%[26]. - The net debt to adjusted EBITDA ratio is calculated as net debt divided by last twelve months adjusted EBITDA, reflecting the company's leverage position[5]. Cash Flow and Investments - Net cash provided by operating activities for the twelve months ended December 31, 2024, was $637,346,000, an increase from $584,480,000 in 2023, representing an increase of 9%[26]. - Adjusted EBITDA (non-GAAP) for the twelve months ended December 31, 2024, was $971,118,000, compared to $838,830,000 in 2023, reflecting a growth of 15.7%[26]. - Distributable Cash Flow (non-GAAP) increased to $657,014,000 in 2024 from $568,507,000 in 2023, marking a rise of 15.6%[26]. - Free Cash Flow (non-GAAP) significantly improved to $410,133,000 in 2024, up from $59,931,000 in 2023, indicating a substantial increase of 585.5%[26]. Strategic Initiatives - Kinetik completed the acquisition of Barilla Draw assets in January 2025, enhancing its natural gas and crude oil gathering systems[5]. - The company is advancing construction on the Kings Landing Complex, expected to start processing services in June 2025[13]. - Kinetik plans to explore a joint venture for a large-scale gas-fired power generation facility in Reeves County, Texas, with a potential Final Investment Decision in 2025[13]. Shareholder Information - The company has 157,712,645 issued and outstanding shares, including 59,929,611 Class A common stock and 97,783,034 Class C common stock[8]. - The company reported a Dividend Coverage Ratio of 1.26 for Q4 2024, based on total declared dividends of $123.1 million[7]. Performance of Affiliates - Proportionate EBITDA from unconsolidated affiliates was $346,666,000 in 2024, up from $306,072,000 in 2023, indicating a growth of 13.3%[26]. - Returns on invested capital from unconsolidated affiliates increased to $289,992,000 in 2024 from $272,490,000 in 2023, a rise of 6.4%[26]. Integration Costs - Integration costs for the twelve months ended December 31, 2024, were $5,826,000, compared to $1,015,000 in 2023, showing a significant increase of 474.5%[26].

分组1 - Kinetik Holdings Inc. reported quarterly earnings of $0.01 per share, significantly missing the Zacks Consensus Estimate of $0.37 per share, and down from $1.70 per share a year ago, representing an earnings surprise of -97.30% [1] - The company posted revenues of $385.72 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 22.13%, compared to year-ago revenues of $348.87 million [2] - Kinetik Holdings has surpassed consensus EPS estimates only once in the last four quarters, while it has topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has added about 0.3% since the beginning of the year, underperforming the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the coming quarter is $0.40 on revenues of $567.27 million, and for the current fiscal year, it is $2.48 on revenues of $2.47 billion [7] - The Zacks Industry Rank for Oil and Gas - Field Services is currently in the bottom 32% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Company Overview - Kinetik Holdings Inc. (KNTK) currently holds a Momentum Style Score of B, indicating a positive momentum outlook [3] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [4] Price Performance - KNTK shares have increased by 21.36% over the past week, outperforming the Zacks Oil and Gas - Field Services industry, which rose by 10.53% during the same period [6] - Over the past quarter, KNTK shares have gained 30.65%, and over the last year, they have increased by 57.82%, while the S&P 500 has only moved 10.53% and 37.42%, respectively [7] Trading Volume - The average 20-day trading volume for KNTK is 515,665 shares, which serves as a useful baseline for assessing price movements [8] Earnings Outlook - In the past two months, one earnings estimate for KNTK has moved higher, while none have moved lower, resulting in an increase in the consensus estimate from $1.39 to $1.46 [10] - For the next fiscal year, two estimates have been revised upwards, with no downward revisions during the same period [10]

Core Viewpoint - Kinetik Holdings Inc. (KNTK) is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price momentum [1][2]. Current-Quarter Estimate Revisions - The earnings estimate for the current quarter is $0.46 per share, reflecting a year-over-year decrease of 72.94% - The Zacks Consensus Estimate for Kinetik Holdings has increased by 6.98% over the last 30 days, with one estimate rising and no negative revisions [4]. Current-Year Estimate Revisions - For the full year, Kinetik Holdings is expected to earn $1.46 per share, indicating a year-over-year decline of 38.66% - There has been a positive trend in estimate revisions for the current year, with one estimate moving up and no negative revisions, resulting in a 5.04% increase in the consensus estimate [5]. Favorable Zacks Rank - Kinetik Holdings currently holds a Zacks Rank 2 (Buy), indicating promising estimate revisions that can guide investment decisions - Research shows that stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) tend to significantly outperform the S&P 500 [6]. Stock Performance - Kinetik Holdings shares have increased by 16.6% over the past four weeks, suggesting strong investor confidence in its earnings growth prospects [7].

Group 1 - Kinetik Holdings (NYSE: KNTK) is identified as a rapidly growing midstream company, but its stock price is perceived to be overvalued at this time [2] - There is a significant amount of class "C" stock that is expected to convert in the future, which will increase the public float [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful investment [2] Group 2 - The analysis provided focuses on the balance sheet, competitive position, and development prospects of oil and gas companies, including Kinetik Holdings [1] - The service offered includes insights that are not available on free platforms, indicating a depth of analysis for members [1]

Financial Performance - Total operating revenues for Q3 2024 were $396.4 million, a 20% increase from $330.3 million in Q3 2023[7] - Product revenue increased by 31.3% to $290.4 million in Q3 2024, compared to $221.3 million in Q3 2023[7] - Operating income for Q3 2024 was $72.9 million, up 89.5% from $38.4 million in Q3 2023[7] - Net income attributable to Class A Common Stock Shareholders was $25.8 million in Q3 2024, compared to $15.6 million in Q3 2023, representing a 65.5% increase[7] - Basic earnings per share for Q3 2024 was $0.35, up from $0.21 in Q3 2023, reflecting a 66.7% increase[7] - Net income for the nine months ended September 30, 2024, was $228,009 thousand, compared to $119,098 thousand for the same period in 2023, reflecting an increase of 91.6%[11] - Net income for the quarter ended September 30, 2024, was $25,763, a significant increase compared to the previous period[14] - For the nine months ended September 30, 2024, net income was $74,505, indicating strong performance year-to-date[15] - The company reported net income including noncontrolling interest of $83.6 million for the three months ended September 30, 2024, compared to $46.6 million for the same period in 2023, reflecting an increase of 79.5%[41] Operating Costs and Expenses - Total operating costs and expenses for Q3 2024 were $323.5 million, an increase of 10.8% from $291.9 million in Q3 2023[7] - Interest expense increased to $66.0 million in Q3 2024 from $45.0 million in Q3 2023[7] - General and administrative expenses increased by $21.7 million, or 30%, to $94.8 million for the nine months ended September 30, 2024, compared to $73.1 million for the same period in 2023[178] - Depreciation and amortization expense increased by $28.0 million, or 13%, to $236.3 million for the nine months ended September 30, 2024, compared to $208.3 million for the same period in 2023[179] - Cost of sales increased by $70.7 million, or 19%, to $444.8 million for the nine months ended September 30, 2024, compared to $374.1 million for the same period in 2023[175] - Operating expenses increased by $24.5 million, or 21%, to $143.3 million for the nine months ended September 30, 2024, compared to $118.8 million for the same period in 2023[176] Assets and Liabilities - Total assets increased to $6,860,461 thousand as of September 30, 2024, up from $6,496,873 thousand at December 31, 2023, representing a growth of 5.6%[8] - Total liabilities decreased to $3,797,986 thousand from $3,869,889 thousand, a decrease of 1.9%[8] - Long-term debt decreased to $3,279,689 thousand from $3,562,809 thousand, a reduction of 7.9%[8] - The company reported a significant increase in accounts receivable, net of allowance for credit losses, which decreased to $65,615 thousand from $215,721 thousand, a decline of 69.6%[8] - Cash and cash equivalents rose significantly to $20,438 thousand from $4,510 thousand, marking a substantial increase of 353.5%[8] Equity and Dividends - Cash dividends paid to Class A Common Stock shareholders increased to $128,428 thousand from $58,030 thousand, an increase of 121%[11] - The company declared a cash dividend of $0.78 per share on Class A Common Stock, payable on November 7, 2024[142] Acquisitions and Investments - The company completed the acquisition of Durango Permian LLC for an adjusted purchase price of approximately $845.2 million, which included $358.0 million in cash and approximately 3.8 million shares valued at $148.2 million[32] - The company made a net cash payment of $341,183 thousand for acquisitions during the nine months ended September 30, 2024[11] - The company has engaged in strategic acquisitions, including the Durango Acquisition valued at $423,200[15] - The company acquired an additional 12.5% equity interest in EPIC, increasing its total ownership to 27.5% as of September 30, 2024[153] Segment Performance - The Midstream Logistics segment accounted for over 97% of the Company's operating revenues for the three months ended September 30, 2024[131] - Midstream Logistics revenue for the three months ended September 30, 2024, was $391,331, up from $324,863 in the same period of 2023, marking an increase of approximately 20.5%[138] - For the nine months ended September 30, 2024, total segment operating revenue reached $1,097,213, an increase from $907,544 in the same period of 2023, representing a growth of approximately 21%[140] - For the nine months ended September 30, 2024, the Company reported total revenues of $380.4 million and net income of $245.0 million for the Permian Highway Pipeline LLC[64] Adjusted EBITDA - Adjusted EBITDA increased by $50.4 million, or 23%, to $265.7 million for the three months ended September 30, 2024, compared to $215.3 million for the same period in 2023[191] - For the nine months ended September 30, 2024, Adjusted EBITDA increased by $122.8 million, or 20%, to $733.6 million compared to $610.8 million for the same period in 2023[192] - The increase in nine-month Adjusted EBITDA was driven by a $189.7 million increase in total operating revenue, partially offset by increased costs of sales and operating expenses of $120.3 million[192] Tax and Legal Matters - The effective tax rate for the three months ended September 30, 2024, was 8.99%, significantly lower than the 2.93% rate for the same period in 2023[13] - The income tax expense for the nine months ended September 30, 2024, was $21,261,000, compared to $2,030,000 for the same period in 2023[13] - The Company has no accruals for loss contingencies as of September 30, 2024, indicating a stable legal and financial position[120] - The Company is awaiting settlement of $8.0 million in outstanding vendor credits related to prior litigation, with no allowance established due to the counterparties' creditworthiness[122]

Financial Performance & Guidance - Kinetik increased its 2024E Adjusted EBITDA guidance to between $970 million and $1 billion[5] - The company tightened its 2024E Capital Expenditures Guidance to $270 million to $290 million[5] - Kinetik increased its quarterly dividend to $0.78, up 4% versus the prior quarterly dividend[5] - The company's Q3 2024 Adjusted EBITDA was $266 million[5] - Free Cash Flow for Q3 2024 was $165 million[5] - Kinetik's leverage ratio is 3.2x[6] Strategic & Operational Highlights - Kinetik increased its equity interest in EPIC Crude to 27.5%[4] - The company is constructing a 200 Mmcfpd Kings Landing Cryo I, expected to commence operations in 2Q25[4] - A new large diameter rich gas pipeline will connect the Delaware North and Delaware South systems[4] - 3Q24 Segment Adjusted EBITDA for Midstream Logistics was $174 million, up 24% year-over-year[9] - 3Q24 Segment Adjusted EBITDA for Pipeline Transportation was $96 million, up 22% year-over-year[10]

Financial Data and Key Metrics Changes - Kinetik reported its best quarter as a public company with adjusted EBITDA of $266 million, a 23% increase year-over-year [6][23] - Distributable cash flow reached $184 million, and free cash flow was $165 million, increasing more than three-fold year-over-year [23] - The company raised its 2024 adjusted EBITDA guidance to a range of $970 million to $1 billion, reflecting a 3% increase at the midpoint compared to previous guidance [28][20] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $174 million, up 24% year-over-year, driven by contributions from New Mexico and strong performance in Texas [24] - The Pipeline Transportation segment reported adjusted EBITDA of $96 million, a 22% increase year-over-year, attributed to PHP expansion and increased ownership in Epic Crude [26] Market Data and Key Metrics Changes - Gas volumes processed were 1.71 billion cubic feet per day, representing a 15% growth year-over-year [7] - Negative gas prices persisted at the Waha Hub, averaging negative $1 per Mcf for the quarter, impacting wellhead gas volume curtailments [7] Company Strategy and Development Direction - Kinetik is focusing on connecting its north and south systems to optimize processing capacity and enhance operational flexibility [14][17] - The company is committed to a balanced capital allocation approach, emphasizing organic and inorganic growth opportunities while accelerating returns to shareholders [22][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the revised EBITDA target, citing strong execution and cost discipline [20][21] - The company anticipates a return of curtailed volumes from Alpine High and expects pricing relief at Waha, indicating a tight basin with ongoing demand for gas egress [72][73] Other Important Information - Kinetik received MRV Plan approval from the EPA for CO2 capturing and sequestration, which is expected to provide economic benefits starting in 2025 [10][11] - The company is finalizing a long-term transport agreement with EPIC, which has received a credit rating upgrade [9] Q&A Session Summary Question: How should we think about GMP fees and their impact on upcoming acreage dedications? - Management explained the distinction in average gross fees between different segments and emphasized the incremental margin capture from sour gas services [34][36] Question: What would be needed to open an expansion for Epic? - Management indicated that the decision to expand would depend on the commercial success of replacing shorter-term contracts with longer-term agreements [39][40] Question: What factors drove the outperformance this quarter? - Management attributed the outperformance to maintenance capital investments, operational efficiencies, and favorable market conditions [44][46] Question: What is the expected trajectory of CapEx for next year? - Management suggested a CapEx range of $250 million to $400 million for 2025, with a focus on growth projects [56] Question: What are the implications of potential setback rules in New Mexico? - Management clarified that the current discussions are part of an economic study and emphasized the importance of the oil and gas sector to the state's economy [78][79] Question: How should we think about further dividend growth? - Management reiterated a commitment to annual ratable dividend growth while balancing capital needs for growth [81]

Core Insights - Kinetik Holdings Inc. (KNTK) reported quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.52 per share, but showing an increase from $0.21 per share a year ago, resulting in an earnings surprise of -32.69% [1] - The company achieved revenues of $396.36 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 10.08% and up from $330.3 million year-over-year [2] - Kinetik Holdings has outperformed the S&P 500 with a stock price increase of approximately 49.7% since the beginning of the year, compared to the S&P 500's gain of 21.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $541.63 million, and for the current fiscal year, it is $1.44 on revenues of $1.6 billion [7] - The estimate revisions trend for Kinetik Holdings is favorable, leading to a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Oil and Gas - Field Services industry, to which Kinetik Holdings belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges in overall industry performance [8] - Another company in the same industry, Archrock Inc. (AROC), is expected to report quarterly earnings of $0.28 per share, reflecting a year-over-year increase of 40%, with revenues projected at $292.95 million, up 15.6% from the previous year [9][10]