Genesis Energy Q4 Earnings Call Highlights

Core Insights - Genesis Energy reported fourth-quarter 2025 results that exceeded internal expectations, driven by growth in offshore volumes and a return to normalized performance in marine transportation [4] - The company anticipates a conservative outlook for 2026, factoring in expected offshore downtime and a heavier maintenance schedule for marine operations [6][8] Operational Performance - The Shenandoah floating production unit (FPU) operated at or near its target rate of 100,000 barrels per day from four phase one wells during the quarter [1] - The offshore pipeline transportation segment showed strong sequential growth, with segment margin and total volumes across the CHOPS and Poseidon systems increasing approximately 19% and 16%, respectively, compared to the previous quarter [2][3][7] Financial Highlights - Genesis exited 2025 with effectively zero revolver borrowings and raised the quarterly common distribution to $0.18, reflecting a 9.1% year-over-year increase [5][19] - The company repurchased $25 million of preferred units, demonstrating a disciplined approach to capital allocation [20] 2026 Guidance - Management expects 2026 adjusted EBITDA to be approximately ±15–20% versus a normalized range of $500–510 million, incorporating assumptions of 10 days of offshore downtime and a $5–10 million impact from marine dry-docking [6][9][10] - The company anticipates a stronger performance in 2027 based on current development plans [11] Offshore Projects and Development - At Salamanca, an additional well is scheduled for completion in Q2 2026, with total production expected to reach 50,000 to 60,000 barrels per day [12] - The Monument development at Shenandoah is expected to be completed by late 2026 or early 2027, potentially increasing total throughput to as much as 120,000 barrels per day [13] Market and Customer Dynamics - The Bureau of Ocean Energy Management's recent lease sale generated over $300 million in high bids for 181 tracts, with a significant portion located in the Central Gulf of Mexico, where Genesis has existing pipeline infrastructure [15] - The acquisition of LLOG by Harbour Energy is viewed positively, as Genesis moves approximately 70% of LLOG's operated production through its pipelines [22]