Core Viewpoint - Pembina Pipeline Corporation (PBA) is a significant player in North America's energy infrastructure, managing extensive pipeline systems and gas processing facilities, which are crucial for hydrocarbon logistics across the continent [1][2]. Financial Performance - Pembina reported a strong first-quarter 2025 with adjusted EBITDA of C$1.2 billion, a 12% increase year over year, and earnings of C$502 million, up 15% [4][10]. - The company raised its quarterly dividend by 3% to C$0.71 per share, indicating confidence in cash flow stability [4][10]. - Pembina is trending toward the midpoint of its 2025 EBITDA guidance range of C$4.2 billion to C$4.5 billion, showcasing resilience amid macroeconomic volatility [4]. Strategic Positioning - Pembina secured long-term, take-or-pay agreements with a leading Montney producer, enhancing utilization across its pipeline systems and providing revenue visibility [5]. - The company is advancing a C$4+ billion portfolio of growth projects, including the Taylor-to-Gordondale expansion and Cedar LNG, aimed at capitalizing on rising volumes in the Western Canadian Sedimentary Basin (WCSB) [6]. - Pembina is diversifying its NGL marketing beyond U.S. markets, leveraging West Coast export capacity to access premium global markets, which enhances long-term resilience [7]. Financial Health - Pembina's debt-to-EBITDA ratio was 3.4x, below its target range, supporting a BBB credit rating [8]. - The company generated meaningful free cash flow in the first quarter, which was allocated to debt reduction and shareholder returns, positioning it for potential acquisitions or share buybacks [8]. Risks and Challenges - Pembina's marketing segment is exposed to commodity price volatility, with management cautioning that lower prices could offset gains later in 2025 [11]. - Regulatory uncertainty regarding Alliance Pipeline tolls could pressure EBITDA, with ongoing reviews adding to the uncertainty [12]. - Delays in partner projects, such as Dow's ethylene cracker, introduce execution risk that could affect cash flows and long-term demand for ethane infrastructure [13]. - The capital-intensive nature of Pembina's growth projects could strain free cash flow if execution challenges arise [15]. - Recent stock performance has shown a decline of 7%, contrasting with a 36.3% gain in its sub-industry, which may reflect investor concerns [16].

Company Overview - Energy Transfer (ET) is one of the largest midstream companies globally, valued at over $60 billion, with a robust asset portfolio [2]. Performance Analysis - The company has experienced recent underperformance, which aligns with the analysis provided in previous articles [2]. Investment Strategy - The Value Portfolio focuses on constructing retirement portfolios using a fact-based research strategy, which includes thorough analysis of 10Ks, analyst commentary, market reports, and investor presentations [2].

Core Viewpoint - High-yield dividend stocks like Prologis, MPLX, and McCormick not only offer attractive yields but also have the potential for rapid dividend growth, making them appealing long-term investment opportunities. Group 1: Prologis - Prologis is the largest owner of logistics-related real estate globally, currently offering a 3.6% yield [3] - The company has a strong credit rating, allowing it to borrow at favorable rates, which benefits its tenants [4] - Amazon is its largest tenant, contributing only 5% of total rent, indicating stability in dividend payouts even if Amazon's performance declines [5] - Prologis has raised its dividend payout by 11.7% annually over the past five years, with less than 30% of its net operating income coming from international markets, suggesting room for growth [6] Group 2: MPLX - MPLX is a midstream energy company with a significant focus on gas and crude oil transportation, offering a substantial 7.5% yield [8] - The company has a reliable revenue stream due to its ties with Marathon Petroleum, which enhances its ability to raise dividends [9] - MPLX has increased its dividend payout by 8.1% annually over the past decade, with a recent 12% year-over-year rise in net income indicating potential for further increases [9] Group 3: McCormick - McCormick, a leader in spices and flavorings, has paid dividends consistently since 1925 and has raised its payout for 38 consecutive years [11] - The company has increased its dividend payout by 8.4% annually over the past decade, although it faced challenges due to rising commodity costs [12] - Despite a 31% decline in stock price from its peak in 2020 and stagnant sales in the first quarter of 2025, McCormick expects adjusted earnings to rise by 6% this year [13] - Currently, McCormick offers a 2.5% yield, which could lead to a double-digit yield on cost for patient investors [14]

Core Viewpoint - The midstream energy sector presents attractive investment opportunities, particularly for income-oriented investors seeking high dividend yields, as companies focus on cash flow rather than production growth [1][2]. Group 1: Energy Transfer - Energy Transfer offers a forward yield of 7.3% and plans to increase its distribution by 3% to 5% annually [4]. - The company has improved its balance sheet, achieving its strongest financial position in history, with a high percentage of take-or-pay contracts ensuring stable cash flows [5]. - Energy Transfer is increasing its growth capital expenditure to $5 billion from $3 billion, anticipating mid-teens returns on projects, and is exploring opportunities related to artificial intelligence [6]. - The stock is trading at a forward enterprise value (EV)-to-EBITDA multiple of 8.1 times, indicating it is undervalued [7]. Group 2: Enterprise Products Partners - Enterprise Products Partners has a forward yield of 6.8% and has consistently increased its distribution for 26 years, even during market turmoil [8]. - The company maintains a conservative approach with one of the best balance sheets in the midstream sector, supported by a robust coverage ratio of 1.7 times based on distributable cash flow [9]. - Growth capital expenditure is set to increase to between $4 billion and $4.5 billion this year, up from $3.9 billion last year, with $6 billion in growth projects expected to come online [10]. - The stock is attractively valued, trading at a forward EV/EBITDA ratio of under 10 times [11]. Group 3: Western Midstream Partners - Western Midstream Partners offers a robust yield of 9.4% and plans to grow its distribution by mid-to-low single digits annually [12]. - The company has low leverage of under 3 times, indicating strong financial health, and its contracts include cost-of-service protections and minimum volume commitments (MVCs) to ensure cash flow stability [13]. - While not pursuing aggressive growth, the company is focused on safe, high-return organic growth projects and is open to acquisitions or stock buybacks if attractive projects are not available [14]. - The stock is considered a good value, trading at a forward EV/EBITDA ratio of 9 times based on 2025 analyst estimates [14].

The Zacks Oil & Gas – Production & Pipelines industry plays a vital role in supporting the nation’s energy security and economic stability. The United States relies heavily on an extensive and efficient pipeline network to transport hydrocarbons from major production regions, like the Permian, Bakken, and Marcellus basins, to refineries, export terminals and consumers. The long-term investment outlook for this industry looks bright due to steady domestic energy consumption, the growth of liquefied natural g ...

With the demand for data processing increasing due to the rapid expansion of artificial intelligence (AI) applications, data centers are facing unprecedented energy challenges. Natural gas is emerging as a pivotal solution in the power strategies of these facilities, offering the reliability, scalability and economic viability needed to support continuous and intensive data processing operations.Integrating natural gas with renewable energy sources allows data centers to balance sustainability goals with op ...

Group 1 - The midstream/pipeline industry is viewed as a stable sector that generates significant cash flows, making it attractive for investors [1] - Crude Value Insights focuses on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] - Subscribers have access to a stock model account with over 50 stocks, in-depth cash flow analyses of exploration and production firms, and live discussions about the sector [2]

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA from continuing operations for Q4 was $176.8 million, up approximately 20% from $147.9 million in the prior year [6] - Full year adjusted EBITDA from continuing operations was $622.9 million, exceeding previous guidance of $620 million [7] Business Line Data and Key Metrics Changes - Water Solutions adjusted EBITDA for Q4 was $154.9 million, compared to $123.4 million in the prior year [7] - Physical water disposal volumes increased to 2.73 million barrels per day in Q4 from 2.39 million barrels per day in the prior year [8] - Crude Oil Logistics adjusted EBITDA decreased to $13.1 million in Q4 from $15.3 million in the prior year, primarily due to lower volumes on the Grand Mesa pipeline [10][11] - Liquids Logistics adjusted EBITDA was $17.7 million in Q4, down from $22.2 million in the prior year [12] Market Data and Key Metrics Changes - Total volumes paid for disposal increased by 11% in Q4 compared to the same quarter of the previous year [8] - Operating cost per barrel for fiscal 2025 was $0.22, down from $0.24 in fiscal 2024 [9] Company Strategy and Development Direction - The company is focusing on core assets after divesting non-core businesses, which will reduce volatility and seasonality of adjusted EBITDA [5] - Plans to continue reducing leverage and improve capital structure by addressing Class D Preferred Units [6][19] - The company aims to generate approximately 85% of adjusted EBITDA from the Water Solutions segment moving forward [16] Management's Comments on Operating Environment and Future Outlook - Management noted that despite oil price uncertainty, there has been no drop-off in customer activity in the Corita Basin [10] - The company is well-positioned with 90% of volumes committed through acreage dedications and MVCs, with 80% of total volumes from investment-grade counterparties [10] - Future growth is expected in the Water Solutions segment, with guidance for fiscal 2026 adjusted EBITDA between $615 million and $625 million [12] Other Important Information - The company completed the sale of 18 natural gas liquids terminals and other non-core assets, raising $270 million [4][16] - The biodiesel business has been fully wound down, eliminating approximately $75 million of working capital [5] Q&A Session Summary Question: Can you offer more color on your expectations by business for 2026 guidance? - Management explained that the water guidance midpoint implies about $560 million, accounting for a $20 million decline in skim oil revenues due to lower crude prices [21][22] Question: What are the conversations with customers regarding growth opportunities? - Management indicated that they are recontracting and focusing on core customers, with no slowdown in volumes currently observed [27][29] Question: How much lower could you flex capital spending down? - Management stated that capital expenditures are already low and further reductions may not be significant [35][37] Question: How do you think about your low and high range on volumes for the water business? - Management noted that fluctuations in volumes are normal, with a strong base wedge of business and no significant changes expected from customers [40][46] Question: Will there be a reinstatement of common unit distributions? - Management clarified that there are no plans for near-term distributions as the focus is on reducing Class D preferred units [52][54]

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA from continuing operations for Q4 was $176.8 million, up approximately 20% from $147.9 million in the prior year [5] - Full year adjusted EBITDA from continuing operations was $622.9 million, exceeding previous guidance of $620 million [6] Business Line Data and Key Metrics Changes - Water Solutions adjusted EBITDA for Q4 was $154.9 million, compared to $123.4 million in the prior year [6] - Physical water disposal volumes increased to 2.73 million barrels per day in Q4 from 2.39 million barrels per day in the prior year [6] - Crude Oil Logistics adjusted EBITDA decreased to $13.1 million in Q4 from $15.3 million in the prior year, primarily due to lower volumes on the Grand Mesa pipeline [8][9] - Liquids Logistics adjusted EBITDA was $17.7 million in Q4, down from $22.2 million in the prior year [10] Market Data and Key Metrics Changes - Total volumes paid for disposal increased by 11% in Q4 compared to the same quarter of the previous year [6] - Operating cost per barrel for Water Solutions was $0.22 for fiscal 2025, down from $0.24 in fiscal 2024 [7] Company Strategy and Development Direction - The company is focusing on core assets after completing non-core asset sales, which will reduce volatility and seasonality of adjusted EBITDA [4] - The strategic shift towards becoming more of a water solutions business, with approximately 85% of adjusted EBITDA expected to come from this segment [14] - Plans to continue reducing leverage and improving capital structure by addressing Class D preferred units [16] Management's Comments on Operating Environment and Future Outlook - Management noted that despite oil price uncertainty, there has been no drop-off in customer activity in the Corita Basin [8] - The company is well-positioned with 90% of volumes committed through acreage dedications and MVCs, with 80% of total volumes from investment-grade counterparties [8] - Future guidance for fiscal 2026 is an adjusted EBITDA of $615 million to $625 million, with total capital expenditures of $105 million [10] Other Important Information - The company completed the sale of 18 natural gas liquids terminals and other non-core assets, raising $270 million [4][14] - The wind down of the biodiesel business has been completed, eliminating significant working capital requirements [4] Q&A Session Summary Question: Can you offer more color on your expectations by business for 2026 guidance? - Management explained that the water guidance midpoint implies about $560 million, accounting for a $20 million decline in skim oil revenues due to lower crude prices and less than $10 million in asset sales not included in future EBITDA [18][19] Question: What are the conversations with customers regarding growth opportunities? - Management indicated that they are recontracting expiring long-term contracts and have seen growth through existing agreements, with no slowdown in volumes currently [20][25] Question: How much lower could capital spending go? - Management stated that while there might be slight flexibility, capital expenditures are already low, primarily focused on water [33][34] Question: How do you view variability in water volumes for the year? - Management noted that while there can be fluctuations based on customer completions, they have a strong base and are currently ahead of budget for the first quarter [37][41] Question: Will there be a reinstatement of common unit distributions? - Management clarified that there are no plans for near-term distributions as the focus is on addressing Class D preferred units and reducing leverage [50][51]

Water Solutions Crude Oil Logistics Investor Presentation May 2025 NYSE: NGL Company Overview NGL Total EBITDA by Segment $661.7 MM(1) $542.0 MM 82% 10% 8% 82% 1. EBITDA values reflect full year Fiscal 2025 and does not include corporate or discontinued operations 2 $66.4 MM 82% 10% 8% Liquids Logistics $53.3 MM 10% 8% ▪ Provides water transportation, treating, recycling, and handling services for upstream customers ▪ Largest integrated water solutions network of injection wells and large diameter pipe in t ...