Financial Data and Key Metrics Changes - The third quarter results were broadly in line with expectations despite some fluctuations across business segments [7] - The company generated excess cash in Q3, allowing for further reduction of outstanding borrowings under the senior secured revolving credit facility [13] - A clear trajectory of significant improvement in the leverage ratio is expected throughout 2026 [13] Business Segment Data and Key Metrics Changes - The Offshore Pipeline Transportation segment saw a sequential improvement in both volumes and segment margin, benefiting from the absence of weather-related disruptions and resolution of mechanical issues [7][12] - The Marine Transportation segment faced temporary challenges in July and early August due to market conditions affecting day rates and utilization, but financial results improved in September and October [9][22] - The Onshore Facilities and Transportation segment performed as expected, with increasing volumes through Texas and Raceland terminals and pipelines [27] Market Data and Key Metrics Changes - Demand for the inland fleet was modestly impacted as Gulf Coast refiners maximized runs of light crude oil, reducing the supply of intermediate black oil [22] - The transition back to heavier crude slates is anticipated, which should increase demand for inland heater barges [23][24] Company Strategy and Development Direction - The company is focused on generating increasing amounts of free cash flow, simplifying the balance sheet, and returning capital to unitholders [33][28] - There is a strategic emphasis on being positioned for future growth opportunities while maintaining financial flexibility [28][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the successful startup and ramp-up of the Shenandoah and Salamanca Floating Production Units, which are expected to significantly enhance future financial performance [12][20] - The company views the offshore business as a self-regenerating annuity, with expectations of maintaining throughput with minimal capital expenditure [35] Other Important Information - The company remains the only truly independent third-party provider of crude oil pipeline logistics in the central Gulf of Mexico, positioning it for continued growth [22] - The management team and Board of Directors are committed to building long-term value for all stakeholders [28] Q&A Session Summary Question: Future growth capital direction - Future growth capital is expected to be in the $10 million to $15 million range, focusing on operational support rather than large projects [31][32] Question: Wells needed to offset declines - The company views the offshore business as self-regenerating, needing approximately 11 additional wells per year to maintain throughput [34][35] Question: Offshore segment margin with full utilization - If producers meet their forecasts, an incremental segment margin of approximately $160 million per year is expected, with significant upside potential without additional spending [39][40]

Core Insights - The company has commenced production from the Salamanca FPU and plans to ramp up to 40,000 barrels per day, with expectations to reach 50,000 barrels per day in the first half of next year [1][11][12] - The marine transportation segment faced temporary challenges but has shown improvement in September and October, indicating a positive outlook for the fourth quarter [2][3][21] - The successful ramp-up of the Shenandoah FPU has exceeded expectations, reaching a cumulative target rate of 100,000 barrels per day [5][8][12] Offshore Pipeline Transportation Segment - The offshore pipeline transportation segment has benefited from the absence of weather-related disruptions and the resolution of mechanical issues, leading to improved financial performance [3][7] - Total throughput on the CHOPS and Poseidon pipelines has recently exceeded 700,000 barrels per day, with expectations to surpass this level as projects reach full potential [13][12] - The company anticipates that the addition of new volumes from Shenandoah and Salamanca will significantly enhance future financial performance [6][12] Future Production and Capacity - The Salamanca FPU is expected to handle up to 60,000 barrels of oil, with plans for a fourth well to be drilled in 2026 [11][12] - The company estimates that 11 new wells per year are needed to maintain production levels and replace reserves, ensuring a self-regenerating business model [14][33] - The potential for additional discoveries in the Gulf of America presents a multi-decade opportunity for growth, leveraging existing pipeline infrastructure [16][17] Marine Transportation Segment - The marine transportation segment experienced temporary market conditions affecting day rates and utilization but is expected to recover in the fourth quarter [2][21][23] - Demand for inland transportation is anticipated to increase as Gulf Coast refiners shift back to heavier crude slates, generating more refinery bottoms [20][21] - The market for blue water vessels remains structurally tight, with limited new supply expected, supporting stable to modest growth in the marine transportation segment [22][23] Capital Allocation and Financial Outlook - The company is focused on generating free cash flow, reducing debt, and returning capital to unitholders, with growth capital expected to be modest in the near term [30][25] - The management emphasizes a disciplined approach to capital allocation, prioritizing debt reduction and evaluating future distribution increases [25][30] - The company remains committed to building long-term value for stakeholders, with a focus on operational efficiency and financial flexibility [25][26]

Financial Performance - The company reported Adjusted EBITDA of $1320 million in the third quarter[10] - Total Segment Margin was $146576 thousand in the third quarter[13, 21] - Available Cash Before Reserves was $35482 thousand in Q3 2025, with a Common Unit Distribution Coverage Ratio of 176x[17, 23] - The company exited the third quarter with a leverage ratio of 541x, aiming to improve the balance sheet and maintain the ratio near 40x[10] Operational Highlights - Shenandoah achieved first oil in late July and ramped up to a targeted rate of 100 kbd in early October[15] - Salamanca achieved first oil at the end of September, expecting production from the first 3 wells to approach 40 kbd, with a fourth well planned for 2Q 2026 potentially reaching 50 kbd[15] - Marine Transportation segment experienced challenging conditions in July and August but rebounded in September and October[15] Liquidity and Capital Allocation - The company has a credit facility with $800 million in commitments[8] - The current quarterly distribution remains $0165 per common unit[8] - To date, the company has repurchased $325 million of Class A convertible preferred securities and 114900 common units at an average price of $909 per unit[10]

RT Bloomberg Live (@BloombergLive)How are today's leaders investing in the next generation of transport and storage solutions? At #BBGCanadianFinance we speak with:◼️ @Pembina's Scott Burrows◼️ @KeyeraCorp Eileen Marikar◼️ AltaGas Ltd's Vern YuFind out more ⬇️ ...

Market Overview - The current market is characterized by uncertainty, with tech stocks facing pressure due to concerns about an artificial intelligence bubble, alongside global tensions, trade disputes, and rising inflation expectations [1][10] - In this environment, value investing is recommended, focusing on purchasing solid companies at reasonable prices [1][10] Earnings Yield - Earnings yield is a key metric that indicates how much a company earns for every dollar invested in its stock, calculated by dividing annual earnings per share (EPS) by market price [3] - A higher earnings yield typically suggests a stock may be undervalued, while a lower yield could indicate overvaluation, assuming other fundamentals are equal [4] - Investors often compare earnings yield with bond yields, particularly the 10-year U.S. Treasury yield, to assess stock attractiveness [5] Screening Criteria for Value Stocks - A primary screening criterion is an earnings yield greater than 10%, supplemented by additional parameters such as estimated EPS growth, average daily volume, and current price [6][7][8] - The estimated EPS growth for the next 12 months should be greater than or equal to the S&P 500, indicating potential for solid returns [6] Selected Stocks - **Plains GP Holdings (PAGP)**: Involved in crude oil and refined products transportation, with a projected earnings growth of 215.4% and 27% for 2025 and 2026, respectively [9] - **Heritage Insurance (HRTG)**: Provides insurance products, with expected earnings growth of 104% and 1.2% for 2025 and 2026, respectively [11] - **The Mosaic Company (MOS)**: A leading producer in agriculture, with projected earnings growth of 60% for 2025 [12] - **LATAM Airlines Group (LTM)**: Latin America's leading airline, with expected earnings growth of 45% and 19% for 2025 and 2026, respectively [13] - **PHINIA Inc. (PHIN)**: Designs fuel systems, with projected earnings growth of 18% for both 2025 and 2026 [14]

Core Insights - Value investing focuses on identifying stocks trading below their intrinsic value, allowing investors to benefit as market prices align with true company value over time [1] - Earnings yield, calculated as earnings per share divided by stock price, is a useful metric for identifying undervalued stocks, with a higher yield indicating potential undervaluation [2][4] - A screening criterion of an earnings yield greater than 10% is established, alongside other parameters like estimated EPS growth and average daily volume [6][7] Company Highlights - IAMGOLD Corporation (IAG) is a gold exploration and mining company with projected earnings growth of 44% and 40% for 2025 and 2026, respectively, and currently holds a Zacks Rank 1 [9] - Plains GP Holdings (PAGP) is involved in crude oil and refined products transportation, with earnings growth estimates of 206% and 24% for 2025 and 2026, respectively, also holding a Zacks Rank 1 [10][11] - Hope Bancorp (HOPE) provides commercial banking services, with earnings growth estimates of 12% and 40% for 2025 and 2026, and holds a Zacks Rank 1 [12] - CommScope Holding Company, Inc. (COMM) offers communication network infrastructure solutions, with an extraordinary earnings growth estimate of 3,167% for 2025 and 28% for 2026, holding a Zacks Rank 2 [13] - Harmony Biosciences Holdings Inc. (HRMY) focuses on therapies for rare neurological disorders, with earnings growth estimates of 22% and 32% for 2025 and 2026, and holds a Zacks Rank 2 [14]

Strategic Decisions & Financial Performance - Genesis Energy successfully exited its soda ash business for $1425 billion, receiving ~$1 billion in net proceeds[6, 9] - The transaction significantly reduced annual cash costs by >$120 million[9] - Reported Adjusted EBITDA of $1317 million in the first quarter[9] - The company maintains a clear path to Adjusted EBITDA growth in 2025 and increasing cash flow[9] Offshore Pipeline Transportation - Shenandoah and Salamanca developments remain on schedule for first oil in mid-2025, with a combined capacity of ~200k/d[9] - A new 105-mile SYNC pipeline connecting to Shenandoah FPS is in progress, with commissioning scheduled for late-May 2025[9] - Offshore Pipeline Transportation segment margin was $76548 thousand in 1Q 2025[14] Capital Allocation & Credit Profile - Annual cash costs to run the business are ~$425 - $450 million per year[9] - The company has a credit facility with $800 million in commitments[9] - The leverage ratio was 549x at the end of the first quarter, with a target of maintaining it at or near 40x[9, 14]

Core Viewpoint - OPEC+ plans to increase oil production, negatively impacting oil producers like ExxonMobil and ConocoPhillips, while benefiting oil transport companies like Frontline due to increased demand for shipping services as oil prices fall [1][3][6]. Group 1: Impact on Oil Producers - ExxonMobil and ConocoPhillips stocks are down 2.5% and 3.6% respectively following OPEC+'s announcement [2]. - Brent crude prices have decreased by 28% over the past year, contributing to the negative sentiment around oil producers [2]. - The increase in oil supply by OPEC+ is expected to lead to further price declines, which will negatively affect profits for ExxonMobil and ConocoPhillips [4][3]. Group 2: Impact on Oil Transport Companies - Frontline's stock is up 3.9% as the demand for oil transport services is expected to rise due to falling oil prices [2][6]. - The company benefits from increased shipping needs as consumers seek to purchase cheaper oil, leading to higher demand for Frontline's services [7]. - Frontline is considered a cheaper investment option with a trailing earnings ratio of 7.7 and a generous dividend yield of 4.7% [8]. Group 3: Long-term Considerations - Despite the current sell-off, long-term investors may consider buying Exxon and ConocoPhillips stocks due to their respectable dividend yields of 3.7% and 3.4% respectively [9]. - Both companies are reasonably priced with trailing profit ratios of 14.1 for Exxon and 11.7 for Conoco, suggesting potential for future growth as demand rebounds [10].