DT Midstream(US:DTM)2022-08-03 19:02Financial Performance and Key Metrics - The company reported adjusted EBITDA of $205 million for Q2 2022, driven by strong performance in both pipeline and gathering segments [13] - Year-to-date performance is ahead of plan, with the company reaffirming its 2022 adjusted EBITDA guidance of $770 million to $810 million [14] Business Line Performance - The pipeline segment results were boosted by the in-service of the Stonewall expansion and higher revenue on LEAP, along with a favorable one-time settlement [13] - The gathering segment saw increased revenues on Blue Union, with total gallery volumes averaging 2.8 billion cubic feet per day [13] Market Data and Key Metrics - The company is experiencing strong interest for capacity out of Appalachia, particularly with the Stonewall and NEXUS systems [10] - The LEAP system is expected to expand from its current capacity of 1 Bcf per day to 1.7 Bcf per day with the Phase 2 expansion [5][6] Company Strategy and Industry Competition - The company is focused on expanding its Haynesville system and has reached a final investment decision on a Phase 2 expansion, which is fully underpinned by long-term take-or-pay commitments [5][6] - Competitive dynamics in the Haynesville are strong, with the company emphasizing its unique service offering and delivery point flexibility as competitive advantages [31][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2023 early outlook and highlighted the company's resilience through cycles due to high levels of long-term contracts [12] - The company is optimistic about the regulatory environment and potential permitting reforms that could open up new opportunities for expansion [43][45] Other Important Information - The company celebrated its 1-year anniversary as a stand-alone public entity and was recognized as the top-rated company in the MASTIO Midstream Customer Service Study [8][9] - The company is advancing its CCS opportunity in Louisiana, aiming for a Class VI permit application by the end of the year [11] Q&A Session Summary Question: Insights on first half performance versus guidance - Management clarified that a one-time settlement of about $6 million was included in the guidance and that they expect a lift in the second half of the year [17][18] Question: Thoughts on CCS and new bill implications - Management expressed optimism about the new bill and its potential improvements, while also focusing on preparing a high-quality filing for the Class VI permit [19][20][21] Question: Update on Haynesville volumes and Blue Union expansion - Management noted that while volumes were flat, EBITDA increased, and they are confident in upcoming expansions driving growth [23][25][27] Question: CapEx guidance and spending in the second half - Management confirmed that they do not foresee any CapEx slipping into 2023 and expect heavy spending in the second half of the year [26] Question: Details on LEAP expansion contracts - Management stated that all contracts related to the LEAP expansion are long-term take-or-pay contracts, with an average duration of approximately 9 years [29] Question: Competitive dynamics in Haynesville - Management highlighted strong fundamentals and competitive advantages in terms of time to expansion and service offerings [30][32] Question: NEXUS capacity and long-term contracting - Management confirmed ongoing efforts to secure additional long-term contracts for NEXUS, capitalizing on strong demand [39][41] Question: Permitting reform proposals and implications - Management expressed optimism about permitting reforms and their potential to create new expansion opportunities, particularly in Appalachia [43][45]