EnLink Midstream(US:ENLC)2022-05-04 15:59Financial Data and Key Metrics Changes - EnLink achieved adjusted EBITDA of approximately $304 million, marking a 22% increase over the prior year [10][31] - The company reported $105 million of free cash flow after distributions for Q1 2022 [10][32] - Increased 2022 guidance implies 16% growth at the midpoint in adjusted EBITDA over 2021 [11][35] - Leverage ratio stood at 3.8 times at the end of Q1 2022, with positive credit profile momentum recognized by rating agencies [33][40] Business Line Data and Key Metrics Changes - Permian Segment: Generated segment profit of $73 million, with a 12% sequential increase and over 62% growth from the prior year [19][22] - Louisiana Segment: Reported segment profit of $90.5 million, increasing approximately 4% sequentially and 16% year-over-year [23][24] - Oklahoma Segment: Delivered segment profit of $85.8 million, with nearly 29% growth from the prior year [25][26] - North Texas Segment: Segment profit was $63 million, flat sequentially and decreased less than 4% year-over-year [28][29] Market Data and Key Metrics Changes - Average natural gas gathering volumes in the Permian were approximately 12% higher compared to Q4 2021 and 46% higher compared to Q1 2021 [20] - Average natural gas processing volumes in the Permian were approximately 10% higher sequentially and 43% higher year-over-year [20] Company Strategy and Development Direction - The company is focused on executing a disciplined and capital-light approach while enhancing customer relationships [9] - EnLink aims to lead in innovation and create sustainable value for stakeholders, with a strong emphasis on ESG efforts [13][39] - The Carbon Solutions Group is a strategic focus, with the first customer agreement signed with Oxy Low Carbon Ventures [11][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the supportive commodity price environment and its impact on business momentum [8][9] - The outlook for 2022 and beyond is strengthening, with expectations of meaningful volume growth returning in Oklahoma by 2023 [11][27] - Management highlighted the importance of safety and operational excellence, achieving zero recordable injuries in Q1 2022 [39] Other Important Information - The company issued its fourth sustainability report, reporting significant progress towards reducing methane emissions intensity [13] - EnLink is actively repurchasing common units, with $23 million repurchased in Q1 2022 [34] Q&A Session Summary Question: Guidance increase linked to commodity prices or higher volumes? - Management indicated that the guidance increase is due to strong performance across segments and improved commodity price environment, with about 90% of revenue being fixed fee [42][43] Question: Producer activity levels in Oklahoma? - Management noted that producer activity has stabilized, with expectations for meaningful growth in 2023 due to improved pricing [46][47] Question: Timing for CO2 projects with Oxy and Talos? - Management stated that permitting processes are underway, with expectations for CO2 movement through the system by 2025 [49] Question: Thoughts on investment grade status? - Management highlighted positive credit profile momentum and expectations for continued improvement towards investment grade [74][76] Question: CCS initiatives and investment opportunities? - Initial capital requirements for CCS projects are modest, with potential for increased funding through green bonds in the future [76]