Kinetik (KNTK)2024-11-07 17:44Financial Data and Key Metrics Changes - Kinetik reported its best quarter as a public company with adjusted EBITDA of 184 million, and free cash flow was 970 million to 174 million, up 24% year-over-year, driven by contributions from New Mexico and strong performance in Texas [24] - The Pipeline Transportation segment reported adjusted EBITDA of 1 per Mcf for the quarter, impacting wellhead gas volume curtailments [7] Company Strategy and Development Direction - Kinetik is focusing on connecting its north and south systems to optimize processing capacity and enhance operational flexibility [14][17] - The company is committed to a balanced capital allocation approach, emphasizing organic and inorganic growth opportunities while accelerating returns to shareholders [22][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the revised EBITDA target, citing strong execution and cost discipline [20][21] - The company anticipates a return of curtailed volumes from Alpine High and expects pricing relief at Waha, indicating a tight basin with ongoing demand for gas egress [72][73] Other Important Information - Kinetik received MRV Plan approval from the EPA for CO2 capturing and sequestration, which is expected to provide economic benefits starting in 2025 [10][11] - The company is finalizing a long-term transport agreement with EPIC, which has received a credit rating upgrade [9] Q&A Session Summary Question: How should we think about GMP fees and their impact on upcoming acreage dedications? - Management explained the distinction in average gross fees between different segments and emphasized the incremental margin capture from sour gas services [34][36] Question: What would be needed to open an expansion for Epic? - Management indicated that the decision to expand would depend on the commercial success of replacing shorter-term contracts with longer-term agreements [39][40] Question: What factors drove the outperformance this quarter? - Management attributed the outperformance to maintenance capital investments, operational efficiencies, and favorable market conditions [44][46] Question: What is the expected trajectory of CapEx for next year? - Management suggested a CapEx range of 400 million for 2025, with a focus on growth projects [56] Question: What are the implications of potential setback rules in New Mexico? - Management clarified that the current discussions are part of an economic study and emphasized the importance of the oil and gas sector to the state's economy [78][79] Question: How should we think about further dividend growth? - Management reiterated a commitment to annual ratable dividend growth while balancing capital needs for growth [81]