DT Midstream(US:DTM)2023-08-01 16:38Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $224 million for Q2 2023, aligning with the full-year plan [13] - The 2023 growth CapEx guidance has been increased to $700 million to $750 million, while the 2024 committed growth CapEx has been reduced by $100 million [14] - Liquidity remains strong at approximately $900 million, with a declared dividend unchanged at $0.69 per share [16] Business Line Data and Key Metrics Changes - The Pipeline segment results were $2 million below Q1 2023 due to lower winter-related revenues from pipeline joint ventures [13] - Gathering segment results were consistent with Q1 2023 and aligned with the annual plan [13] - Total gathering volumes averaged approximately 2.9 billion cubic feet per day in Q2 2023, with Northeast volumes increasing while Haynesville volumes decreased due to outages [29] Market Data and Key Metrics Changes - The natural gas market is experiencing moderating production levels and short-term deferrals in activity due to weak prices [11] - Recent weather conditions have driven strong power demand for natural gas, contributing to a reduction in storage surplus and some price improvements [12] - Gas prices are expected to be favorable in 2024 and 2025, projected in the $3.50 to $4 range [27] Company Strategy and Development Direction - The company is focusing on a new greenfield gathering opportunity in Ohio, with a significant investment of approximately $100 million being shifted from 2024 to the second half of 2023 [8] - The energy transition platform is developing, anchored by a CCS project in Louisiana and a hydrogen partnership with Mitsubishi [18] - The company aims to grow its business in a disciplined manner, leveraging core competencies and existing platforms [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the full-year guidance for 2023 and early outlook for 2024, with key growth investments on track [32] - The company is optimistic about the Ohio Utica project, which diversifies the customer base and integrates with regional assets [32] - Producers are exhibiting rational behavior in the Haynesville region, pausing activity in response to low cash prices while maintaining drilling levels [68] Other Important Information - The company plans to spend approximately $15 million this year on the Class V characterization well permit application, with drilling expected in Q4 2023 [10] - The CCS project is seen as a significant contributor to the company's Net Zero goals while also being economically viable due to existing tax credits [48] Q&A Session Summary Question: Thoughts on leverage and CCS project CapEx - Management confirmed plans to stay at or below the 4x leverage ratio, with expectations to end 2023 at approximately 4.2x and around 3.8x by year-end [36] Question: Details on Ohio Utica investment and MVCs - The impact on cash flows from the Ohio Utica investment is expected to materialize in 2025, with MVCs ramping alongside producer activity [51] Question: CCS project economics and capital costs - The CCS project is expected to significantly reduce CO2 emissions and is economically viable due to existing tax credits [48] Question: Future expansion opportunities in natural gas storage - The company is assessing expansion opportunities in natural gas storage, which has been a bright spot in the portfolio [57] Question: NEXUS expansion and permitting reform - Management supports ongoing permitting reform efforts and is optimistic about future expansions, with no public announcements yet [70]