CorEnergy Infrastructure Trust (CORR) 9 Nov 212021 Q3 Earnings call transcript

Greetings, ladies and gentlemen. Hello, and welcome to CorEnergy's Conference Call to discuss the Third Quarter 2021 Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] I would now like to turn the call over to Matt Kreps, Investor Relations for CorEnergy. ahead. go Please

published for Call. everyone John Core Infrastructure XXXX. morning, Energy CFO; third announcing Thank results quarter me joining today Conference for we This CFO. With Robert CEO; press are Trust release and the you, Waldron, today's a Dave Grier, Schulte,

We expect Form afternoon. file this our to XX-Q

those made within end. Harbor could access the statements hours We our discussed statements of of and in also on the Important I available can everyone protection the couple like do during applicable webcast the You in remind our factors IR forward-looking our Safe subject filings update are cause this securities are live These calls of a on to replay a that site, results would to our to available with facts documents are statements laws. typically of website. presentation not from statements. posted the purely not course the actual SEC. Investor forward-looking the under materially may that that be section Relations historical forward-looking differ

the encourage review During that, of be factors, which would results of filings reconciled subsequent over with I those related ahead. to we Dave call part make turn GAAP our to to like non-GAAP all complete We and Schulte. forward-looking disclosures, will And Please non-GAAP numbers, in reporting. you will this certain to with reconciliations. call, go metrics, our reference risk now measures

morning, everyone. Good

of and dividends. a Third providing the from quarter, the preferred quarter step-up $XX common solid coverage in million, second $XX to million and revenue increased our

annual financial will the changes operations stack steady operating rate a our modest assets, with our increase a talk structure, John all at our and by streamlined stockholders continued the We also structure review. the completed implemented changes finish quickly structural our both operating from and our I'll capital Robert and our California of for capital operations approved simplified and meeting. recap recent will assets. in about that

REIT the the are of reduced external management as was first administering, the And to beneficial is with team. these a especially cost internalization provide our structure, platform. equity owners, holders issuing who coverage which to direct change of our we grow through cost manager equity REIT ratios. manager The savings our as external the structural prior and debt improved compared mostly external on This the member benefit

approximately John? team per consistently even position the of requires equity a dividend management-owned Series that, the with be has B This subordinated our to our equity absorber. greater year, a achieve membership Eliminating shares actions issued address our give management of in for our management Series a rate Series unit the the $XXX,XXX Second, the common I'll The indication an equivalent in steps million as is to to issued and order has financial acting to preferred common, recent effectively exchange these these Class a future of conversion to due confidence the confidence company. common common, management-owned C the platform, Grier to to from holders, to was which and AX let course of while we in subordination into $XX our thresholds, potential dividends classes by performance our of common C preferred a shock coverage the common John also is next. common share Crimson declared AX these stockholders, coverage to should approval. and The B them. of certain already being coverage of external takeaway CPUC Board to the Class position in net be of dividend reduction our and good from in preferred approximately right updated subject the benefit the all also eliminating of units, to rights B the below direct units

Dave. Thanks,

increase to us sequential operations. Turning we our second quarter revenue the as was in The expected. the suggests the trough for that

refinery even California economy wells permitting well new regulatory pre-COVID opportunity X pay until transition energy for invest in of production the recently, normally oil imported to California, not activity to will producers, year, has prices oil levels, drilling already flow crude with in drilling utilization increasing cash of and over reliance level at free process the what last crude for jammed are increasing the increased increase new seeing, as count in – congesting oil Higher environmentally month. been the have ports. is in locations California boost to the due The been certain have lagging to responsible products. of long has down nearly from place focused producers from the decreased expansion meantime, and refined are and rapid to programs, that much are XX which profitable California potential, we further production While log not prices we such on an delaying returned persist. less how rig demand curtailed slow in debt, we increased the gridlocked are the is signal it this has commodity In on would volumes extremely using for but partly at

production, While be volume produced diesel state's decades to should our cost California virtually ahead and resume of levels on the world. is connecting the the efficient systems. assets a to production this US, carb tariff is It in-state will aligning system change. required this for crude to producing market on that petroleum was of feedstock implemented of a production align. California for of to locally effect in X to rate vehicles all systems been we products if responsible crude the the The I to San the has gas the time costs refineries in full volumes increase to -- for products. July X reliant We This pipeline summer. implemented largest refiners, XX% in efficiently not above for a of We tariff in-state for California the most it's slower the and increase the moving the has believe gasoline in and new of across environmentally pipelines is for cost rise used only and production ideal continued note serving petroleum market US. captive Pablo the Bay, the for California still over our come heat one expense increase, also matter fleet in the other assumed August the natural

next with costs gas in to income manage should our three to Crimson natural will possible along sources. tariff We assessment other examine factors ways cost persist. stands from that gain

climate First, in for -- crude oil very profitable oil a improve production investment crude oil. volumes could

year to available start construction XX, diesel convert serve intent to expect announced P production. Phillips the our each by They early two to to has and consequently permits Second, refineries shut and refineries XX, crude would those as that down of refinery next they we Santa and become shutdowns which reduced renewable publicly in implies purchases their California, with pipelines. Rodeo get Maria

sequestration in portions of as actively discussions is using initiative. with pipeline carbon parties energy regarding transition Crimson for our part system and working of the various Finally, on

Midwest. the in assets our to Turning

over volumes performing steadily contracts systems the Our year. customer MoGas expanded increased and projects Omega last and delivering and are completed under new

asset customer of the a the of are Spire, in We area consistency support long-term efforts provider goals that base. critical which and gas in winter to our our St. of to across particularly assets Louis, approaching. is predictability reflective of natural with these The working customers is

Importantly, to billions and pressure large infrastructure energy we in have a dollars through dividend plan and majors the are strategic The through assets additional to storage actions opportunities and of gain scale as very our with non-core to model. of holdings. complementary transportation acquisitions that variety on of a the to is market. increases and market grow looking assets activities reduce exposure addressable commercial ESG of carbon-related hundreds The to sell off others them of fit

market -- more energy buyers traditional However, to including, deal actively transition there a to expand are reviewing pipeline. in potential and contract since energy, in limited than our transactions the the markets MLP continues are dozen both there opportunities

fit a pricing on level We have platform offer I'll are opportunities. our it over financials. and criteria our that we address qualification meaningful, but growth don't on fit With requirements several passed that turn advancing the to that to REIT handful strict and Robert

John. Thanks,

utility, our limited quarter including EBITDA to $X.X months was time, XXXX, providing and for September cancel net was the losses income the million a basis, three we for On It million of Cash of not million. was net period majority net $XX.X XXXX out. the and is to debt amortization, income measurement stockholders CAD quarter after since the vast pipeline Over we in XX which expect of third income non-GAAP the ended include has million. million of $X.X and $XX difference of million expenses. inclusion be Adjusted distribution should million, adjusted third million $X.X or the gains revenue common of $X.X had Comparisons $X.X reoccurring. measurement noted available $X.X gain, capital is maintenance that a Crimson results. XXXX For attributable and results of to transaction

These management a shutdown and indications impact $XX highlighted million dividend, oil and of earn opportunities gain, million, At restrictive of drilling Even can include to outlook provided so, the current our spill bondholders. preferred high to recovery the $X.X common permitting continue the confidence reduced million California, the dividend our in to of believes we in market for same our $XX the heating our we $X.XX lines, saw of John where annualized improve to due time, the to pipeline result costs we we will annualized measurement California. plus common offshore half natural conditions. quarter, previously results. to several EBITDA our the for third While providing pay as the second -- XXXX in excluding have gas non-recurring

along filing Form to with expect our of provide sooner. XX-K, outlook not our the if We XXXX

cash the million to of including liquidity sheet. revolver. the and $XX finished of balance Turning undrawn approximately million, quarter million $XX $XX We of with

to provide equity become The on was common Class Class declared X.XX preferred required common preferred of stock, and was B equity as most B capitalization material actions, for the be our all XX-Q impact a benefiting The dividends vote ratio million common the coverage dividends, preferred was on common a meeting the and additional of quarter exchanged filed third No declared during of company's on on the the located table, simplified third distributions As on reflects these our priorities prospective the details. today, $XX a the capitalization capital this fully of to result page quarter proxy the subsequent obligations structure forward-looking share subordinated Board result to and The our and dividend move stockholders. not XX per quarter. stock. of to $X.XX corporate current dividend of later changes shares.

With coverage stability volumes we the external providing uptick dividends. subsequent we we tariffs, acts The hold for have and levels in a management dividend stockholders. as QX the of B and quarters, owned good Class common -- common at these by our preferred for buffer, if hold

added investors, which before potential covering than benefit our ordinary this stockholders, many of to questions to as call. like institutional our rather our capital XXXX, dividends tax of time, you. the foreseeable our future, the from due or favorable from we'd As take income At for analysts to return a expect may closing we provide losses circumstances characterize to the for

necessary Relations call, team needs Investor additional If to Thank or and have arrangements. today's out addressed not on you please questions make our follow-up we'll reach you.

question [Operator with line your the Stifel. you. Akyol question. first proceed from with Please Our Selman of Thank Instructions] comes

Thank of couple quick for me. you. A morning. Good ones

wait that volume just all, we'd of or the can you first in Q? for So release data,

on third up barrels for XXX,XXX were quarter Yeah. day. volumes average at The a

So up little a bit.

QX. it was XXX,XXX think I for

I you guys well then just close. you I potential you you didn't Great. are don't And to appreciate handful know a were that. say mentioned, close acquisitions. of can you And --

far You can Can you I that? engaging. close additional color said you is how provide or you're some guess for on there outlook away, give how there any

as have expansion an whether that's already of level whether did storage well are there assets we're expansion most type natural interesting related on our at which some the gas to market in terminals assets there things Well, There an just to it's we potential interconnect in the us the footprint as nearest with looking project California. been pipelines. both confirming or acquisitions

Crimson aggressive we've looking or been then and a to looking pipelines successful level California at where very those on what don't And assets it that picked whether been platform does for acquisitions actively or own fit. activity be been our they're fit is operate to our since back outside give and now whether in we've the know assets looking recognize up, and we've And see can historically and So that platform assets, we've pretty like But some, who's expansion. in frankly, us assets. criteria. Missouri simply sellers as stockholders and got at not fit Those platform processes or auction processes. intermediaries feedback has as rather at than pricing own of lease level and acquisition tend storage auction our

to taking steam. for it's that pick a while up So

I think bear those will fruit.

So to us two I year. expect one would acquisitions close to per

So for XXXX. is at the this little in getting tooth, a look year least in long one but

I back shelf -- at filing? registration statement into think and should tying we that And saw Okay. be I a

had to shelf. last was renew filing the only shelf The because they three and years for we

insiders a also -- And that in by road. So resale which we the the the also the consideration potential transaction. more for under shelf tax tax could useful the for is Crimson is There the same management sales dollar tax team left of be down received sales related the for amount shelf.

So resale one the or lose setting to we bigger the timing renew registration simply aside a of to one would matter statement, had it you're we was referring it. the

for All me. it. That’s right. Got it Thanks.

Selman. Thanks,

at you. Dave time, would Ladies and this I for comments. the to back closing turn to like gentlemen, Thank floor Schulte

for IR upcoming us to at like direct rest our Have arrange us everyone of team, call. a you Bye-bye. joining Please one-on-one great if meet one contact the investor day. or of events your conference a Thanks today.

and gentlemen, Ladies you. concludes teleconference. today's Thank this

you participation. for lines your You your Thank may this time. at disconnect