BP Midstream Partners (BPMP) 8 Aug 192019 Q2 Earnings call transcript

Good morning, and welcome to the BP Midstream Partners Second Quarter 2019 Results Conference Call and Webcast. [Operator Instructions]. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Brian Sullivan, Vice President of Investor Relations. ahead. go please Sir,

Zinsmeister; BP Sullivan, Second Relations, Vice with Officer, here to Craig Financial Presentation. Coburn. and XXXX I'm today Rip Executive Chief Brian President our our Midstream everyone Chief Quarter Officer, Partners Results I'm and Welcome of Investor

I to we statement. attention cautionary draw to begin, Before your our would like

we slide could During we forward-looking make estimates, in will today's due differ filings. our results materially expectations. this and Actual statements plans note to our SEC factors presentation, and and that outcomes on refer to

also measures. on We available information Please to our measures. important refer presentation disclosures these also this are our supplemental and website. refer These to non-GAAP documents to related financial SEC in for filings

And now, to over Rip.

our here to call today. Thanks, Good Brian. I'm for second joining be quarter results. morning, everyone. for our pleased Thanks

our Brian a that and As moved quarter with our have our at will our of it new is calls. second well forward, has results join serve leading approach outset as and mentioned quarter, sponsor calls and fourth for one going reporting call we last cadence BP. We believe the first model results third this I'll us quarter where to Craig

quarter and duration again to job Craig of do to first, did leaving over hand a take of you keeping results, then I'll Craig plenty your remarks questions. few concise, to a through share last same quarter we today. our great time the second our intend prepared the for words you with

underlying robustness our exception. The this strong full no And since our continue since slide IPO. performance portfolio. just of are past we and graphs and year our first the of the of demonstrate show XXXX are the midpoint X operation asset IPO, on consistent second months We of delivery high-quality to the strength

we and quarterly mid-teens cash And are XX%, grown and by of we distribution adjusted last year, delivered by for this first quarter available same year. delivering for the resilience. XX%. EBITDA the and real XXXX growth have again since growth on distribution track We around around That's

visualization year powerful during delivering we are what portfolio were and to our of record asset first graphs the months are performance we we X this full available we going see evidence for of the said the of through distribution do. and available track on solid Considering the raised established These have that to and EBITDA of year today the million. for cash our cash $XXX second growth we in the have distribution we to year, $XXX million guidance half

more talk will Craig about in moment. a this

our and the balance continued strong and organic attributed our financial to our we which offshore fee-based frame in flow underpins including the of our revenues, the up cash stable cash XXXX, asset Gulf first maintenance and maintenance comfortably going Mexico, the apportionment main offshore activity production This of Enbridge's between on resilience our growth sponsor the confidence resilience, pipeline offshore We and of portfolio have Whiting flows, revised can line. Refinery facilities have be and nature and of continued onshore MVCs, guidance. BP's half absorbing demonstrated the impacts volumes at of at

are the our will we just frame, guidance transaction a guidance in available market year than believe permit conditions the the and to including done there in be this Other manner our that the furthers of mentioned, address other distribution cash later the distribution factors no one-dropdown-a-year financial and to provided We dropdowns increase full investment year. cadence for to still our changes partnership. changes that proposition, are There to growth. I interests and no that

identified to the action a would execute to have Although be we XXXX, have we not and drop. like in yet committed in we dropdown assets ready to to are

continue challenged available. should they we remain become to for and opportunities markets look Equity

watching investors our landscape. to listen to continue will the MLP We closely evolving

actions proactively others make the pragmatically that a over from will or of A time. in transition address need may how transition learning to we to and on to that are not the BPMP navigate We future.

quarter With that, to results. let me through second take our over to hand Craig you

Rip. everyone. morning, Good Thanks,

May. second oil equivalent of facility to since the was maintenance and highest reflecting activity Thunder quarter was following X.X pipeline gross operations with on throughput a throughput throughput million than returning in returned IPO. offset primarily due total to the quarter lower record Our higher partially our normal higher per significantly throughput barrels first levels. Endymion and day, during on BP-operated throughput quarter as our This XXXX Horse Proteus more normal by startup on the maintenance the Shell-operated quarter Appomattox of as ahead to at seasonal first the well This IMO as of Refinery lower Diamondback during facility BPX, was demand Whiting diluent

a me and take talk expected. a April to by Whiting more little about moment were volumes impacted maintenance Let May BPX. as at

These throughput the throughput temporary perform levels at higher by throughput During MVC the our see rates middle year. offset the the rates BPX at After continued was were and to above restriction half the building second of late the MVC level on early reflecting July. a and move during we the as of well is Station to returned by June. restriction a we fire encouraging into rates at resolved, performance This higher we of pipeline the June, saw Griffith above Refinery. level, Whiting caused in the

revenue a to per compared was basis barrel portfolio flat average Second broadly quarter. quarter first the on

all barrels associated and Hurricane portfolio by of impact in offshore the the in in maintenance with Mexico. estimate gross higher Mexico of to single seasonal broadly quarter, to to our event offset XX,XXX compared Looking ahead, quarter, weather affected reflecting completion continue second we performing second expect primarily be offshore Whiting impacts Refinery BPX following the flat quarter, the the on activity our day Gulf with the offshore pipeline quarter the expected this strongly of producers throughput be maintenance Barry, which pipelines. the third by to of around to during throughput of for Gulf third We the per

for lower $XX.X and largely to due due million, was higher mentioned insurance BPX at fire the method throughput Griffith as by on quarter Moving to and compared during the relating throughput broadly pipelines million from the costs our quarter. to mentioned. during to Station was previously the lower second Endymion equity Diamondback attributable quarter significantly the higher previously flat income of higher reflecting first around and as financial Proteus building to offset quarter, to results. deductible revenue an Net This to the pipelines operating investments, partnership income from relating $X our primarily I

with to only these the be have in we X pipelines. onshore throughput with the will revenue in our aware, minimum you BP pipelines. our respect X on results commitment And arrangements includes place financial As line volume

of did revenue volume the any record on in the second and related balance sheet deficiency we volume quarter, the revenue recognize While Diamondback. not did $X to deficiency BPX from million we around quarter minimum on deferred in

and revenue $XX.X for totaled onshore our in revenue million deferred estimates. the quarter, to consensus together, line pipelines related with revenue Taken second

For the first million related half recorded of deferred volume $X.X have XXXX, deficiency. around of to we revenue

was Adjusted Board to quarter. for the distribution unit increase of distribution second first over the partner per and unit. for in for declared X.XXx. quarterly an the ratio of distribution factoring quarter distribution attributable first per the higher million XXXX increased of distribution, coverage quarter July, million, In was $X.XXXX X.X% the $XX.X partnership was of both for the Directors EBITDA the the quarter After quarter. represented general $XX.X than the cash cash our This available second an increased

third expect Looking available the higher distribution slightly for quarter, to the be than we cash to second quarter.

portfolio. our our quarter again, asset earlier, of the resilience demonstrate, mentioned Rip this results As

in half the the available we've on Enbridge's During to have at grow the first adjusted activity of and BP's of absorbed distribution. production Gulf maintenance these Mexico, continued our maintenance impacts main EBITDA Notwithstanding and Whiting pipeline Refinery offshore XXXX, of facilities line. continued cash for we at impacts, apportionment

as and from the of only. During deferred last relating deficiency our profile end of for XXXX first volumes maintenance This in year recognition and ramp forecast quarter Whiting the revenue adjusted year Refinery EBITDA the and building the will the to forecast profile for of the available a the post back EBITDA half This half. with of second Mattox the performance adjusted impact the described the the pipeline, at through we factor across year reflects the second results the the of year. increase cash fourth distribution call, half

the us the portfolio gives the just continuing to to our The $XXX confidence million. hand together resilience to with momentum of performance Rip. year described, back I as cash across $XXX million full With portfolio, distribution I'll raise guidance the that, to for available

Craig. Thanks,

engaged high-quality the quarter set Craig, another from and solid continues remained to targets of you. that's the team on out a be have very and entire assured, to well. portfolio asset focused And perform performance BPMP So myself delivering we fully that

cash portfolio's our have the strength of resilience and We generation. demonstrated flow

cash have with We opportunities convert to our organic more that available growth distribution we shown potential come. for to organic growth can increase

late final For And day transported production production investment on South is start decision Proteus has project of equivalent estimated Mars XXXX. last that Thunder example, Horse from oil transported and at Phase for Expansion Thunder per an barrels in week, X with peak on PowerNap expected pipeline. in Production project in the only decision XXXX, its XX,XXX announced it pipelines. taken announced first of adding to early May, the oil Endymion investment the on and with BP Shell Horse final

of to PowerNap results have X growth XXXX continued quarter are the visibility the we in and Phase Gulf of this. early Expansion decade, fourth our Mexico South through during Thunder Horse the mentioned and We call of part that evidence next offshore organic clear

is transaction for for unitholders work exploring such Our robust. but both and inventory must next And options financing are sponsor. dropdown, our dropdown any we our BPMP's

later at I in and Conference week. Vegas Infrastructure Midstream/Energy Citi be next Craig the will Las

the With you're So take you seeing look we and phone forward let's if lines that, to open questions. there. attending,

[Operator Instructions].

Barrett today Securities. Our question Blaschke comes from MUFG from first

remaining we some thinking here, of assuming with XXXX up options capital Just that is how know there markets of I a do dropdown? financing rapidly XXXX we're about challenged, sort and the using kind start

this Thanks Barrett. morning, There interested for are good reverse question. are that inbounds. I've vehicle. in Well, the folks had

A to there. the doing MVCs folks the have a of business, the all lot difficult something. I the stability It's business of opportunity I that Makes market sensibly choppiness on and reassert I My about onshore So that tape it can nervous. makes really believe is $XX be only XX% million impressive. annually, currently really is our think our I off it impact right? it. will in April with the Basically, we of FLA our swing by oil what, and we materially. a change trade way $X do. latest, since income bit business oil So continue the oil's perplexed won't to why

various is, So that bit the but of continue is reassert herd. on a market calls, to what I it

to to got a trade be So sponsor we to bit that makes site, on guy. I’m the as against, an But as - for is if committee There well There done both and can stability. hit a seller, conflicts our deal the the are I table. there. noise Balanced unitholders. more envision got to sensible all M&A a relaxes the get options get price sense accretive on the is

[Operator Instructions].

Our next from JPMorgan. comes Jeremy Tonet from question

all picking this juncture? you are When options table, is the up just or point able to see us share Maybe the there. options more kind you with you of which on are likely kind of with at last of say kind favorite

for question. thanks Jeremy, the

hit I X go reflect is choice think how I'll that banks So will different X got Like CEOs to market. I with we no. right? and simple and, the of on M&A lot of optimize bankers. a this, rolodex of when course, soberly I a answer of have professionals, ideas the about the different

Okay?

Fair enough.

wondering of have The make back Just capital was repurchases reflect of into it as price any distribution going how guess, it you to thoughts and the to that? describe this unit there, the to come thought unit in price sense as really be kind guys at Would that I you value doesn't all put juncture if a noting to going of apply portion about any support sense unit talked any to at the that's or growth about. forward? just to proposition increases seem wanted distribution there and kind to,

it powder versus have investing for a growth Jeremy. the bit of misaligned opportunities. Well, time, in long move I take a The price to would organic is probably been around kind

which So online BPX I and hours. with in was response circumstance, quarter by team both Griffith's back working XX industry teams, to have with not U.S. last an pipeline only our the spent basically less amazing the get than dealing the

internally been to also growth the we're that opportunities, We way. have reinvest inclined what cash on and hand distributions at to looking organic grow

So growing as the I'm more to reducing many opposed shares of trying distributions denominator to pivot are how to outstanding.

Rip turn And ladies point, Instructions]. over like gentlemen, [Operator Zinsmeister additional call no to to back I'd and this any for questions. the remarks. I'm at conference showing closing

thank you. Well,

the Somebody snuck post. in at

Derek do We have question a from Walker.

Derek. easy Better be one an

seeing some there just just little sort the talk Maybe Diamondback. on competitive that opportunities are of bit dynamics about pipeline? you Can third-party of the a little that on just bit a and you

Okay.

We discussions. are actually in the market now in

we So renewals. in are interested

the long, to oil is think crowd oil stay. I heavy heavy

As still make a consequence, diluent sense. will

to we in can over see time So Canadian their business. the still reinvest in extent volumes producers moderate still growth

We organic at for opportunity diluent, hopper. shipping other the and looking of batch our products that's one are opportunities that's in than

And is that half or 'XX of is second something of development that for sort that XXXX? is

Certainly, not year. this

Okay? come. There it, a bit build of is if will you -- they

take have still off the You to develop to the take. customers

need things prudent a up you sync So to investment. have do to

Got it, okay.

thanks. squeezing the so have answered I think minute me questions I my appreciate other here been in but last

right. All

wrap. are I to ready think we

call with few So thanks today. Hopefully, joining have you today's everyone from a impressions. away for come

our the ability deliver we've in got to of a confidence proposition. First, investment lot

in resilient. to is online, will in onshore universe in conditions flight same relatively interest XX% the market all and on caveat profile. With the supportive lastly, because market I you our rates for business portfolio given is The about delivery. repeatedly. year's the for float we growth change started we our outlook versus is this where have by likelihood forward in our confidence next have in drop rock-solid week. example, we permitting, exit in conditions they next And MLP more MLP visibility underpinned to in sentiment, third, quickly; Appomattox coming rate And are proposition. our underpins December very the of be May ready Vegas excellent assets, growth can Offshore, the Second, are MVCs. for their

the Have IR have a any look a if ask info questions contact to with really Their is we get So website. you for you Take or to team our don't forward further. looking safe are to you our up forget you day. didn't talking everybody. additional didn't And you with chance on that follow content today. get care

conference the gentlemen, presentation. We and thank today's Ladies has for attending concluded. you now

disconnect now may You your lines.