Midstream (EQTNP) 2 Nov 212021 Q3 Earnings call transcript

Thank you for standing by. My name is Cheryl, and I will be your conference operator today. At this time, I would like to welcome everyone to the Equitrans Midstream Q3 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator President your Development conference. Vice you Investor may begin of Tetlow, and Corporate Relations, Nate

Please and and the forward-looking future replay will Good to statements quarter XXX-XXX-XXXX ID beginning for A XXXX Please in refer and and this such today's earnings December XXXXXXX. news materially this Form morning, this measures. release the call the differ welcome ETRN's refer expectations. as number reconciliations call news to Equitrans to our measure. evening. the presentation The Form Midstream XX-Qs for XX-K XX regarding XXXX, available to by disclosures replay may for to comparable release factors contain for results from be the phone the is XXX-XXX-XXXX these Today's third of is cause measures, days year call updated risk related events could important conference or including call most contain and for may to actual XX, morning's non-GAAP ended forward-looking financial investor certain GAAP Corporation. for statements. financial that factors and Today's

Vice it Officer; Chief Gas Chairman will Planning On Charletta, and and Engineering; Diana the Tom Oliver, Operating President Justin turn to Tom. open Financial to Senior we After call the Pietrandrea, Officer; Karam, I'll and Chief Macken, and President prepared Senior Vice Kirk Brian the President With Systems, President, remarks, and call over Officer. and are Chief today Accounting questions. CEO; Vice that

Nate. everyone. Thanks Good morning

was to very were We a of financial $XXX income believe details results minutes. net was in both compelling expectations. quarter, E-Train on million ahead provide $XX adjusted third continues a the EBITDA the and investment. be For Kirk few will million

Let me summarize.

consistent free commitments. substantial rooted foundation. we high-quality meaningful have flow. business long-term business core our by solid and minimum and cash volume It's The is that generates contracts, a core First customers

these of We're few result that and gathering we've to is simplified capital last day. agreements from done operational setting and and have realizing benefiting another continue our for every efficiencies drilling to ability in the step Second, integrate reducing years. hard are both return-to-pad estimates, also This we in gathering efficiency design a change the we're acquired over flexibility. provide commercial reflected ramps legacy in work benefits up systems CapEx refining activity coming when the This year, our up years. and capital

customers' long-term Third, us environment our financial the and boost commodity providing positioning success. is for a them to health

only it Mount country's the flow customers completion largest gas Basin access will Lastly, Pipeline Valley multiple United Southeast cash but and pipeline to natural will direct it only provide and Mid-Atlantic accelerate incremental will our supply. liquidity demand benefits, not delivering, reliable States Appalachian long-term provide and most providing the enhance

closing see remarks. Kirk financial and demand-pull up now post-MVP for back productive I'll and for update growth update for of continue discussions to operations it in-basin to come have customers some with We are to the Diana? pass I'll as Diana environment. that, the opportunity for organic signs beginning to we then well a setting With

Thanks, everyone. Tom, MVP. morning, with and good start I'll

areas outstanding forward of miles the of in National about completed approximately work, XX Jefferson upland have the the work. this Forest. year. leaves for final around crossings miles construction we water largely of and will total and We which are in In stages XX of consists work This XXXX, for remaining the

date The approximately of State project XXXX agencies the that MVP on effort processes putting are our estimate of are changed the Corps in-service remains targeted expectation all total and and cost appreciative the last summer On remain has significant track FERC, state for the and forth. comprehensive remains up since We timing year. side, by year-end our We wrap early to the believe or permitting update. and next $X.X Federal Army not billion.

Moving on to our business. base

seeing On are side, of a producer gathering activity. we level consistent the

be not still if total fees volumes helped the recent quarter, compression drive year, we last revenue related expect the third same gathering to began sequentially. modestly to roughly investments. to XXXX. higher For some we This recognizing flat the quarter In increase year to and compared the in compared to

As mentioned, on we Tom to focus initiatives. continue capital efficiency

year terms open XXXX. CapEx this further year. expected that have now gathering On we season CapEx working in held of transmission, our projecting final approximately are We we reduced gathering on this for the and million $XXX are earlier we towards

the we reminder, and gas have in the Gulf the a Connector, for delivers We'll when arrangements on Ohio more Ohio project was access Clarington As season which open to place. provide the in Coast. to to Valley expansion markets Midwest capacity around centered details the

water a EQT. recently side, the with year. announced XX-year will The and commence signed early agreement next the new On early letter we last we agreement replaces agreement year

network As provides expect years revenue The part in first CapEx We our water to million this year our estimate ETRN $XX million reflect the initial of did the and the We water per last agreement of a build of for create mixed-use in approximately assets $XX five build-out. Pennsylvania. we to agreement, will existing firm CapEx the million five upon bump with XXXX. year now for $XX years. water for per year

and to MSCI I'll in XXXX were XXXX turn in on we reduction the emissions to methane expected facilities. levels. X various several September. call plan And lastly XXXX. interim we includes target a an estimated to XX% on air-driven ESG. in pleased BBB upgrade XX% to a be assessment ESG, overall approximate announced with executing methane at end receive pneumatics high to an this compared their recently X climate from of to stations the to to We achieve and now to Scope convert gas-driven our reduction year, began pneumatics emissions to policy, and compressor pneumatics bleed is Moving which This replace of in very over two-notch is operating complete Earlier at ratings by low-bleed initiative by Kirk.

share everyone. net was million. good and of morning third reported shareholders quarter EBITDA Net income and was common E-Train per of million $X.XX. and Diana, attributable we revenue $XX Today million, million deferred was E-Train income diluted to common $XXX Thanks adjusted earnings $XX $XX

and adjusting revenue. net operating O&M and lower $XX cash to the the was was of This in-service quarter the income quarter of adjusted exceeding payments to volumes quarter lower impacted continuing provision expenses free income. last unrealized from million. attributable primarily provided third activities from gain, $XXX to certain MVP's to relates and XXXX were Henry EQT flow third a of water compared with $X common $XX for $X $X.XX. E-Train income thresholds, same year revenue the for reported operating common other After in approximately unrealized of million million, by share XXXX attributable adjusted entitling was was common volumetric increase coming offset diluted QX per quarter E-Train of and on natural by and of by third reported also primarily to SG&A. $XX during We quarter earnings about net was from gas increase the the gathering E-Train quarter the quarter than an shareholders XXXX, is Hub E-Train cash million cash Operating firm of through by third on gain which based Net starting higher in receive million shareholders in million derivative contractual instruments, prices for XXXX. the

for on range Xnd. increased for share the million third ranges free free now $XXX November pay is quarter, to dividend the the now $XXX and close common record quarterly billion adjusted adjusted to the back is common million. XXth business cash narrowed flow. E-Train will midpoint $X.XX of flow And I'll full E-Train EBITDA $X.XX The full now a to of year cash and EBITDA hand at call guidance cash $X.XX For to November per and of on we've the Tom. our billion, lastly, shareholders range year

Thanks, EQT to briefly came did Hammerhead The an conclusion Kirk. week. pipeline like rule attributable to early which that have termination service the last panel rate. was I'd delay force mention, the majeure in not arbitration a in and thus to Hammerhead dispute,

begin put and MVP the service. We firm behind us. reservation with expect with in to conjunction to situation outcome pleased fees isolated the in on ready this Hammerhead collecting We're

like E-Train did this I'd instead and advanced between collaboration EQT teams. commercial let teams dispute the commend to not that operations and the distraction, but both Lastly, a the isolated become

So let play. summarize, E-Train's me of state current

Our business core is strong consistent. and

macro Our customers the getting and outlook are is healthier encouraging.

outside Mountain ESG be to track take assessors. your And stay expectations. are questions. As with we're and Diana hands. the construction and tangible with your Valley mentioned, to that, by recognized progress permitting on wash we're safe, continue And lastly, beginning making it's the front, Please on happy Pipeline our to

Please go UBS. Brian [Operator first question from Instructions] comes Reynolds of Your ahead.

is Your line open.

get Hi. on can any taking on line the or the Thanks. Thanks a from current quarterly additional start updates there's arguments given MVP? time Diana update oral if questions. proceedings my first just have around for off – And Circuit comments to Fourth Maybe commenced? specifically, we

Good Sure. morning.

week arguments while announced Forest unable away, biological opinion the last Fourth additional remains XX but we're often decisions litigation. So Jefferson the provide by to to in on and judicial matter right Circuit predict, the days. the also the oral to respect details, XX within National held and were we process It's difficult therefore are

appears but that's Corps see. time moving process will normally have So and hear, it schedule. firm is Army to be on don't we along, a that we what The we

We end our by West or decision the act, decision to we amendment We're XXX the expect the an FERC certificate order end exactly application them Virginia on will November, of and XXX XXXX. by December. issue year-end by expect Virginia when early the of uncertain but

winter of to still So, little so And has is the completely on. Construction crossing, in winding service. schedule think done. January work ramp permit. current us almost that likely up construction gets I for that, XXXX one to There's very the in now schedule in we're as starts weather the summer down February we're right working and

Great. all color. Appreciate that

curious, was MVP to if there's about know, non-recourse financing just in utility. As follow-up my one have any it $X divestments improved on you of initial EQT's billion, capacity. talked I if previously roughly MVP sold thoughts

still of reach are to curious $X and if that Thanks. we of capacity to need see kind billion ultimately sold where Just more we mark?

will this through definitely really think the does the I would I more between think capacity. for Yes, chunk actually down run be and $X what laid sat Kirk. billion that $X towards been and off More We've mean billion $XXX it this good, and being helps. move million it is I haven't saying but number. we

in jump Great. the Thanks. queue. back Appreciate I'll it.

John question next Sachs. go from comes Your MacKay open. is ahead, Please your line Goldman of

flow Good just to on cash some ask want term free maybe morning. I everyone. little longer Hey focus. a bit

and talking this CapEx gathering kind some the down time So, you spent year. about bringing capital of efficiencies

how and we can wondering think CapEx Just Thanks. what potentially those that more rate you EQT And if balance about talk out little gathering look should the bit alongside the future relief? of about in like down future? a kind could coming how two the

Yes, in. off maybe Diana I'll and this haven't we kick guidance. But provided cash Justin to ask flow jump long-term and free just

the flow year. situation think XXXX MVP, way is to best to top think looks I going back if like think and cash right So, of you're you $XXX about out about the on get And to a what almost it there. million

pretty thinking rate And a good the I'll CapEx. about comment to that's then think I Justin and start. let be to on Diana run

Sure.

of and assets our his with As some three our our realize to then of the integrating it started and pretty off other And our sides. aligning additional existing and a producers we've pads contract some transmission additional relates capital to I years, CapEx simplified comes remarks, once We have advantage our both CapEx we're during gathering and think existing on it and largest mentioned in drill It place. capacity. savings last executing the latent on taking with but online, the synergies we'll EQT already plan. and interest over on consistent been well-positioned infrastructure laterals those to the customer return MVP Tom

set we've ourselves CapEx talked over a about three hard So, the in done last calls, previous work one good sustaining our up of long run. because for years as is the success on the the trajectory we've to I think

Thanks. of kind on more That's one Maybe gears helpful. Southgate. right. All shifting

you've So, more sign about on some talked that. to contracts the potential

your of they've We region also of some on regionally. in contracts kind saw of the one a prefiling out signed competitors

overall trying get the Southgate. able kind that of and might kind Just there upside be of guys think to you really for to outlook about

Yes.

are So, additional interest we certainly Southgate in capacity. seeing

an has impact the I think Carolina legislation North expansion. in that on

as law it's to accelerate so to going coal-to-gas switching. And promote that

So, really for that's good us.

very we're on expanding So, capacity about Southgate. optimistic that

Thanks everyone.

[Operator is Instructions] is Please question your Derek of of line ahead, open. Your next from go America. Walker Bank

Hey everyone. good morning

Good morning.

remarks to formal a I I to compression the about on be talked to there get just little talked other just referring growth base touch I that color you more wanted in Just there MVP. specifically organic components guys you think project should are expansion on thinking or about past on that that. Are about? just we wanted in-basin you the guess the

Yes.

of be piece compression to largest we then compression So, have MVP end That on can a then laterals to and of that MVP Southgate MVP. certain Southgate also and some we is in places expansion. Off end can add Southgate. expansion or that off to would conjunction largest the our there's on the MVP, get we certainly the end of the of do of

those you yet do sense or just projects and still guess I And a spend capital those for wait see? have on

expansion, Southgate believe. about and $XXX – million see wait MVP Yes, But day. – to $XXX the million million $XXX so a the it's on for it's expansion on on -- I $XXX

discussions helpful. once to Okay. a if guys bit little guess distribution your but online buybacks? growth peers. had yet, internal MVP MVP announced We you're maybe distribution saw capital comes when I then have sort you further today allocation, And of how one about just just see just from online, comes just it's thinking out of whether That's through wanted special any around

as for about to wanted you MVP are things to just of a the you fully how portfolio? thinking So within feel get start get kind guys

I Yes mean we'll be... – we'll

if will $XXX don't. so That a I to MVP gross I'll – at make me I answer sorry, I'm is Nate that because you to to going about Kirk, net gave capital for I yell I'm you number but sure Yes, It's number. expansion want us. let million

there. get Nate in me So will don't if that I get

Kirk. Sorry,

it's project allocation okay. of Yes be kick we'll to capital mean, stock But mean investment. the or using okay. I allocation to MVP be that financing service. we'll the be out for be or repurchase off in once dividend and going at I That's, choices delever That's, to capital to that's goal at whether then blocks different looking we'll open all on is increase

we to So we And feel of on times in MVP right don't there. sub-four service we goes now like show need think I get couple after that to the accelerate a get we leverage. years just

we'll that So start then in we'll be and open-minded. direction

it. Got

Is other then priorities? be So is look opportunities we allocation it some maybe just and organic that say how deleveraging at should the to the thinking fair within growth then capital perhaps some portfolio? about sort of

Yes.

think that's a good think I to about it. way

Appreciate Excellent. Thank you very much, guys. it.

this Yes. Derek, is Tom.

return will to each will delivering, I think along Kirk as hit of opportunities it spot all so on, strong right? toward saying the we've into to committed, to shareholders. our a consideration allocation, we have be moving to to position Our remain spot, capital to which those that be focus get other capital been sweet taking

There over are no further closing call for time. this Karam questions will remarks. turn at I the Thomas to

the joining for everybody today. you, thank call Well,

is us. zone. We a call As red focused that MVP online. I'll each and dedicated on we've towards stay it. the lost and will not calls, now we project focused phone signature remain these anyone bringing gone on in to MVP quarterly It's through it it's completion of for

just benefit it's to the have. strong that that added really core So business we another

So thank stay out us We Thank joining your E-Train. you for appreciate interest all you. today. there. Everybody in safe

This concludes conference call. today's

now disconnect. may You