Midstream (EQTNP) 3 May 222022 Q1 Earnings call transcript

Good morning. My name is Joseph and I will be your conference operator today. At this time, I would like to welcome everyone to the Equitrans Midstream Quarter 1 2022 Earnings 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. Instructions]. [Operator you. Thank President Vice Development Investor and Nate of Relations. Tetlow, Corporate

begin You your now conference. may

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

Chief Chairman Senior Officer. call Tom the are President Kirk CEO. Vice Officer. Karam, today Charletta, Diana and President On and Financial Operating Oliver, and Chief

remarks, And it Macken, Vice Brunner, over prepared President open Janice will Officer. President Vice Systems turn the President Chief Planning Gas and and Treasurer. the Justin that, to Accounting Senior questions. I we With Vice Engineering. Brian call Pietrandrea, and will to Tom. After

minutes. we of deferred review will on EBITDA Along new deliver approximately counsel, MVP cost we agencies, business income also an new XXXX agencies, we morning, of which face. regarding extended billion. reported solid the million. will and The to few includes of that permits adjusted base the Today, discussions with provided target million, is in believe the XXXX revenue results. Good quarter permits decisions $XX we in-service scrutiny path a net Today everyone. Kirk federal a agencies. results of details Nate. these of $X.X Thanks, $XXX guidance total financial to provide million, relevant After and the forward of and continues our recent $XXX federal with project the half external partners, of inevitably the court second recognize from and pursue first

However, can agencies effectively past, perceived respective the we federal produce that the only and ambiguities. potential that as decisions have the that the sound between permits mitigating they law have also technically not technical permits, connect dots in confidence but the

on country day, everything every MVP that at laws We and required prevail. will are end live the the follow focused process within of in we believe and a that and projects and regulations, to permits our have required and control receive like every we of

side, On positive we some the recently received news. permitting

As tools. FERC crossings and construction method certain changing water trend unanimously to wetland MVP approved certificate and open the cut amendment from to body relating

We Senator Russia our is for rolled economy. and unrest invasion will carbon some the as lower of consistently geopolitical all the work driven continue and tight that recent critical continue has current leading and Ukraine by toward Lastly, to MVP. case suspect Washington reliability market, we time. Manchin energy as The of charge to so to the costs months, has the others by in MVP's a a exacerbated you I do aware, are from security in for make been have said

the update, and it possible over Diana. later them. and will for statements. others, the Senator then results. And the remain We Manchin will bring discussing into operations questions. have the back now, remained support Kirk service. have Senator will we on public path the Manchin, for of outlined in and frequent further Diana public We speculate The project, Capitol, Senator engaged while contact statements turn not more appreciate to MVP discuss with from come on all I'll And those for financial fronts, I'll to some

I'll first XXXX. [Indiscernible] with per we Good quarter, for decline a flat our expect the segment. volumes start about versus morning, development gathered year, the XXXX we In on eight base volumes in gathered the to gathering we Thanks, day. environment, based current everyone. and remain this and roughly do Tom. expect a In plans

of which access expansion, Moving day we Pipeline, incremental Ohio you, start cubic progress or remind transmission. in Gulf provides for process. And Clarington, X/XXXX. million updated OVC capacity interconnects Ohio our on as the keep QX, of on Valley FERC about per the make to through OVCX on And February, in targeted the announced XXX markets Coast feet project. To us OVCX Connector In is deliverability Valley will The application and Connector add to we in-service Mid-Continent projects. we you the the Ohio. will

includes believe quality mixed This $XX water replace prescribed complete $XX lines, intend in meet water to certain water EQT EBITDA year, with commenced do do $XX We approximately million. seek installed annual The and approximately recruitment we water related costs. these for use on agreement million we an XX-year standards. to Xst. not March $XX that On their plan This $XX includes commitment invest revenue the remaining of In five of million replacement initial years. first and expect to services the system we amount previously the years five of mixed-use agreement water the million side, approximately the build-out. XXXX, million to

air targeting for XXXX replacing reduction the gas-driven bleed This are methane particularly from as is build to a with program we high a program component methane included relative mitigation, upon as on continues year, Last Next, our began which we XXXX emissions momentum methane annual replace last plan of incentive of plan. instrument pneumatics X% an our short-term update bleed, low in ESG. again systems. year. pneumatics well as pneumatics we This area year, to and a year, in with in the certain emissions to our

to expand further readiness our We security also undertake to water platform. include plan the to a our assessment reporting ESG and to CDP expand questionnaire, TCFD

to committed the our year the turn additional operations, now will advancements continue and are call I'll to we to and over make We beyond. this of Kirk. sustainability

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

by $XXX E-Train shareholders attributable income billion two common also net cash We of million. impacted by activities items. reported $XX a operating Net to provided flow of cash free and was

on than first was for net for specific same deferred a lower common to income. adjusting and reduction per This reduction After gets quarter income is decreases E-Train reported income these earnings because a allowances in And the $XX XXXX. XXXX which million year exceeding O&M the $XX First second, were primarily unrealized SG&A the of assets. line in tax prices E-Train compared by was quarter E-Train $XX other the common Henry $X.XX. million from deferred related Natural This through shareholders two by attributable gathered valuation the and reflected $XX Gas assets. quarter contractual line. volumes for from to evaluation operating $XX diluted adjusted post lower revenue. deferred cash decrease through lower to impact the expense lower in-service tax million allowances last quarter and entitling net expenses. because million through quarter the within driven revenue expenses million. items, by This of million $X reflected was a Operating 'XX decreases receive share of second derivative income EQT by revenue. certain And gain This first thresholds adjusted tax E-Train expense Hub lower stop. on NYMEX gets of services is taxes to instruments, conditioned first water the was and payments is First provision XXXX, the by MVP's

For revenue includes of the record approximately we will million million. income net Xth. common common guidance, on of XXXX of to on $XXX a deferred $XXX XXth first to Today cash of $XXX close to pay of full-year adjusted million, quarter, and E-Train of introduced which EBITDA per billion, million shareholders $X.XX the $XXX financial May May at a share $X.XX dividend quarterly E-Train business

our X.XX Lastly, We to and the facility. towards The $X.XX progresses recently facility the billion who lenders, closed changes completion. $X.XX through then worked our a $X.XX for on times in amendment the that of a Tom. revolving ratio X.X XXXX, credit October now while maturity the to with the the support MVP four the will to mobilization beginning appreciate reduction facility; through a we ratio quarters final an back feature leverage provide to flexibility maximum facility I'll forward call of to leverage XXXX. hand from step-up of key construction that to billion now includes the to facility MVP. April in us The consolidated of size include times provides except the for of term maximum with for be the

mentioned, is energy. will elected Board who gas to We're sufficient business. In world's the natural to the to to way. new five the path to Kirk national week. period. does in thoughtful Diana through questions. Kirk. forward reissuance commitment that congratulate It manage Thanks, We're a as I'd our has as domestic And your to she under to be that the us and Directors resilient. and of that, Diana, the meet evident gained MVP four demand same to developed for months entered the committed the operations just excellence remains gas operating provides to credit MVP for construction. business increasing confident the we're And natural we take facility lastly, happy the remaining pleased bring reserves flexibility build of the With positive and target dialogue Board abundant last summary, the the to on to the like permit that and base time in-service transported or was must reliable

We'll Instructions]. Q&A our for moment a pause [Operator roster. to just compile

Brian John, question line Reynolds. First bad, from of comes the my

Your line open. is

be to could off to with the get morning, off, the updated of start Thanks. if incremental everyone. on specifically board. would on color timeline, an that At update just any regulatory signposts congrats Diana date. great. Diana, the and and the Circuit, Good the the fourth Army Hi. the end MVP, helped drive to the and to day, around Maybe we on wondering assumptions was Maybe the Corps elections start half XX service FERC, second

timeline interaction positive, the have we've we're the back you. that given with to now second which we the there assumed is construction be perspective, quarter, having that been From with we timing will agencies, has think which a what gives us we

XXXX. of quarter Second

me clear. Let be

or additional or potential, we the when on guess, update update any get Army on Is there FERC any Corp? could I from just Circuit fourth ruling, permits

Yes.

every QX of we that of way of detail to So the and we now we our through this those get pieces. right one remainder guidance The of XXXX need to the start everything we're by and have is not going construction. work through that year, all that

Great. Maybe follow-up. ask Appreciate it. one just my

Just to on updated guidance. talk the

off, just assumption it revised I I free some cash potential EQT the about rates. been pushed the secondly, First like Capex the timeline has guidance 'XX of And around year-end change. just think payment curious you was was that Thanks. XXXX? at should seems if flow that into color could flow downwards the to MVP provide free now slightly how officially drivers we cash the exclusive around was curious

the are replacements. which And that have it water activity of the grow. producers is an into we're over stay this year. strength Sure. for of year last, of pushing with Certainly, that's down Capex, to takeaway producer to then the long-term is slightly mixture business pads caught, remains, limitation the increase disciplined and additional to and there we the like sounds we and a next capacity some a have see to you've base There is going additional and volumes But the a issues couple which the of physical the continue water takeaway. for ability

Great, appreciate the color. everyone. great day, Have a

the next John line Mackay. comes of Your from question

is line now open. Your

of most a the can Maybe gathering for of on driving, year. up balance morning. it producer declines I just time. just XQ set maybe the talk the bit is to flattered but through it foe Thanks up the like with the issues, some little year. that morning. last Good wanted you the through comment. Understand looks of the slightly Good some pick

MVP is not So you to continue a expect you. or might declines and maybe whether those two as going before Thank just trying to forward, well balance online.

acreage, some of producer we we key takeaway say, feel bump the I other seeing then So and that of it activity capacity of flat think grows. But core places. I the is get declines the and certainly would in the out biggest that some until water because like pad. part We're timing some can and it's

Okay.

the are to fixed. online expect water once that would come You issues

Correct.

costs. thanks. Okay, wish I another the Maybe follow-up. on business to base may

curious guys costs that one-off. versus the this of were better You a ratable is how mentioned quarter, just much

how about that forward. Just we think going should

When you say expenses? about talking costs or are you

O&M side. Yeah, on the

Yes.

O&M little a part so the certainly can on like business, side, on bit I optimization of of So we of the But of coal and each just we an asset other that pressure else. this have everybody seeing inflation a commodity little bit mean, are off. take advantage oil, balancing uptake, they're also

inflation We well. capital the seeing on as are side

queue. back that's and there right, fair. Thanks. All in get the I'll leave it

(ph.). comes Your next question from Michael of line the Lou

open. is line Your

everyone. Thanks. Good morning,

of a quick couple questions. Just

this it now is depending on be is The say fair of safe something given that at leverage the dividend credit current how progresses? that to agreement, terms the or is first, still could MVP levels a just updated the

The the the is flow the we fine, business mean, base supports Kirk. have dividend. do I cash the so to dividend This is, -- dividend business anything no with base thoughts from

And the comments the to potential referenced Thanks. Can elaborate MVP In the on great. you on and sure bit that? footnote just in then, timing. I changes design I wanted you Okay, little to a understood. just make Southgate,

need really the recent environment is and rolling, for design customers. [Indiscernible] we about and optimize ways project, demand timing the the around of there having the with are are But can discussions evaluating think the no given I there and better we the whether question some the Southgate.

Okay, you much. great. Thank so

Your next of line from comes the Mitra. question Neel

line open. Your is

to a just construction, XXXX. go past, get timing of once to in of back I like to the project the come to has would just to looked issue legal at them. morning. sure It forward a to MVP. second submit a straight piece? and you be a Circuit And to process? again In of that appeals. amount your the confident construction Good there makes be legal come had What you that permits, of Hi. And wanted isn't you isn't before back with wait time the half sounds online you've you there want after forward your certain final going move to you Fourth make going going submit lot permits, that

deference, dealing court of has no from narrow departed and but now -- we're a question there's also the historical scope judicial issues. So that with narrower

action and which One route, of there held, was incidental just for ideological assessment the basis takes. foundation for recently by were are certain permits aspects FERC; of addressed and up MVP's that the challenges areas to framework

trying you to their are technical I'm use. to we and working agencies So the the understand requirements round, the while the the applicable exceeded rationale and laws, much did substantive and that last to review articulate for order legal and in more potential do believe specifically in now good need under Right. regulatory decisions, agencies proactively a be -- legal the mitigate word know

permit generally not applications. is Which required in the

writing of into understand need diligently decision, technical, focus legal scientific they're They all and on the the permit. permit. they they're not really the reasons working the why aspects their put to to those So that

progress understand they with I going the you it so forward If decides going the interveners, it's move that just right, the to There's and can fourth can be permits. you So obviously don't, issues. they're is but Circuit to whether correct? who then hear follow construction,

That's correct.

I gathering thoughts the EQT. in how discussion in on then the and the terms gas amount wanted shares project they a on not out? that they follow of play with just to could for ETRN the XXXX. off agreement one. on being or in agreement roughly And know sold I $XXX Any potentially quick with also remaining up the and them would of million having up come reimbursed had

to I have do a determination that want made don't to as they believe there. what they

we're what So is. work hear waiting through whenever their way, it want. to we'll they just Either determination

Great. Okay. very Thank much. you

of line Followill. from Becca The comes next the question

open. now Your line is

guys. morning, Good

Following to up on spend the you're water going there. Capex

recovery. pipelines constructed or original the you're said that seek owners? Is people to that from You the going the

the So the that people to having not retreatment, are wit. but review, is a isn't It's from it's we vendor it really issue. it people project. that constructed receive going an constructed is we're pending that And the pipeline the really legal issue but

I you. you. Thank all Okay. Thank That's had.

Your Sunil next question Sibal. comes from

is line Your open.

morning, first QX, max X.Xx for XXXX good the Hi, My you clarity. question us, thanks all of I folks. covenant? And covenants. leverage to the end Could leverage. at related you [Indiscernible] the were the tell with related where

is now looking right This up to We're service, like into the low in -- at Yeah. MVP prior Kirk. fives. getting going we're

offline we did if or have you Okay. can it that. end, And where take specifically QX the don't

This amended the the of The and as appreciate X.X X.XX. we and covenants. revolver banks of coverage is now under times We're sufficient our the revolver it we through Janice. support is now, smaller have We but just XXXX, maturity up recently steps at that. we did to the April

So we under have address order support to bank of that the room in covenant revolver. and the are the from thankful we sufficient

Understood. Any that. discussions kind post of that with reading [Indiscernible] agencies bit for little

we recent this We generates in improving business balance core strength upgrade, do close continue flow of But in our with dialogue certainly our and strong rating along agencies, with remain core again. coupled customer, leverage largest sheet positive. strength, they MVP remain and the cash And of service. with the to our investment counterparties. three Janice of Yes, agencies the advance -- highlight that the is very strong of we the by two are on and focused increasing business grade the the

leave Thanks. it it. I'll got Okay, there.

Your from line Jeremy comes the Tonet. of next question

is open. line Your

Good morning. Hi.

morning. Good

want partners as does the that does budget, there? for was over Just time, time that approve How or to in the budget how stake the process and approval? participate how curious, when's process a work process happen? if cost And project, change And for maybe ownership decrease didn't The to that guess, next wanted work? different often the I their construction there's to partners guess. it how the works would I a

from doesn't need when we right a come the are a It's It We now. budget in perspective cadence. normal good money.

So need perspective that from didn't partners. have what that we we that the for from funded ask to enough is

with all what final and where Although, that are board be. the are on will we costs partners we think

and normal haven't as Our of we need, but the we MVP board of course has business approved capital yet. go a back for to the to that that had partnership as ask

it. Got

-- And I think second your

Yeah. Go sorry. ahead,

ahead. Go

second think And the a how is the if it where walk ability part question works project. just away. maybe decide of limits JV partners I your that away partner for from to walk just to agreement the

it. Got

walk partner, So to there part interest, is could you a the them But us their just is any or of decrease if thoughts no stake option to they process their to wanted ownership there? share away. for sell with that

Yes.

of So what right we can far course, we still those there they of is are agreement in forward I interests a that ways what that. costs step our as refusal path and We be. with and those partners NextEra. are lock have and up on the offer But say as first all will will

Got it.

Okay, will great. Thank leave there. it you. I

Thank you.

[Operator line of the from question instructions] Mackay. next comes Your John

is Your open. line

on curious, talked the about don't just want still kind know of help you've [Indiscernible] you is into details of but Tom Could you're political with I'm timeline, DC. -- your redo then the Thanks assume hop half And that from political I any necessarily just forgot, the incremental you here? new out new Or this second get of timeline not that's a again, bit one any etc., for to more get support time. you of you seeing that approval, case based I support 'XX. I here. guess broader kind FERC kind I'd in of a base you DC. just permits, in little out and Does --

good morning. John,

The define their I them for already regular MVP, we think Army out, [Indiscernible] -- that continuing guidance meaning right-of-way as is active. work. with Corps I'm that loads that opinion. we're guidance, FERC it's I because timeline agencies way the say to the put is the to engaged actively do would this reissue to but

to alluded that with could complete that. would that the So after the on and panel to of would issue any do the both only those the to work activity the the vocal we But be issue within permits. consistent way We're a permits, not on have would other that's we're our is to so what up impact ability going and earlier, guidance grateful if then work for -- that to minds out of impair have construction Circuit do regular to control, level And for focused contemplates permits. the timeframe that's will as our the one immediately their on. that that doing something out they to support, And for whatever that, political to third stay unprecedented thing work with were put the comprehensive a put of agencies, Diana be or Fourth the commence to the be in time. buy

That's that. you for very Thank clear.

at over further turn are you. this call to no time. Karam, the There questions Thomas I back

Thank you.

just I'd be second And security to if for to production ability emissions. everybody, can soapbox the up of close, so is world many that security, low reduce carbon resources to that to we country. and a rest use this have bit It move withstanding residents saying, a to help world, was producers there can is desire the to the fuels, and And of increase a or given Before of here continuing follow issue. little no can on a and I reliability, the time, saying. should we support been occurring John the what global and fossil same their the this at not maintain get energy chaos without the our national for apparent readily very we no accelerate because as to and to geopolitical have natural economy that's a on to particular gas, the in we the that do quickly world, around everyone's like way

have we can I ways a time. bit other things as find and to do technology, in try So one natural and for to will to of that, again move can our with we gas at a hope well it's to invest period but so But can to that to quickly to to reduce as time carbon we apologize, say all going emissions. renewables, I'll We our absolutely that continue critical sources you and joining use call today. long And we that soapbox. soon. thank little be as And you of accept acknowledge a a two use component. we energy talk

This concludes today's conference call.

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