Midstream (EQTNP) 1 Nov 222022 Q3 Earnings call transcript

Good morning. My name is Rob, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Equitrans Midstream Corporation Third Quarter 2022 Results Conference Call. [Operator Instructions]. Nate Tetlow, Vice President, Corporate Development and Investor Relations, you may begin your conference.

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

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

quarter and third Today, revenue of million $XX deferred good everyone. a $XXX including adjusted we million. morning, $XXX and loss reported EBITDA of Nate, million, net Thanks, of results

cash flow on also our year few Kirk full We financial will provide increased details results guidance. free the minutes. a in

agencies the Fourth of discuss through vacated time in Let minute. actively basis with path, early remain path second the timing increased the in factors engaged the these On Today, in million, announced we in Circuit the that of normal with now XXXX. permitting of primarily that me uncertainty permitting the permits a some quarter. analysis MVP. start for on circuit an all impairment we the since Kirk the $XXX present Fourth of will

permits that We by hearing said, high courts Circuit to the agencies this used panel legal last all with on well standards West are overruled a of the of the the than produce to evident consistently Environmental conducted week as panel Virginia it based when issuance federal for court a the unreasonably was bar. XXx, regulators again by to conclusions That MVP. permit federal work to same challenge and of will regarding state that Protection's Department reissued as more exceed that Virginia has the continuing courts XXX hostile appeared West certification, Fourth technical

there As remains timing. the project, some agency on in federal federal any front uncertainty permitting regarding

work Circuit view for for Notwithstanding As proposed I said, the panel to Fourth are their issuance. we agencies they that exceeds and this permit well-established far engaged our in uncertainties, schedules refine deference. with boundaries as develop these agency

will continue pursuing law. We under available the path existing the permitting

significant encouraged and and drawn Congress However, Diana? financial lower to Diana in to inclusion for from consumers, to the XXXX under and legislation. pass the gas And Congress off since We representatives on having now the capital, discuss XX% the continued adding efforts administration. to get the pass project of results. project. national legislation complete XXXX best Kirk Through help it Biden has half the by of that of We security bipartisan legislation bipartisan natural to management being and with for to reform support, this urge particular, term. MVP's and remain then permitting path the Senator's construction now the permitting for infrastructure Energy turn momentum act early update, for in I'll legislation while and near flow the support will including reform in operations the of total by our is cost second and completion requiring energy been to roughly property, landowners' MVP complete work,

start about Thanks, day. Tom. X.X Bcf per third Good I'll gathering. we quarter, gathered with morning, everyone. the In

roughly remain maintenance levels to volumes will continue takeaway becomes see capacity holding We further producers believe A-Basin flat to until and available. that

year, plans slightly be year pad down this based year-over-year to timing. expect on development we current will For and volumes gathered that continue

or and transmission. will Ohio of about feet to project. In expansion the on The which on X impact deliverability Connector issued September, Mid-Continent to Moving cubic OVC add Ohio FERC the statement XXX a million draft expansion Valley pipeline, per Connector provides Valley access environmental day and capital our on the for to during XXXX. we markets is be X a for build multiple earn through $XXX Ohio. The of still the of to to in X Gulf Coast project interconnects half Total service project Clarington, in first is track placed million, times. expect

build-out. X are aboveground segment, In barrels. and system nicely first August, approximately the The XXX,XXX a of in September, storage of redelivered capacity progressing the month offloaded at and the the mixed-use full has completed operations barrels operations, initial XXX,XXX facilities. On we we we started on and Water of first about facility

logistics frac and reducing challenge water reusing Our daily in around and handling a are storage water producer play production customers traffic. job focused truck critical role very on And the services alleviating timing. ETRN

next will The storage which the targeted capacity operations second to have first XXX,XXX barrels in approximately year. quarter in of be is facility,

continue expect of For we EBITDA year, water to the million. approximately $XX

we've the have ESG, more quarter. than planned and Scope on pneumatic X have year-end, methane mitigation completed program. progress to we conversions, continue through conversions high emissions will or fourth low X By compressor mitigation full reduced starting pneumatics. in X conversions to either air on more sites Lastly, we This to XX% in methane bleed at bleed make the year, by

over CDP reporting we completed and disclosure, to now Additionally, questionnaire I'll TCFD terms the water in the recently on Kirk. the readiness assessment. and security to responded of turn call

the a E-Train reported diluted of to E-Train everyone. of morning, $XXX million. attributable for and good $XXX third loss was share quarter EBITDA $XXX revenue and common was Net quarter $X.XX. Diana, Adjusted deferred loss million shareholders million for common net loss $XX and we million. Today, Thanks, was

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

losses by to income investment from the MVP investment the venture, million that to tax tax Pipeline First, the driven by Second, cumulative to million due deferred increase primarily expense were on placed venture. Mountain allowance our a impairment in joint valuation $XXX our assets joint to Valley $XXX in the impairment resulting our

by $X contractual loss to gas gain the investment, timing gathering post-MVP's which unrealized factors, of at impairment decrease regulatory actions. is gathering to inputs challenges we a core sale for adjusted This primarily have is This result a common the the huddling attributable the assets. $X.XX. and is which of onetime specific third adjusted timing uncertainty lot related a $X.X in diluted E-Train of Equitrans probabilities, And the from of assets the natural serve low-pressure XXXX. on The probabilities of determining to variable resulted vertical also and net including a thresholds income E-Train and continued of additioned items, consider in-service a value was quarter capital to like we relates on provisions lastly, process and and permit earnings NYMEX per timing expenses considerations. issuance through E-Train is the remaining income. This sale around direct cost by reported the partially investment revenue increased year. $XX revenue. by million to $XX cash nearly same impairment volumes instruments, lower certain from quarter After million with the other third the service derivative same flat With by on operating third million last the in-service last Henry adjusting of for non-core XXXX quarter the And gathered is in Hub Third, million. higher Fourth EQT, prices a quarter exceeding water quarter receive and the shareholders Circuit. to MVP Operating that and of offset the revenue and was lower regard deferred these item year primarily from wells. share and XXXX compared was were was for payments in-service

E-Train which retired November reflect from shares in July, were to quarter, $XXX was common a $X.XX on shareholders will Today, business cash an In pay year retained XX approximately elected X. payment, early quarter associated of full of the on XXXX. final For EQT payment made flow million XX.X at that of $XXX to on CapEx million share in the rate decrease increase close cash and first our free a for purchased modest and guidance to flow. future and per quarterly X, of the The represents to updated up consideration October in and common EQT forego million we dividend cash of to cash November E-Train record cash relief. receive common expected free third

back contributions we million the to and to expect now of For hand CapEx $XXX cash the million. I'll $XXX to of now and call $XXX flow million year, capital free Tom. $XXX million

Kirk. Thanks,

executing completing We're project. summary, the and MVP, network. to premier operations establishing And gathering business on transmission organic handling and the well. base projects and a are we So our perform committed to water continue on in

We will MVP agencies continue to to With promote your take questions. permits work and legislation permitting durable complete reform we're from to and at federal that, the to happy same pursue federal process. time,

your from Goldman question line Mackay [Operator Sachs. Instructions]. first John And the from comes of

book Let's you talking the point? when moving more? parts start in I'm timing talking like just to you the in into what XXXX process of and mean the but this to Are that get I guess, of a impairment, I a there? of $XXX XXXX? trying way if of and understand start could end comfortable can kind you about to kind you're plays on million we MVP. risks look share think went a what the different I timing, about bit at little service, a

so. is along crews that summer into But XXXX, still know to going can line path Look, thanks. will MVP question. we Tom. And to partners, can our MVP with which of doing winter the Thanks committed in complete a or for fully XXXX. difficult the time travel, confident through we right? which until path, to we we're mobilize John, This service bring of MVP we Yes. in provide X regardless remain we're we construction path It's if definitive of another.

in we're remain the to order, national specific and we can energy right? opposed we relief of winter gas aid we our the crews committed provide confident, mobilize displacement with hanging and can the and deliver needed [indiscernible]. we do security lower exports that's is date So trying help that So that message through cost to construction specific LNG some as to consumers by any as XXXX, natural partners to summer can so XXXX, our remain into our we bring the message if assistance or of the on schedule

that's So answer to the definitive question. the

that. appreciate shift gears, let's gathering. Maybe I talk right. All about

that bit little of going a So the weakness. talked the I the about beginning water down, you line into year, causing was at year, of think that

your we're largest the the then Just counterparty, some if volumes that XQ kind curious, kind the is something there is this we quarter? in from that producer is saw think and going Or And of about off gathering weaker softness how of quarter saw thing? of that? maybe fourth of driving to softness same incremental we was we

is Justin. this that John, can one. I answer

that replace experienced behind we line And reprioritized ensure this period you lines water that because earlier certain the fracs we to year that that EQT were which a in issues their problem lines. What of are So quality And that We're call few that's time on required the I during of replacing was that as system select this addressing we think building us as that at we some the point. see Cascading did now. out. think on impacts I were well. touched to schedules certain

as to remain in that more remarks, will our schedule year the so this I see guidance based the basin, mid-single-digit in as out maintenance And can her at that you think I largely is impacted. I year throughout But we and said, on throughout built on throughout been point. the year think like volumes do out the mode us that their has infrastructure is that behind flat prepared Diana it expect touched the declining So of until play built. get producers that's

line of the Mitra of from America. Bank from comes question next Neel Your

provide that bit just color was give wondering and First had that? touch drill. about a EQT kind and your I discussions can Tug if for would 'XX little on acquisition, more if them planning going budgeting you of they Any impact forward? flexibility wanted base recent you've on with where them plan on and the Hill to

This again. is Justin

regularly their So EQT certainly, with about in we're plans. conversations

We this acquisition. have about talked them to

upstream the OVC we acquiring, built it, have system into assets are assets As around with the material any our really our assets. purpose see overlap gathering XcL That not they're that XcL an system. for really interconnect does

on broader acquired opportunities all acreage some a But for from that this to marketing. there the producers additional some continue EQT to we does best offer to much and onto don't downstream EQT see into this in Due we path really online, the flowing newly MVP downstream acquisition. see them certainly, systems that, I for time, At to system. beyond of on our be system to to even our that give And our any capacity. signal do the volumes And maintenance the And so impact markets. to best scale, bring really path when get more mode. there'll think volumes optionality our comes

time, us all reason things would at market. to away I volumes those with be any this don't believe So see play, for in at moving that

second And it. Got MVP. then the question on

that is looking legislation, mansion what an just believe doubt. through you And more last carve-out permitting then look week, permit? -- issues MVP finish general you at with the Could Circuit water to the it's you in up, the you noted hearing that's like about line? are some when something which is also the came get Fourth some noted And that created needed. the then kind elaborate on You happening this you hearing legislation that water permitting of for potential or

Thanks, Look, true things be can at time. same X Neel. Yes. the

a a in the that think Agency's it's overrides expert the XXx just when I particularly panel project. way, not stating we're conclusions to panel friendly obvious a

So, the that's obvious. stating

to with X project. include Senator permitting complete and and of The second legislation proposed Mansion's reform, Senator or forms the is that MVP each without permitting both reform, MVP permitting Capital's meaning bipartisan reform

agencies. expert way issued fully can't to that are and construct third just it's permits be this you overruled. reform. that inefficient So that certainty infrastructure our we're needs to country. believe that have on round critical issued been of of I permitting having from to we there if federal mean, in finality have federal an try And permits incredibly

expect the we'll durable, the court, with also true that would positive to agencies forward, this we with said that in language federal very relationship most brought whatever So our your be that and project. has can permitting to they which earlier, included there would going would question that to answer pass permits as this I even not so comprehensive But that, federal I were constructive us muster to friendliest legislation been permitting reissue is fully guess were the that take. court, if panels every of legislation that form is continue MVP we're

that we why the But that's at question. we particularly acknowledge country remain permitting your has unfriendly hope the been So need time, same reform confident. in to answers also panel to have and I that obvious that we this this MVP.

the And UBS Brian question next your from line from of Reynolds Financial. comes

contract and to 'XX? inflationary per follow-up Are burn is change rate quarter quick a just MVP heading Maybe rate by any or where there into the pressures just month. or changes that to rate materially cash

largely million been think for to rate between burn a the I $XX which permits somewhere continued the remained month, of and the court right-of-way, years. million vacate -- Yes. this Brian, restored the run has for has not because rate $XX -- X is maintenance

maintenance. we're property meaningful complete, course, too way of the permanently when there's right-of-way is So landowners' long. pressures restored, have the on not or inflationary contractual remain It's not or Because of for pressures. significant XX% really really we because right of far maintenance you

curious any rate capital on of 'XX, to rates that free flow the some of know on question should and into I aforementioned should free for impact kind then allocation little be the rate. debt just a interest with and that the have rate just excess Are in And flow an and on exposure. bit interest just maybe through 'XX. press. to could flow have your touch revolver we that And exposures little 'XX just about burn thinking But cash rising you there bit a addition, sum profile? that cash in you

exposure is interest No, Brian, we rate this have. the only the basically it's revolver Kirk. No, is

core perform Our right? point, generate and interesting continues setting an aside free cash MVP flow. significant raise you Brian, well business, to

a even but will pace, of, remains free level delever we predictable I'll so rate that slower at cash continue it, the So burn MVP, to the heightened constant call with for bring we and because to cash deterioration after on quarter. not our need to into there's we're the flow for MVP quarter service a execute free generating such while plans, question. strong larger Thanks flow

just Thanks That my on for as relates as question. does the moving it just touching and overall MVP answer those business whole. pieces to a

it, appreciate I So your morning. rest enjoy the of and

Thanks.

line Research. the from comes question Wolfe next from Kania your And Alex of

from maybe previously, just an of or it of terms just see updated kind to -- by expectation Or early maybe permitting what down that it's end I on to in just some -- Is extended? sense reform the of comments issued? of as the getting think goes maybe you time uncertainty know the you'd federal kind on lines suggested I final guess of just Great. you're was the it next. be government permitting. I before, permit's before have federal on is there might that, comes with question a when year it the a

specific to we for our bring XXXX, project mobilized in of but the date, on regard. I I in XXXX. permits Yes. of conversation to are schedule permits If hung like our the anything complete can current the want we're don't we that's don't talking relentless a I that specific that line even issued, the to. winter get a think We're agencies ability get X of circumstances this up Tom. determinative is are frame about within dispense summer the our the month and there's Alex, litigation. can issued just not -- quickly as guidance, earlier. If federal to that of said project to either ability in project or on this surrounding when I'd pointing the the way, move just the

Got sense. thinking its revenue profile it. the of updated year exercising a just going option, through lot question, an just next just sense might about That deferred beyond And like? Can profile. what kind the have you makes maybe and about cash then of how maybe the maybe into EQT of look think to kind of again we're flow cash that a now that

Pietrandrea. Yes, this Brian is

when they're about option, So relief. of forgoing cash rate EQT their million $XXX exercise

for into that that guidance but or rate that factor -- XXXX have forgoing XXXX analysis. did we And So later, we'll and me, excuse guidance going relief adjust forward. our we

question Goldman Mackay line comes the from Sachs. next of from John Your

to I decisions maybe In for potential Thanks still to about an permits? here. see water higher second if you've in just the news on. X continue hop to past, to to to these above we reversed. Is that talked possibility wanted get a of some court eventual the the and the go try bad court appeals look here

John, round second Well, cost more. questions of all, of first

So I'm not a lawyer.

to Nate talk offline. I'll that about

and that a the be law hard fathom there to received it's we're record. law going Right. give be so We issuing would enough, then Fourth but like So of the that now in would a is issuing I'm right to or the reissue from that that push we should different to fix? get environmental of agencies, we Supreme to we've is individual that broken us round deference is on many in and that But the in what third issues so right? sound of right administration continue case agencies. going difficulty permits before and to take a federal now, agencies to input issued with Court front comprehensive Biden the times lawyer, not do they're a I'm permits, that Circuit have the you positive with on permits that is as to the and going again, when like global of this is Circuit have for nothing have make permits capricious now, Fourth actually accordance really the of take the ripe the and for themselves, us that the relationships from the all that series arbitrary in to the based these to administration and SCOTUS When enough, constructive have right? and follow the lawyers, solve to to

plan complete our project in will, XXXX. XXXX you if in that's and the So attack of that of here, this summer can so mobilize we winter

further I'll And questions remarks. there to Mr. are back Karam, for turn closing this time. Tom the over at some no you call final

that all So pleased the And call thank have the interest continued for company. today. you we're in joining you

not rest does and have business, taking nor We we're intention will until consistently our not core off as see do That by strong our results. we can mean you partners our the eye resting no MVP. of complete

very in very near the will be that, will future, Thank MVP the bring a So good E-Train off country we day. service hopefully, off. you better and better into will Have be and much.

your today's Thank participation. concludes This conference call. for you

now disconnect. You may