Midstream (EQTNP) 20 Feb 242023 Q4 Earnings call transcript

Good morning, and welcome to Equitrans Midstream Corporation's Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Anthony DeFabio, Treasurer and Director, Investor Relations. Thank you. Please go ahead.

Good morning, and welcome to the Fourth Quarter 2023 Earnings Call for Equitrans Midstream Corporation. call available this beginning XX of evening. this replay will for be days A for is the (XXX) number phone The replay XXX-XXXX. (XXX) or XXX-XXXX related The contain expectations. XXXXXXX. Today's is to statements conference and future call events ID forward-looking may refer Form for ETRN's Please Factors XX, ended XX-K today's and the News Risk to in December year XXXX. Release December to expected XX-K by these forward-looking from be Form updated that for as the today. materially year for factors SEC is could the differ Form XX, cause filed with And XX-Qs, the to the ended actual XXXX, results later statements. Also, may Today's certain call contain non-GAAP financial measures. to News financial reconciliations this to Please our refer including disclosures GAAP comparable morning's measure. investor important presentation for most measures, and such regarding Release

President and Vice Financial Accounting we Senior Macken, President, turn Brian Finance call Pipeline and and Vice Services; Investor Justin today Operations Chief that, With President, to Diana the Executive the Commercial prepared it Execution; Vice remarks, and and President, are Relations; Senior Vice Nate CEO; the Janice I'll over Chief Tetlow, Diana. Project President President Pietrandrea, will Officer; to questions. On Executive Charletta, After Brenner, Kirk and call open Vice Oliver, Officer.

and everyone. Anthony, morning, good Thanks,

into January support. past led you thank continued for the of Karam company. want we stand-alone Tom We and years As many his efforts role to started him Chairman. X, since Equitrans Tom Executive know, X effective of unwavering the moved has for as a

this the business News jump into want address statement Before I morning's we to the Release. discussion, from

us. expressed a Our Board with in third interest been strategic process parties with transactions have in engaged has that

strength our our near-term by the assets. view surprised given of not expected are completion of We interest MVP and of the this

is with and the ongoing. Board has outside advisers Our engaged process

expect, questions we not As this on you addressing matter. be may will

on the business update. to Moving

safely, at total second permitting completion cost a and estimated of Our XXXX ranging from updated which priority focus morning, project's billion the protocols a to compliance. This quarter bringing targeted to billion. into steadfast the $X.XX maintaining environmental approximately $X.XX on includes we service MVP remains our project approximately

Act substantial the we of passing made XXXX, of Fiscal have the progress. Following Responsibility construction

exited our challenging we we caused construction we XXXX, As to guidance track lower prior productivity conditions, forecasted. despite continue than which to

unforeseen weather we including throughout of precipitation January, addition well conditions, much to averages. adverse considerably above encountered issues, construction XX-year In

plans longer conditions While our than significant construction of account lasted productivity, potential took and on the into had much which weather, far effects in anticipated, impact winter which, worse were these a weather and to reduce in our have productivity project turn, and factors construction has been timing updated improvement. cost our ability impacted recently, rates shown More our total resulted favorable, the headcount. These targets.

As of remaining. less to construction resumed the X cross. XXX roughly XX, miles leaving in had had Of miles pipe XX installed, that crossings remained than water February we XXX left when of XXXX, been

construction far labor. complete, and is the working project route. the through the February, a of of every the before will impacted sign the just and packed conditions hydro time spreads, crossings list miles the and expected the construction exit remain of We expect current we are overall which narrowed remaining only pipe fiberboard the the by X progress continues XXX have be tested of about purged we require work in Virginia. The will to and continue some day. If activities XX consist remaining which Trail further the construction finishing less of Appalachian less and [indiscernible] along of to these place the first commissioning all time in weather by service, areas limited construction miles crossing completing we to weather pipe in the and Once project are installing is on

challenges. on the complete, of the present the further most is includes construction and remaining While construction tasks the majority MVP difficult some could of project

the narrowing of bring and are this service. focus into activities scope to remains critical our remaining pipeline safely We

turn to and results. will the for Kirk then financial over discuss I'll operations it update, the Justin now

Justin?

Good Diana. morning, Thanks, everyone.

of Let's which volumes, roughly our X.X start was year-over-year. flat with Gathering segment. day Bcf we averaged XXXX, gathered In about per

we a continue year-over-year on For volumes expect lows. as producers again to be at see gathered to XXXX, flat we remain maintenance basis

in when fourth progress Our a majority project in-service that service to interruptible a backed commitment horsepower commence. full was who installed XXXX, and service of in investment we provide to deliveries XXXX. Hammerhead booster coming asset is be customer, continued by ready is expected to commercial and producer flow and make in-service firm for MVP to capital also long-term on days. The commitment alongside in made of the we'll XX,XXX be quarter, and reverse achieves compression compression a this the in In project MVP firm for Hammerhead

to has Our that expansion systems to of are and would for transmission several gathering provide connectivity MVP highly the potential project years. only integrated an and the of approximately and area been capacity upstream the currently basin MVP. X.X Bcf day direct takeaway constrained per add

this the MVP the pricing combined in growing Given demand in-service. and TETCO improvements expected dynamic, MX with to with Southeast

the several volume of MVP basin million the CapEx is Today, that gathering following over there within believe in-service. $XXX years, next initiated guidance we growth We for to $XXX a XXXX path million.

transmission. to on Moving

OVCX enhancing the cubic same expect to liquidity or in cubic have XXX gas Ohio will will feet reach over with day complete, optionality. can move customers we base of project backhaul and per the XXXX. to significant completion nearing is pipeline also about Connector second X.X of ability in to the Ohio, billion and are provide the capacity providing incremental Clarington, feet the OVC capacity. Once capacity, quarter OVCX, our MVP of place day Valley expansion to million add service which We per in expansion of

finalize feet guidance XX-year cubic the open $XX MVP XXX the Currently, the per scope million X months. in to commitments recently project Southgate project million is completed be utility day. The amended the coming $XX Southeast aggregate, in the to totaled $XX joint project. In the customers and million, the Our December, completed XXXX CapEx with is June targeted OVCX an expects approximately venture venture includes firm precedent transmission for capacity which XXXX. project. season agreements executed binding Southgate joint for In to million

On completed water in the segment, system. XXXX, our we of mixed-use the water majority

XXXX, million. I'll our call is now expected turn million be CapEx to to water to approximately the $XX $XX Kirk. over For

the $XXX Justin, of million, Thanks, million. This share and reported to full year was good Adjusted Net morning, everyone. approximately common attributable of diluted EBITDA income earnings morning, income was per million net million. and was revenue $XXX shareholders and we common E-Train deferred for $X,XXX year $X.XX. $XXX

free of negative net operating flow $XXX by year full provided billion activities million. reported also We cash and approximately $X cash

we EBITDA E-Train to per of was was shareholders revenue million $XXX fourth and quarter, deferred reported net of million. For Adjusted diluted $XXX share attributable income $XX income million. million, $XXX was the common $X.XX. Net common earnings and

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

to the EQT, thresholds million unrealized asset prices income by within shareholders adjusted adjusted in-service mentioned with conditioned $XXX reported gas related certain After Mountain entitling receive share payments derivative was E-Train of provision expense Henry exceeding fourth million, natural adjusting million diluted million on for by a E-Train relates EQT earnings related E-Train million $X.X NYMEX post second, E-Train other unrealized common the earlier. instruments is and through on impacted MVP's primarily instruments, diluted quarter and incident; Water contractual adjusted income which provision share from shareholders attributable to common the cash this, Hub for and to a XXXX. income. This was contractual loss these specific earnings per on After $XXX to full $X.XX. net of was million First, items, storage $X.X QX adjusted common Rager $X.X attributable last, segment; gain to contract in per year adjusting $X.XX. The was derivative net operating $X.X write-down the a was and a

which primarily volumes, Performance water we Additionally, due due the to relating by contract in million XXXX equity full income million partially associated quarter fourth to the increased of costs, transmission for result AFUDC by expense. Operating $XX a as $X.X driven compared compensation and which incentive full is water increased an million year fourth to construction. volumes. by SG&A income to Operating other water reported service the increased were revenue. Revenue expenses write-down primarily to the equity with lower and including related partially Award MVP XXXX, full the increased gathered as lower gathering the asset and fourth offset year, primarily Operating $X.X as quarter of for was an to XXXX of revenue expenses, million, for offset of year increase quarter fourth to increase compared primarily costs XXXX. $XX for of quarter by expenses million MVP personnel by approximately O&M to flat by and increased of compared million quarter the and last XXXX roughly increased increased was and $XXX year compared revenue depreciation in for well same $XX the

February E-Train fourth close record business dividend XXXX share at X, of to cash per a the the shareholders For on XXXX, quarter paid $X.XX common of on of XX, of XXXX. February

Finally, XXXX. initiated today, we guidance for

full million. We're forecasting million; approximately and flow cash EBITDA revenue negative $XX and For now to retained of to negative $XXX billion contributions to of $XXX income $X.XXX $XXX $X.XXX the million CapEx free year, net of million. I'll $XXX $XXX Diana. to $XXX million the free $XXX we're to of full deferred million and billion of flow million $XXX million negative call million, adjusted of back capital forecasting year to negative cash hand also

Thanks, Kirk.

safety I our to remain the Before and their to call to open we'll we open call the commitment endlessly minute take ongoing thank through environmental And like to that, with success would E-Train's compliance. They committed a to to you. questions. employees. Thank questions,

Citi. [Operator question Dounis Instructions] comes Our from Spiro first from

have the out balance it of course, sounds like started to I'd love strategic of but that's process, today. I'd, with

start and maybe MVP opportunity the there thinking with the value. it So some about incorporates expansion,

returns and expandable project you from of like it, beyond some believe Just you do ahead speak loopring if you'd X.X day a Bcf a not get compression to curious well? it's the is that. I to too compression if expect maybe as it but often of and just

This is Justin.

where able we've station ways scope, guess, stations. expansion. add go to fourth are we and we what we out to Technically, on at expect have probably starting with expansion doing in Bcf greenfield about we'll but weigh of that, sweet be previously. economics have X.X spot the the of I look, physically above That's range the for other compressor as scoped so. the will the to there are probably the the Based a day talked So

you're limited looking very investment. a the In is probably this because terms project range to compression in strong X just of multiples, build the X to

ahead, I Diana, it of you like potentially Construction, Got some looking at but just news all on the it. some that like there MVP issues here. are appreciate anticipated. That's helpful back And had more It maybe I turning from was seems some that kind some sounds and process complaints. the with still color. of routes guess runoff local local color mentioned, reports, to the challenging rain

make of perspective delays from all Just weather are sure in want the can if triggered issues just have an standing, oversight permits confirm sort you good either? not to still any

Yes.

but and So the I land far other has good, closely actually a shape. working agencies. there working as up as is cleared there, -- Virginia daily are issue the the that the think turbidity with The all good we are owner and permits inspectors DQ in the still with very bit everything out and are

comes next John Our Sachs. from from Goldman McKay question

up that theme on because here. last of kind it's the pick point just I'll Maybe

prior line, probably Curious Just baked X in terms into June of a frame service, to of time of guidance. month that you're just a think I few -- I in you've the mean past X kind at seen your of if a it's new months can you least months delays. your kind pointing up. benchmark,

and So right on just of how maybe watch feeling from more number think to that to here? any conservative trying you're now guidepost

to with decreasing each have the variability has we're cost of of good last, think, some the still and we but test. the days that I obviously of weather, that the timing. end next and week every to able We narrow rain, as look With remain, before pretty Challenges us did month. February weather but XX complete they're been better. the get Sure. good, that weekend will

which So improved increase, continues lengthens to January. Daylight our productivity has workday. since

for handful but a as April significantly have and to substantially work, people require some which sensitive complete boards steeps, commissioning to work of less planned We will left will the not and be weather. is

how -- that's So it. kind look at of kind that's of I

construction March be mostly up will finish April We will commissioning. and through

past, the Is in think I about talked that, fair? you've about month. being clarify a to Just commissioning generally that

have it's to And our to on pieces, and gas purged we that's miles go. March. packed, in pipeline. we happen compressor of and our but sometime station, will XX already as which have Yes, complete and get in we couple third been still we'll them and work gas need the then these commissioning after We've we test activities. other hydro it,

So month fun. real is about a a good,

Maybe incremental guess revolver. on on these new this you're in your leverage got you. of ceilings? just some Kirk, feeling a the how and the buffer question CapEx you I -- cost your I context second here, that is Maybe just versus frame about up think, Maybe, the increased for relief,

good really about ceilings, Yes, the buffer.

for leverage X.XX the covenant been QX work did then really down to we quarter. good X.XX on to and it but for the back we comes this, and Xx X.X banks what then the following and QX, to on got raise to with So is have --

question Fargo. from Blum comes next Our Wells from Michael

to we'll last reduce as dividend the Any just CapEx deleveraging of balance was some Wanted Maybe lever, get to with debt given this free stay kind to the higher. clearly, a sheet at since process? up is that spending, the the question. that dividend point cash thoughts on leverage thoughts the all on to your accelerate

No.

anything any got the right haven't about with now. We doing thoughts dividend

we and chunk at there we looking on markets increasing can possibly is will focused as a will delevering, $X at have that there. We've right service, said, and MVP in and soon amount the time. that as that billion that, are project financing be be We if to turning the we MVP debt of think, we million on are $XXX to reduction in that I big

that kind helpful. after just of look these That's outlined. sustaining ask just in-service. And some of about it. discrete of if like to we And MVP's ignore already kind then you steady-state projects CapEx Got wanted Okay. what would

about to thinking you required have I should overall to CapEx CapEx view Is we is total cash sustaining it's kind Or $XXX you cost what Slide think about? of know there be I that, million of more you of million. would X, flat? the like that business talked flows keep as $XXX the the of amount

in gathering for that segment. low $XXX 'XX this as terms the number gathering some time our that So is specific and 'XX. think now We're And probably of of at we to for $XXX for I we've sustaining year, million to guided end look to the million now range CapEx. on

in you to if for If closer compression-related take growth this the the probably some segment, projects, the answers works of question. we're $XXX million projects that your we gathering that have year, that

question from Tonet next Jeremy JPMorgan. comes from Our

Just that bit the on It from if EBITDA wanted last like to question the seems a a expected have with off we here. Hammerhead ticked correct. down disclosure, start

could talk drivers the Just some you if wondering about of there.

Jeremy, is Yes, this Nate.

to really and directly from in-service. tied MVP's slide that firm million are which So Bcf of is day a we commitments -- now reflects the EBITDA, those of $XX X.X

had I a XXX of think day previously about on included that uncontracted capacity. slide, we

in the remarks, pipeline, Hammerhead it volumes pipeline, but the moving on we've mentioned is opening been that bidirectional. Justin it

have beyond MVP. on $X million So will and about with volumes. of do those pad revenue have we 'XX, interconnects that's coming here, another other moving volumes north we flow on In pipes I think those Hammerhead. midyear We earned

to additive the that's $XX million. So

EBITDA the to we're that's $XX timing certainly, the just to started earn in do So MVP to cleaned that the in-service, but of million, that directly slide I that make and to really we above up think attributable 'XX. looking

a -- recent too was fine of risk -- is weekend. XX, the And to a see at just line, the the lot snow considered as that -- MVP wanted you what is May there it. time point bit on most today, just that there, put bit the of when and of June Got X a there's dates a of out of bringing over

wondering all here. that's Just considered if

this if point. Sorry, fine too is of a

told At get snow right least way. no me didn't one the did. We we the on weekend over

don't think we down So snow there. I had

is second good. that that's now, That quarter of we're -- where we as So are. right

touch don't point very review, to bring talk appreciate far reason to this. if want about the any That's on as discussing just helpful. But is versus or in general, why, in past? the this you it. Got touch forward? today there any on Or can't it strategic And I that as

Yes. We're today. to not that going comment on

from Neel Our comes of Mitra from next Bank question America.

see complete I are wanted to the you understand and any just challenges we where important Appalachian how Roanoke with take would crossings, there's Trail to and X and that long there? River, if

Sure.

we progress. trail, made the On have We're XX% about good at complete.

We mechanical are equipment down bit. within we rates. us a are the the we when slowed had making drilling, But have that has little issues good

good pretty XX that about like have feet -- It's left feel I The feet. XXX So it's we Roanoke, bore. think that. about of I

have under going. We're feet We about XX going, is slow it is the but river. It left.

We're So just I It's the feel water. under good. been slow.

requests that Or crossings? variance ready there being Are of these path completely go filed for forward? to are any you on

Yes.

I approved there the X Right XX/X with requests that we're crews. just out XX/X It's for with there for operate trail. so is Roanoke, we Roanoke. variance now, can already working So believe have a X X. we

existing for but speed Our us doesn't approval, get it guidance help -- that has things to up us. require would

it, what do. get if trying we So we're to can that's

follow revised I with on to leverage covenant kind Okay. question you the sheet. of upward. if wondering on up where has could know Perfect. going increasing I peak balance And been one I'm leverage the your the see just just costs? ratio

the is revolver that more covenant amended cushion. adequate we Yes, than believe

come then amended would that high in project financing. probably quickly we targeted would very And the after expect the this do MVP are that, with X level We MVP we down in-service.

Financial. UBS from from comes question Reynolds next Our Brian

seems had prior room on follow to based your amendments. on facility. the you like still It enough up run to Maybe credit amended

basically take X.XXx. X reasoning kind and to above of partially just to curious it So of the

that? behind doses does maybe the periodically? debt Or it drivers of level facility of maybe the the and to influence decision some some just Is the wondering of amend extra timing MVP Just conservatism? that

primarily should for action not on that. to signal That have we was it some any it didn't ability MVP any just ourselves but going with, combined regards execute our cushion concerns to and adequate concerns the financing and conservatism so give that with to forward,

off Just Brian. any the to hurry take table,

you of understand know And of a around some just question. Spiro's sense. of issues I help there the part will around projects. me permitting were -- Makes Southgate leg these then addresses be Okay. expect maybe coming to the we follow-up that Or to should Can scope as previously, additional that how those concerns permitting months the maybe the in some new pursue over to there? filed of project the some permits jurisdictions project?

start. I'll Yes,

So the permitting There'll the crossings challenges that the certainly project road. be could things revised less considerably. other stream scope shortens be and down

derisking think I it long that ability more exit because revised scope goes with to So derisking the a and the way. way we're project, here our we're comfortable to

also We've removed compression. the

helpful. have is far But permits. That that's So data is out but permitting will through we'll route pretty The to to process. file shorter there. we great, need go still the

yet, route. the work leg started We've been the quite and haven't have we a this So but all for time. we have that working route long on

further no the have like to Diana in closing for remarks. call to I'd back queue. over Charletta questions We turn

it. for Have We much very your all you appreciate Thank great a time. day.

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

You may disconnect. now