DT Midstream (DTM) 28 Oct 222022 Q3 Earnings call transcript

Good day, and welcome to the DT Midstream Third Quarter 2022 Earnings Conference Call. Please note, today's conference is being recorded. [Operator Instructions]. At this time, I would like to turn the conference over to Todd Lohrmann, Director of Investor Relations. Mr. your begin may you conference. Lohrmann,

welcome, Good morning, and everyone.

forward-looking like we statement to you started, reference on would get I to to the read including X the remind of Before Page presentation, statements. the safe harbor

Our refer GAAP the Please financial to includes presentation the reconciliations appendix. references also in non-GAAP measures. to contained to

call. Vice to are I'll now CFO. morning this and David me and start Slater, President CEO; it President over and Joining David Jeff to the Jewell, Executive turn

thank you and Thanks, joining. good financial to Jeff growth turn Todd, update everyone, and other development discussing third the performance our and today's review on start financial initiatives during major I'll by it an projects review for over and call and executed morning, results quarter outlooks. I'll key provide and to quarter, our Then that commercial our we our initiatives.

that, So delivering results. we strong business both another segments with quarter great had with

on of second communicated the I towards our the business half call, we the to weighted growth And As the year. plan. running be quarter ahead of second was expect

third $XXX can the performance increasing results, EBITDA uplift the in from Millennium acquisition. range adjusted recent base our Pipeline our million we growth. quarter a reflects you As that XXXX we are are $XXX to business, and guidance million, And as which see to delivering result, our strong from our

ago, that and our for in opportunity the few on our us directly This a a weeks with doubling export by previously ownership is impact the expansions. And organic of resulted A Pipeline on combined us interest to a thesis. in asset. long expansion, a Bcf acquisition closed our final in great cubic Millennium aligns helped for Bcf majority capacity focus we approximately close our be additional capacity transaction firm the opportunities risk I'm contracted day the increasing accelerates with phase, report our asset, timely our by accretive, LEAP are This which from Millennium, was to immediately discussions day. to and plan growth of ownership pleased further LNG Gulf we owner on commercial access announced to million another to efficient growth on example in X This add LEAP pathway XX% term fully add provide XXX increase core owned in day increase expanded we investment decision feet the and significantly premier we capacity expansions, attractive the for investment this are markets LEAF XXXX. and to ability Coast. the We was our pipeline to incremental a of of contract. to will quarter this latest and XX% ownership which Haynesville X.X remain we've domestic very and This and will continue segment, this economic reached have the contribution on another which in excited since and With be XX% to pipeline, X a our active XXXX. phase we that develop customers XXXX, successfully low our further we'll from and system is

outlays both on from on this successful projects ongoing solidly projects. for an in we schedule remain projects our been perspective, update growth optimizing year. have these Now for cost All track, and a capital and our

plan customers' portion will expansions. we Union phase completed Blue quarter, XXXX, supporting expansion, and first continue a our through our drilling the third of LEAP our quarter of to the in During which

supported also third expansion placed incremental growth. our in the We System which Phase X during service Appalachia Gathering quarter, volume

X-year NEXUS, of as agreement we constraints at remain producers. takeaway Appalachia another rates. for for an strong see well as interest capacity on to new issue as continue out attractive NEXUS And Stonewall on recently We executed

EPA We CCS end plan to well permit to through with in financials are are application, our pass to now of the VI and Louisiana November, target. filing I'll you over our Class file which we also the advancing an from Jeff it and by acceleration our walk previous our opportunity quarterly finalizing representing outlook.

expansion confidence total a XX% increase from projects across third averaged driven in-service was both the $XXX which Segment NEXUS. acquisition. the recognized good rates driven business capacity Northeast we XXXX and was both feet In the the delivered our gathering in Gathering the and in of by our short-term pipeline were Thanks, $XXX were the strong expansion. from performance the impact onetime quarter we million fourth third and improved of is Haynesville our by guidance after for David, quarterly EBITDA quarter, higher Operationally, on segment to contracting of overall With LEAP performance billion results and volumes year, cubic million a in adjusting higher includes segments. a was quarter. growth volumes strong Union Millennium EBITDA Blue of increasing to in X segment regions. on by year-to-date Pipeline driven results sequential the settlement over increased $XXX driven that range also the The in second strong both morning, are on million, quarter, adjusted and day balance which revenues XXXX of the to delivered which and QX uplift due everyone. pipeline adjusted by gathering

are also reflect $XXX $XXX favorable the our and capital range organic overall acquisition growth our million and million efficiencies to We moving retiming to on projects. guidance to Pipeline Millennium XXXX

year-end million call, our million of outlook will acquisition. our We full Millennium year Pipeline provide base long-term Additionally, an complete also which update range uplift are facility $XXX to our ceiling. to XXXX, adjusted providing structure I look on sheet upsized incremental our wanted year another refreshed fee a a forward to EBITDA we out more the and of flexibility. sheet plan. the regarding back raising and for Xx when our XXXX for capital update included our growth guidance view program include balance ESG strength our business this to the the early on language and $XXX to reflect XXXX leverage grade. fallaway remarks. month, David investment pass lowered details and achieve to our for our to credit committed term Earlier billion, of and remain strength ratio by our to I'll we over extended revolving we closing We to now balance it $X the

these in on our opportunities X focused develop forward Future the initiatives, to agenda, the as we seek Hub. We remain We advancing Jeff. Appalachian Hydrogen for organizations with the clean Clean on Energy and industry energy look are Regional focused to we Thanks, energy participating Appalachian transition ESG region. and groups collaborating

is summary, very can we in grow pleased financial, positioned So operational up commercial open beyond. the stable, questions. XXXX and very the with continue deliver and well to durable and significantly 'XX for We to line successes well for returns 'XX now our into be and and company

[Operator Instructions].

comes question first from of Your Jeremy line the Tonet JPMorgan. with

guidance want wasn't XXXX, bit little for about and with base is could there to the a if reason there 'XX. Just your to that relates kind a more especially to business bit as think of a you that Wondering the on in update dial it bit help improving. regards quantify rolled kind or into commentary of any that us

just wondering what those you So I'm can lines, along say.

on year-end Jeremy, call. the a look yes, we'll provide refreshed

out sometimes the of our you of a customers on year, settle year. the know, next into early their planning until end don't As even lot the

want we you So really clear give high-quality and to a look.

that to refresh And just confident everybody for we're like we'll year-end We're with going the that. providing right So on I sit call. said, now. tight very what we're on

say can was more local it. I CCS Got state Louisiana, also on in there. I the wondering, guess, you thoughts primacy on just the I guess, getting in what environment

infrastructure. Livingston pushback against think kind CCS in I some saw we of Parish

if of on could there. what you update So you wondering kind just on the ground us see

Sure.

well is accelerating the So Class VI our first thing we're permit. that

aware very do get EPA expect that that with as will but is working the We primacy, to to when that Louisiana federally. to unclear occur. We're

we forward move So schedule. want just to hold to

right We're level, engage here officials business, So individual we local the project at in through on normally November. and local do doing is the landowners. this very which with happen works all details, including state engaged our the locally officials, now will the across that and what

the into now. in really to I local of that We're say to that is engagement And that the So of everything more don't details right suffice project as get forward it this Jeremy, at sort that's we're want in season. but moving season point, planned.

That's helpful.

what real prospects coming the are Just is X-year that of through? last was X contract those size Who agreement quick again? what here. And for And with? more the

You're referring to Jeremy? the contract, NEXUS

sir. Yes,

Yes.

So investment-grade that's information contract, public million $XX X-year will and be a it's counterparty, a day. this ,

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

exactly I increase the asked guidance 'XX like so I want you just base what think half, this, I half break said, year up could Maybe that's just -- some are Jeremy it, looks but you I of you other you at is of pushing follow under wanted the maybe a kind pick seeing just far out Millennium, to is business. again. higher? to specifics. this up like little It the on

give we're plan, few I details that we're couple more corresponding Jeff to which incremental them came just earlier timing then portfolio than volumes the through. a say Sure, One on. little of a maybe But a of maybe can provide expansions of of favorability John. our can is a revenue and Jeff, also you seeing a in the segment. you in And on some that. things. in original pipeline few some come I'd But I'll and details. we the give across in had few thoughts believe a you allowed flow those few flight

morning. been the our the of we've seeing of good we've all across part providing We -- Yes, that saw that's of year. favorability and been all continuation year. what throughout Yes, the platforms. We've the really discussion

that saw And quarter. same thing in third so we -- the here and

the which, a couple we're that incremental term, of short had the of we're everybody to just that and again, LEAP some We to. of that's us. very confident year, year-end We feel around in also point some providing places, the the that has added noted for about around we've we we favorability other to we'd capacity also But full that optimize to provided. guided guidance which able what you guidance

talk gathering a EBITDA been a little margins. and volumes you We bit just over and Okay. less that up quarters? pick overall more. could trend and gathering There's maybe about margins on up you're where. bit volumes saw what between a of next on of little bit the then seeing couple should year than there how all forth And little let's a back maybe Maybe

remind everybody sort maybe working some I'll portfolio. this of how John. the Sure, is in just of

on system. gathering some the haul is activity, for our on that what of coming So I'll in LEAP a short call

monty full gathering the different seeing we're delivering and rate that we're then volumes what but pipelines. doing call gathering gathering So where a and the ramp, at to through than the treating coming I'll is

So guys the that's to way you probably through. understand easiest how plays it help to explain that

up following Or is side? kind growth you into Any on and those 'XX? looking just of that us saw on roll the the on as are mean we're sense look in off? share you can as going Maybe third that quarter should volumes volume fourth in short-term forward quickly. quarter this we ratable I

Yes.

continue think to see we're going I fourth going quarter. the volumes we're strong in to -- have to

kind today. of sit we As here

So I wouldn't that's fourth surprises to quarter. yes, believe. through, in play expect And I going the any

the line Barclays. from Solecitto of comes question next with Marc Your

that or be ramp should here? today. update of through capacity Maybe just Union quarter relates sequential contribution in as increase Blue XQ where expect Should think volumes on Haynesville the solid the was the the with it we quarter. ratable we came expansion to then to 'XX, here. are fairly the from And from really a that volumes on on just Congrats partial sticking any

Marc, comments the Thanks, for the quarter. on

in with quarter. maybe just the the we'll brought through we quarter. So incremental Yes, facilities start third

more our the what going rate what fourth like. look quarter be So that probably will exit, exit is I'll of to call indicative

off-line of just data a front front that we be honest in up can the sitting next you I numbers want terms make having follow And have In comment with of around 'XX. don't me. certainly of don't details year, on without with in to to me, those you, I so

to was what rate there, XQ? And up end the follow exit just at of it. Got the

Jeff, have do that handy? you

page X.XX. on where Yes, Yes, for X, we the were that on can at average you sure, see page Haynesville, right is were got Page Northeast X.XX. quarter. for right do here on we've -- our volumes --

So for average our we're right at about Bcf. X gathering, total

Blue there? capacity of Blue million feet dynamics could now And XXX it. think million on cubic and you you've Got Union the we of LEAP, X? there then lead mentioned cubic on some of coming talk XXX Phase the capacity to Union, being more capacity opportunities Or should tied feet about on is added have expansion you expansions on with

Yes.

I think to some picking portion expansions, Blue system. to those of from Union the we're expansions, is up of is gathering that for fed a simplest third-party LEAP gathering gas describe that the of way to portion through going the going a be to it But be systems. tree

line Your the Research. next question Wolf of from with Alex comes Kania

Maybe question permit. just is the the on first Class up well VI following

the time process terms it really also about about the through how coming EPA of of of just then thought process it. kind tax understanding in an CCUS from carbon well the of customers Just goes maybe as And process. Was your and that behind interest from accelerating thinking maybe IRA increased credit. just again, lines acceleration permitting

month process. acceleration that's we were we with a just filing. the And is go ready Sure. that say to time And to Alex, through great question. if freshly us, the shave move we off can line, great. want I'd for

it's no that. more than complicated So

In I from actually terms a that the not of here, where once lot people there's way. lot through think -- process, we I'll well, a it been say of we of go file, there's

really navigate we get But to get I'd we be the directly be consensus is again, process closely stakeholders put it, regulator as think with better a with to we've forward get navigate But sense you window. as goal as application. think of the the XX- we we into requirements. as an we'll more all I with through engaging as different line. those high-quality general learn I I can said transparent time the with earlier, and the been we'll the like more a XX-month and say So working

process. So that we the through can move swiftly and successfully

a follow-up Millennium. And Great. just on

draws. with kind financing costs could interest you about on of Or if think thinking financed -- just little the environment? rate kind color credit cash the it a bit how was in maybe current obviously, how and Just the think do But facility give kind about time? you ultimately more you over of optimizing of

Yes.

Jeff we've in. position. then of So to, has really spun, to to fill been But and start sitting I'll maybe significant a well are on over ahead had we And running cash plan. alluded a The since performing it pass as business yes, you in the be we it his provide for Jeff, in to term top maybe Jeff component comments, on cash acquisition. used we that significant that comments we that are using mid And But can some as then a of and year revolver alluded longer-term up. kind you maybe view? well

Alex. sure can, Yes. Yes,

the is So again, strategically we're way really up. we pleased the balance sheet set with where sit

we We've pay and so David because We're use so of got revolver use ability able ahead be got also And able able got term to maturities the with plans. down. available could that. take reviewing those. any like do a the more activity both of with reminder, that term And now and of just on we the that, We the a we've And do how some mentioned, out. financing as to options, on project to of use we're B don't then for We're we've due and that then of we loan revolver, have cash. options several and got strategic or be years. to to that we've what couple capabilities,

pretty we're sitting. we again, lot a got we've again, flexibility how overall, pleased this. But manage we're where of in So with

Robert Your next Mosca the line with from question of comes Mizuho.

exist billion part purchase -- Millennium purchase? Just Does parcel? that X-year wondering Or $X.X exists outlook, your is how fit kind that it of does and X-year that plan [indiscernible] Millennium CapEx within to billion. $X.X still

question. Great Rob. Yes.

using plan acquisition. of some So this in that I'd we're original say

kind will long-term to refreshed our forward on bring alluded a of year-end on that's we call, we right plan capital view about -- yes, on it thinking But we're the call. kind how As now. the of

those I'm portfolio of again, board a my of couple the up business that, as also refreshed billion, sheet side. balance significant deployed pick portion a to plan across of the knows, flight year-end earlier we'll of organically ahead question. call. of that a and across The So everyone next we've the of is give on view call This total. already on all the $X.X And running from going in piece that But comment over midpoint the the years. a the the are amount earlier is projects on on you

So it's enabling additional balance we additional us sheet investment pursue flexibility as opportunities.

decision to scale like you stake it. maybe bit deploying Haynesville, Millennium talk not with have this more Got high-quality a asset should a maybe as knew playbook I little the to And you That's to And building contract buy it's helpful. is growth talk about of in we, kind was Haynesville an the opposed the more that areas of that hoping now? you're this just maybe for capital the was can about, mean really pretty right base. M&A might

that Yes. of Why the rationale sort strategic acquisition. don't first I address on Millennium

whenever we off, for an ownership development that very history number we deploying the is term gas intimately extremely So side. general market the asset side highest serves capacity long asset, price natural it's Very would demand everybody, priced of just around is America, to market us asset. always on in market fundamentals at signals know is fundamentals forward asset one, the on for on asset -- first that we're which of North and tell remind our strong that, an this look curve. the New really in the Millennium, And supply closely with a strong market England. the and capital, supply demand And that signals, our that strong the the fundamentals the short, because

assets. the around strong very were fundamentals the So

it's that capacity incremental very with in cash difficult irreplaceable our flows. with asset an area alluded thesis, of contracted the build to investment fully strong, in. to, is aligning stable It's country an of terms In you as

So thinking. of again, that part was the

The TransCanada was would partner we've one good is wants at to National our other And really in -- it structured have partners partnership and be preferential Grid. that partnership if agreements. since X rights exit. the part We've agreement the had built is asset partners way

transaction. when to with you happen, to is option option and can't that's going predict had exercise So opportunity we but that this portfolio, that value an value our in

So mix. -- the which our in adds some it to and pipeline I'd is our segment. say higher segment value scale lastly,

So all completing into for that of those rolled rationale considerations the transaction.

helpful, was that hopefully Rob. So

And you in with color. flows. commensurate dividend you year, great a that know your this talk to can dividend I that to plan the board was you next why you something that guess That early said the cash grow growth guidance thanks. No, is highlight might maybe past, higher end nudge your when as range? to I lastly, you've towards Yes. And the of

Yes. Rob. Yes,

as consider as our for to in piece. what on our shareholder the flows. that's continue our grow cash and line. flows. cash our grow cash will we're flows grow right, guidance dividend. But about the as continue grow, we that's investment And with about a about to in we line line we're then probably We that us. far thinking it So in believe going obviously, of dividend the part and talk --you're to thesis want the it dividend that we'll part We'll as sure of with But our total we'll with return

dividend, spin, of that this And right? behavior future. similar first -- this reflected the with we behavior expect we year in strong this had you got and should grew in a year, year, that and post tier really out did gate the the We earlier our

of Your with from line Fargo. Blum the next Wells question comes Michael

wanted X Would additional thoughts assets, other see second. Millennium broader to for here. have you in stake? just to regions? on of broader want get you interest get of stay assets kind M&A the increase really your opportunities your just a at and I on Maybe operating on we look to thoughts to your already a I this. more acquisition Do

of earlier, strike, ever as to partnerships. assets, look option in for Sure. at it if our I refer that. those partnership have features I options unique value obviously Well, said those as we we and all of will all

deploy look we at it we've both said As the the organic set in capital, really when been have organic in And just past, deploying we've executing and have we -- the Haynesville. rich Appalachia those. opportunities, opportunities on we and a the like portfolio meticulously to just in of today to

the those What of would again, that event We that with haven't missed was been option But incremental value truly plan. any original occurred. it happened Millennium was opportunities. have outside and

with go shareholders the M&A value we to on So that neighborhood more of back broadly, equation day, and of We our in we to end consistent assets the in look creation fit the the creation drive are capital of at and have value thesis terms aware plan, they at you, our very again, that that But them. market. investment have that within for are long-term to the they the ultimately. are

lens So the to M&A of in sits but it priority. organic disciplined greenfield. our also very priority aware that we in vis-a-vis continue stay of and #X maintain aware allocation on it, where capital It's probably

it. Got

sense. Okay. That makes

question, the Second growth back maintenance want just my if your math sure off I'm I looks like came for it CapEx XXXX both and to down. CapEx, make correctly, Millennium doing if

you 'XX I'm of forward wondering terms speak And does going a So that could beyond? run anything and to in rate or mean into that. cadence just if

to a least down. that defer reduce I on math capital, always on CapEx on the And -- did returns alluded or projects. correct. we're ways come outlay impacting the second And quarter on on successful of the doing to the any one, without number projects the impacting were schedule new that that call is at enhances We or is of comments projects little projects. those of which at my think we Sure. I They one your did on bit looking in the the the

we had I off update efficient to being in then more for And little a in here just again, some were CapEx work and in reflect we be CapEx the QX. doing as wanted vis-a-vis achieve the we're guidance, group to this of construction on able able that year, on hats the what the original think that. maintenance to maintenance to our we So just the

this to for further questions no turn Slater the I'll are remarks. call There at time. closing David over

and you us all certainly everybody. weekend, your joining for day a and Have in Midstream. questions appreciate care. interest DT thank Well, Take the a today, great we and wonderful

conference. today's concludes This

disconnect. may You now