DT Midstream (DTM) 1 Nov 232023 Q3 Earnings call transcript

Welcome to the DT Midstream Third Quarter 2023 Earnings Call. I'll now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Thank you. Please go ahead.

Good morning, and welcome, everyone.

Before we get started, I would like to remind you to read the safe harbor statement on Page 2 of the presentation, including the reference to forward-looking statements.

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

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

good and Todd, for thank joining. and Thanks, you morning, everyone,

over our review on Difficulty] latest and commercial financial then [Technical I'll During results, outlook. an projects today's touch call, to update growth provide before to turning performance and it fundamentals financial our our on Jeff construction of activity. I'll

with strong XXXX So for with quarter business continues full giving that, year us our guidance full EBITDA and line in early and year we had adjusted in confidence outlook another to for our plan, perform XXXX.

guidance the reflecting and $XXX EBITDA We to midpoint business of range $XXX million, $XXX are narrowing reaffirming the to solid date. million performance million XXXX to our adjusted

service, gas team in in-service our in to completion Our in be as expansion certainty. manner, service has X they important a turned weather to discussions X attractive expansion, Coast August, make our reach demonstrates QX recent LEAP consideration those fee growth active will wanted on ability progress I placed challenges. In work XXXX for construction supply markets year serve and to in hard X for Phase continues in projects, expansion efficient seeking our LEAP has capacity track an chain the our and its successful to which as remain running their we of many to and seeking well since LNG supply filled for was timely and QX and on by a budget. team the Gulf The X customers XXXX. We producers well Phase this and expansion schedule our X and immediately remains them customers out expansion flat followed for Phase our Phase our commend been date. of expansion late up great all overcame ahead The the on which attention quickly as Phase

know, a growing Gulf is interconnect the you Bcf will building are Coast, that are new LEAP and This As Gillis located on Access industrial to day the excited corridor. X to further demand LNG to and we with provide a direct project. the strategically announce we Louisiana serve access

] our Last area, and we in now investment X LNG the go opportunity LEAP interconnect with to competitive expected QX the service of new a in base. our expected with ahead building be QX Ohio in on Gillis and per which schedule final the on decision of add our announced will processing will Following LEAP to customer Carthage Construction [ service XXX expected growth, of approximately Access Union, network position. incremental on budget XXXX cubic export Upstream project Bcf the Blue diversify new of is we our new progressing to continue and day strengthening supply day plant a early quarter, gathering new in XXXX. directly Utica. third-party connected further feet are supply interconnect, demand a to million in a a greenfield

ability capacity demand fully the our Eastern structure. volumes expect customer period and take-or-pay This from NEXUS, play. XX- to cubic great an see XX-month over lease, protected and Appalachia. reminder, investments. On And another delineates development a to continue a volumes on XX emerging mainline. excellent is we highs, recently from day a execute the added pull plan our which we NEXUS ramp near our been contract construction strong to our this to all-time their feet short-cycle under NEXUS example for feeds running As to amendment pipeline takeaway of a on of through new have we've an as Texas and team executes million capacity are work its revenues

year, of the Our directly Appalachia the by expansion feeds also be system the which Gathering in is expected NEXUS. of end to service

definitely this critical asset, for lot is Eastern a durable it to positive of momentum growing in capacity there the egress markets So building offers Canada. Midwest strong, and and as

Turning to in and transition our platform project energy our Louisiana. CCS

well drill currently our working are Louisiana a us will to characterization through [ DNR the well. We V allow Class permit which ], with

on view to first Assuming the the final test reach seek decision of our results would half confirm XXXX. in well investment the we favorable geology,

When, weak in cash across not activity. surplus, summer impacted short drilling gas price the and growth. this our continues Finally, producer of financials the I short-term impact, in market are quarterly export and The Long-term our decline and forward which of to pass firsthand sector, production this a Domestic of the Coast. There LNG high if, world come. I'll one reflected deferral and for decision activity deliver across pipeline capabilities growth has to portion of certainly in is activity future year, and opportunities, our resulted on and you continues the we for gas are strong want its has timing, market Jeff balanced fundamentals a company. been generation natural $X supportive the backlog XXXX more is has to many take enabling to which fueled producer growth to a range natural in outlook. power completion investment Gulf U.S. a This address demonstrate U.S.-sourced portfolio. of to natural and it also asset the resulting driven very portfolio. Stable in prospects experienced over and XXXX of power price the pricing to prices assets. These fundamentals demand years walk waiting its has of demand importance us $X.XX the especially the domestic distinctive economy, lot our Storage to grow on term. as on of signal. grow generation now growth by across a is however, our our activity by our and a in steady and producers, right moment this is focus deep seeing long-term primarily gas to reliable and in durability and the supportive to demand U.S. assets organic through the

Thanks, David, a overall good from the third quarter, the million, EBITDA million $XXX prior and adjusted morning, representing everyone. increase we In of quarter. delivered $XX

the and feet million Blue overall volumes up Northeast, by lower results total the and the higher reflecting to XXX greater the operational cubic impact expansion. second with segment Pipeline the Gathering quarter. quarter, than feet the capacity a of quarter, were the the across $X third segment averaged prior Our Operationally, billion outages In quarter, quarter. In LEAP the of volumes following second X full approximately a second to up observed second Phase million were close gathering reflecting the the volumes from in our were day quarter, O&M. day from in-service in line the in return early prior results million $X were Union maintenance Haynesville revenues driven on X up Haynesville, to cubic the the compared Northeast quarter.

the of mentioned, are reaffirming million, EBITDA the $XXX year-to-date $XXX previously $XXX reflecting strong to our we million the midpoint range David million guidance to adjusted business and narrowing As XXXX performance.

midpoint distributions due flow $XXX million. our cash raising range also ventures. of distributable million pipeline favorable to to increase to guidance $XXX A $XX are We approximately million joint from our

next cash over do flow committed investments XXXX, If cash for capital that approximately free $XXX growth will with million XXXX, not most FID it our approximately excess remains providing for with current view year. and Our reduction. the reach be opportunity will towards XXXX evaluate allocation likely flow options for excess deployed committed we accretive of debt million unchanged XXXX in $XXX the

to strength an of rating. and sheet committed the are We preserving balance our credit investment-grade achieving

Xx share debt of below or XXXX on-balance expect We including proportional leverage or ventures. ratio at sheet to end an X.Xx below, joint of our our with and

the of the consolidation. sheet with X-year on-balance to Over to low to the we our and the assuming plan, mid-Xs debt X-s proportional course expect delever

and also growing $X.XX David Finally, announced closing cash now we Today, the declaration dividend of pass with in over to remarks. committed dividend quarter are flow. I'll back fourth to we our it line per of share, for the

Thanks, Jeff.

in XXXX early range we full and outlook for are summary, confident for our in So year guidance XXXX. feeling

investments XXXX and in on projects budget some track ahead with on growth to meaningful short-cycle running continue schedule, contributions and in XXXX. Our of growth schedule, resulting

approach Our over with flow remains thoughtful allocation and balance the plan our and disciplined to X-year within spending investment-grade capital rating. focus credit cash our achieving an of on

line growth portfolio, and to strong torque building open program up the strategically continue build across integrated significant for capital asset located we we As opportunity foundation with now a the laying and investment see to questions. our can our upon. We footprint look

The first from Jeremy is from question [Operator JPMorgan. Tonet Instructions]

for on Reddy Jeremy. Vrathan This is

For provide project I maybe the guys that are CapEx of to any going color just wanted means my and what backlog, first quarter you ask one, to interconnects for incremental the just kind on able forward? announced this on

those contemplated This capital CapEx That is related was in our current guidance. interconnects David. committed to

capital no with our that So associated guidance. in there's capital incremental

volumes. for to grab competitive and get on to the guess, want Got DTM's your new ability it. -- just Haynesville And I one, next thoughts positioning I the within

could that your thoughts would great. to just there, broadly you speak If be

Sure.

talked both position. So enhances that of about items just further we those competitive our

price new a rate X is I years, as competitive X Obviously, is also transparency think timing and clarity is and at next on the in coming to important. I execution what's for important look project critical customers.

So new the -- significantly position, LEAP's LNG there And capacity all years. Venture competitive underwriter is as project as this think of we that in export and expansion, score built we primary couple those so service. well Gillis on criteria. growing all Access of know, as the I in next and are about their very is Global

even completes. all well is that to the export connected time LEAP will be So by very connected project facilities and now the LNG better

as expansions we're spot expansion. like of the position, did round in that Haynesville. strong security providing procure So next of and serve very supply these for shipper and looking round well a in I to a supply very need to reach good expect deliver to facilities really markets the new we fully certainty of in Haynesville to any back We're competitive the as and earlier the service out egress just high-quality these export well.

Fargo. The Blum Michael Wells with question next from is

CapEx far. So you're to I you sure 'XX wanted yet. But guidance providing I'm so correctly said understanding what not make realize just

and But committed 'XX, million assumes about So you'll that saying other does so by the $XXX 'XX or get get you're like in end of change -- that leverage of doesn't X.Xx or you to better far you'll that CapEx, and regardless? number terms those that there have -- for that in 'XX.

question. Great Yes.

we've of million free $XXX $XXX So And cash today, simple the capital million, after as committed is for said XXXX. what flow here the we is sit dividend. math

we speak. as uncommitted So significant of capital obviously We're a working projects amount XXXX. there's for on

will We successful we those some of expect be on projects.

will you'll here as much committed best update So we'll call clearer 'XX. the provide to I on year-end there his in expect a to goes I here Jeff today, will be view some debt 'XX sit of today, be as comments. as we -- that for cash But excess in how likely 'XX of to as And again, reduction to XXXX. flow free that sit alluded as

Okay. pipeline, Got Millennium about of you you're I'm aware being talking own recent then well sure And the sale. the don't the mix it. for piece in press articles

horse, ask again So it maybe you in since just you're it's how in to back comment play. dead that a figured like the but I hate about I'd back since news thinking seems beat it's to

mean have don't I any Yes. nothing most many talked Thanks of our comment about we've year. on perspective, this From question. for really the that. that changed. has and for I quarters Yes,

has our well -- the view hasn't majority we're that, think We're them changed. partner owner front with of in wish very I plate that very but happy that exceptionally happy the The We're the activities this asset asset. very full of with and year. has them our a of the best are asset. performed

is topic, Beyond acquired any when I year previously for add this ago. question And grid's to on interest not we pro comments TC. a probably think forma and again, to this going really that I'm a made I've

Sachs. is The Mackay from next John Goldman question with

the on up 'XX pick EBITDA things just maybe to and 'XX. X wanted I guide for for

'XX. is kind rate? expected, had about for added kind of we Are was projects of current than narrowed of if the we quarter better pulled just also few kind we of And your but versus of -- bridge forward you number Wondering should kind those? but have 'XX, you guys projects, any in run you quarter range, didn't for a there that that offsets a gap of guys few then Third fourth think on the can both unchanged. -- higher guide kind but us

question. great John, Sure.

talk water with I'll far the strong what narrowed We kind confidence yes, for QX, year. quarter year. had which -- the band year bridge call the And just the 'XX. set high under So up here we this delivering in will reflecting a us I'll this of so really

As deliver years. you to we like strong know,

just I'll leave So that. it at

the asked terms remarks, comments fall. we've as from in side looking QX, my and the public deferral my -- of you I'm been QX, how of look of all experienced the back you the that of prices and a completion the of at heard they summer business low opening lot and there's Gathering way producers comments fundamental derivative refer a question, delay in In from the does the activity of the my to in that inferring a this some earlier I'll

a short-term play It through. and system they how long It play through. expect phenomenon. So to plan, But very term. long-term their that's again, this use is to the going change doesn't will

So it's timing issue. a

leave year. balance I'll comments that of it at So the on for this

it's that 'XX In through the on for has to and and our next 'XX, prompt practice to for always across takes And will the outlook early and the call. of give a puts and terms been year year, plus refresh it and play year. practice our digest all an portfolio the year-end update

as why of their end as comments the we'll think the the just call. of that down reason that is locking customers. all and in our that, I everyone's lot information we reliable leave the confidence the so of time you have we high get crisper much we wait frame guidance benefit becomes we from would you better, until information more That that And get you So a to and plants. is when to we January our just expect, they're the provide do John, year for year-end

well. the us the So prompt year us guidance and plus year high of in confidence prompt for that that lot provide as gives the we a gives in confidence

we'll a side. pipeline of the to So going lot focus side Gathering be is of that on business, 'XX on the have the our

business, our As outstanding And of our year, side of we've on the as it's portion you know, our talked that's about largest performing all just business. the about that's of -- business. pipeline performance been X/X

year the of and some fundamentals both pipeline we've our confidence seen asset assets our for the LEAP ahead. in for years gives tremendous out, across that south, So the really strong around playing well in all as North us and the

So...

shippers that I detail following this in just on to with flexibility about bring all Maybe there. looking appreciate is I kind you on incremental flows? this are your what or quickly side, great. That's guess from onto just existing volumes of the were you expecting, up interconnects existing an of kind adding kind expecting material question. and for of our more above earlier curious LEAP

position the I entire system growing product more on interconnect base. competitive demand, Union tremendous strong adding is competitive puts the that the And customer the I more Gillis think supply of services the system really asset footprint us diversifies position puts serve the to of system it's us John. Haynesville think, on and in lots different of strengthens to offer I Access flexibility customers. project, all just Blue to of different to above, very the our mean all gives the customers long term and with strategic a the that

going basin. going the hub process want out short in as making to to to term in people how to different it's network their their ultimately expect delivery the network I and gas gas -- long points and market of deliver it's positive but of treat have in a the to it's term, move gas choices the terms attractive also they their So very when be very this positive be

next Dounis is The Spiro question from Citi. with

the to volumes. Wanted just quickly go Haynesville Gathering back to

to addressed on put a XQ back bit them it. of finer in little You've of the want bounce kind XQ. I this, point in versus a Saw maintenance

cadence sort from LEAP? draw to going you're forward, online, systems you in, about thinking to other off phases them as we of volumes lead as moving or incremental that gathering these on is go curious that Just come here are

It's delivered It's third-party going to to that the stay likely pipes network be network. question. to are incremental have to volumes it's future. the in the other great on going draw And being volumes onto in both. Yes, going currently

So Spiro. it actually does both,

Phase on I well. had what came of there it think Okay. next And and something sounds you expecting mentioned quickly kind similar I you're based like on as that just these said, filled you phases,

optimistic. highly We're

phase pricing look how So you'll how demand that that pool a little was need the quickly the -- first the at at broadcast -- answer think The And you we is signal price signal being market, I the the market. in bit gas yes. more it Yes, saying surprised if Gillis. strong see was. pricing is in even filled the us

encouraging that's fundamentally, very X. Phase Phase So X for and

And of Great. that for guess signal sure about here? if $X.XX thinking start supportive. producers. just are range to question. range about that's no magic second already the about? is looking $X.XX see also is kind in mobilize to talked talked a that producers I be range should for this waiting price forward to prevalent, I but we of we then guess, And the And you kind you there's pricing number, what David, I'm the right

Yes.

say, gas pedal, that is price is speak. on I that the kind I'll to back think producers going of getting so band trigger to are what the

in delay $X February I'd balanced say showed expect pickup. the that I premised But just be producer there supporting in that, that of a there to a uptick delay will like up on on reaction also frame. low was on market price time fundamentally All is that the price. a that

ask want public well. to to the I'm I before opinion. pricing. couple this bit. I would see that's suspect the question just they're the current durability see producers in But as going just sure And this months of But capital price And is the more into of they to to sort to my that drill a of pour think opinion. want producers the market I of sticking are going my

be will there opening a before this in think the said see that I is view like outlook. And I we that I not impact lag question, think comments, in November up and And activity. bit when a my of short-term have or whether a our ramp very happens a doesn't of and our long-term January, in It's question. material an phenomenon. it's a long-term if pickup it pickup on

next Keith with Stanley is from The Instructions] Research. question Wolfe [Operator

project. questions some Just on the CCS

to If capital would the can bulk you were likely on XXXX to FID in when project, or start you more start-up more of paying XXXX the ties current cash with taxes you of on this and how eventually remind how the be aligns cash expect the more in spending CCS taxes, plan? to would And in the project? paying in us that the then

Good Keith. Sure, question.

in you're multiyear capital CCS a frame. FID The correct. 'XX, be assuming time frame, So spread the XXXX, out likely like over time will 'XX

it again in flow view I other have all that today. part will you uncommitted is, do will which address So our again, cash we're why year, early on to think, Jeff, XXXX, hit free we likely have the that the that want the information X of telegraphing not we question? in based

sure. Yes,

us. of that not probably final played the to pay going to our factor the rulings cash depending on into Our the [Indiscernible] material back increase cash will taxes the going cash get thought start sort the our in But around X-year XX plan, will or be around we're around how again, And out talking is of then is other also. is things, 'XX. 'XX, as taxes for taxes various -- part increasing, the direct

So view current that's our that. around

this At questions. any we'll Slater time, further David for closing to over no have remarks. turn it We

appreciate interest much Well, great for DTM, all we the day. in support, thank you a very and and have your

for concludes conference today's This participating. call. Thank you

now disconnect. may You