Q4 2022 Kinetik Holdings Inc Earnings Call
[music].
Hello, everyone and welcome to the kinetic fourth quarter 2022, without my name is not yet and I will be coordinating the call. Today. If you would like to ask a question at the end of the presentation. Please press star followed by one on your telephone keypad I will now hand over to your host Marty why cannot director of Investor Relations to begin Martin.
Please go ahead.
Thank you good morning, and welcome to kinetics fourth quarter 2022 earnings conference call here with me is our President and Chief Executive Officer, Jamie Welch as long as Matt Walsh, Our Chief operating Officer, Steve Stellato, Chief accounting and administrative officer Tod Carpenter, our general Counsel Trevor Howard.
Vice President of Finance, and Chris Kendrick and Tyler in Ireland, our vice President of commercial.
Press release, we issued yesterday this slide presentation and access to the webcast for today's call are available at Www Dot kinetics Dot com before we begin I would like to remind all listeners that our remarks, including the question and answer section. We will provide forward looking statements and actual results could differ.
What is described in these statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. We may also provide certain performance measures that do not conform to U S. GAAP. We've provided schedules that reconcile these non-GAAP measures as part of our earnings press release and after our prepared remarks, we will open.
The call to Q&A with that I will turn the call over to Jamie.
Thank you Matt Good morning, everyone and thank you for joining US today, we reported our full year 2022 results yesterday afternoon, as well as issued 2023 guidance.
Last week marked the one year anniversary of the merger forming kinetic and our team has done a tremendous job.
So thank you to our employees for going above and beyond this past year. They have successfully integrated both assets and people following the merger all while operating in a safe and reliable manner.
And as always I would like to thank you our investors for your continued support.
Yesterday, we reported full year pro forma 2022, adjusted EBITDA of $822 $2 million.
Which was within our revised guidance range provided in August and notably above our initial guidance from last February .
This was despite weaker commodity prices in the fourth quarter, particularly in December and the impacts of winter storm Elliot in late December .
In addition to our results, we announced yesterday another highly strategic project expanding our gas gathering system into Lea County, New Mexico. This project is extremely important and candidly transformative for our company.
This has long been part of our strategic vision to extend our operations further north and provide new Mexico produces access to kinetics best in class gathering and processing network.
The system expansion is fully supported with the substantial minimum volume commitment.
Under a long term gathering and processing agreement with a large cap investment grade counterparty.
This project will serve as an entry into a new market within the Delaware Basin.
We will construct more than 20 miles of new large diameter high pressure pipeline north from the existing kinetic gathering system in loving County, Texas into Lea County, New Mexico.
The kinetics existing processing complex is the.
The project is estimated to be in service in early first quarter of 2024 and will position us for additional commercial opportunities with both new and existing customers in an area of the basin that continues to see significant development activity and growth potential.
'twenty three is in execution and transition year that sets kinetic up to be the very best version of itself in 2024.
Think of it as kinetic next we have a number of strategic projects underway, which will be placed in service at the end of this year, including Delaware link and the PHP expansion and next year with the expansion into new Mexico and front end Amy treating at all of our processing complexes that will result in <unk>.
<unk> EBITDA growth in 2024.
These projects are all mid single digit build the multiples and materially change our cash flow profile in 2020 for these.
These projects will allow us to further improve our liability, while providing a differentiated service offering of both blending and treating the customers as well as enhanced residue egress to the Gulf Coast.
We believe our overall product offering will become even more compelling for producers and customers in the capacity constrained areas of southern New Mexico.
We would be remiss to not discuss the 2023 commodity price outlook, given that 2022 benefitted from higher commodity prices.
Last year, we saw geopolitical events, most notably the Russia, Ukraine conflict.
That reinforced the importance of U S natural resources, including crude oil natural gas and natural gas liquids products.
Three Permian to Gulf Coast residue gas pipeline projects reached.
Last year in anticipation of the capacity constraints that we have already begun to experience.
In the fourth quarter of 2022, we saw in fact, how constrained and tight the market actually was when planned maintenance events resulted in depressed pricing at wahoo.
In 2023, we expect continued price volatility it was.
The Whistler and PHP pipeline expansions will help in the latter part of this year. However, given the forecasted annual natural gas growth from the base of one five to 2 billion cubic feet per day throughout this decade, we will continue to face constraints and require new pipelines out of the Permian basin.
Permian residue gas will continue to provide the critical feedstock stock for global LNG demand, most notably on the Gulf Coast.
As it pertains to kinetic commodity prices will not be as favorable in 2023 relative to 2022. However, we have been actively hedging our 2023 exposure to Derisk This which we will touch on momentarily.
Additionally, once the PHP expansion capacity is placed in service.
Exposure to one will be reduced to zero.
Similar to our previous 2022 quarterly earnings results. Many of the figures today will be reported on a pro forma basis, assuming the business combination between our predecessors BCP and altice closed on January one 2022.
We believe it is more reflective of actual results and helped to reconcile our 2022 full year guidance.
Moving to our recent highlights on page three we reported pro forma adjusted EBITDA of $822 2 million for the year meeting our revised 2022 guidance.
<unk> in August .
Despite lower commodity prices and winter weather events, we benefited from increased volumes across across both the midstream logistics and pipeline transportation segments.
As mentioned on our call last quarter, three large gas gathering and processing agreements commenced in the fourth quarter as such we processed record volumes in the quarter.
Our core shareholders Apache Blackstone I squared and management have agreed to continue to reinvest 100% of the dividends from the base shares as part of the drip in 2023.
This will help preserve cash to fund our 2023 capital program, while working towards three five times leverage target.
In our press release are three institutional core shareholders emphasize there continuing supported kinetic and a conviction in our 2020 for growth.
I highly recommend reading their statements. If you have not yet had the chance to do so.
It is also worth noting management's actions the management team believes in the company and its future and that the stock at its current price is very much undervalued.
So the team has requested and the board has approved to pay 2022 performance bonuses in kinetic stock.
The board has also authorized a $100 million share repurchase program.
Any stock acquired under the repurchase program is expected to be re issued under the drip.
At current stock price levels, the repurchase program would represent over 25% of the stock expected to be issued under the drip for the year.
We believe the repurchase program will afford us more control of our drip issuance price and allow us to potentially acquire shares at levels that do not reflect our earnings power in 2024 and beyond.
And Opportunistically acquire stock from short term investors, while continuing to increase our partnership with longer term investors and core shareholders.
I would now like to hand, the call over to Matt <unk>, Our chief operating officer to provide an operational update.
Thanks, Jamie.
In the fourth quarter, we achieved a new quarterly record for gas processed volume at $1 2 billion cubic feet per day, representing a 9% increase year over year crude volumes gathered were flat year over year at 73000 barrels per day, and up 8% quarter over quarter water gathered volumes were 146000 barrels per day.
And up approximately 11% quarter over quarter as our largest customer completed their recycling efforts and resumed normal deliveries. The diamond cryo expansion of 120 million cubic feet per day of incremental capacity is currently under construction and on budget and are scheduled to start up in April of this year and.
In 2022, we've replaced or avoided. The addition of 32000 horsepower of rental compression with 10 company owned surplus compression units annualized this translated to over $4 million of operating expense savings.
We also completed the Super system interconnect on time and on budget in June of last year. This project allows us to access the latent capacity at the Diamond Cryo complex and leverage the <unk> technology, resulting in enhanced system recoveries. This is especially important in today's commodity price environment. We also.
<unk> approximately $20 million of cost synergies through operating expenses, G&A and AD valorem tax reductions following the merger.
In 2023, we expect to achieve an additional $20 million of integration cost synergies, we plan to replace or avoid adding an additional 30000 horsepower of rental compression given the inflationary environment today in particular with respect to compression rental rates the compression relocation projects reps.
Or is it more cost savings than originally anticipated at the time of the merger announcement.
Front end naming trading will also be placed in service at the East Toy Cryo complex later this year and at the Pecos and Pecos Bend complexes in 2020 for the addition of trading to our processing complexes will result in margin expansion with our customers and allow us to receive gas that would have previously been considered off spec.
For example, the addition of trading has allowed us to expand our operations into new Mexico, where the gas is higher <unk> content.
Delaware link our wholly owned 1 billion cubic feet per day intra basin residue gas pipeline is progressing as planned Delaware link will connect the Pecos Pecos Bend and east toy Cryo complex is directly to PHP. The project remains on track to be placed in service by November <unk> of this year the PHP 550.
<unk> million cubic feet per day expansion also remains on track for a November one in service.
This past year, we became the first and only midstream company to link 100% of our debt capital structure to sustainability related initiatives and we have made substantial progress towards our sustainability performance targets and ESG related goals two of our three sustainability performance targets are linked to scope one and scope.
Two greenhouse gas and methane emissions intensity reductions over the past year, we began implementing several strategies to progress our emissions reduction goals, including the application of new technology heightened.
Leak detection and repair practices and increased training, we will provide an update on our progress later this year.
Our third sustainability performance target seeks to increase our female representation in corporate officer positions to 20% by 2026 already in 2022, we increased our female representation in corporate officer positions to just over 17%, which is above our industry peer average.
To reinforce our commitment to ESG initiatives, our 2022 compensation program tied 20% of all employees at risk pay to the achievement of specific ESG related goals in 2023, we will repeat the same approach.
We will look to publish our 2022 ESG report midyear, providing additional context on our sustainability initiatives and 2022 achievements with that I would like to turn the call over to Trevor Howard to review, our financial results and present, our 2023 guidance.
Thanks, Matt staying on page five we reported adjusted EBITDA of $211 million in the fourth quarter of 2022, we also generated an adjusted pro forma distributable cash flow of $142 million and free cash flow of $92 million on January 17th we.
Declared a <unk> 75 per share quarterly cash dividend, representing a pro forma dividend coverage ratio of one five times for the quarter.
We exited the quarter with a with a four times leverage ratio and remain confident in our ability to achieve our long term leverage target of three five times.
Total capital expenditures for the quarter were $68 million $22 million of which was associated with the pipeline transportation segment and more specifically funding for the PHP expansion in Delaware link.
Our midstream logistics segment generated a pro forma adjusted EBITDA of $133 million in the fourth quarter year over year. Our segment adjusted EBITDA was up 2%, despite a $12 million of commodity headwind in the quarter.
Additionally, winter storm Elliott effect affected gas and crude volumes on our system during the second half of December .
However, despite the weaker commodity prices and winter weather, we met our full year 2022 revised guidance.
Shifting to our pipeline transportation segment, we had another record quarter, we generated adjusted EBITDA of $79 million up 8% year over year.
For the full year 2022, we reported pro forma adjusted EBITDA of $822 million $616 million of distributable cash flow and $372 million of free cash flow or.
Our total capital expenditures for the year were $284 million $116 million of which was associated with the pipeline transportation segment.
And lastly, we realized approximately $30 million of integration cost synergies in 2022 through compression relocation projects system optimization and other cost reductions all of which exceeded our 2022 EBITDA synergy target of $25 million.
Now I would like to discuss our 2023 outlook and guidance, which you can find on pages nine through 12 or 2023 adjusted guidance is $800 million to $860 million.
Our underlying business remains strong in 2023 with respect to volumes and operational performance. However, commodity prices are lower year over year.
Within our midstream logistics segment 2023 will benefit from the annualized nation of several contracts, which commenced in the fourth quarter of 2022 as well as a number of new contracts that will begin this year. Additionally, we expect modest growth from our current customer contracts year over year.
Taken together the midpoint of our 2023 guidance is predicated on an almost 20% increase in processed gas volumes with a 15% increase in gas fee based gross profit year over year.
We expect to exit the year with approximately $1 5 billion cubic feet per day of processed gas volumes, representing a 20% increase over fourth quarter 2020 to process gas volumes.
We expect to realize approximately $50 million of total EBITDA synergies this year through additional compression relocation projects further system optimization and the installation of front of naming treating.
Within our pipeline transportation segment, Delaware link and the PHP expansion will be placed in service at the end of this year.
Almost all of the capital for these projects will be spent this year. However, we will not see a full year EBITDA benefit until 2024 as such we estimate December 2023 annualized adjusted EBITDA to be approximately $900 million.
In 2023 commodity price reductions are expected to offset fee based earnings growth within our midstream logistics segment and the contribution from the pipeline transportation projects placed in service at the end of this year.
On page 11, we have detailed our full year 2023 commodity price exposure and price sensitivities to our guidance.
Our 2023 guidance assumes market forward prices of approximately $76 per barrel for <unk>.
$2 seven per <unk> for natural gas and approximately <unk> 69 per gallon for natural gas liquids.
For comparison 2022 actual prices were over $94 per barrel for <unk> greater than $5 20 per <unk> for natural gas and approximately <unk> 96 per gallon for natural gas liquids note that is approximately a $26 million and 30% year over year reduction in crude.
Gas and natural gas liquids prices as.
As discussed earlier by Matt Hi, gas transportation capacity utilization rates and continued Permian gas supply growth likely translates to a turbulent turbulent year for natural gas pricing at Wawa until the new pipeline projects are placed in service later this year and in 2020 for staying in front of this dynamic.
We layered on ethane and natural gas spread hedges in late 2022.
This will result in us running several of our processing plants and recovery and reduce our equity natural gas exposure to effectively zero.
And I would further note that with the in service of the PHP expansion project kinetic customers and our equity volumes will be protected against Wahhab volatility given Gulf coast pricing on PHP.
Less than 10% of our 2023 total gross profit is exposed to commodity prices and over 75% of this direct commodity price exposure is not influenced by natural gas prices a.
A 25% increase or decrease in commodity prices is expected to impact 2023 gross profit by two 5%.
We have been actively derisking, our 2023 commodity exposure through our board approved hedging program and we will continue to do so throughout the year.
Capital expenditures guidance remains elevated as we fund the several strategic growth projects. Our 2023 guide is $490 million to $540 million. This includes $235 million to $265 million, our midstream logistics.
Logistics capital and $255 million to $275 million of pipeline transportation capital.
Our midstream logistics capital guidance includes $90 million of maintenance and growth projects $150 million of high pressure gathering capital and $45 million of our remaining integration capital.
Following 2023, there will be no further integration capital spend.
The $115 million of high pressure gathering capital expenditures includes capital to support the new Mexico system expansion and remaining spend associated with the previously announced 2022 contracts.
Pipeline transportation capital guidance includes the Delaware link in the PHP expansion projects, our 2023 capital expenditure guidance is in line with our previously communicated expectations when excluding the new Mexico expansion in 2024, we expect to return to a capital program of less than $150 million assuming.
No spend for new processing capacity, nor the Shin oak and gcs expansions.
Turning to page 13, as we previously announced we made great strides in 2022 to clean up our balance sheet first we completed our comprehensive 3 billion sustainability linked refinancing in June and fully redeemed our series a preferred in July .
Later in the year, we swapped 100% of our term loan a floating rate to fixed through April 2023, and swapped 1 billion of floating rate exposure to fixed through may 2025.
As a result kinetics floating rate exposure as a percent of total current debt outstanding has been reduced to less than 15% through April and approximately 40% thereafter.
We will continue to actively de risked our floating rate.
Exposure through additional swaps and additional note issuances.
We remain committed to achieving a three five times leverage target an investment grade credit ratings.
We expect to maintain our <unk> 75 per share quarterly dividend in 2023, and we look to recommend a minimum 5% dividend increase once we have met our capital allocation priorities and with that I would like to open up the lines for Q&A.
Thank you if you would like to ask a question. Please press star followed by one on your telephone keypad.
Hello, a question. Please press star followed by case on the pairing to ask a question. Please ensure your phone is on mute lately and.
Our first question today, Michael <unk> of Pickering Energy Partners. Michael. Please go ahead. Your line is open.
Yes.
Hey, good morning, everyone. Thanks for taking my questions.
Good morning, Mark interesting growth opportunities on the horizon.
But I feel like funding is kind of come up a few times.
I have a question mark so.
You've seen the Permian gas pipes that you.
<unk> got some pretty high multiples is that an option instead of debtor equity could you sell some interest in some of your your long haul gas pipelines.
So Michael Thanks for the question this is Jamie.
I think youre right in the context of we always are presented with some interesting growth opportunities as evidenced by what we announced last night with New Mexico, which is obviously a big deal from a standpoint and probably the best means for us to make sure that we completely fill up our existing processing com.
Plexus.
As we continue going forward and we look for opportunities probably the easiest button. We have is a <unk> sale.
Honestly there is a marker out there done last year by Tiger two a private to a private equity firm.
It's straight up tea copay nice duration of contracts obviously, the only question Mark out there is whether it will actually get expanded or not but I definitely think that is something that we've got we've been ruminating about we're not acting on it at this point, but we're certainly thinking about it.
As far as what <unk>, what exists within our toolkit as we consider and contemplate more in more and different growth opportunities going forward.
Got it that's.
Thats all I had appreciate it Jamie.
Thanks, Michael.
Thank you and the next question Betsy Jackie collectors of Goldman Sachs. Jacky. Please go ahead. Your line is open.
Hi, good morning. Thank you so much for the time today.
First I would just like to touch on.
You've commented that you expect around one five Bcf a day in natural gas processing I was wondering if you could give a sense of what youre thinking for overall Permian basin growth and how much you are baking in additional contracts.
We are open processing capacity there.
Alright, so Jackie it's Jamie I'll, let Trevor answered part of this but as far as what are we baking in as far as additional contracts the answer is nothing.
In fact, I think we probably risked more on our existing customers.
And we're being therefore conservative as far as overall Permian growth I think as we intimated earlier I think just on the residue side, we're obviously expecting.
Basin wide about one five to two Bcf a day I think we saw two Bcf a day as far as actual residue gas growth coming out of the Permian for last year.
We think that we're still going to as we are seeing increasing gol as we're seeing some of our customers start to experiment on some of the different benches.
Hydrocarbon stack, we start we have continued to believe and see that the overall gas growth will continue to be pretty robust.
Drove anything that answer.
Yes, thanks for the question Jackie.
I think from from our from our vantage point, we're going to continue to grow with our existing customers and I think the Genesis of your question is what sort of market share gains or are you potentially baking in and.
With the <unk> the contracts that were announced in the middle of last year and the New project that was announced this morning or last night.
Extending into new Mexico.
It should be pretty representative of sort of the market share gains that we are achieving and expect to achieve not just in 2023, but as the new Mexico gathering expansion is completed and move forward into 2024.
Okay, great. Thank you and Jeff too.
Talk a quick follow up given that gas prices are so low how are you thinking about apache's activity on alpine high specifically.
So you will see that obviously, the alpine high activity, which was contractually committed to as far as the development as a result of the proceeds from the sell down last year.
We've got a couple of wells for this first quarter and most of the rest of the activities at the end of the year. So it's really a 2024 phenomena for alpine high gas growth than it is 2023, we are seeing obviously a pickup in the context of overall gas as you look out towards the end of this.
Year into next year.
And obviously, we've been we've seen obviously gas prices being pretty burdened.
In this first part of the year and as you saw in our overall commodity assumptions, we've got $2.07 ourselves as far as gas price expectation so more.
More to come I think on the Apache side, sorry, a long way of saying it but I think lot more to come into the year, we'll start to really see what this.
Alpine high development looks like going forward.
Okay, great. Thank you so much I appreciate it.
Thank you and the next question you guys. He Speedway Dennis cities Cyp's go ahead. Your line is open.
Thanks, Operator, hey, guys.
Once you go to the new agreement Lea County, if we could.
You guys mentioned, obviously you are a new entrant to the basin there.
And so I'm just curious as you think about the commercial strategy.
And winning business against the incumbents, how do you guys think you're going be able to do that and you also mentioned high levels of activity there.
You look out to 2024 and you continue on this path how much of any of that activity sort of considered in that $150 million of Capex you highlighted.
So let me let me start with the end and then what have Chris Kendrick.
Who is our VP of commercial one of our vps of commercial talk about sort of the overall.
<unk>, we see up there, but as far as so it is a portion of obviously the.
The overall capital that we've got $115 million I think it is which is allocated this year in gross debt on the pipeline side and a portion of that a significant portion of that is related to the high pressure connections.
Going up into new Mexico.
New Mexico by itself as far as the straw is one element, but you have to take it Spiro wood treating.
Once you have the straw and you have the capabilities to actually both blayne. So we see new Mexico, some higher <unk> higher cotwo. Some nitrogen we've got we look and we have the ability in our system to actually blend that.
And and obviously process that which we have not.
To this point being able to do because we've been a historically a suite system, but all that changes with the front end 19 treating at all of our processing complexes, which we'll have in place by the end of this year into next year.
<unk>.
Across the footprint. So I think it's both working in tandem together and as far as the opportunities that we see out there Chris.
This is Chris.
As Jamie mentioned before this has been a strategic goal for kinetic for a long time, even when we're going back to when we were at Eagle claw.
I think it's pretty pretty exciting to what we've done over the last couple of years with the north and a lot of this is due to matt's team and running a great operation and run time, because thats number one for the customer as we think about new Mexico.
For us.
Pretty exciting to be able to offer a new Mexico customer a solution for processing in Texas.
Effectively moving those residue gas molecules through our pipes are dealing and ultimately to the Gulf coast Thats, a pretty compelling solution for some of these customers into Mexico Grr constrained. So we are excited to have these discussions and hope to be able to talk about.
Talk about some more growth here in the future.
Sure.
Got it great. Thanks for the color on that.
And then moving to the $900 million.
Run rate you guys pointed to for <unk>.
Number 23, I'm curious how much of that reflects G&P volume behind the system waiting for PHP to come online at the end of the way once PHB dug into service in November I don't expect to see those volumes kind of rushing back into the system could we see sort of several quarters. After the fact to kind of ramp up on the GP side.
I think thats, probably a fair.
Fair.
Perspective.
We ourselves as a management team have been really.
This is probably one of the elements that we've really agonized over which is exactly water turned in line forecast looks like given the depressed pricing that we're seeing and obviously the.
We're seeing obviously the runway towards the back in the November December in particular, where we start to see some of that relief.
So I do think we will start we will see more activity towards the back of the year, particularly when we've got Whistler and PHP expansion online I think that will give the ability of the base into XD breed for a second and then sort of work out what the next steps will be.
Got it great last one if I could just quickly sneak it in just looking out to 2024. It seems like the set up today is really a fairly nice inflection point on free cash flow, you've got capex coming down you, obviously have EBITDA projected to be a lot higher.
So that does it make a new option for you as you think about capital allocation and so I'm. Just curious you got several things going on obviously a lot of robust growth.
The pause in capital return this year and so maybe an expectation you sort of returned to next year. Because you are also trying to sort of your letters and achieve investment grade.
How are you thinking about those options and as mentioned before when you do have a little more free cash flow and Brian .
Look I think our capital allocation priorities that we've laid out is committed to the three five times leverage target than raising that raising the dividend.
And obviously that I think is front and center for us as far as our overall.
Objected to that concern.
Great.
Thanks.
Thanks Kara.
Thank you and as a reminder, if you'd like to ask a question. Please press star followed by one on the telephone keypad.
Next question. Thank you Robert Moskow.
<unk> Securities. Please go ahead your line is open.
Hi, good morning, everyone.
Good morning, Robin just wondering.
Yeah.
So now that I guess Grand Prix is off the table I know you guys have identified that as a potential.
Initial target I'm, just wondering how that affects your desire to increase the downstream connectivity of your system could we see that mindset shift to perhaps getting more involved on the fractionator asset are aligned more closely with the specific midstream providers such as PPD, just curious to hear your thoughts there.
Look I think we have been consistent to say, we like having a vertically integrated business I think in saying that we realize that we've got a <unk>.
Significant capital spend for this year, we have obviously stacked hands with our core shareholders to make sure that it is funded in an appropriate and prudent manner from a balance sheet and credit standpoint.
And I think it is important that we focus going forward in 2025 that we not literally expect a less than 150 of capital to start to grow again, so I really do think.
First the first order of business for US is new Mexico was critical trading was critical PHP expansion was critical Delaware link the kinetic NGL that was absolute core to our vision anything else is interesting and.
And but it's nowhere near the priority or importance. So I think right now what we see going out 24 and longer is that we've got some pretty good tailwind, particularly as we see overall growth.
<unk> produces set as well as our customer opportunities, whether they are in new Mexico, or whether theyre, obviously in central Reeves and Culberson.
Got it that's helpful color Jamie.
So wondering if you could expand a little bit on the.
The outlook for Tcs expansion, we've seen some contracts you signed with these other greenfield pipeline offerings I'm. Just wondering does that expansion look better now that gas prices are lower and presumably fuel prices prices are lower just wondering what's keeping a lid on that expansion from happening.
I would say Robert it's very interesting I think that is and look Chris.
Kindrick in particular, who sits on the board with me at PHP, We talked about this a lot. We really think there is a overwhelming emphasis by produces on new steel in the ground. They want new egress, increasing percentage fuel on our existing pipeline. Yes. If you are really in a pinch and U.
Could do it quickly that may make sense, but I think honestly with what happened with <unk> as I take my hat off to Whistler I think they did a really good job there were quick they got that done.
Obviously built the lateral into the Midlands. So they were able to access incremental volume. So I think they did a really good job I think.
I, just don't know what GCE experts and I think it is more likely we'll probably you'll be hearing about the <unk> of the world worry or pipelines or other pipeline potentially getting done in the next 18 months and being at that point, then I do think gcs I still don't think Gtx is.
I mean you'd have to ask Kinder is obviously there've been mostly engaged and it's for us it's a small percentage.
But I'm just not sure Gtx expansion is is in the cards in the near term.
Christy yogurt.
Rob This is Chris no I agree with what Jamie said producers overwhelmingly new steel in the ground versus these pipeline expansions.
And also since we did PHP expansion the markets softened a little bit in the Florida as well as a matter of aren't coming on later in 2024. So it's just going to take more time to get a project done with that being said the kinder team is still looking at it and we'll see what happens.
Great great. Thanks for that update and maybe just one quick last one I just wanted to kind of confirm what I thought I heard in your prepared remarks.
Function of that $100 million to $100 million buyback program. That's really just you can be more opportunistic.
When it comes to I guess the share price at these pik.
Sure. They are offered at and that's why you didn't just take down that 100% to 75% plus you have some more I guess autonomy over the share price youre purchasing that.
Robert exactly I mean, we look at the price right now and we think it is significantly undervalued. If we have the opportunity to in fact capitalize on something that the market doesn't seem to be fully appreciating then we will do so and that's what the board has given us.
And that is that also means that we've got a.
As it relates to our ability to capitalize on a lower buyback price then ultimate issuance price under the drip given the following quarters.
That's great. So I think we just thought of it as a great self help mechanism for us.
Understood. Thanks, a lot guys.
Thank you.
Thank you we have no further questions I'll hand back to Jamie Welch for any closing remarks.
Thank you everyone for your time. This morning, we're excited for 2023 execution year end year of transition and we look forward to catching up with you all relatively shortly on the conference circuit. So.
Thank you very much and have a great day.
Thank you. This now concludes today's call. Thank you so much for joining you may now disconnect your lines.