Q2 2024 EnLink Midstream LLC Earnings Call
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Operator: Greetings. Welcome to the EnLink Midstream 2nd quarter 24 earnings call on webcast. At this time, we'll just spend, so we can listen only mode. The question and answer session will follow the formal presentation. If anyone wants you to acquire operators systems during today's conference, please press star zero on your telephone keypad. Please note that the conference is being recorded.
Operator: Greetings. Welcome to the EnLink Midstream second quarter 24 earnings call and webcast. At this time, all participants will be in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. At this time, I'll turn the conference over to Brian Brungardt. Brian, you may now begin.
Speaker Change: If anyone should require operator's assistance during today's conference, please press star zero on your telephone keypad. Please note that this conference is being recorded.
Operator: At this time, we'll turn the conference over to Brian Brungardt.
Operator: Brian, you may now begin. Thank you. Thank you more and everyone.
Brian Brungardt: Thank you, and good morning everyone. Welcome to EnLink's second quarter of 2024 earnings call. Participating on the call today are Jesse Arenivas, President and Chief Executive Officer, Dilanka Seimon, Executive Vice President and Chief Commercial Officer, and Ben Lamb, Executive Vice President and Chief Financial Officer. Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions during the Q&A session.
Brian Brungardt: Welcome to EnLink 2nd quarter of 2024 earnings call. Participating on the call today are Jesse Arenivas, President and Chief Executive Officer; Delante Simon, Executive Vice President and Chief Commercial Officer; and then Lamb, Executive Vice President and Chief Financial Officer. Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions going into Q&A session.
Speaker Change: Thank you, and good morning everyone.
Speaker Change: Welcome to EnLink's second quarter of 2024 earnings call. Participating on the call today are Jesse Arenivas, President and Chief Executive Officer, Dilanka Seimon, Executive Vice President and Chief Commercial Officer, and Ben Lamb, Executive Vice President and Chief Financial Officer.
Operator: We issued our earnings release in presentation after the market's closed yesterday, and those materials are on a website. A weekly of today's call will also be made available on our website at Investors. In this.com.
Brian Brungardt: We issued our earnings release and presentation after the markets closed yesterday, and those materials are on our website. A replay of today's call will also be made available on our website at investors.enlink.com. Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws. Such forward-looking statements speak only as of the date of this call, and we undertake no obligation to update or revise them. This call also includes discussions pertaining to certain non-GAAP financial measures.
Speaker Change: We issued our earnings release and presentation after the markets closed yesterday, and those materials are on our website. A replay of today's call will also be made available on our website at investors.enlink.com.
Operator: Today's discussion will include forward-looking statements, including expectations and predictions, within the meeting that a federal security clause. The forward-looking statements being only as of the date of this call, and we undertake no obligation to update or revise. Actual results make different materialies from our projections, and a discussion of factors that could cause actual results to differs can be found in our press release presentation in F-185.
Speaker Change: The forward-looking statements speak only as of the date of this call, and we undertake no obligation to update or revise. Actual results may differ materially from our projections, and a discussion of factors that could cause actual results to differ can be found in our press release, presentation, and SEC files.
Operator: This call also includes discussions pertaining to certain non-GAAP financial measures. Definitions of these measures, as well as reconciliation comparable gap measures, are available in our press release and the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release in our F-185. Including those under the heading Risk Factors.
Speaker Change: This call also includes discussions pertaining to certain non-GAAP financial measures. Definitions of these measures, as well as reconciliations comparable to GAAP measures, are available in our press release and the appendix of our presentation.
Speaker Change: We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading, Risk Factors. We'll start today's call with a set of brief prepared remarks by Jesse, Dilanka, and Ben, and then leave the remainder of the call open for questions and answers.
Brian Brungardt: Definitions of these measures, as well as reconciliations to comparable GAAP measures, are available in our press release and the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading Risk Factor. We'll start today's call with a set of brief prepared remarks by Jesse, Dilanka, and Ben, and then leave the remainder of the call open for questions and answers. With that, I would now like to turn the call over to Jesse Arenivas.
Operator: We will start today's call with a set of brief prepared remarks by Jesse DeLongford and Ben, and then leave the remainder of the call open for questions and answers.
Jesse Arenivas: With that, I would now like to turn the call over to Jesse Erivis. Thanks, Brian, and good morning, everyone. Thank you for joining us today to discuss our second quarter 2020 four results. For the quarter, we generated $36 million of adjusted even on. Given by a target to plant full-ended service of a chromium. The return of volume that was impacted by weather or temporary shut in the first quarter. And normal seed analogy in our Louisiana segment. These results were in line with our expectations and those solid free cash flow after distributions of approximately $53 million.
Jesse Arenivas: Thanks, Brian, and good morning, everyone. Thank you for joining us today to discuss our second quarter 2024 results. For the quarter, we generated $306 million in adjusted EBITDA, driven by a Target 2 plant going into service with Acromion, the return of volume that was impacted by weather or temporary shut-in in the first quarter, and Normal Seasonality in our Louisiana site.
Speaker Change: With that, I would now like to turn the call over to Jesse Arenivas.
Jesse Arenivas: For the quarter, we generated $306 million in adjusted EBITDA.
Jesse Arenivas: These results were in line with our expectations and drove solid free cash flow after distributions of approximately $53 million, consistent with our approach to return capital to investors. We repurchased approximately $50 million of units outstanding, taking our total buyback execution to more than 10% of unit outstanding over a little more than two years, all while continuing to invest in and grow our business. As we reported earlier this year, we previously agreed with ExxonMobil to reassess the Pecan Island CCS project with the expectation that other CCS opportunities along the Gulf Coast might be prioritized ahead of the Pecan Island project. Since that time, we and ExxonMobil have been unable to find alternative CO2 transportation projects for EnLink.
Speaker Change: and Normal Seasonality in our Louisiana segment.
Speaker Change: These results were in line with our expectations and drove solid free cash flow after distributions of approximately $53 million.
Jesse Arenivas: Consistent with our approach to return capital to investors. We repurchased approximately $50 million of unit outstanding, taking our total buyback execution to more than 10% of unit outstanding over a little more than two years. All while continuing to invest in and grow our business.
Jesse Arenivas: As we reported earlier this year, we previously agreed with Xon Mobile to reassess that the Con Island CCS project would be expectation that other. joint CCS opportunities along the Gulf Coast might be prioritized ahead of the con island project. Since that time, we and Xon Mobile have been unable to find alternative CO2 transportation projects for handling. We are now pursuing a financial agreement for the value to it of the Pecan Islands CO2 transportation agreement. We plan to provide an update when appropriate. Despite the CCS business being slower to develop, I continue to be impressed by our team's execution on multiple fronts where we can create value for our unit holders.
Speaker Change: As we reported earlier this year, we previously agreed with ExxonMobil to reassess the Pecan Island CCS project with the expectation that other joint CCS opportunities along the Gulf Coast might be prioritized ahead of the Pecan Island project.
Jesse Arenivas: We are now pursuing a financial agreement for the value to EnLink of the Pecan Island CO2 transportation agreement. We plan to provide an update when appropriate. Despite the CCS business being slower to develop, I continue to be impressed by our team's execution on multiple fronts where we can create value for our unit holders. We'll discuss these in more detail later on the call, but I want to give you some quick highlights.
Speaker Change: We plan to provide an update when appropriate.
Jesse Arenivas: We'll discuss these in more detail later on the call, but I want to give you some quick highlights.
Speaker Change: We'll discuss these in more detail later on the call, but I want to give you some quick highlights.
Jesse Arenivas: On the commercial front, we announced last night the first expansion of our natural gas storage assets in Louisiana. We've talked in prior quarters about the shifting supply and demand market, and this new announcement represents a third project to meet this evolving market. On the operations front, we successfully brought online our third relocated processing plant in the Kermit Tiger 2. Consistent with our broader optimization approach, when compared to new build alternatives, this plant relocation strategy represents an efficient capital allocation with significant cost savings and shorter period to end service.
Jesse Arenivas: On the commercial front, we announced last night the first expansion of our natural gas storage assets in Louisiana. We've talked in prior quarters about the shifting supply and demand market, and this new announcement represents our third project to meet this evolving market. On the operations front, we successfully brought online our third relocated processing plant in the Permian, Tiger 2. Consistent with our broader optimization approach, when compared to new build alternatives, this plant relocation strategy represents an efficient capital allocation with significant cost savings and shorter period to end service.
Speaker Change: On the commercial front, we announced last night the first expansion of our natural gas storage assets in Louisiana.
Speaker Change: Consistent with our broader optimization approach, when compared to new build alternatives, this plant relocation strategy represents an efficient capital allocation with significant cost savings and shorter period-to-end service.
Jesse Arenivas: On the balance sheet front, we announced last night at Proactive step to simplify our capital structure with a significant reduction in the series the preferred stock outstanding. In short, we've been very active over the last several months managing the parts of our business where we can create the biggest impact.
Jesse Arenivas: On the balance sheet front, we announced last night a proactive step to simplify our capital structure with a significant reduction in the Series B preferred stock outstanding. In short, we've been very active over the last several months managing the parts of our business where we can create the biggest impact. With that, I'll turn it over to Dilanka to provide an update on our commercial opportunities.
Delante Simon: With that, I'll turn over to Lockett to provide an update on our commercial opportunities. Thanks, Jesse, and good morning, everyone. For the last several quarters, we have discussed the shifting Louisiana gas supply and demand market and how we are focused on meeting the needs of the market and creating value for our unit holders. As I mentioned during the last call, we are approaching the Louisiana gas opportunity in three phases. The first phase is well underway with 2024 explorations mostly contracted, and the team is now focused on 2025 renewals. While some work remains to be done, we have now captured the majority of this value, and we are seeing it in the recent financial results in Louisiana.
Dilanka Seimon: Thanks, Jesse, and good morning, everyone. For the last several quarters, we have discussed the shifting Louisiana gas supply and demand market and how we are focused on meeting the needs of the market and creating value for our unit holders. As I mentioned during the last call, we are approaching the Louisiana gas opportunity in three phases. The first phase is well underway with 2024 expirations, mostly contracted, and the team is now focused on 2025 renewal. While some work remains to be done, we have now captured a large majority of this value, and we are seeing it in the recent financial results in Louisiana.
Speaker Change: Thanks, Jesse, and good morning, everyone.
Speaker Change: For the last several quarters, we have discussed the shifting Louisiana gas supply and demand market and how we are focused on meeting the needs of the market and creating value for our unit holders.
Dilanka Seimon: The second phase of opportunities is leveraging our assets to drive attractive, quick-to-market projects. Last quarter, we announced the Henry the River project, which brings approximately 210 MMCF of capacity to the Mississippi River Corridor. We're pleased that this project execution is progressing very well. We have also begun operations of another such previously announced project. Expanding Deliveries to Venture Globals, TakashiPath, and LNG Export Facilities. Both of these projects expand our capacity primarily through additional compression and therefore result in an attractive economy.
Speaker Change: The first phase is well underway with 2024 expirations mostly contracted and the team is now focused on 2025 renewals.
Speaker Change: While some work remains to be done, we have now captured a large majority of this value, and we are seeing it in the recent financial results in Louisiana.
Delante Simon: The second phase of opportunities is leveraging our assets to drive attractive, quick-to-market projects. Last quarter we announced the Henry Deriver project, which brings approximately 210 MMCF a day of capacity to the Mississippi River corridor. We pleased that this project execution is progressing very well. We also commence operations of another such previously announced project. Expanding deliveries to Venture Global, Calcissue path, LNG export facility. Both of these projects expand our capacity primarily through additional compression and therefore result in attractive economics. We have done several optimizations of our system to increase the flow rate of our subbeam, leg, and bridge line systems, and we are presently marketing that increased capacity, and we continue to see a healthy final of these opportunities over time.
Speaker Change: The second phase of opportunities is leveraging our assets to drive attractive, quick-to-market projects.
Speaker Change: Expanding Deliveries to Venture Global, Calcasieu Path, LNG Export Facility
Dilanka Seimon: We have done several optimizations of our system to increase the flow rate of our Sabine, LIG, and BridgeLine systems and are presently marketing that increased capacity, and we continue to see a healthy funnel of these opportunities over time. We are very excited to announce the expansion of Jepson Island Storage Hub, or JISH.
Delante Simon: We are very excited to announce the expansion of Jefferson Island Storage Hub or GISH. The first project in the third long-term phase of opportunity. We've grievously disclosed that we had already progressed engineering work for a brownfield expansion at Gish, which is located near the Henry Park, and is very well connected to regional supply and demand points. And we expect to begin injecting gas in 2028. Like our other Louisiana projects, this project represents low-to-mid single-digit EBITDA molecules, as we leverage our existing assets to generate attractive returns. With this expansion, we increase our total natural gas storage position to nearly 20 BCF.
Speaker Change: We are very excited to announce the expansion of Jepson Island Storage Hub, or JISH.
Dilanka Seimon: The first project in the third, long-term phase of opportunity. We previously disclosed that we had already progressed engineering work for a ground-field expansion at Gershwin, which is located near Henry Hall and is very well connected to regional supply and demand. The market responded very quickly, and we received excellent customer interest. We will expand our dish-working gas storage capacity to approximately 10 BCF from 2 BCF today. The project will cost approximately $85 million, and we expect to begin injecting gas in 2028.
Speaker Change: We previously disclosed that we had already progressed engineering work for a brownfield expansion at Jish, which is located near the Henry Hall and is very well connected to regional supply and demand points.
Speaker Change: We will expand our dish-working gas storage capacity to approximately 10 BCF from 2 BCF today.
Speaker Change: The project will cost approximately $85 million and we expect to begin injecting gas in 2028.
Dilanka Seimon: Like our other Louisiana projects, this project represents low to mid single-digit EBITDA multiples, as we leverage our existing assets to generate attractive returns. With this expansion, we increase our total natural gas storage position to nearly 20 BCF. As we look forward, we are encouraged by the strong potential for new gas power generation and data center growth around our assets, particularly in the key North Texas market, where we are one of the largest gatherers and processors of natural gas.
Speaker Change: Like our other Louisiana projects, this project represents low-to-mid single-digit EBITDA multiples.
Delante Simon: As we look forward, we are encouraged by the strong potential for new gas power generation and data center growth around our assets, particularly in the key North Texas market, where we are one of the largest gatherers and processors of natural gas. The diversity of end-links assets in key locations in Louisiana, North Texas, the Permian, and Oklahoma continues to set us up for commercial opportunities.
Speaker Change: As we look forward, we are encouraged by the strong potential for new gas power generation and data center growth around our assets, particularly in the key North Texas market, where we are one of the largest gatherers and processors of natural gas.
Dilanka Seimon: The diversity of EnLink's assets in key locations in Louisiana, North Texas, the Permian, and Oklahoma continues to set us up for commercial opportunities. With that, I'll turn it over to Ben to provide an overview of our operations and our financial results.
Speaker Change: The diversity of EnLink's assets in key locations in Louisiana, North Texas, the Permian, and Oklahoma continues to set us up for commercial opportunities.
Walter Pinto: The data, a steady go to them, to provide an overview of our operations, and often answer with us.
Speaker Change: With that, I'll turn it over to Ben to provide an overview of our operation and our financial results.
Walter Pinto: Thanks, Dilanka, and good morning, everyone. Let's start with the Permian; for segment profit for the second quarter of 2024 came in at $93.1 million. Segment profit in the quarter included approximately $16.8 million of gross operating expenses tied to plant relocations and $1.3 million of unrealized derivative losses. Excluding plant relocation objects and unrealized derivative activity, segment profit in the second quarter of 2024 grew 10% sequentially and also grew 10% from the prior year quarter. Our diverse mix of producers remained active during the quarter; average natural gas gathering volumes were approximately 7% higher sequentially and 17% higher than the prior year quarter.
Ben Lamb: Thanks, Dilanka, and good morning, everyone. Let's start with the Parmian. Her segment profit for the second quarter of 2024 came in at $93.1 million. Segment profit in the quarter included approximately $16.8 million of gross operating expenses tied to plant relocations and $1.3 million of unrealized derivative losses. Excluding plant relocation, OPEX, and unrealized derivative activity, segment profit in the second quarter of 2024 grew 10% sequentially and also grew 10% from the prior year quarter.
Ben Lamb: Thanks, Dilanka, and good morning, everyone.
Ben Lamb: Let's start with the Parmian, where segment profit for the second quarter of 2024 came in at $93.1 million.
Ben Lamb: Segment profit in the quarter included approximately $16.8 million of gross operating expenses tied to plant relocations and $1.3 million of unrealized derivative losses.
Ben Lamb: Excluding plant relocation OPEX and unrealized derivative activity, segment profit in the second quarter of 2024 grew 10% sequentially and also grew 10% from the prior year quarter.
Ben Lamb: Our diverse mix of producers remained active during the quarter. Average natural gas gathering volumes were approximately 7% higher sequentially and 17% higher than the prior year quarter. During the quarter, our third relocated processing plant, Tiger 2, came online and provided much-needed capacity for our customers in the Delaware Basin.
Walter Pinto: During the quarter, our third relocated processing plant, Tiger 2, came online and provides much needed capacity for our customers in the Delaware Basin. Turning now to Louisiana, we experienced another quarter of solid performance, reflecting normal seasonal effects and the last natural gas liquid segment. Segment profit for the second quarter of 2024 came in at $84.3 million, including $5.6 million of unrealized derivative gains. Excluding the impact of unrealized derivative activity, segment profit in the second quarter of 2024 decreased approximately 39% sequentially and decreased approximately 9% compared to the prior year quarter. The sequential decreased reflects both seasonality and an outside result in the first quarter, driven by weather-related activity.
Ben Lamb: Turning now to Louisiana, we experienced another quarter of solid performance reflecting normal seasonal effects in the natural gas liquids sector. Segment profit for the second quarter of 2024 came in at $84.3 million, including $5.6 million of unrealized derivative gain. Excluding the impact of unrealized derivative activity, segment profit in the second quarter of 2024 decreased approximately 39% sequentially and decreased approximately 9% compared to the prior year quarter. The sequential decrease reflects both seasonality and an outsized result in the first quarter driven by weather-related activity.
Ben Lamb: Turning now to Louisiana, we experienced another quarter of solid performance reflecting normal seasonal effects in the last natural gas liquid segment.
Ben Lamb: Excluding the impact of unrealized derivative activity, segment profit in the second quarter of 2024 decreased approximately 39% sequentially and decreased approximately 9% compared to the prior year quarter.
Walter Pinto: Moving up to Oklahoma, we delivered segment profit of $103.5 million for the second quarter of 2024, including approximately $0.1 million of gross operating expenses tied to plant relocations and $0.8 million of unrealized derivative gains. It's excluding the impact of plant relocation off-ex and unrealized derivative activity, segment profit and second quarter of 2024 grew 14 percent sequentially, the decrease to approximately 5 percent from the prior year quarter. During second quarter, we saw operators remain active with rigs on our acreage, and average natural gas gathering volumes were 7 percent higher sequentially, but were 3 percent lower compared to the prior year quarter.
Ben Lamb: Moving up to Oklahoma, we delivered segment profit of $103.5 million for the second quarter of 2024, including approximately $0.1 million of gross operating expenses tied to plant relocations and $0.8 million of unrealized derivative gains. Excluding the impact of plant relocation opex and unrealized derivative activity, segment profit in the second quarter of 2024 grew 14% sequentially, but decreased approximately 5% from the prior year quarter. During the second quarter, we saw operators remain active with rigs on our acreage, and average natural gas gathering volumes were 7% higher sequentially, but were 3% lower compared to the prior year quarter.
Ben Lamb: Excluding the impact of plant relocation OPEX and unrealized derivative activity, segment profit in the second quarter of 2024 grew 14% sequentially, but decreased approximately 5% from the prior year quarter.
Ben Lamb: During the second quarter, we saw operators remain active with rigs on our acreage, and average natural gas gathering volumes were 7% higher sequentially, but were 3% lower compared to the prior year quarter.
Walter Pinto: Rapping up with North Texas, segment profit for the quarter was $52.4 million, including $1.1 million of unrealized derivative losses. Excluding unrealized derivative activity, segment profit and second quarter of 2024 decreased 11 percent sequentially and decreased 28 percent from the prior year quarter, driven by the full quarter impact of the previously discussed one-time contract reset. Natural gas gathering volumes were 2 percent higher sequentially but were 8 percent lower compared to the prior year quarter. These solid results reflect the benefits of our diverse asset mix. In total, our segments drove $306 million in adjusted EBITDA. We are tracking close to the midpoint of our adjusted EBITDA guidance range of $1.31 billion to $1.41 billion for full year 2024.
Ben Lamb: Wrapping up with North Texas, segment profit for the quarter was $52.4 million, including $1.1 million of unrealized derivative loss. Excluding unrealized derivative activity, segment profit in the second quarter of 2024 decreased 11% sequentially and decreased 28% from the prior year quarter, driven by the full quarter impact of the previously discussed one-time contract receipts. Natural gas gathering volumes were 2% higher sequentially, but they were 8% lower compared to the prior year quarter.
Ben Lamb: These solid results reflect the benefits of our diverse asset. In total, our segments drove $306 million in Adjusted EBITDA. We are tracking close to the midpoint of our Adjusted EBITDA guidance range of $1.31 billion to $1.41 billion for full year 2024. While we don't give quarterly guidance, we anticipate our second half 2024 results will be weighted towards the fourth quarter, driven by the normal winter seasonal strength in our Louisiana NGL business. Capital expenditures, plant relocation expenses, Net-to-EnLink, and investment contributions were $103 million in the second quarter of 2024. Free cash flow after distributions for the second quarter came in at approximately $53 million.
Ben Lamb: In total, our segments drove $306 million in adjusted EBITDA. We are tracking close to the midpoint of our adjusted EBITDA guidance range of $1.31 billion to $1.41 billion for full year 2024.
Walter Pinto: While we don't give quarterly guidance, we anticipate our second half 2024 results will be weighted towards the fourth quarter, driven by the normal winter seasonal strength in our Louisiana NGL business. Capital expenditures, plant relocation expenses, net to end link, and investment contributions were $103 million in the second quarter of 2024. Free cash flow after distributions for the second quarter came in at approximately $53 million. On the balance sheet side, we continue to be in a very strong position with a leverage ratio of 3.3 times at the end of the second quarter, and we retain ample liquidity.
Ben Lamb: While we don't give quarterly guidance, we anticipate our second half of 2024 results will be weighted towards the fourth quarter, driven by the normal winter seasonal strength in our Louisiana NGL business.
Ben Lamb: On the balance sheet side, we continue to be in a very strong position with a leverage ratio of 3.3 times at the end of the second quarter, and we retain capital liquidity. Consistent with our capital allocation plan, we maintained our common unit distribution of $0.1325 per unit in the second quarter, which represents a 6% increase over the second quarter of 2023. Additionally, we remain active with our common unit repurchase program, with approximately $50 million spent in the second quarter.
Ben Lamb: On the balance sheet side, we continue to be in a very strong position with a leverage ratio of 3.3 times at the end of the second quarter, and we retain ample liquidity.
Walter Pinto: Consistent with our capital allocation plan, we maintained our common unit distribution of 13 and a quarter cents per unit in the second quarter, which represents a 6 percent increase over the second quarter of 2023. Additionally, we remain active with our common unit repurchase program, with approximately $50 million spent in the second quarter. After the quarter, the board expanded our common unit repurchase authorization to $250 million. Since the end of 2021, we have now repurchased approximately $50 million common units, or over 10 percent of total units outstanding. Lastly, after the quarter, we took a significant step towards simplifying our balance sheet through the purchase of nearly $200 million of our Series B preferred.
Ben Lamb: Additionally, we remain active with our Common Unit Repurchase Program, with approximately $50 million spent in the second quarter.
Ben Lamb: After the quarter, the board expanded our common unit repurchase authorization to $250 million. Since the end of 2021, we have now repurchased approximately 50 million common units, or over 10% of total units outstanding. Lastly, after the quarter, we took a significant step towards simplifying our balance sheet through the purchase of nearly $200 million of our Series B preferred stock. In total, the balance of the Series B preferred stock has been reduced by about half since the beginning of 2024.
Ben Lamb: After the quarter, the board expanded our common unit repurchase authorization to $250 million.
Ben Lamb: Since the end of 2021, we have now repurchased approximately 50 million common units, or over 10% of total units outstanding.
Ben Lamb: Lastly, after the quarter, we took a significant step toward simplifying our balance sheet through the purchase of nearly $200 million of our Series B Preferreds. In total, the balance of the Series B Preferred stock has been reduced by about half since the beginning of 2024.
Walter Pinto: In total, the balance of the series beat preferred stock has been reduced by about half since the beginning of 2024.
Walter Pinto: In summary, the NLT team delivered solid results in the second quarter of 2024, and we expect the momentum to continue for the rest of the year.
Jesse Arenivas: In summary, the EnLink team delivered solid results in the second quarter of 2024, and we expect the momentum to continue for the rest of the year. With that, I'll turn it back over to Jesse. Thank you, Ben. The EnLink team delivered another quarter of solid execution that showcased our ability to drive value in multiple areas of our diverse business and integrated value chain. With that, you may now open the call for questions.
Ben Lamb: In summary, the EnLink team delivered solid results in the second quarter of 2024, and we expect the momentum to continue for the rest of the year. With that, I'll turn it back over to Jesse.
Jesse Arenivas: With that, I'll turn it back over to Jesse. Thank you, Ben. The NLT team delivered another quarter of solid execution that showcased our ability to drive value in multiple areas of our diverse business and integrated value chain.
Jesse Arenivas: Thank you, Ben. The InLink team delivered another quarter of solid execution that showcased our ability to drive value in multiple areas of our diverse business and integrated value chain.
Operator: With that, you may now open the call for questions. Thank you. Well, now we conduct any questions and answer sessions. If you'd like to ask questions this time, please press star one from your telephone keypad, and a confirmation tone indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question at this time, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.
Speaker Change: If you'd like to ask a question at this time, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Operator: One moment, please will we pull for questions.
Operator: One moment, please, while we poll for questions. Thank you, and our first question is from the line of Praneeth Satish with Wells Fargo. Please proceed with your question.
Praneeth Satish: Thank you, and our first question is from the line of Praneeth Satish with Wells Fargo.
Speaker Change: Thank you and our first question is from the line of Praneeth Satish with Wells Fargo. Please receive your questions.
Praneeth Satish: Please receive your questions. Thanks.
Praneeth Satish: Thanks, good morning all. So just turning to guidance, if we look at the first half results and compare, you know, against the midpoint of full year EBITDA guidance, it would imply a fairly steep ramp up in the second half. You mentioned a lot of it is weighted towards Q4. Maybe if you could just kind of, you know, further unpack some of the drivers of growth between the first half and the second half and how much visibility you have into the ramp.
Praneeth Satish: Good morning, all. Just turning to guidance, if we look at the first half results and compare against the midpoint of a full year EBITDA guidance, it would imply a fairly steep ramp in the second half. You mentioned a lot of it is weighted towards Queue four.
Praneeth Satish: Thanks. Good morning, all. So, just turning to guidance, if we look at the first half results and compare.
Praneeth Satish: You know, against the midpoint of a full year EBITDA guidance, it would imply a fairly steep ramp in the second half. You mentioned a lot of it is weighted towards Q4. Maybe if you could just kind of, you know, further unpack some of the drivers of growth between first half and second half and how much visibility you have into the ramp.
Ben Lamb: Maybe if you could just further unpack some of the drivers of growth between first half and second half, and how much of visibility you have into the ramp.
Ben Lamb: Good morning, Praneeth. This has been happy to unpack that a little bit. So a few moving parts. You know, one item is we placed the tiger to plant in service just in May, and it's already well utilized. So we'll expect to be at a higher run rate for the Permian in the second half versus the first half. We also have the normal seasonality of the NGL business. The fourth quarter is our strongest quarter just based on the timing of some of our deliveries to customers that will be the same this year as it has been in past years.
Ben Lamb: Hey, good morning, Praneeth. This is Ben.
Ben Lamb: I'm happy to unpack that a little bit. So, there are a few moving parts. You know, one item is that we placed the Tiger II plant in service just in May, and it's already well-utilized, so we'll expect to be at a higher run rate for the Permian in the second half versus the first half. We also have the normal seasonality of the NGL business. The fourth quarter is our strongest quarter just based on the timing of some of our deliveries to customers that will be the same this year as it has been in past years.
Speaker Change: We also have the normal seasonality of the NGL business. The fourth quarter is is our strongest quarter just based on the timing of some of our deliveries to customers that will be the same this year as it has been in past years.
Delante Simon: I also mentioned in the Louisiana gas business where we have a storage business. We have some storage-related activity that we'll expect to realize in the fourth quarter. And then fairly small item, but we'll expect to have some contribution from the Matterhorn JV in the fourth quarter. So all of those are parts of the way that you get to a higher run rate for the second half that we saw in the first half.
Ben Lamb: I'd also mention in the Louisiana gas business, where we have a storage business, we have some storage-related activity that we'll expect to realize in the fourth quarter. And then, a fairly small item, but we expect to have some contribution from Matterhorn JV in the fourth quarter. So all of those are part of the way that you get to a higher run rate in the second half than we saw in the first half.
Speaker Change: I'd also mention in the Louisiana gas business where we have a storage business.
Speaker Change: parts of the way that you get to a higher run rate for the second half than we saw in the first half.
Delante Simon: And maybe switching gears, I wanted to talk about your NGL contracts in the Permian.
Praneeth Satish: Got it, that's helpful. And maybe switching gears, I wanted to talk about your NGL contracts in the Permian. Our understanding is that EnLink controls around 150,000 barrels per day of NGLs in the Permian. These NGLs are being transported to Bellevue on higher-cost pipelines, and there's an opportunity to renegotiate those rates lower over time. So I guess the first question is, is this an accurate summary? Is this an opportunity for you guys? And then second, if so, can you help us understand maybe the timeline for when some of these volumes will come off contract?
Speaker Change: Got it, that's helpful. And maybe switching gears, I wanted to talk about your NGL contracts in the Permian. Our understanding is that EnLink controls around 150,000 barrels per day of NGLs in the Permian.
Delante Simon: Our understanding is that NLink controls around 150,000 barrels per day of NGLs in the Permian. These NGLs are being transported to Bellevue on higher-cost pipelines. And there's an opportunity to renegotiate those rates lower over time.
Speaker Change: these NGLs are being transported to Bellevue on higher cost pipelines and there's an opportunity to renegotiate those rates lower over time. So I guess the first question is, is this an accurate summary? Is it an opportunity for you guys? And then second, if so, can you help us understand maybe the timeline for when some of these volumes come off contract?
Delante Simon: So I guess the first question is, is this an act here at Summary? Is it an opportunity for you guys? And then second, if so, can you help us understand maybe the timeline for when some of these volumes come off contract?
Delante Simon: Good morning, Delanca here. I'll take that one. In the Permian, we have about 220,000 barrels of NGL that we market about 75%. So your 150 number is accurate.
Dilanka Seimon: Good morning, Dilanka here. I'll take that one.
Dilanka Seimon: Good morning, Dilanka.
Dilanka Seimon: In the Permian, we have about 220,000 barrels of NGL that we market about 75% of. So your one 50 number is accurate. We have adequate pipeline capacity today, and this capacity starts to expire over the next three to four years, probably weighted towards the back end of that range, which is a time when NGL pipeline capacity is expected to increase. Given the expirations are still a few years out, and the NGL build-out relative to the demand for capacity is yet not clear, I think it's too early to talk too much in specificity.
Delante Simon: We have adequate pipeline capacity today, and then this capacity starts to expire over the next three to four years, probably weighted towards the back end of that range, which is a time where NGL pipeline capacity is expected to increase. Given the explorations are still few years out and the NGL build out relative to the demand of capacity yet not clear, I think it's too early to talk too much in specificity. But, as you say, these contracts are various rates and, depending on when they were executed, on average, I think it's safe to say that we will be able to contract at re-contractor at lower TNF rates.
Speaker Change: 50 number is accurate.
Dilanka Seimon: But as you say, these contracts are at various rates, and depending on when they were executed on average, I think it's safe to say that we will be able to contract at Recontractor at lower TNF rates, and we expect to capture some value there.
Speaker Change: We don't want to go into too much in specificity, but as you say, these contracts are various rates and depending on when they were executed on average, I think it's safe to say that we will be able to contract.
Delante Simon: and we expect to capture some value there.
Speaker Change: at recontractor at lower TNF rates and we expect to capture some value there.
Delante Simon: Great, thank you.
Spiro Dounis: Our next question is from Alina of Spiro Dounis with City. Please just see it through your questions. Thanks, operator. Morning, gentlemen. I want to start up with Louisiana, Dilanka, as you sort of laid out. You've got projects across all three phases now at this point. And so I guess I'm just curious what should we expect next. You are on phase one.
Operator: Our next question is from the line of Spiro Dounis with Citi. Please answer your question.
Speaker Change: Our next question is from the line of Spiro Dounis with Citi. Please receive your question.
Spiro Dounis: Thanks, operator. Good morning, gentlemen.
Spiro Dounis: I want to start off with Louisiana. Dilanka, as you sort of laid out, you've got projects across all three phases now at this point, and so I guess I'm just curious, what should we expect next? You know, it sounds like in phase one, you're already sort of focused on 2025, but the thing about the next two phases, really, specifically around phase three, are there other projects like JISH you've got in the hopper and anything that can maybe be even quicker to market?
Dilanka Seimon: You're already sort of focused on 20, 25, but the thing about the next two phases, really specifically around phase three, are there other projects like Gish you've gotten the hopper in anything that can maybe be even quicker to market? Sure, I think in all three phases, kind of we are working various angles on the first phase. I think, given that 24 explorations are mostly re-contracted. We are quickly turning our attention to the 25 explorations, so teams are working hard on renewing those. On the phase two expansions, we are working on a good funnel of debottlenecking type projects and talking about incremental deliveries to existing customers who are already connected, as well as newer customers that are coming online.
Dilanka Seimon: Sure, I think... In all three phases, we are working on various angles. In the first phase, I think, given that 24 expirations are mostly recontracted, we are quickly turning our attention to the 25 expirations. So teams are working hard on renewing those to serve them, and we like our chances there. So a combination of these I think will fill in the gaps of phase two and phase three from a transport perspective. On the storage side, now that we've...
Speaker Change: In all three phases kind of we are working various angles on the first phase I think given that 24 expirations are mostly recontracted We are quickly turning our attention to the 25 expiration so teams are working hard on renewing those
Dilanka Seimon: If you were to think about where the gas demand is coming through, it's from basically LNG, power demand, and industrial. On the LNG front, Venture Global, two projects, Counter-Pass, and the Placaman's LNG, as they ramp up, I think there'll be more opportunities for us to bring incremental volume to those facilities on top of what we already have contracted for. And then there are obviously other LNG projects that are being progressed. On the power side, I think everyone understands the incremental demand for gas-fired power generation, particularly in Louisiana. We are seeing the utilities reacting pretty quickly with plans for incremental power generation.
Speaker Change: On the power side, I think everyone understands the incremental demand for gas-fired power generation. Particularly in Louisiana, we are seeing the utilities reacting pretty quickly with plans for incremental power generation. On the industrial side...
Dilanka Seimon: On the industrial side, the most of the incremental demand seems to be coming from the ammonia sector. Each million tons of ammonia is about 130 MMC everyday of gas demand, and a few of these projects are expected to take FID next year. And given that most of these around the river cargo are quite close to our two systems being bridge-line and ligged, I think we are well-positioned to serve them, and we like our chances there. So a combination of these, I think we'll fill in the buckets of the phase two and phase three from a transport perspective.
Speaker Change: MNCF a day of gas demand and a few of these projects are expected to take FID next year and given that most of these around the River Cardo are quite close to our two systems being bridge line and LIG I think we are well positioned to
Speaker Change: to serve them and we like our chances there. So a combination of these, I think we'll fill in the buckets of the phase two and phase three from a transport perspective. On the storage side, now that we've...
Dilanka Seimon: On the storage side, now that we've completed the engineering studies, sold the capacity, and I develop and phase of this expansion, we are turning our eyes on the next expansion. You know, it's going to be a mix of between do we expand nepholine wheel storage more, or do we turn our eyes to a further expansion at GISH. As we did in the recently announced expansion, we will optimize for the best solution there. So more to come on storage, but I think it's the combination of transport and storage that will fill these phase two and phase three buckets.
Speaker Change: We have completed the engineering studies, sold the capacity, and are in the development phase of this expansion. We are turning our eyes on the next expansion.
Speaker Change: You know, it's going to be a mix of between do we expand Nepal Envil storage more or do we turn our eyes to a further expansion at JISH as we did in the
Spiro Dounis: Great, I appreciate color there, Dilanka.
Spiro Dounis: The second question, a few part one on CAPEX. First part, just curious how you're thinking about the need for that next processing plant. And you mentioned that Tiger II is kind of ramping up pretty quickly. If I look at past cadence, you know, maybe you'd need another one by the end of 25 on my map, so just want to kind of sense check that. And then just giving some of the moving pieces around CCS, maybe moving out, and I think some of these moving out of projects moving in. You've just updated us, and I are you thinking directionally about CAPEX in 2025?
Ben Lamb: Yes, Spiro, this has been so first on the next plant you're right. We have been roughly on a pace of a plant that you're in the Permian, and as I said earlier, we just brought Tiger II online in May. Next plant very likely would be in the Midland Basin, and also very likely would be another very cost effective plant relocation. We're not at the point of announcing it today, but I would say, watch this space. We're progressing well for making that decision, still in consultation with our customers to make sure that we understand the outlook for volumes, but we may have news on that front in the fairly near future.
Dilanka Seimon: in the Permian, and as I said earlier, we just brought Tiger 2 online in May.
Speaker Change: in the Permian, and as I said earlier, we just brought Tiger 2 online in May. Next plant, very likely, would be in the Midland Basin, and also very likely would be another very cost-effective plant relocation.
Speaker Change: But we may have news on that front in the fairly near future.
Ben Lamb: In terms of 2025 capital, listen, it's obviously too early to say too much about that because we don't have full picture of what our producers are going to be doing. But I think that directionally, you're correct to say less CCS capital in the near term, more capital devoted to Louisiana, probably reasonable to think that those things today roughly offset one another so that we stay on roughly the same pace we've been on the last couple of years.
Speaker Change: In terms of 2025 Capital Listen, it's obviously too early to say too much about that because we don't have full picture of what our producers are going to be doing.
Speaker Change: But I think that directionally, you're correct to say less CCS capital in the near term, more capital devoted to Louisiana. Probably reasonable to think that those things today roughly offset one another so that we stay on roughly the same pace we've been on the last couple of years.
Spiro Dounis: Great.
Spiro Dounis: I'll leave it there for today.
Operator: Thank you, guys.
Speaker Change: Great, I'll leave it there for today. Thank you guys.
Operator: Thank you.
Jeremy Tonet: Our next question is from the line of Jeremy Toneit with J.P. Morgan. Please just use your question. Hi. Good morning, this is Jeremy Toneit from J.P. Morgan. I just want to, I guess, start off a little bit more with the CCS side and appreciate that we're still early innings in everything that is happening here. But just over what type of time frame do you see, I guess, this market maturing to support more commercial arrangements?
Speaker Change: Hi, good morning, this is Jeremy Tonet from J.P. Morgan.
Speaker Change: Wanted I guess
Jeremy Tonet: Start off a little bit more with the CCS side and you know appreciate that we're still kind of early innings and everything that is happening here, but just over what type of time frame do you see
Speaker Change: I guess it's market maturing to support more commercial arrangements.
Jesse Arenivas: Thanks, Jeremy. As we said, the space is slower to develop.
Jesse Arenivas: Yeah, thanks, Jeremy. It's Jesse.
Speaker Change: Yeah, thanks, Jeremy. It's Jesse. Look, as we've said, you know, it's the space is slower to develop.
Jesse Arenivas: What's not changed on our end is we are core principles have not changed. CCS, it will be the key mitigating factor to the industrial space, so that's going to happen. Let me just remind you, we have in the region the second highest emitting region in the US, 80 million metric tons emitted today and growing. We have nearby sequestration; we have pipe in the ground. So we feel very well positioned for the long term. Let me remind you, we have multiple conversations with the public parties we've talked about: Shell, Noxie, and a couple others. Those discussions are ongoing.
Speaker Change: What's not changed on our end is our core principles have not changed. You know, CCS, we are...
Jesse Arenivas: With respect to timing, it's just been tough. I think we are moving at pace of the emitters, and the emitters are still focused on reducing their carbon footprint. They're still in the process of evaluating and choosing their counterparties. So timing, we can't really speak to; it's been slower, but longer term, we feel very well positioned to take advantage of our core competencies. in the area.
Jesse Arenivas: Look, as we've said, the space is slower to develop. You know, what hasn't changed on our end is that our core principles have not changed. CCS, we are, it will be the key mitigating factor to the industrial space. So that that's going to happen.
Speaker Change: And the emitters are still focused on reducing their carbon footprint. They're still in the process of evaluating.
Speaker Change: and choosing their counterparties.
Jeremy Tonet: Got it, understood. It may be just pivoting to the base business here.
Jeremy: Got it, understood. Um, maybe just pivoting to the base business here.
Delante Simon: Just curious if you could remind us, I guess, with the level of a commodity price exposure in the business today, maybe after recent bolt-on acquisition. The margins came in a bit lighter than we expected in the Barnett and the Permian. It's awesome to climb their quarter of quarter. So just trying to get the sense, are these kind of just the new contracts or how much is commodity price influence? There trying to get a feeling for margins.
Speaker Change: Just curious if you could remind us, I guess, with the level of commodity price exposure in the business today, maybe after recent bolt-on acquisitions, the margins.
Speaker Change: came in a bit lighter than we expected in the Barnett, in the Permian, and saw some declines there quarter of quarter. So just trying to get a sense, are these kind of just the new contracts, or how much is commodity price influence there, trying to get a feeling for margins.
Delante Simon: Hey, Jeremy, it's done. So when you think across all of EnLink, we're about 90% fee-based, about 10% commodity-based, and we're very well-heged on that commodity piece for this year. And in fact, we're already layering in hedges for next year. So not a ton of commodity sensitivity. You're right, though, that where we have the commodity sensitivity primarily is in the Permian, and particularly in the middle of the base inside of the Permian, where we have a component of POP gathering and processing agreements. So it does have some impact on Permian margins, not a huge impact, especially none of the hedging.
Ben Lamb: Hey Jeremy, it's Ben.
Speaker Change: So when you think across all of EnLink, we're about 90% fee-based, about 10% commodity-based.
Speaker Change: And we're very well hedged on that commodity piece for this year, and in fact we're already layering in hedges for next year.
Jesse Arenivas: And, you know, let me just remind you that we have in that region, the second highest emitting region in the US, 80 million metric tons emitted today and growing. You know, we have nearby sequestration, we have pipe in the ground. So we feel very well positioned for the long term. You know, just let me remind you, we have had multiple conversations with, you know, the public parties. We've talked about Shell and Oxy and a couple others.
Speaker Change: So not a ton of commodity sensitivity. You're right, though, that where we have the commodity sensitivity primarily is in the Permian, and particularly the Midland Basin side of the Permian where we have
Speaker Change: a component of POP, Gathering and Processing Agreements. So it does have some impact on permeate margins, not a huge impact.
Delante Simon: On North Texas, the bigger factor when you look at this quarter versus the prior year quarter, or even versus the first quarter, is you're seeing a full three-month impact of that one-time rate reset that we talked about in the last call. So we had one month impact of that in Q1. Now you see a three-month impact. So from this point forward, you can expect to see those margins stay relatively stable and track more closely with volumes. Got it. That's helpful.
Speaker Change: On North Texas, the bigger factor when you look at this quarter versus the prior year quarter, or even versus the first quarter,
Delante Simon: Thank you for that.
Speaker Change: Got it. That's helpful. Thank you for that.
Zach Venevere: Thank you.
Zach Venevere: Our next question is from the line of Zach Venevere with TPH. Please receive your questions. Perfect. Thanks for taking my question, guys. Maybe just going to the Permian, you all mentioned you hope to see contributions from Matt or Warren. I know you guys aren't operating the pipe, but any updates you can give on the timeline for that kind of start service or start line fill. Yeah, this has been, again, first let me say a happy we are with our Matterhorn investment.
Speaker Change: Perfect, thanks for taking my question guys. Maybe just going to the Permian, you all mentioned you hope to see contributions from Matterhorn. I know you guys aren't operating the pipe, but any updates you can give on the timeline for that to kind of start service or start line fill?
Speaker Change: Yeah, this has been, again, first let me say how happy we are with our Matterhorn investment. The Whitewater team runs an excellent project, they do a great job commercially. We couldn't be happier with the investment in Matterhorn.
Zach Venevere: The Whitewater team runs an excellent project. They do a great job commercially. We couldn't be happier with the investment in Matterhorn. As far as timing, we expect the pipeline to be in service in the month of September. That's maybe a two-week difference to, you know, to what the original plan was, or toward the very end of August, but a very minor delay in the grand scheme of things; some of that weather related with Hurricane Barrel, in fact. So that's our current expectation, and so we'll expect to begin seeing some contribution to the financials in the fourth quarter.
Jesse Arenivas: Those discussions are ongoing. With respect to timing, it's just been tough. You know, I think we are moving at the pace of the emitters. And the emitters are still focused on reducing their carbon footprint; they're still in the process of evaluating and choosing their counterparties. So timing, we can't really speak to it being slower, but longer term, we feel very well positioned to take advantage of our core competencies in the area.
Ben Lamb: Got it, understood. And maybe just pivoting to the base business here, just curious if you could remind us of the level of commodity price exposure in the business today, maybe after recent bolt-on acquisitions. The margins came in a bit lighter than we expected in the Barnett and in the Permian, and saw some declines there quarter after quarter. So just trying to get a sense, are these kind of just the new contracts, or how much is the commodity price influence there? Just trying to get a feeling for the margins.
Speaker Change: As far as timing, we expect the pipeline to be in service in the month of September .
Speaker Change: That's maybe a two-week difference to, you know, to what the original plan was or toward the very end of August , but a very minor delay in the grand scheme of things, some of that weather related with Hurricane Beryl, in fact.
Speaker Change: So that's our current expectation and so we'll expect to begin seeing some contribution to the financials in the fourth quarter.
Zach Venevere: God, so that makes sense. Maybe just to follow up on that, you know, do you guys have a sense for, you know, it seems like you all and all the other midstream GMT companies have not really seen an effect from negative wall hop prices. When that comes online, is there gas trapped behind that pipe that will fill it relatively quick, or do you guys kind of see it growing with the cadence of the Permian, which is, you know, second half-weighted on the ramp as it is right now? I think it's going to fill pretty quickly.
Speaker Change: Gotcha, that makes sense. Maybe just to follow up on that, you know, do you guys have a sense for, you know, it seems like you all and all the other midstream GMP companies have not really seen an effect from negative WAHOP prices.
Speaker Change: When that comes online, is there gas trapped behind that pipe that'll fill it relatively quick? Or do you guys kind of see it growing with the cadence of the Permian, which is, you know, second half-weighted on the ramp as it is right now?
Delante Simon: Yeah, you know, as far as speaking for the pipe, I think it's going to fill very quickly. You know, in terms of our exposure to Wal-Hop basis, we really have two exposures. One is that POP exposure that I mentioned earlier. We are very proactive in hedging our Wal-Hop basis to protect ourselves. We had all of our Wal-Hop basis for this year done before the year even began. The second exposure, of course, is if it changes producer behavior. But, you know, as you can imagine, in an oil-directed basin, you know, the producers, frankly, are not that sensitive to it.
Speaker Change: I think it's going to fill pretty quickly. Yeah, you know, as far as speaking for the pipe, I think it's going to fill very quickly.
Ben Lamb: Hey Jeremy, it's Ben. And we're very well hedged on that commodity piece for this year. And in fact, we're already layering in hedges for next year, so not a ton of commodity sensitivity. You're right, though, that where we have the commodity sensitivity primarily is in the Permian, and particularly the Midland Basin side of the Permian, where we have a component of POP, gathering and processing agreements. So it does have some impact on Permian margins, not a huge impact.
Ben Lamb: On North Texas, the bigger factor when you look at this quarter versus the prior year quarter, or even versus the first quarter, is that you're seeing a full three-month impact of that one-time rate reset that we talked about in the last call. So we had a one month impact of that in Q1, and now you see a three-month impact. So from this point forward, you can expect to see those margins stay relatively stable and track more closely with volume.
Speaker Change: You know, in terms of our exposure to WAHA bases, we really have two exposures. One is that POP exposure that I mentioned earlier. We are very proactive in hedging our WAHA bases to protect ourselves. We had all of our WAHA bases for this year done before the year even began.
Speaker Change: The second exposure, of course, is if it changes producer behavior, but, you know, as you can imagine in an oil-directed basin, you know, the producer's frankly not that sensitive to it. So you're right. We really haven't had much of an impact from from weak WAHA prices.
Delante Simon: So you're right, we really haven't had much of an impact from Wal-Hop prices.
Zach Venevere: Got it.
Zach Venevere: Well, I was super helpful.
Operator: Thank you, guys.
Speaker Change: Got it. Well, that was super helpful. Thank you guys.
Operator: Thank you.
Operator: Thank you. Our next question is from the line of Zack Van Everen with TPH. Please proceed with your question.
Operator: If you like to ask a question, this time, we may press star one for your telephone keypad. Thank you.
Ben Lamb: Yeah, this has been, again, first, let me say how happy we are with our Matterhorn investment. The Whitewater team runs an excellent project; they do a great job commercially. We couldn't be happier with the investment in Matterhorn. As far as timing is concerned, we expect the pipeline to be in service in the month of September. That's maybe a two-week difference from what the original plan was toward the very end of August, but a very minor delay in the grand scheme of things, some of that weather-related with Hurricane Beryl, in fact.
Ben Lamb: I think it's going to fill pretty quickly. Yeah, you know, as far as speaking for the pipe, I think it's going to fill very quickly. You know, in terms of our exposure to WAHA bases, we really have two exposures. One is that POP exposure that I mentioned earlier. We are very proactive in hedging our WAHA bases to protect ourselves. We had all of our WAHA bases for this year done before the year even began.
Ben Lamb: Got it. Well, that was super helpful. Thank you, guys. Thank you. If you'd like to ask a question...
Speaker Change: Thank you. If you'd like to ask a question at this time, you may press star 1 from your telephone keypad.
Operator: At this time, this comes to close our question and answer session.
Speaker Change: Thank you. At this time, this concludes our question and answer session. I'll hand the floor back to management for any closing remarks.
Brian Brungardt: I'll hand the floor right to management for any closing remarks. Thank you, Rob, for facilitating the call this morning, and thank everyone for being on the call today and for your continued support. As always, we appreciate your continued interest and investment in in-link with a four-dub day and you with our third quarter results in November.
Speaker Change: Thank you, Rob, for facilitating the call this morning and thank you everyone for being on the call today and for your continued support. As always, we appreciate your continued interest and investment in EnLink. We look forward to updating you with our third quarter results in November .
Operator: In the meantime, we wish you well and have a great day. Thank you.
Operator: In the meantime, we wish you well and have a great day.
Speaker Change: In the meantime, we wish you well and have a great day.
Operator: This will conclude today's webcast. Let me disconnect your lines at this time.
Thank you for your participation, and have a wonderful day.
Speaker Change: Thank you. This will conclude today's webcast. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.