Q1 2025 DT Midstream Inc Earnings Call
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Operator: Welcome to the DT Midstream first quarter 2025 earnings call.
L: Well. Thank you Didnt see T midstream first quarter 2025 earnings call I will now turn it over to our speaker today try to learn and director of Investor Relations. Please go ahead.
Todd Lohrmann: I will now turn it over to our speaker today, Todd Lohrmann, Director of Investor Relations. Please go ahead. Good morning and welcome everyone.
Speaker Change: Good morning, and welcome everyone.
Todd Lohrmann: Before we get started, I would like to remind you to read the safe harbor statement on page two of the presentation. including the reference to forward-looking states. Our presentation also includes references to non-GAAP financial measures. please refer to the reconciliations to GAAP contained in the appendix.
Speaker Change: Before we get started I would like to remind you to read the safe Harbor statement on page two of the presentation.
Speaker Change: Including the reference to forward looking statements.
Speaker Change: Our presentation also includes references to non-GAAP financial measures.
Speaker Change: Please refer to the reconciliations to GAAP contained in the appendix.
Todd Lohrmann: Joining me this morning are David Slater, President and CEO, and Jeff Jewell, Executive Vice President and CFO. So, with that, I'll go ahead and turn the call over to David.
David Slater: Joining me. This morning are David Slater, President and CEO, and Jeff <unk> Executive Vice President and CFO.
David: So with that I'll go ahead, and turn the call over to David.
David Slater: Thanks, Todd.
David Slater: And good morning, everyone. And thank you for joining. During today's call, I'll touch on our financial results, provide an update on the latest commercial activity and construction progress on our growth projects. I'll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook. So with that, we're off to a strong start in 2025, giving us confidence in our full year plan. We are reaffirming our 2025 Adjusted EBITDA Guidance Range and our 2026 Adjusted EBITDA Early Outlook Range. And we continue to execute on our 2.3 billion organic growth project backlog.
David: Thanks, Todd and good morning, everyone and thank you for joining.
David Slater: During today's call I'll touch on our financial results.
David Slater: An update on the latest commercial activity and construction progress on our growth projects.
Jeff: I'll, then close with some commentary on the current market fundamentals before turning it over to Jeff to review, our financial performance and outlook.
Jeff: So with that we are off to a strong start in 2025, giving us confidence in our full year plan. We are reaffirming our 2025 adjusted EBITDA guidance range.
Jeff: Our 2026 adjusted EBITDA early outlook range.
Jeff: And we continue to execute on our $2 3 billion organic growth project backlog.
David Slater: Our teams remain focused on integrating our newly acquired interstate pipelines. The key integration activities are progressing on schedule, and we completed full cutover of all financial activities in the DTM systems on April 1st, and are on track to complete all remaining milestones by year end. We onboarded all key employees at close and benefited from the team's expertise with these assets during the winter season, which our pipelines were highly utilized and provided reliable service. As we gain additional insights into these assets and how they operate, we're developing a clearer view of the commercial opportunities they present, including synergies with our existing network, and we feel that the growth and modernization opportunities offered from them are better than our initial assessment.
Jeff: Our teams remain focused on integrating our newly acquired Interstate pipelines.
Jeff: The key integration activities are progressing on schedule and we completed full cutover of all financial activities in the TTM systems on April one.
Jeff: And are on track to complete all remaining milestones by year end.
Jeff: We on boarded all key employees at close and benefited from the team's expertise with these assets during the winter season, which our pipelines were highly utilized and provided reliable service.
Jeff: As we gain additional insights into these assets and how they operate we're developing a clearer view of the commercial opportunities to 8%, including synergies with our existing network and.
Jeff: And we feel that the growth in modernization opportunities offered from them are better than our initial assessment.
David Slater: Construction is currently underway on the first of these growth projects. The Midwestern Gas Transmission Power Plant, lateral to serve AES, Indiana's Petersburg Generating Station. On the broader construction front, all of our inflight growth investments remain on track and on budget. And expansions across the gathering footprint will begin to contribute during the second half of the year. As a reminder, we expect these projects to ramp over a period of time and look forward to their contributions as they serve some of the most strategic supply areas in the country.
Jeff: Construction is currently underway on the first of these growth projects.
Jeff: The Midwestern gas transmission power plant lateral gesture.
Jeff: S. Indiana is Petersburg generating station.
Jeff: On the broader construction front all of our in flight growth investments remain on track and on budget.
Jeff: And expansions across the gathering footprint will begin to contribute during the second half of the year. As a reminder, we expect these projects to ramp over a period of time and look forward to their contributions as they serve some of the more strategic supply areas in the country.
David Slater: Finally, I'd like to take a moment to address the recent market volatility and its long-term impacts to DTM and the broader natural gas sector fundamentals. The first quarter of 25 was a volatile period for the market, with significant cold weather in January rebalancing the market and driving natural gas prices up, followed by a decline in pricing as the market tried to understand the impact of tariff announcements. Despite the uncertainty ahead and volatility, DTM, a pure play natural gas midstream company, is fundamentally well positioned and our plan remains unchanged. Our contracts have been structured to be durable, even in volatile markets, with significant demand-based revenues.
Jeff: Finally, I'd like to take a moment to address the recent market volatility and its long term impacts to TTM in the broader natural gas sector fundamentals.
Jeff: The first quarter 25 was a volatile period for the market the significant cold weather in January rebalancing, the market and driving natural gas prices up.
Jeff: Although by a decline in pricing as the market try to understand the impact of tariff announcements.
Jeff: Despite the uncertainty ahead and volatility ATM, a pure play natural gas midstream company is fundamentally well positioned and our plan remains unchanged.
Jeff: Our contracts are structured to be durable even in volatile markets with significant demand based revenues our.
David Slater: A customer base that is over 80% investment grade rated and contract terms that average seven years. In addition, we have no commodity exposure and minimal volume exposure across our portfolio. with our pipeline segment comprising 70% of adjusted EBITDA. serving strong demand pull utility customers anchored by a long-term contract. We expect terrorists will have no material effect on us. As we have procured long lead critical components for our projects currently in progress and maintain strong strategic relationships with suppliers, which is why we are confident in reaffirming our 25 and 2026 adjusted EBITDA guidance ranges, as well as our CAPEX guidance.
Jeff: Our customer base that is over 80% investment grade rated.
Jeff: In contract terms that averaged seven years.
Jeff: In addition, we have no commodity exposure and minimal volume exposure across our portfolio.
Jeff: With our pipeline segment, comprising 70% of adjusted EBITDA.
Jeff: Serving strong demand pool utility customers anchored by long term contracts.
Jeff: We expect tariffs will have no material effect on us.
Jeff: We have procured long lead critical components for our projects currently in progress and maintained strong strategic relationships with suppliers, which is why we are confident in reaffirming our 25 in 2026 adjusted EBITDA guidance ranges.
Jeff: As well as our Capex guidance.
David Slater: Looking out over a longer term time horizon, we remain bullish about the outlook for natural gas industry. Total U.S. natural gas supply and demand are both expected to grow by approximately 19 BCF per day through 2030. with demand growth primarily driven by LNG exports, data center power generation, utility scale power generation, and industrial onshoring. Our Louisiana assets are very well positioned to serve this growing LNG demand in the Gulf Coast region. Likewise, data center and utility scale power generation is expected to drive 25% growth in the PJM and MISO power market regions by 2030. And this is where the bulk of our pipeline assets are located.
Jeff: Looking out over a longer term time horizon, we remain bullish about the outlook for natural gas infrastructure.
Jeff: Total U S natural gas supply and demand are both expected to grow by approximately 19 Bcf per day through 2030.
Jeff: With demand growth, primarily driven by LNG exports datacenter power generation utility scale power generation and industrial onshore.
Jeff: Our Louisiana assets are very well positioned to serve this growing LNG demand in the Gulf Coast region.
Jeff: Likewise datacenter in utility scale power generation is expected to drive 25% growth in the PJM and MISO power market regions by 2030.
Jeff: And this is where the bulk of our pipeline assets are located.
David Slater: In addition, the long-term positive effects of higher tariffs will result in reshoring of industrial demand, require more power and natural gas to serve energy-intensive industries that relocate manufacturing and industrial operations to the United States. Two-thirds of the supply increase to meet this demand growth is expected to come from the Haynesville and Appalachian regions where assets are located, providing opportunities for higher utilization and expansion of our gathering systems to feed our pipelines.
Jeff: In addition, the long term positive effects of higher tariffs will result in re shoring of industrial demand require more power and natural gas to serve energy intensive industries, they relocate manufacturing and industrial operations to the United States.
Jeff: Two thirds of the supply increase to meet this demand growth is expected to come from the Haynesville in Appalachian regions, where assets are located.
Jeff: Adding opportunities for higher utilization and expansion of our gathering systems to feeder pipelines.
David Slater: Finally, there is growing political and regulatory support emerging for natural gas and energy infrastructure. with the recognition of a national energy emergency and appreciation of the need to streamline the process for getting much needed infrastructure built. So, overall, the fundamentals supporting the need for more natural gas infrastructure remain intact and we are confident in our ability to continue to deliver on our commitments to our customers, suppliers, and investors.
Jeff: Finally, there is a growing political and regulatory support emerging for natural gas and energy infrastructure.
Jeff: The recognition of a national energy emergency and depreciation of the need to streamline the process for getting much needed infrastructure built.
Jeff: So overall the fundamentals supporting the need for more natural gas infrastructure remain intact, and we are confident in our ability to continue to deliver on our commitments to our customers suppliers and investors.
Jeff Jewell: I'll now pass it over to Jeff to walk you through our quarterly financials and outline. Thanks, David. And good morning, everyone. In the first quarter, we delivered adjusted EBITDA of $280 million, representing a $45 million increase from the prior quarter. Our pipeline segment results were $39 million higher than the fourth quarter 2024. which includes a full quarter contribution from our acquired interstate pipeline. Gathering segment results were 6 million greater than the fourth quarter 2024. reflecting lower overall expenses in the first quarter 2025 and the impact of growing volumes in the Haynesville. Operationally, total gathering volumes across the Haynesville averaged 1.67 BCF per day.
Jeff: I'll now pass it over to Jeff to walk you through our quarterly financials and outlook.
Jeff: Thanks, David and good morning, everyone.
Jeff: In the first quarter, we delivered adjusted EBITDA of $280 million.
Jeff: Representing a 45 million increase from the prior quarter.
Jeff: Our pipeline segment results were 39 million higher than the fourth quarter 2024.
Jeff: Which includes a full quarter contribution from our acquired Interstate pipelines.
Jeff: Gathering segment results were 6 million greater than the fourth quarter 2024.
Jeff: Reflecting lower overall expenses in the first quarter 2025.
Jeff: And the impact of growing volumes in the Haynesville.
Jeff: Operationally total gathering volumes across the Haynesville averaged 1.67 Bcf per day.
Jeff Jewell: An increase from the fourth quarter. driven by new volumes and the return of offline production. In the Northeast, volumes averaged 1.3 BCF per day, a decrease from the fourth quarter. driven by timing of producer activity, primarily across our Appalachia and Susquehanna gathering systems. but remain in line with our full year plan.
Jeff: An increase from the fourth quarter.
Jeff: Driven by new volumes and the return of offline production.
Jeff: In the northeast volumes averaged 1.3 Bcf per day, a decrease from the fourth quarter.
Jeff: Driven by timing of producer activity, primarily across our Appalachia and Susquehanna gathering systems.
Jeff: But remain in line with our full year plan.
Jeff Jewell: Looking ahead to the second quarter, our plan. which our full year guidance is based on, is for adjusted EBITDA to be lower than the first quarter. driven by seasonality across our interstate pipelines, including JV. An expected rate step down on Guardian Pipeline, which was settled earlier in 2024. and included on our transaction purchase multiple. and Typical Maintenance Activity across our gathering hours.
Jeff: Looking ahead to the second quarter our plan.
Jeff: Which our full year guidance is based on is for adjusted EBITDA to be lower than the first quarter.
Jeff: Driven by seasonality across our interstate pipelines, including Jv's.
Jeff: And expected rate step down on Guardian pipeline.
Jeff: Which was settled earlier in 2024.
Jeff: And included in our transaction purchase multiple.
Jeff: And typical maintenance activity across our gathering assets.
Jeff Jewell: We remain confident in our full year outlook and reaffirm our 2025 Adjusted EBITDA Guidance Range and our 2026 Adjusted EBITDA Early Outlook. reflecting the strong positioning of our assets and the durable nature of our contracting. We've increased our committed capital in 2025 and 2026 to reflect several new projects being executed. with approximately $365 million total committed in 2025. and approximately 100 million committed in 2026.
Jeff: We remain confident in our full year outlook and reaffirm our 2025 adjusted EBITDA guidance range.
Jeff: And our 2026 adjusted EBITDA early outlook.
Jeff: Reflecting the strong positioning of our assets and the durable nature of our contracting.
Jeff: We've increased our committed capital in 2025, and 2026 to reflect several new projects being executed.
Jeff: With approximately 365 million total committed in 2025.
Jeff: And approximately 100 million committed in 2026.
Jeff Jewell: We look forward to our annual rating agency meetings in mid-May. where we will discuss the strength of our credit profile and our commitment to preserving the strength of our balance sheet and achieving an investment-grade credit rating. As a reminder, we are currently investment grade with Fitch Ratings and on Positive Outlook with both Moody's and S&P. requiring only one additional agency to upgrade us before fully achieving an investment grade rating.
Jeff: We look forward to our annual rating agency meetings in mid May.
Jeff: Where we will discuss the strength of our credit profile.
Jeff: And our commitment to preserving the strength of our balance sheet and achieving an investment grade credit rating.
Jeff: As a reminder.
Jeff: We are currently investment grade with Fitch ratings and on positive outlook with both Moody's and S&P.
Jeff: Requiring only one additional agency to upgrade us before fully achieving an investment grade rating.
Jeff Jewell: Finally, today we also announce that our Board of Directors approved our first quarter dividend of $0.82 per share, unchanged from the prior quarter. And we remain committed to grow the dividend 5% to 7% per year in line with our long-term adjusted EBITDA growth.
Jeff: Finally today, we also announced that our board of directors approved our first quarter dividend of 82 cents per share.
Jeff: Unchanged from the prior quarter.
Jeff: And we remain committed to grow the dividend, 5% to 7% per year in line with our long term adjusted EBITDA growth.
David Slater: I'll now pass it back over to David for closing remarks. Thanks, Jeff. So in summary, we remain confident in delivering on our guidance, continuing our track record of strong performance that we've maintained since we founded the company in 2021. Our high-quality, pure-plane natural gas pipeline asset portfolio is very well positioned to take advantage of opportunities across our network and execute on our large organic project backlog. And the fundamentals supporting natural gas infrastructure remain stronger than ever, with significant increases in demand coming from energy exports and the power sector, increased political support behind natural gas and energy infrastructure, and a broader realization of the key role natural gas will need to play as a reliable, cost-effective and clean fuel to meet our country's growing energy demands.
David Slater: I'll now pass it back over to David for closing remarks.
David Slater: Thanks, Jeff.
David Slater: In summary, we remain confident in delivering on our guidance continuing our track record of strong performance that we have maintained since we spun the company in 2021.
David Slater: Our high quality pure play natural gas pipeline asset portfolio is very well positioned to take advantage of opportunities across our network and execute on our large organic project backlog and the fundamentals supporting natural gas infrastructure remains stronger than ever with significant increases in demand coming from LNG exports and power.
David Slater: <unk>.
David Slater: Increased political support behind natural gas and energy infrastructure.
David Slater: In a broader realization.
David Slater: The key role natural gas will need to play as a reliable cost effective and clean fuel to meet our country's growing energy demands.
Operator: And with that, we can now open up the line for questions. Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
David Slater: And with that we can now open up the line for questions.
David Slater: Thank you and we will now begin the question and answer session. If you have dialed in I would like to ask a question. Please press star one on your telephone keypad. Your Easter handled R&D here, if you would like to read a question you Press Star one again.
Michael Blum: And your first question comes from the line of Michael Blum with Wells Fargo. Please go ahead. Thanks. Good morning, everybody. Morning, Michael.
Speaker Change: And your first question comes from the line of Michael Blum with Wells Fargo. Please go ahead.
David Slater: Thanks, Good morning, everybody.
Speaker Change: Good morning, Michael.
David Slater: So, I wanted to start on the volumes, the gathering volumes in Q1, so you had a really big uptick in Haynesville and obviously a downtick in Northeast. I wanted to get, first of all, just speak to what's happening there, particularly in Haynesville. Is this kind of a new run rate or is there anything in particular going on there? And then, how do you see the rest of 25 and beyond playing out in both Northeast and Haynesville? Yeah, in Haynesville, which is where you saw the biggest uptick, that's completely in line with our large public producers and what they've communicated and reported to the market on their activity.
Speaker Change: So I wanted to start on the on the volumes the gathering volumes in Q1, we had a really big uptick in Haynesville and obviously a downtick in northeast.
Speaker Change: Wanted to first of all just.
Speaker Change: Just speak to what's happening there, particularly in the Haynesville is this kind of a new run rate or was there anything in particular going on there and then how.
Speaker Change: How do you see the rest of 'twenty five and beyond are playing out in both northeast and Haynesville.
Speaker Change: Yes in the Haynesville, which is where you saw the biggest uptick that's completely in line with our large public producers on what they've communicated and reported to the market on their activity I'd say the other.
David Slater: I'd say the other... particularly in the Haynesvilles, the privates have become very active. We have a number of privates on the network. So we're working very closely with them as they seem to have been responding. quicker to the price signals and the demand showing up in the area. than some of the publics, but yeah, we feel very confident. I'm very confident in our guidance for what we expect to see there for the balance of the year. likely continue to see some ramp throughout the year towards So, again, feel very optimistic about the Hainesville rights.
Speaker Change: Activity, that's happening, particularly in the Haynesville is the privates.
Speaker Change: Are have become very active we have a number of privates on the network.
Speaker Change: So we're working very closely with them as they seem to have been responding.
Speaker Change: Quicker to.
Speaker Change: The price signals in the demand showing up in the area.
Speaker Change: Then some of the publics, but.
Speaker Change: Yes, we feel very confident in.
Speaker Change: In the Haynesville activity there.
Speaker Change: Very confident in our guidance for what we expect to see there for the balance of the year.
Speaker Change: Likely continuing to see some ramp through.
Speaker Change: The year towards year end.
Speaker Change: Again feel very optimistic about the Haynesville right now.
David Slater: Appalachia, it's playing out exactly as we expected it to play out in our guidance. There's some timing of activity that's kind of embedded in those volume numbers and I think in our disclosures we've talked about a number of projects. Appalachia, and that's how you should think about the profile for Appalachia, but in general very aligned. and what we've got in there.
Speaker Change: Appalachia.
Speaker Change: Playing out exactly as we expected it to play out in our guidance.
Speaker Change: There is some timing.
Speaker Change: The activity.
Speaker Change: Kind of embedded in those volume numbers and I think in our disclosures we've talked about a number of projects kicking in in the second half of the year.
Speaker Change: In Appalachia and that's how you should think about the profile for Appalachia, but in general very aligned with what we've got in our full year plan.
Michael Blum: Okay, great. Thanks for that.
Speaker Change: Okay, great. Thanks for that and then just wanted to ask in the past.
David Slater: And then I just wanted to ask in the past, you've talked about, you know, multiple, I think six or maybe even more potential projects aims at supplying data centers and want to kind of hear the update where that stands today. Yeah, that continues to be very active, that file, and yeah, there's... There's a large group of proposals on the table with numerous sites across our entire. and I'm referring to what I'll call behind the meter data center power demand. In addition to that, there's also numerous proposals across our entire footprint on what I would call utility scale power generation.
You've talked about.
Speaker Change: Paul I think six maybe even more.
Speaker Change: Potential projects aims at supplying data centers and want to kind of hear the update where that stands today. Thanks.
Speaker Change: Yes that continues to be very active staff file and yes. There is.
Speaker Change: There is a large group.
Speaker Change: Proposals on the table with numerous sites across our entire footprint.
Speaker Change: And Thats and I am referring to what I'll call a behind the meter data center power demand. In addition to that there is also numerous proposals across our entire footprint on.
Speaker Change: I would call utility scale power generation.
David Slater: So we're seeing both those sectors very active. You know, and advanced commercial conversations in both those categories. It's very active and ongoing.
Speaker Change: We're seeing both of those sectors is very active.
Speaker Change: And.
Speaker Change: Advanced commercial conversations in both those categories.
Speaker Change: It's very active and ongoing and.
David Slater: Yeah, as we FID projects, we'll happy to share that with our investors. Thank you.
Speaker Change: Yes, as we add projects will be we'll be happy to share that with our investors. So.
Speaker Change: Thank you.
Jeremy Tonet: And your next question comes from the line of Jeremy Tonet with J.P. Morgan. Please go ahead. Hi, good morning. Morning, Jeremy. Hi, just want to start off with Millennium here, if I could.
Speaker Change: And your next question comes from the line of Jeremy at the Jpmorgan. Please go ahead.
Speaker Change: Hi, good morning.
Speaker Change: Good morning, Jeremy.
Speaker Change: Alright, just wanted to start off with millennium here, if I could it looks like I think there might be an open season.
David Slater: Looks like I think there might be an open season for about a half a year or so, and just wondering if you could provide any color there on the Outlook, if that's in the backlog, or any other thoughts you could share. Yeah, thanks for bringing that one up, Jeremy. That is literally hot off the press. I think that went public at the end of the week last. But yes, I'd say that's a good example of the level of inbound inquiries we're getting right now across all of our pipelines, especially in the upper Midwest. There's just strong interest in incremental capacity.
Speaker Change: For about a half a year or so and just wondering if you could provide any color there.
Speaker Change: On the outlook, if that's in the backlog or any other thoughts you could share.
Jeremy: Yes, thanks for bringing that one up Jeremy that is literally hot off the press I think that went public at the end of it.
Speaker Change: The week last week.
Speaker Change: Yes.
Speaker Change: I'd say thats a good.
Speaker Change: Example of the the level of inbound inquiries, we're getting right now across all of our.
Speaker Change: Pipelines, especially in the.
Speaker Change: The upper Midwest and northeast areas.
Speaker Change: Strong interest.
Speaker Change: And incremental capacity.
David Slater: And Millennium is in a fairly unique position there. and to leverage other assets that are in the ground locally that Synergies between the Millennium Pipeline and those other assets to get deeper into that New York and New England market. I think that market area has come to a realization that they are. materially short capacity, and I think what I talked about in my opening statement, just that fundamental backdrop. it's shifted and changed in a positive way. And I think those utilities and those... Markets are sort of reassessing their situation. We'll see how the open season goes, but this open season is really to draw in and get a better read from those markets.
Speaker Change: Millennium is in a fairly unique position there they've got.
Speaker Change: Some abilities to repurpose existing capacity.
Speaker Change: And to leverage other assets there in the ground locally.
Speaker Change: There are synergies between the millennium pipeline in those other assets to get deeper into that New York and New England market.
Speaker Change: I think that market area has come to a realization that they are.
Speaker Change: Materially short capacity.
Speaker Change: <unk>.
Speaker Change: I think what I talked about in my opening statements just that fundamental backdrop.
Speaker Change: It's shifted and changed.
Speaker Change: Positive way.
Speaker Change: And I think those those utilities in those.
Speaker Change: Markets are sort of reassessing their situation and.
Speaker Change: We'll see how the open season goes but this open season is really to draw in and get a better read from those markets.
David Slater: the nature of the demands that they need to meet and how Millennium can serve that. So stay tuned.
Speaker Change: The nature of the demands that they were.
Speaker Change: They need to meet and and how millennium conserve that so stay tuned that's kind of the first step in.
David Slater: That's kind of the first step in a larger expansion project. We're seeing similar inbounds across other FERC assets. you know, including our newly acquired asset. So again, it just kind of goes to that fundamental backdrop that we're operating in. Clear Demand Growth Occurring Across Our Footpath. We're in the early stages of assessing. How we can respond to that and what type of expansions are acceptable in the market. You know, another data point to kind of support this early activity. We had peak day send-outs on... our storage business, and two of our new pipelines. And that's just an indication that demand has grown in this region.
Speaker Change: Larger expansion project.
Speaker Change: We're seeing similar inbounds across other Trc assets.
Speaker Change: Including our newly acquired assets.
Speaker Change: Again, it just kind of goes to that fundamental backdrop that we're operating in.
Speaker Change: Just.
Speaker Change: Clear demand growth occurring.
Speaker Change: Across our footprint.
Speaker Change: We're in the early stages of assessing how.
Speaker Change: How we can respond to that and what <unk>.
Speaker Change: Type of expansions are acceptable in the market.
Speaker Change: Another data point to kind of support this early activity.
Speaker Change: We had peak day.
Speaker Change: <unk>.
Speaker Change: Three of our FERC regulated assets.
Speaker Change: Our storage business and to embark.
Speaker Change: Our new pipelines and that's.
Speaker Change: That's just an indication of.
Speaker Change: That demand has grown in this region and theres constraints emerging.
David Slater: and others constrained.
David Slater: In terms of is this in our backlog, no, this is not in our backlog. This is another good example of... You know, what we communicate with investors are projects that are either FID or near FID in the backlog. Projects like this that are earlier days are kind of excluded from the backlog. So the backlog is. gross backlog, the unadjusted backlog is actually growing right now. Again, very optimistic. Our job is we need to commercialize that and Stay tuned as we move these projects along and we'll share the updates with the investors as appropriate. Great question.
Speaker Change: In terms of business in our backlog no. This is not in our backlog. So this is another good example of.
Speaker Change: What we communicate with investors are projects that are either either near <unk> in the backlog.
Speaker Change: Projects like this are there earlier days.
Speaker Change: Kind of excluded from the backlog.
Speaker Change: So the backlog is.
Speaker Change: Gross backlog the unadjusted backlog is actually growing right now so.
Speaker Change: Again, very optimistic our job as we need to commercialize that and <unk>.
Speaker Change: Stay tuned as we as we move these projects along and we'll share the updates with the investors.
Speaker Change: As appropriate great.
Speaker Change: Great question, though.
Jeremy Tonet: Got it.
Jeremy Tonet: And maybe if I could just dig in at a high level a little bit more in some of the comments you state there. I mean, clearly, there's a change at the federal level with dealing with energy infrastructure, and utilities have a duty to serve their customers. And so we see that alignment.
Speaker Change: Got it and maybe if I could just dig in at a high level a little bit more some of the comments you state there I mean, clearly does it change at the federal level with dealing with energy infrastructure.
Speaker Change: And the utilities have a duty to serve their customers.
Speaker Change: And so we see that alignment.
David Slater: But just, you know, curious, I guess, maybe more at the local level, or really at the state level, we've seen legal filibuster and other tactics in the past, you know, stymie energy infrastructure development. Do you do you see, I guess, different tone coming out of, you know, some of those stakeholders? Thank you. You know, I think there's a series of... events that have occurred over the last 12 months, and I'll rattle off a few that I think are changing the sentiment in the market. I would say one is... A lot of the renewal builds that have been announced, they haven't delivered as advertised.
Speaker Change: But just curious I guess, maybe more at the local level are really at the state level, we've seen legal filibuster another tactics in the past.
Speaker Change: <unk> energy infrastructure development do you do you see I guess different.
Speaker Change: Tone coming out of.
Speaker Change: Some of those stakeholders.
Speaker Change: We do and.
Speaker Change: I think Theres a series of.
Speaker Change: Events has occurred over the last 12 months and I'll rattle off a few that I think are changing the sentiment in the market.
Juan: Hey, Juan.
Speaker Change: As.
Speaker Change: A lot of the renewal builds that have been announced.
Speaker Change: They haven't delivered as advertised they've either been canceled.
David Slater: They've either been canceled. or they're showing up late or. The cost is significantly different than what was originally intended. So that would be one thing that I'd. soaking into the market. I'd say on a reliability perspective. True Impact to Reliability on... New Generation Assets is sinking into the market and being realized. You said it well, Jeremy, the utilities have an obligation to serve. And if there are service challenges in the future, that public sentiment will be with the utilities, and they don't want to be the ones, quote, holding the bag on that public sentiment. So I think that's shifted.
Speaker Change: Or theyre showing up late.
Speaker Change: For the.
Speaker Change: The cost is significantly different than what was originally intended.
Speaker Change: That would be one thing that I think is soaking into the market.
Speaker Change: I would say on a reliability perspective, the true impact to reliability on there on the Intermittency of these new generation assets is sinking into the market and being realized.
Speaker Change: You said, it well Jeremy that utilities have an obligation to serve.
Speaker Change: And if there are service challenges in the future.
Speaker Change: Likely lands.
Speaker Change: Public sentiment will be with the utilities and they don't want to be the ones quote holding the bag on that public sentiment. So I think thats shifting.
Speaker Change: The thinking around the executives with a bunch of utilities.
David Slater: So there's significant growth happening behind the utilities, both gas and power. So these are all just the fundamentals that are, I think, causing the growth. sentiment in the market to shift and a realization We're probably short capacity and we need to shore up the supply side. I think we're in the early days of that, so. And I think public sentiment has shifted as well.
Speaker Change: Significant growth happening behind the utilities, both gas and power. So these are all just the fundamentals that are I think causing.
Sentiment in the market to shift and a realization that we're probably short capacity and we need to shore up the supply side.
Speaker Change: And.
Speaker Change: I think we are in the early days of that so.
Speaker Change: And I think public sentiment has shifted as well I think on.
David Slater: I think on the other side of the new administration. I think there's just this recognition in the public, the general recognition in the public that hey, we need this. economic fuel and energy and we have it country. This is a domestic supply. So there's just a lot of things I think have shifted here over the last 12 months that's really moved the pendulum, you know, from what I'll call maybe on the far left side to bringing it back to the center where there's an appreciation we need all of the above. And I think that's going to benefit the natural gas, the pipeline sector, and it's also going to benefit the electric sector as well.
Speaker Change: On the other side of the New administration and how the election played out I think theres just this recognition and the public.
Speaker Change: The general recognition of public that Hey, we need we need this fuel.
Speaker Change: Need.
Speaker Change: Economic fuel and energy.
Speaker Change: And.
Speaker Change: We have it within the country. This is a domestic supply.
Speaker Change: So theres just a lot of things that I think have shifted here over the last 12 months, that's really moved the pendulum.
Speaker Change: From what I'll call, maybe on the far left side to bringing it back to center.
Speaker Change: Where there is an appreciation we need all of the above.
Speaker Change: And I think that's going to benefit.
Speaker Change: The natural gas the pipeline sector, and it's also going to benefit the electric sector as well so.
Speaker Change: Okay.
Jeremy Tonet: Got it. That's very helpful. Thank you for that.
Speaker Change: Got it that's very helpful. Thank you for that one last one if I could sneak it in here just on the LNG demand pull side, we saw the Woodside here and just wondering if you could comment on opportunities that might stem from that or anything else. We're seeing on LNG commercialization moving forward across the board.
David Slater: One last one, if I could sneak in here, just on the LNG demand pull side, we saw the Woodside FID here and just wondering if you could comment on opportunities that might stem from that or anything else we're seeing on, you know, LNG commercialization moving forward across the board. Yeah, that FID was really positive when I when I read that the other day and just to remind everybody. Woodside, part of that FID is the header system that serves that facility. It's about a three BCF a day header system, and it's designed to connect directly. So LEAP will be one of a handful of supply points into that header system, so we're really happy and pleased to see that FID.
Speaker Change: Yes.
Speaker Change: It was really positive when I read that the other day and.
Speaker Change: Just to remind everybody.
Speaker Change: Woodside part of that.
Speaker Change: The header system that serves that facility, it's about a three bcf a day header system and its designed to connect directly and to leap.
Speaker Change: So the <unk> will be one of the handful of supply points into that header system. So we're really happy and pleased to see that.
Speaker Change: And.
David Slater: As we worked hand-in-glove with the previous owner, we will continue to work hand-in-glove with Sunil. Very pleased to see that.
Speaker Change: As we work hand in glove with the previous owner, we will continue to work hand in glove with Woodside and the new ownership so.
Speaker Change: Very pleased to see that.
David Slater: Got it. Sounds like an expansion opportunity there.
Speaker Change: Got it sounds like expansion opportunity there. Thank you for the color.
Jeremy Tonet: Thank you for the call. You're welcome, Jeremy.
Speaker Change: Youre welcome Jeremy.
Theresa Chen: Next question comes from the line of Theresa Chen with Barclays, please go ahead.
Speaker Change: Next question comes from the line of Theresa Chen with Barclays. Please go ahead.
David Slater: David, I'd like to dig in a little bit more on your backlog, specifically related to your comments about potential further expansions that are under development. Can you provide some more color on where things stand with the integrated solution across your Northeast Gathering, as well as the existing pipelines into your newly acquired Midwest assets? Are there any commercial developments to note there? And can we just think about how much CapEx that could be for DTM if you were to bring that molecule from your Gathering system onto Nexus expansion, Vector expansion, straight to the end user in the Midwest?
Theresa Chen: Good morning.
Speaker Change: David I'd like to dig in a little bit more.
Theresa Chen: On your backlog.
Theresa Chen: Related to your comments about adding.
Theresa Chen: Potential further expansion that are under development can you provide some color on where things stand with the integrated solution across your northeast gathering <unk> and existing pipelines in Germany.
Theresa Chen: Newly acquired mist plus assets are there any commercial developments to note there and can we just think about.
Theresa Chen: How much capex that could be for TTM. If you were to bring that molecule from a gathering system onto nexus expansion vector expansion straight to the end.
Theresa Chen: Starting with the question.
David Slater: Yeah, sure, I can provide a bit more color there.
Theresa Chen: Yes, sure I can provide a bit more color there maybe I'm going to pivot I think we've talked about what's happening already on millennium. So.
David Slater: Maybe I'm going to pivot. I think we talked about what's happening already on LAM. So I'm going to pivot over to the new pipelines that we acquired from one. So we're in month four. You know, we had a really strong winter, those assets, like I mentioned earlier, performed really well, really strong demand, had some, you know, record high send-outs on those assets, so really pleased fundamentally with how they performed. and our assessment of their importance to serve those load centers in the upper Midwest. We're taking a harder look and we obviously have more information now around the growth opportunities.
Theresa Chen: I'm going to pivot over to the new pipelines that we acquired from one oak.
Theresa Chen: So we're in month four.
Theresa Chen: We had a really strong winter, though those assets like I mentioned earlier performed really well really strong demand had some.
Theresa Chen: Our record high spend outs on those assets really pleased fundamentally with how they performed.
Theresa Chen: And our assessment of their importance to serve those load centers in the upper Midwest.
Theresa Chen: We're taking a harder look and we obviously have more information now around the growth opportunities.
David Slater: The Modernization Opportunity. and how they will integrate into the other assets, so it's particularly storage and that. and what I'll say at this point. is that what we thought when we announced the transaction based on what we think today, we are more bullish. The opportunity set is more robust than we thought it was. so very positive about that. Obviously, it's our job to commercialize that. you know, that power plant on Midwest. Literally commercializing late last year right around close was a really good early indication of the opportunity set and the speed at which So as we get more confident in this, we will be providing more clarity and updates to the investors.
Theresa Chen: The modernization opportunities and how they will integrate into the other assets, particularly storage and vector.
Theresa Chen: And what I'll say at this point.
Theresa Chen: Is that what we saw when we announced the transaction based on what we think today, we are more bullish.
Theresa Chen: The opportunity set is more robust than we thought it was when we announced the acquisition so very positive about that.
Theresa Chen: Obviously, it's our job to commercialize that now.
Theresa Chen: That that power plant on Midwestern literally commercializing late last year right around the close was was a really good early indication of the opportunity set and the speed at which it can move.
Theresa Chen: So as we get more confident.
Theresa Chen: In this we will be providing more clarity and updates to the investors but.
David Slater: But at this point, I would just put a green arrow up on the backlog of opportunities that are manifesting as we get more confident with them. to clarify them, we'll provide further updates.
At this point I would just put a green arrow up on the on the backlog of opportunities that.
Theresa Chen: That are manifesting.
Theresa Chen: As we get more confident with them and can clarify them, we'll provide further updates.
Theresa Chen: Thank you.
Spiro Dounis: And your next question comes from the line of Spiro Dounis with Citi. Please go ahead. Thanks, Operator. Good morning, team. I wanted to start with LEAP, actually. David, I just want to pull some of your comments together. It sounds like Angel Activity is kind of ramping back up again. At the same time, Woodside LNG is starting to FID again. And I think our working assumption around the next LEAP expansion was that maybe it was years away, just given the two competing pipelines, coming online soon. But any sense that that timeline is moving forward? Just want to get your latest thoughts there.
Speaker Change: And your next question comes from the line of Spiro <unk> with Citi. Please go ahead.
Speaker Change: Thanks, operator, good morning team I wanted to just start with leap.
Speaker Change: <unk>.
Speaker Change: David just want to pull some of your comments together it sounds like Haynesville activity is kind of ramping back up again at the same time Woodside LNG starting to <unk> again, and I think our working assumption around the next leap expansion was that maybe it was years away just given the two competing pipelines coming online soon but any sense if that timeline is moving forward swinging your latest.
Speaker Change: Thoughts there.
David Slater: Good morning, Spiro. Yeah, so our thoughts on LEAP, you know, LEAP If you look at how we've expanded that over the last two, three years, it's been in these nice bite-sized digestible increments. I don't see that changing going forward. I think we're really well positioned in the market in terms of the service offering. We offer very competitive rates. We are highly interconnected to the supply across the entire footprint of the base. uh... and we have a lot of delivery flexibility in terms of the physical deliveries we can do. to a myriad of the energy facilities on the Gulf Coast.
Spiro: Good morning Spiro.
Spiro: Yes, so our thoughts on leap leap.
Spiro: If you look at how we've expanded that over the last two three years has been in these nice bite size.
Spiro: Digestible increments I don't see that changing going forward I think we're really well positioned in the market in terms of the service offering we offer very competitive rates, we are highly interconnected to the supply across the entire footprint of the basin.
Spiro: And we have a lot of delivery and flexibility in terms of the physical deliveries, we can make to a myriad of the LNG facilities on the Gulf coast. So.
David Slater: You know, I'd say from a competitive perspective, we're well positioned. the continued, what I'll call, bite size. Expansion Office. You know, we're kind of coming out of this... period where Haynesville kind of tapped the brake over the last 18 months right and they're now you know feels like they're putting their foot back on the gas so I think we just need to let the clock run here a little bit see how the basin responds You alluded to the new projects coming into service. They're expected to come in later this year. that that'll digest into the market.
Spiro: I'd say from a competitive perspective, we're well positioned.
Spiro: You should expect.
Spiro: The continued what I'll call a bite size.
Spiro: Expansion opportunities.
Spiro: We're kind of coming out of this.
Spiro: Period, where haynesville kind of tap the break over the last 18 months right in there now.
Spiro: <unk> like they're putting their foot back on the gas. So I think we just need to let the clock run here a little bit to see how the basin response.
Spiro: You alluded to the new projects coming into service. They are expected to come in later this year.
Spiro: That'll digest into the market and then we.
Spiro Dounis: carry on from there, so. Nothing has changed in terms of how I think that will play out over time. Clearly, the Woodside FID is a positive cap. So, um, and that's hot off the press, so. You know, we're going to digest that, the market's going to digest that, and we'll see where that takes us. But I feel good about it. Got it, got it. Good to hear.
Spiro: We will carry on from there so.
Spiro: Nothing has changed in terms of how I think that will play out over time.
Spiro: Clearly the Woodside.
Spiro: As a positive catalyst absolutely so.
Spiro: And Thats hot off the press so.
Spiro: We're going to digest that the market's going to digest that and we'll see where that takes us, but I feel good about our position right now.
Spiro: Got it got it get here.
Jeff Jewell: Second question, maybe just a finer point on maybe just the cadence as we think about the rest of the year. Jif, as you pointed out, TQ maybe dips down a little bit on seasonality and some other factors, which does seem to imply kind of a pretty strong second half of the year. And so, just curious if you guys could put maybe a finer point on what the specific drivers are to maybe get you to that midpoint. How much is volume growth versus projects versus other items? Yeah, sure can.
Spiro: Second question, maybe just a finer point on maybe just the cadence as we think about the rest of the year.
Spiro: As you pointed out <unk>, maybe dip down a little bit on seasonality and some other factors, which does seem to.
Spiro: July kind of a pretty strong second half of the year and so just curious if you guys put maybe a finer point on what the specific drivers are to mitigate that midpoint. How much is volume growth was projects versus other items.
Speaker Change: Yeah sure Ken Hello, Theres barrel, yes, so what we've got Youre exactly right. The second half of the year, we're planning on being stronger than the first half and you're right. That's driven by volume and a couple of other projects coming online. So you've got a couple of those factors and then the move from the first quarter to the second quarter is one item I mentioned was <unk>.
Jeff Jewell: Hello there, Spiro. Yeah, so we've got, you're exactly right. Second half of the year, we're planning on being stronger than the first half. And you're right, that's driven by volume and a couple of other projects coming online. So you got a couple of those facts. And then the move from the first quarter to the second quarter is one item I mentioned was related to the Guardian. There's a small decline in the rates related to that. That was all contemplated in the acquisition, and that's all built into the guidance that we provided and for the full year pieces of guidance there.
Spiro: Weighted to the Guardian theirs.
Spiro: There's a small decline in the rates related to that that was all contemplated in the acquisition and that's all built into the guidance that we've provided for the full year.
Spiro: Pieces of guidance.
Jeff Jewell: So I think those are really the factors to think about as you're thinking about the modeling. It's the second half of the year is stronger than the first.
Spiro: There. So I think those are really the factors to think about as you're thinking about the modeling. It's the second half of the year is stronger.
Speaker Change: In the first half.
David Slater: Spiro, I do want to be clear though, we haven't changed our guidance. here. So... If we felt we were getting outside of that, we would be updating you on the call. And I'll just add to what Jeff said there. You know, we had a pretty cold winter, right? So we had some. really robust seasonality, I'll use that word, on our pipeline asset. severe winter. You know, we had almost a... your normal winter up here in the Midwest. a long, long time since we've had a winner. So there's some of that playing through in Q1. Got it.
Spiro: Spiro.
Speaker Change: I do want to be clear, though we haven't changed our guidance for.
Spiro: For the year so if.
Spiro: If we felt or we felt we were getting outside of that we would be updating you on that on the call.
Speaker Change: And I'll just add to what Jeff said, there we had a pretty cold winter right. So we had some.
Speaker Change: Really robust seasonality I'll use that word on our pipeline assets because of the severe winter that we had and we had almost.
Speaker Change: A 30 year normal winter up here in the Midwest, which.
Speaker Change: It's been a long long time since we've had a winter like that.
Speaker Change: So theres some of that playing through in Q1 as well.
Speaker Change: Got it alright, I appreciate the color I'll leave it there. Thank you gentlemen.
Spiro Dounis: All right. Appreciate the color. I'll leave it there. Thank you, gentlemen. You bet. Thanks, Spiro.
Speaker Change: Alright, Thanks Bill.
Speaker Change: Yes.
John Mackay: And your next question comes from the line of John Mackay with Goldman Sachs. Please go ahead. Hey, good morning. Thanks for the time. I wanted to go back to some of your comments, David, on the privates in the Haynesville. You commented that they're kind of, you know, responding quicker to price signals, definitely makes sense for first quarter. I guess I'd be curious, your view, though, we've kind of bounced back from, you know, $4.50 down to about $3.00 now. Are we seeing them kind of respond quicker in the opposite direction at this point? Or you think this kind of first quarter, you know, strength can follow through even if prices are a little weaker here in the shoulder season?
Speaker Change: And your next question comes from the line of John Mackay with Goldman Sachs. Please go ahead.
Speaker Change: Hey, good morning, Thanks for the time I wanted to go.
Speaker Change: Go back to some of your comments David on the privates and the Haynesville you commented that they are kind of responding.
Speaker Change: Quicker to price signals definitely makes sense for first quarter I guess I'd be curious your view, though we've kind of bounce back from $4 50 down to about $3 now.
Speaker Change: Are we seeing them kind of respond quicker in the.
Speaker Change: In the opposite direction at this point or you think that's kind of first quarter.
Speaker Change: Strength and follow through even if prices are a little weaker here in a shoulder season.
David Slater: Yeah, John, that's a really good question. That's a topic that's the forefront of my mind right now. We're watching that very closely. to see if what you just described, if we see any signals of that happening. My high-level sense, John, is that they... They're fairly quick on the draw, but they also are pretty disciplined about hedging when they see those attractive prices. You know, privates are typically P.E.-backed and, you know, capital recovery. Paramount in their minds, right?
Speaker Change: Yes, John that's a really good question.
Speaker Change: A topic thats forefront of my mind right now we're watching that very closely.
Speaker Change: Two to see if what you just described if we see any signals of that happening.
Speaker Change: My high level sense, John is that a fair.
Speaker Change: We are fairly quick on the draw but they also are pretty disciplined about hedging when they see those attractive prices.
Speaker Change: Private surge typically p/e backed in capital recovery is paramount in their minds right. So if they can they can drill on edge and turn that capital quickly thats their business model. So we are watching for that we're not seeing any signals of that at this point.
John Mackay: So if they can they can drill an edge and turn that capital quickly, that's their So, we're watching for that, we're not seeing any signals of that at this point. We've seen a little bounce back here on price over the last week or so, but we're definitely watching closely for that. Currently, we don't see any. I appreciate it. That's helpful.
Speaker Change: We've seen a little bounce back here.
Speaker Change: Price over the last week or so, but we're definitely watching closely for that currently we don't see any evidence of that.
Speaker Change: Alright appreciate it that's helpful. Maybe just staying in gathering work.
David Slater: Maybe just staying and gathering. We're, I don't know, about a year into the Utica pickup.
Speaker Change: I don't know about a year into the Utica.
David Slater: Maybe if you can kind of just share your, you know, latest thoughts there, maybe what that looks like in this kind of softer liquids environment, and maybe anything you can kind of share on just, you know, pace of development from here. Sure, yeah, so just to remind everybody, the area of the Utica that we're gathering for EOG. It's really the oil window, which is... You know, their economics are not NGL dependent. predominantly driven economically by oil. And, you know, I would just point you to what they've said publicly about their resource. The Virgin Area. We've unlocked the rock, technically.
Speaker Change: Pick up maybe if you can kind of just share your latest thoughts there and maybe what that looks like in.
Speaker Change: This kind of software liquids environment in.
Speaker Change: And maybe anything you can kind of share on just pace of development from here.
Speaker Change: Sure Yeah, so just to remind everybody.
Speaker Change: The area of the Utica that we're gathering for EOG, it's really the oil window.
Speaker Change: Which is.
Speaker Change: Their economics are not NGL dependent.
Speaker Change: Predominantly driven economically by oil.
Speaker Change: <unk>.
Speaker Change: And I would just point you to what they've said publicly about their resource there they have a.
Speaker Change: Massive resource footprint that they've established in that area.
Speaker Change: Virgin area.
Speaker Change: We have unlocked the rock technically and.
David Slater: You know, the pace of development is consistent with kind of what we have in our guidance for this year and next year. You know, they're a great counterparty, we're working closely with them.
Speaker Change: The pace of development is consistent with kind of what we have in our guidance for this year and next year and.
Speaker Change: They're a great counterparty, we're working closely with them.
David Slater: Yeah, we view that as kind of a long-term growth opportunity in size. The Appalachian Gathering. And the nice thing about it is... is one of our pipelines as well. I appreciate it. Thank you.
Speaker Change: Yes, we do.
Speaker Change: View that as kind of a long term growth opportunity inside the.
Speaker Change: The Appalachian gathering portfolio.
Speaker Change: The nice thing about it is that it.
Speaker Change: Feeds exceeds one of our pipelines as well so it feeds in excess pipeline.
Speaker Change: Okay. Appreciate it thank you.
Keith Stanley: Your next question comes from the line of Keith Stanley with Woke Research. Please go ahead. Hi, good morning. First, just wanted to start and clarify slide 10, the high end of the 2026 CapEx range looks lower than last quarter. Was that intentional or not? Hey, good morning, Keith. No, there is no change to the high And if that looks different, we'll check the formatting on the slide. There could be a formatting glitch there, but there is no change in the high end of 26 CAPEX guidance. And so, Keith, from our guidance, and what we've guided you guys to, is we're going to spend our free cash flow on organic growth projects.
Speaker Change: Your next question comes from the line of Keith Stanley with Wolfe Research. Please go ahead.
Keith Stanley: Hi, good morning.
Keith Stanley: First just wanted to start and clarify slide 10, the high end of the 2026 Capex range looks lower than last quarter was that intentional or not.
Speaker Change: Hey, good morning, Keith No. There is no change to the high end and if that looks different we'll check the formats on the slide there could be a form adding blips there but.
Speaker Change: There is no change in the high end of 2006, Capex guidance and so Keith from our from our guidance and what we guided you guys to.
Speaker Change: Going to spend our free cash flow.
Speaker Change: On organic growth projects, so thats in your body metrics, you'd assume and Youre right.
Jeff Jewell: So that's, in your model, that's what you'd assume, and you're right. But we'll adjust that slide and make that match up to that guidance. There's been no change.
Speaker Change: Okay.
Speaker Change: We'll adjust that slide and make that.
Speaker Change: That's up to that there's been no change in that.
David Slater: Okay, great. Thanks for that. The second one... Thanks for mentioning that. Second question, so you know last quarter you put out a large number of pre-FID projects in the refreshed backlog and you talked to a number of opportunities today too. Are there any projects you'd flag as closer to moving forward based on customer demand and timing from that list? And I guess I'm just curious what's looking most interesting near-term or making the most progress?
Speaker Change: Okay, great. Thanks for that.
Speaker Change: The second one.
Speaker Change: Yes.
Speaker Change: Second question so.
Speaker Change: Last quarter, you put out a large number of pre FID projects and the refreshed backlog and you talked to a number of opportunities today to are there any projects you'd flag as closer to moving forward based on customer demand and timing from that list.
Speaker Change: Im just curious whats looking most interesting near term are making the most progress.
David Slater: Yeah, I'm going to give you a high level answer to that because I don't want to get too specific, just given the Discussions are happening directly with the anchor customers and some of our commitments, you know, contractual commitments with them. But what I'll say generally, and I'm probably going to repeat what I said earlier, is there's a green up arrow sitting in that $2.3 billion backlog. A number of things are driving that, our assessment of The new pipelines we acquired is part of what's driving that. Millennium Open Season, which is, you know, hot off the press is driving that.
Speaker Change: Yes, I'm going to give.
Speaker Change: You're a high level answer to that because I don't want to get too specific just given.
Speaker Change: <unk>.
Speaker Change: The discussions that are happening directly with the.
Speaker Change: The anchor customers and some of our commitments contractual commitments with them.
Speaker Change: But what I'll say generally I am probably going to repeat what I said earlier is there's a green up arrow.
Speaker Change: Sitting in that $2 $3 billion backlog.
Speaker Change: A number of things that are driving that our assessment of.
Speaker Change: The new pipelines, we acquired.
Speaker Change: As part of what's driving that.
Speaker Change: The millennium open season, which is.
Speaker Change: Hot off the presses as I think Matt.
David Slater: I'd say a number of the projects that we've been talking to you about are progressing to FID, so what I'm seeing in that backlog. There's nothing but... kind of fundamental green arrows. And again... As we get more confident, just to remind everybody, that backlog is not the total opportunity set. only the opportunity set that we feel highly confident in executing on and delivering to our investors. So as that gross backlog continues to grow, it's going to eventually push into that talk to the investors about. I'm feeling really bullish about it, but... I don't want to communicate anything until we're highly confident.
Speaker Change: I'd say a number of the projects that we've been talking to you about our progressing too.
Speaker Change: So what.
Speaker Change: What I am seeing in that backlog is nothing but.
Speaker Change: Kind of fundamental green arrows up.
Speaker Change: And again.
Speaker Change: As we get more confident because just to remind everybody that backlog is not the total opportunity set.
Speaker Change: It's only the opportunity set that we feel highly confident in executing on.
Speaker Change: Delivering to our investors.
Speaker Change: Is that gross backlog continues to grow it's going to eventually push into that $2 three.
Speaker Change: We talk to investors about so.
I'm, feeling really bullish about it but.
Speaker Change: I don't want to communicate anything until we are highly confident in it and.
David Slater: and I just say... I was consistent with my fundamental assessment earlier on the call that there is just a It feels like we have, you know, we went from a situation a year ago where it felt like we had a headwind, that we're constantly bucking. around the business. and we're working hard. better quantify and assess that tailwind.
Speaker Change: I'd just say its consistent with my fundamental assessment earlier on the call that there is just a.
Speaker Change: It feels like we have we went from a situation a year ago, where it felt like we had.
Speaker Change: Headwind that we're constantly bucking.
Speaker Change: Two today it feels like we actually have a tailwind now.
Speaker Change: Around around the business and we're working hard to better quantify and assess that tailwind and.
David Slater: how that would adjust into our future long-term outlook for the company. Thank you.
Speaker Change: How that would adjust into our future long term outlook for our company.
Speaker Change: Thank you.
Jean Ann Salisbury: And your next question comes from the line of Jean Ann Salisbury with Bank of America. Please go ahead. Hi, good morning.
Speaker Change: And your next question comes from the line of Jamie Feldman Staring with Bank of America. Please go ahead.
Jamie Feldman: Hi, Good morning, Boardwalk recently announced an open season for the Borealis project, which would source gas very close to your Appalachian footprint.
David Slater: BoardWalk recently announced an open season for the Borealis project, which would source gas very close to your Appalachian footprint. If this project goes forward, do you see DTM as being a material beneficiary? Oh, good morning. And thanks for the question. Yeah, that's a really interesting project. Because as we look at our new asset footprints, just to remind everybody, Midwestern connects directly Texas Gas And there is an existing pathway into clearing. that could potentially. Avoid a greenfield build or maybe set a different way. There could be some lower cost capacity expansion. So we're very aware of that, you know, and assessing that.
Speaker Change: If this project goes forward do you see VPN as being a material beneficiary.
Jamie Feldman: Good morning, and thanks for the question.
Jamie Feldman: Yes, that's a really interesting project because as we look at our new asset footprint just to remind everybody Midwestern connects directly to <unk>.
Jamie Feldman: Texas gas at a point called Portland.
Jamie Feldman: And.
Jamie Feldman: There is a existing pathway and declaring 10 between that asset and one other asset.
Jamie Feldman: That could potentially avoid a greenfield build or maybe said a different way there could be some lower cost capacity expansions that could kind of marry into their open season. So we're very aware of that.
Jamie Feldman: In assessing that.
David Slater: But so if there is a benefit to our asset footprint, it would predominantly. As I've just described, and that's on the pipeline side, flipping over to the gathering side, a project like that leaving Clarington, there is not an incremental couple BCF a day of gathering capacity. So, yes, if a project like that, of that size and scale, was to FI... I think there would be upstream incremental gathering investments that that would trigger. And I think we would be, you know, one of a short list of parties that would... be a beneficiary or be able to participate in some of that.
Jamie Feldman: So if theres a benefit to our asset footprint it would predominantly be.
Jamie Feldman: As I've, just described and Thats on the pipeline side flipping over to the gathering side.
Jamie Feldman: A project like that leaving clearing churn there is not an incremental couple of Bcf a day of gathering capacity to clearing 10.
Jamie Feldman: So yes, if a project like that of that size and scale was to I think there would be upstream.
Jamie Feldman: Incremental gathering investments that would trigger and I think we would be one of the short list of parties that would.
Be the beneficiary of being able to participate in some of that to get more gas declaring Tim.
David Slater: That's super helpful. Thank you.
Jamie Feldman: That's very helpful. Thank you, yes, that's a great example of what I just talked about on the previous question Justice. This tailwind that's emerging.
David Slater: Yeah, that's a great example of what I just talked about on the previous question, just this tailwind that's emerging. Great. Thank you for the detailed answer. That's super helpful.
Jamie Feldman: In the region so.
Jamie Feldman: Great. Thank you for the detailed answer that's super helpful.
David Slater: And then as a follow-up, there are concerns that if the China tariffs remain in place, you could see eventual significant pressure on U.S. propane prices, which could reduce kind of the call on the NGL portion of Appalachia. Can you remind us what share of your Appalachia footprint is in the wet versus dry footprints, and do you view that as a risk? Yeah, so first off, we don't view that as a risk, and very little of our Appalachian Gathering footprint gathers what I'll call the wet side of the Marcellus or the NGL side of the Marcellus.
Jamie Feldman: And then as a follow up there are concerns that if the China tariffs remain in place you can see eventually significant pressure on U S propane prices, which could.
Jamie Feldman: Reduced kind of the call on the NGL portion of Appalachia and can you remind us what share of your Appalachia footprint is in the wet versus dry footprint do you view that as a risk.
Jamie Feldman: Yes, so first off we don't view that as a risk and very little of our Appalachian gathering footprint gathers what I'll call. The wet side of the Marcellus or the NGL side of the Utica. So the EOG assets is really the oil.
David Slater: So the EOG assets is really the oil side of the Utica, not the NGL side of the Utica. And the bulk of our gathering in Appalachia is on the dry side. So we don't have any derivative exposure to the NGL side in Appalachia. What I will say though, is if that crack spread collapses or shrinks. What we do see is we see ethane rejection. What that means is they put more of the NGLs into the gas stream, which basically grows the gas production in the basin. by kind of toggling over to the gas infrastructure versus the NGL infrastructure.
Jamie Feldman: Of the Utica not the NGL side of the Utica.
Jamie Feldman: And the bulk of our gathering in Appalachia is on the dry side.
Jamie Feldman: So we don't have.
Jamie Feldman: Any derivative exposure to the NGL side.
Jamie Feldman: In Appalachia.
Jamie Feldman: What I will say, though is if that crack spread collapses or shrinks.
Jamie Feldman: What we do see is we see ethane rejection.
Jamie Feldman: And what that means is they put more of the ngls into the gas stream, which basically grows as the gas production in the basin by kind of toggling over to the gas infrastructure versus the NGL infrastructure.
David Slater: And that would be a positive for us because that typically would show up on the egress pipelines nexus. The capability to pivot that in Appalachia is capped by the gas quality spec. You can only put so much ethane into the stream before you cap out on the quality. That would actually be an opportunity for us versus...
Jamie Feldman: And that would be a positive for us because of that typically would show up on the egress pipelines Nexus for example.
Jamie Feldman: The capability to pivot that in Appalachia is capped by the gas quality specs. So you can only put so much ethane into the stream before you.
Jamie Feldman: Cap out on the quality specs, but.
Jamie Feldman: That would actually be an opportunity for us versus a risk.
David Slater: Great, super interesting. I'll leave it there. Thanks. You're welcome. Great question.
Jamie Feldman: Great Super interesting I'll leave it there thanks.
Jamie Feldman: Youre welcome Great question.
Manav Gupta: And your next question comes from the line of Manav Gupta with UPS. Please go ahead. Good morning. There's a lot of macro uncertainty out there. You saw GDP shrinking a little today. Some companies are actually withdrawing guidance. It's very positive that you actually reaffirmed your 2025 guide and 26 guide.
Speaker Change: And your next question comes from the line of Manav Gupta with UBS. Please go ahead.
Speaker Change: Good morning.
Speaker Change: There's a lot of macro uncertainty out there you saw GDP shrinking Lulu today.
Speaker Change: Some companies that Theyre drilling guidance, it's a positive that you actually reaffirmed.
Speaker Change: 2025, guys. Anthony Thanks, guys. So help us understand what gives you the content means that you can navigate this kind of very tough macro environment and deliver on both 'twenty five 'twenty six.
David Slater: So help us understand what gives you the confidence that you can navigate this kind of very tough macro environment and deliver on both 25 and 26 goals. Yeah, so I would I would say, you know, the worry in the market is the R word, right? That's the worry is that we slide into a recession in the short You know, so we've talked already about the long-term fundamentals and how we feel about that.
Speaker Change: Yeah, So I would I would say the worry in the market as the iron ore grade. That's the worry is that we slide into a recession in the short term.
Speaker Change: So we've talked already about the long term fundamentals and how we feel about that I'd say in the near term.
David Slater: I'd say in the near-term... the way we built the portfolio. It's a highly durable portfolio, and it's intentionally built to... Tech to the Downside.
Speaker Change: The way we've built the.
Speaker Change: Portfolio.
Speaker Change: Highly durable portfolio and its intentionally built to protect the downside.
Jeff Jewell: So. If I just talk at a very high level, we have no commodity exposure in this portfolio. Very minimal volumetric exposure, and that only exists in her gathering segment, which is only 30% of the business. And on the pipeline segment, which is the bulk of the business, 70%, that's predominantly 100% demand-based contracts, so it's highly resilient. short-term economic fluctuation.
Speaker Change: So.
Speaker Change: If I just talk at a very high level, we have no commodity exposure in this portfolio.
Speaker Change: Very minimal volumetric exposure and that only exists in our gathering segment, which is only 30% of the business.
Speaker Change: And on the pipeline segment, which is the bulk of the business, 70% is predominantly 100% demand based contracts. So it's highly resilient to short term economic fluctuations.
David Slater: So, that's really, you know, the short answer.
Speaker Change: So that's really.
Speaker Change: The short answer I think Jeff you may want to add from a balance sheet perspective, and a durability perspective, how we feel about what.
Jeff Jewell: I think, Jeff, you may want to add from a balance sheet perspective and a durability perspective how we feel about what I'll call our company itself going through a turmoil. Yeah, sure, Ken. Again, just like David talked about on the commercial side, how we built the company, we've done the same thing on the balance sheet. We don't have any maturities throughout through 2029. We've got over a billion dollars worth of equity. We're right here on the doorstep of getting upgraded to investment grade, you know, here soon. So I mean, we have and again, you see where our leverage metrics and those things are.
Speaker Change: I'll call it our company itself through turmoil, yes, sure Kenneth just like they were talking about on the commercial side, how we built the company. We've done the same thing on the balance sheet, we don't have any.
Speaker Change: Charities.
Speaker Change: Throughout through 2029, we've got over $1 billion worth of.
Speaker Change: Liquidity.
Speaker Change: Right here on the doorstep of getting upgraded to investment grade.
Speaker Change: Here soon so.
Speaker Change: And again, you can see where our leverage metrics and those things are so again from a balance sheet perspective same thing between 'twenty five 'twenty six and beyond.
Jeff Jewell: So again, from a balance sheet perspective, same thing between 25, 26 and beyond. We're in a very healthy position, so we're also not impacted by the broader macro sort of.
Speaker Change: Very healthy position. So we're also not impacted by the broader macro sort of events.
David Slater: And maybe my last proof point on that question. It's an important question. I think it's on the mind of a lot of investors, so I'm glad you're asking. is when you look at, historically look back at other cycles, the economic cycles that we've gone through. We've been able to grow through those cycles.
Speaker Change: And maybe my glass my last proof point on that question. It's an important question I think it is on the mind of a lot of investors, so I'm glad you're asking it.
Speaker Change: Is when you look at historically look back at other cycles that economic cycles that we've gone through.
Speaker Change: We've been able to grow through those cycles.
David Slater: So that's the other. point to provide confidence. Nothing has changed with the management team in terms of how we're running. past performance is only one data point, but I think it's another. Perfect.
Speaker Change: I'd say, that's the other major proof point.
To provide confidence that nothing has changed with the management team in terms of how we're running the company.
Speaker Change: And.
Speaker Change: Past performance is only one data point, but I think it's another comforting data point to point to.
Manav Gupta: My quick follow-up here is, you know, last year we were in this power trade where data centers are going to need a lot more power. And then first DeepSeek came, and then came all these announcements that Microsoft is pulling back from the data center. You are obviously negotiating with a bunch of customers about their power needs. Has anything actually changed on the ground because of either DeepSeek or Microsoft pulling back the data center spend? Or when you go out there, the underlying demand for power is still growing and very resilient out there.
Speaker Change: Perfect.
Speaker Change: Follow up here is last year, we learned this Paula <unk> Datacenters I'm wondering need a lot more power and then first deep Sea theme and then came these all of these announcements that Microsoft is pulling back from the data Center you will just negotiating with a bunch of customers without their power needs has anything actually changed on the ground because of either.
Speaker Change: Deep seek all Microsoft pulling back the datacenter spend when.
Speaker Change: When you go out there the underlying demand for power is still growing and very resilient out there.
David Slater: Yeah, so let me kind of break that question up into two parts. I'll address the behind the meter site-specific power generation opportunities, and then I'll address the utility scale power generation opportunities, because I think There's different fundamentals driving those two different opportunity sets. on the site-specific data center. We have numerous, like many, and I don't want to put a number out there because every time I put a number out there... Everybody chases the number. I'm just going to tell you, there are a lot of... what I'll call mature commercial proposals sitting in front of developers for numerous sites across our entire...
Yes, So let me kind of break that question up into two parts. So I'll address the behind the meter site specific power generation opportunities and then I'll address the utility scale power generation opportunities because I think.
Speaker Change: Theres a different fundamentals driving those two different opportunity sets.
Speaker Change: On the site specific data centers, we have numerous like many and I don't want to put a number out there because every time I put a number out there.
Speaker Change: Everybody chases a number I can tell you there are a lot of.
Speaker Change: What I'll call mature commercial proposal sitting in front of developers for numerous sites across our entire footprint.
David Slater: A lot of different elements have to come together for a site to commercialize, you know, energy and fuel supply is only one of many elements, and then once all those elements are together and commercially sort of lined up. then ultimately the host has to commercialize. And I'd say that's the phase that we're in right now. We're in the phase where. Sites have all the elements that they need. And the final step is commercialization of the service. So that's where we are with a host of opportunities across a myriad of our. So, to the extent that...
Speaker Change: A lot of different elements have to come together for a site to commercialize.
Speaker Change: Energy and fuel supply is only one of many elements and then once all of those elements are together in commercially sort of lined up.
Speaker Change: Then ultimately the holes task to commercialize a site and I'd say, that's the phase that we're in right now we're in the phase where <unk>.
Speaker Change: Sites have all the elements that they need now and the final step is commercialization on the site. So that's where we are with a host of opportunities across a myriad of our pipelines.
Speaker Change: So to the extent to the extent that.
David Slater: The ultimate host is waiting or making decisions. That's where I think we are today. And I suspect that's true for all the other pipelines as well.
Speaker Change: The ultimate hope is waiting or making decisions.
Speaker Change: That's where I think we are today.
Speaker Change: And I suspect that's true for all the other pipelines as well.
David Slater: Flipping over to the utility scale generation, we announced the West Virginia project, that project is expected to FI... Next year, they continue to move along and do the things that they need to do. Marshallize that site, they're in the PJM Interconnect. full control of the site now, they've gone through the West Virginia regulatory process. Their air permit is underway. So we see these utility scale sites advancing and continuing. Like I said in my earlier comment, this realization that there's a reliability issue in PJM and emerging in MISO. The demand is robust than they thought. The other generation that they thought was coming in isn't coming in, or it's coming in at a different pace.
Speaker Change: Flipping over to the utility scale generation, we announced the West Virginia project.
Speaker Change: That project is expected.
Speaker Change: Next year.
Speaker Change: They continue to move along and do the things that they need to do to commercialize outside that are in the PJM interconnect full.
Speaker Change: Full control of the site now they've gone through that West Virginia regulatory process.
Speaker Change: They are air permit is underway.
Speaker Change: So we see these utility scale sites advancing and continuing.
Speaker Change: And like I said in my in my earlier comments.
Speaker Change: This realization that figures a reliability issue in PJM and emerging in MISO.
Speaker Change: The demand is robust and they thought the other generation.
Speaker Change: They thought was coming in isn't coming in or it's coming in at a different pace.
David Slater: All of those are positive catalysts to drive incremental utility scale. And I'd say the last thing that we're seeing... The utility side is the utilities, many utilities have been quietly very successful in connecting these data centers directly to the utility. and I would point the investors. public announcements made out of Wisconsin by some of the utilities there, in Michigan by some of the utilities there. Louisiana, The Energy Announcement. So the utilities are being. are getting a fair share of this demand directly connected to utilities. And what that does is it drives utility scale generation. So instead of site generation.
Speaker Change: All of those are positive catalysts to drive incremental utility scale generation and I'd say the last thing that we're seeing on the utility side as utilities.
Speaker Change: Many utilities have been quietly very successful.
Speaker Change: Connecting these data centers directly to the utility grid.
Speaker Change: And I would point investors to public announcements made out of Wisconsin by some of the utilities there in Michigan by some of the utilities there.
Speaker Change: Louisiana energy announcements so the utilities are being.
Speaker Change: Are getting a fair share of this demand directly connected the utilities and what that does is it drives utility scale generation. So onset of site generation utilities are just rolling it into their portfolio and will add a plant to their future.
David Slater: are just rolling it into their portfolio and will add a plant to their future development.
Speaker Change: Development.
David Slater: So, that's how I would characterize what's happening on the data center side. I know that was a long answer, but... very interesting to watch. We're active on both of those two dimensions, the utility scale and on the site specifically. And again, I'm highly confident we're going to get our fair share of that market across our geographic footprint. So, I'll stop. Thank you so much. You're welcome.
Speaker Change: That's how I would characterize whats happening on the data center side I know that was a long answer but.
Speaker Change: It's a very interesting to watch.
Speaker Change: We're active on both of those two dimensions, the utility scale and on the site specific.
Speaker Change: And again I'm highly confident we're going to get our fair share of that market across our geographic footprint. So I'll stop there.
Speaker Change: Thank you so much.
Speaker Change: Welcome.
Speaker Change: Okay.
Operator: We have another question.
Speaker Change: Do we have another question.
Robert Mosca: Oh, your next question comes from the line of Robert Mosca with Mizzou. Please go ahead. Hey, thanks, everyone. Just one for me. Seems like your major customer in the Haynesville is building product capacity this year, that they could tap into in 26. Just wondering the extent to which that's captured in your preliminary 26 guidance, and if possible, the base case you're assuming there? Yeah, so I'll just keep it at a high level. You know, all of our customers provide us insights into their plan, and for all of our customers that's reflected in our 25 and 26 guidance.
Speaker Change: Question comes from the line of Robert Moskow with Mizuho. Please go ahead.
Speaker Change: Hey, Thanks, everyone. Just one from me it seems like your major customer in the Haynesville is building.
Speaker Change: City. This year so they can tap into in 2006, just wondering the extent to which that's captured in your preliminary 2006 guidance.
Speaker Change: Possible that base case youre, assuming there.
Speaker Change: Yes.
Speaker Change: Ill just keep it at a high level are.
Speaker Change: All of our customers provide us insights into their plan and for all of our customers as reflected in our 25 and 26 guidance.
Speaker Change: So.
David Slater: The short answer is in there.
Speaker Change: The short answer is in there.
Robert Mosca: Great, thank you.
Speaker Change: Great. Thank you.
Speaker Change: Okay.
Operator: Operator, do we have another question? We have no further questions at this time.
Speaker Change: Operator, do we have another question.
Operator: This time, we have no further questions at this time I would like to turn it back to David Slater for closing remarks.
David Slater: I would like to turn it back to David Slater for closing remarks. Well, thank you very much, everybody, for your great questions today, and appreciate the support. and I look forward to catching up with everybody on the next course. Thank you presenters and ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.
David Slater: Well, thank you very much everybody for.
Speaker Change: Yeah, great questions today, and I appreciate the support.
Speaker Change: And look forward to catching up with everybody on the next quarter.
Speaker Change: Thank you presenters, ladies and gentlemen. This concludes today's conference call. Thank you all for joining you may now disconnect.
Operator: Please wait, the conference will begin shortly.
Speaker Change: Please wait the conference will begin shortly.
Speaker Change: [music].