EnLink Midstream, LLC

Good day and welcome to the NLINK Midstream Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Brian Brongard, Director of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to NLINC's second quarter of 2022 earnings call. Participating on the call today are Jesse Aranivas, Chief Executive Officer, Ben Lamb, Executive Vice President and Chief Operating Officer, and Pablo Mercado, Executive Vice President and Chief Financial Officer. 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 www.inlink.com. Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws. 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. This call also includes discussions pertaining to certain non-GAAP financial measures. Definitions of these measures, as well as reconciliation of comparable GAAP measures, are available in our press release and in 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 underheading risk factors. We'll start today's call with a set of brief prepared remarks by Jesse, Ben, and Pablo, 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.

Jesse Arenivas Thank you, Brian, and good morning, everyone. Thank you for joining us today to discuss our second quarter results, which include the highest second quarter adjusted EBITDA in company history, as well as our increased 22 guidance and plans to further increase returns to investors. First, however, I'd like to provide some perspective on the state of our business and how NLINC is well positioned, not only to weather the current volatility in the markets, but to continue to thrive. In the last several months, there has been a renewed call on domestic natural gas production to help meet the needs of our friends in Europe, and NGLs also remain a critical feedstock for products that we use in our everyday lives. While current focus is on the recent European demand for U.S. LNG cargoes, the trend has simply accelerated with the recent geopolitical events. The United States became the largest LNG supplier to the EU and the United Kingdom last year. And during the first five months of 2022, the United States exported 71% of its LNG to Europe, compared with an average of 34% last year. Additionally, we are seeing greater acceptance for the use of natural gas to power the global economy. The EU Parliament recently added natural gas to the bloc's list of environmentally sustainable economic activities as they look to secure reliable sources of electric generation and heat for their homes. Notwithstanding recessionary risk, we see this trend accelerating given the unfortunate wake-up call about energy security that Europeans are living through. Now, while our country may indeed be going through a recession, it's important to realize that the economic slowdown will not change the bigger geopolitical and structural trends. Said simply, the supply and demand for natural gas, both over the near term and the long term, continue to improve as reflected in the more supportive forward curve. As we look to the future, NLEAK's platform is well positioned to grow and to be an active participant in the energy transition, with natural gas NGLs accounting for approximately 90% of our business. We have three geographically diverse gathering and processing regions and exposure to the growing natural gas and NGL demand markets along the Gulf Coast. Each of NLINK's four segments generates robust free cash flow, which allows us to reinvest in our business while capitalizing on our first mover advantage to build a CO2 transportation business in southeastern Louisiana. More specifically, we continue to see robust activity in our Permian footprint, We are making solid progress with our second plant relocation, Project Phantom, to grow alongside our customers in a capital efficient manner. We also recently announced plans to participate both as a shipper and as an investor in the Matterhorn Express Pipeline, providing up to two and a half BCF a day of takeaway capacity from the Permian. We are in the early stages of a renaissance in Oklahoma and North Texas. While the oilfield service sector remains tight, we are seeing producer plans pick up, and we expect meaningful growth in Oklahoma and an improving outlook in North Texas next year. We are well positioned to meet incremental supply with our existing asset footprints in each of these basins. Our recent acquisition in North Texas has an attractive economics of four times 2023 EBITDA, generated in part by the redeployment of assets to meet growing supply in the Permian and Oklahoma. This strong operational outlook is matched by our strength of our financial position. We continue to generate robust free cash flow, and based on the midpoint of our updated guidance, we expect 2022 to mark the third consecutive year generating at least $300 million in free cash flow after distributions. We remain committed to prudently investing in our business while increasing the return of capital to unit holders. At the same time, while we are in the early innings of building out a scalable CCS business, we are executing our first mover advantage. The area of southeastern Louisiana along the Gulf Coast is very well positioned to meet the goals of the country to reduce carbon emissions. Unlike other parts of the country, there is a high concentration of industrial CO2 emissions coupled with substantial prime geologic formations with ample sequestration capacity located within miles of the emission sources. We believe we can play an important role as a midstream conduit in this region, given our extensive network of pipe that is already in the ground. We continue to have very active discussions with both emitters and sequestration providers, and we look forward to providing additional updates in the near future. Lastly, we remain committed to improving our own emissions profile. To that end, we announced during the quarter a project with BKV, our largest customer in North Texas, to capture and sequester CO2 from gas that is processed at our Bridgeport facility. This project marks tangible progress towards our near-term reduction goals while earning attractive returns. When combined with our other work on methane emissions, we estimate that our carbon capture projects at Bridgeport result in a combined emissions reduction of 250,000 metric tons per year. In summary, the outlook for NLINK continues to strengthen. We are seeing robust activity across all our segments. The strong underlying business fundamentals coupled with a robust cash flow generation continue to drive a strengthening in our financial position, allowing us to invest in the business while returning capital to our investors. We remain committed to driving sustainable value through operational excellence and strategic growth while maintaining financial discipline and flexibility. With that, I'll turn it over to Ben to provide an overview of our operations.