EnLink Midstream, LLC

Greetings and welcome to the NLINK Midstream Q1 2024 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brian Brumgaard, Senior Director of Investors. Please proceed with your questions. Thank you, Brian. You may begin.

Thank you, and good morning, everyone. Welcome to NLINC's first quarter of 2024 earnings call. Participating on the call today are Jesse Aranivas, Chief Executive Officer, Delanka Simon, Executive Vice President and Chief Commercial Officer, and Ben Lamb, Executive Vice President and Chief Financial Officer. Walter Pinto, Executive Vice President and Chief Operating Officer, is also in the room to answer any questions during the Q&A session. We issued our earnings release and presentation after the markets closed yesterday, and those materials are on our website. A replay of today's call will also be made available on our website at investors.enlink.com. Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws. 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 events to differ can be found in our press release, presentation, and FTC 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 the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading risk factors. We'll start today's call with a set of brief prepared remarks by Jesse, Delanca, and Ben, and then leave the remainder of the call open for questions and answers. With that, I would now like to turn the call over to Jesse Aranivas.

Thanks, Brian, and good morning, everyone. Thank you for joining us today to discuss our first quarter 2024 results. While our operations were not immune to the impact of the winter weather during the quarter, our results showcase the resiliency of our business. We continue to be encouraged with the longer-term setup for Enlink, given our diverse systems and incremental demand potential for natural gas to help power our nation's growing industrial and power needs, including the developing industries around data centers and artificial intelligence. For the quarter, we generated $338 million of adjusted EBITDA, driven by the strength of our Louisiana system and offset by temporary volume impacts from the winter weather impacts of our GMP systems. These results were in line with our expectations and drove solid free cash flow after distributions of approximately $74 million. Consistent with our approach to return capital to investors, we repurchased approximately $50 million of units outstanding, taking our total buyback execution to nearly 10% of the units outstanding, over a little more than two years, all while continuing to invest and grow our business. Last quarter, we discussed our commitment to provide safe, reliable, and cost-efficient CO2 transportation solutions, linking emitters with sequestration providers. Despite recent progress on the regulatory front, and while we continue to develop our CO2 transportation expertise by operating both new-build and converted CO2 pipelines, the CCS industry as a whole has been slower to develop than we initially anticipated. However, we are continuing our discussions regarding CCS opportunities, ExxonMobil, as well as other parties and look forward to providing an update when we reach definitive terms. Overall, we continue to see positive momentum for our business. We have spoken at length in prior quarters about the next wave of LNG demand coming starting in earnest in 2025. and how that is reshaping the landscape and driving our three phases of growth in Louisiana. The LOCA will provide more color around our Louisiana natural gas strategy, and I'm impressed with the quick execution. We are seeing customers respond to the shifting market dynamics as they look to secure the natural gas critical to their operations. To that extent, we've executed our first project to help resupply the eastern part of Louisiana, to a capital-efficient, quick-to-market, de-bottlenecking project that is fully subscribed to high-quality customers. Beyond just Louisiana, though, the need for natural gas to help power our modern society becomes more apparent as industries look to secure reliable and affordable energy. Like you, we have been amazed at the rapid emergence of the data center demand for power, particularly driven by the AI revolution. This is occurring across the country, even right here in North Texas. We understand and can appreciate that these are early days and that consultants, policymakers, utilities, and the investment community are still trying to get their collective arms around the ultimate impact of this growth in demand. But the initial forecasts are staggering. While data center electricity consumption is approximately 2.5%, of the US total in 2022, there are forecasts for this demand to triple or more by 2030. To help put that in perspective, according to the Boston Consulting Group, this growth in consumption is the equivalent to adding 40 million homes. What is key for our industry is that these AI data centers are not only voracious users of energy, but they run 24-7 and do not turn on at all. Renewables will surely play a key part, but because of this dynamic, we expect natural gas to be a large contributor to meet the increased baseload demand for power generation. We consider this to be a potential incremental growth driver, creating a rising tide that will lift all boats in the natural gas industry and one that is likely to drive rapid and exciting change for our business. Wells Fargo analysts forecast that additional natural gas demand could be 7 BCF or more by 2030, assuming that natural gas accounts for 40% of the fuel mix. To wrap up my comments, NLINK is executing today to meet customer needs and excited about the growing need for natural gas to provide reliable and affordable energy to power our modern society. And with that, I'll turn over to Laka to provide an update on our commercial opportunities.