Enterprise Products Partners L.P.

Good day, and thank you for standing by. Welcome to the Enterprise Product Partner Second Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-answer session. To ask a question during the session, you need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your speaker today, Randy Burkhalter, Vice President, Investor Relations. Please go ahead.

Thank you, Victor. Good morning, everyone, and welcome to the Enterprise Products Partners conference call to discuss second quarter earnings. Our speakers today will be Co-Chief Executive Officers of Enterprises General Partner Jim Teague and Randy Fowler. Other members of our senior management team are also in attendance for this call today. During the call, we will make forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934. based on the beliefs of the company, as well as assumptions made by an information currently available to Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to ultimately be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. And with that, I'll turn the call over to Jim.

Thank you, Randy. Today we reported a record adjusted EBITDA of $2.4 billion for the second quarter, and that was driven primarily by higher margins in our octane enhancement business, higher natural gas processing margins, and contributions from the Midland Basin assets we recently acquired. Those assets continue to significantly exceed our expectations. We generated a record $2 billion of DCF, excluding proceeds from asset sales, providing 1.9 times coverage. We retained $974 million of DCF for the quarter, taking us to $1.8 billion for the first six months. We achieved 11 financial records and four operating records, with more details outlined in the press release. In short, it was a good quarter. In this environment, we're not having any trouble keeping our systems full. Our Permian processing plants are running at capacity. We have two processing plants under construction, one in the Delaware, one in the Midland, and we've approved two more, one in each of those basins. When this build-out is complete, we'll have 15 processing plants in the Permian producing 530,000 barrels a day of liquids. which will take us to 36 processing plants as a company, producing over 900,000 barrels a day. We also recently approved a project that expands our Shin Oak NGL pipeline by 275,000 barrels a day, and this is done through partial looping. We now have powerful options as it relates to takeaway for NGLs out of the Permian. We can close those loops gain a lot of capacity, or we can put Simenhold back into NGL service, or we can do both. These projects do not change the CapEx guidance that we have communicated in the past. As we announced at Analyst Day, we're also expanding our systems in the Hainesville over and above the Gillis lateral we put into service last year. Our two and a half BCL today Hainesville system is unique. It not only reaches into the supply area, but it ties into interstate and LNG corridors, but it also reaches into the lucrative Mississippi River industrial corridor, which is hungry for gas. We have significant operations in key basins that consistently represent 65 to 75 percent of the rigs running in the U.S., We've always focused not just on supply, but also markets. Today, we export 2 million barrels a day of crude oil, NGOs, refined products, and petrochemicals. We started building this export position over 25 years ago. And the leader of the negotiating team when we did that was a lady named Rhonda Duncan. That trend continues. of the major export expansions we have underway for both ethane and ethylene. In addition, this last Friday, our spot project reached an important milestone with the FEIS for the terminal put in the federal registry. I think it was in the Wall Street Journal I read that the past three years we've gone from pandemic to pandemonium. When Russia invaded Ukraine in late February, No one was really surprised. Instead, the surprise to most is that the conflict looks like it's going to last a while. The other surprise to most is the magnitude of the impact this war is having on both energy and agriculture. We're all coming to grips with the fact that many things we took for granted have changed. We have suddenly realized what a just-in-time world we live in and how quickly prices shoot up when something breaks. We're also learning, for some of us, relearning about inflation, how strong and insidious it is. Most of our young people have never experienced inflation. Energy is reportedly responsible for over 50 percent of inflation, as it is involved in every aspect of our lives. Add to that the high cost of food and the increasing cost of housing. U.S. energy independence is now more valuable than ever. It is clear that Russia has a stranglehold on Europe, and Russia and China appear to be aligned in policies that are in direct conflict with Western values. Fortunately, the U.S. has an abundant energy resource. It is a fact that our crude oil, NGLs, and LNG cargoes are the only short cycle resources the world has left. We have tremendous hydrocarbons potential, but unfortunately, It is squandered in the current political climate that is intent on restricting its development. Appalachia alone has over 25 BCF a day of production upside. That's more than what Europe imports from Russia. However, this potential is unattainable, not by economics or resource, but by massive amounts of laws and regulations that are vague at best, and consistently applied and consistently. In addition to being the only short cycle resource the world has, our energy is environmentally superior. It's much cleaner because it comes from shale and is produced here in the U.S. under environmental and safety standards that are second to none. It's not an oil and gas versus renewable debate as so many make it out to be. Enterprise's view has always been We are absolutely going to need it all, and what most call energy transition is actually going to be badly needed energy additions that will take place gradually. Oil and gas will be in high demand for decades. People who say otherwise are either extremely naive or have their own agenda. Demonizing fossil fuels, overt restrictions on investments, and massive layers of regulation that are designed to keep it in the ground will only create chaos in the form of ever-increasing shortages and high prices. We need to learn from the mistakes of our friends in Europe and avoid risky dependence on unreliable or unfriendly suppliers for our oil and gas or for the materials and equipment needed for cleaner energy. Randy will go into this more, but the proposed mansion legislation is not everything the oil and gas community wanted. But the same will be said by the green movement. It appears to try to strike a balance between clean energy incentives and recognition that continued development of fossil fuels is needed to ensure energy security and energy reliability. Randy?