NuStar Energy L.P.

Good day and thank you for standing by. Welcome to the New Star Energy LP first quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pam Schmidt, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to today's call. On the call today are New Star Energy LP's Chairman and CEO, Brad Barron, and our Executive Vice President and CFO, Tom Schoaf, and our Executive Vice President of Business Development and Engineering, Danny Oliver, as well as other members of our management team. Before we get started, we would like to remind you that during the course of this call, New Star Management will make statements about our current views concerning the future performance of New Star that are forward-looking statements. These statements are subject to the various risks, uncertainties, and assumptions described in our filings with the Securities and Exchange Commission. Actual results may differ materially from those described in the forward-looking statements. During the course of this call, we will also refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered as alternatives to GAAP measures. Reconciliations of certain of these non-GAAP financial measures to U.S. GAAP may be found in our earnings press release and, if applicable, Additional reconciliations may be located on the financials page of the investor section of our website at newstartenergy.com. With that, I will turn the call over to Brad.

Good morning. Thank you all for joining us today. I'm excited to tell you about our great first quarter as well as our positive outlook for the rest of 2023. Let's get started with a few highlights from our strong first quarter 23 results. We generated 187 million total adjusted EBITDA in the first quarter of 23. which is 8% higher than adjusted EBITDA in the first quarter of 2022. Our pipeline segment EBITDA was up in the first quarter of 23 by 16% over the same period in 2022. Our refined product systems and our ammonia system continue to deliver solid, dependable revenue contributions in the first quarter of 23, with throughput up 6% over the first quarter of 22, reflecting the strength of these assets and our position in the markets we serve in the mid-continent and throughout Texas. Our Central West Pipeline systems, particularly our McKee system, performed well last quarter with higher revenues and throughputs versus the same period last year. Additionally, our Permian crude systems volumes averaged 543,000 barrels per day, which is up 6% over the same quarter last year. In South Texas, we're pleased that our Corpus Christi crude system throughputs averaged 369,000 barrels per day in the first quarter, which is above our MVCs for that system, and 8% higher than our first quarter 2022 volumes. After a near record-breaking 2022, our fuels marketing segment kicked off 2023 with a strong first quarter, generating $7 million of EBITDA, comparable to the segment's strong first quarter 2022 results. With that, a few observations about the rest of 2023 before I turn it over to Tom. First, looking at the Permian, as we mentioned on our previous call, we've seen some lumpiness in some of our producer schedules so far this year. We expect volumes to pick up as those producers ramp up activity, but depending on how quickly they're able to do so, we could see our 2023 exit rate slightly lower than we forecasted. We're in a range of 570 up to our original forecast of just under 600,000 barrels per day. There's still a lot of the year left, but fortunately, as we frequently emphasize, given the fact our systems capex scales up and down with our producers' needs, we would expect that if our exit rate varies, we would also see a commensurate change in our capex. which should counterbalance any potential reduction in volumes. Looking at the full year of 23 for our business as a whole, even though the high inflation and volatility that distinguished 22 have persisted so far this year, Neustar continues to expect to generate total adjusted EBITDA of $700 to $760 million. As we had mentioned in prior calls, we proactively mitigated some of the impact of inflation in 23 through the expense optimization initiative we kicked off in early 2022. New Star's results will also benefit from provisions of our pipeline tariffs and contracts that provide for annual rate escalations linked to the preceding year's PPI or the FERCS index. This year, we expect to once again self-fund all of our cash requirements, including all of our growth capital spending and our distributions, and we also expect to finish the year with a healthy debt to EBITDA metric well below four times. And with that, I'll turn the call over to Tom.