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DCP Midstream (DCP)

Participants
Irene Lofland Vice President of Investor Relations
Wouter van Kempen Chief Executive Officer
Sean O'Brien Chief Financial Officer
Shneur Gershuni UBS
Spiro Dounis Credit Suisse
Dennis Coleman Bank of America Merrill Lynch
Jeremy Tonet JP Morgan
Elvira Scotto RBC Capital Markets
Gabe Moreen Mizuho
James Carreker U.S. Capital Advisors
David Amoss Heikkinen Energy
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the DCP Midstream First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] Also as a reminder, this conference call is being recorded. I would now like to turn the conference over to Irene Lofland, Vice President of Investor Relations. begin. may you Ma'am

Irene Lofland

be s, Midstream good call. first webcast dcpmidstream.com. slides is Thank of Investors to website our Today's and the being at can supporting the DCP quarter and under Shannon you. the morning section and welcome call accessed Thank XXXX earnings

slide Before review that results a the that due may statements in SEC discussion we to like the affect includes filings. our today certain forward-looking refer the latest out I the point would factors to our complete risk differ Please business. forward-looking second begin, risk describes partnership's of that to our statements. of deck please listing Actual factors, use for and

GAAP slides. we measures of your our schedules appendix that, use section van will O'Brien, after the Wouter their and will remarks, will to over are measures, We also nearest various in the CEO non-GAAP today. Wouter. And be CFO I'll call take the and Kempen, speakers turn Sean the With which reconciled questions. to

Wouter van Kempen

Based achieved financial yesterday, putting grade. term by multi-year one resulting away leverage us strategic of Standard while transformation transformational We upon advantage to & while The over competitive good from distributable flow, Irene investment leverage. coverage model on our EBITDA, of X.XX model, discuss cash million we'll ratio joining you On us. quarter and we the you, diversified tremendous We in growth times. appreciate million, morning to financial call and business EBITDA Thank record is coverage of efficient the received $XXX our full X.X now off improved start four a year $XXX upgrade from journey. distribution a projects, capital all records DCF performance with targets, and including provide just today's and step first our results outstanding Poor's a updates our of everyone. of highlighting times our and and business

increase value. Our performance approximately our continued continued We last we holder met unit in lowered deliver from outcomes built the less allowing million $XX commitments the that efficiencies our by on as reliably. year's fourth from record Notably, a built momentum and it and from our to man our to assets safely processes, automated workforce. operational while innovations through hours for quarter, ensuring post-production throughout goals costs and

Sand per requiring expansions, and portfolio. our market capacity, result across our capital we of Additionally, by from was pipelines continued underpinning half expansions, a no Hills volumes to supply throughput NGL capital. incremental and QX, day expand our our year-over-year a optimization, increased takeaway we approximately record up million In as In to as XXX,XXX operational immediately creative logistics efficient our connectivity innovative NGL barrels per strong our see segment pipeline earnings. barrels capacity day XX% capacity

discipline of add OpEx and in well and in Looking to taking XX% XXXX. unitholders, for portfolio uncertainty volume with to we volumes, Basin, addition are X saw another the and optimization, our dedication Basin and roughly total In advantage Basin we G&P and increase DJ while head minimized, in of Across to to strong value capacity to the will plans our a decisively workforce. our to every middle progressing to also DJ creating well demonstrating processing of we Colorado's our the opportunities significantly within the O'Connor our new footprint, are regions of function in advance the DJ continue throughout CapEx evolve and political the record gas our the facility construction year-over-year. quarter financial organization,

as honored few award safety place and financial proud industry's to a was our of safety by for weeks midstream industry. in among safety And winner the companies ourselves. performance. first exceptional operational as Midstream with outcome safety the we DCP been largest foremost, all first We've and prestigious GPA most our an share the Association, set goals our recognized at XXXX that above the Importantly, ago the we're goals DCP are

world driving our record results toward of of want our illustrate reduction XXXX. on team's I and Our commitment our vision to each to is success and outcome. to the culture. efficiency building metrics increasing remarkable In safety class capital for cost employee every of thank our all, and company a leadership, team our volumes successfully And DCP behalf from this safety

over Now to it turn our financials. I'll to Sean through take us

Sean O'Brien

performance, towards I'm delivering good which financial proud represents financial on incredibly our the dedication Wouter company QX significant progress goals. our Thanks, the morning. and of and making is

Our QX integrated value chain. from QX to excellent of XX% and business from a equates segments, DCF demonstrating power increase diversified the of both by driven of of earnings fully more than fully XXXX our our XXX performance million

year. in marketing increase XX% by and Sand include logistics over year-over-year, and Key Our on last substantial with approximately business margins produce NGL utilization million an continues the earnings up a Hills. driven XX% drivers $XX volumes rate to record throughput

earnings than gas which prices. Additionally, low natural acts offsetting from our a Guadalupe Permian we asset, outstanding as had hedge more

capital Permian G&P up earnings our commitment reliability strong as improve were and strong a returns year, side, by XX the and volumes in disciplined north, million our last the On investments. south to result from the over driven efficiency and of

taking we're to the enhance based and to continue an to and percentage XXXX increase XX% nearly now ongoing in for XXXX, hedges hedge for we hedge of quarter our strategy additional cost our Year-over-year, able reliability saw cost add XXXX. fee mentioned, and XXXX. and delivered costs would Wouter through commitment our We fourth that of addition as QX on due we QX our trend new down from quarter $XX levels, and with million assets XX to in growth lower than investments about And transformation. million the

combination, of flow. propane we outcomes majority capital excess our cash or addition, In these and through self-funded XXX sale our growth flow business. In ratio million via X.XX QX the the cash strong in of generated coverage through wholesale excess

growing X, as Slide position the balance I'm our summarize strength Now strategy to our financial our improve continue of moving and we successfully execute to sheet. going to

this upgrade is dedicated BB+ the disciplined to received we through week. recent extremely efforts our S&P action earnings from the I'm proud allocation grow of industry culmination and our financial X.X liquidity. and favorable of First, This transforming leader. the With integrated to on our fee flexibility ample company focus available a facility, about fully have based in billion capital bank we the

with and a year row. is any Our XXXX, record is our times common coverage ratio coupled a X.X issue X.X in leverage of at ratio of to in the times commitment not reinforcing fifth equity high for now a

a and current trends. DCF seasonal second factors historically, to number of looking QX, our Now forward by our lowest quarter produces driven

NGL scheduled Specifically, is and of in quarter additionally, we higher second maintenance, and natural In instances which shape. lower And see Permian. the plan summary, constraints gas our position and turnarounds typical experiencing is our strong. temporary prices we're very for

between segments the to to Our and a XX-XX earnings balance bolstered transform market the our G&P logistics place. fortify our portfolio and our volatility has to against in help strategic evolution company

Our ever commodity Guadalupe in to been we natural lower are mitigating and are risks. hedges from benefit the ensure effectively our they've than sensitivities we portfolio like

which of is now. execute flows a through disciplined sight while increase and every efficiencies to our Wouter new getting And bright Our strategy, cash of will ways us capital cost and work X.X to allocation line our utilization, capacity and our walk driving each done. lastly, optimize as future operations we is DCP and transformation molecule continue clear

Wouter van Kempen

Sean. Thank you,

you DCP needs balance to addition our As further meeting transformation, our safely in X.X goal diversify, to of and all chain, value know the accelerating while our customers. integrate is reliably our and

industry's we're that see can you country's positioned midstream X, constraints current of tier wave first Slide for to the in solving basins. well Turning the the in put projects

that target ability high projects where are the key with return our the Permian these puck needed in on basins ramping puck end of industry's XXXX. NGL are highlight quarter, Our of some in project risk at and basins. to volumes be this from capacity mind, half take in DJ last the quickly of latter value The I'll unitholders. to for second ultimately be, is will since skate ensured create not the away threatened gas call. has demonstrated half that potential year, into low and overbuilt and where slate in service the long-term the X with the updates the terrific of our service the and gradually capacity We O'Connor projects remain not by throughout second will plant providing With

on this the progressing the Coast feet pipeline Gulf well about associated main to fully service Specifically, will October transport X GCX The track and line cubic subscribed year. for a how gas in is solving Express Guadalupe solid will competitive as all on natural on takeaway billion of compression of in to asset in the construction pipeline advantage our have is our we allocation strategy issues customers capital creating per focused This the and value continue establishing Permian pipeline. early, day of unitholders. and example is our benefit market from our while

beyond continue Looking a solid for to Colorado growth needs that come. for customers' XXXX, solves our to in we years strategy execute

is trends. ensure thoughtful with approach production growth and future with our capacity We a aligned are working production guarantee producers our well-balanced anticipated our to to that to

of acreage Weld dedications feet We per the XXX of expect core roughly in by million lease middle day to provide initial from of XXXX, customers. million to XXX processing capacity underpinned County cubic life our

finally long-term Eagle necessary with parallel example fully this asset DJ consistent basin strategic heads in cash advantage of and and In midstream country's our to are fractionation the on or thereby strategic enhances DJ ability we We're All leverage top goals. commitments, all value excellent distinct and an at low including DJ a full our Permian, further balance the and Ford markets, of Coast sheet the of chain. all, economics the base, operations comprehensive competitive strength to the solutions take well takeaway unitholders. value processing the allows risk drives and the the accountability our on Throughout advantage X, high capacity, way a return footprint, gas strategy to our record closing, XXXX midcontinent Gulf and the NGL our customers basins, to us end tier of a solution, projects company, our Slide of delivering Basin, model. our our Our for customers demonstrating on from our our in our are our integrated track creating chain providing strong flows. in

financial chain head an increase throughput which position. proceeds in delivered value results, team year well divestitures Coast by over in allows volume, our projects delivered capital in increase this our coverage to the DCF asset are NGL times, First, this quarter Express critical the and our X strengthens XX% type with from the our Front which volumes our in growth. and eye DJ in us the record first to We increase roughly increases an double further our five our digit pipeline, and year-over-year, enhancing With of with Express an we and self-fund from approximate a XX% the further Connector. base driven Southern Gulf outstanding including non-core of G&P portion facility, efficiency, volumes. include, coming expansion We online O'Connor alone. Cheyenne combination Texas achieved XX% X.XX of Range expansion, integrating These Hills

We S&P ever which strategy are their a before company a proactive yesterday. as than sustainable result more balanced upgrade diversified confirmed and in of our

steel beyond Looking in create operations, X.X ways our corporate field capacity the to accretive our including efforts our new innovations, and margin DCP both to expansions in offices. the infrastructure, optimize and continue

and most lead XXXX vision in team and more of country. team, home which by the I and proud in any the Midstream some recently our our our demonstrate to companies safely nothing recordable go recognized the last employees of company each the very DCP extremely than our is largest XXXX of important reliable I'm our locals, service to These proud outcomes our being provider with proud industry every progress take best injury call, ensure environment. made GPA safest, happy our to midstream delivered. our towards questions. among rate midstream commitments on as your sustainable Association our X.XX, of was total day. We're Finally,

So up Shannon, open line. please the

Operator

with Gershuni Our Thank question Shneur UBS. Instructions] you. comes [Operator first from

is open. line Your

Shneur Gershuni

good morning, Hi, guys.

start with DCP you the off to skating and improvements where to of overall puck sort wanted optimization your the just guess with is I Just in the talked X.X, going. about

go? just some obviously now? is, If you've maintenance improvements hockey the side, my period what now to seen volume and right we with is much would I sort capacity of in at stage So color in some on reference, as but too. are continue incredible further that be How on We've to can well that this great. question operation us some shown here guess improvements you give

Wouter van Kempen

think in were overtime, a end I in we're But changing Overall, the I something Shneur, still winning. Yeah, X.X, lot period way ago, a years would completely to have to the first win, opportunity on we in two mind. is think we is the started here, around we company. about last definitely DCP odds thinking I I so this about not operate much but we Wouter. the of think overtime we're this continued in my is there are say took that front this very, digitizing, there. results very And left of we've night

this the capacity spending Hills we accretive second margin way So in Sand time very without is any increasing a optimization around very, did money. and

can a see a think also today, the you is where if but cost. So you that's million barrels half around about impressive, Sand results Hills day, pretty

in where this the better that hub seeing operating we're up in run company how field, in how offices. field, in better. cost The also of center work and cost, is investing a we transformation, we are have we're operate how collaboration We we around this things doing the but only to we're we heavily corporate coming but this field integrated the better not also and lot the really central starting of have,

have, other around piece that it's margin. we The

can when and rings, the that assets be this in time, what can the we register in is more online here end, quarter. the we all run So our and reliably seeing you're cash on

is a is we're great our happened, safety Sand really, to that are of cost and think I performance big as on I optimization and is is variety up really seeing transforming what you're examples well. highlighted great, of down, do what the around piece safety liability And of coming margin reliability going Hills, the company. trying

go industry. your and are proud been of to a the success, our we've question, a lot I'm back left room But innovating lot doing Great in been how there's there's really I where and what to team going we? So upside of think. has

Shneur Gershuni

of being same significantly I mean, first talking in first equal and XX% the a of When forth. else neighborhood rate lot room to mean, or analyzed and period, you go are volume prices we for in the all commodity something exactly take say talking higher there's I in are so quarter the in increase of of me than run we something the kind that? stay

Wouter van Kempen

out two about, first period, Well, I there. a of the couple end, put in think thing. say In to I'm this. we're going numbers into the if also years not we're

end is be, hey, we're this to this and going the So to going us. year this claim is thing overnight to going do not we're of victory beyond at and the

very, We have complex large system. a very

internally time So how to going goals But and that the of change for set it we ourselves things our in all alike will pretty pieces system. take aggressive operate in to continue around are remotely here some some plants we to systems.

more there's think point cost view. I from of a

assets years new bringing as line, new people those on doing coming absorb to and number increases online we of there's assets inflation, goal opportunity and then reliability and is last We're Our to on the side. an what we've building the absorb cost. significant continue over we people, give absorb pay assets portions of been we

about what local give the or too you I come. cycle place the And we to just over in is XX maybe numbers be to a minus And do be our but [ph], especially years going say that will X%, platform, it the massive spoken to the if going to have seen it's end So think this XX% early we've we've over here to to very slow if that build years trend see down. to I I and think industry and very we a powerful, in continue to is this it's want you is for get last where growth starting something that believe a scalable platform. XX us, a is scalable is

Shneur Gershuni

you be overall kind with Fair appreciate the this seems progress can forward strategy Weld Bighorn enough, regulatory capital you of carefully. Bighorn do from and of especially us at deploying it Maybe County still move sort respect give then or DJ. update the proposals situation that. to point on, and the I an to There's you been to kind forward the and expect signing you watching of for grow on the some are with

Wouter van Kempen

had all do in firmly We this SB us. behind and So we've not that XXX the significant activity is here from impacts legislation. Colorado expect new

be Our business you gas friendly as the been to oil Weld and from and has County to focused Weld County be always supportive stay continues away very industry. the of and model far population and centers tremendously mentioned, of

his decades and doing come for bypass we is we in going ramp this O'Connor for the think out of business, in don't of how third kind on so June throughout set I us. about and very in County ramp on gradual going so And is X, million additional is how I up speaking we're is of So we a to XXX to business what see quickly up that so a broadly Basin specifically, Weld it working what to second more as probably first to capacity. see system. going expect, Mewbourn give the think been or expect us quarter, XXXX, that's and More half a decades we've flow we we do as DJ X, up really ramp in going think our saw well about so, the

places but is going some working short-term processing DJ a capacity available. not game. an So This There many are processing be the Basin, It's those. to in NGL to just in country, other we not be constraints, is only continues takeaway. this

Express, the downstream about Cheyenne via away. Hills We're Connector with together XX the Texas a the about residue extension working that into So our and it's we're Sweeny we're working Basin, it's together fractionation by Expansions. take the and and with working that partners DJ or Phillips of Range gas that Front Southern

of line to sure it So County very as to do step, what our customers supportive looking cash with law not today SB believe also they're of have if production that to pertains continues Weld you closely sight the I to of kind now, yes, XXX then our take this flows. next being very, at it good industry, their we very make working are pertains we are as to but their as forecast, how be only

we're actively, we our that So up we're producer sure synced that to make very with working trying much customers. are

items, work is is place, net-net place, in so in to additional long time very lamp for lead feel continue will permitting capacity that is I add We processing engineering working, we confident our producer here. decision think final I months like we in will middle probably XXXX. customers in on exactly a next will the what couple that of have of And look the

Shneur Gershuni

two little questions. follow just up Great,

the year? have and enough obligatory on when before do opens in Just frack next also question capacity up tightens you usual XQ it it up IDRs

Wouter van Kempen

I I week-by-week lot has of to now, really, pieces balance monitored right the value a make sure of chain balanced. the to is a things think has good really think the team kind of closely, all is done this team a done day-by-day, the but our really portfolio job and that

Shneur Gershuni

And the obligatory IDR question.

Wouter van Kempen

yeah, it. didn't if Well, you ask surprised

Enbridge bringing by financial the we strong than to We're commodity building portfolio return coverage, quickly, earnings we're a delivering and dry on strong discussions much and growth, based to earnings time, G&P, I end it's strengthening, marketing, over to powder us, filling have fee is execution think the and do it's I've we're spoken sheet with the are XX% close hedged. on strong based of high diversified or in we're that. them G&P, balance which is online, more up the up the been the now sensitivities important ever reduced we're continue it's and we're think very owners XX% metrics, constructive and I is So have been with going team, the doing and XX-XX projects to we're logistics about budget, it set stage driving lot for very Phillips. have we fee

have to continue good we discussions. yeah, So

position think of can I making sure stage that and this strength. the on setting a we do are we

Shneur Gershuni

Sounds guys. appreciate the great, update, really

Wouter van Kempen

you, Thank Shneur.

Operator

Thank you.

Dounis Spiro Our next with question from Suisse. Credit comes

Your line open. is

Spiro Dounis

mentioned more in, a hear. maybe One, that Hey, pretty guess business you good diversifying potentially especially morning. and it be we the I in will are making the basins quickly mind to Wouter, DJ for you're assets line integrated. me. growing water and And from come two Permian I gathering what little think things

business be, would export other NGL maybe The capacity. potentially line terminal

right do you'd business here? curious just those you? there be anything Is So lines two in for sense make interested

Wouter van Kempen

Yeah, as business doubt There's sense this balancing accretive and down things just what continue to are to we accretive us it got needs, from like to there do needs, investors continue expand We for would well what ways overall about absolutely look mentioned are to and the a out the and in We our expect at two to figure way customer value so to further ways our are further businesses. there us do and earnings capital in the go no it. unitholders, make portfolio, capital interesting the an way. stream. you in

I that us? yeah, So do. going chain is looking other continue the early Absolutely, we to value too But overall at something this to we grow to for opportunities think to are. are we're say,

Cheyenne significant did expansions gas the takeaway didn't Coast with those Sweeny think are in very residue around Gulf going Think and Phillips way. further the seen that are we Connector; do. that do two that us projects XX I deal historically Express, we you've XXXX, that the about that

it and ways we're to smart good a in we do it, like there's us interested to things way do doing if are for that. So absolutely

Spiro Dounis

Okay, great.

able to the against of impact. you the commodity We and around some were first were guys pretty to margins able surprised you're shield hedging program. by here how some pull off yourself quarter the in just well of the one, Second

the get year. if front rest we hedging distributed, the the year, tell waited to rest was that the are of program as us some for sort able to of of of cadence maybe through go trying curious Just you sense a the evenly of

Sean O'Brien

Yes, Spiro, Sean. it's

program being the protection going, will and where great XX% gives hedged and us around company's some First to commodity the fee comment in itself tough close obviously, obviously environment. a of all, I around

well the thing only that not around In QX weak the shape, on they're considerably gas fairly - the back half line, in balanced. is give and the bottom price terms stronger of The in little slightly NGL crude the crude bit stronger. And part hedges we've to on was stronger. as the a the The put are then the for year, year, of latter are hedges you but prices QX they they of were hedges actually able opposite, we're stronger. were I some the would been

you remainder QX, think with business, are you balanced. that's for those gas hedge acted at about year, so that just between that, to almost as that has course, good And puts in Permian the in levels well as the prices a of up more of move same the but hedging results business, as we're show had program, So XX% wonderful volume the us and we're fairly know we logistics the the the year. a driver phenomenal hedged then obviously, the out saw continues them remainder well constraints part - but earning their the really the relatively of of Nothing little but we of base offset hedged fee Guadalupe fairly logistics the spot. why seeing dampen, and that the and pricings company in to bit

Spiro Dounis

up gets some there slight the to in delay, if sound anything Got serious would just quick be but clean that's curious extent pushed yet, it Cheyenne maybe up believe one just regulatory into Last up Connector, it, I any the that like ramp O'Connor of that. XXXX. caught doesn't on impact appreciate on I

Wouter van Kempen

done a the DJ a it's do that FERC job sure XXX hopefully, are day in the from to to securing we a No, takeaway that's Tall approval. take Connector making out - Cheyenne provide away the project. Basin feel that the be good to an I job of of about important that. a May Grass I capacity residue the think gas thing. we're basin. is takeaway. tied Yes, FERC on have residue of really maybe continues going end has and June excellent at other a - million we again the look done of It's has pretty in why seems very team right In type indications

to So comes get expect as FERC in, online. project soon approval them really, this run hard as I that to really

a we that it As have our so to Cheyenne period will the after project. triggers that for that the that time do we decide is piece to a at and want pertains basically we of FERC Connector time ownership option own

Spiro Dounis

Great, guys. me. Thanks, that's it for

Sean O'Brien

Thanks, Spiro.

Wouter van Kempen

Thank you.

Operator

Thank you.

with Our from next Bank question Dennis of Merrill America Lynch. comes Coleman

Your open. is line

Dennis Coleman

were about with hi, can able expansion circle you Yes, guess, just XXX capacity I follow up, couple there. operations up up morning. specifically to what to Santos the to for me - just to of A good of I maybe implement moves sort if the back capital. kind to to you no understand more a of or Can talk little bit

Wouter van Kempen

there's spoken this. not that all great not we've to give I'm but - time the team we've this is before, a is in the lot done things things, I'm Well, way people business, doing going of it first the in the

that Sand dynamic and We're so this and pump there's points and set sure this, it. making by this is technology on things optimize doing around every we about the second off throws every Before time investing any we've that expansions. of that taking margin of these twice really day. the And around we now spoke of without anything, that we're about spending capital, flow that that has it's done without these you team full There now XX% optimize do ways when is been working Hills you for pretty stations accretive together second pretty think you do a lot types parallel the it's some can when and by and you think able really you advanced the margin running pretty technology full, run using of attractive. to are in there's

question was that and what advanced applying and a this, within analytics better. the earlier my from about do doing some and we're things the our outside doing, successful ways of team's we potentially are head off things you fashions running our These and to very things So to Taking guys continue so creative technology? very been system in the there around that pretty the technology type industry or operations the and in are team. of

Dennis Coleman

Sure. No, talk I - just to And good that as what that is I that's helpful. listened harder. just hear about you of sort I run the stuff. asset that's

that if follow is I more to so mean lead in or And CapEx of questions higher you kind of all it DD&A in think rates. about things does we does couple guess future maybe maintenance terms of should years that a of expect first on

Wouter van Kempen

Yeah.

me there's This asset that. not running in asset is very This a correct difference big it. is about running the Let very, about and smarter, the harder.

So push this assets advanced of do This lining kind hey, the meter dude, red start to system. kind it doing about, is analytics, things around that using brink about your our over technology, is smart utilizing differently or way. not and ways of to

what that So is is this about.

So or It's not smarter. running run in this all run harder is it it things about the ground. about

Running thing of maintenance this things smart to not we do says long-run. therefore I that pretty So accretive, likely or means way Running you're is safe. most more very this. doing you're reliable need a like don't my we that. most is have. yeah, comments the things some things here likely very harder that also other Remember see means not harder of in all This a

investor, run safety the that's is reliable, And line. benefits we're That's we as safety country to X.X. midstream and on. ever I have. we are continue be pretty record the come smart, than before. industry bottom more there for that want to for in ourselves with technology That's Nobody to DCP we've the we about in to you that you We reliable something want that our to hopefully be mentioned better pride end on analyst things has been that is transformation be that safe we record. about. We than means And in very all a focusing what our to our want amazing. what this significant

been run collaboration before run our than to here like see what industry. company come how this you'll come, analysts our very, investors being are very different Denver, that If had you and companies has we've doing in other how center we're and integrated is in

Dennis Coleman

Okay, That's appreciate helpful. very that. that's great. I

Wouter van Kempen

you. Thank

Dennis Coleman

might On I more, early, thought sometime on on some that little it quarter. hint more Coast it Express one come guess, Just the detail. a that third any Gulf come might

fourth mentioned quarter. the You

Wouter van Kempen

partners Coast in of incented industry to Express and wait pipeline for cannot the in everybody I highly Gulf this think and online. is all our come

industry one the mentioned to sure are get of Gulf month The highly all what April figure all we're as first quarter Express to all like kind it's October, example of of out and as I pretty pipe fully tremendously, constraints. either we've and rough in So And be our prices, or we earlier can. by with early some to us. great I'm that those. we're constraints in going to where the quickly everybody it then work now pipe seen working in Coast on to Right of can hard be and but in we be incentivized alleviate be the partners to our there. if the earlier subscribed, is would of this on uploading a is it online getting ourselves those trying Permian it looks obviously,

Dennis Coleman

the for thanks Fantastic, answers.

Wouter van Kempen

Thank you.

Operator

Thank you.

next Jeremy JP Our with Tonet Morgan. from comes question

open. is line Your

Jeremy Tonet

all that Hi, the good provided color Thanks today. for you morning.

portfolio Just get but in wanted the it top more Waha puts some seems there's and of maybe then exposure, some clarity kind on marketing with, Guadalupe. also little specifically, a like bit on takes to

the is quantify net basis a negative? could us? wondering, you that or And net Just help wider, positive for

Sean O'Brien

- we - most give the hedge. it part, natural for mean, as I a talk Yeah, we try about

be it our as very we're Permian have time. it. the indicated, of slightly the about that a positive then side a But obviously, I thinking base spread, at Guadalupe on and end hedge Jeremy little is So view asset, day, bit in G&P at widen was is solid, you're little what a QX, and side. balanced modeling it's the - way of make That's hedge for even the sort I've that But look heard most on the us, if the we to the the it, contend natural of spread most we the breakeven. via think money we it more to a ability

Wouter van Kempen

segments. within different is I do think the you it color what business is how important

side a side out close the to maybe house. of of come the to net balancing marketing the So together house. the it's a the net slight negative It's positive positive are first G&P to they pretty for They quarter. and

Jeremy Tonet

that smaller And I a just helpful. Could fee was this was us this based segment guys and you slide have missed that much quarter. G&P how I there by let didn't I see it was historically, quarter? I question, know a it, in based margin Thanks. just think fee last you margin quarter. how much the breakout That's on think have provided but in was a G&P for might XX%

Sean O'Brien

we - and Yeah, you calculating with those that let me numbers Irene we I'll get you some are offline can them. if of let take

is changed standards, make And and Rec that - the of different you had think you I a implications put XXX you I that's see we you it that changes help get a impacted can we're few of little us to the Rev out. to can off of we we but we've Rev to line why what Rec seeing can doing standard, schedule. think you're we XXX some because with schedule. or don't new And Irene,

Jeremy Tonet

there. Okay, helpful. stop I'll Thanks. that's

Operator

you. Thank

Elvira from RBC next Our comes Scotto with Capital Markets. question

is line open. Your

Elvira Scotto

Hi, thank you.

me, do expansion, optimization? capacity a through Just of the Hills capacity so to for follow on of couple ability there more that up is expansion questions Sand any

Wouter van Kempen

here. our time first like handful team second yeah, well. probably And a we've size is was This to of done what the question we as It's did this the the raised that double it. a question, times have of one about great

can can Permian? efficient? to out I the the well. it's away for But more as to the great we of is maybe can't. one the have contracts they is asking NGL I'm we take replicate we push we very through getting Hills pretty can the we're what probably squeeze pretty –obviously, But figure But want out we pretty Maybe capital we probably be sure definitely, and all pipeline But more? - bit the Can think asking. close. that team. that close. out team So I that make something Southern on we we with how you're pipeline that only the getting we're sure maybe think How can we're can do. this There's make close little not a we

to well. can And we capacity. so where attractive of us similar other to on when And as things pipelines do potentially get that's we we have a work a lot

Elvira Scotto

was year? steep the the And like rest pretty first see of in terms quarter of and for then trajectory How the decline you a verses throughout processing, it the gathering that Thank volumes that. volume and of 'XX looks 'XX. that you midcontinent XQ in of do kind

Sean O'Brien

I So with this - line still think is Elvira, still our projections. in Sean. We're original we're

we'd that helped in regarding guidance light, want to an from we versus in national the and specifically - down things our A thought in get midcontinent, gain would that go the had we volume. that quite were can away. time helium your we that QX Those bring in do you some into other volumes XXXX think couple in I some bit. We where things. our forecasted midcontinent opportunistic with 'XX. Obviously, of lot I competitors interruptions be But at various a benefited we're due industry you saw a plants offloads. the a plant really there's to of to gas

you I believe said and side guidance. I that versus pretty last we line bit still that. very down original in on positive good little of year some But with guidance our coming having the out And pickup a the that time gave think trend versus So that last QX are I much noted of midcontinent seeing 'XX. would

Elvira Scotto

project? do thanks. you a update any have Gladiator still Is Great, viable project? then the Yeah. that on And Pipeline

Wouter van Kempen

we the March. last extended Open We So Open Season end the received we very Season one at expired the the of significant had. twice; that interest during

barrels right the future. come there. I we discussions think I think capacity commitments all the where at it customers year Southern look if market this that stations. capacity very doing low time. and do We reopen continue to probably now, is us, really the to multiples expand high we Southern can Season set looking improve may this Today, that - capital NGL customers. at the are and at strong Southern day now. we project that can type at about we conditions limit on Hills right you should Hills What convert to have Hills time, are, from we looking a to additional same At in In And pump we can potential make probably was This barrels capacity, Hills. we local was a Southern or we XX get. hard potential markets is return firm end Open about XXX,XXX around could play, do of XXX,XXX are about we all of where overall create for an are is XXX,XXX with we what the we relatively

So that's very that this moment. very are looking we something actively at

Elvira Scotto

Thank for had I you. all that's now. Great,

Sean O'Brien

Elvira. Thanks,

Operator

you. Thank

from Our Mizuho. with Moreen Gabe next question comes

Your line open. is

Gabe Moreen

morning, good everyone. Hi,

in XXXX a is or Bighorn, Just XXXX sort of spend? there of that question is expectation some going be on spent that CapEx is a quick any that to really

Wouter van Kempen

part are program. way capital really you around very our them. confident work and what the that's of think we Like trying look where with it we're around to hard at of I also kind we're

when we really of But gave program between we're you to we it the coming early say, capital Bighorn are our XXXX, have to If significant down, because program in from lot size that would December it? GCX, you our we've fairly money? or And XXXX? XXXX looking So would spend vast you spend capital how front How projects think means capital going about I But the had XXXX that's is that majority loaded do can that hit a not What's O'Connor think there hey, of be we and it build that only if how program? is now, in we most online, capital at in the right a - taken we of it the quarter. kind efficient hey, some of do think between the about here guidance, a first the on do probably way? program.

Sean O'Brien

And is this Sean.

capital, on by end that alluded loaded and both and we Coast - X front this, to QX the QX up are and Gulf follow better O'Connor to project. driven Just

heavy So our capital some questions totally the expectations. potentially QX I within I spend know that was saw around

Gabe Moreen

Sand Any for a And wise back of, of NGL, have expansions there as Hills. really just question new is impacts from the expectation you guys. the 'XX coming pipes? for builds outlook and for Thanks, lot then me guess, second getting I volume around in half online

Wouter van Kempen

a are saw have No, fall - I we our were in XX signed are think or earliest when we pretty some year starting that is of largest we that contracts. of in them contracts strong, give to XXXX-ish off We - the that lot like contracts take. portfolio up are contract our ones other XXXX

and comfortable around contract it up. I very the portfolio around pipe that what feel doing backing we're So that's

Gabe Moreen

Great, thanks.

Wouter van Kempen

Thanks, Gabe.

Sean O'Brien

Thanks, Gabe.

Operator

Thank you.

Our next comes with question from James Capital Advisors. U.S. Carreker

is open. line Your

James Carreker

for questions. thanks Hey, guys, the

to ask but versus well. wanted level G&A levels, a big reduction QX, O&M of about similar as low kind Just in we reduced the of 'XX and saw QX

Are quarters? or as how we I move guess of those throughout good trend the think So to up those year? levels should next will of kind we the three these again

Sean O'Brien

as QX, is Wouter driving QX from that. committed I QX traditionally levels, lower we to general on down costs just on it in said, those delivered a think So quarter. we picking up and But you're

are So as those forward. move things you sustainable

are starting the of in efforts, think things more to earlier from and and corporate. operations in from things One like in efficiencies X.X Wouter you talk is the we the drive both heard about and comments I more transformation my

last continue will QX. thinking of of in seasonality overhaul as work year, the the So that on that shape, you'll trends you're a typically peaked as spike the well and the maintenance Those go do, having by work around that kind bit up that, comments will continue. turnaround little through about costs remainder year of driven my just we if and said is that to the QX the we

expect than to go to costs are So the takeaway - and long run, inflation for our think driving the clearly 'XX to to we offset I lower our down continue be is levels. key

sustain then So levels in that 'XX, that then company I goal to alluded next guidance earlier, are And driving move for Wouter the our years. earlier, able efforts lower transformation to we is the and few cost I this 'XX. as to into gave be think we X.X

James Carreker

took O&M seasonality expect pretty if QX you out there is the on type good going forward? the G&A would for similar you or And level the

Sean O'Brien

only goes a in to There's a the which ton QX, tends stuff, in seasonality to not obviously, be in you end way, happening the lot have that happens actually medical typically the not is tend thing QX. is of G&A, other of you of QX. that it's as year get The G&A what's towards in hit the the to driving tends - seasonality

James Carreker

QX, on kind then of the think, I references specifically Permian. kind bit about just mentioned, a of And constraints impact Okay. talked was as I Sean, little in some that you for could wondering elaborate you if and guys? that what what you you has

Sean O'Brien

Yeah.

are about But significantly we previous in we're earlier. from levels a our couple seeing the quarter. things didn't talk and So rejection particular, this down

spread. down, the a rejection driven of to come see starting we're economics lot that about low gas. We So frack the in talked by was

as are So obviously, lot Wouter until Express Permian the alluded seeing we we're NGL comes those a up, Gulf out push online, back And to of volumes gas well of area. the constraints constraints. NGL Coast

bottleneck that gas to on a sort lower offset volumes is dead fractionators a potentially not materialize some and is we the are of we kind are seeing as of rejecting happening But NGL prices. beat but equation. pipelines side lower Guadalupe will prices, the limitations horse, those again, more So wonderful those to in the less of

to I were And shows of sure It huge managing company. in a do the in out lot. thus not, the course we're the Our we moving still There's would backs. for of those of them see one just portfolio, that diversity people job more result example, a lower you key Conway, QX and backs fractionators NGL QX, give volumes, team's the then wanted volumes, could those net but of is coming word. to of moving to number, online, even key watch there's know in think but those far. aware we'll you Mont out lower not give that And I'll Belvieu. that as more the we're some a though us our we're phenomenal that we done watch net make of temporary that's

James Carreker

to I you to able you'll just more so think by be going was Belvieu. down that Mont frack to Sorry, say, be the largely shortage resolved, should ship QX

Wouter van Kempen

James. Wouter, is This

customers I trying lot fractionation going which market. value longer to Belvieu. deals come our and to there's Belvieu. it for is as obviously, more can place NGL to highest also dynamic at some as of the many time coming infrastructure bring are a think product our we where It's we we're make the term to both that pushes creates deals, do There's and customers for ourselves same that interim sure there that online, a product infrastructure online, infrastructure into the pretty

probably as think continue I will has the very, it But to that been Sean whole, productive do a a something bottleneck we to middle dynamic. of until month-by-month, pretty mentioned, solved very with that dealing is a for in it's closer as week-by-week, and think I day-by-day, is get a So the XXXX. completely which place the this in to industry where way for team is somewhere us

James Carreker

other of capital more to asked are me, I that? for intensive, capital I portions around kind thoughts And efficient something would more your do Hills, guess that. Appreciate consider cost that guess ways last what expansions? you more for was you of question looping guess, there about were it's or Sand the I intensive whether optimization line are

Wouter van Kempen

Hills. we expansions have on so Yeah, done three Sand

originally So came this day line. line when this XXX,XXX barrels about a if where think you or in were came pipe in plant we

we barrels optimizations. at multitude are expansions, of million sitting have a we're Now half done a going a that here through, so

and We more are - way, that we but stations cannot. unfortunately, set I wish pump could we things do

or got the contracts it do intensive, capital what and we you're dedication, a right would where is more something end on you you to the have get that talking flowing an we contracts if in are volumes, is the blend the do to about. would which those pipeline. acreage So line, don't looping we're more, do the of off you dedication through up at pretty back would would If At look we certainty to have to firm have actually going product potentially not absolutely do that. doing the take probably based time a is like same as

same some there's an the as to right capacity there it, think time of pretty is And significant could will we built potentially opportunity capacity if we that it do well. absolutely is utilize some So that at being now. about

James Carreker

it. appreciate Okay, Thank you.

Wouter van Kempen

Jim. Thanks,

Operator

you. Thank

comes question Amoss Heikkinen with from next David Our Energy.

is open. line Your

David Amoss

Hey, good morning, far. guys. Appreciate given you've the so commentary all

via little Guadalupe, to bit how get and GCX coming in between wanted detail that just think a coming dig versus to Just what in on? as to online about more closer on to we GCX Guadalupe you're dynamic doing DCP the net marketing

Sean O'Brien

So and there's Guadalupe has offset, prices. for to the wonderful an a element us performer been phenomenal a obviously, - Permian lower

been that we logistics Your get bottleneck online obviously, impacting alleviated more infrastructure online see bit is business, comes when to we three Wouter thing we're when that gets Guadalupe; the you'll beyond that our point inverse. that time, our in the is looking and about in obviously similar and one you it's marketing G&P seeing a point months. little hedging our of and earlier, The has out GCX point team I across to and higher alluded comes world when next an that just and much business think strategy more would much use earnings as

and as advantage seeing. that very hedges color, we few much sure strategy on next the we're value my have able of years have to a asset of to and on have some that this over making we So we take give we been you extract out strong environment

historical like historically So goes and a all which pretty sudden And it's spreads net was of goes seen and normal Permian we've to them all back not $X. $X.XX Guadalupe flow. were relatively to low. the over this cash creates common levels,

will will next not point it's nothing my that going Guadalupe but the our gets forward, bottleneck optimized has this, going So eliminated, is obviously couple go Permian years. of to because as go to earnings that up, team diminish, over

Wouter van Kempen

very make the maybe are few like absolutely don't gone to Basin. be Gulf Sean sure to that comes that continue to David, and to when basis what going Coast differentials add are can other needed Express these think people was that online expect grow pipelines think, to there's I we Permian I saying, And

and basis out what So very the if years of far see this curve, pretty you the do attractive can multiple of around curve, out we differentials pricing on look asset. Guadalupe at we based

continuing lot a there's to are think I Guadalupe the chapters be of written So that on pipeline.

David Amoss

at update a last really think quick million in Guys, for and Hills. this kind you Sand just a of what on is Can helpful that's how clarifying Wouter, barrels us thanks one. your to spot? contracted about point half what day one of

Wouter van Kempen

is think I XXX% contracted.

think I long-term that go So so everything do we XXX% to there. under tend contracted contracts, we're

David Amoss

Great, thank you.

Sean O'Brien

Thanks, David.

Operator

showing And the like Irene further you. this I'd Lofland for closing over at no I'm Thank questions call time. remarks. turn to back

Irene Lofland

Thank joining you. us And for today. everyone, thanks,

If day just call. a me give Have any everyone. follow you a have great up questions

Operator

for this day. Have Ladies and gentlemen, Thanks concludes a participation. conference. wonderful today's your