Pipelines | Quarterly / Earnings Reports | Fourth Quarter (4Q) Update | Private Equity Activity

Enlink Multi-Basin Update; Barnett Increase Activity; JV In STACK

emailEmail    |    printPrint    |    bookmarkBookmark
   |    Wednesday,February 15,2017

Enlink Provided the following update.

 EnLink announced the acceleration of the Lobo II processing facility expansion, from its current 60 million cubic feet per day (MMcf/d) capacity to 120 MMcf/d of capacity, which is expected to be operational during the second quarter of 2017. The volume commitments associated with the new contract are expected to utilize the majority of the expanded capacity.

EnLink also recently announced gas gathering and processing commercial successes in the STACK with the signing of a contract with Newfield Exploration Co. and the formation of a joint venture with Kinder Morgan Inc.

Distributable cash flow for 2017 is projected to range from $590 million to $650 million, and ENLK is projected to exit 2017 with a distribution coverage ratio in excess of 1.0, assuming flat distributions throughout 2017. EnLink expects to continue to build excess coverage during 2017, supporting the potential to resume distribution growth during 2018.

Capital Expenditure :-

Growth capital expenditures funded solely by ENLK continue to be projected to range from $505 million to $645 million for 2017. A mid-single-digit adjusted EBITDA multiple is projected to be achieved from 2017 organic capital investments. Total growth capital expenditures are projected to range from $610 million to $770 million, including contributions from joint venture partners and ENLC of approximately $105 million to $125 million. Growth capital expenditure ranges exclude the $250 million installment payment related to the acquisition in January 2016 which was paid in January 2017.

Proceeds from planned and completed asset sales and at-the-market equity issuances are expected to generate sufficient capital for the equity-funded portion of ENLK's 2017 growth capital program.

Operational Update:

Central Oklahoma:

Throughout 2017, EnLink plans to increase gas processing capacity in Central Oklahoma at the Chisholm complex by 400 MMcf/d. EnLink's previously announced Chisholm II plant is expected to be operational in the second quarter of 2017, and the Chisholm III plant is expected to be operational by the end of 2017. Once the expansions are completed, EnLink will operate approximately 1 billion cubic feet per day of processing capacity in Central Oklahoma, and will continue to be one of the largest gas processing providers in the STACK. Central Oklahoma is EnLink's fastest growing core area, and is expected to become EnLink's largest operating region.

Throughout 2017, EnLink plans to increase gas processing capacity in Central Oklahoma at the Chisholm complex by 400 MMcf/d. EnLink's previously announced Chisholm II plant is expected to be operational in the second quarter of 2017, and the Chisholm III plant is expected to be operational by the end of 2017. Once the expansions are completed, EnLink will operate approximately 1 billion cubic feet per day of processing capacity in Central Oklahoma, and will continue to be one of the largest gas processing providers in the STACK. Central Oklahoma is EnLink's fastest growing core area, and is expected to become EnLink's largest operating region.

Delaware Basin:

The Partnership formed a strategic joint venture with NGP during 2016. The first joint project was the completion of phase one of the Lobo II footprint expansion, which included the installation of a cryogenic natural gas processing facility with capacity of 60 MMcf/d and approximately 80 miles of natural gas and liquids gathering pipeline infrastructure in Loving County, Texas, and Lea and Eddy counties, New Mexico.

EnLink recently announced commercial success in the Delaware Basin with the signing of an additional long-term, fee-based contract with a large investment-grade producer who is very active in the region. The new business has accelerated the timing of phase two of the Lobo II footprint expansion, which includes increasing processing capacity from 60 MMcf/d to 120 MMcf/d. The volume commitments associated with this new contract are expected to utilize the majority of the expanded processing capacity. Phase two is now underway, and the additional capacity is expected to be operational during the second quarter of 2017. Once the expansion is complete, EnLink will operate a total of 155 MMcf/d of processing capacity in the Delaware Basin.

The Partnership formed a strategic joint venture with NGP during 2016. The first joint project was the completion of phase one of the Lobo II footprint expansion, which included the installation of a cryogenic natural gas processing facility with capacity of 60 MMcf/d and approximately 80 miles of natural gas and liquids gathering pipeline infrastructure in Loving County, Texas, and Lea and Eddy counties, New Mexico.

EnLink recently announced commercial success in the Delaware Basin with the signing of an additional long-term, fee-based contract with a large investment-grade producer who is very active in the region. The new business has accelerated the timing of phase two of the Lobo II footprint expansion, which includes increasing processing capacity from 60 MMcf/d to 120 MMcf/d. The volume commitments associated with this new contract are expected to utilize the majority of the expanded processing capacity. Phase two is now underway, and the additional capacity is expected to be operational during the second quarter of 2017. Once the expansion is complete, EnLink will operate a total of 155 MMcf/d of processing capacity in the Delaware Basin.

Midland Basin:

EnLink's natural gas system is located in the core of the Midland Basin, and the company completed a cost-effective gas processing expansion in 2016, which created approximately 30 to 40 percent of additional capacity to support volume growth as incremental drilling activity continues throughout 2017. EnLink also has the majority of infrastructure in place to cost effectively expand the Riptide gas processing facility by an additional 100 MMcf/d as volumes continue to grow.

The Partnership announced plans in 2016 to construct a new crude oil gathering system in the Midland Basin called the Greater Chickadee crude oil gathering project. The project is progressing very well and has expanded in scope due to the addition of new customers, volumes and dedicated acreage. The initial phase of the Greater Chickadee project became operational in early November 2016, and full-service is on-track to be operational during first quarter 2017.

EnLink's natural gas system is located in the core of the Midland Basin, and the company completed a cost-effective gas processing expansion in 2016, which created approximately 30 to 40 percent of additional capacity to support volume growth as incremental drilling activity continues throughout 2017. EnLink also has the majority of infrastructure in place to cost effectively expand the Riptide gas processing facility by an additional 100 MMcf/d as volumes continue to grow.

The Partnership announced plans in 2016 to construct a new crude oil gathering system in the Midland Basin called the Greater Chickadee crude oil gathering project. The project is progressing very well and has expanded in scope due to the addition of new customers, volumes and dedicated acreage. The initial phase of the Greater Chickadee project became operational in early November 2016, and full-service is on-track to be operational during first quarter 2017.

Louisiana:

Record volumes were achieved on the Partnership's Louisiana gas system during the second half of 2016, as demand across the footprint was strong and the Partnership continued to enhance operational capacity and capture new business.

EnLink's natural gas liquids (NGL) system experienced short-term weakness in volume throughout 2016. However, this weakness, is expected to reverse in early 2017, as NGL output increases on the Partnership's Central Oklahoma system. It is expected that throughput on the Partnership's Cajun-Sibon pipeline should reach capacity in the second quarter of 2017, coinciding with the expansion of the Chisholm complex, which is expected to benefit the entirety of the company's Louisiana NGL footprint.

Record volumes were achieved on the Partnership's Louisiana gas system during the second half of 2016, as demand across the footprint was strong and the Partnership continued to enhance operational capacity and capture new business.

EnLink's natural gas liquids (NGL) system experienced short-term weakness in volume throughout 2016. However, this weakness, is expected to reverse in early 2017, as NGL output increases on the Partnership's Central Oklahoma system. It is expected that throughput on the Partnership's Cajun-Sibon pipeline should reach capacity in the second quarter of 2017, coinciding with the expansion of the Chisholm complex, which is expected to benefit the entirety of the company's Louisiana NGL footprint.

Barnett Shale:

Devon recently announced initial capital investment increases during 2017 related to their Barnett Shale operations, and plans to invest up to $50 million of capital in the Barnett to optimize base production and further de-risk future development activity. Devon announced that its initial investment will focus on horizontal refrac activity and the initiation of a drilling pilot of five to 10 wells. Devon also noted that additional capital could be allocated to the Barnett in 2017 as these projects have the potential to deliver highly competitive returns.

During 2016, gathering volume declines were slightly above expectations, and averaged 8 percent. As forecasted for the mature basin, volumes declines will continue during 2017, and the projected reduction for gathering and transmission volumes is around 10 percent when comparing 2016 to 2017, and normalizing for the North Texas Pipeline sale. EnLink is currently evaluating the benefit that Devon's announced investment plans will have on volume uplift in the near to mid-term, however, cash flows from the asset base are expected to remain stable for 2017 due to the minimum volume commitments in place. Devon's announcement of new investment activity is an encouraging step forward to the potential redevelopment of the legacy field.

Devon recently announced initial capital investment increases during 2017 related to their Barnett Shale operations, and plans to invest up to $50 million of capital in the Barnett to optimize base production and further de-risk future development activity. Devon announced that its initial investment will focus on horizontal refrac activity and the initiation of a drilling pilot of five to 10 wells. Devon also noted that additional capital could be allocated to the Barnett in 2017 as these projects have the potential to deliver highly competitive returns.

During 2016, gathering volume declines were slightly above expectations, and averaged 8 percent. As forecasted for the mature basin, volumes declines will continue during 2017, and the projected reduction for gathering and transmission volumes is around 10 percent when comparing 2016 to 2017, and normalizing for the North Texas Pipeline sale. EnLink is currently evaluating the benefit that Devon's announced investment plans will have on volume uplift in the near to mid-term, however, cash flows from the asset base are expected to remain stable for 2017 due to the minimum volume commitments in place. Devon's announcement of new investment activity is an encouraging step forward to the potential redevelopment of the legacy field.


Search Data From Enlink Midstream Partners Lp Latest Presentations



Search Data From Enlink Midstream Llc Latest Presentations


October 31, 2017
Key Slides found in this Presentation


Related    Pipelines News

ad

STACK News >>>


Delaware Basin News >>>