EnLink Midstream, LLC

EnLink reported second-quarter 2024 adjusted EBITDA of $306 million. Segment profit was $93.1 million in Permian, $84.3 million in Louisiana, $103.5 million in Oklahoma, and $52.4 million in North Texas. Excluding plant relocation costs and unrealized derivatives, Permian segment profit grew 10% sequentially and 10% year over year; Oklahoma grew 14% sequentially and declined about 5% year over year; Louisiana declined about 39% sequentially and about 9% year over year; North Texas declined 11% sequentially and 28% year over year. Free cash flow after distributions was approximately $53 million, capital expenditures plus plant relocation expenses net to EnLink and investment contributions were $103 million, leverage was 3.3x, and the common unit distribution was $0.1325 per unit, up 6% from Q2 2023. Full-year 2024 adjusted EBITDA guidance remains $1.31 billion to $1.41 billion, and management said results are tracking close to the midpoint; they expect second-half results to be weighted toward Q4.

Jesse Arenivas emphasized operational execution and capital allocation discipline, pointing to Tiger II, the new Louisiana storage expansion, and the Series B preferred reduction as examples of actions that can create value. He also said CCS remains slower to develop, but EnLink still sees long-term positioning in a high-emitting region with nearby sequestration and existing pipe. His tone was constructive but measured, with repeated emphasis on what the company can control rather than on CCS timing.

Ben Lamb said Q2 adjusted EBITDA of $306 million and $53 million of free cash flow after distributions reflected solid execution across the portfolio. He highlighted $103 million of capital expenditures, plant relocation expenses net to EnLink and investment contributions, leverage of 3.3x, approximately $50 million of unit repurchases in the quarter, and the $250 million expansion of the buyback authorization. He also noted the purchase of nearly $200 million of Series B preferreds after quarter-end, cutting the preferred balance by about half since the start of 2024. On guidance, he said full-year EBITDA is tracking near the midpoint and that second-half results should be stronger, especially in Q4 because of winter seasonality, storage activity, Tiger II ramp, and some Matterhorn contribution.

Analysts focused on how EnLink reaches the second-half EBITDA ramp implied by full-year guidance, and management said the lift comes from Tiger II ramping, normal Q4 NGL seasonality, Louisiana storage-related activity, and a modest contribution from Matterhorn in Q4. Questions also centered on Permian NGL contract expirations, and Dilanka Seimon said about 220,000 barrels of NGL are marketed, capacity expirations begin over the next 3 to 4 years, and EnLink expects to recontract at lower transport-and-fractionation rates over time. On CCS, Jesse Arenivas said discussions continue with public parties including Shell and Oxy, but the market is developing slowly because emitters are still choosing counterparties. In response to margin questions, Ben Lamb said EnLink is about 90% fee-based and roughly 10% commodity-based, with hedges already in place for this year and being layered in for next year.