EnLink Midstream, LLC has reported financial results for the second quarter of 2019 and updated financial guidance for full-year 2019. EnLink has also announced the signing of a precedent agreement for natural gas transportation with Venture Global Calcasieu Pass, LLC (Venture Global) related to Venture Global's planned Calcasieu Pass export facility in Louisiana.
- Reported a net loss attributable to EnLink of US$16.1 million, compared to net income of US$28.0 million for the 2Q18. Reported net cash provided by operating activities of US$257.5 million for the 2Q19.
- Delivered adjusted EBITDA of US$259.2 million, distributable cash flow (DCF) of US$167.6 million, and distribution coverage of 1.20x. Second quarter results were impacted by the write off of EnLink's secured term loan receivable due to the bankruptcy filing of a customer, White Star Petroleum Holdings, LLC (White Star), that resulted in the recognition of a US$40.5 million after-tax loss in EnLink's consolidated statement of operations.
- Announced the signing of a precedent agreement for natural gas transportation services related to Venture Global's Calcasieu Pass liquefied natural gas (LNG) export facility. EnLink expects to spend approximately US$20 million on this project during 2020, at an attractive adjusted EBITDA multiple of 1 to 2 times. Venture Global has secured equity funding and is in the late stages of completing debt financing for the Calcasieu Pass facility, and, should Venture Global reach a positive final investment decision, EnLink's project is expected to be operational during 2021.
- Placed into service the 200 million ft3/d Thunderbird natural gas processing plant in Oklahoma, resulting in a total of 1.2 billion ft3/d of total gas processing capacity in Central Oklahoma. The new processing plant averaged a utilisation rate of approximately 50% for the month of July.
- Updated financial guidance due to moderating producer activity in Oklahoma and a shift in timing of producer activity in the Permian Basin:
- Updated full-year 2019 net loss guidance to a range of US$24 million to US$31 million, revised down from the previous guidance range of net income between US$18 million and US$28 million. The updated range includes a US$40.5 million non-cash loss, net of taxes, related to the complete write off of the White Star secured term loan receivable recognised during the 2Q19, and a US$186.5 million goodwill impairment recognised during 1Q19.
- Updated full-year 2019 adjusted EBITDA guidance to a range of US$1.07 billion to US$1.10 billion.
- Refined full-year estimated growth capital expenditures, net to EnLink, guidance range to US$630 million to US$710 million, from the original range of US$565 million to US$725 million. Growth capital expenditures remain within the original guidance range even with new project announcements in the Permian during the 1Q19 due to successful sequencing of capital with well completions in Oklahoma.
- Updated target distribution growth rate to approximately 5% for full-year 2019 over 2018 and, going forward, to a range of up to 5% growth, from the previous guidance range of 5% to 10%.
- Declared a quarterly cash distribution of US$0.283 per unit on all outstanding common units for the second quarter of 2019, which represents approximately 6% growth over the declared distribution for the second quarter of 2018.
“EnLink's second quarter performance demonstrates the financial resilience of our business, the strength of our differentiated platform and the flexibility and diversity of our operations in the midst of an evolving operating environment,” said Barry E. Davis, Executive Chairman. “During the quarter, outperformance in Louisiana and North Texas enabled us to deliver solid results despite moderated producer activity in Oklahoma and certain timing delays in the Permian.”
Precedent long-term natural gas transport agreement signed with Venture Global
- EnLink entered into a new precedent agreement for natural gas transportation with Venture Global, a provider of LNG, with export facilities under development along the US Gulf Coast.
- Under the terms of the 20-year fixed-fee agreement, EnLink will transport natural gas feedstock to Venture Global's Calcasieu Pass facility in western Louisiana.
- Growth capital expenditures, net to EnLink, associated with the agreement are expected to be approximately US$20 million. The majority of the growth capital associated with this project will be spent during 2020, and the project is expected to generate an attractive adjusted EBITDA multiple of between 1 to 2 times.
- Venture Global has secured equity funding and is in the late stages of completing debt financing for the Calcasieu Pass facility, and, should Venture Global reach a positive final investment decision, EnLink's project is expected to be operational during 2021.
Read the article online at: https://www.worldpipelines.com/business-news/07082019/enlink-midstream-reports-2q19-results/
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