EnLink Midstream, LLC (ENLC)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 delivered resilient results despite winter weather: total revenues $1.6479B, net income $50.0M, diluted EPS $0.03, adjusted EBITDA $337.7M, and free cash flow after distributions (FCFAD) $74.0M .
• Louisiana outperformed: segment profit $110.4M; Phase 2 “Henry Hub to the River” project adds ~210 MMcf/d capacity for ~$70M at a mid‑single‑digit EBITDA multiple, in service 4Q25 .
• Balance sheet and capital returns strengthened: leverage 3.3x, S&P upgrade to BBB‑, $50M buybacks in Q1 (on pace for $200M in 2024), distribution maintained at $0.1325/unit (+6% YoY) .
• Management reiterated tracking to the midpoint of 2024 adjusted EBITDA guidance ($1.31B–$1.41B); potential FCFAD upside if CCS spend comes in below the $50M placeholder .
• Near‑term stock catalysts: Louisiana debottleneck project execution, potential storage expansion FID, continued Permian ramp with Tiger II coming online, investment‑grade credit upgrade, steady buybacks .

What Went Well and What Went Wrong

• What Went Well
  • Louisiana momentum: segment profit $110.4M; excluding unrealized derivatives, +26% QoQ and +23% YoY on seasonality and volatility in gas/NGLs .
  • Capital returns and credit: S&P upgraded to BBB‑; ~$50M Q1 buybacks; cumulative ~46M units repurchased (~10% of shares since 2021) .
  • Strategic execution: Phase 2 “Henry Hub to the River” fully contracted; ~210 MMcf/d capacity addition for ~$70M; mid‑single‑digit EBITDA multiple .
• What Went Wrong
  • Weather and one‑time items weighed on G&P: Permian segment profit $89.0M included ~$9.3M plant relocation OpEx; a ~$5M utility true‑up; Oklahoma/North Texas volumes lower from winter impacts and contract resets .
  • Unrealized derivative losses reduced reported segment profits: Louisiana ($19.5M), Oklahoma ($4.1M), Permian ($2.4M) .
  • CCS commercialization slower than anticipated; Pecan Island paused; management continues discussions with Exxon and others; timing uncertain .

Financial Results

Segment Breakdown (Segment Profit, $USD Millions)

KPIs (Operating Volumes)

Balance Sheet & Capital Allocation

Notes:

• Non‑GAAP adjustments impacting Q1 Adjusted EBITDA included $23.0M loss on litigation settlement (Winter Storm Uri), $26.1M unrealized commodity derivative loss, and $9.3M plant relocation costs .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We generated $338 million of adjusted EBITDA driven by the strength of our Louisiana system and offset by temporary volume impacts from the winter weather… drove FCFAD of approximately $74 million.”
• “We have executed on our first project to help resupply the eastern part of Louisiana… a capital‑efficient, quick‑to‑market debottlenecking project that is fully subscribed by high‑quality customers.”
• “These AI data centers… run 24/7… we expect natural gas to be a large contributor to meet the increased baseload demand for power generation.”
• “Segment profit for Q1: Permian $89 million… Louisiana $110.4 million… Oklahoma $85.7 million… North Texas $59.8 million… leverage ratio of 3.3x.”
• “S&P recognized our strong credit profile and upgraded us to BBB minus… maintained distribution of $0.1325 per unit… remain active with our repurchase program with approximately $50 million spent in the first quarter.”

Q&A Highlights

• CCS timeline and Pecan Island: industry taking longer; EnLink progressing scope with Exxon and others; Bridgeport facility operating; timing uncertain but conviction intact .
• Capex/CCS spend: 2024 capex midpoint $465M unchanged; CCS placeholder ~$50M likely underspent, potentially raising 2024 FCFAD .
• Louisiana storage: marketing ~9 Bcf brownfield expansion; potential FID in coming quarters .
• Permian outlook: Tiger II enabling next growth leg; ability to time additional relocations as needed; Delaware growth favored .
• Waha basis risk: hedged at better levels; minimal direct impact; Matterhorn JV in service 2H (equity method) .
• Capital allocation: prioritize buybacks over deleveraging given IG status; opportunistic preferred reductions only below par .

Estimates Context

• We attempted to retrieve S&P Global consensus for Q1 2024 (Primary EPS, Revenue, EBITDA, estimate counts), but consensus data was unavailable due to a mapping error for ENLC (spgi_ciq_company_map) and could not be retrieved at this time. As a result, Street comparison is not provided and estimates may need to be updated given Louisiana outperformance and lower‑than‑planned CCS spend pacing [GetEstimates error].
• Management indicated results were “in line with our expectations,” and tracking to the midpoint of full‑year adjusted EBITDA guidance, suggesting limited deviation versus internal plans .

Key Takeaways for Investors

• Louisiana is the near‑term growth engine; Phase 2 debottleneck adds ~210 MMcf/d by 4Q25 at attractive returns; watch for storage expansion FID and additional quick‑to‑market projects .
• Weather and one‑time costs muted G&P results; with Tiger II online and winter impacts behind, sequential improvement in Permian and Oklahoma volumes is likely through 2Q–3Q .
• Capital return remains a core pillar: $200M 2024 buyback program on pace; distribution steady; IG upgrade to BBB‑ enhances financing flexibility .
• FCFAD could exceed initial guidance if CCS capex undershoots the $50M placeholder; monitor updates on CCS pacing and definitive agreements .
• Risk management effective: derivative hedges and Waha basis protection limit near‑term commodity price exposure; Matterhorn egress adds basin reliability in 2H .
• Medium‑term thesis: AI/data center power demand plus LNG expansions underpin baseload gas demand, favoring EnLink’s Louisiana positioning and diversified footprint .
• Watch for recontracting cadence: ~$20M uplift embedded in 2024; 2025 uplift expected to be marginal, shifting focus to debottleneck and storage economics .