Executive Summary

Q4 2023 delivered solid execution: Adjusted EBITDA of $350.8M (vs. Q3 $341.9M; vs. Q4’22 $337.2M) and FCFAD of $79.4M, with GAAP net income of $100.1M and revenue of $1.86B .
2024 outlook guides Adjusted EBITDA to $1.31B–$1.41B and FCFAD to $265M–$315M; base-business EBITDA growth ~~4% ex. legacy rate resets (~~$50M headwind) and ORV divestiture .
Segment cadence: Permian and Louisiana are primary growth engines; Oklahoma and North Texas face a one-time 2024 rate reset; Permian 2024 segment profit forecast +~15% y/y including relocation expense; Louisiana +~7% y/y .
Strategic catalysts: broadened ExxonMobil CO2 partnership scope beyond Mississippi River corridor, Tiger II plant on track for 2Q24, and Louisiana rate renewals plus gas storage expansion path (engineering underway) .

What Went Well and What Went Wrong

What Went Well

Permian and Louisiana led Q4 performance: segment profits of $105.9M and $103.6M respectively; Permian gas gathering +6% q/q and +23% y/y; Louisiana NGL fractionation +6% q/q .
CEO: “EnLink delivered another record year by generating adjusted EBITDA of $1.35 billion, achieving the midpoint of 2023 guidance and 5% growth over the prior year.” .
Capital returns and balance sheet: QTD distribution raised ~6% to $0.1325/unit; $250M repurchases in 2023 (~9% cumulative reduction since late 2021); leverage 3.3x at year-end .

What Went Wrong

North Texas softness: Q4 segment profit $68.6M; gas gathering volumes -1% q/q and -9% y/y; processing -1% q/q and -5% y/y .
2024 one-time rate resets: Oklahoma (~~-8% segment profit) and North Texas (~~-13%) pressured by legacy G&P contract resets, with minimal impact beyond 2024 per management .
Commodity sensitivity and producer activity risk: while ~90% fee-based, $0.50/MMBtu Henry Hub and $5/bbl WTI swings move EBITDA by ~$5–$6M; a 6-month completion deferral by key gas customers would be a ~$20M EBITDA impact in 2024 .

Financial Results

Metric	Q4 2022	Q3 2023	Q4 2023
Total Revenues ($USD Millions)	$2,050.3	$1,746.2	$1,856.3
Net Income attributable to ENLC ($USD Millions)	$160.0	$29.5	$64.2
Diluted EPS ($USD)	$0.33	$0.06	$0.14
Adjusted EBITDA, net to ENLC ($USD Millions)	$337.2	$341.9	$350.8
Net Income Margin %	7.8% (=$160.0/$2,050.3)	1.7% (=$29.5/$1,746.2)	3.5% (=$64.2/$1,856.3)
Adj. EBITDA Margin %	16.4% (=$337.2/$2,050.3)	19.6% (=$341.9/$1,746.2)	18.9% (=$350.8/$1,856.3)
Note: Margin percentages are computed by Fintool from cited figures.

Segment profit (reported) – sequential compare

Segment Profit ($MM)	Q3 2023	Q4 2023
Permian	102.7	105.9
Louisiana	87.1	103.6
Oklahoma	104.6	112.0
North Texas	63.8	68.6

Key operating KPIs (volumes)

KPI	Q4 2022	Q4 2023
Permian Gas Gathering (MMBtu/d)	1,584,700	1,943,500
Permian Gas Processing (MMBtu/d)	1,475,900	1,769,100
Permian Crude Handling (Bbls/d)	141,800	186,700
Louisiana Gas Transportation (MMBtu/d)	3,113,900	2,474,700
Louisiana NGL Fractionation (Gals/d)	7,971,200	8,017,600
Oklahoma Gas Gathering (MMBtu/d)	1,071,500	1,228,100
Oklahoma Gas Processing (MMBtu/d)	1,085,000	1,180,800
North Texas Gas Gathering (MMBtu/d)	1,704,300	1,544,800
North Texas Gas Processing (MMBtu/d)	764,900	725,200

Trend context (prior quarters)

Metric	Q2 2023	Q3 2023	Q4 2023
Adjusted EBITDA ($MM)	$334	$341.9	$350.8
FCFAD ($MM)	$96	$66.2	$79.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Income ($MM)	FY 2024	—	$370–$470	Introduced
Adjusted EBITDA, net to ENLC ($MM)	FY 2024	—	$1,310–$1,410	Introduced
FCFAD ($MM)	FY 2024	—	$265–$315	Introduced
Total Capex + Relocation + Investments ($MM)	FY 2024	—	$435–$485	Introduced
Growth Capex + Relocation ($MM)	FY 2024	—	$345–$375	Introduced
Maintenance Capex ($MM)	FY 2024	—	$85–$95	Introduced
Investment Contributions ($MM)	FY 2024	—	$5–$15	Introduced
Annualized 4Q23 Declared Distribution	FY 2024 baseline	—	$0.53/unit	Introduced
Unit Repurchase Authorization ($MM)	FY 2024	$250 in 2023	$200 in 2024	Reauthorized
Segment Profit – Permian ($MM)	FY 2024	—	$420–$490	Introduced
Segment Profit – Louisiana ($MM)	FY 2024	—	$405–$435	Introduced
Segment Profit – Oklahoma ($MM)	FY 2024	—	$375–$405	Introduced
Segment Profit – North Texas ($MM)	FY 2024	—	$230–$250	Introduced

Notes: Management highlights base-business Adjusted EBITDA growth ~~4% at guidance midpoint excluding legacy rate resets (~~$50M impact) and ORV asset sale headwind .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2, Q-1)	Current Period (Q4 2023)	Trend
CCS / CO2 transportation	Q2: 25-year Exxon agreement; portfolio could reach >$300M EBITDA by 2030 at ~5x multiple; growing LOIs . Q3: execution continues; permitting/land for Pecan Island corridor; active with multiple parties; regulatory backdrop supportive in LA .	Expanded collaboration with Exxon beyond Mississippi River corridor; reassessing Pecan Island sequencing; Bridgeport CCS project online (up to 210k tpa CO2) .	Expansion in scope and execution experience; timing optimization ongoing.
Louisiana gas/storage	Q2: system well-positioned; evaluating expansions; strong LNG-driven demand . Q3: storage valuations high; ~15 Bcf existing storage, evaluating expansion .	Rate renewals at higher prices (~$20M uplift in 2024); progressing storage engineering; potential +9 Bcf working gas capacity .	Improving rates; pipeline/storage optionality building.
Permian growth & relocations	Q2: robust volumes; more relocations likely over time . Q3: Tiger II in-service 2Q24; strong Midland ramp, JV Matterhorn 2H24 (equity method) .	Permian 2024 segment profit +~15% incl. relocation expense; Tiger II on track 2Q24 .	Continued capacity-led growth.
Hedging & commodity sensitivity	Q2: aggressively hedged 2024 natural gas earlier than normal . Q3: hedged almost all 2024 gas; ~90% fee-based .	2024 sensitivities: +/–$5/bbl WTI ≈ +/–$6M; +/–$0.50/MMBtu gas ≈ +/–$5M; hedged ethane exposure; ~90% fee-based .	Risk managed; limited direct commodity exposure.
Legacy contract reset	Q3: timing/color on Oklahoma activity and deferrals, stable to slight growth bias .	One-time 2024 reset in certain legacy OK/NTX contracts; minimal impact thereafter .	Transitory 2024 headwind.

Management Commentary

“We forecast adjusted EBITDA of $1.36 billion at the midpoint… Growth this year will be led by our largest business, the Permian, followed by Louisiana… partly offset by the… ORV asset sale… and a contractual rate reset…” .
“We expanded our commercial discussions [with Exxon] to provide… CO2 transportation… across the Gulf Coast beyond the Mississippi River corridor… we… agreed to reassess the Pecan Island project’s near-term role…” .
“As contracts expire and are renewed [in Louisiana], we estimate the value of the higher rates in 2024 is approximately $20 million… we can expand our salt storage capacity by an incremental 9 Bcf and are currently marketing this capacity.” .
“We… fully executed our expanded $250 million common unit repurchase program… we have now repurchased nearly 42 million common units, representing approximately 9% of the… outstanding…” .
“We are projecting another year of significant growth for our Permian business… 2024 [segment profit]… $455 million… [Louisiana] $420 million… [Oklahoma] $390 million (–8%)… [North Texas] $240 million (–13%).” .

Q&A Highlights

CCS/Pecan Island prioritization: reassessment due to expanded Exxon scope; prior spend mainly permitting/ROW; no new spend until optimized plan; update expected “very soon” .
Permian cadence: more 2024 growth from Delaware gas with Tiger II in 2Q24; Matterhorn JV in-service 2H24 but below the line (equity method) .
Hedging: programmatic approach maintained; substantial 2024 protection on gas and ethane; commodity sensitivity modest vs. fee base .
Legacy rate reset: contracts extended in 2018 with onetime reset in 2024; effect is non-recurring and not meaningful in 2025 .
Louisiana contracts: renewals at higher rates mostly done; uplift reflected in 2024 margin; storage expansion capex weighted to 2025+ .

Estimates Context

S&P Global (Capital IQ) consensus estimates for ENLC were unavailable via this environment’s S&P mapping, so we cannot provide vs-consensus comparisons for Q4 2023 revenue or EPS. As a result, any “beat/miss” vs. street cannot be assessed here. Values would normally be retrieved from S&P Global; in this case, consensus data were unavailable.

Key Takeaways for Investors

Core profitability is compounding: Adjusted EBITDA stepped up sequentially in Q4 and reached a record $1.35B for 2023; 2024 midpoint implies modest growth despite transitory headwinds .
Mix shift toward growth engines: Permian and Louisiana now ~60% of profit mix and should lead again in 2024; North Texas/Oklahoma rate resets are one-time .
Louisiana pricing/storage optionality: higher renewal rates (~$20M uplift in 2024) and potential +9 Bcf storage capacity underpin medium-term EBITDA upside as LNG and industrial demand tighten markets .
CO2 transportation scaling: broadened Exxon collaboration expands TAM; Bridgeport CCS operating builds execution credentials; multi-party dialogues continue, though sequencing/timing remains a watch item .
Capital return remains core: 2024 $200M buyback authorization in place and distribution reset to $0.53 annualized; leverage at 3.3x provides flexibility .
Risk management intact: ~90% fee-based with proactive hedging; commodity/producer-activity sensitivities quantified and manageable .

EnLink Midstream, LLC (ENLC)·Q4 2023 Earnings Summary