EnLink Midstream LLC reported financial results for the second quarter of 2019 and updated financial guidance for full-year 2019.
EnLink also announced the signing of a precedent agreement for natural gas transportation with Venture Global Calcasieu Pass LLC related to Venture Global's planned Calcasieu Pass export facility in Louisiana.
- Reported a net loss attributable to EnLink of $16.1 million, compared to net income of $28 million for the second quarter of 2018. Reported net cash provided by operating activities of $257.5 million for the second quarter of 2019.
- Delivered adjusted EBITDA of $259.2 million, distributable cash flow (DCF) of $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 $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 LNG export facility. EnLink expects to spend approximately $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 cubic feet per day (MMcf/d) Thunderbird natural gas processing plant in Oklahoma, resulting in a total of 1.2 billion cubic feet per day (Bcf/d) of total gas processing capacity in Central Oklahoma. The new processing plant averaged a utilization rate of about 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 $24 million to $31 million, revised down from the previous guidance range of net income between $18 million and $28 million. The updated range includes a $40.5 million non-cash loss, net of taxes, related to the complete write off of the White Star secured term loan receivable recognized during the second quarter of 2019, and a $186.5 million goodwill impairment recognized during the first quarter of 2019.
- Updated full-year 2019 adjusted EBITDA guidance to a range of $1.07 billion to $1.1 billion.
- Refined full-year estimated growth capital expenditures, net to EnLink, guidance range to $630 million to $710 million, from the original range of $565 million to $725 million. Growth capital expenditures remain within the original guidance range even with new project announcements in the Permian during the first quarter of 2019 due to successful sequencing of capital with well completions in Oklahoma.
- Updated target distribution growth rate to about 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 $0.283 per unit on all outstanding common units for the second quarter of 2019, which represents about 6% growth over the declared distribution for the second quarter of 2018.
Adjusted EBITDA and distributable cash flow used in this press release are non-GAAP measures and are explained in greater detail under "Non-GAAP Financial Information and Certain Definitions" below.
"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.”
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