Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Given the strong demand growth potential for gas to the end of the decade, could you comment on what you see as advantaged molecules from a margin perspective in this environment?
A: (Justin B. Fowler - SVP of Gas Marketing & Transportation) Yes, with our firm transportation portfolio, we see premiums continuing to gain value versus Henry Hub in the outer years. Our delivery points in the Southeast head station, CGT onshore, TGP 500L will continue to be strong. We have the ability to sell local production volumes as well if prices increase seasonally or in different months of the year because we have a transport position of 75% to the Gulf.
Q: What kind of flexibility do you have in the system for exporting more than 50% of your C3+ molecules, and what are you seeing in terms of shipping rates?
A: (David A. Cannelongo - SVP of Liquids Marketing & Transportation) We've already flexed to export over 80% of our propane in the summer. There are ways to take that higher if the market demands it. Freight rates have improved dramatically from last year, allowing prices at the dock to be closer linked to the international price.
Q: What is your view on dock capacity, and are there concerns about reaching maximum capacity?
A: (David A. Cannelongo - SVP of Liquids Marketing & Transportation) We are at dock capacity, with the 2.3 million barrels per day being an unusual peak. The average capacity is around 1.85 to 1.9 million barrels per day. There are expansion projects expected in the second half of next year which should increase capacity.
Q: Can you provide more details on the startup of the Plaquemines LNG and the expected timeline for reaching feed gas demand levels?
A: (Justin B. Fowler - SVP of Gas Marketing & Transportation) The Evangeline Pass project should start up by July 1, with a capacity of 900 million per day. We will track vessels showing up to the facility as we approach July, and then we'll see through the nominations into the new Evangeline Pass project how quickly the liquefaction trains are ramping up.
Q: How do you see the TGP 500 line pricing relative to Henry Hub, and what could be the catalyst to drive that relative hub pricing higher?
A: (Justin B. Fowler - SVP of Gas Marketing & Transportation) The forward markets are showing a financial basis alone at plus $0.40 for Cal '25 and Cal '26. There will be a physical premium component as well, potentially leading to $0.60 or $0.70 over Henry Hub as the physical gas starts to price closer to delivery.
Q: Given the current weak spot prices, what would make you consider pushing out wells until later in the year?
A: (Michael N. Kennedy - Senior VP of Finance & CFO) Our activity is dominated by liquids pricing. We have one pad in the capital program that's a spot we have had for the third quarter of this year, which is still to be determined based on current prices. If deferred, that would put us at the low end of the capital guidance range.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
