On August 7, 2024, Kinetik Holdings Inc (KNTK, Financial) released its 8-K filing detailing its financial results for the second quarter of 2024. Kinetik, a midstream operator providing gathering and processing services to gas and oil producers, operates exclusively in Texas, serving the Permian Basin and connecting fields with market hubs and other large pipelines.
Financial Performance and Key Metrics
Kinetik Holdings Inc (KNTK, Financial) reported a net income of $108.9 million for Q2 2024, marking a 52% increase year-over-year. The company also achieved an Adjusted EBITDA of $234.4 million, a 13% increase compared to the same period last year. These results surpassed analyst estimates, which projected earnings per share (EPS) of $0.48 and revenue of $337.41 million.
Strategic Acquisitions and Operational Developments
During the quarter, Kinetik completed the acquisition of Durango Permian, LLC and divested a 16% non-operated equity interest in the Gulf Coast Express pipeline. These strategic moves are expected to enhance Kinetik's position in the Delaware Basin and provide significant growth opportunities.
"The second quarter was a major step towards our ultimate vision for Kinetik," said Jamie Welch, Kinetik’s President & Chief Executive Officer. "In June, we closed our two largest transactions since the merger in 2022, expanding our system footprint into Northern Eddy and Lea Counties, New Mexico."
Revised 2024 Guidance
Following the strong performance in the first half of 2024 and the successful completion of strategic transactions, Kinetik has revised its 2024 Adjusted EBITDA guidance upwards to a range of $940 million to $980 million, reflecting a 3% increase at the midpoint. The company also updated its capital expenditures guidance to $260 million to $300 million.
Income Statement Highlights
| Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 |
|---|---|
| Net Income: $108.9 million | Net Income: $144.4 million |
| Adjusted EBITDA: $234.4 million | Adjusted EBITDA: $468.0 million |
| Distributable Cash Flow: $162.9 million | Distributable Cash Flow: $317.4 million |
| Free Cash Flow: $105.4 million | Free Cash Flow: $213.0 million |
Operational and Governance Achievements
Kinetik continues to advance its construction projects, including the Kings Landing I and II processing complexes in Eddy County, New Mexico. The company also executed an amendment with a Lea County producer to increase treating services and minimum volume commitment levels.
"Our base business continues to perform well versus our internal expectations outlined in February," Welch continued. "Processed natural gas volumes in the quarter were 1.58 Bcf/d, representing a 7% increase year-over-year."
Conclusion and Analysis
Kinetik Holdings Inc (KNTK, Financial) has demonstrated robust financial performance and strategic growth through acquisitions and operational expansions. The company's ability to exceed analyst estimates and revise its guidance upwards reflects its strong market position and effective management. These achievements are crucial for value investors looking for stable and growing returns in the midstream oil and gas sector.
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Kinetik Holdings Inc for further details.
