Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Energy Transfer LP (ET, Financial) reported a significant increase in adjusted EBITDA for Q2 2024, reaching $3.76 billion compared to $3.12 billion in Q2 2023.
- Record volumes were achieved through crude oil and NGL pipelines, as well as record NGL exports.
- The company completed the acquisition of WTG, enhancing access to growing supplies of natural gas and NGL volumes.
- Energy Transfer LP (ET) raised its 2024 adjusted EBITDA guidance to between $15.3 billion and $15.5 billion.
- Moody's upgraded Energy Transfer LP (ET)'s senior unsecured credit rating to Baa2, reflecting improved financial strength.
Negative Points
- The interstate segment saw a decline in adjusted EBITDA, dropping to $392 million from $441 million in Q2 2023.
- Operational gas sales and maintenance project costs negatively impacted the interstate segment's performance.
- The company faces legal challenges related to pipeline crossings in North Louisiana.
- The Haynesville and Marcellus/Utica basins experienced a decline in production due to lower natural gas prices.
- Energy Transfer LP (ET) has significant capital expenditures planned, with 2024 growth capital expenditures expected to be approximately $3.1 billion.
Q & A Highlights
Highlights of Energy Transfer LP (ET) Q2 2024 Earnings Call
Q: Can you provide more details on the commercial opportunities with WTG and the JV with Sunoco?
A: (Marshall McCrea, Co-CEO) We are very excited about the WTG acquisition, which enhances our Permian operations. The JV with Sunoco is also promising, focusing on optimizing existing assets and exploring new opportunities.
Q: How do you view the egress situation in the Permian Basin for different hydrocarbons?
A: (Marshall McCrea, Co-CEO) We don't see immediate concerns for crude oil egress but are closely monitoring it. For natural gas, we are optimistic about the Warrior project and expect to announce FID soon. NGLs will be managed based on customer contracts.
Q: Can you elaborate on the factors driving the updated EBITDA guidance for 2024?
A: (Thomas Long, Co-CEO) The increase in guidance is due to strong base business performance and the WTG acquisition. Optimization efforts have also contributed significantly.
Q: What is the focus for future M&A activities, and could the JV with Sunoco play a role in this?
A: (Marshall McCrea, Co-CEO) The JV with Sunoco is currently focused on optimizing existing assets but could explore acquisitions if opportunities arise. Overall, we are looking at consolidation opportunities across all commodities.
Q: How is the conversion of Double H to NGL service impacting Dakota Access recontracting?
A: (Marshall McCrea, Co-CEO) The Double H conversion has not significantly impacted Dakota Access. We remain the pipeline of choice in the Bakken and expect to maintain strong volumes.
Q: Can you provide more details on the marketing strength in the NGL and refined products segment this quarter?
A: (Unidentified Company Representative) The strong performance was driven by price optimization in the Gulf Coast and Northeast, as well as strong margins in the butane and gasoline blending business.
Q: Do you have ambitions to grow on a global level, and how does this fit within the MLP structure?
A: (Thomas Long, Co-CEO) Yes, we are evaluating global opportunities carefully, considering risks and potential value. We believe it makes sense for our partnership.
Q: Can you discuss the opportunities in power generation and data centers?
A: (Marshall McCrea, Co-CEO) We see significant demand growth for natural gas in power generation and data centers. We are well-positioned to meet this demand with our extensive pipeline and storage network.
Q: Could you participate in the Double H conversion project, and what are the contract terms for NGL barrels from the Crestwood acquisition?
A: (Thomas Long, Co-CEO) We see potential benefits from the Double H conversion, particularly in the Bakken. We are in early discussions and see this as an upside for our assets.
Q: What are your latest thoughts on the Haynesville and North Louisiana regions given recent legal challenges?
A: (Marshall McCrea, Co-CEO) Despite recent challenges, we see significant growth potential in these regions. We are addressing legal issues to protect our rights and ensure safety.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
