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Jun 30, 2022
Kinetik Q2 2022 Earnings Report
Reported robust financial and operating results and increased 2022 guidance.
Key Takeaways
Kinetik Holdings Inc. reported strong Q2 2022 results, driven by increased volumes and higher commodity prices. The company revised upwards its 2022 guidance for Pro Forma Adjusted EBITDA to $820 million to $840 million. Kinetik also completed a $3.0 billion sustainability-linked refinancing and fully redeemed all Series A Preferred Units.
Revised upwards 2022 Guidance for Pro Forma Adjusted EBITDA to $820 million to $840 million, representing a 5% increase over the prior guidance midpoint.
Completed $3.0 billion comprehensive, sustainability-linked refinancing.
Fully redeemed all Series A Preferred Units in July 2022, completing Kinetik’s overall capital structure simplification.
Reached Permian Highway Pipeline (“PHP”) expansion investment decision with expected in-service by November 1, 2023.
Kinetik
Kinetik
Forward Guidance
Kinetik is revising upwards its 2022 Guidance to $820 million to $840 million for Pro Forma Adjusted EBITDA and total 2022 capital expenditure guidance is $280 million to $300 million.
Positive Outlook
- Additional capital required for incremental wells to be turned-in-line in 2022 and new long-term gathering & processing agreements.
- Capital in 2022 for the 120 MMcf/d processing capacity expansion of the Diamond Cryo complex.
- Related to early capital spend for its 1 Bcf/d Delaware Link residue pipeline from Central Reeves County to Waha.
- Expects a mid-teens pre-tax unlevered rate of return for its investment in the PHP expansion project.
- Expects to fully fund its go-forward capital budget with organically generated free cash flow
Challenges Ahead
- Additional capital required for incremental wells to be turned-in-line in 2022 and new long-term gathering & processing agreements.
- Capital in 2022 for the 120 MMcf/d processing capacity expansion of the Diamond Cryo complex.
- Related to early capital spend for its 1 Bcf/d Delaware Link residue pipeline from Central Reeves County to Waha.
- Capital contributions associated with the PHP expansion project, which is included in the Pipeline Transportation segment.
- Borrowings on its $1.25 billion revolving credit facility and proceeds from its Dividend Reinvestment Plan