Announcement • Oct 18

Enlink Midstream, LLC Announces Board and Committee Changes

On October 15, 2024, EnLink Midstream, LLC announced that Benjamin M. Daniel, Matthew C. Harris, and Scott E. Telesz each tendered his resignation from the Board of Directors of the Manager . In addition, Mr. Harris resigned from his position as Chairman of the Manager Board, each of Mr. Daniel and Mr. Harris resigned from the Governance and Compensation Committee of the Manager Board, and Mr. Telesz resigned from the Sustainability Committee of the Manager Board . The foregoing resignations did not result from a disagreement with the Manager. Jesse Arenivas, Deborah G. Adams, Tiffany (TJ) Thom Cepak, and Leldon E. Echols will continue to serve on the Manager Board. Additionally, on October 15, 2024, each of the following individuals was appointed to the Manager Board and Pierce H. Norton II was appointed to serve as Chairman of the Manager Board: Pierce H. Norton II; Walter S. Hulse III; Lyndon C. Taylor. In addition, the Manager Board appointed (i) Mr. Norton and Mr. Taylor to serve on the Governance and Compensation Committee in the vacancies left by the resignation of Mr. Harris and Mr. Daniel and (ii) Mr. Hulse to serve on the Sustainability Committee in the vacancy left by the resignation of Mr. Telesz. Pierce H. Norton II, 64, is President and Chief Executive Officer of ONEOK and is a member of the ONEOK Board of Directors. Previously, Mr. Norton was president and chief executive officer of ONE Gas, Inc. for more than seven years and served as a member of the ONE Gas board. Mr. Norton worked for ONEOK for almost 10 years, having joined the company in 2004. Prior to the separation of ONE Gas in January 2014, Mr. Norton served as executive vice president, commercial, of ONEOK and ONEOK Partners. His other roles at ONEOK included executive vice president and chief operating officer of ONEOK and ONEOK Partners, responsible for the company's natural gas gathering and processing, natural gas pipelines, natural gas liquids, natural gas distribution and energy services business segments. Mr. Norton also held the position as president of ONEOK Distribution Companies – Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service. Mr. Norton began his natural gas industry career in 1982 at Delhi Gas Pipeline, a subsidiary of Texas Oil and Gas Corporation. He later worked for American Oil and Gas with operational responsibilities for natural gas gathering and processing, and for intrastate and interstate pipelines. He then worked for KN Energy as vice president and general manager of the Heartland Region, before moving to Bear Paw Energy as vice president of business development. In 2002, he was named president of Bear Paw Energy, now ONEOK Rockies Midstream. Mr. Norton is currently on the board of directors for the American Petroleum Institute and is a 2024 tri-chair for the Tulsa Area United Way citywide campaign. He is a past board member of the Interstate Natural Gas Association of America, the Texas Pipeline Association, the North Dakota Petroleum Council, the Western Alliance, American Gas Association (AGA) and served as chairman of the AGA board in 2017. Locally he is a past board member of Tulsa Community College Foundation, Tulsa Community Foundation and Oklahoma Center for Community and Justice. An Alabama native, Mr. Norton earned a Bachelor of Science degree in mechanical engineering in 1982 from the University of Alabama in Tuscaloosa and was a University of Alabama College of Engineering Distinguished Fellow. He also is a graduate of Harvard Business School's Advanced Management Program. Walter S. Hulse III, 60, is Executive Vice President, Chief Financial Officer, Treasurer, Investor Relations and Corporate Development of ONEOK. Mr. Hulse joined ONEOK in 2015 from Spinnaker Strategic Advisory Services, LLC, which provided consulting services to mid-cap and large-cap publicly traded companies, including the review of merger and/or acquisition opportunities, debt and equity markets, corporate restructuring and potential divestitures. Mr. Hulse served as a consultant to ONEOK for many years, including during the separation of the company's natural gas distribution business into the stand-alone publicly traded company, ONE Gas. Previously, Mr. Hulse was vice chairman of the Investment Banking Department, managing director and head of the business development group at UBS Investment Bank. Prior to that, he was head of the Global Utility Group at UBS Investment Bank. Before joining UBS through its merger with PaineWebber Incorporated, Mr. Hulse held various roles at Paine Webber and J.P. Morgan. Mr. Hulse graduated from the Wharton School at the University of Pennsylvania with a Bachelor of Science in economics. Lyndon Taylor, 66, is Executive Vice President, Chief Legal Officer, and Assistant Secretary of ONEOK. Mr. Taylor joined ONEOK in 2023. Before joining ONEOK, he was Executive Vice President, Chief Legal and Administrative Officer of Devon Energy Corporation from 2005 to 2021, responsible for overseeing the legal, corporate governance, compliance and government relations functions. Prior to Devon, Mr. Taylor founded and led the Houston office of Skadden Arps, serving the legal needs of numerous energy clients for 12 years. He has in-depth experience in many aspects of the energy business, including capital markets and Securities and Exchange Commission activities, merger and acquisition deals, commercial transactions, regulatory compliance, labor and employment matters, intellectual property and litigation. With nearly 40 years of legal expertise, primarily in the energy space, Mr. Taylor has extensive experience guiding organizations on legal and business strategies that balance risk and company objectives, helping them to be successful in a changing market. Mr. Taylor earned a Juris Doctor with honors from the University of Oklahoma College of Law and a Bachelor of Science in industrial engineering and management from Oklahoma State University.

Seeking Alpha • Feb 24

EnLink: Buy The Dip

Summary EnLink reported record profits in 2022, up 22% YoY led by massive growth in the Permian and higher natural gas prices. EBITDA will grow to $1355MM in 2023, but much of that growth will be consumed by higher expenses. Their project roster will eventually drive their EBITDA to $1.4 billion. They purchased Tall Oak's Midcon system in Oklahoma which adds a lot of value to their existing footprint. EnLink is still undervalued. Their strong buyback program is closing that valuation gap in a hurry. In mid-February, EnLink (ENLC) reported a record 2022 full year performance, with their adjusted EBITDA, net to EnLink coming in at $1285MM, a new record. This grew 22% YoY which is also a record. But it wasn't all roses - their guidance for 2023 showed additional EBITDA growth of $1355MM at the midpoint of the guide, but nearly all that growth is being gobbled up by higher interest and maintenance expenditures and slightly higher preferred equity payouts. Also, recent 13F data shows some large institutions took profits in the 4th quarter, suggesting that in the near term, EnLink will be rangebound. Nevertheless, EnLink remains a buy on any pullback of $1.50 to $3 from the recent peak of $13.58. Swing traders can buy the dip and resell the highs as the stock price oscillates. Long term investors can add to their position in the $10.58 to $12.08 range. There is a ton of data to unpack, so let's get started. Enlink's Permian Assets Extraordinary Rise Net of plant relocation OPEX and unrealized derivative gains, EnLink poured in $414.5MM in 2022 segment profits from their Permian assets versus $262.3MM in 2021 - a massive 58% rise due to higher volumes, exceptionally high natural gas prices, reduced natural gas hedging and higher volumes on their crude gathering assets. Volumes on their natural gas assets rose from Q4 2021 to Q4 2022 by 31% and their crude volumes came in 16% higher, so the volume growth was certainly the largest contributor to higher profits - roughly 2/3rd of the 58% uplift in segment profit is attributable to higher volumes. The next contributor to higher profits in the Permian were natural gas prices which soared close to $10/MMbtu (Henry Hub) in August of 2022 before pulling back. Henry Hub Daily Natural Gas Prices ((EIA)) Relative to 2021's realized natural gas prices, roughly 1/3 of the $152.2MM rise in segment profit for the Permian footprint is due to higher natural gas prices. Although a lot of the volume in the Permian is fee based, they have a significant exposure to natural gas prices on the Midland side of the basin. Instead of paying a fixed fee based on volumes, some producers who contract with EnLink pay a portion of what they owe in the form of natural gas. They call these contracts precent-of-proceeds or POP. By my estimation, EnLink receives roughly 125MMcf/d from its producers in lieu of dollars and nearly all of this comes from the Permian. EnLink's Natural Gas Hedging What EnLink did in the face of rising natural gas prices in 2022 shows some skill: EnLink's Natural Gas Hedging (Enlink's quarterly and annual reports) As natural gas prices rose to the $4 handle, they reduced their hedging exposure significantly. They let out the sail and rode the wind of higher natural gas prices. By Q1 of 2022, they hedged only 14% of their exposed natural gas volumes and only for the next two quarters. Then when natural gas prices took off in Q2 and Q3, they increased their hedges substantially for the following quarters. Contrary to running a programmatic hedging program, they responded brilliantly, locking in higher natural gas prices as they peaked in Q2 and Q3 of last year, securing additional cash flow for 2023 (and beyond). Although prices for the natural gas have collapsed to the $2 per MMbtu range in early 2023, EnLink hedged 96% of their 2023 exposure at higher prices such that a 50 cent rise or fall in natural gas prices only moves their profits up or down by $1MM. With a warmer winter, the continued outage at the Freeport LNG export terminal and higher US output, US natural gas inventories have swelled over their 5-year average, crushing prices. US Natural Gas Storage Report (EIA Natural Gas Weekly) Freeport will ramp back up to 2 Bcf/d over the coming months and large natural gas producers are expected to pull some drilling rigs - both actions should help support natural gas prices, but one thing is for sure, prices won't repeat their 2022 super performance and Enlink's Permian profit growth won't see the same level of uplift, despite the robust volume increases expected for 2023. I estimate that EnLink will realize $18.3MM less in segment profit in 2023 in their Permian footprint due to lower realized natural gas prices in 2023 versus 2022. Although they've hedged their 2023 natural gas exposure, it is hedged at lower prices than their realized prices for 2022. 2023 Guide The guide shows a rise from $1285MM in 2022 to $1355MM in 2023 at the midpoint, but nearly all that growth is being gobbled up by higher interest and maintenance expenditures and slightly higher preferred equity payouts. EnLink's 2023 Guidance (at the midpoint) (Enlink's Q4 Earnings Presentation) Interest expenses are up by $35.5MM versus 2022. This is due to a rise in the level of debt from $4,381MM at the end of 2021 to $4,764MM at the end of 2022 - a rise of $383MM YoY primarily because they financed two deals: The Crestwood acquisition in the Barnett and a new purchase in Northern Oklahoma (more on this below). They also refinanced $700MM of their near-term debt at higher rates (6.5% for 2030 notes versus 4.14% and 4.4% for 2024 and 2025 notes). In addition, their maintenance capex rises by $25MM YoY to $70MM. On the earnings call, Enlink's CFO, Ben Lamb, explained that this rise in maintenance CAPEX is due to an extensive amount of compressor maintenance and isn't indicative of a new run-rate. The preferred equity rises by an additional $3MM despite the fact that they purchased $19MM worth of Series C preferred stock at a discount of $0.80 on the dollar. The yield on the Series C rises to 8.8463% from a fixed 6% as of December 15th 2022. The new rate on Series C is now variable - 4.11% plus the 3-month Libor rate which is currently 4.7363%. Since rising rates impact the 3-month Libor rate, EnLink can expect to pay higher payouts. Although EnLink is growing in 2023, much of that growth is being consumed by higher expenses elsewhere. DCF and Growth CAPEX Their 2022 Distributable Cash Flow came in at $908MM in 2022 and this will grow to $915MM at the midpoint of the guide. The distribution rises by $0.05 to $0.50 per unit. Growth CAPEX including plant relocation expenses rises by $54MM to $365MM for 2023. Much of that 2023 growth CAPEX spend will be realized in future years: EnLink's Growth Capex Spend for forward years (Author with Data from Enlink) They will spend another $50MM for their 15% share of the massive 2.5Bcf/d Matterhorn Express natural gas pipeline project (bringing the total spend to $114MM) and $25MM for their share of their Gulf Coast Fractionator maintenance which is scheduled to restart in 2024. They will spend $30MM net to EnLink to move their newly acquired Cowtown plant from the Barnett to the Delaware basin. That move along with other synergies have driven their $275MM Crestwood acquisition to well below a 3x EBITDA multiple. We discussed the $20MM expansion of the Venture Global LNG project in our previous article. The Exxon Mobile Carbon Transport project will soak up $40MM in 2023 and another $160MM in 2024 generating a total estimated EBITDA return of $25MM (we'll provide more details on this project in a future article). Given all the spend for 2023, their Free Cash Flow after distributions drops to $240MM (at the midpoint of the guide) versus $312MM in 2022. Looking at segment profit guidance by region: EnLink's 2023 Segment Profit by Region (Enlink's Q4 Earnings Presentation) The Permian segment profit is still growing but not at quickly for the reasons stated above. Louisiana is estimated to lose some profits. Some of the extensive natural gas marketing opportunities that appeared in Q3 and Q4 of 2022 and created record segment profits for their Louisiana gas segment are forecasted to fade in 2023. They have a large natural gas system in Louisiana with multiple receipt and delivery points and storage facilities, and the large, flexible system allows them to occasionally take advantage of market dislocations. In 2022, they moved a lot of gas for their neighbors, solving a lot of their problems - buying, storing and selling gas. In addition, earlier in 2022, they opportunistically pulled rich natural gas from neighboring pipelines and processed it for near record margins. Those margins faded almost overnight. Occasionally, the market hands midstream businesses extraordinary short-term opportunities, and EnLink capitalized on them, however, Ben Lamb doesn't expect those opportunities to repeat in 2023, so consider 2022 a banner year for Louisiana. Their Ohio River Valley (ORV) crude and condensate business (which is counted in their Louisiana segment) came in exceptionally low in the 4th quarter clocking in at just $1.9MM due to unfavorable margins, and this weakness may leak into 2023. The segment profit for the ORV crude business drops to $22MM for 2022 versus $30MM in 2021 and $35MM in 2020 - poor margins and lower volumes on some ORV assets are to blame. The shift in volumes on their ORV assets may be permanent given that they sold $12MM worth of ORV's compression equipment in Q4. ORV has yet to fully recover post-Covid. North Texas is coming in flat as expected and Oklahoma loses a bit of steam because the crash in prices for the NGL barrel and natural gas prices may slowly reduce drilling in that patch in the 2nd half, although volumes are still expected to rise by double digits due in part to a recent acquisition. Rather than double digit segment profit growth, we are seeing only an 8% increase in segment profits, and that's inclusive of their recent Oklahoma purchase which adds $19MM for 2023. What did EnLink buy for Christmas? EnLink purchased another tuck-in gathering and processing system, this time in Northern Oklahoma for $101MM including working capital. Tall Oak's Midcon System (Enlink's Investor Day Presentation) This is Tall Oak's Midcon system which stretches across 9 counties in Northern Oklahoma. If the Tall Oak name sounds familiar, it's because EnLink paid roughly $1.4 billion in 2015-2016 for Tall Oak's core gathering and processing system in the STACK and CNOW regions. Here are the details on the Midcon system according to Tall Oak's website and Enlink's annual report and earnings release: 1,000 miles of low- and high-pressure gas gathering lines. Two processing plants: the operational Redcliff Cryogenic natural gas Plant in Woodward county which can process up to 220 MMcf/d and the non-operational 60 MMcf/d Carmen plant in Alfalfa county (not shown in the image) 80 MMcf/d is currently being gathered and treated on this system. 2023 estimated EBITDA is $19MM The system has seen some drilling activity since the purchase closed in December These tuck-in systems offer a lot of value to EnLink. There is 140 MMcf/d of spare capacity on the Redcliff gas plant which EnLink can use to offload some of their growing volumes in their Oklahoma footprint. The system fully integrates with Enlink's system with minimal CAPEX spend. It ties their Dewey county gathering assets to their overall system (with minimal CAPEX spend) and over time, the larger system will allow them to daisy-chain additional tuck-in assets that make sense and come available at the right price.

Oil and Gas Industry Growth	33.67%
Revenue growth rate	9.03%
Return on equity	14.44%
Net Margin	1.50%
Last Earnings Update	30 Sep 2024

Date	Revenue	Earnings	G+A Expenses
30 Sep 24	6,652	100	708
30 Jun 24	6,834	141	717
31 Mar 24	6,801	163	696
31 Dec 23	6,879	206	674
30 Sep 23	7,072	302	672
30 Jun 23	7,947	353	669
31 Mar 23	9,025	384	661
31 Dec 22	9,528	361	650
30 Sep 22	9,745	256	609
30 Jun 22	8,923	177	573
31 Mar 22	7,772	69	538
31 Dec 21	6,845	22	471
30 Sep 21	5,676	-177	455
30 Jun 21	4,788	-166	440
31 Mar 21	4,111	-140	428
31 Dec 20	3,916	-421	477
30 Sep 20	3,995	-1,197	509
30 Jun 20	4,462	-1,198	546
31 Mar 20	5,398	-1,218	585
31 Dec 19	6,039	-1,106	620
30 Sep 19	6,914	-239	608
30 Jun 19	7,633	-243	604
31 Mar 19	7,710	-200	598
31 Dec 18	7,694	-13	594
30 Sep 18	7,420	247	574
30 Jun 18	6,704	246	554
31 Mar 18	6,186	224	544
31 Dec 17	5,744	210	547
30 Sep 17	5,214	6	538
30 Jun 17	4,916	1	532
31 Mar 17	4,693	-4	529
31 Dec 16	4,264	-455	517
30 Sep 16	4,098	-644	520
30 Jun 16	4,158	-837	532
31 Mar 16	4,393	-824	539
31 Dec 15	4,443	-354	553
30 Sep 15	4,355	-136	480
30 Jun 15	4,046	85	445
31 Mar 15	3,702	99	409
31 Dec 14	3,486	89	381
30 Sep 14	3,112	187	320
30 Jun 14	2,834	163	263
31 Mar 14	2,493	131	212

Data	Last Updated (UTC time)
Company Analysis	2025/01/30 14:36
End of Day Share Price	2025/01/30 00:00
Earnings	2024/09/30
Annual Earnings	2023/12/31

Package	Data	Timeframe	Example US Source ^*
Company Financials	10 years	Income statement Cash flow statement Balance sheet	SEC Form 10-K SEC Form 10-Q
Analyst Consensus Estimates	+3 years	Forecast financials Analyst price targets	Analyst Research Reports Blue Matrix
Market Prices	30 years	Stock prices Dividends, Splits and Actions	ICE Market Data SEC Form S-1
Ownership	10 years	Top shareholders Insider trading	SEC Form 4 SEC Form 13D
Management	10 years	Leadership team Board of directors	SEC Form 10-K SEC Form DEF 14A
Key Developments	10 years	Company announcements	SEC Form 8-K

Analyst	Institution
Ethan Bellamy	Baird
Dennis Coleman	BofA Global Research
Akil Marsh	Brean Capital Historical (Janney Montgomery)

This company has been acquired

EnLink Midstream Past Earnings Performance

Past criteria checks 1/6

Key information

Recent past performance updates

Third quarter 2024 earnings: EPS and revenues miss analyst expectations

EnLink Midstream, LLC to Report Q3, 2024 Results on Nov 06, 2024

Second quarter 2024 earnings: EPS and revenues miss analyst expectations

First quarter 2024 earnings: EPS and revenues miss analyst expectations

EnLink Midstream, LLC to Report Q1, 2024 Results on Apr 30, 2024

Full year 2023 earnings: EPS and revenues miss analyst expectations

Recent updates

ONEOK, Inc. (NYSE:OKE) completed the acquisition of remaining 56.2% stake in EnLink Midstream, LLC (NYSE:ENLC) from ALPS Advisors, Inc., Invesco Ltd. (NYSE:IVZ) and others.

EnLink Midstream Request NYSE to File Form 25 to Delist and Deregister Units

ONEOK, Inc. (NYSE:OKE) agreed to acquire remaining 56.2% stake in EnLink Midstream, LLC (NYSE:ENLC) for $4.3 billion.

Consensus EPS estimates fall by 28%

Third quarter 2024 earnings: EPS and revenues miss analyst expectations

EnLink Midstream, LLC to Report Q3, 2024 Results on Nov 06, 2024

Less than half of directors are independent

Enlink Midstream, LLC Announces Board and Committee Changes

Second quarter dividend of US$0.13 announced

ONEOK, Inc. (NYSE:OKE) completed the acquisition of 43% stake in EnLink Midstream, LLC (NYSE:ENLC) from Global Infrastructure Management, LLC.

EnLink Midstream, LLC Declares Quarterly Distribution for the Third Quarter of 2024, Payable on November 14, 2024

Tiger II Plant And Decisive Expansions Set To Ignite Growth In The Energy Sector

Investor sentiment improves as stock rises 15%

Second quarter 2024 earnings: EPS and revenues miss analyst expectations

First quarter dividend of US$0.13 announced

EnLink Midstream, LLC Declares Quarterly Distribution, Payable on August 14, 2024

Consensus revenue estimates fall by 14%

EnLink Midstream: A Mixed Q1 Given A Mixed Asset Base

First quarter 2024 earnings: EPS and revenues miss analyst expectations

Consensus revenue estimates increase by 13%

Fourth quarter dividend of US$0.13 announced

EnLink Midstream, LLC to Report Q1, 2024 Results on Apr 30, 2024

Key Executive notifies of intention to sell stock

VP & Chief Accounting Officer recently sold US$616k worth of stock

Consensus revenue estimates fall by 12%

EnLink Midstream: Bullish Thesis Still Intact

VP & Chief Accounting Officer notifies of intention to sell stock

Full year 2023 earnings: EPS and revenues miss analyst expectations

Enlink Midstream, LLC Provides Financial Guidance for 2024

New minor risk - Shareholder dilution

Third quarter dividend of US$0.13 announced

EnLink Midstream, LLC (NYSE:ENLC) announces an Equity Buyback for $200 million worth of its shares.

EnLink Midstream, LLC to Report Q4, 2023 Results on Feb 20, 2024

EnLink Midstream: Deleveraging Itself And Driving Value Expansion

Consensus EPS estimates increase by 16%

Consensus EPS estimates fall by 17%

EnLink Midstream, LLC Announces Impairment for the Three Months Ended September 30, 2023

Third quarter 2023 earnings: EPS and revenues miss analyst expectations

EnLink Midstream, LLC to Report Q3, 2023 Results on Oct 31, 2023

EnLink Midstream: Low Yield, But Some Growth In CCS Business

EnLink Midstream, LLC Names Dilanka Seimon as Executive Vice President and Chief Commercial Officer, Effective August 15, 2023

Executive VP notifies of intention to sell stock

EnLink Midstream, LLC Announces Alaina K. Brooks Executive Vice President and Chief Legal and Administrative Officer Will Depart from the Company

Consensus revenue estimates fall by 18%

VP & Chief Accounting Officer recently sold US$472k worth of stock

Second quarter 2023 earnings: EPS exceeds analyst expectations while revenues lag behind

EnLink Midstream, LLC to Report Q2, 2023 Results on Aug 01, 2023

New major risk - Revenue and earnings growth

EnLink Midstream: Riding The Wave Of LNG Export Growth

Consensus revenue estimates fall by 20%

First quarter 2023 earnings: EPS exceeds analyst expectations while revenues lag behind

Now 20% undervalued after recent price drop

Less than half of directors are independent

Now 23% undervalued after recent price drop

Key Executive notifies of intention to sell stock

EnLink: Buy The Dip

Key Executive recently sold US$4.5m worth of stock

EnLink Midstream, LLC Provides Earnings Guidance for 2023

EnLink Midstream, LLC to Report Q4, 2022 Results on Feb 14, 2023

Revenue & Expenses Breakdown

Earnings and Revenue History

Free Cash Flow vs Earnings Analysis

Past Earnings Growth Analysis

Return on Equity

Return on Assets

Return on Capital Employed

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Company Analysis and Financial Data Status