Kinetik Holdings Inc. Q3 FY2025 earnings call

• Strategic initiatives: Brought Kings Landing to full commercial service in September, made progress on ECCC pipeline, FID on acid gas injection project at King's Landing, agreement with CPV to connect residue gas pipeline network to CPV Basin Ranch Energy Center, executed European LNG pricing agreement with INEOS at Port Arthur LNG, expanded takeaway capabilities by securing additional firm transport capacity to U.S. Gulf Coast.
• Financial performance: Acknowledged challenges in integrating Delaware North system, delays in Kings Landing, turbulent macro commodity and inflationary headwinds, but emphasized focus on long-term strategy and organic growth initiatives.

The Midstream Logistics segment generated an adjusted EBITDA of $151 million in the third quarter, down 13% year-over-year. The decrease was due to lower commodity prices, lower Kinetik marketing contributions, higher cost of goods sold, and higher operating expenses, partially offset by increased volumes across both Delaware North and South assets. The Pipeline Transportation segment generated an adjusted EBITDA of $95 million. Total capital expenditures for the quarter were $154 million.

• Revised 2025 adjusted EBITDA guidance to $985 million at the midpoint, down from previous guidance. Capital guidance tightened to $485 million to $515 million. Delays in Kings Landing start-up, commodity price volatility, curtailments, and EPIC crude sale closing impacted guidance.
• Confident in long-term strategy and value creation potential of organic growth initiatives, with focus on capital allocation for long-term shareholder value.

• Challenging commodity price environment, particularly in September, affecting margins and producer decisions.
• Delays in project timelines such as Kings Landing reaching full commercial service.
• Producer-directed actions from commodity price volatility leading to curtailments and development delays.
• Waha natural gas price volatility and its impact on producer activity and earnings.

Q: About producer delays, are they moving into 2026 or delayed within the quarter?

A: Jamie Welch said it's delayed within the quarter, most benefit happens in 2026.

Q: About larger customers in Durango system area, what's being seen?

A: Kris Kindrick said Northwest Shelf is exciting, geology is good, activity still exists, and robust E&P M&A activity and management/private equity return are seen.

Q: On natural gas moves, about capacity on Permian egress pipe in 2028 and LNG strategy?

A: Jamie Welch said it's a contract counterparty, LNG strategy has been discussed, with interest in taking incremental capacity and seeing premium step up.

Q: On implied Q4 EBITDA in new guidance, what about King's Landing volumes and Waha pricing?

A: Trevor Howard said it assumes customer volumes, shut-ins, timing delays, and pricing impacts, with over 60% of revision explained by factors like curtailments and EPIC sale.

Q: On recontracting on TNF and industry developments?

A: Jamie Welch said 2026 is first time for expirations, aware of market dynamics, and will deal with it over 2026.

Q: On data center-related infrastructure investments and Kinetik's position?

A: Trevor Howard and Kris Kindrick said Kinetik has ability to connect residue gas pipeline network to power generation sources, having conversations with many parties, and seeing mix of private and public producers with different drilling activity dynamics.