Kinetik Holdings Inc. Q4 FY2024 earnings call

• 2024 was a transformational year with strategic M&A, expansion in the Delaware Basin, and reduced leverage.
• Q4 results were temporarily impacted by November events but rebounded by December.
• 2025 outlook includes growth in gas processed volumes, startup of the King's Landing complex, acquisition of Barilla Draw assets, development of the Eddy County project, and exploration of a gas-fired power generation facility in Texas.

In the fourth quarter, the Midstream Logistics segment generated adjusted EBITDA of $150 million, up 3% year over year on volume growth but down 14% sequentially. The Pipeline Transportation segment generated adjusted EBITDA of $92 million, up nearly 9% year over year. For the full year, adjusted EBITDA was $971 million. The Midstream Logistics segment saw 13% year-over-year growth in 2024.

• 2025 full-year adjusted EBITDA is expected to be in the range of $1.09 billion to $1.15 billion, with the midpoint at $1.12 billion (15% growth year over year).
• Midstream Logistics anticipates approximately 20% growth in gas processed volumes, with the King's Landing complex starting up in late June.
• 83% of 2025 gross profit is sourced from fixed fee agreements, and 75% of commodity-exposed gross profit is hedged.
• 2025 capital expenditures are expected to be between $450 million to $540 million, including contingent consideration to the Durango seller.

• Volatility in gas prices.
• Seasonal maintenance of pipelines leading to potential capacity cuts.
• Compression-related risks affecting operations.
• Steel tariff impacts on capital expenditures.

Q: Spiro Dounis with Citi asked about execution risk for 10% EBITDA CAGR over five years and M&A opportunities in 2025.

A: Jamie Welch responded on execution risk related to internal capabilities and M&A opportunities needing to meet return thresholds.

Q: Jeremy Tonet with JPMorgan inquired about producer customer activity and longer-term growth outlook.

A: Jamie Welch discussed producer activity remaining robust and internal growth objectives tied to organic and inorganic opportunities.

Q: Neel Mitra with Bank of America asked about managing pipeline maintenance risks and growth in Southern Delaware.

A: Jamie Welch addressed maintenance risks and growth in Southern Delaware tied to multi-stream services and Barilla Draw acquisition.

Q: Keith Stanley with Wolfe Research asked about the power plant project and processing volume growth assumption.

A: Jamie Welch provided details on the power plant project and processing volume growth split between segments.

Q: John McKay with Goldman Sachs asked about sour gas opportunities and compression margin improvement.

A: Jamie Welch discussed sour gas opportunities and compression margin improvement related to unit redeployment and market dynamics.

Q: Theresa Chen with Barclays asked about the Barilla Draw economic contribution and power plant timeline.

A: Trevor Howard and Jamie Welch clarified Barilla Draw's economic contribution and power plant timeline.

Q: Gabe Maureen with Mizuho asked about Epic Crude distributions and steel tariff impacts.

A: Jamie Welch responded on Epic Crude distributions and steel tariff impacts on capital expenditures.