DT Midstream, Inc. (NYSE:DTM) Q1 2024 Earnings Call Transcript

DT Midstream, Inc. (NYSE:DTM) Q1 2024 Earnings Call Transcript April 30, 2024

DT Midstream, Inc. beats earnings expectations. Reported EPS is $1.24, expectations were $0.95. DT Midstream, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning. My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the DT Midstream First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions]. At this time, I would like to turn the conference over to Todd Lohrmann, Director of Investor Relations. Please go ahead.

Todd Lohrmann: Good morning, and welcome everyone. Before we get started, I would like to remind you to read the safe harbor statement on Page 2 of the presentation, including the reference to forward-looking statements. Our presentation also includes references to non-GAAP financial measures. Please refer to the reconciliations to GAAP contained in the appendix. Joining me this morning are David Slater, President and CEO, and Jeff Jewell, Executive Vice President and CFO. I'll now turn it over to David to start the call.

David Slater: Thanks, Todd. And good morning, everybody. And thank you for joining. During today's call, I'll touch on our financial results, provide an update on the latest commercial activity and construction progress on our growth projects. I'll then close with some commentary on the current market fundamentals before turning it over to Jeff to review our financial performance and outlook. So with that, we're off to a great start in 2024, giving us confidence in our full year plan. We are reaffirming our 2024 adjusted EBITDA guidance range and our 2025 adjusted EBITDA early outlook range. Our construction and commercial teams continue to make great progress on our backlog of organic growth projects, setting the company up for continued success.

This morning, we are excited to announce a new expansion on our Stonewall system, which includes additional mainline capacity, incremental compression, and a new interconnect with Mountain Valley Pipeline. This project will provide a new production outlet to the mid-Atlantic market, which we expect will become a fast growing region with new data center and AI powered demand load emerging. The project is anchored by a 15-year agreement with a large investment grade producer, which includes an acreage dedication and a minimum volume commitment. In conjunction with our new Stonewall development, we have also upsized our Appalachia Gathering System phase 3 expansion. The capital investment to support both these projects was already contemplated as highly probable as part of our capital guidance.

And our capital plan for the year remains within our free cash flow after dividends. Staying in Appalachia, initial volumes began flowing on our Ohio Utica System in March. As a reminder, we expect production volume to ramp over an 18 to 24 month period as our customer executes on its development plan and delineates this emerging play. And our revenues are fully protected under a take or pay contract structure. The liquids rich Ohio Utica resource play is highly economic in today's price environment and further diversifies our Gathering segment. We expect this emerging basin to continue to grow. They're observing increased drilling activity from both our anchor customer, as well as other producers in the region. Turning from Appalachia to the Haynesville, we are pleased to announce the completion of our new interconnect between our Haynesville system and the Gillis Access project.

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