Oklahoma City’s Enable Midstream Partners, LP reported millions in reduced net income for the first quarter of 2020 including a $10 million drop in net income to limited partners and a $10 million decline for common units.
Revenues were $648 million for first quarter 2020, a decrease of $147 million compared to $795 million for first quarter 2019.
Gathering and processing segment revenues were $477 million for first quarter 2020, a decrease of $153 million compared to $630 million for first quarter 2019.
The company announced Wednesday net income for limited partners totaled $112 million compared to the $122 million reported in the first quarter of 2019.
Net income attributable to common units was $103 million for first quarter 2020, a decrease of $10 million compared to $113 million for first quarter 2019.
Net cash provided by operating activities was $200 million for first quarter 2020, a decrease of $15 million compared to $215 million for first quarter 2019. Adjusted EBITDA was $286 million for first quarter 2020, a decrease of $11 million compared to $297 million for first quarter 2019. Distributable cash flow was $214 million for first quarter 2020, an increase of $6 million compared to $208 million for first quarter 2019.
The earnings included a non-cash impairment of $28 million.
“In response to current industry conditions, we have taken decisive action to increase our financial flexibility and liquidity, and we are committed to further action, as needed, to maintain our strength in 2020 and beyond,” said Rod Sailor, president and CEO. “With the challenges we see ahead in 2020 for crude-directed drilling areas, I am encouraged by the continued activity we see in the dry gas areas across our footprint and the continued contracting activity in our transportation and storage business, which highlights the benefits of our diversified asset portfolio.”
The first quarter earnings report came after Enable announced April 1 that it intended to reduce the partnership’s quarterly distribution per common unit resulting in nearly $290 million of additional cash a year. It also made a $115 million reduction in anticipated expansion capital expenditures and another $20 million in maintenance capex. The company also cut $35 million in anticipated 2020 operating expenses. More could be coming, according to the quarterly report.
“Enable will make further capital and cost reductions, as appropriate, should challenging market conditions persist,” stated the report.
Capital expenditures were $54 million for first quarter 2020, compared to $143 million for first quarter 2019.
As of April 27, 2020, there were twelve rigs across Enable’s footprint that were drilling wells expected to be connected to Enable’s gathering systems. Six of those rigs were in the Anadarko Basin, four were in the Ark-La-Tex Basin and two were in the Williston Basin. With the recent decreases in crude oil prices, most producer drilling and completion activity for the balance of 2020 is expected to be focused in the Haynesville Shale, with more limited activity in the Anadarko and Williston Basins. Enable also expects some amount of volume curtailments in the Anadarko and Williston Basins in the second quarter of 2020.
Current energy market volatility is not expected to significantly impact the transportation and storage segment, given the significant portion of segment gross margin contributed from firm, fee-based contracts. EGT recently recontracted substantial capacity with its largest customer, CERC. The contract term for the majority of the renewed capacity is nine years, and the effective date of the new contracts will be April 1, 2021. EGT also recently contracted 100,000 dekatherms per day (Dth/d) of capacity for two years starting in 2021 on EGT’s Line CP with Rockcliff Energy LLC. In April 2020, Enable Oklahoma Intrastate Transmission, LLC was awarded a three-year renewal from a utility for approximately 150,000 Dth/d. Enable continues to evaluate asset optimization opportunities, and the partnership closed April 1, 2020, on the sale of EGT’s undivided 1/12th interest in the Bistineau Storage Facility for approximately $19 million.
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