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EnLink Midstream Partners Could Gain Upward Momentum

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EnLink Midstream Partners Could Gain Upward Momentum PART 2 OF 10

EnLink Midstream Partners’ Operating Performance

EnLink Midstream Partners’ Texas segment

EnLink Midstream Partners’ (ENLK) Texas segment provides natural gas gathering, processing, and transportation services in the North Texas and Delaware regions. The Texas segment is the partnership’s largest segment in terms of the operating margin. It accounted for 45.1% of the total operating margin in 2Q17. The Texas segment reported a 1.6% YoY (year-over-year) increase in the gross operating margin during 2Q17. The increase was mainly due to strong Delaware volumes and slight drilling recovery in the North Texas region—the Barnett Shale region.

EnLink Midstream Partners’ Operating Performance

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The partnership placed phase 1 of the Lobo II capacity expansion in 2Q17. It’s expecting to place phase 2 of the Lobo II capacity expansion by the end of 2017. The Lobo system’s total nameplate capacity would increase to 185 MMcf/d (million cubic feet per day) following the completion of this phase.

Louisiana segment

EnLink Midstream’s Louisiana segment is mainly involved in:

  • NGLs (natural gas liquids) transportation and fractionation
  • natural gas gathering, processing, and transmission

The segment posted a 3.9% YoY increase in its operating margin driven by strong NGLs volumes resulting from recently placed projects including the Chisholm II processing plant. EnLink Midstream Partners and ONEOK (OKE) entered into a fee-based agreement to move NGLs volumes from its Chisholm processing plant in Central Oklahoma to the Gulf Coast and the Cajun-Sibon platform.

Oklahoma segment

The Oklahoma segment, which provides natural gas gathering and processing services in the Central Oklahoma region, has been EnLink Midstream’s top performing segment in recent quarters. It posted 40.3% operating margin growth in the recent quarter due to strong throughput volume growth. The partnership expects the trend to continue in 2H17. The partnership expects to place the 200 MMcf/d Chisholm III processing plant into service by the end of 2017. It will bring the total processing capacity in the region to ~1 billion cubic feet per day.

Crude and Condensate segment

The Crude and Condensate segment, which is involved in crude oil gathering, transportation, and marketing, has been EnLink Midstream’s worst performing segment in recent quarters. The segment posted a 17.6% YoY decline in its operating margin in the recent quarter. It had lower margins in the crude oil marketing business and lower Eagle Ford volumes. The fall was partially offset by strong Midland volumes.

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