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EnLink Midstream Partners: What to Expect in 3Q17

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EnLink Midstream Partners: What to Expect in 3Q17 PART 1 OF 3

Analyzing EnLink Midstream Partners’ 3Q17 EBITDA Growth

3Q17 EBITDA estimates

EnLink Midstream is EnLink Midstream Partners’ GP (general partner). In this series, we’ll discuss EnLink Midstream Partners’ 3Q17 estimates, throughput volumes, valuation, and analysts’ ratings. We’ll start with analysts’ earnings estimates.
Analyzing EnLink Midstream Partners’ 3Q17 EBITDA Growth

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EnLink Midstream Partners’ consensus EBITDA estimate for 3Q17 is $212.5 million. It’s 7.8% higher than the 3Q16 adjusted EBITDA and 1.3% lower than the previous quarter’s adjusted EBITDA. The partnership beat its EBITDA estimate by 3.9% in 2Q17. The 2Q17 EBITDA estimate for EnLink Midstream Partners was $201.8 million, while it reported an adjusted EBITDA of $209.7 million.

EnLink Midstream’s 3Q17 EBITDA drivers

EnLink Midstream’s YoY (year-over-year) EBITDA growth in 3Q17 is expected to be driven by the following factors.

  • strong throughput volumes from the STACK, Delaware, and Midland regions
  • increased natural gas processing capacity driven expansion projects placed into service
  • higher natural gas processing margins resulting from higher crude oil and NGLs prices

The average crude oil price was $48.2 per barrel in 3Q17—compared to $44.9 per barrel in 3Q16, which is a YoY increase of 7.3%.

The above positives might be offset by falling throughput volumes in some regions and non-core asset sales.

3Q17 distribution

On October 20, 2017, EnLink Midstream Partners declared a flat distribution of $0.39 per unit for 3Q17. It’s the eighth consecutive quarter for flat distribution at EnLink Midstream Partners. EnLink Midstream also declared a flat distribution of $0.225 per unit for the third quarter. EnLink Midstream Partners’ coverage ratio might improve in the third quarter due to flat distributions and distributable cash flow growth. EnLink Midstream Partners expects to resume distribution growth from 2018. Investors will likely watch any updates on the distribution forecasts during EnLink Midstream Partners’ 3Q17 conference call.

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