What Will Drive EnLink Midstream Partners’ 2Q17 EBITDA?



EnLink Midstream Partners’ 2Q17 EBITDA estimates

EnLink Midstream Partners (ENLK) and its GP (general partner), EnLink Midstream (ENLC), are scheduled to release their 2Q17 earnings on August 1, 2017. In this series, we’ll talk about ENLK’s 2Q estimates, segment performance drivers, throughput volumes, distribution, valuation, technical indicators, and analyst recommendations.

ENLK’s consensus EBITDA (earnings before interest, taxes, depreciation, and amortization) estimate for 2Q17 is $200.6 million, 5.8% higher than its 2Q16 adjusted EBITDA and 5.0% lower than the previous quarter’s adjusted EBITDA.

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EnLink Midstream Partners’ 2Q17 EBITDA drivers

EnLink Midstream’s YoY (year-over-year) EBITDA growth in 2Q17 is expected to be driven by the following factors:

  • strong throughput volumes from the Delaware, STACK, and Midland regions
  • an increase in processing capacity due to expansion projects placed into service
  • improved natural gas processing margins due to higher crude oil and NGLs prices

Average crude oil prices in 2Q17 were $48.1 per barrel compared to $45.6 per barrel in the corresponding quarter last year, a YoY increase of 5.5%. Energy Transfer Partners (ETP), DCP Midstream (DCP), and Western Gas Partners (WES) are among the midstream companies involved in natural gas processing and are expected to benefit from the YoY rise in crude oil prices.

The above positives might be offset by non-core asset sale and declining throughput volumes in some regions. The partnership completed the sale of its North Texas Pipeline during 1Q17.

EnLink Midstream Partners in 1Q17

The partnership beat its EBITDA estimate by 7.9% in 1Q17. The 1Q17 EBITDA estimate for ENLK was $195.7 million, while the adjusted EBITDA stood at $211.2 million. We’ll have to wait for the 2Q17 earnings release to see whether ENLK beats or misses its 2Q17 earnings estimates. We’ll cover this in our post-earnings series for ENLK once it reports its 2Q17 results.

In the next article, we’ll look at the performance drivers of EnLink Midstream’s five business segments.


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