WES, ENLK, ENBL, DCP: Assessing Capital Spending Plans

Western Gas Partners

MLPs’ distributable cash flow and distribution growth are mainly linked to their expansion of midstream infrastructure. Publicly traded partnerships expand their midstream infrastructure through both organic and inorganic expansions. In this article, we’ll look at the 2017 capital spending plans for our four select peers. Let’s start with Western Gas Partners (WES).

WES, ENLK, ENBL, DCP: Assessing Capital Spending Plans

WES announced reduced 2017 capital spending of $800 million–$850 million, compared to previous guidance of $800 million–$850 million. The new capital spending target at the midpoint is still 101.1% higher than capital spending in 2016. WES is bullish on expansion in the Delaware Basin due to Anadarko Petroleum’s (APC) strong focus in the region. The partnership expects to bring its sixth processing plant online at the Ramsey complex in the Delaware region by the end of the fourth quarter of 2017.

Enable Midstream Partners

Enable Midstream Partners’ (ENBL) capital spending guidance at the midpoint is 43.6%—higher than its expansion spending in the previous year. ENBL also announced its 2018 capital program during the 3Q17 earnings release. It expects to spend between $450 million and $600 million on expansion projects in 2018, of which, $330 million–$460 million should be spent on the Gathering and Processing segment and $120 million–$140 million on Transportation and Storage segment.

EnLink Midstream Partners

EnLink Midstream Partners (ENLK) announced two new processing plants during the 3Q17 earnings release, which includes a 200 MMcf/d (million cubic feet per day) processing plant in the Oklahoma region and a 200 MMcf/d plant in the Delaware Basin. However, the partnership has kept its 2017 capital guidance unchanged. ENLK’s 2017 capital guidance is 23.7% higher compared to the growth capital spending in the previous year.

DCP Midstream

DCP Midstream has the lowest 2017 capital budget among our select peers. DCP expects to spend $350 million on organic projects by the end of this year. DCP’s lower capital spending plans could be due to its high leverage. The partnership’s 2017 capital budget is allocated to processing capacity expansion and Sand Hills NGL pipeline expansion projects.