The following is a summary of the Kinetik Holdings Inc. (KNTK) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Kinetik Holdings Inc. reported an impressive increase in adjusted EBITDA which grew 23% year-over-year.

• Processed gas volumes were 1.71 billion cubic feet per day, representing a 15% growth year-over-year.

• Adjusted EBITDA guidance for the full year 2024 was revised upward to $970 million to $1 billion, indicating a positive trajectory in financial performance.

• Third quarter adjusted EBITDA was $266 million, showing robust growth and operational success.

Business Progress:

• Kinetik acquired an additional equity interest in EPIC Crude, increasing total ownership to 27.5%.

• Initiated a long-term transport agreement with EPIC, following a multi-notch credit upgrade and refinancement of its Term Loan B.

• Approved MRV Plan from the EPA for three acid gas injection wells, enhancing sustainability efforts and leveraging 45Q credits.

• Announced investment in a new large diameter pipeline connecting Eddy County, New Mexico, and Culberson County, Texas, to optimize processing capacity and facilitate higher margin sour gas processing.

Opportunities:

• Expanded ownership and strategic partnership in EPIC Crude, coupled with a refinanced Term Loan B, positions Kinetik for future distributions and financial stability.

• The integration of sustainability measures such as the MRV Plan enhances Kinetik's environmental credentials and opens up new revenue streams through 45Q credits.

• The construction of a new pipeline between Eddy and Culberson Counties will significantly boost the company's processing capabilities and operational flexibility.

Risks:

• Persistent negative gas prices at the Waha Hub, with average daily prices as low as negative $1 per Mcf, led to curtailment of approximately 170 million cubic feet per day of wellhead gas volume. This pricing volatility presents an ongoing risk to operations and revenue stability.

• Dependence on regulatory approval and market conditions for project developments and expansions.

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