Enable Midstream Partners, LP (NYSE: ENBL) announced today that
the partnership is taking significant measures to strengthen its
financial position in response to current industry conditions.
Taken together, the actions announced today are expected to result
in an annualized increase in retained cash flow of approximately
$450 million and position Enable to fully fund its business and
reduce total debt in 2020.
The board of directors of Enable’s general partner has approved
a 50% reduction in the partnership’s quarterly distribution per
common unit from $0.3305 to $0.16525. This reduction will result in
Enable having nearly $290 million of additional cash on an
annualized basis, providing meaningful financial flexibility and
funding for Enable’s capital investment program.
Enable is reducing 2020 total expansion capital expenditures by
$115 million, or 48%, from the top end of the previously provided
outlook, which included capital projects not expected to contribute
revenues in 2020. The remaining expansion capital expenditures
primarily represent projects to serve incremental firm
transportation commitments or to support expected levels of
contracted producer activity.
Enable is removing costs from its business and estimates
achieving approximately $35 million of savings in 2020, growing to
run-rate savings of approximately $70 million in 2021 for operation
and maintenance and general and administrative expenses. After
considering its commitment to safe and reliable operations,
technology investment and other projects, Enable expects a
reduction in maintenance capital of $20 million, or 17%, from the
midpoint of the previously provided outlook for 2020. Enable also
expects to maintain this $20 million reduction next year.
“Due to the sharp decline in commodity prices and producer
activity across our footprint and the future business uncertainty
created by the coronavirus pandemic, we are taking decisive action
to fortify our financial position, protect our balance sheet and
ensure liquidity to navigate these unprecedented market
conditions,” said Rod Sailor, president and CEO. “We continue to
work with our customers and to refine our costs and capital, not
only to maintain maximum financial flexibility but also to ensure a
high level of safe and reliable service.
“Enable has implemented a number of initiatives to respond to
the risks created by this pandemic and is focused on protecting the
health and safety of our employees, customers and the communities
where we work and live while providing vital energy infrastructure
services during this crisis,” added Sailor.
Enable has ample liquidity available under its $1.75 billion
revolving credit facility. The partnership has no near-term senior
notes maturities, with the next senior notes maturity not due until
2024. The partnership’s term loan and revolving credit agreements
have scheduled maturity dates in 2022 and 2023, respectively, that
could be extended.
During this market downturn, Enable continues to benefit from
its scale and diversified asset and customer base. The partnership
has long-term relationships with large-cap producers and utilities,
and the largest customers on each of Enable’s interstate and
intrastate natural gas pipelines are investment-grade utilities.
Enable has significant fee-based contracts in both its
transportation and storage and gathering and processing segments,
and the partnership still expects its gross margin to be over 90%
fee-based or hedged for 2020.
Enable plans to provide an update to its 2020 outlook during its
first quarter earnings call in May.
ABOUT ENABLE MIDSTREAM
PARTNERS
Enable owns, operates and develops strategically located natural
gas and crude oil infrastructure assets. Enable’s assets include
approximately 14,000 miles of natural gas, crude oil, condensate
and produced water gathering pipelines, approximately 2.6 Bcf/d of
natural gas processing capacity, approximately 7,800 miles of
interstate pipelines (including Southeast Supply Header, LLC of
which Enable owns 50%), approximately 2,300 miles of intrastate
pipelines and eight natural gas storage facilities comprising 84.5
billion cubic feet of storage capacity. For more information, visit
www.enablemidstream.com.
FORWARD-LOOKING
STATEMENTS
Some of the information in this press release may contain
forward-looking statements. Forward-looking statements give our
current expectations, contain projections of results of operations
or of financial condition, or forecasts of future events. Words
such as “could,” “will,” “should,” “may,” “assume,” “forecast,”
“position,” “predict,” “strategy,” “expect,” “intend,” “plan,”
“estimate,” “anticipate,” “believe,” “project,” “budget,”
“potential,” or “continue,” and similar expressions are used to
identify forward-looking statements. Without limiting the
generality of the foregoing, forward-looking statements contained
in this press release include our expectations of plans,
strategies, objectives and anticipated financial and operational
performance, including estimated capital expenditures, estimated
reductions in operation and maintenance and general and
administrative expenses and anticipated increases in cash flows.
Forward-looking statements can be affected by assumptions used or
by known or unknown risks or uncertainties, including risks
resulting from the ongoing spread and economic effects of the novel
coronavirus (COVID-19) and the recent actions of Saudi Arabia and
Russia which have resulted in a substantial decrease in oil and
natural gas prices. The combined impact of these events on
commodity prices have resulted in significantly reduced capital
expenditures by our upstream customers, which is expected to impact
our operating results, liquidity and financial condition and may
impact our recorded goodwill and other financial metrics.
Consequently, no forward-looking statements can be guaranteed.
A forward-looking statement may include a statement of the
assumptions or bases underlying the forward-looking statement. We
believe that we have chosen these assumptions or bases in good
faith and that they are reasonable. However, when considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in this press release and
in our Annual Report on Form 10-K for the year ended Dec. 31, 2019
(“Annual Report”). Those risk factors and other factors noted
throughout this press release and in our Annual Report could cause
our actual results to differ materially from those disclosed in any
forward-looking statement. You are cautioned not to place undue
reliance on any forward-looking statements.
Any forward-looking statements speak only as of the date on
which such statement is made and we undertake no obligation to
correct or update any forward-looking statement, whether as a
result of new information or otherwise, except as required by
applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200401005825/en/
Media Leigh Ann Williams (405) 553-6947
Investor Matt Beasley (405) 558-4600
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