DALLAS, March 24, 2020 / PRNewswire / – EnLink Midstream, LLC (NYSE: ENLC) (EnLink) today announced an update regarding its financial strategy, including a reduction in its quarterly distribution of common units and reductions additional operating, general and administrative costs.
EnLink’s board of directors approved a reduction in its quarterly distribution of common units to $ 0.09375 per unit, from $ 0.1875 per share paid for the fourth quarter of 2019, reflecting a reduction of 50%. This reduction translates into approximately $ 185 million additional liquidity available to EnLink for fiscal 2020, which it intends to use for liquidity preservation and balance sheet management.
EnLink continues to identify and implement numerous expense reduction initiatives and is currently targeting $ 50 million additional expense savings across its entire cost structure in 2020, on top of the expense savings initiated in the fourth quarter of 2019.
At March 17, 2020, EnLink announced a 30% reduction in total capital expenditure in 2020, net to EnLink, which will result in approximately $ 115 million additional cash flow for 2020 based on the midpoint of EnLink’s latest forecast range. In addition, EnLink continues to assess further reductions in capital expenditure, excluding maintenance expenditure, as a significant portion of EnLink’s capital expenditure for 2020 is flexible and can be managed based on activity. from the producer.
“We continue to take deliberate steps to position EnLink to withstand this changing environment,” said Barry E. davis, Chairman and Chief Executive Officer. “The comprehensive measures we have taken in 2020 will create more $ 500 million free cash flow for the full year of 2020 to effectively manage our balance sheet, including our liquidity and leverage. We remain focused and committed to protecting the health and safety of our employees and to ensuring the safe and efficient delivery of service to clients. ”
EnLink ended 2019 with a $ 1.75 billion unsecured revolving credit facility, on which only about $ 350 million was drawn, and no short-term debt maturities. EnLink’s unsecured revolving credit facility is backed by 21 leading global financial institutions, and 17 of those institutions are lenders of the EnLink term loan, which does not mature until december 2021. If capital markets remain difficult, EnLink has the option of repaying the term loan using the unsecured revolving credit facility, which matures in early 2024, without impacting the leverage metrics or calculations of restrictive covenants. EnLink’s first maturity on its senior notes is in the first quarter of 2024. Approximately 35% of EnLink’s outstanding senior notes have a remaining term of more than 20 years, and all of the notes outstanding outstanding are not guaranteed.
EnLink continues to maintain a diverse customer base across its asset platform, which includes large integrated clients and other blue chip counterparties. Approximately 80% of EnLink’s total revenue in 2019 was generated by blue chip counterparties or by customers who provided credit protections. EnLink has limited credit exposure related to its producer customers due to the structure of its collection and processing contracts and continues to closely monitor its working capital and credit exposure.
About EnLink’s Intermediary Companies
EnLink Midstream reliably operates a differentiated middle ground platform designed for long-term sustainable value creation. EnLink’s best-in-class services span the mid-level value chain, providing natural gas, crude oil, condensate and NGLs capacities. Our purpose-built, integrated asset platforms are located in major production basins and major demand centers, including the Permian Basin, Oklahoma, North Texas, and the Gulf Coast. EnLink’s strong financial foundation and commitment to execution excellence generate competitive returns and value for our employees, clients and investors. Based at Dallas, EnLink is publicly traded through EnLink Midstream, LLC (NYSE: ENLC). Visit www.EnLink.com to learn how EnLink connects energy to life.
This press release contains forward-looking statements within the meaning of federal securities laws. While these statements reflect the current beliefs, assumptions and expectations of our management, the matters discussed here involve certain assumptions, risks and uncertainties that could cause actual activities, performance, results and results to differ materially from those indicated here. Therefore, you should not rely on any of these forward-looking statements. All statements, other than statements of historical fact, included in this press release constitute forward-looking statements, including, but not limited to, statements identified by the words “expect”, “may”, “believe” , “will”, “should,” “plan”, “predict”, “anticipate”, “intend”, “estimate” and “‘expect” and similar expressions. These forward-looking statements include, but are not limited to limit, statements about directions, projected or anticipated financial and operating results, potential levels of common unit distribution or additional cost reductions, potential financial liquidity and flexibility, access to capacity credit agreements, capital expenditure plans, future operating results of our customers, future cost savings, profitability, financial metrics, operational efficiency and other benefits of cost savings e costs or operational initiatives, our future capital structure and credit ratings, our goals, strategies, expectations and intentions, and other statements that are not historical facts. Factors that could cause such differences or otherwise affect our financial condition, results of operations or cash flow include, but are not limited to (a) potential conflicts of interest of Global Infrastructure Partners (“GIP”) with us and the possibility that GIP may favor GIP’s own interests to the detriment of unitholders, (b) GIP’s ability to compete with us and the fact that it is not required to offer us the possibility of acquiring assets or additional activities, (c) a default on the GIP credit facility could result in a change in our control, could adversely affect the pricing of our common units and could result in a default under our credit facility. credit, (d) dependence on Devon for a substantial part of the natural gas and crude we collect, process and transportation, (e) developments that affect mater ially and negatively Devon or other customers, (f) negative developments in intermediary businesses which may affect our financial condition, results of operations and reduce our ability to make distributions, (g) competition for supplies of crude oil, condensates, natural gas and NGLs and any decrease in the availability of these products, (h) decrease in the volumes we collect, process, fractionate, or transport, (i) construction risks in our major development projects , (j) our ability to receive or renew required permits and other approvals, (k) changes in the availability and cost of capital, including due to a change in our credit rating, (l) changes in the availability and cost of capital, effects of existing and future government laws and regulations, including laws or regulations relating to hydraulic fracturing or climate change or other issues. environmental estimates, (m) operational risks, natural disasters, weather-related problems or delays, accidents, losses and other items beyond our control, and (n) impairment of goodwill, assets to long-term and investments using the equity method. These and other uncertainties, factors and applicable risks are described in more detail in the documents filed by EnLink Midstream, LLC and EnLink Midstream Partners, LP with the Securities and Exchange Commission, including the annual reports of EnLink Midstream, LLC and EnLink Midstream Partners, LP on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Neither EnLink Midstream, LLC nor EnLink Midstream Partners, LP undertakes to update any forward-looking statements.
The management team of EnLink has based the forward-looking financial information included in this document on certain information and assumptions, including, but not limited to, the budgets / forecasts of the producers to which EnLink has access as of the date of this press release and projects / opportunities that should require growth capital. expenses as of the date of this press release. The assumptions, information and estimates underlying the expected financial information included in the guidance information in this press release are inherently uncertain and, although considered reasonable by EnLink’s management team as of the date of its preparation. , are subject to a wide variety of business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the forecast financial information. Accordingly, there can be no assurance that expected results are indicative of EnLink’s future performance or that actual results will not differ materially from those presented in the forecast financial information. The inclusion of the forward-looking financial information in this press release should not be taken as a representation by anyone that the results contained in the forward-looking financial information will be achieved.
Investor Relations: Kate walsh, Vice-President Investor Relations and Taxation, 214-721-9696, [email protected]
Media Relations: Jill McMillan, Vice President of Strategic Relations and Public Affairs, 214-721-9271, [email protected]
SOURCE EnLink Midstream, LLC