DCP Midstream, LP
Q1 2017 Earnings Call Transcript

Published: 11 May 2017

[Operator:]

Good day, ladies and gentlemen, and welcome to the DCP Midstream First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce you host for today's conference Ms. Irene Lofland, Vice President of Investor Relations. Ma'am, please begin.

[Irene Lofland:]

Thank you, Vinn. Good morning, everyone and welcome to the DCP Midstream first quarter 2017 earnings call. Today's call is being webcast and the supporting slides can be accessed under our Investors section of our website at dcpmidstream.com. Before we begin, I'd like to point at that our discussion today includes forward-looking statements. Actual results may differ due to certain risk factors that affect our business. Please review the second slide in the deck that describes our use of forward-looking statements, and for a complete listing of the risk factors, please refer to the partnership's latest SEC filings, and the 10-Q that was filed yesterday. We will also use non-GAAP measures such as distributable cash flow, adjusted EBITDA and adjusted segment EBITDA, which are reconciled to the nearest GAAP measure in schedules in the appendix section of the slides. Wouter van Kempen, CEO and Sean O'Brien, CFO, will be our speakers today and after their remarks, we will be happy to take the questions. With that, I will turn the call over to Wouter.

[Wouter van Kempen:]

Thanks, Irene. Good morning, everyone, and thanks for joining us today for our first quarterly call for the newly combined DCP. As you recall, the new DCP is one of the largest NGL producers, natural gas processors, with a strategic footprint in the Permian Basin in this country. We are a leading integrated midstream service provider, with excess to the full energy value chain. Let me underscore a key thought. Our GMP assets are fully integrated with a downstream NGL and marketing businesses, offering our customers excess from well head [ph] to the NGLs markets. Today, DCP is a much larger, more diverse company, a must-run business with a large diversified asset portfolio, including our downstream integrated NGL pipeline assets which are tied to the Permian regions and key producing basins, including the DJ, the Delaware and Midland areas of the Permian and the Scoop and Stack areas in Oklahoma. Our integrated asset portfolio provides us with significant organic growth opportunities to extend our value chain and our strong emphasis on capital efficiency and operating leverage will drive growing cash flows. Our history reflects a strong and proven track record of delivering on our commitments. Two years ago, we recognized the headwinds that foreshadow the industry downturn and two corrective action to manage through its cycle. DCP continues to be an industry leader in safety and I am proud of how all of our employees remained focused on our DCP 2020 strategy to become the most reliable, safe low cost midstream service provider in any environment. And I will remind you that throughout it all in a period where many others have cut their distributions, we have and will continue to deliver on our promises, which translates into sustainable value creation. Now let's move to slide four, highlighting first quarter of the newly combined DCP. We recognized that the oil and gas industry would be in choppy waters in 2017 and as we have told you at the beginning of this year, we view this as a transition year for the industry. With the solid foundation that we have built, we are well-positioned to manage through this environment, to achieve our financial strategy. We started the year strong and delivered solid first quarter results on the heels of closing our combination transaction. As to the first quarter, we generated $161 million of distributable cash flow, which provided above one times coverage for the quarter based on our declared distribution of $0.78 per unit. And these results are due to our steadfast focus on operational excellence and I am really proud of our employees and the emphasis they place on operating reliably and safely every day. Our $550 million of in-flight expansion project underway are tracking on time and on budget and I will cover these in more detail in a minute. And looking forward, we are very excited about multiple strategic growth opportunities to continue to extend our value chain and optimize our footprint. These includes expanding Sand Hills even further to capture prolific Permian growth, having even more capacity to the DJ Basin and the opportunity, we announced at Kinder Morgan to develop the Gulf Coast Express Natural Gas Pipeline to further expand our integrated Permian position. We will also continue our focus on optimizing our asset portfolio to drive growth in areas where we have the strongest positions that means we may divest smaller non-strategic assets as well as idling underutilized compression of planned capacity. Now let's turn to slide five and talk about our growth focus. We have a tremendous opportunity to continue to grow around our expensive footprint. On this slide, we have outlined a visible pipeline of $1.5 billion to $2 billion of accretive largely fee-based growth opportunities over the next few years. Let me start with our downstream integration opportunities in the logistics and marketing segment. With a significant growth projections from producers in Permian, Delaware Basins, market growth from pipeline exports to Mexico as well as LNG exports, we believe there will be significant capacity demand for both natural gas and NGL takeaway. Sand Hills has been a great success story. In the near term our expansion to 365,000 barrels per day is underway and expected to come online by the end of this year and it's anticipated to ramp up quickly. We have multiple new supply connections, backed by blend dedications on the construction which will bring an incremental NGL volumes to the system in 2017 and beyond and provide clear support to the pump expansion project that is currently underway. We sent Sand Hills up to be a producer friendly pipe that allows our customers to flexibility and accessibility to take their NGLs to fractionators or other delivery points of their choice along the Gulf Coast where we're seeing growing demand. With continued NGL volume growth in the Permian region we're advancing the further expansion of Sand Hills from 365,000 to 550,000 or more barrels per day. We're looking at a phased approach which could lead to incremental investment net to our interest but to $900 million. We're also excited about prospects to strengthen our integrated downstream value chain. DCP's presence in asset portfolio in the Permian basin has provided us with a natural opportunity to partner with Kinder Morgan to develop needed infrastructure for residual gas takeaway for existing and prospective producer customers. In April, we signed a letter of intent with Kinder Morgan to develop Gulf Coast express and proposed 430 miles the intrastate natural gas line providing 1.7 bcf per day of capacity from Waha to Agua Dulce expected to be in service in the second half of 2019. We have received great responses to the non-binding open season and we believe this pipeline provides a very welcome competitive alternative and diversity to the market place. The Gulf Coast express pipeline affords great aim for connectivity and market functionality throughout integration with Kinder's existing pipeline and storage network. And it provides Permian producers and other shippers a very attractive option from two strong companies with proven track records. Now let's shift to the DJ Basin. Our 800 plus million a day of capacity in the DJ Basin has been running full for some time. As I spoke about last quarter we and select key producers have formed a cooperative development plan for DCP will construct new plans and associated gathering to meet capacity needs in the basin. With project in flight and in development our total capacity at the DJ Basin is expected to increase by 50% to 1.2 bcf a day over the next two years. This is driven by our $200 million a day Mewbourn 3 plant that will be in service in the fourth quarter of 2018. Incremental capacity of $40 million a day this summer via bypass project and the potential for another $200 million a day plant currently in the development phase for 2019. And these projects along with multiple of other opportunities write under our feet all underscore the strength of our footprint. These projects are predominantly fee based they provide strong returns with 5 to 7 times multiple and are at much-much lower risk. And with these organic opportunities as we sit here today, we have clear line of sight to $1.5 billion to $2 billion of growth projects. So, with that, Sean will now review our first quarter 2017 results.

[Sean O'Brien:]

Thanks, Wouter, and good morning. Before we go through the numbers, I first want to go over a couple of items to ground you on the newly combined financials and expanded operating statistics. The reported results, I'll be speaking to today reflect a combined entity for both the first quarter of 2016 and 2017. Prior periods have been recast to reflect the results of the partnership as is but always own the DCP business contributed at the beginning of the year similar to the pulling method. We've reset our reporting segments around our key businesses with DCPs assets now proved into a gathering and processing segment and logistics to marketing segment. Additionally, we've included a new schedule for the combined company in the Appendix section of these slides that provides additional details around our segments. Now, let's turn to our first quarter results. During the first quarter of 2017, we generated adjusted EBITDA of $245 million. First quarter 2016 adjusted EBITDA of $307 million included a non-recurring fiduciary settlement of $87 million. Excluding this item, adjusted EBITDA was up 10% from the first quarter of 2016. First quarter 2017 BCF was $161 million resulting in distribution coverage ratio of 1.04 times and our bank leverage ratio was 4.6 times both in line with our guidance. Now let's move to our segment results on slide eight. Our gathering and processing segment adjusted EBITDA of $211 million increased 27% after adjusting for the non-recurring fiduciary settlement I just mentioned. The increase reflects higher commodity prices net of hedges continued solid performance by our north region largely due to higher unit margins and stronger NGL recoveries, higher fee margins from our contract realignment efforts in the Permian and mid-continent regions and a lower cost base due to our ongoing DCP 2020 efficiency efforts. These increases were partially offset by adverse weather impacts in Q1 and lower volumes which I'll discuss in ore details on the next slide. Our logistics and marketing segment adjusted EBITDA was $92 million in the first quarter of 2017. The decrease from the first quarter of 2016 reflected of lower cash distributions from our NGL pipeline joint ventures primarily related to planned and unplanned pipeline maintenance on Sand Hills in December 2016 which adversely impacted the first quarter 2017 distribution by approximately $10 million as cash is paid on a one month lag. Distributions were also impacted by working capital timing which we expect to come back over the course of the year. Additionally, our Q1, 2017 gas marketing margin was lower driven by a very strong Q1, 2016 performance last year. Our full year outlook for the logistics and marketing segment remains strong driven by our Premier NGL pipeline positions and continued growth outlook. Looking to the second quarter for the company as a whole, I want to point out that the second quarter is settling up to be slightly lower than the first quarter due to planned maintenance concentrated more in the Q2 in the summer months coupled with slightly weaker commodity outlook offset partially by expected improved performance from our marketing and logistics segment. Also keep in mind we have several growth projects coming online in the second half of 2017 which will drive associated earnings and cash flows. All-in-all we feel good about executing on our near-term strategy and are on target to meet our 2017 guidance. Now moving to slide nine, we show our volume trends, capacity utilization of rig count activity around our footprint. As we previously discussed, we have forecasted volumes to be flat to down in 2017 and as expected our first quarter 2017 G&P volumes were lower compared to the first and fourth quarters of 2016. This is largely due to the delayed impact of lower drilling through 2016 and severe weather in January, which temporarily impacted volumes by about 5% in both our Mid-Continent and Permian regions. In the Eagle Ford, volumes have held steady over the last couple of months and while still little early to call it a trend we are cautiously optimistic that we're nearing the bottom. As part of our asset optimization strategy and in an effort to continue to drive efficiencies we ideal the $90 million a day underutilized plant in Eagle Ford first quarter to help offset volume declines with cost savings. As we look forward to the remainder of the year, starting in late 2016 rig counts turn the corner and we've recently been seeing increased drilling around our footprint which is the leading indicator to future volume growth. Again, we view 2017 is a transition year for our industry and we continue to be encouraged by the positive sign post we are seeing. Moving to slide 10, let me provide you an update on our hedging financing and liquidity. With our focus on risk we continue to manage commodity exposure through proactively layering on hedges to stabilize cash flows and provide downside projection. And our 2017 estimated margin is currently 73% fee-based and hedged. During the beginning of this year, we saw some strength in the forward commodity curve, so we took the opportunity to layer on some additional gas hedges for the first quarter of 2018 and NGL hedges for the remainder of 2017. On the right side of the slide you can see that we have ample liquidity and financing flexibility. We continue to delever and strengthen our balance sheet and we're off to a good start to achieve our 2017 distribution coverage ratio of 1.08 times or better and our leverage ratio of less than 4.5 times. During the first quarter of 2017, we amended our credit facility upsizing into approximately $1.4 billion and strengthening our covenant package, which provides us with headroom and flexibility to manage and fund our disciplined and expanding growth program. Our bank leverage calculation was amended to net unrestricted cash against our outstanding GAAP. And as a reminder, our leverage calculation excludes to $550 million of subordinated notes from our debt. At the end of the first quarter, there were no borrowing outstanding on a facility and we had approximately $175 million of cash on hand coupled with $350 million available under our ATM program. All this liquidity is available to fund our growth and or repay the portion of our December 2017 $500 million debt maturity. So, all-in-all we continue to strengthen our balance sheet and plenty of flexibility as we look at our financing options. With that, I'll hand it back over to Wouter.

[Wouter van Kempen:]

Thanks, Sean. On slide 11, let me summarize and make to me excited about the opportunities I had of us. Last quarter we describe for you a powerful distribution growth and the operating and financial strategy that will guide us. Grounded and improving track record of delivering on every single one of our commitments to you. We are one of the largest NGL producer in natural gas processors with a strategic footprint in a premier basin in this country. We already approving how well we can execute and manage downturn by adding fee based margins, strengthening our balance sheet, efficiently reducing our cost base and operating more reliably. At least into our 2017, the industry is in a transition year, and we are encouraged but at the same time cautious. Now how the industry outlook has change? We are excited to pivotal growth but we will remain disciplined in our approach. We have outlined for your visibility into tremendous low risk, high return, predominantly fee based growth opportunities, all improving areas around the footprint which will extend the value chain and further integrate our GMP and logistics businesses. And we have optimization opportunities and while the one of the strongest and well diversified asset and earnings portfolios in the industry. This translates into sustainable earnings growth and value creation for our unit holders. We look continue to drive focus on leveraging our asset footprint, operating safely and reliably and listening to our customers. And once again I want to thank all of our employees for their steadfast commitment which is may DCP a leader in environmental health and safety. And with that, I'd like to thank you interest in DCP and now Vance, we are ready to take questions.

[Operator:]

Thank you, sir. [Operator Instructions] Our first question is from Jeremy Tonet of JPMorgan. Your line is open.

[Unidentified Analyst:]

Good morning, thanks for taking my questions guys. This is Rahul [ph] on for Jeremy. Firstly, like I just wanted to ask you about the major drivers that will visit the cash plus to midyear 2018 plus growth obviously, you reiterated yesterday? And also, curious how much of this is leveled so the commodity price recovery given your integrated footprint?

[Sean O'Brien:]

Yes, I mean there is a couple of think we think about 2018, commodities clearly one, we definitely if you look at the outlook that we laid out and some of discussions we've had, we see '18 being little more constructive than '17, so but not crazy but definitely improving some on the commodity side. More importantly, I think as we think about hitting those goals in '18 I think that we are focused on our continued efficiency through the assets that we owned, continued cost savings, continuing to run reliably and then more importantly, we've got some growth coming on like this year obviously type of the DJ, type of Sand Hills, we'll get a full year bank growth as we think about 2018. And broader I thought that we do great job as growing out some of the more exciting stuff that could be down in the pipe, that could be also drive earnings in '18. So, I think it's - you think about it, it's those types of items are more constructive, commodity environment, continued execution on the things that we are doing here every day and then obviously, this growth outlook that continues to strengthen as we move forward.

[Wouter van Kempen:]

Yes, and maybe to, this is Wouter, maybe to add to that unlike there is some and if you think you look at how we not only set up 2017, but also 2018 and like 2017 for us we didn't put a lot of backend loading in that and we didn't put a lot of volumes in that it has to coming towards the end of the year Q3 or Q4. We are pretty level loaded 40 year as a whole, we see opportunity that might bespoke about for a volume outlook is but we decided not to layer those in. Again 2017, we believe is going to be a fairly choppy year some ups some downs related out you earlier in the year when we are announcing transaction in January and I think so far that's definitely coming to - where our January and February were relatively strong from a pricing point of view and then March and April are seeing a little bit of attraction. So, we think there is opportunities for us to kind a get more volume towards the backend of the year. We did lay them into in our budgets and then in our outlooks. Things like ethane recovery which continues to be tremendously important for us and a great opportunity we didn't layered those into our base budgets and what if they come to - it's a good upside for us but there is no reason for us to have to get those to make our numbers.

[Unidentified Analyst:]

Got it, that's helpful. And also, kind of give some incremental color on the sequential declines in Permian volumes, is it like the one-time like a 1Q '17 and how should we think about that in the 2Q into the back half of this year?

[Wouter van Kempen:]

So, in terms of the Permian volumes yes, I mentioned there was about a 5% hit in January again with winter storm, that went through affected our mid-continent our Permian region. That did dampen some volumes in the Permian a little bit again about 5% in Q1. We see that I think the guidance we gave earlier in the year we're still holding to around the Permian region that we saw flat to slightly growing through the remainder of the year. And I would tell you that seems to be a still intact as we sit here today.

[Unidentified Analyst:]

Got you. One last clarification if I may, on your slide deck on slide nine, you've talked about the rig count in the DCP's area. So, are these rigs within the all those numbers or are these within your dedicated acreage or is that like specific to the region like I'm just want to make sure.

[Sean O'Brien:]

Yeah, these are specific to our dedicated areas, the rig count that we're showing on slide 9. Our DCPs area obviously if you look at the region as a whole, you're going to see a similar trend, but we thought it more potent to focus really just on the specific areas that DCP has assets.

[Unidentified Analyst:]

Got you. So, it's a reasonable assumption to I assume like most of the volumes from this will be going through your asset footprint like we can see and this is what would drive the back half of the year the volumes?

[Sean O'Brien:]

Yeah, I mean yes, I mean it's not one-for-one it is our areas there is obviously other midstream companies in the areas, but there is a correlation I think as what's you're headed. And obviously, we think it's good to have increased rig counts right around our assets, that should translate as we've indicated at the leading indicator that should translate into incremental volumes. We're not going to get every one of them obviously, but in terms of market share some of that should come our way.

[Unidentified Analyst:]

Got you. That's really helpful, guys. Thank you.

[Operator:]

Thank you. Our next question is from Arshad [ph] of UBS. Your line is open.

[Unidentified Analyst:]

Hi good morning guys. Sorry, there is some background noise. Just a couple of quick clarifications and really just follow-ups to the previous questions, so just to clarify you were saying that before Sean, so those rigs are specific to the region there you have processing plant then you expect to get a percentage of market share from that? Do you have a sense what kind of market share you expect to take at those rigs?

[Sean O'Brien:]

At the end of - we've done some modeling obviously having rig counts increased versus what we saw in '16, the massive declines is much more constructive environment. We've done some modeling it's little early to tell on as we've indicated rigs can be they're good indicators they're leading indicator it takes time for those to translate into volumes. We are looking in some of the regions where we've seen - where the rigs when they came off obviously had massive adverse impacts on the volumes. We would hope some of that would come back. We're still too early to tell, we'll continue to monitor a good signal and obviously, a lot of the regions where we have some capacity such as the Eagle Ford. So, we're hoping as that we're indicated we're not planning on it as huge move to the remainder of this year. But back to that earlier question of '18 if we can see some constructive movement it should help the volume profile as we move into '18.

[Unidentified Analyst:]

Okay. And then obviously, the Permian volumes declined in the quarter. You've sort of addressed that with respect to some of the weather issues and so forth. But I guess just a question both for Permian and for the Eagle Ford as well as due to your shelling at Permian region rig increase. When you look at let's say volumes on a daily basis at the beginning of the quarter versus the end of the quarter versus where you are today, are you already starting to see that churn there I mean could we see excluding the negative weather impact to the Permian, do we see it running even higher in 2Q, If I sort of look at the end of the quarter run rate versus the [indiscernible] run rate any color with respect to that?

[Sean O'Brien:]

Yeah, I can give you I think there's two areas for that I'll start with the Permian definitely we saw a rebound that 5% came back - in the Permian when I go from two-year point from January to March and obviously, we're having some works in April, so I think that trend is continuing so we definitely saw a rebound in the Permian. You've heard a little bit different. In our comments around the Eagle Ford we indicated we saw a kind of flattening out for a couple of quarters so I wish I can call that a trend that we've hit the bottom but it's nice to see a few months I said quarters then months nice to see a few months where the Eagle Ford is kind of flattened out and we see that trend relatively holding as we look at March and April as well. Not seeing again back to recap question we're not seeing any movement on the uptick yet in Eagle Ford VI, V. we're cautiously optimistic that we've hit the bottom there Permian definitely rebounded from the lower volumes we saw in January.

[Wouter van Kempen:]

And then maybe, to add to that it's almost what we're going to see laying out the processing side of the house. If you look at the logistic side of the house from the NGL transportation unlike we're seeing good increases on the pipeline so that is something where we're seeing pretty nice volumes. We're optimistic around that.

[Unidentified Analyst:]

Okay. And then one final question you guys have done a very good job over the last two years it will bring down breakeven price you continue to make cost operational prudent. Did we get at the end of that and that really you haven't proved in this quarter as well so like when do we sort of get to the end of that, when did this sort of flatten out or do you actually still have more to go and wish to continue to taking about that?

[Wouter van Kempen:]

I appreciate you saying this I do have to say I agree I'm very proud of what the team and all of our employees have done to continue to look at how can we be more efficient as a company while at the same time and this is very important, being more reliable and being more safe. Because we all know taking cost out in and by itself is something that is relatively simple, you can do that. The real art lies into how do you take cost out but become more reliable for your customers and become a safer company and we've done both of those. I'm very proud of what our teams have done. If you take a look at where we're sitting here today I think there continues to be opportunities unlike to me making the company more efficient is something that is never done so we continue to do things around how we utilize technology, how we utilize efficiencies, how we're trying to do different processes like maintenance work process and things to continue to drive cost out of the business and become more productive and again do that at the same time while being more reliable, while being more safe and I think some other things that you're seeing around this reliability [indiscernible] and not everybody always going to put these things together is things like maintenance capital as we're more reliable company, we've spent more time upfront making sure assets running well. We have an opportunity to do last overall maintenance and that is something that's obviously very attractive and is also reflected in our numbers.

[Unidentified Analyst:]

All right. Perfect. Thank you very much for the color, guys. Really appreciate it.

[Sean O'Brien:]

Thank you.

[Operator:]

Thank you. [Operator Instructions] Our next question is from Elvira Scotto of RBC Capital Market. Your line is open.

[Elvira Scotto:]

Hi, good morning. Just wanted to ask about the Gulf Coast express project with KMI couple of questions around that I guess, number one, what's needed to get that project moving forward? Number two, what level of contractual commitment is DCP contemplating and then number three, what level of ownership interest is DCP contemplated?

[Wouter van Kempen:]

Yeah. Elvira, thanks for those questions. First and foremost, we are very excited about this project and my Gulf Coast express it's another way for us how we play the Permian basin and we are not the new DCP it's not just a gathering and processing company. If you take a look at our G&P position on marketing and logistics position, it's fully integrated company so we're showing things around our Sand Hills, our thinking about doing another expansion on top of the one that we're currently doing. Now we're talking about how can we leverage a great position that we have the great expertise and we have the great expertise and position a Kinder Morgan has and combine that into the Golf Coast express project. We are very excited about how the open season when so far, I think it the open season was really, really well a lot of interest in the pipeline and I think it clearly going to show it's that the market A needs this pipeline, B believes that the combination of Kinder Morgan and DCP two very strong companies are actually companies that can bring this project to provision. Over the next couple of months, we will be working together with Kinder and looking at how can we convert that open season into binding contract. At the same time, we are taking with Kinder about the amount of gas and the level of gas and we will bring to the pipeline and level of commitment and both are commence with ownership position. So, I can't give you all the detail here just yet other than saying that what we are wearing very optimistic around the how the open season came in, how the market is looking at this new pipeline and the likelihood that company Kinder Morgan and DCP together can executing this project.

[Elvira Scotto:]

Okay. That's really helpful. My second question is around growth, so you highlight some of these other potential growth projects which could be sizable growth CapEx. How do you balance or how are you thinking about financing this growth in terms of kind of balancing your distribution coverage, your leverage, distribution growth? Is this - would you use more internally generated cash flow for this growth or would you kind of go back to for those 50-50 kind of debt equity financing, just sort of your stock process on financing this growth and leverage and coverage?

[Sean O'Brien:]

Hi, Elvira, this is Sean. Couple things obviously, we are excited about the growth as we seat here today, we are seeking on about $200 million of cash, there is businesses continue to generate more cash flow. So, we are excited the balance sheet we have nothing drawn on a $1.4 billion facility and I mentioned we do have still $350 million on that ATM program. So, in terms of starting point, we're starting from a very good spot. We've been - as you know when we grew prior to the downturn, we were very active out in the market. It's a very seasoned capital markets company. And I think the reason we were so successful I think we've raced on average about $1.5 billion a year back during the growth period, one because of the quality of the projects. So, as you think about where how we'll be go about financing, 50-50 is in the both part sometimes we targeted a 45-55 structure. But at the end of the day it's really how strong or the projects that we will be out financing in the capital market. And as we were excited, when you think about things like you just talk about Kinder you think about the Sand Hill was expansion the projects up in the DJ, these are very and we give you the range of 5 to 7X so they are very strong multiple projects that are fee based in many cases, so we are adding to our fee base portfolio addition to the strength of our integrated asset base. I believe those are great parties to the lot of finance when we will need to and they will intern continue to drive obviously, our ability to grow to maintain the distribution and ultimately helpfully growing. So, I think that's what we said that is an organic project, they have staged capital needs versus big acquisition to 15x or 20x that you've going to come up with money all at once. So, it gives us great line of site and gives us a lot of flexibility on how we throughout the finance and I feel very strongly that these parties will be viewed when we do need to go out finance them well by the investment community.

[Elvira Scotto:]

Okay. Thank you. And then just my final one, and I don't want to - early to tell, but can you talk about any potential impact following the unfortunate incident in Firestone, Colorado and then the sort of a notice to operators from the state?

[Wouter van Kempen:]

Yes, like first and for most our Firestone community, our infrastructure was not involved with this incident and it did not have and we do not proceed any material impact to our operations in the DJ Basin. But most importantly unlike we always hold ourselves to high standards about safety and in the abundance of caution we have taken a number of different actions beyond compliance to provide additional piece of mind in my discussions with our large customers and the large producer operators in the basins everybody is working very hard and I think most or all of the producers are doing all of their work to make sure they get to in place that the governors, the request of the governor put out is going to be satisfied here in very short order.

[Elvira Scotto:]

Thank you. That's all I had.

[Wouter van Kempen:]

Thanks.

[Operator:]

Thank you. At this time, I show no other questions in queue. I'll turn back to Mr. Van Kempen for closing remarks.

[Wouter van Kempen:]

Thank you Vinn, and thank you all again for joining us today. If you have any follow-up questions, please give Andrea or Irene a call and have a great day.

[Operator:]

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.