Enable Midstream Partners, LP
Q3 2015 Earnings Call Transcript

Published: 7 Nov 2015

[Operator:]

Welcome to the Enable Midstream Partners Third Quarter 2015 Earnings Conference Call and Webcast. [Operator Instructions] It is now my pleasure to turn the floor over to Enable's Senior Director of Investor Relations, Mr. Matt Beasley. Sir, you may begin.

[Matt Beasley:]

Thank you, Zack. Good morning and welcome to Enable Midstream Partners' third quarter 2015 earnings call. I'm joined on today's call by our President and CEO, Pete Delaney; our Chief Financial Officer, Rod Sailor; our Chief Commercial Officer, Paul Weissgarber, as well as other members of management. Statements made during this call that include Enable Midstream's expectations or predictions should be considered forward-looking statements and are covered by the Safe Harbor provision of the Securities Act of 1933 and 1934. Actual results could differ materially from our projections, and the discussion of factors that could cause actual results to differ from our projections can be found in our SEC filings. Also, please see the appendix of the presentation for a reconciliation of non-GAAP financial measures. With that, we will get started, and I will turn the call over to Pete Delaney.

[Pete Delaney:]

Thank you, Matt. Good morning, everyone, and thank you for joining us for our third quarter call. I would like to start off with a few comments about our recent announcement naming Rod Sailor as Enable's President and CEO effective January 1, 2016. At the time of my appointment as interim CEO this past May, committee of the Board had been formed to hire a search firm to conduct a national search for my replacement with an expectation that such a process would conclude prior to year end. While Rod was identified as a candidate to start, he went through the same evaluation process with interviews and testing as the other external candidates. At the end of a very thorough and successful search, the committee recommended the Board unanimously selected Rod as CEO. In my role as interim CEO, I've worked closely with Rod and wholeheartedly support that decision. Rod has demonstrated to me CEO-level leadership throughout the last few months; he led our strategic planning process with the Board in recent months. He has a vision for this company, has great experience in this sector, and will keep us moving ahead. And we are moving forward. We continue to grow our volumes in this commodity environment. We are seeing a lot of activity in our core SCOOP area and have announced some new transmission and storage projects. Now I would like to turn the call over to our CEO elect and CFO, Rod, to share some of the highlights from the quarter. Rod?

[Rod Sailor:]

Thank you, Pete, and I am very humbled and honored to be named the next CEO of Enable. I'm excited to continue executing on our growth strategy and building on our recent successes. We are focused on the right areas for growth, capturing new business along our system, expanding into new basins or seeking expansion in new basins, expansion of our transportation and storage system, trying to expand down the value chain. But strategy is more than that; it is continuous improvement and executing on our business plan, focusing on cost management and improving on our capital efficiency. We see significant opportunities ahead of us, and we're going to capture those by focusing on safety, reliability, customers, lowering our costs, and improving how we deploy capital. I feel very fortunate to be surrounded by a strong senior leadership, a great team of dedicated employees, and strong assets in key areas. Turning to the presentation, Enable Midstream has continued to deliver on its growth strategy, despite headwinds in the current commodity market. Our recently announced third quarter distribution of $0.318 per unit represents the fifth consecutive quarterly distribution increase since the IPO. With this quarter's increase, Enable is now at the low end of our distribution growth guidance for the year. Producer remain active along our footprint and we continued -- and with continued volume growth in the Anadarko basin, which has resulted in the sixth consecutive quarter that Enables per-day natural gas process volumes have increased. Enable has recently seen significant commercial success in both our gathering and processing, and transportation and storage segments. In our gathering and processing segment, we were recently awarded a long-term, fee-based business from a three producers in the Anadarko basin, with dedications totaling $380,000 gross acres. In our transportation and storage segment, we were recently awarded almost 300,000 decatherms per day of additional firm, fee-based natural gas transportation business to serve a natural gas fired power plant and a large local distribution company. Now, to discuss our commercial activities in further detail, I will turn the call over to Paul.

[Paul Weissgarber:]

Thank you, Rod. We are excited about continuing to execute our growth strategy under your leadership, and now let me share some of our recent successes. Turning to slide 5, we highlight some of the gathering and processing achievements in the Anadarko basin. As Rod mentioned, we were awarded new long-term gathering and processing contracts, with additional dedication totaling 380,000 gross acres in the SCOOP, Oklahoma Deep Mississippi, and Granite Wash plays. In addition to adding to our acre dedications, we continued to expand our asset footprint in the basin during the third quarter by adding 6,900 horsepower of compression and 1,000 barrels per day of condensate stabilization. We continue to make investments to support our producer customers' growth and enhance our leading asset position in the SCOOP, STACK, and Cana Woodford plays. As we have previously announced, Enable is adding an additional 400 million cubic feet per day of processing capacity in the Anadarko basin. The need for this additional capacity is driven by continued volume growth from the prolific plays in the basin. These growing volumes in the Anadarko basin are anchored by the continued rig activity, which you see on the next slide. Enable has a substantial footprint in many of the high-profile plays in the Anadarko basin, including the SCOOP, STACK, Cana Woodford and Greater Granite Wash plays. Within those plays, 26 to 28 rigs are currently drilling wells that are scheduled to be connected to Enable's gathering and processing systems. We are encouraged by strong current production and the expectation for continued volume growth with Wood Mackenzie estimating that producers will invest $63 billion in the SCOOP, STACK, and Cana Woodford plays over the next 10 years. The next slide shows how well Enable is positioned to capture the volume growth resulting from this producer investment. Since January of 2014, Enable has connected 86% of all horizontal oil and gas wells completed in the core SCOOP area in Grady, Garvin, and Stephens Counties in Oklahoma. Enable has been able to achieve this significant market share in the play through strong customer relationships, a strong customer focus, and a commitment to investing in assets to serve our customers. You can see many of the top producers we are proud to serve in the play on this slide. Moving on to our Bakken crude-gathering segment, our crude gathered volumes continue to grow, as crude-gathered system volumes on our Bear Den system are approaching the system's stated capacity of 19,500 barrels per day and crude gathered volumes on the Nesson system, which is a 30,000 barrels per day crude-gathering systems, continue to ramp up. We now estimate that construction on our Nesson system will be complete in the second quarter of 2016. Enable is fortunate to have XTO as a strong customer in the Bakken, and a footprint that covers the most active counties in North Dakota. In the Ark-La-Tex and Arkoma basins, Enable continues to benefit from significant fee-based minimum volume commitments and guaranteed return contracts. In the Ark-La-Tex basin, we continued to leverage our assets to support the growing need for condensate processing in East Texas and Northwest Louisiana. In the Haynesville, recent asset sales are driving increased activity, with three rigs currently active in the play that are currently dedicated to Enable. Enable's customers in the Haynesville hold acreage in the quarter of the play, which we believe will drive activity in the play, even in this lower commodity price environment. Turning to the transportation and storage segment, Enable continues to focus on supplying end-user markets in and around our existing footprint. Recently, Enable was awarded an additional 300,000 decatherms a day of firm, fee-based natural gas transportation business, serving a natural gas power plant and large local distribution company. Our previously announced Enable Gas Transmission expansion has received commitments in excess of 175,000 decatherms per day, and it is expected to be in service during the second quarter of 2017. In addition, our Bradley Lateral project on EGT is expected to be completed in the fourth quarter of this year. The EOIT intrastate transportation system in Oklahoma continues to see increased, interruptible transportation fees as a result of increased Oklahoma production and demand for transportation services. Finally, Enable continues to develop natural gas takeaway solutions for customers in the Anadarko basin. As Rod mentioned earlier, Enable has executed on its growth strategy even in the current market environment. Enable continues to capture organic gathering and processing opportunities in our core basins, as demonstrated by the recently awarded acreage dedications in the Anadarko basin. Enable also continues to capture additional supply market demand on and around our transportation system, as demonstrated by the recently awarded transportation business, serving both a power plant and a local distribution company. These new opportunities all add up to our significant fee-based margin profile and further extend the midstream value chain from the wellhead to end users. This concludes my remarks, and I will now turn the call back over to Rod to discuss third quarter results and outlook.

[Rod Sailor:]

Thank you, Paul. Again, turning to our operating statistics, we gathered 3.17 TBtu per day of natural gas on our gathering systems during the quarter. This was a decrease of 5% compared to third quarter 2014. But the decrease in gathered volumes was primarily due to lower gathered volumes in the Ark-La-Tex and Arkoma basins, partially offset by higher gathered volumes in the Anadarko basin, resulting from increased rich gas production. Most of the decrease in Ark-La-Tex and Arkoma basins are expected to be offset by payments under minimum volume commitment contracts. Our natural gas process volumes were 1.87 TBtu per day for the quarter. This was an increase of 17% compared to third quarter 2014, while NGL production increased 23%, condensate sales increased 32% compared to third quarter of 2014. The growth in process volumes, NGL production, and condensate sales reflects producers' rich gas activity in the Anadarko basin, as well as we continue to see increasing liquid content in the gas that we are processing. Crude oil gathered volumes increased by over 12,000 barrels per day compared to third quarter 2014. This increase was driven by completion of our Bear Den system and the continued connection of new wells to the partnership's crude gathering systems. In our transportation and storage segment, total transported volumes increased by 2% compared to third quarter 2014. Intrastate firm and tracking capacity was down 11% and intrastate transported volumes were up 13%. The decrease in firm intrastate contracted capacity was primarily related to contract expirations on our EGT interstate pipeline, while the increase in interstate transported volumes was driven by the natural gas volume growth we continue to see in the Anadarko. Moving to our third quarter results, I would like to take just a minute to address the $985-million net loss for the quarter. The net loss reflects a non-cash impairment of $1.1 billion resulting from $1.87 billion non-cash impairment of goodwill and $18 million non-cash impairment of long-lived assets. The goodwill was impaired, in the gathering and processing segment, the goodwill that was impaired in our gathering and processing segment was primarily related to goodwill created upon Enable's formation in May of 2013, which was considered a business combination for accounting purposes, with the partnership considered the acquirer of innajets [ph], while the goodwill that was impaired in our transportation storage segment was related to certain acquisitions in 1997 of the predecessor to the partnership. Additional key financial results are our gross margin was $359 million for the third quarter, a decrease of $5 million compared to third quarter 2014. The decrease in gathering and processing gross margin was primarily related to lower commodity prices, while the decrease in transportation and storage gross margin was primarily the result of the lower firm transportation revenues as a result of the previously mentioned EGT contract expirations. Operation and maintenance expense was $130 million for the quarter; this was an increase of $2 million compared to third quarter 2014. The increase was primarily due to costs associated with our workforce reductions. Adjusted EBITDA was $221 million for the quarter, a decrease of $10 million compared to the third quarter 2014. The decrease in adjusted EBITDA was primarily due to decreased growth margin and increased operations and maintenance expense. Distributable cash flow for the quarter was $153 million. This was a decrease of $8 million compared to third quarter 2014. The decrease in DCF is primarily due to lower EBITDA and higher adjusted income expense in the quarter. Finally, expansion capital expenditures were $157 million for the quarter, compared to $201 million for third quarter 2014. As mentioned, the Board of Directors of our general partner declared a quarterly cash distribution of $0.318 recorded on all outstanding units and subordinated units for the third quarter. This represented an increase of approximately 5.1% over the third quarter of 2014 distribution. Distribution will be paid November 13th to unit holders of record at the close of business on November 3. Now, I would like to provide an update on Enable's outlook. Enable's 2015 outlook remains unchanged from what was provided last quarter, although we do expect to be at the lower end of that guidance range. Our 2016 and 2017 outlook has been revised since our last quarter call to reflect the decline we have seen in commodity prices and expectations for lower prices for a longer period of time. It also reflects the potential for a further decline in producer activity, and in this environment, we think it's very important to focus on maintaining strong coverage. And with that, we are bringing down our distribution growth guidance to the lower end, or 3% of the range for both 2016 and 2017. On the next slide, we have provided an updated outlook for expansion capital. For contracted expansion capital, we have pushed $100 million of capital from 2016 into 2017 from our previous guidance. This really reflects a shift in volume timing, and we continue to actively manage our capital program. We have the ability to scale our capital program upwards and downwards to match what we see a customer's needs for next year. Next, I would like to take a moment to review Enable's fee-based and hedged margin. We continued to target fee-based contracts on a firm basis. Enable also has contractual provisions in certain of its contracts that protect against low commodity price environments and volume decreases. For 2016, for commodity sensitivities, we anticipate a 10% change in natural gas and ethane prices would result in approximately a $5 million change in gross margin, while a 10% change in natural gas liquids, excluding ethane and condensate prices, would result in approximately a $3-million change in gross margin. The pie chart at the right of this slide shows our fee-based margin profile for 2016. As you can see, in 2016 we expect about 90% of our gross margin will be either fee-based or hedged. Finally, I would like to spend a minute and highlight why Enable is and will continue to be a compelling investment opportunity. Enable continues to add new business, despite the challenging market environment, as evidenced by our announcement today on significant new organic projects on both the gathering of processing side, and the transportation and storage segment. Enable's large-scale integrated assets are located in some of the best areas of the best basins and are backed by large, well-capitalized customers. As Paul mentioned, strong activity continues around our footprint and Enable continues to be the leading provider of natural gas gathering and processing in the SCOOP. A high percentage of our margin is derived from fee-based or hedged positions. This is driven by significant transportation and storage business, as well as significant firm and fee-based gathering and processing margin. The projects we announced today further add to our fee-based margin profile. Enable has investment-grade metrics, substantial liquidity, and we continue to see strength in the current market environment. Finally, in the current market environment, we are very focused on efficiency. As I mentioned earlier, we continue to scale our capital deployment based on our customers' needs, and we will continue to focus on realizing cost savings in our operations and maintenance expense and capital expenditures. That concludes my prepared remarks. I would now like to turn the call back over to Pete.

[Pete Delaney:]

As this is my last earnings call as CEO, I would like to take a moment to thank all the employees at Enable for their continued dedication and hard work. It has been a privilege to be part of the Enable management team. I look forward to continuing to work with Rod to effect a very smooth transition and look forward to his leadership at Enable. The operator will now open the call up for questions.

[Operator:]

[Operator Instructions] Ali Agha, SunTrust.

[Ali Agha:]

First question, just to be clear, when you provide us the sensitivities EBITDA from gas and NGL [ph] price moves, is that specifically just looking at the price move, or are you factoring in some volume changes in that as well when you come out with those sensitivities?

[Rod Sailor:]

No, it's really just a price move.

[Ali Agha:]

Okay. Related to that, when we look at the forward gas prices for 2016 and 2017, they are still significantly below what the assumptions are, new assumptions for gas for 2016, 2017. How should we think about that, again, from a volume perspective as well? Would the impact be greater than the sensitivities would imply as a result of that?

[Rod Sailor:]

First off, I'd say I don't think they are significantly below prices, but I think we have factored, as I mentioned in my remarks, we have factored what we think is the anticipated reaction from producers in the current price environment into the bottom end of our volume range.

[Ali Agha:]

Okay. Okay. That's helpful.

[Rod Sailor:]

And again, I would also point out when you're talking about the sensitivity, don't forget we have a very nice hedge profile for 2016.

[Ali Agha:]

Yes. And on slide 13, when you gave us your updated outlook numbers, when we look at 2017, are there major moves in maintenance CapEx or interest expense to factor in? So, if you're thinking about the distributed -- distributable cash flow for 2017, should it be fairly ratable to your EBITDA profile or are there other big moves to think about when we're thinking about distributable cash flow?

[Rod Sailor:]

We're not providing specific detail on 2017 for maintenance capital. We are -- continue to be very focused on reducing maintenance capital. We have taken a very hard look at 2016. 2017 is probably going to be a more normalized number, but again we're not giving any specifics on that. Again, I just want to be sure we covered off your volume question. Again, we tried to factor in, in our revised guidance, what we think will be maybe further producer impacts in this commodity environment. So we've try to really design our outlook around things we have line of sight to.

[Ali Agha:]

Okay. My last question, as you're looking at 2017, can you give us a sense of how much your hedge position is currently for 2017?

[Rod Sailor:]

We really haven't done a lot of hedging -- no hedging in 2017.

[Ali Agha:]

Thank you.

[Operator:]

Helen Ryoo, Barclays.

[Helen Ryoo:]

Just going back to Rod, your comment about guidance for this year coming in at the low end, did you mean the distribution growth or was it EBITDA? Because just looking at EBITDA guidance, which was unchanged, it looks like even if you had a flat Q4 versus Q3, that you would be hitting the high end of the guidance. So could you offer some clarification there?

[Rod Sailor:]

We're talking about hitting the low end. We're really guiding the gathered volumes and the EBITDA and the interest expense and capital numbers towards the bottom end of the range. We're leaving the distribution guidance where it's at. Although, again, if we come at the bottom of the range, you shouldn't expect us to be at the upper end of distribution growth for this year.

[Helen Ryoo:]

So, sequentially in fourth quarter, are we looking at a dip in EBITDA, EBITDA going lower? Is that because is there some seasonality there?

[Rod Sailor:]

There is, and we've talked about this. Typically, our first quarter is our strongest quarter and then we have seasonality in the remaining quarters. We actually had a very strong quarter, again, in face of the commodity price environment that we have. Typically, yes, you would see our fourth quarter to be one of our weaker quarters.

[Helen Ryoo:]

Okay, got it. And then, maintenance CapEx, if I look at your 2016 updated guidance, it's down quite a bit from what you had previously. Is that just driven by cost savings or was there any changes to how you defined maintenance CapEx? Also, just going back to your comment about 2017 being more normalized, should it be more like this 2015 versus 2016? If you could offer some clarifications there.

[Rod Sailor:]

Yes, sure. First off, don't forget in 2015, we do have some continued integration costs in our 2015 number. We still have some integration costs in 2016, but we have cut that to a bare minimum. And then again, just recognizing that 2016 is going to be a very challenging operating environment, we have looked at areas where we could be efficient around our maintenance capital spend in 2016. I'm not going to get into specific numbers around maintenance capital for 2017. Although we have consistently said we want our maintenance capital spend as a percentage of EBITDA to look very much like our peers that have a similar mix of assets, and it's one that we continue to focus on. If you go all the way back to when we came out as a public company, our original number was $200 million. We were able to cut about $25 million off of that in 2014. We have cut another $25 million or more out of it. This year, we're taking it to the bottom, or what we think is the bare minimum for 2016. Again, my anticipation is we will continue to be very focused on it in 2017, but we're not going to talk about with that specific number is.

[Helen Ryoo:]

Okay. Then, on interest expense…

[Rod Sailor:]

And just -- and to close off on your last question, we haven't made any changes on how we define maintenance capital. So, no changes there. It's really just trying to be very efficient about how we spend our dollars.

[Helen Ryoo:]

Okay, that's helpful. And then, on interest expense guidance for 2016, it looks like it went up a little bit, even though your expansion CapEx came down a bit. So are we -- was there any changes in the financing assumptions that may be -- in your previous guidance, you've had a some equity issuance for 2016 and now it's taken down? Or if you're not assuming any equity issuance given where your yield is -- your stock is trading, could you offer some clarifications there?

[Rod Sailor:]

To answer the last one first, look, we're going to -- we are and will continue to be very focused on maintaining our investment-grade credit rating. That is, it's very important to us. We think it's very important to our customers. We're going to continue to try to focus on investment-grade credit metrics. We have just seen us and many of our peers have seen a widening of our credit spreads. Currently, our anticipation is we will continue to see that into 2016, and so we've reflected higher interest costs on any debt that we would issue next year.

[Helen Ryoo:]

Okay, so it's not necessarily driven by lower equity issuance?

[Rod Sailor:]

We're going to continue -- what we've said on that is we'll try to be prudent with how we finance our growth capital. And as we have done this year, we have leaned more on the balance sheet. We haven't been to the equity markets. We will have to sometime between now and the end of next year get into the equity markets. We will continue to use the most prudent form and lowest cost of capital that we can holding to what we have said, which is we want to maintain the investment-grade credit rating.

[Helen Ryoo:]

Okay, got it. Thank you very much and congratulations again, Rod.

[Rod Sailor:]

Thank you very much, I appreciate that.

[Operator:]

Andy Gupta, HITE Hedge.

[Andy Gupta:]

My question was just answered, but a quick follow-up. In terms of leverage levels, you've maintained it pretty well. What is your target as you get into 2016? With some good projects coming online, would you make an exception for a temporary period and take on higher leverage, with expectation of bringing that down in 2017?

[Rod Sailor:]

I think what we've said is, again, the rating is very important to us. I think if you look at where I think the agencies are comfortable, its they probably start to get distressed about 4 turns on leverage. Many of our peers are at or above that number, but we will continue to have a very robust dialogue with the agencies. And again, we're going to focus on the leverage that we need to operate the business and maintain the investment-grade credit rating. It's a bit of a soft answer, but as you know, it's a bit of a dialogue that we will continue to have with the agencies. And we want to be treated just like our peers, but we're going to be very mindful of maintaining plenty of liquidity and a strong balance sheet.

[Andy Gupta:]

Got it. One more question is OG&E has publicly talked about conversion of certain coal plants, possibly more natural gas plants in the next few years. Are any of those potentially incremental volumes in your system that will come as a result of these conversions included in your forecast for 2016 or 2017, or is that beyond 2017?

[Rod Sailor:]

Clearly, we think we are very well positioned to capture coal to gas conversions for OG&E or for a number of utilities in the state. We clearly have some growth capital targeted for coal to gas conversions, but that's about all I can say on that.

[Paul Weissgarber:]

And I would say -- this is Paul. From our commercial team, we are very, very heavily focused on that segment and pursuing that very robustly with a number of customers. And we think there is some additional opportunity there, but again, we have still been fairly conservative as to what's baked into our plans right now.

[Andy Gupta:]

Got it. Well thank you for taking my questions.

[Operator:]

Michael Blum, Wells Fargo.

[Michael Blum:]

Staying on the financing topic, could you talk about in the event that your equity yield stays where it is right now, and next year, would you consider alternative equity financing equity, like you have seen some other MLPs, the preferred, converts, things of that nature? Or -- and the second part to that question is, is there any contemplation of the sponsors providing some financing support until markets settle down?

[Rod Sailor:]

The last question, I'm not going to speak for the sponsors and what they may or may not do. What I will say is we're very focused on trying to maintain as low a cost of capital as we can. We're very familiar with a number of the products that are out there, a number of the products that our competitors are using and we will continue to look at all sources of financing with an eye toward trying to maintain as low a cost of capital as we can.

[Michael Blum:]

Okay, great. Thank you.

[Operator:]

Neck Raza, Citigroup.

[Nick Raza:]

I only had one question; most of the others have been asked, relating to expansion CapEx. Could you talk more about what the drivers were for the decrease of the 2016 outlook specifically?

[Rod Sailor:]

Yes, it's really related to, as you saw, we've pulled down our volume forecast in the 2016 outlook, and we have said that we can adjust capital up and down. So with the decrease, if you look at where that range was coming out, we have pushed some of the capital into 2017. I think I said in my opening remarks, it was about $100 million. We still expect the volumes to show up, but I think we're trying to be mindful of when those volumes will show up. Again, the last thing we want to do is deploy capital that we're not going to be earning a return on quickly.

[Paul Weissgarber:]

Yes, and just to add to that, if you looked at our system, with the expansiveness of the system in western Oklahoma, we can actually stage in capital as the volumes come in. It's part of that staging in the capital that, as Rod talked about, we have the ability then to throttle it up and throttle it down, and it's really driven off changing expectations as far as when the volumes were going to be hitting us.

[Nick Raza:]

Got you. Got you. That's all I had. Thank you, guys.

[Operator:]

[Operator Instructions] Ted Durbin, Goldman Sachs.

[Ted Durbin:]

Rod, just wanted to say congratulations on the appointment. And on that, any change for you, personally or maybe a mandate from the Board from the two sponsors around in changes in strategic direction?

[Rod Sailor:]

I think from a growth perspective, no. The Board was involved when we outlined our course a year ago. We spent a lot of time with them this year just recently on thinking about where we should be deploying capital, where we should be putting resources, and so no real change there. But as I said, there are some things we want to focus on. We want to focus on being sure that we are not just focused on growth, but building the organizational capacities in the company to capture those opportunities that we are focusing on, our core competencies around design, build, operate; very focused on cost management, both on the O&M side but also on how we deploy capital. So, no. I think the sponsors are very aligned with where we want to take the company and really no changes, I would say, as it relates to that. I think what we want to be sure we're doing though is we're thinking about continuous improvement in everything we do. And that one of the things I want to focus on, be sure we are moving barriers and allowing our folks to get the job done that they are very capable of doing. So, trying to remove roadblocks where we can.

[Ted Durbin:]

Yes, that's helpful. I think there had been a thought that you would like to diversity out of the mid-con footprint that you're in. Is that still one of the priorities?

[Rod Sailor:]

That is a stated tenet and we continue to work on that. Yes, we would like to have some more basin diversity. We want to expand the pipeline system and we want basin diversity around the G&P side of the business.

[Ted Durbin:]

Got it. And then just to that point, sponsors still I think potentially would be willing to help you with an expansion like that, if you saw something strategic that was interesting, and I guess could be accretive. Would there be financial support from the sponsors?

[Rod Sailor:]

I think what we have always said there, first off, is we can't speak for the sponsors. But there have, in times past, they have expressed the question what can they do to help? It doesn't mean that they will be able to or they can help. But again, I think we have a very open dialogue around those opportunities.

[Ted Durbin:]

Okay, I will leave it at that. Thank you.

[Operator:]

[Operator Instructions] I would like to hand it back over to Mr. Rod Sailor for any additional or closing remarks.

[Rod Sailor:]

I would like to thank you for joining us on our call. On behalf of all the employees at Enable, we would like to again, thank Pete for his leadership and support that he has provided to Enable. I have been very grateful for the opportunity to work with Pete over the past few months, and while he is going to leave us in the CEO slot, he will remain on the Board. And I really look forward to continue to work with him and seek guidance from him as I grow into my new position. In addition, I would like to just again thank all of our employees for their continued engagement around safety, all their hard work that has resulted in the accomplishments that we have outlined here today. And thank all of you and please have a safe day.

[Operator:]

Thank you, this does conclude today's teleconference. Please disconnect your lines at this time and have a wonderful day.