EnLink Midstream, LLC
Q3 2016 Earnings Call Transcript

Published: 2 Nov 2016

[Operator:]

Good morning and welcome to the third quarter 2016 EnLink Midstream Earnings Conference call. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Kate Walsh. Please go ahead.

[Kate Walsh:]

Thank you and good morning everyone. Thank you for joining us today to discuss EnLink Midstream’s third quarter 2016 results. Participating on the call today are Barry Davis, Chairman and Chief Executive Officer and Michael Garberding, President and Chief Financial Officer. Steve Hoppe President of the Gas Gathering, Processing and Transportation Business, Mac Hummel, President of the Natural Gas Liquids, Crude and Condensate Business and Ben Lamb, Executive Vice President of Corporate Development. As you saw, we issued our third quarter 2016 earnings release yesterday and planned to file our form 10-Q with the SEC later today. To accompany today’s call, we have posted the third quarter earnings release and the operations report to the investor relations portion of our website. Shortly after today’s call, we will also make available a webcast replay of this call on our website. I will remind you that any statements made about our future, including our expectations or predictions, should be considered forward-looking statements within the meaning of the Federal Securities Laws. Forward-looking statements are subject to a number of assumptions and uncertainties that may cause our actual results to differ materially from those expressed in these statements. And we undertake no obligation to update or revise any forward-looking statements. We will discuss certain non-GAAP financial measures and you will find definitions of these measures as well as reconciliations of these non-GAAP measures to comparable GAAP measures in our earnings release. We encourage you to review the cautionary statements and other disclosures we made in our SEC filings, specifically those under the heading Risk Factors. The structure of today’s call will be just start with brief prepared remarks and then leave the majority of the call open for question and answer period. With that, I would now like to hand the call over to Barry Davis.

[Barry Davis:]

Thank you, Kate and good morning everyone. Thank you all for joining us today. I am pleased to report that for the third quarter we delivered the strongest results in EnLink’s history. We achieved the milestone $201 million of adjusted EBITDA before non-controlling interest for the quarter. The results that we were able to achieve are a testament to the strength of our business model and the dedication of our team. We’ve been successful in realizing strategic growth across our core development areas during what many have characterized as the most significant downturn that our industry has experienced. And while we would certainly agree that the operating environment has been challenging, we've been able to grow our business throughout the cycle because we were prepared for it. We did not predict it but we were certainly prepared for it. So what is our approach? While we prioritize financial stability, we make disciplined financial decisions to preserve our investment grade balance sheet and protect our liquidity. We are supporting our distribution with strong contracts and cash flows. And we are doing this while making targeted acquisitions and initiating growth projects in the best basins in North America including the Delaware Basin, the Midland Basin and the STACK, actions that have been enhanced our platform and will drive growth and stakeholder value for years to come. We are intentional, we're thoughtful, we are deliberate and you are seeing that in our results today and you will see it in our growth tomorrow. Looking ahead, we remain confident in our ability to exit the year on plan to provide greater clarity as we wrap up 2016, we are further refining guidance of our consolidated adjusted EBITDA to a range of $760 million to $790 million. Our business is focused on the right basins with the right customers across each value chain. We have some of the top EMP customers delivering growth across our system. They include our sponsor Devon, Marathon, Pioneer Concho RSP Permian and Diamondback. To sum it up, we are well positioned with the right partners. The way we look at it, there are five key drivers to our continued success and if you follow our story you're probably familiar with each of these core drivers. I'm going to take the next few minutes to provide an update on each. First, our premier position in central Oklahoma. The results we're seeing from our producer customers in this region are encouraging. It seems like we're provided weekly with update, they include outperforming type curves, record setting well results and improving technical efficiencies. More importantly what this means for our business is increased volume and throughput. During the third quarter, our average volumes on the assets we acquired in central Oklahoma were 85% higher than the average during the first quarter of 2016. As a result to be increasing activity on our expanding footprint in central Oklahoma, we are starting to think about the next 200 million cubic feet per day of additional processing capacity and if current trends continue, we could add even another 200 million cubic feet a day plant in addition to the one being considered today in the next two to three years. Let’s stop and think about that, we are saying that the potential volume growth momentum assuming current trends continue could lead us to processing well over a BCF of gas per day in central Oklahoma alone within the next few years. We are positioned for growth. Devon, our strategic producer sponsor remains one of the most successful and active producers in the region. During the third quarter, Devon more than doubled their rigs on our dedicated acreage increasing from two rigs to five with the expectation of a sixth rig to be added by yearend. This basin is one of Devon's top place. Marathon, another key producer customer in central Oklahoma also announced plans to accelerate their development and have added a third rig this quarter. By yearend we expect to have approximately twelve rigs on our central Oklahoma footprint. Our team has been focused on identifying both on transactions within our asset portfolio to continually drive value on our existing footprint. A great example of lease opportunities is the expansion we completed at Arkema facility earlier this year expanding that facility by 50 million cubic feet per day to 400 million cubic feet per day with less than $13 million in capital outlay. Similarly, during the third quarter, we added 20 million cubic feet per day of processing capacity to Chisholm I with less than $3 million in capital costs bringing that plant capacity to 120 million cubic feet per day. We also announced a further expansion of our Chisholm Complex. With the Chisholm II, a new 200 million cubic feet a day plant, we are progressing well with the expansion and remain on plan and on budget to be operational during the first half of 2017. I will leave you with this last point on central Oklahoma. When Chisholm II is up and running our total central Oklahoma processing capacity increases to approximately 800 million cubic feet per day which is up from 350 million a day in 2015. That represents nearly 130% growth in processing capacity over 12 to 18 months. Moving on to the second driver of success, our advantage position in the Midland Basin. We are in the core of the core of the Midland Basin. We have operations in the heart of Midland county which leads the US in overall drilling activity. In fact, rig activity as of mid October indicated that nearly 15% of our rigs in the Permian are active in Midland County alone. We are also well positioned in Martin, Glasscock, Upton and Howard counties all of which reside in the Premier group of the top 15 counties with the most US drilling activity and together these five counties account for 40% of all Permian rigs. It's powerful to think that two out of every five rigs in the Permian are active in the counties in which we have a strategic and significant presence. It's the very reason we were deliberate in executing our strategy to be in the best growth basins in the United States. We've invested around $1.4 billion in the Permian getting in early, being opportunistic and building our footprint during periods of volatility and because of our advantage footprint that we've been able to develop, we are in a position to work with the majority of the top 15 most active producers in the Permian. As we focus on growth in the liquid side of our business, we are executing on the greater Chickadee Crude Oil Gathering project and it's a project that keeps getting better and better. We have upsized the scale of this project since our original announcement due to strong producer demand and still expected to be fully operational during the first quarter of 2017. We have three rigs operating on our dedicated Chickadee acreage right now with a fourth rig expected before yearend. The first phase of the project is commencing in the coming days. We continue to expect at least 20,000 barrels a day to be on the system upon phase I start up. The third of our focus areas is our growing position in the Delaware Basin where we are well on our way to replicating the expansion strategy we've successfully executed in the STACK and Midland Basin. We built our portfolio of assets in the early phases of the Delaware and today's producer activity further supports our strategy and our view that we are right where we want to be. The Lobo II plant became operational in late October with gathering being completed and in full operation by yearend. In addition, our team is aggressively executing on the build out of our gathering infrastructure, pipeline connectivity and residue takeaway options to support our expanding capabilities. The fourth of our core focus areas is our premier position in Louisiana. We are positioned in the heart of the Gulf Coast growth corridor in Louisiana and as a result we continue to achieve record volumes on our system. This demand pool market is evolving in exciting ways for us and we are executing on integrating assets and increasing connection points to enable greater volume deliveries. We are well positioned for the next wave of NGL and L&G demand and work each day to solidify our strategic advantage. As we look to 2017, we see a great NGL story unfolding for us. With all of the central Oklahoma processing we're bringing online, it comes a meaningful increase in equity barrels of liquids which we plan to link to our Cajun-Sibon system. We anticipate that throughput on the Cajun-Sibon system will return to full capacity during the second quarter of 2017 which enhances the entirety of our premier Louisiana NGO value chain. In addition, we have completed permitting and commence construction on the long awaited ascension pipeline, this pipeline a joint venture with Marathon Petroleum will enhance our Cajun-Sibon system by linking it be a pipeline to an important market area east of our existing footprint giving central Oklahoma NGL s additional market outlets along the Mississippi River. And the last focus area I want to touch on is our anchor position in the Barnett Shale. We believe the challenging times create opportunities to improve upon the things we already do well and our North Texas position is a great example of that, results are exceeding expectations as our team remains laser focused on cost efficiencies and our size and scale in the area enables us to attract new customers and volumes as consolidation continues in this mature basin. For example, we've seen almost $12 million in operational savings this year as compared to last year. From a basin perspective, we previously estimated 10% to 12% volume declines in the Barnett. We've been successful in lessening the declines to 5% to 7% to seven in 2016 assisted by pressure reduction initiatives and bringing on new customers as I mentioned. Looking ahead, Devon continues to review its development opportunities in the area which could unlock significant value for both Devon and EnLink. Before I turn it over to Mike, let me leave you with this

[Michael Garberding:]

Thanks Barry and good morning everyone. As Barry highlighted, EnLink delivered strong results for this quarter achieving adjusted EBITDA before non-controlling interest of just over $200 million, a level achieved for the first time in EnLink’s history. This represents sequential growth of approximately 7% when compared to the three months ended June 30th 2016. On a standalone basis, the partnership delivered adjusted EBITDA of around $198 million. While ENLC achieving cash available for distribution of $50 million for the quarter. The partnership’s distributable cash flow was around $155 million coming in slightly above last quarter's DCF of approximately $151 million. The stable cash flows from our business generates a healthy the year to date distribution coverage ratio of around 1.04 times of ENLK and 1.07 times of ENLC. As Barry said we are committed to maintaining our strong investment grade balance sheet and preserving ample liquidity. During the third quarter, we successfully executed on about $60 million at the market equity sales and exit the quarter with more than $1.6 billion of consolidated liquidity and a debt EBITDA of 3.75 times. We continue to be focused on funding our growth capital which includes first installment payment of the Tall Oak purchase. Our business offers significant flexibility in how we ultimately fund this payment. As previously discussed, we could raise capital from a number of avenues including traditional funding sources. However, our current focus has been on the potential sale of non-core assets including our interest in Howard Energy Partners. As always, we have proactively managed our balance sheet while ensuring to maintain our solid financial position anchored by our investment grade, credit rating, stronger liquidity and overall flexibility. I will now turn the call back to Barry for concluding remarks. Barry?

[Barry Davis:]

Thank you, Mike. Before we get into Q& A, I want to highlight one of EnLink’s key differentiators, our people. I can't say enough about the talent and tenacity of the team we are fortunate enough to have at EnLink. I am proud to come to work day in and day out and collaborate with such high quality individuals that take true pride and ownership of their responsibilities and share in the collective goal of driving the company forward, our execution and success our direct result of the people that we have here at EnLink and I am proud of it and thankful to be a part of it. With that operator, you may open the lines for questions.

[Operator:]

We will now begin the question and answer session. [Operator Instructions]. At this we will pause momentarily to assemble our roster. And our first question will come from Brian Gamble of Simmons & Company.

[Barry Davis:]

Good morning, Brian.

[Brian Gamble:]

Good morning. Couple of topics I wanted to hit on, first

[Ben Lamb:]

Brian, its Ben Lamb. First, great question and I could take the entire Q&A time talking about this. There were a lot of parts to that question but let me give you the big picture. The big picture is everything is going the right way. I think that if not all then very nearly all of our producer customers raise their type curves in the last quarter. Devon announcing there’s last night that you will also saw Marathon new field do likewise earlier in the quarter. We have seen really encouraging results from down spacing tests and from test of multiple productive horizons within Merrimac what we haven't seen yet but I think we'll see next year, the beginning of this drilling efficiencies as full transition from delineation into full field development, I think we'll see greater rig efficiency and what that translates into as you point out is significant volume growth. Just as a marker in time when we acquired the Tall Oak assets, the volume on those assets was about 70 million a day as of this morning, as of this morning, it’s about 185 million a day and that's all occurred obviously in not a nine month or ten month period here. As far as looking forward, our decision points on expanding capacity really have everything to do with the producer customers and their plans. From where we are today, I could see us moving forward with another plant in the fairly near term and then the decision on the plant to follow that would be dependent upon the level of activity that we see next year. In terms of our level of confidence in achieving the $300 million by 2018 we laid out at the time of the acquisition we remain very confident in achieving that number. I think the most important thing for you and everyone to watch in assessing whether we remain on track is something to recount. Today we have 11 rigs working on our dedicated acreage in the midcontinent. We've got into or 12 or so at the end of the year and that range of 12 rigs or so is what we need to see on a sustained basis in 2017 and 2018 to deliver on that number. One other thing that I would say, a highlight for you is we've got a lot of work this year to interconnect all three processing complexes in central [indiscernible] we have 400 million cubic feet a day capacity, Chisholm II where today we have 120 going to 320 early next year and that average we have 75 million a day of capacity. That's all done and so it becomes increasingly difficult to differentiate between the assets we acquired and our legacy assets. I think we need to start focusing on the big picture in central Oklahoma and as Barry said his prepared remarks, the big picture is 800 million cubic feet a day of processing capacity soon with lots of sites to add even more.

[Brian Gamble:]

Hi Ben, I appreciate that. And then maybe on the flip side of that, obviously we want to go loud how we're going to pay for it. Mike, can you walk us through some of the options that you mentioned, obviously traditional capital, would be preferred if that were an efficient use of the market. You mentioned non-core asset sales, we all know about how we're maybe anything else to put in that bucket that we can think about, you just have a lot of pieces to work with all corn one way or another but what's on the periphery at this point.

[Michael Garberding:]

Yes, it’s a good question, Brian. So when we think about our funding we think about just being consistent with how we've done things today. And if you look at sort of the scorecard of that you know a couple of points would be, we've raised about $1.2 billion in equity in 2016, if you look from a balance sheet standpoint we've really been between 3.5 to 4 times from a leverage all during that time with the commodities backdrop we have seen. We've had distribution coverage ratio, one or above during that whole time In that same playbook is what we plan to use in 2017 is looking at all the avenues you mentioned, we did say there is a preference and a focus right now on not core asset sales and that's something we're pushing hard on. Howard is one we've mentioned and we will continue to work toward and we believe that that is going to be a piece of the solution. We did have a good quarter also on the equity of about 60 million and that's something we've seen better strength and better capability to execute as this year has gone on. So it's going to be a combination of all that and we have the nice thing is we have all of those levers to execute on but we're going to be intentional on that. We're going to continue to manage the balance sheet the same way we manage the balance sheet in 2016.

[Brian Gamble:]

Other pieces to the non-core potential sales that would be as meaningful if not more meaningful than Howard or those smaller single and double type things?

[Barry Davis:]

I would say it's more of the latter, this is what it is.

[Brian Gamble:]

Great. I appreciate that guys.

[Barry Davis:]

Thank you, Brian.

[Operator:]

And our next question will come from Ethan Bellamy of Baird.

[Ethan Bellamy:]

Good morning. You've got a $30 million potential swing in fourth quarter EBITDA from the revised guidance. But can you tell us what are the biggest drivers of that range potentially?

[Michael Garberding:]

Yes, so when you when you think about it, one we feel great on how the business has performed this year. If you look where we started and what we've done over that time we feel we're in a great position. Where we came out with this quarter is to give you guys better guidance and how we think about the business today which is really in the range of that 760 or 790 for the year based on how the business is perform today. I think the key for you to hear is that we're confident that we're going to execute on that top end or the upper end of that range and that's where we think we're going to be ultimately as we go through these final months of the year. So a big thing for us is how our business has performed on all sides whether it's the gross margin or whether it's the OpEx.

[Ethan Bellamy:]

That’s helpful and then just one quick one on Howard. Could you remind us, do you have a row for or tag along rights or what are the features of your investment there if any that matter in terms of how you would dispose of that.

[Barry Davis:]

Yes, Ethan, this is Barry. We are not going to get into the details of what we have with our partners there. I just think that there are certain things there that we're working through but we feel really good about our ability to transact on that if we find the right situation.

[Ethan Bellamy:]

Okay, that's helpful. And then one last one on Oklahoma, what are you hearing at the field level on induced misery from water disposal and has that so far impacted any of your customer's drilling plans and do you think that in any way going to be governing or updating factor on SCOOP and STOCK development?

[Ben Lamb:]

Ethan, its Ben. At this point we don't see, there has been a governing factor on SCOOP and STOCK development. Where the industry has had some issues is more to the northeast as you get into a more traditional Mississippian Lime target where water cuts maybe nine or ten barrels of water per barrel of oil, the water cuts in the STACK or nothing like that. So while certainly the producers do have to handle the water they don't make the same challenges and where the seismic events have occurred is generally away from the core of this SCOOP and the STACK.

[Ethan Bellamy:]

Thank you, Ben. Thanks, Barry.

[Operator:]

And our next question will come from Darren Horowitz of Raymond James.

[Darren Horowitz:]

Good morning guys. Ben, a question for you, just thinking about the downstream opportunity, with regard to the volumes out of the tailgate of that processing plant build out. How do you think about not just getting the incremental Y grade down into Louisiana system indicate but also maybe opportunities for residue gas and ultimately from a CapEx perspective, what is that opportunity set look like to you?

[Barry Davis:]

Darren, its Barry. I'll start and I'll ask Mac to add on particularly as it relates to NGLs. What it means is an ocean of NGLs pointed toward Max business over the next few years and we're trying to position ourselves in a way that Mac and NGL team to take full advantage of the liquid that we are going to control out of the area. Initially at least where we used third party infrastructure to move between Basins so from Oklahoma town to the Gulf Coast and it will pick up our own Cajun-Sibon system into the Louisiana. Our residue, we have not been active recently and working a residue solution. Our variation on a residue solution is a project you've heard about before that’s Oklahoma Express which would be a rich gas line to move the gas from Oklahoma to north Texas for processing that remains an option plus we think a very good option that is quick to execute relative to a large scale work regulated residue pipeline and will be one of the things that we consider as we think about future processing expansions in Oklahoma as an option.

[Michael Garberding:]

Darren, its Mike. I'll just follow up a little bit on the NGL piece related to Oklahoma and really just to ride with what Bean said there. We see that the Oklahoma growth benefiting our NGL business very significantly. We have talked in our information today, we're currently below capacity on our Cajun-Sibon system, with the expectations of getting the capacity as Oklahoma processing facilities come on and those NGLs are made available to our system. As we see future growth in our NGL Oklahoma will certainly see the opportunity for us to look at other opportunities for us to expand on the NGL side of the business, whether that's within the state of Louisiana or whether that's in the state of Texas for instance or possibly even in Oklahoma. So we think it gives an opportunity to look at a pallet of potential that we simply wouldn't be able to look at without that kind of growth upstream in our gas business.

[Darren Horowitz:]

Mac, from your perspective, does the incremental volume addition coming from a lot of that central Oklahoma Y-grade, does it ramp to such an extent that you think it could backstop, if not just additional frac capacity opportunities but also maybe backstop. Some supply assurance for LPG or even purity product export?

[Michael Garberding:]

I will say, I'll answer that is yes but I think it's also an opportunity for us to look at other options like for instance five points which is something that you didn't mention. So the full suite of NGL or CapEx or NGL investment opportunities that you can imagine, I think are in front of us with this kind of growth potential in our business.

[Darren Horowitz:]

Thank you.

[Barry Davis:]

Thank you.

[Operator:]

[Operator instructions] And our next question will come from Robert Balsomo of FBR.

[Robert Balsomo:]

I wonder if you just give us a little more clarity on the crude and condensate segment, you know expectation obviously volumes down again but margins remaining relatively flat, how to think about that into the year and in 2017?

[Barry Davis:]

Yes, the way I look at our crude business is with a lot of excitement. As I was I think about even a recent milestone that we've had today and that is that we've introduced first oil in our Chickadee gathering system which we announced earlier this summer, that's a great example of us taking the position that we entered the Permian with which is the LPC business and using that as a platform to grow our crude business elsewhere in the Permian, we wouldn’t have had that opportunity to build the Chickadee project without LPC. That's really facilitated that the growth potential that we see behind chickadee. As I mentioned, we've already introduced first oil into as of really last night and today we see continued commercial excitement around the assets. In fact we expect to sign more agreements this week that add acreage volume and additional customers to that project. We've got three rigs active in that area right now going to four by the end of the year. So as said here today and I look out into our crude business in the fourth quarter and beyond my expectation is that we're going to be successful on growing that business. And again I think that the proof is in what we're seeing today.

[Robert Balsomo:]

Where there any changes to operating expenses for the legacy assets in that segment?

[Barry Davis:]

Yes there was, Robert. In this downturn in volumes we've been very aggressive in terms of not only how we acquire new volumes or stave off the decline of the existing volumes but we've also been very aggressive in terms of how we manage the cost and I would say that that's something you've seen across EnLink, it's not specific to the crude business but certainly in the crude business as we've seen volumes decrease. We have been very aggressive in terms of managing the cost associated with providing service to our customers. While at the same time, making sure that the level of service to those customers does not suffer.

[Robert Balsomo:]

Barry, thanks. That’s it from me.

[Barry Davis:]

Thank you, Robert.

[Operator:]

And the next question will come from Tom Abrams of Morgan Stanley.

[Tom Abrams:]

Thanks. Good morning, last remaining question, slow it for me, when precisely is the first quarter ’17 payment in 2015 or so have to be made. Is it end of quarter, beginning of quarter?

[Michael Garberding:]

Yes, this is Mike. I think it’s January in January.

[Tom Abrams:]

January, okay. So I guess that gave sense of how much time we have left to come up with a solution. Thanks a lot.

[Michael Garberding:]

This is Mike. I'll follow on a little bit is part of the solution we have continue to work toward that solution, we don't they were in a situation where we have to find a solution. We work every day on that whether that working toward Howard whether that's issuing additional ATM equity whether that was debt raise we did earlier we done all those things working toward that. So we don't feel that we have one solution to solve that is a continuation of how we've been solving and working toward funding our capital.

[Tom Abrams:]

Great thanks a lot.

[Operator:]

And next we have a follow up question from Brian Gamble of Simmons & Company.

[Brian Gamble:]

Alright, that’s good you guys have more stuff. This is fun. Okay, how about Devon on the Barnett discussion, you mentioned they continue to evaluate Basin operations, there ops reports clearly was, Midland, Delaware Mid-con, heavy. What are they saying about the Barnett, what kind of discussions have you had in regards to where their CapEx falls in the Barnett kind of from an order of magnitude or order of importance standpoint for next year, just kind of want to get a handle on around, exactly what type of opportunity that presents and you want you can juxtapose that against all the good work you guys have been doing so far to mitigate the degradation there on their own.

[Steve Hoppe:]

Brian, this is Steve and I think you laid that out pretty well. Devon is continuing to look the Barnett in its portfolio and where it fits and over the last year, they've done some re-fracking, we had about 17 wells refractor early ’16 and I think that the key driver that they mention is around gas price and we continue to be optimistic that that'll drive some development but the other thing that we're doing with them is we are very focused on optimizing our operations. We are reducing pressures in the system that's resulting in an uplift in volume form. Just recently we completed some projects and saw about a 10 million to 15 million a day uplift from pressure reduction. We are continuing to become more efficient in our operations. I think you saw in their operating report pretty significant reductions in the down-time. Our assets are running well over 99% of up time operations. So we're very much in line with Devon about optimizing the value of that asset and we're continuing to work with them and identifying opportunities not just for re-fracks but also new drilling locations. So I think it's a very positive story, I think it's just a question as Devon states that they are waiting and looking at the opportunities that the price environments going to provide to them.

[Barry Davis:]

This is Barry. Let me just emphasize, I think Steve gave a great answer but I want to make sure that folks have heard about Barnett if you've heard the highlight which are we've turned 10% to 12% inherent decline into a 5% to 7% for this year through the operational adjustments that we've made in the work we've done with Devon. I hope you're here in that operational excellence in a mature basin. Secondly our cost reduction in that area have been significant. Our team has done an outstanding job. Thirdly, the consolidation is happening. We are active in several conversations that would lead to us being the consolidator of a mature basin in which will allow us to continue to make cost reductions and really maximize cash flow from the area and lastly the asset sales the transactions that we're seeing there, I think we are going to end up with acreage in the hands of folks who really want to develop this and maybe don't have other places to invest capital. So the Barnett, I believe has been optimistic future and we feel good about that.

[Brian Gamble:]

Good job on the optimization work. Clearly this year and I don't want to front run 2017 possibilities clearly so there's some moving pieces that could be short term in nature but as far as the efficiencies on your end that trend from last year to this year, are we reaching the latter stages of those on a standalone basis or are there, I guess additional efficiencies to be weaned without considerations of new contracts or consolidation that that might even make that degradation rate lower in ’17.

[Steve Hoppe:]

We're working on that today and we don't have any guidance for ’17 yet. We should probably have that when we go to the next call but we're continuing to look at opportunities whether or not we're at the end I can't say for sure because I continue to be surprised at the things that our teams come up with. So I'm going to remain optimistic that that they're going to continue to deliver the results like Barry talked about and that we're going to say some pretty positive things that they're going to come up with in 2017 as well.

[Barry Davis:]

Brian, I think the question that you asked really gives me an opportunity to highlight just the execution and the diligence by our team, look at all of the content of this call and the answers to our question what you hear over and over is on budget, on time and in most cases it's actually ahead of time, starting up with a greater Chickadee last night, startup of the rowboat plant earlier this week, we would probably go through more than a dozen significant projects in Oklahoma that are on time on budget. Our team is executing with excellence right and this is one of the highest growth period we've ever seen. So really want to applaud the efforts of all of the EnLink folks.

[Brian Gamble:]

I appreciate that Barry, thanks guys.

[Barry Davis:]

Thank you, Brian.

[Operator:]

[Operator Instructions] I am showing no additional questions, I would like to conclude the question and answer session. I would like to turn the conference back over to Barry Davis for any closing remarks.

[Barry Davis:]

Thank you, Laura and thank you to all that have joined on today's call. We look forward to updating you on 2016 yearend results in February and with our full two 2017 outlook with you then have a great day and again thank you for being on the call.

[Operator:]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.