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Overview
Kinetik Holdings Inc (NYSE: KNTK) is a fully integrated midstream operator that plays a pivotal role in the oil and gas sector. Specializing in gas and oil gathering, processing, and pipeline transportation, the company offers critical infrastructure solutions designed to connect upstream production with downstream markets. Leveraging extensive assets in the Permian Basin and beyond, Kinetik incorporates advanced gathering systems, processing facilities, and transportation pipelines with a strategic focus on operational efficiency and reliability. Keywords such as midstream, pipeline transportation, and decarbonization underscore its dual commitment to traditional energy infrastructure and evolving environmental considerations.
Business Segments and Core Services
Kinetik Holdings Inc operates through two principal segments that together form a comprehensive service portfolio:
- Midstream Logistics: This segment encapsulates a range of services including gas gathering and processing, crude oil gathering, stabilization, and storage services, as well as produced water gathering and disposal. These services are integral to maintaining the flow of energy products from production centers to processing and refining hubs.
- Pipeline Transportation: Kinetik’s pipeline transportation segment includes operations on multiple pipeline systems. The company not only operates its own pipelines but also holds substantial ownership stakes in critical pipeline assets. These pipelines connect the prolific regions of the Permian Basin with access points along the U.S. Gulf Coast, ensuring efficient and safe transportation of natural gas liquids (NGLs) and crude oil.
Operational Excellence and Infrastructure
The company’s infrastructure is a testament to its operational sophistication. Its network includes state‐of‐the‐art gathering systems, robust processing facilities, and strategically located pipelines that serve as lifelines between production areas and markets. By ensuring consistent and reliable service, Kinetik reinforces its position as an indispensable participant in the midstream industry. The company’s operations are characterized by a high degree of integration, allowing for streamlined service delivery across diverse energy products. Each element of its network is engineered to maximize efficiency while minimizing downtime and operational risk.
Sustainability and Decarbonization Initiatives
While rooted in traditional midstream operations, Kinetik Holdings Inc also demonstrates an active commitment to sustainability within the energy sector. A notable example is the company’s collaboration with an eFuels provider, which involves the strategic capture and sale of carbon dioxide (CO2) generated in its gas gathering and processing systems. This captured CO2 is repurposed as a valuable feedstock in the production of ultra-low carbon electrofuels (eFuels). Such initiatives not only reflect Kinetik’s responsiveness to evolving regulatory and market dynamics but also its role in fostering innovative decarbonization strategies. By participating in these sustainable endeavors, Kinetik illustrates how traditional midstream operations can integrate environmental stewardship into their business model without compromising core service delivery.
Kinetik Holdings (NYSE: KNTK) has announced the pricing of $250 million in sustainability-linked senior notes through its subsidiary Kinetik Holdings LP. The notes, priced at 101.25% of par, carry a 6.625% interest rate and will mature on December 15, 2028.
These new notes are an addition to the existing $800 million sustainability-linked notes issued under the same terms. Interest payments will be made semi-annually on June 15 and December 15, with the first payment scheduled for June 15, 2025. The offering is expected to close on March 19, 2025.
The interest rate is tied to Kinetik's performance against sustainability targets outlined in their Sustainability-Linked Financing Framework from May 16, 2022. The proceeds will be used for general corporate purposes, including repaying revolving credit facility borrowings.
Kinetik Holdings (NYSE: KNTK) has announced that its subsidiary, Kinetik Holdings LP, plans to offer $250 million in 6.625% sustainability-linked senior notes due 2028. These notes are additional to the previously issued $800 million aggregate principal amount under the same terms.
The new notes will be offered under Rule 144A and Regulation S of the Securities Act, exclusively to qualified institutional buyers and non-U.S. persons. The proceeds will be used for general corporate purposes, including repaying a portion of revolving credit facility borrowings.
The interest rate on these notes is linked to Kinetik's performance against sustainability targets outlined in their Sustainability-Linked Financing Framework from May 16, 2022, which received a second party opinion from ISS ESG.
Kinetik Holdings (NYSE: KNTK) reported strong financial results for Q4 and full-year 2024. The company achieved Q4 net income of $16.2 million and Adjusted EBITDA of $237.5 million. For the full year 2024, Kinetik posted net income of $244.2 million and record Adjusted EBITDA of $971.1 million, representing 16% year-over-year growth.
The company completed strategic expansions including the Durango Permian acquisition and Barilla Draw assets purchase. Q4 results were temporarily impacted by negative gas prices at Waha and maintenance activities, resulting in a $15 million headwind.
Looking ahead, Kinetik provided 2025 guidance with projected Adjusted EBITDA between $1.09-1.15 billion and capital expenditure guidance of $450-540 million. The company expects approximately 20% growth in gas processed volumes and projects Q4 2025 annualized Adjusted EBITDA to exceed $1.2 billion.
Kinetik Holdings (NYSE: KNTK) has announced its fourth quarter dividend of $0.78 per share ($3.12 annualized), payable on February 12, 2025, to shareholders of record as of February 3, 2025. The company will release its Q4 2024 earnings after market close on February 26, 2025, followed by a conference call on February 27, 2025.
The company maintains an active Dividend Reinvestment Plan (DRIP) that is open to all shareholders. Details of the plan are available in the company's S-3 registration statement filed with the SEC on July 12, 2024. Shareholders can register for the DRIP through Broadridge Corporate Issuers, , either online or through various contact methods.
Permian Resources (NYSE: PR) has announced the sale of its natural gas and oil gathering systems in Reeves County, Texas to Kinetik Holdings for $180 million in cash. The sale includes recently purchased and legacy company-owned midstream infrastructure but excludes water infrastructure and surface acreage.
The transaction is expected to close in Q1 2025, subject to regulatory approval. The divestiture aims to streamline operations and enhance value for investors while allowing Permian Resources to increase its residue natural gas sales at Gulf Coast pricing, reducing exposure to in-basin Waha pricing. The company expects no significant impact on its cash operating costs.
Kinetik Holdings (NYSE: KNTK) has announced a definitive agreement to acquire natural gas and crude oil gathering systems from Permian Resources for $180 million in cash. The assets, primarily located in Reeves County, Texas, include approximately 60,000 gross operated acres dedicated under long-term, fixed-fee agreements.
The transaction features over 250 Mmcf/d of primarily owned electric compression with a private electric distribution system, and is expected to handle more than 150 Mmcf/d of gas gathered volumes and 25 Mb/d of crude gathered volumes in 2025. The assets are adjacent to Kinetik's existing Delaware South system and will be integrated post-closing. The deal is expected to close in Q1 2025, subject to customary conditions.
Kinetik Holdings reported strong Q3 2024 financial results with net income of $83.7 million, a 94% increase year-over-year, and Adjusted EBITDA of $265.7 million, up 23%. The company increased its 2024 Adjusted EBITDA guidance to $970-1000 million and tightened Capital Expenditures guidance to $270-290 million. Natural gas processing volumes reached 1.71 Bcf/d, a 15% increase year-over-year. Kinetik increased its quarterly dividend by 4% to $0.78 per share and expanded its ownership in EPIC Crude to 27.5%. The company announced plans for a new pipeline connecting Delaware North and South systems, capable of flowing over 150 Mmcf/d of rich gas.
Kinetik Holdings Inc. (NYSE: KNTK) has announced a 4% increase in its quarterly cash dividend to $0.78 per share ($3.12 annualized) for Q3 2024. The dividend will be paid on November 7, 2024, to shareholders of record as of October 28, 2024. CEO Jamie Welch cited strategic transactions and business outperformance as reasons for the increase, stating they've reached their 3.5x leverage target earlier than expected.
The company will host its Q3 2024 results conference call on November 7, 2024, at 8:00 am CST, with the earnings release scheduled for November 6, 2024, after market close. Kinetik also reminded shareholders of its Dividend Reinvestment Plan (DRIP), which is open to all shareholders and can be accessed through the Broadridge website or by contacting Broadridge Corporate Issuers,
Kinetik Holdings Inc. (NYSE: KNTK) has announced that Todd Carpenter, General Counsel and Chief Compliance Officer, will retire from the company effective February 28, 2025. Mr. Carpenter will continue his current responsibilities and ensure a smooth transition until his retirement. After retiring, he will provide ongoing support to the company.
Kinetik has begun an internal and external search for Mr. Carpenter's successor and will announce the appointment in due course. Jamie Welch, Kinetik's President & Chief Executive Officer, praised Mr. Carpenter's almost 40-year legal career and his contributions to the company over the past seven years, expressing gratitude for his counsel, friendship, and dedicated service to Kinetik.
Diamondback Energy, Kinetik Holdings, and EPIC Midstream have announced transformative transactions for EPIC Crude Holdings. Key highlights include:
1. Diamondback and Kinetik acquired a 30% equity interest in EPIC Crude, now each owning 27.5%.
2. Diamondback increased its volume commitment to 200 MBpd.
3. Kinetik entered a new transportation arrangement with EPIC Crude.
4. Combined long-term volume commitments from partners represent over 33% of EPIC Crude's capacity.
5. EPIC Crude transports over 600 MBpd and has secured MVCs or contracts for ~90% of 2025 total volumes.
These actions aim to strengthen EPIC Crude's financial profile, reduce costs, and enhance returns. The company is positioned for potential expansion, with partners having an option for about one-third of the expansion capacity.
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