The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Brian Patrick Reynolds - UBS Investment Bank, Research Division - Analyst
: Maybe to follow up on Spiro's CapEx question. Kristen, I think you mentioned that you expect the processing plants to effectively open full. So how
should we be thinking about the next processing plant, just given that it seems like WES is gaining more and more acreage dedications out in the
Delaware?
Question: Brian Patrick Reynolds - UBS Investment Bank, Research Division - Analyst
: Great. Appreciate that. And then looking ahead to '24, it sounds like there'll be some growth. Clearly, the Delaware is growing and the processing
plants are running full. But is there any way to sensitize how many volumes are currently being offloaded and potentially the impact that will have
on margin as that comes back onto your system?
And then as it relates to DJ, some tailwinds there with the first quarter of growth. When should we expect to be above those MVCs at this point?
Is it second half of '24 or early '25 at this juncture?
Question: Brian Patrick Reynolds - UBS Investment Bank, Research Division - Analyst
: Just as it relates to margin, I mean, could see some margin benefits just given that you're no longer offloading the volumes and (inaudible).
Question: Indraneel Mitra - BofA Securities, Research Division - Analyst
: I just wanted to understand maybe the rationale going forward, underpinning distribution increases now that Meritage is in the mix and debt is a
little bit higher. Wanted to understand the priorities with capital allocation. And when you look at distribution increases, do you have a formula
where you look at payout ratios or percentage of CFO? Just wanted to understand the background behind that and how you're looking at that
going forward?
Question: Indraneel Mitra - BofA Securities, Research Division - Analyst
: Yes. That's very helpful. I appreciate it. And just as a follow-up, I know you can't answer what the numbers shake out, but maybe you could just
kind of outline the factors that go into cost of service for the calculation next year? I know the wells are turned in line later than expected, similar
commodity prices. But as I understand it, it's backward-looking and forward-looking and there are some other components. So are there any general
themes that we should look at going into next year?
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