With Devon Energy Corp.'s production continuing to increase in Texas and Oklahoma, EnLink Midstream LLC is anticipating growing its adjusted EBITDA by as much as $125 million in 2018.
EnLink, a master limited partnership controlled by Devon, credited the sponsor company's expanding operations in Oklahoma's STACK play for driving the anticipated revenue growth. Devon is rapidly growing its drilling activity in the STACK area, which EnLink carries to market.
"We are seeing key producer customers accelerate activity in the STACK, with the first production from Devon's 24-well multizone development expected during the first half of 2018," EnLink President and CEO Michael Garberding said during the partnership's 2018 guidance call Feb. 7. "Producers are moving into full-field development in 2018, and the rig activity during the second half of 2017 is driving our 2018 growth today."
EnLink said it was "set up well for continued success" in 2018, growing its adjusted EBITDA by 15%, or about $125 million. Executive Chairman Barry Davis said the partnership is on pace to generate about $1 billion in adjusted EBITDA for the whole of 2018. While some of the revenue will come from increased use of assets in the Permian Basin, Garberding made it clear that Oklahoma transportation would drive the company's profits.
"During 2018, we are expecting an increase of between 30% and 40% in Oklahoma segment profit and volumes when compared to our third-quarter 2017 annualized results," he said. "And given our increasingly interconnected system focusing on all commodities, growth in Oklahoma translates directly to growth in our NGL Gold Coast business as well as growth in our black crude system."
