Kinetik Earnings: Volume Increases and Lower Spending Bode Well for 2024

The fourth quarter saw no-moat Kinetik bring online the Permian Highway expansion and new intra-basin Delaware Link pipeline to the market, supporting increased volumes throughout the network. With these completions, there is only the Shin Oak NGL pipeline remaining, slated for 2025. Overall, the results beat our expectations with volumes in the gathering and processing segment hitting higher levels of utilization than anticipated with the new assets. We plan to incorporate these operating and financial results in our model shortly, but after this first look our $36 fair value estimate and no-moat rating remain unchanged.