Participants

Barry Davis, CEO of EnLink Midstream (ENLC)

Nate Abercrombie, The Stock Podcast

Interview Transcript

Nate:         Thank you very much for joining me on this show and taking the time to talk to me.

Barry:        Yeah Nate, it’s great to be with you.

Nate:         I start off all these interviews with my guests background, so could you just tell the listeners just a little bit about yourself?

Barry:        Yeah, my name is Barry Davis. I’m chairman and CEO of EnLink Midstream. I have been with EnLink and the predecessor companies since the beginning, which is over 25 years ago when I led the founding of the previous company. And so a role that I’m very familiar with and a company that I’m very proud of and what we’ve been able to do over the last 25 plus years.

Nate:         Yeah. And so what brought you back to the role of CEO? I know that you had left, I think it was two years ago?

Barry:        Yeah, so great question, timely. I did leave the company in January of 2018, left the CEO position. I didn’t leave the company. I was Executive Chairman for about 18 months. Felt like it was the exact right timing to do that, had a great successor, Mike Garberding who I had worked with for over a dozen years. We were at a very stable place from a company standpoint, had lots of good things going on in a very high growth period. Felt like the table was set and it was a great time for Mike to take over as CEO. As you know, and I’m sure many of the listeners know that we’ve seen dramatic change in the industry environment in the last 18 months and for us in particular, we’ve seen change with the Devon ownership change, which quite frankly started not long after I stepped out of the CEO position. Devon decided to sell its interest due to a need on its part to really accentuate just a few core areas and midstream investment was no longer something that they wanted to have as part of their company. And so they ultimately sold in the middle of 2018 their position to Global Infrastructure Partners or GIP as I will refer to them frequently, I’m sure throughout the call here. And that really began a series of changes that ultimately led to about 90 days ago. My being asked to rejoin the company as CEO and help navigate through something that certainly we’ve seen before. This is a cyclical industry. And so since the beginning of EnLink and its predecessors, we’ve probably seen four or five dramatic cycles. And this one is no less than the challenge that we’ve seen before, that’s something that we have seen before and we’re optimistic that we’ll navigate through it. And I think you’ll hear me say several times that we have a path to the other side of this cycle and today our focus is on executing through it and I’m glad to be leading from the CEO position.

Nate:         Yeah, I would really like to get your thoughts on just the overall macro environment within energy right now. But before we get to that, could you talk a little bit about just the origin story for EnLink?

Barry:        Yeah, for sure. So again, we started from scratch. We started a handful of relationships that we were a consulting for in the early days, building projects, building infrastructure for producer customers. That was all around just getting broader from the wellhead to the burner tip and and so that’s how we started. The very earliest days started in 1992 and in 1996 we formed Crosstex Energy and many of our folks will know us as Crosstex Energy before we became EnLink in 2014. So with our beginnings really on the upstream end of the pipe, we are still highly concentrated, 75% of our business is what you would characterize as gathering and processing and about 25% of our business is downstream or delivery market facing infrastructure.

Barry:        So to step through that a little bit, today we are in four core areas. Our G&P focus is first of all in the Central Oklahoma STACK play. We are the leading infrastructure provider midstream player in that basin with significant volume of over one BCF, about 1.2 BCF a day of services provided from a gathering and processing standpoint. So the number one position in Central Oklahoma. Secondly, we are the leading infrastructure midstream company in the Barnett Shale or North Texas as we call it, again, having about a BCF a day of throughput across our system in the North Texas area, but the number one position by far in that flight.

Barry:        Thirdly, on a G&P basis, we are a significant player in the Permian Basin with gathering and processing in both the Midland Basin and the Delaware Basin. We continuously are growing that position rapidly today and it really is a great source of growth for us going forward. Lastly, our fourth core area we’re the second largest midstream company in Louisiana serving the Gulf Coast of Louisiana on gas, crude oil, natural gas liquids and fractionation services that we provide in Louisiana. One thing that I would like to highlight when you look at the company today and where we are, we’ve grown dramatically over the last six years. We’ve grown from just over $200 million a year of earnings to this year will almost be $1.1 billion, so more than a fourfold growth over the last five or six years. And so it’s been a very heavy growth and in a fast pace several years for us.