DALLAS - EnLink Midstream, LLC (NYSE: NYSE:ENLC), a Dallas-based midstream energy services provider, announced today its plans to issue senior notes in a public offering. The notes will be guaranteed by EnLink Midstream Partners, LP (ENLK), a subsidiary of ENLC.
The company aims to use the proceeds from this offering for general corporate purposes, which include repaying debt from its revolving credit facility and accounts receivable securitization facility. Some of these debts were incurred for the recent purchase of ENLK's Series B Cumulative Convertible Preferred Units on Monday.
The offering is being managed by a group of financial institutions, including BofA Securities, Inc., Citigroup Global Markets Inc., Mizuho Securities USA LLC, and RBC Capital Markets, LLC, who are acting as joint book-running managers. The senior notes and the guarantee by ENLK are part of an effective shelf registration statement previously filed with the SEC.
EnLink Midstream provides integrated services for the transportation and management of natural gas, crude oil, and natural gas liquids (NGLs), as well as CO2 transportation for carbon capture and sequestration. The company operates in key areas such as the Permian Basin, Louisiana, Oklahoma, and North Texas.
This announcement contains forward-looking statements, which reflect the current views and assumptions of ENLC's management but involve risks and uncertainties that could cause actual results to differ materially. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today.
The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed. This press release is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
The offering is made only by means of a preliminary prospectus supplement and accompanying base prospectus, and any sale would be unlawful without registration or qualification under the securities laws of any relevant jurisdiction.
In other recent news, EnLink Midstream reported a robust second quarter in 2024 with $306 million in adjusted EBITDA. The company has repurchased $50 million of its units and is working on a financial agreement related to the Pecan Island CO2 transportation project. Alongside, the successful launch of a third processing plant in the Permian and the expansion of natural gas storage assets in Louisiana have bolstered EnLink's performance.
EnLink Midstream anticipates a stronger performance in the second half of 2024, particularly in the fourth quarter, due to the expected seasonal strength of its Louisiana NGL business. The company also expects the Matterhorn pipeline, despite minor delays due to Hurricane Beryl, to be operational in September and to quickly reach capacity.
Despite some margin impacts due to a one-time rate reset in North Texas and some agreements in the Permian Basin, the company remains resilient. EnLink Midstream has effectively hedged its exposure to Waha basis, mitigating risks from weak Waha prices. These developments are part of the company's recent strategic focus on asset expansion and financial maneuvering.
InvestingPro Insights
As EnLink Midstream, LLC (NYSE: ENLC) gears up for its public offering of senior notes, investors are closely monitoring the company's financial health and market position. Recent data from InvestingPro provides a snapshot of the company's current financial status and market performance.
With a market capitalization of $5.51 billion, EnLink Midstream is a significant player in the midstream energy sector. The company's Price/Earnings (P/E) Ratio stands at 39.73, which suggests that investors are willing to pay a premium for its earnings potential. This aligns with the company's strategy to use the proceeds from the note offering to strengthen its financial position.
InvestingPro Tips highlight that EnLink Midstream has maintained dividend payments for 11 consecutive years, indicating a commitment to returning value to shareholders. This could be a reassuring factor for investors considering participation in the offering. Additionally, the company is trading near its 52-week low, which may present an attractive entry point for investors seeking to capitalize on potential upside.
Looking at the company's performance over the last twelve months as of Q2 2024, EnLink Midstream reported revenue of $6.83 billion, although it experienced a revenue decline of 14.01%. Despite this, the company has shown a gross profit margin of 30.08%, demonstrating its ability to maintain profitability.
For investors interested in further insights and analysis on EnLink Midstream, there are additional InvestingPro Tips available at https://www.investing.com/pro/ENLC. These tips provide in-depth information that can help investors make more informed decisions regarding their investment strategies.
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