Crestwood Equity Partners LP expects its fourth-quarter 2022 financial results to be slightly below previously guided ranges due to impacts of winter weather events on production volumes and well connect activity across its gathering and processing assets during the quarter.
“As producers battled oilfield services constraints and labor and supply chain issues throughout the year, extreme weather events in the fourth quarter created difficult operational conditions that, when combined, materially impacted forecasted producer drilling and completion activity and drove a lower 2022 exit rate than expected.” Said Robert G. Phillips, founder, chairman, and chief executive officer.
The winter weather forced producers to contend with surface equipment freezing, widespread power outages, and limited road accessibility, which resulted in well shut-ins, infrastructure downtime, and delays in drilling and completion activity, Crestwood noted in a Jan. 11 release.
Compared with previous expectations underpinning prior full-year 2022 guidance, the company estimates fourth quarter Williston basin gathering volumes to have decreased by about 15%, and Powder River basin and Delaware basin gas gathering volumes to have decreased by about 5-10%.
Crestwood said its producer customers have fully resumed normal operations and the volume disruptions are expected to be isolated to fourth-quarter 2022.
“As we take a preliminary look into 2023, based on current levels of field activity, which includes approximately 15 rigs running on Crestwood’s gathering systems, and conversations with our producer customers about their 2023 development plans, we continue to anticipate year-over-year EBITDA growth driven by an active well connect program and the full integration and contribution of our Oasis Midstream, Sendero Midstream, and CPJV acquisitions,” Phillips said.
Previous guidance
As part of its third-quarter 2022 results reported in November 2022, based on 2022 results at the time and the previous outlook for the fourth quarter, Crestwood previously expected full-year adjusted EBITDA to be $780-800 million.
As part of the third-quarter results, the company noted plans to connect 40-45 incremental wells in Williston basin in the fourth quarter, bringing the full-year total to 105-110 wells.
In the Delaware basin, the company had expected 45-50 wells to be connected in the fourth quarter, bringing the full-year total to 135-140 wells.
There were three rigs operating in the Powder River basin on Crestwood’s dedicated acreage targeting multiple formations, which were expected to result in increasing volumes on the Jackalope gas gathering system throughout 2023.
About the Author
Mikaila Adams
Managing Editor, Content Strategist
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was later named Managing Editor - News. Her role has expanded into content strategy. She holds a degree from Texas Tech University.