Jesse Arenivas: We continue the discussions with Shell, Oxy, the public announcements we’ve made those are progressing. I think these have taken a little longer than we would have anticipated. But I think that’s for a couple of reasons. One is the uncertainties around the 45Q regs and then Louisiana privacy. I think a lot of those uncertainties are behind us and we’re optimistic that these things will move forward in 2024. But again, those are progressing very nicely.
Jeremy Tonet: Thanks. That’s helpful. And as a quick follow-up, on the contract rules, where were the contract rules and where do you see them rolling at into 2025?
Ben Lamb: So these contracts were the original Devon contracts that were put in place when we formed EnLink way back in 2014. And we extended them in 2018 for an additional five years of term. At that time, they would have expired this year in 2024, we pushed them out to 2029 and one of them has even been extended again since then and it expires now in 2023. So we just agreed back at the time in 2018 that at the contract’s original expiration date, the rates reset to pre agreed numbers. And that’s what’s happened here in the first quarter of 2024. So the rate reset has occurred. It’s a onetime item. It’s not recurring and won’t have a meaningful further impact in 2025.
Operator: Our next question comes from the line of Zack Van Everen with Tudor Pickering & Holt.
Zack Van Everen: Hey, guys. Thanks for taking the question. Just one on hedging. It sounds like you’re pretty well protected on the natural gas side, flipping to NGLs and crude, should it still be the thought process that you guys hedge 100% down to 25% throughout the year or is that hedging changed as well?
Ben Lamb: Generally, that’s right. The programmatic approach that you described is our approach. I will say though, we’ve also gotten ahead for this year on our ethane exposure because that market is driven by many of the same forces that drive the natural gas market. In the prepared remarks, I mentioned that a change of five dollars on WTI either way moves our result by about $6 million all else being held equal. So it’s not a huge driver frankly either way. Of course, the bigger impact is on producer activity and we gave you some guidance around that as well.
Zack Van Everen: Perfect. Appreciate that. And then the last one is just on the contracts that rolling off in Louisiana. It seems like you guys are seeing pretty good upside from the rate resets. Can you give a percent of contracts left that are maybe lower rate legacy contracts that you might see additional upside in 2025 and beyond?
Dilanka Seimon: You stated correctly. We are seeing good success in renewing the existing contracts at higher rates. And most of those transactions are down, but a little bit more to go. And as Ben mentioned earlier, we’ve baked that uplift into our 2024 budget.
Operator: Our next question comes from the line of Praneeth Satish with Wells Fargo.
Praneeth Satish: Thanks. Good morning. I guess just going back to CCS, can you maybe elaborate on how Exxon is delineating or thinking about new CCS projects in the Gulf Coast between working with you guys versus Denbury? I guess what are kind of the key factors there as they think about the opportunity set?
Jesse Arenivas: I think just I can’t speak for Exxon, but broadly speaking, you’ve got two systems. The acquisition of Denbury and the green line also came with additional sequestration sites. If you look on a map EnLink our systems intersect that green line in multiple areas. So I think as I said earlier, we’re looking for mutually beneficial opportunities to gain more market share, right? So that’s going to be how can we do this quicker, how can we get these quicker to market, how can we get this optimized from a cost perspective, returns perspective. So it’s a very collaborative effort. I think they’re looking at this as a broader opportunity. Again, utilizing the Denbury assets with EnLink assets could provide unique opportunities to move forward.
Praneeth Satish: Got it. And then maybe just, I guess, switching gears to gas storage. Just wondering if you could kind of elaborate on the discussions that you’re having with customers there for potential brownfield storage expansion in Louisiana. Do you think the current market rate is high enough to support 3-to-5-year contracts on that expansion? Maybe if you could just kind of ballpark what the cost of that expansion would be? And then finally, is there a scenario where you take some of this capacity yourself and market it?
Dilanka Seimon: As I had alluded to during the last call, there is significant market interest for natural gas storage driven by multiple things commodity volatility, increasing LNG exports which requires natural gas storage to manage operational issues and increasing demand as well. So the interest level is quite high. In terms of our response to that between our three natural gas storage facilities that are in operation today, Jefferson Island storage, Napoleonville and Sorrento, we are looking at a mix of brownfield and greenfield projects and try to optimize what is the best solution and to meet the customer demand in that time line. So I don’t have great cost estimates. Just a second, what we’ve found out from the initial engineering studies is that we can expand is about at 9 Bcf from about 11 Bcf today.
And we think at the market rates that are being discussed, we can definitely have very attractive projects through a mixture of brownfield and some greenfield. The brownfield one’s benefit is of course we get to leverage pipeline connectivity that already exists and that becomes quite significant versus a brand new development of all the infrastructure. So a combination of that would be the optimized solution for us.
Operator: Our next question comes from the line of Christopher Jeffrey with Mizuho Securities.
Christopher Jeffrey: Maybe just to follow-up on that last question and confirm, if the opportunities for the brownfield expansion in Louisiana are currently captured in that 2024 CapEx guide that you’ve given? or are you kind of looking for some of that in 2025 or just general timelines of the opportunity and the basis?
