Enterprise Products Partners (EPD.N), a pipeline and storage company, has reported a slight increase in its crude oil pipeline volumes for the first quarter of the year.
Reuters reported yesterday the growth was aided by the surge in production in the top U.S. shale basin, citing a statement made by the company on Tuesday, May 2.
The company has maintained a bullish outlook on oil production from the Permian Basin, which stretches across Texas and New Mexico and is seeking to build a crude oil export terminal on the Gulf Coast. The Sea Port Oil Terminal (SPOT) project received a record of decision in late 2022, a significant milestone in the licensing process.
According to Jim Teague, the co-CEO, who spoke with analysts in a conference call, EPD expects the SPOT project to obtain other licenses and permits in the second half of 2023. Teague said the company anticipates growth opportunities in gathering and processing in the Permian.
The firm's crude oil pipeline transportation volumes increased to 2.3 million barrels per day (bpd) in the first quarter, compared to 2.2 million bpd a year earlier, with crude oil marine terminal volumes surging by 5.7% to 841,000 bpd.
Despite this growth, the gross operating margin from the crude oil pipelines and services segment fell by 4.3% to $397 million in Q1. The surge was partly due to the expiration of minimum volume commitments on a significant pipeline.
EPD's net income also rose 6.8% to $1.4 billion, translating to 63 cents per share, with Colton Bean, an analyst at Tudor Pickering Holt & Co, hailing the results as "a healthy start to 2023 earnings."
Bean also noted that they bode well for EPD's unofficial target of $9.3 billion in full-year earnings before interest, taxes, depreciation, and amortization.
Natural gas transportation volumes also hit a record high of 18.0 trillion British thermal units per day (TBtupd) in Q1 compared to 16.4 TBtupd a year ago. However, EPD cautioned that lower natural gas prices were starting to dampen activity and growth in dry natural gas plays, including the Haynesville and Eagle Ford.