MarkWest Energy Partners LP (NYSE:MWE)
Q2 2010 Earnings Call
August 10, 2010 04:00 am ET
Dan Campbell - VP of Finance and Treasurer
Frank Semple - Chairman, President and CEO
Michael Blum - Wells Fargo Securities
Xin Luo - JPMorgan
John Edwards - Morgan Keegan
Sean Wells - RBC Capital Markets
Teresa Fox - Stone Harbor Investment Partners
Welcome to the MarkWest Energy Partners second quarter 2010 earnings conference call. (Operator Instructions) I will now like to turn the call over to Dan Campbell.
Thank you, (Tammy) and welcome, everyone, who have joined us on the call today. Our comments will include forward-looking statements which involve risk and uncertainties and are not guarantees of future performance. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties.
Although we believe that the expectations expressed today are reasonable, we can give no assurance that the expectations will prove to be correct and we caution you that projected performance or distributions may not be achieved.
Factors that could cause actual results to differ materially from their expectations are included in the periodic reports that we file with the SEC. And we encourage you to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading risk factors.
And with that, I'll turn the call over to Frank Semple, our Chairman, President and CEO.
Good afternoon and thanks to everyone for joining us on the call today. As indicated in our earnings release, we had another solid quarter, which was highlighted by the strong performance of our core assets, the continued ramp up of our Marcellus operation and our financing activities which resulted in a significant increase in our liquidity and also an upgrade to our credit ratings.
Our year-over-year gathering volumes increased by approximately 12% which is significant, given the fairly depressed gas price environment during that period, and also the continued flattening of the forward price curve. Thanks to the success of our producer customers, we had a quality set of expansion projects nearing completion that will drive future cash flow and distribution growth.
Our overall performance was a direct result of the strength and diversity of our operations in some of the best resource plays in the U.S. Over the past three-and-a-half years more than 70% of the $1.7 billion we and our partners have invested have been focused on strategic expansions together, and process gas from the Marcellus, the Woodford, the Granite Wash and Haynesville plays.
During the call today, I'll give a quick overview of our financial performance, provide a commercial and operational update and then conclude with a more detailed review of our balance sheet and our guidance. We'll then respond to your questions.
Now, beginning with our financial performance, distributable cash flow during the second quarter was $53 million, adjusted EBITDA was $73 million and segment operating income was $102 million. In July, we announced the second quarter distribution of $0.64 per common unit, which results in a distribution coverage ratio of 1.16 times for the quarter and 1.28 times for the first six months of 2010.
Our second quarter Bcf was $11 million less than the first quarter, due to the normal storage requirements for our northeast propane business and lower NGL prices. Ethane was the product most affected, and there has been a lot of industry discussion regarding ethane supplies and prices.
We agree with most industry experts that ethane prices will likely stay depressed in the near term, with a continued recovery from the global recession. And a significant advantage of U.S. ethylene crackers bodes well for the future prospects of domestic ethane producers. It's also worth noting that over the last month propane and heavier NGL prices are showing signs of recovery.
Even with the impact of lower NGL prices and seasonal propane storage, we were still able to produce solid financial results. And significantly improve our liquidity through financing activities, while maintaining a strong coverage ratio for the quarter.
Now I'll spend a couple of minutes giving a brief overview of each of our operating areas starting in Southeastern Oklahoma. Our Woodford gathering volumes during the second quarter of 2010 increased significantly to an average of 539 million cubic feet per day, an increase of nearly 34% year-over-year and 9% from the first quarter of 2010.
Based on public information and our close working relationships with our producer customers, we expect gathering volumes in the Woodford to remain relatively flat over the remainder of 2010. Similar to the Woodford volumes, The Arkoma Connector Pipeline throughput during the second quarter increased to an average of 388 million cubic feet per day, an increase of more than 8% compared to the first quarter of 2010.
In our western Oklahoma operating area, which includes both our Foss Lake and Granite Wash system, gathering volumes during the second quarter of 2010 averaged 185 million cubic feet a day, a decrease of approximately 5% year-over-year and 8% when compared to the first quarter.
While we are experiencing reduced drilling activity at Foss Lake due to the current price environment, the Granite Wash drilling activity remains very strong, as we feel emphasized in their recent earnings call, the Granite Wash is their highest return gas play, and they plan to run forward for the balance of 2010 with a specific focus on the very rich (Marbetton) formation.
As a result of the continued drilling in the Granite Wash, our Western Okalahoma volumes have increased since the end of the quarter and we expect volumes to grow to the end of the year. In our Carthage system in East Texas, gathering volumes during the second quarter of 2010 averaged 439 million cubic feet per day, this is a decrease of approximately 5% year-over-year, but an increase of 2% when compared to the first quarter. The second quarter increase has largely driven growing Haynesville production, which now exceeds 50 million cubic feet per day, an increase of approximately 60% since the beginning of the year. We have more than 200,000 perspective Haynesville acres dedicated to our system and we expect continued growth in Hayneville production.
Our Javelina plant in Corpus Christi continues to perform well and product volumes in the second quarter were slightly higher than those in the first quarter. Javelina is a key part of our operations and has served as a great platform for discussions with producers regarding field level gathering in the rich area of Eagle Ford shale and utilization of our existing fractionation marketing capabilities along the Gulf Coast.
Now let's move to the Appalachian region where we divide our operations into two financial reporting segments. The first is our northeast business segment, which includes four processing facilities in Kentucky and West Virginia and our Siloam fractionation and marketing complex that we have operated for more than 20 years.
The second segment is our Liberty joint venture with the Energy and Minerals Group which is focused on the development of the Marcellus shale in southwest Pennsylvania and northern West Virginia. The northeast gas processing volumes were 4% higher in the second quarter of 2010 compared to the first quarter. While our NGL fractionation volumes increased by nearly 7% quarter-over-quarter. The increase at NGL fractionation volumes was driven by growing NGL deliveries from (ETTs) here on the way of shale operations and from the significant volume of butane and heavier NGLs from our Marcellus operations.
We will continue to fractionate the heavier NGLs from our Marcellus operations in Siloam while we are constructing the Houston, Pennsylvania fractionation and marketing complex. In the Liberty segment, where we are investing a majority of our company's growth capital to expand our Marcellus operations, range resources continues to have great success in the development of their extensive acreage underlying our gathering system.
As a result, our Liberty volumes during the second quarter of 2010 increased to an average of 129 million cubic feet per day, an increase of nearly 200% year-over-year and 27% from the first quarter. During the second quarter, we continue to build out high pressure and low pressure gathering pipelines and compression to meet the increasing production and continue to make solid progress on our previously announced processing and fractionation projects.
From a processing perspective, we currently have 155 million cubic feet per day of cryogenic capacity at our Houston complex in southwest Pennsylvania. In the first quarter of 2011, we are scheduled to complete the 200 million cubic per day Houston three plant, bringing our total processing capacity to 355 million cubic per day at Houston. In response to the rapidly expanding producer drilling programs in West Virginia, we are constructing a 120 million cubic feet per day processing plant in Majorsville, West Virginia. And a liquid pipeline connecting the Majorsville facility to our Houston complex, with both projects expected to be completed next month.
We are also on track to complete both the 150 million cubic feet per day Majorsville II plant as well as our 60,000 barrel per day fractionation facility at our Houston complex by mid 2011. As a result, by the middle of next year, we will be able to provide the full slate of processing, fractionation and NGL marketing service with a total capacity of 625 million cubic feet per day. And we continue to work with our producer customers to further expand our system to meet their growing needs.
As many of you know, the regulatory environment in Pennsylvania is challenging and requires a significant amount of attention and focus. Our overarching goal is to provide competitive, efficient midstream services and in an environmentally responsible manner. This requires that we work proactively with the agencies to ensure we comply with all regulatory requirements while continuing to meet the commitments to our customers.
During the second quarter, MarkWest Liberty and NiSource Gas Transmission and Storage announced our intent to jointly develop natural gas gathering and processing projects to meet increased Marcellus production in northern West Virginia. The development project would initially include existing and new pipelines that deliver gas to the NiSource Midfield compressor station where we would install a 120 million cubic feet per day processing facility by late 2011. We would complement this processing facility with fractionation services provided in Liberty's Houston complex.
In order to address the ethane production in the Marcellus, we recently announced our intent to jointly develop the Mariner Project with Sunoco Logistic Partners. As planned, Liberty would make minor modifications to its processing facility to extract ethane. And we've constructed 45 mile ethane pipeline from the Houston complex to an interconnection with our existing Sunoco Logistics pipeline. The ethane would be transported to an existing east coast facility where Sunoco Logistics would construct refrigerated ethane storage and marine loading facilities. The ethane would then be transported via marine vessel to premium markets in the Gulf Coast.
The Mariner Project would have an initial capacity to transport up to 50,000 barrels per day of ethane to the Gulf Coast markets as soon as the second quarter of 2012 and could be scaled to transport higher volumes to support additional ethane production. Sunoco continues to make very good progress on the engineering for the pipeline and storage facilities. And we are in detailed discussions with a number of Gulf coast ethane consumers that have a strong desire to secure Marcellus ethane supply.
The risk of turning today's call into a Mariner marketing conference, let me briefly explain why we believe the Mariner Project provides Marcellus producers with the best ethane solution. The other announced projects include a variety of mixed NGL pipeline projects to the Sarnia and Chicago markets where the NGLs would be fractionated into purity products.
The ethane market in Sarnia is limited, and therefore, much of the ethane would likely be transported to Chicago, which trades at Connelly market price. Historically, Connelly ethane prices trade at a discount to the Gulf coast, and recently that discount has been $0.15 to $0.25 per gallon.
In addition, the majority of the NGL strain that would be transported to Sarnia market will be propane and heavier components, the pricing for which is roughly equal to the northeast market. The rates for these alternative projects only include transportation. We do not believe it makes sense for producers to pay what maybe $0.15 of transportation plus the cost to process fractionate and sell the NGLs into a market that is at or below the northeast market.
By contrast, MarkWest Liberty already delivers propane and heavier NGLs into the premium North-east. Additionally, the Mariner project would cost less than the other projects, have less environmental impact, and we provide a fully bundled processing fractionation and transportation service to deliver Marcellus ethane to the best market in the world.
To summarize, our commercial and operational activities, we're very well positioned to continue to grow our asset base and to provide excellent midstream services to our producer customers. It's important to understand that for the past few years, we have focused on growing our presence in some of the best resource plays.
And the execution of that plan has resulted in more than 700,000 highly perspective acres dedicated to our midstream operations in the core areas of the Woodford, Haynesville, Granite Wash and the Marcellus. These plays represent a significant portion of the future natural gas supply for the U.S. because of the quality of the resourced and the utilization of very efficient and productive drilling technologies by our producer customers.
Checking out the balance sheet, we have been very focused on achieving the right balance of debt and equity financing in proving our liquidity, and positioning the partnership for additional growth opportunities. In April of this year, we completed a public offering of nearly 5 million units for net proceeds of approximately $142 million.
Shortly after the end of the quarter, we closed on a five year $705 million credit facility that provides additional financial flexibility and lowers our future borrowing cost. As a result of the equity issuance in the second quarter and the revolver refinancing, we currently have available liquidity of more than $670 million to fund our capital program.
Our total debt at quarter end was $1.2 billion comprised primarily of senior notes in three traunches with the earliest traunch due in 2014. In the second quarter, our debt to total capital improved from 45% to 41%. Our interest coverage ratio improved to 3.4 times and our leverage ratio improved to 3.6 times.
We have considerably improved these important financial metrics over the past 12 months, and the strength of our balance sheet continues to be a key priority. We are also pleased to report that both Moody's and S&P recently upgraded our credit rating to BB, and Fitch initiated coverage of MarkWest also with a BB rating.
These ratings were based on our improved financial performance and successful track record in executing our growth strategy, and will benefit us in the form of lower capital cost in the future.
As discussed previously, one of our long-term objectives is to continue to increase fee-based operating margin with our contracts in the rapidly growing Marcellus and Woodford operations, we expect fee-based operating margin to increase to approximately 50% by the end of 2012.
We also continue to execute our rolling 36 month hedging program to manage the risk associated with commodity price exposure to meet or distribution objectives. For 2010 and 2011, we are currently hedged at approximately 70%, which we consider being fully hedged because of operational considerations.
For 2012 and 2013, we are hedged at approximately 45% and 15% respectively. And will continue to opportunistically execute hedged transactions by locking strong margins and to secure a large percentage of the commodity sensitive portion of our future distributable cash flow.
We continue to execute our hedged transactions with our banker counterparties which was recently enhanced by the addition of new banks to our syndicate.
Before concluding, I want to briefly discuss our 2010 guidance. We narrowed our full-year 2010 Bcf to a range of $210 million to $230 million. The mid-point of this guidance would provide a coverage ratio of approximately 1.2 times for the year at our current distribution and the number of units outstanding.
As in the past, we have included in the press release, the sensitivity table which shows the impact of 2010 Bcf of various crude and natural gas prices as well as NGL correlations. Our 2010 growth capital forecast is unchanged at a range of $300 to $350 million. This capital program continues to be driven primarily by high quality largely fee-based projects.
So in summary, we have very diverse set assets with unparalleled opportunities in the growing resource plays. Those growth opportunities, coupled with our strong balance sheet and strong coverage ratio put MarkWest in a very good position to provide long term distribution growth and total returns for our unit holders.
So with that, Tammy, I'll go ahead and open it up for questions.
(Operator Instructions) Our first question comes from Michael Blum.
Michael Blum - Wells Fargo Securities
I suppose range volumes were down a bit sequentially. Can you just talk about what's going on the Granite Wash from your perspective and how those volumes look to be ramping?
Yes. Just to get everybody on the same page there as I said in my earlier comments. If you just look at the year-over-year overall western Oklahoma volumes, they were down 5% year-over-year and 8% compared to the first quarter. That's both the Foss Lake and Granite Wash systems. And we also went on to say that the volumes and drilling activity in Foss Lake in Anadarko is down. Just due to the current price environment, the economics are producing that gas, and in Granite Wash we didn't give a specific volume or percent increase, but it almost offset the decline in the Foss Lake area.
That's all Newfield gas, they are running four rigs. They are going to continue to run four rigs. This is a very economic play for Newfield. And as they said on their earnings call, that it is their highest return gas play and they except those volumes to continue to grow out there in western Oklahoma.
But we're basically very pleased with Newfield's continued focus and their strong performance out of Granite Wash.
Michael Blum - Wells Fargo Securities
Second question is on the Mariner Project. Can you talk about what timing, what sort of benchmarks or hurdles we'll be looking for? And then any information you can provide as to who will be the actual marine shipper and who will be responsible for landing the ethane on the golf coast?
Michael, as far as the schedule is concerned and Randy Nickerson is sitting here beside me. So I'll let him dive into this with a little bit more detail. But as I said in my formal comments, this is very much a partnership, a combined project which Sunoco Logistics. And in higher on going discussions with both the producers customer's and the Gulf Coast consumers. It's on a very fast track; we have specific engineering and design objectives as well as marketing objectives over the course the next six to twelve months.
And, Randy, you want to kind of jump in here and kind of give specifics of how the project's proceeding. Yes, Michael also asked about who are some of the petrochemical that we're talking to on the Gulf Coast.
First question was some of the key objectives. I really think they probably fit into three categories. The first one is engineering, so Sunoco and MarkWest are both in the middle of their engineering. So far everything coming up very well confirming all of our project assumptions. We think the detail engineering part could be done in the next couple of months; it's moving along well.
The second part, which is sort of tied in to the question of the marine transport. We think the regulatory requirements for that should be completed by late this year and so we're on schedule for that as well. And the third, I guess, leg in the stool would be the contracts for landing the ethane as you call it, Michael, in the Gulf Coast.
And we're certainly in detailed conversations with roughly five or six different consumers in the Gulf Coast, who have a strong desire to secure the Marcellus ethane. So that's sort of the schedule and the three things we have to get over. We expect all three of those things to be concluded potentially by the end of this year and then just executing on all those assets of the project for the end of the year.
In terms who we're talking to in the Gulf Coast, I don't know specifically about that, but I think it's fair to say almost all the crackers that have access to the docks in the Gulf Coast have contacted us. We also feel that the number the questions they're having some discussions with some international markets who've expressed a strong desire for some of the U.S. ethane to compete.
We've not talked publicly, Michael, right now about who the company is going to be shipping the marine transport vessel; we're in sort of important stages of the conversion of the re-flagging, but we're getting close. And I would expect fairly shortly we'll probably come out with an announcement related to that, but to this day we haven't done that.
And our next question comes from Xin Luo.
Xin Luo - JPMorgan
Can you comment on the project announced by El Paso yesterday, the proposed Marcellus acting pipeline, how does that compete in terms of cost? And is your project more competitive than theirs, any thoughts on that?
I'll let Randy go ahead and answer that one also.
I think it's instructive to sort of start out from where MarkWest came from and how these projects developed. I think it's fair to say, we spend probably six months contacting every long haul pipe, all of that we all know from the Gulf Coast up there trying to encourage them to think about turning around the pipe.
So our perspective always has been that we want the best ethane project for the producers. That's what means the most to MarkWest and so we support every single one of the ethane projects and want the best project for the producers. We think having said that, the other side of that point is we are convinced and believe strongly that project manner is that project.
However, our goal is to support health, do everything we can for all the other projects that include El Paso's project to turn around pipe. So my understanding is that open season was both back hauling Marcellus gas, it was both perhaps poor hauling Marcellus gas and perhaps turning around one of those pipelines for ethane.
And my understanding is they've certainly been talking to producers and talking about the cost of doing that, the transport rate. And it's one of the various projects that the Marcellus producers have been talking about. We still believe based on all of the rates that have been discussed that project manner requires much less capital and have a more competitive rate than any other project.
Certainly including the discussions that have been had so far, but we continue cheering for El Paso and India the competing projects, again, because that's what's simply best for MarkWest, it's self serving to say, we want the very best project for the producers, because we want their production to be the absolutely most economic. I think that's answered it.
Xin Luo - JPMorgan
And so they talk about shipping as being from fractionation plants. So I guess you guys are talking with them on this potential as well?
Yes, absolutely. If that was the project that ultimately proved to be the most cost effective and the best for producers. Then we would certainly recover the ethane at our plants, de-ethanize or fractionate out and separate the ethane at our Houston complex and deliver that ethane to whichever project. And if it was the El Paso project, could be a pipeline over from our Houston fractionation complex over. That's the logistics of that particular project.
Xin Luo - JPMorgan
And you mentioned earlier that you even modify the processing plant to extract ethane, how much capital is involved in that?
Overall to be careful, John Mollenkopf our Chief Operations Officer will get it out. But the cost to modify the processing plant is fairly nominal. We do have to spend some money to put in deethanizing towers in the complex. But overall the cost to all of those modifications is certainly not very significant when you look at the cost of the other projects; it's pretty insignificant on a relative basis.
Xin Luo - JPMorgan
On a separate topic, is your Oklahoma processing plant, are they in the ethane rejection mode right now?
We're in the ethane rejection in the western Oklahoma plants. Our southeast Oklahoma plant receives Bellevue prices. And so the processing that we're doing down there is in ethane recovery. There's still a pretty good margin for ethane recovery at Bellevue prices.
But Conway prices, very close call. We actually flip back for a couple of weeks in July and now we flip back again. It's on the order of a penny at MCF one way or the other at this point in time. Still good margins though overall for recovering NGLs, particularly the C3 and better, still have very good margins in Oklahoma for processing.
Xin Luo - JPMorgan
And final question, on the Huron gas, I guess you fractionate for EQT, they have a joint venture agreement with DCP Midstream, I wonder if that affects the volume that you're going to get from them.
Well, yes, first of all just to clarify that Huron gas from EQT is flowing into our processing facilities, excuse me, that's their processing plant now. And then we fractionate it as you said. That's a long-term agreement that we have for fractionating that gas under POL agreements. So those we do not expect that announced joint venture with EQT and DCP Midstream to impact that operation.
(Operator Instructions) Your next question comes from (Will Tardy of Van Ness Feldman).
Question first of all pertaining to dividend. What kind of metrics are you looking for, before you decide to start increasing that dividend again?
Well, obviously we are, to just kind of use a term that we've use previously, we are still widening the spring so to speak with all the capital projects, particularly in the Marcellus. And really it's sustainability of the distributable cash flow on EBITDA flowing out of these projects and the ability to maintain a reasonable coverage ratio once we start to increase again the distribution.
We get the fact, that that's very important to our unitholders. Our unitholders have seen MarkWest over the years deliver very strong distribution growth and rates of return. So our goal is to re-establish MarkWest as one of the best performing MLPs in the industry. And that means starting to raise our distribution again, and to deliver total returns that are top of the industry.
So that's our goal, and we are getting very close to getting at that point where we would be comfortable based on our cash flow performance and our coverage ratio at starting to increase our distribution again.
And then second question is, briefly with the assets in Michigan, are they critical, non critical, and what is happening in Michigan?
Well, Michigan continues with the assets we currently have up there, currently have a crude oil pipeline essentially that delivers the western production over to the Enbridge Lakehead pipeline. And that's a very nice steady flow of the volumes and in cash flow, but it's also very small. So it's not a part of core mission, is not a part of what we call kind of our core operations around which we can continue to grow the full range of gathering, processing and NGL services, but it's making money and cash flowing and so it's still an important part of our overall company.
Finally, if I remember right, several years ago, maybe it was couple of years ago, but you were looking to replicate the Javelina project maybe somewhere up in the Northeast. Any other thought about getting together with other refineries and doing the same thing there?
Well, our interest and the opportunities to replicate Javelina still exist along the Gulf Coast, was our primary focus and we continue to work that project. It's one of the mini projects that Randy and his team continue to work on and develop.
I would not say that there is anything that has been developed to the point where we are ready to taking things specifically, but it continues to be a very good model for us, Javelina does, and we certainly are interested in continuing to pursue those opportunities. It obviously depends on the refined economics as far as whether or not that off-gas processing model would work for another refiners.
Your next question comes from John Edwards.
John Edwards - Morgan Keegan
Frank, things are tracking pretty well for you guys now. What kinds of things do you worry about now?
Well, we continue to be blessed with a lot of great opportunities. What we tried to communicate in our comments earlier is that in order for us to execute on these growth opportunities around these resource plays, it takes a combination of marketing and customer service and operational and balance sheet capabilities that is a real balancing act.
And for us, I think that the continued access to the capital markets to support these growth programs is one of the top priorities for us to make sure that we stay ahead of those capital requirements, at the same time making sure that we continue to deleverage our balance sheet and provide adequate, significant liquidity to support what may be some unknowns in this recovering economy. That's one of the top issues that, in order of our top priorities, that's driving our business today.
If you get down to some of the operational issues, just the ability for John Mollenkopf and his team to execute on all of these capital programs in a very challenging environmental environment is something that we obviously worry about and spend a lot of time trying to manage. And it's getting harder, not easier. And we like to control and manage these projects internally in order to get the kind of execution that we need.
So that's a big issue for us. It's a good problem to have, but John, I would say that balance sheet and operational execution on these significant growth opportunities still represents the two major areas of focus for us.
John Edwards - Morgan Keegan
What is your employee count now and how has that changed over the last year?
We're 500 plus right now, and it actually stayed fairly flat with the exception of Liberty, the Marcellus operations which continues to ramp up. So we feel pretty good about what we're able to accomplish with it. It's still a fairly small but efficient organization.
If you just think about the capital that we are managing, we talk about capital in terms of our own MWE requirements, but what we are managing is all the capital requirements for us and our joint venture partners. So it is significantly higher overall capital requirements out there, or capital projects that are being managed largely by our internal teams.
The next question comes from Sean Wells.
Sean Wells - RBC Capital Markets
I just had the one question on the Arkoma Connector pipeline. Is that running at full capacity now?
No, it's certainly ramping up for the Woodford up (inaudible) number is good. It's running well. It's not anywhere near full capacity. Our full capacity is up about 600,000 Dth/d, and we're just under 400, 380 or something. So we've (dealt lots of growth) in the Arkoma Connector.
Sean Wells - RBC Capital Markets
So you got plenty of room. And how long do you think it'll take to ramp-up to the full capacity?
I'm assuming you're talking about volume growth.
Sean Wells - RBC Capital Markets
That's probably more a function of what our producer customers are doing in the relative price environment. Price goes up, and I think you grow pretty dramatically, pretty quick for sure. That's more a function of the producers than it is us.
I think that's the point, is that in the Woodford, the ramp-up of the volumes in all these plays, the ramp up is obviously dependent on the pricing environment and the hedges that are in place. But if you just look at the forward curve, I think we are pretty optimistic that the Woodford volumes and the Arkoma volumes are going to continue to ramp-up as the economy recovers and we start to see more rigs deployed in these resource plays that have the best economics.
And the next question comes from Teresa Fox.
Teresa Fox - Stone Harbor Investment Partners
You have a couple of expansion plans slated to complete around I guess the second half of 2011.
I know you put out your 325 CapEx guidance for this year. What are you looking at for 2011 so far if you include these so far outlined plans?
Teresa, we haven't provided formal guidance for 2011 yet. We're firming up our 2011 project schedule and capital program and we'll start to provide guidance for that at the next earnings call.
You're right. We do have a pretty clear line of sight on a number of major projects, primarily in the Marcellus that would drive that capital program, but what I have said is that while we're not providing formal guidance, we are looking at projects that could drive, again, total capital, part of which would be ours and part of that would be the Energy & Minerals Group capital.
But it could be kind of in at $200 million to $300 million range in 2011. But again, we'll provide some better guidance for that in November when we have our third quarter call.
And there are no further questions. I'll now turn the call over to Frank Semple for closing remarks.
Well, I appreciate as always your time and interest in the company and for all the questions this time. We haven't had questions the last couple of quarters. That's great.
Any additional questions you might have, you know where to reach us, Nancy and Dan. And so make sure that you contact us with any other questions you might have. So again, thanks a lot. And this concludes our call.
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