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Crestwood Midstream Partners LP (NYSE:CMLP)

Q3 2012 Earnings Call

November 06, 2012 11:00 am ET

Executives

Mark G. Stockard - Vice President of Investor Relations - Crestwood Gas Services GP LLC, Treasurer of Crestwood Gas Services GP LLC and Assistant Secretary of Crestwood Gas Services GP LLC

William G. Manias - Chief Financial Officer of Crestwood Gas Services GP LLC and Senior Vice President of Crestwood Gas Services GP LLC

Robert G. Phillips - Chairman of Crestwood Gas Services GP LLC, Chief Executive Officer of Crestwood Gas Services GP LLC and President of Crestwood Gas Services GP LLC

Joel D. Moxley - Chief Operating Officer of Crestwood Gas Services Gp Llc - General Partner and Senior Vice President of Operations and Commercial of Crestwood Gas Services Gp Llc - General Partner

Analysts

TJ Schultz - RBC Capital Markets, LLC, Research Division

Mark L. Reichman - Simmons & Company International, Research Division

Operator

Good day, and welcome to the Crestwood Midstream Third Quarter 2012 Earnings Conference Call. This call is being recorded. At this time, I'd like to turn the conference over to Mr. Mark Stockard, Treasurer and Vice President of Investor Relations. Please go ahead.

Mark G. Stockard

Thank you. Good morning, everyone, and welcome to our call. Bob Phillips, Crestwood's Chairman, President and CEO; and Bill Manias, Senior Vice President and Chief Financial Officer, will review the quarter and then we'll open up the call for your questions.

During this call, we'll make certain forward-looking statements as defined in the Securities and Exchange Act of 1934 based on the beliefs of the company, as well as assumptions made by information currently available to management. Although management believes that the expectations reflected in such forward-looking statements are reasonable, they can give no assurance that such expectations will prove to be correct. Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call.

In addition, during the call, we'll be discussing certain financial measures, such as Crestwood's EBITDA, adjusted EBITDA and distributable cash flow and adjusted net income, which are non-GAAP measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in the press release that we issued earlier this morning and posted on the Investor Relations section of our website, which is www.crestwoodlp.com.

With that, I'll turn the call this morning to Bill Manias to review the financial and operating performance of the third quarter.

William G. Manias

Okay. Thanks, Mark. Crestwood reported today record adjusted EBITDA for the third quarter of $32 million, and that's up 12% from the $28.5 million we reported in the second quarter. Adjustable -- adjusted distributable cash flow for the third quarter 2012 was also a record for Crestwood, totaling $25.2 million and it allowed the partnership to increase distributions in October to $0.51 per unit, which is a 6.3% increase over the same period last year.

But importantly, all of our operating segments showed improvement in third quarter adjusted EBITDA when compared to the second quarter. Major contributors to the third quarter included in the Barnett segment were higher volumes from the Devon acquisition that we completed in August offset volumes decline on Lake Arlington and the impact of a fire we had at the Corvette processing facility in September.

The Fayetteville volumes were up due to additional BHP well connects. And our Other segment, which includes the Haynesville, where we have a minimum volume contract, which supports revenues were also up quarter-to-quarter. And finally, the growing contribution from our Marcellus Shale assets was also up.

Gathering revenues during the third quarter for Crestwood's 100% owned systems averaged 604 million a day, that's up 8% or 43 million a day from the second quarter 2012, showing we really did hit bottom during the second quarter as far as volumes are concerned.

Processing volumes in the Barnett and Granite Wash were up 25%, totaling 180 million a day in the third quarter, that's compared to 144 million a day in the second quarter of 2012.

Gathering volumes for Crestwood Marcellus averaged 289 million a day in the third quarter, that's up 12% over the 257 million we gathered in the second quarter. But the exciting news here is that Antero ran 6 rigs during third quarter on our area of dedication, that 12 rigs running in area. We've also observed that they have had as many as 8 rigs running in our AOD at one time. And now that the MarkWest Sherwood plant is in operation, and Antero is getting NGL upgrades for the product sales, Antero appears to be accelerating their rich gas development plans.

The 16 wells we added during the third quarter and the additional wells since then have resulted in a substantial jump in volumes, with October volumes averaging 362 million a day and November 1 spot volumes 376 million a day. And we're also on track to connect the 16 new wells we expected for 2012.

Now, the trend here, as evidenced by the third quarter results, is that the growth in rich gas volumes in the Barnett, the Granite Wash and the Marcellus are offsetting dry gas declines in the Barnett and Haynesville from a volumetric standpoint. It's also important to note that Crestwood receives a higher fee for rich gas volumes in the Barnett than we do the for the dry gas volumes in the Barnett. So while we might continue to experience some softness in the Barnett dry gas volumes until gas prices improve, and they are improving, our overall Barnett operating margins should remain relatively stable and our overall partnership EBITDA should track the growth in our rich gas volumes across the various plays.

Now, to support this conclusion, the Barnett rich gas gathering volumes totaled 167 million a day in the third quarter, that's up 23% over the second quarter where we averaged 136 million a day. The increase included a quarterly average of 24 million a day of gas related to the Devon assets that we acquired in August, offset by somewhat by the 5 days of downtime we experienced due to the fire at the Corvette facility, and the downtime at Corvette resulted in about 0.5 million of lost revenue. And this is compared to the Barnett dry gas volumes of 271 million a day in the third quarter, also an increase 2% over the second quarter of 2012. This increase was primarily due to new wells that we've brought online in Alliance at the end of the second quarter, which offset natural declines from existing wells on Lake Arlington.

Now, when comparing the offsetting Barnett volumes, you should factor in the non-recurring items, such as the lost rich gas revenue due to the Corvette fire, a $1.6 million increase in operating expense due to a $0.5 million of cleanup costs at Corvette and the addition of the Devon assets, and that lets you arrive at approximately $26.3 million of Barnett segment EBITDA in the third quarter. And that's versus $26.2 million in the second quarter of 2012. So it's relatively flat quarter-to-quarter.

Now, looking at the fourth quarter. We should get a full quarter of Devon volumes, where we will get a full quarter of Devon volumes. We should have reduced operating expenses attributable to the Devon assets once the Cowtown-West Johnson County integration is complete. And we will not have the cost, obviously, associated with the Corvette fire.

Now, moving on to the other segments, the Fayetteville segment total gathering volumes were 91 million a day there. That's up 17% over the 78 million we gathered in the second quarter. And the increase here was primarily due to the 9 wells we added to the system during the quarter. Year-to-date, we've added 19 wells to our system as BHP continues to keep a rig active and the acreage that's dedicated to our system.

Volumes in the Granite Wash totaled 20 million a day, a 34% increase over the second quarter. The volumes are increasing due to drilling by LeNorman Operating, which is a First Reserve affiliate, BP operating, and that's Boone Pickens' company, and Great Plains operating, our original producer in the field that's now developing some newly acquired Granite Wash acreage. Now, if the volumes growth continues as forecasted by these producers, we're going to be looking to expand our Indian Creek gathering and processing facilities in 2013.

On the expense front, operating expenses for the third quarter of 2012 totaled $10.1 million, that's an increase of about $1.2 million for the second quarter of 2012. And the increase here was attributable to the Devon assets and the cleanup cost associated with the Corvette fire that I described.

The combined G&A expenses for CMLP and CMM are down slightly in the third quarter, with CMLP G&A of $5.8 million, including about $0.5 million of non-recurring Devon acquisition cost or $5.3 million of net adjusted G&A compared to the second quarter 2012 net G&A of about $5.2 million. So flat on a net basis. And the $5.2 million is the $6.9 million of G&A that we recorded, less $1.7 million of second quarter non-recurring expenses.

G&A expenses associated with Crestwood Marcellus totaled about $0.8 million for the third quarter compared to $1.7 million for the second quarter. At quarter end, we had $333 million outstanding on our $500 million revolving credit facility. And during the quarter, we received proceeds of about $115 million for the issuance of 4.6 million common units. We used these proceeds to fund the $87 million Devon acquisition in August and to reduce the outstanding balance on our revolver. As defined in our credit agreements, our total debt pro forma EBITDA was about 4x at September 30. Now, under a separate $200 million revolving credit facility we have for our unconsolidated affiliate, which is Crestwood Marcellus Midstream, we have $19 million outstanding on that facility at quarter end. So between the 2 facilities, we have plenty of liquidity at both CMLP and CMM to complete our capital spending initiatives.

Finally, for the 9 months ended September 30, our CapEx -- our capital expenditures excluding acquisitions totaled $29 million, and for the full year, we expect capital spending to be about $35 million. And the $35 million includes about $5 million of maintenance capital. Capital spending, by Crestwood Marcellus Midstream, totaled about $5.4 million since the end of March and then things will pick up in the fourth quarter and we estimate that we'll spend about $20 million for the full year in 2012.

And with that, I'll turn the call over to Bob

Robert G. Phillips

Thanks, Bill, and good morning. Thanks to all of you for joining us. I know it's busy, so we'll complete this quickly and get to the Q&A. As we stated in the earnings release, I'm very pleased to deliver record results in quarterly adjusted EBITDA and quarterly adjusted DCF with solid sequential increases of 12% and 22%, respectively. Glad to get the second quarter of 2012 behind us and in the rearview mirror. Now, as you know, strategically, in response to lower gas prices in early 2012, we've been repositioning Crestwood to decrease our dry gas exposure and diversify the partnership into new rich gas plays. We've completed 2 acquisitions so far this year that have, on a combined basis, have increased gathering volumes in our rich gas plays to now 55% of our total combined volumes in the third quarter. And that's up 16% from our rich gas volumes gathered in the second quarter. So again, solid improvement there. Those 2 acquisitions also drove very strong third quarter performance as we could see in adjusted EBITDA and DCF. And they provide investors with very good visibility to a good fourth quarter and a strong 2013, which as Bill said, we'll benefit from a full fourth quarter and a full year of Devon and then a significantly growing Marcellus contributions, as again, Bill described the growth in volumes there in the Marcellus. Additionally, as you know, we've now hired a business development team. We're looking at a number of projects. We're staying active in the acquisition market. We remain disciplined to look at bolt-on acquisitions like Devon around our existing rich gas assets working on several opportunities there. And the new BD team is looking at diversifying acquisitions and organic development projects in all of the new rich gas plays. We've got Heath Deneke here along with Joel to answer any questions you might have about our existing assets or our new projects. I'm very pleased to note that we reached a milestone for the company during the fourth quarter. Recently, we gathered in excess of 1 Bcf a day on a gross combined basis for the first time ever in the history of Crestwood, on October 19, and we're very, very pleased to reach this operational achievement in just 2 years.

As you know, we really just started Crestwood a couple of years ago. We think this gives Crestwood substantial operating credibility with our producer customers and it clearly labels us as one of national midstream companies participating in shale developments. Now, back to our strategy. To the rich gas plays first. The Devon West Johnson County acquisition was a classic bolt-on. We got it for a very good value. It's extremely accretive to our bottom line and it creates significant operational synergies with our Cowtown gathering system in our Cowtown and Corvette processing plants, where we've had spare capacity for the last couple of years. As I said, it increases our rich gas volumes in the Barnett segment. It further reduces our dependence on Quicksilver for Barnett Shale growth, offsets dry gas volume declines that we've experienced in the last quarter, and replaces lower margin dry gas gathering and treating volumes with higher margin rich gas gathering and processing services. And that's very important as well. All things being equal, this acquisition should stabilize our Barnett segment for the next few quarters until gas prices improve. And we see further development of the Alliance and the Lake Arlington systems. Additionally, after the full integration of the Cowtown and West Johnson systems, which Joel and his operating team are working on right now should have that done in the fourth quarter, we can then lower operating expenses by turning back a lot of spare Devon rental compression. And most importantly, we can redeploy the Devon 100 million a day West Johnson County Processing Plant into one of the rich gas areas that Heath and his team are working on developing organic infrastructure projects such as the Niobrara, the Utica or the Avalon Shale around our Las Animas systems.

Now, to the Marcellus Shale. Exciting news here. As Bill said, Antero is accelerating their drilling and development program and they've really ramped up volumes for Crestwood Marcellus. From 200 million a day at the beginning of the year to 257 million a day average for the second quarter, to 289 million a day average for the third quarter, to 376 million a day on a spot basis on November 1, we are witnessing substantial growth in system expansion up there. We recently completed our first major pipeline project in the AOD, that's our area of dedication. As a reminder, that's about 130,000 acres and Antero continues to add acreage, both within the AOD and outside of the AOD. We have 2 new compressor stations in construction and underway, and we're just now commencing 2 new pipeline projects. And as a reminder, we've got a 20-year contract here. So just 3 quarters out of the gates, we're seeing real growth in the Marcellus. We've got a great producer partner in Antero. They're now processing their gas at the MarkWest Sherwood plant, so they're getting the benefit of the NGL upgrade. They continue to expand their hedge portfolio for their production. Going forward several years, they continue to make significant long-term downstream commitments to accommodate significantly higher volumes in the future. And as some of you may know, they just announced this morning the sale of their Piceance Basin assets for $325 million. And Paul Rady made the statement in his -- Paul Rady is the CEO of Antero, he made the statement in that press release that the Piceance asset sale allows Antero to redeploy capital and human resources to its Marcellus and Utica shale projects, where we are focused on the development of liquids-rich natural gas and oil reserves. So we're excited about the developments there for Antero and their partner, and we've enjoyed working with them for the past few months as we transition operations of those assets from Antero to Crestwood.

So excited about that. Now, back to the overall strategy and kind of where we are today. Despite what I think is a repositioned portfolio in the making and some very exciting growth opportunities in the Barnett rich area, the Granite Wash, the Marcellus, clearly, Crestwood unit year-to-date unit performance has been, for lack of a better term, lousy. I've used different terms here in the office, but I think lousy is a pretty good term, relative to our peer group and to the AMC Crestwood just simply has not performed well. I think it indicates that investors continue to be concerned or weary about the activity level of Quicksilver in the Barnett Shale. Clearly, we have taken large steps to grow and diversify the partnership away from Quicksilver. We've reduced KWK's revenues to less than 50%, actually 46% of adjusted revenues in the third quarter. That's down from over 90% when we bought the business from them just 2 years ago. On a volumetric basis, our calculations for 2013 have Quicksilver volumes becoming less than 30% of our gross total, on a combined basis, so we'll see further separation from Crestwood and Quicksilver in 2013. But let's be clear about this, our analysis suggests that the underlying properties that Quicksilver owns in the Barnett Shale are very prolific, they're located in some of the best areas of the Barnett, they're core properties, they're dedicated to us until 2020. And no matter who owns those properties or how they're capitalized, those properties have significant long-term value and they will be drilled eventually. So while we're all waiting for, as one analyst put it, additional clarity, on the near-term uncertainty regarding Quicksilver's development plans in the Barnett, let's be clear about where we are. We think there's tremendous long-term value in our Barnett systems and the investment we made in the Barnett. It was the original platform, the starter kit, if you will. Over the last 2 years, we've done a great job in diversifying and we continue to push that. I think clearly, our current price and yield for CMLP do not reflect both the efforts that we've made to diversify the company, the exciting growth prospects that we have in the rich gas areas and the long-term value of the properties that we have under contract in the Barnett. So you can be assured of the fact that your management team continues to aggressively diversify the partnership to maintain our growth objectives. We certainly have every intention of continuing to build the company on a sustainable basis, notwithstanding this short-term problem that we have in the Barnett. We're hopeful that our friends at Quicksilver are continuing to have success in resolving their issues. And like the rest of you, we're anxious to hear positive news on that front. So with that, Mark, we're ready to -- we've concluded our remarks and we're now ready to open it up for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Now we'll take our first question from TJ Schultz with RBC Capital.

TJ Schultz - RBC Capital Markets, LLC, Research Division

I guess just first, a couple of questions in Marcellus. I guess first, what do you expect for well connects in the fourth quarter, and how are you progressing with attracting third party volumes onto the system? And I guess most importantly, what does all this foretell for your timing to drop the rest of Sabine [ph] into the MLP?

Robert G. Phillips

TJ, let me give you a brief answer about the drop-down and then I'm going to turn it over to Joel Moxley, our Chief Operating Officer to answer some of the specific questions about what we've got going on in the Marcellus, because we've got a lot going on. I appreciate you asking that question. From a strategic standpoint, recall that we created a joint venture with Crestwood Holdings and CMLP, specifically for the purpose of financing what at the time, back last March, was a fairly large transaction for Crestwood to finance on its own. It was a $377 million acquisition, and Bill and I simply felt at the time that, that was an awful lot of leverage and potential equity that we would need to issue given our fairly small float at the time. And so we chose to -- we had a lot of debt capacity at Crestwood Holdings. It was over-equitized from the initial investment by First Reserve. They've been great partners. They were willing to warehouse that -- a portion of that acquisition at Holdco. And so we did that for financial reasons. The another reason why we did it was essentially to de-risk the properties under the contract. We'd had a lot of drilling there in advance of us acquiring the assets, but we wanted to see several quarters of very positive performance. It started out slow in the second quarter. It picked up an awful lot of speed in the third quarter. The same for the fourth quarter, we're now on track or actually slightly ahead of where we were, we thought we would be volumetrically from the acquisition forecast. We now have in play more capital projects than we thought we were going to have in play at this point in time. And when we worked with Antero to look at their 2013 drilling plan, we see a far more aggressive development program than we thought. So 2 things have happened. One is Crestwood has gotten bigger from a financial standpoint over the year and the properties have been de-risked and we now have a much more positive point of view about the development plans at Antero as witnessed by their sale of the Piceance and essentially the redeployment of that capital and those people to developing the Marcellus property. So as a result, it's now about time to start thinking about a drop-down. We've accomplished the 2 things that we wanted to do, to warehouse financially and operationally at the holding company level, and so First Reserve has been a great partner to allow us to do that. And so we're now thinking about it's time for a drop-down. And with that, I'll turn it over to Joel to talk about some of the operational things.

Joel D. Moxley

Great. Thanks, Bob. Yes, we have a lot of activity going on. We have 5 pipeline projects going on in the Marcellus dedication area right now. We actually turned on a compressor station that had a capacity of around 50 million a day, about mid-October. So that's contributed to the volume growth and that we are looking forward into 2013 as was mentioned in the earlier remarks to add 2 compressor stations that each have 50 million a day or more compression capacity each. And so we have a lot of activity going on. We're putting a lot of energy in trying to stay ahead of Antero's drilling program. We've connected 3 wells so far this quarter and on track to have somewhere between 12 and 15 between now and the rest of the year. Yes, as a highlight there, the wells continued to be spectacular. We are seeing wells IP somewhere between 15 million and 20 million a day each, and those are great problems to keep up with. Those guys are doing some really great work and we're doing all we can to stay ahead of them, work with them. We're having meetings with them monthly to talk about their plans. They update them constantly and so we're working very diligently to stay ahead of their drill bit to make sure their volumes flow with the highest rates possible.

TJ Schultz - RBC Capital Markets, LLC, Research Division

Okay, good. Helpful. Would you look to drop all of the remainder of CMM into the MLP at one time, or is it possible that you will look to take pieces of it over time?

Joel D. Moxley

That's a great question, one that we're evaluating here internally as well. And any drop-down, of course, would be subject to the review and approval of our conflicts committee, which is constituted by our 3 independent directors. These are all experienced veterans of the industry. We worked with them when we formed the initial joint venture between Crestwood Holdings and Crestwood. We did it with the understanding that Crestwood had a minority interest, but would be the operator and would have virtually exclusive rights to acquire additional interests at some point in time. We're evaluating our 5-year plan. We do not have all of our producers' 2013 development plans yet, so we have not finalized our 2013 budget. As we get closer to the end of the year and we get more visibility about how our producers are going to develop their properties for 2013, how much capital we're going to need to spend. We're looking at spending capital, of course, in the Marcellus, but we have a separate revolver to deal with that. But we're looking at some exciting capital opportunities on existing assets like the Granite Wash, which we mentioned. But of course, Heath Deneke and his new business development team, they're burning up horses putting projects together, and so we have to reserve some capital for them. All those things will factor into ultimately whether or not Crestwood Midstream Partners makes an offer to acquire a piece or all of Marcellus, and I think that will become clear as we further develop our 2013 forecast and capital spending estimates.

TJ Schultz - RBC Capital Markets, LLC, Research Division

Okay, good. I guess just lastly, maybe a little longer term in the Marcellus. As you look at Antero and the access now to Sherwood and activity obviously accelerating. Just on the ROFO that you have for any gathering that they construct on a 100,000 net acres adjacent to your AOD? Is there any insight in the timing on some of those gathering projects that can lead to acquisition candidates as we look out over 2013, 2014?

Robert G. Phillips

Joel and I had a high-level meeting with Antero executives just a few weeks ago. They gave us a preview as to their development plans for what we call the Western AOD, which is an area that has significant acreage to it. We're not at liberty to divulge exactly what the acreage position is out there. But I can tell you that we were impressed with Antero's commitment to the overall region, both in terms of adding additional acreage to the west of our AOD, beginning to deploy a number of rigs in that area, to begin to drill and develop and get a better long-term development feel for how they're going to develop those properties. And of course, as they drill those wells, Antero was starting to build midstream infrastructure to service those wells similar to the way they did it with the assets that we acquired from them in March. We do have a 7-year ROFO. We would hope that the development that we see in the general area and just corporate events like the announced sale of the Piceance Basin and the redeployment of capital into -- as Paul Rady, CEO of Anteros, said in his quote into the Marcellus and Utica areas, will drive that development faster and would then create an opportunity for us under that ROFO much quicker than we ever imagined when we acquired the business a year ago. So I don't know anything more than that. I can tell you that I'm extremely impressed with how fast they are beginning to develop their properties and their results, as Joel said, have been nothing short of spectacular. So I'm a buyer of Antero right now. They're a great company. They're doing a great job. We highly value that ROFO in the western area and we're watching them as they begin to develop those properties and we're anxious to have an opportunity to participate in that midstream development as well.

Operator

And we'll take our next question from Mark Reichman with Simmons.

Mark L. Reichman - Simmons & Company International, Research Division

I just wanted to -- I wondered if you could just maybe elaborate on the Granite Wash. I mean sequentially, you saw a real nice bump up in volumes and just wanted to find out if you could just talk a little bit more about the producers' plans. And I think you've indicated earlier that you see possibly some expansion opportunities for Indian Creek in the future.

Robert G. Phillips

Sure. Mark, I'm going to give you an opening comment then again, turn it over to Joel for the specifics because we do have a lot going on out there. So remember that the Indian Creek plant and gathering system we bought in the frontier deal in the April of 2011 frankly was a throw-in at the time as we were largely focused on the large Fayetteville systems and the large Fayetteville acreage dedication that slowed down for us a little bit. Although as Bill noted, we have seen an increase in volumes in the Fayetteville and so an increase in profitability there. For the last year, nothing much happened at Granite Wash. Recently, a First Reserve affiliate company, which highlights again, the value of having First Reserve as our general partner, took some properties out there and began to drill new wells with longer laterals and much larger stage fracs and he's had tremendous success. The first couple of wells have come in far in excess of the wells that had been drilled previously on that dedicated acreage. So we're very thankful that the new operator came in that he was an affiliate of ours through First Reserve and that he has a very active program going there. Now some additional operators are coming into the area and deploying rigs, and so it's an exciting time for us and it clearly is going to lead to an expansion of that plant out there. So Joel, you want to talk about the phased process we're going through?

Joel D. Moxley

Yes. Let me do that. As Bob mentioned LeNorman has had some great success when he acquired the acreage out there, that acreage was producing between 3 million and 4 million cubic feet a day. As of yesterday, it was making over 14 million a day, and he's got a lot more wells to bring on. He's got as many as 35 to 40 more wells to drill in the acreage. So in response to that, we relocated the compressor unit from our Alliance facility. It started up last week to bring more gas in from the LeNorman's acreage, and we are working on plans to relocate a second compressor from Alliance to the Indian Creek area, again, to pull more gas from the dedication area that we have with LeNorman.

Additionally, what we're doing, we're working again to reuse some existing compression that we have in the Barnett area at both Alliance and our Lake Arlington Dry Systems and move that out to Indian Creek. We need to add some capacity to our existing plant and so our goal there is to add some compression in the plant yard itself so that we can bring the plant up to its full capacity at 35 million cubic feet a day. And additional benefit of that is to be able to release a rental unit that we have had out there since we acquired their facility. So not only are we adding capacity to the plant, we're also reducing our operating cost by getting rid of some rental units. So we have some really exciting plans for Indian Creek. We're also doing the beginning work to find an expansion facility that would be added to existing plant sites. So we have room out there to grow to expand the facility, and so we're talking to folks and looking for an existing or used plant that we can redeploy out there and expand, again just stay ahead of the plans that LeNorman has in the area and the other producers that were mentioned in our call earlier.

Robert G. Phillips

Is that it, Mark? No more?

Operator

[Operator Instructions] And at this time, there are no other questions in the queue.

Robert G. Phillips

Okay. Well, that concludes our call for this morning. We appreciate your participation with Crestwood this morning. Thank you very much.

Operator

That concludes today's conference call. We appreciate your participation.

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