EnLink Midstream, LLC. (ENLC) CEO Barry Davis on Q1 2021 Results - Earnings Call Transcript
Dynex Capital, Inc. (DX) Q1 2021 Earnings Conference Call May 5, 2021 9:00 AM ET
Company Participants
Brian Braungart - Director, Investor Relations
Barry Davis - Chairman & Chief Executive Officer
Ben Lamb - Executive Vice President & Chief Operating Officer
Pablo Mercado - Executive Vice President & Chief Financial Officer
Conference Call Participants
Shneur Gershuni - UBS
Michael Cusumano - Hiking and Energy.
T.J. Schultz - RBC Capital Markets
Chris Jeffery - Mizuho
Chris Tillett - Barclays
Operator
Good day and Welcome to EnLink Midstream's First Quarter 2021 Earnings Call. [Operator Instructions] Please note that this event is being recorded.
I would now like to turn the conference over to Brian Braungart Director of Investor Relations. Please go ahead.
Brian Braungart
Thank you and good morning, everyone. Welcome to EnLink's First Quarter of 2021 Earnings Call. Participating on the call today are Barry Davis, Chairman and Chief Executive Officer; Ben Lamb, Executive Vice President and Chief Operating Officer; and Pablo Mercado, Executive Vice President and Chief Financial Officer.
We issued our earnings release and presentation after market closed yesterday and those materials are on our website. A replay of today's call will also be made available on our website at www.enlink.com. Today's discussion will include forward-looking statements, including expectations and predictions within the meaning of the federal securities laws. The forward-looking statements speak only as of the date of this call and we undertake no obligation to update or revise. Actual results may differ materially from our projections and a discussion of factors that could cause actual results to differ can be found in our press release, presentation and SEC filings.
This call also includes discussion pertaining to certain non-GAAP financial measures. Definitions of these measures as well as reconciliations of comparable GAAP measures are available in our press release and the appendix of our presentation. We encourage you to review the cautionary statements and other disclosures made in our press release and our SEC filings, including those under the heading Risk Factors. We'll start today's call with a set of brief prepared remarks by Barry, Ben and Pablo and then leave the remainder of the call open for questions and answers.
With that I would now like to turn the call over to Barry Davis.
Barry Davis
Thank you, Brian and good morning everyone. Thank you for joining us today to discuss our First Quarter 2021 results. After a 2020, that was a challenging year, yet one in which our performance exceeded expectations. The first quarter of 2021 was a continuation of that strong performance.
I am incredibly proud of the relentless effort our employees made during winter storm URI, not only to ensure the integrity and performance of our assets, but also to ensure people's homes could be and powered and that impact to the communities we serve would be short-term in nature. I am particularly thankful that they did that while remaining safe.
For the first quarter, EnLink delivered another strong resilient quarter. We achieved adjusted EBITDA of $249 million and free cash-flow after distributions of $94 million, both of which exceeded our expectations. When you drill down into our segment performance, we achieved another quarter with all four assets segments generating significant cash-flow.
This is a tremendous outcome. Given the unprecedented temporary volatility, winter storm URI presented and speaks to the operational excellence focus we have had over the last few years. Overall, URI had a minimal net impact to our first quarter results, despite the unprecedented temporary impact the volumes across all our segments.
Importantly, all of our systems are back online and volumes have returned to normal. With the strong first quarter results, we remain positioned to meet our full year 2021 adjusted EBITDA and free cash-flow guidance. Our focus for 2021 continues to be one of execution with four key areas that our team is working on today.
First is operational excellence and innovation. We have been laser focused on this. We have centralized some compressor station and plant monitoring to enhance the cost and scalability of operations. And we have fully embraced an efficiency mindset, which has led to operating our business better each and every day.
Second is financial discipline and flexibility with our focus on operational excellence. We continue to reduce operating and G&A expenses in the first quarter. And we continue to forecast another year of very strong, free cash-flow after distributions with the ability to continue to pay down debt.
Our third focus area is strategic growth, we have previously discussed our disciplined approach to opportunistic a creative bolt on acquisitions. Yesterday, we announced an acquisition consistent with our strategy with the Amarillo Rattler system in the Midland basin. The Amarillo Rattler acquisition builds on our long standing relationship with Diamondback Energy and offers another example of using operational synergies to achieve attractive economics.
In terms of business development, we continue to see our Louisiana footprint offering growth opportunities. In addition to new projects, like the Venture Global Project, we completed last year, our extensive asset footprint and longstanding customer relationships position us well to collaborate with others in an energy transition over the long-term.
And our fourth and final focus area is sustainability and safety, providing safe, reliable operations is foundation of sustainability at EnLink and the cornerstone of our operational excellence. You'll see the clear evidence of this through our third annual sustainability report issued last night and available on our website yesterday, we advanced our goal of being part of the energy transition and being an active participant in it.
As we build our path towards a long-term emission goal, we have established emission reduction milestone, which include striving for a 30% reduction in methane emissions intensity by 2024 and pursuing a path to reach a 30% reduction in our total carbon dioxide equivalent emissions intensity in our operations by 2030. These milestones will build a pass to our long-term goal to reach a net zero emissions by 2050.
Lastly, to remain yet united with our industry and addressing the environmental impact, we also joined the environmental partnership. With that, I'll turn it over to Ben to talk about operations.
Ben Lamb
Thanks, Barry and good morning everyone. Before we get into the segments, I want to thank our team for their efforts to manage the business during winter storm URI. The storm was an unprecedented event that temporarily disrupted volumes across all of our assets segments, and created a number of operational challenges, negatively impacting the quarter.
We purchase gas at extremely high market prices to cover from sales as volumes received from producers on our systems fell. We experienced other marketing related losses, including losses on derivatives that in normal times are used to ensure price, stability and predictability. In spite of the challenges presented from the severe decline in customer volumes, EnLink resilient assets helped to create offsetting operational savings. We were able to make limited, incremental commodity sales to support local markets in less operationally affected regions.
Additionally, as a result of forced outages on our systems due to the unavailability of volumes from producers and from power outages, we received approximately $40 million in credits for unused electricity that had been purchased on a firm basis. Our focus on operating efficiently and safely helped set the foundation for us to respond swiftly to the challenges in the extreme temperatures presented.
Our teams prepared for the storm by pre-positioning heavy equipment, to ensure that we could access our assets, reducing the levels in our storage tank so that we could operate without truck access for a period of time and having detailed plans for how to keep our employees safe, as they responded to this unprecedented event. These actions and others helped contain the operational impact to a window of about 10 days.
We are incredibly proud of the work our employees did during this unprecedented gut. Our team worked tirelessly to ensure that all of our assets operated to the greatest extent possible because we know that our products are essential to the lives of those in our communities. Additionally, I want to add on to Barry's earlier comments on the Amarillo Rattler acquisition. We are extremely excited to deepen our longstanding relationship with Diamondback Energy, one of the most successful Permian focused producers.
At a cost of $60 million, the acquisition represents attractive economics of about 6 times on 2022 expected EBITDA, thanks in part to significant operational savings and it requires minimal CapEx for system integration.
Now moving to the segment results, The Permian continues to see robust activity in generated $42.8 million in segment profit. Additionally, the first quarter of 2021, marked the third consecutive quarter of positive segment cash-flow with $29.5 million being generated. Average natural gas gathering volumes were 1% lower compared to the fourth quarter of 2020 that increased by approximately 11% over the first quarter of 2020.
Average natural gas processing volumes for the first quarter were 3% lower compared to the fourth quarter of 2020, that increased by approximately 2% over the first quarter of 2020. The sequential decline in gas volumes on our system was due to the temporary, severe volume disruptions we saw from URI. For example, we saw volume reduced as much as approximately 90% on our Midland gas system before returning to normal operations.
When we look at March, 2021 volumes gathering and processing volumes increased over 12% and about 7% respectively over December, 2020. Project Warhorse, our Midland basin plant relocation continues to make good progress and it remains on schedule to be in service in the second half of 2021.
Given the current commodity environment and level of producer activity, we anticipate that Warhorse will be highly utilized shortly after start-up. Turning now to Louisiana, segment profit for the quarter was very strong coming in at $82.2 million. This represents an increase of almost 2% when compared to the seasonally strong fourth quarter of 2020 and a 9% increase from the first quarter of 2020.
Louisiana saw very strong cash-flow generation of $79.4 million during the quarter and we continue to forecast strong cash-flow for the remainder of 2021. The segment benefited from strong NGL prices, the recent inception of the venture global transportation agreement and the acquisition of Jefferson Islands Storage and Hub. The recent of the Jefferson Island assets also helped to balance our system and ensure that our, from Louisiana customers, including utility power and industrial users continue to receive service during winter storm URI. And despite the addition of the acquired assets are focused on operational excellence benefit at the segment as operating expenses declined over 8% year-over-year.
Moving up to Oklahoma, we delivered $55.5 million of segment profit for the first quarter of 2021, which was approximately $43 million lower than the fourth quarter of 2020. The first quarter of 2021 marks the first quarter, following the expiration of a minimum volume commitment. This MVC accounts for approximately 40% of the decline relative to the fourth quarter of 2020.
Despite the MVC rolling off, Oklahoma continues to be a very strong source of cash-flow, which was approximately $54 million in the first quarter of 2021. Natural gas gathering and processing volumes decreased by about 10% sequentially, similar to what we saw in the Permian average volumes for the first quarter of 2021 we're significantly impacted by the volume disruptions associated with URI, which saw temporary reductions of over 90% in Oklahoma.
The JV project between Devon and Dow began development under its two rig program. We continue to expect to begin receiving volumes in the second half of 2021. Additionally, we expect to see slightly higher levels of activity from private operators. Given the current commodity price deck, we think both of these factors may help provide momentum into 2022
Wrapping up in north Texas, segment profit for the quarter was $76.9 million, which increased by approximately 25% compared to the fourth quarter of 2020. Additionally, we saw very strong segment cash-flow generation with approximately $75 million in the first quarter of 2021. Our team in north Texas is doing an incredible job managing the asset base and was able to reduce operating expenses by 6% compared to the first quarter of 2020.
Gathering volumes for the first quarter of 2021 declined 3% when compared to the fourth quarter of 2020, due in part to the impact from URI. While volumes were negatively impacted by the storm, we were able to support the local market during the storm with some limited incremental gas sales at higher than normal prices.
North Texas is a mature basin that we have been encouraged by some recent activity, a private operator drilled four, very successful new Wells on our system in the first quarter. And BKV has been reactivating old Wells and re-stimulating active Wells. This kind of activity can help to reduce the overall decline rate of the basin. With that. I'll pass it over to Pablo to discuss our financial update.
Pablo Mercado
Thank you, Ben and good morning, everyone, I'll start with the first quarter highlights. As Barry mentioned EnLink delivered a strong first quarter achieving $249 million of adjusted EBITDA. The team overcame significant volume disruptions and operational challenges created by the winter storm, in addition to the Oklahoma MVC roll-off. EnLink also a achieved $94 million of free cash-flow after distributions for the first quarter of 2021 with all four of our asset segments, delivering strong contributions.
As Ben highlighted winter storm URI temporarily impacted all four of our segments. However, in aggregate the storm did not have a material impact on our first quarter results. On the segment level basis, Oklahoma was the hardest hit since it did not have significant offsets to counter the volume impact to our systems. We estimate that Oklahoma was adversely impacted by approximately $15 million. North Texas. On the other hand, saw a net positive impact of a similar magnitude.
The effects of winter storm URI on our industry are far ranging and resulting industry-wide litigation and billing disputes will take time to resolve. And so our team's performance through the February storm, we're incredibly proud of the work. They have done the focus on operational execution and gain efficiencies since 2019.
Operating and G&A expenses, in the first quarter of 2021, we're down 13% year-over-year, excluding the $40 million electricity credits resulting from URI and project core force op ex of $7.6 million. We continue to see the significant cost reductions that we achieved in 2020 as a hundred percent sustainable in 2021 and a large portion of them about 85 to 90% sustainable, even in a modest growth environment.
On the expenditure front, the team continues to keep a sharp eye on capital light, high-return projects as exemplified by project War Horse. For the quarter capital expenditures net to EnLink we're only $28 million, which is down from $91 million in the first quarter of 2020. We do however anticipate CapEx to take up starting in the second quarter.
As we proceed with project War Horse another well connect activity. In total, we continue to expect capital expenditures to be between $140 million and $180 million in 2021. On the balance sheet side, one of our top priorities is to maintain our strong liquidity and financial position. And we continue to make progress on that reduction. During the quarter, we reduced our bank that balanced by a hundred million dollars in increased our cash position. We continued to be well positioned to repay our remaining $350 million term loan balance this year, given our strong free cash-flow generation and our $1.75 billion on drawn revolver.
Also in the first quarter, we expanded our AR securitization facility by $50 million to $300 million while simultaneously lowering the cost by almost 40 basis points to live or plus 125 basis points. At the end of the quarter, we had only $150 million strong on that facility giving us additional liquidity.
Our debt to adjusted EBITDA ratio on there our credit agreement was 4.2 times at quarter and reducing leverage below four times continues to be our objective, and we will likely set a lower objective over time. Now, as we look ahead with a strong first quarter under our belt, we feel very good about our guidance range of $940 million to $1 billion of adjusted EBITDA and $275 million to $325 million of free cash-flow after distributions. We continue to see solid operator activity, which should drive higher volumes in the second half of the year. And while we have seen some volatility in commodity prices, current forward curves for NTLs and WTI remain above the assumptions used in our guidance.
For referenced as discussed last quarter, our guidance was based on average prices of $0.55 a gallon for NTLs $3 per MMBtu for natural gas and $50 per barrel for WTI. That said there's still a lot of year yet to play out. So we will look forward to providing a further update with respect to our guidance on our second quarter call.
Turning to capital allocation, we remain committed to a disciplined and balanced allocation of our free cash-flow. Well be leveraging the balance sheet remains our top objective. We have the financial flexibility to pursue other high return opportunities and return of capital to unit holders. We continue to evaluate small talking acquisition opportunities around our existing footprint, but like the Amarillo Rattler acquisition, those investments will have to clear high bar with respect to returns and not impede our de-leveraging objective.
We did not re-purchase any of our equity or securities in the first quarter, but continue to have that flexibility as we generate cash and balance our capital allocation objectives.
With that, I'll turn it back to Barry.
Barry Davis
Thank you Pablo, to sum it up, I am very proud of all the hard work and dedication the team has shown to put us in this position and showcase the resiliency of our asset footprint, during this past quarter. We are well on our way to meet our 2021 guidance and continue to lay the foundation for this to be our trough year in terms of EBITDA. Additionally, we are laying the path to be active participants in the energy transition with that. You may now open the call for questions.
Question-and-Answer Session
Operator
We will now begin the question and answer session to ask a question. [Operator Instructions] The first question will be from Shneur Gershuni with UBS. Please go ahead.
Shneur Gershuni
Hi, Good morning, everyone. You know, maybe to start off, I was wondering if we can talk about the Oklahoma segment for a back year. You know, when I sort of think about the segment several years ago, you were coming off a very active period and you know, when the rig count decline you were, you're fighting high decline rates, just because of the newer Wells you had the NBC roll off you know, at the end of last year. And so I guess kind my question is – are, we at the point where the decline rates are more manageable? Can you talk about where it goes from me from here? Have rigs returned to the footprint? It's so how many can we assume, you know, with the flattening of decline rates that not as many rigs are needed to keep Oklahoma flat, especially when I sort of take into account the 14% reduction in OPEX year on year and any color would be, would be super helpful in helping us think about the Oklahoma segment on a go forward basis?
Barry Davis
Hey, good morning. It's been yeah, a lot, a lot, a little sub-questions there, but let's, let's just kind of lay the lay, the foundation, obviously the storm you know, makes it difficult to see in our reported first quarter results you know, sort of the underlying volume trend, but I'll, I'll share with you that if you were to look at March versus December, which is about the fairest comparison you have at a pretty noisy quarter.
The gathered volumes were down about 2%. I think the process volumes were down about about 5%. And so that gives you some sense of, you know, what's going on the footprint with relatively little activity today in terms of rig activity right at the moment we have three running, two of those are the Devon Dow JV rigs that we expect to be on the footprint all year long.
And we expect to see first volumes from that activity in the second half kind of late, late summer, early fall. And the third rig is a private operator and that's been pretty consistent. We've seen one or two rigs for our private operators alongside the two from the Devon Dow JV.
What I would tell you is the, the private guys in the current price deck, especially with some more robust NGL pricing that really comes into play. And in the combo play that Oklahoma is, I expect we'll see a moderately higher level of activity from the private guys in the second half. And I think that combined with the Devon Dow JV sets up to carry us with pretty good momentum into 2022.
Shneur Gershuni
Perfect. Thank you for that. And maybe it's a follow-up question. I, I know I asked this on almost every call, but I was wondering if we can talk about the operational excellence program. I think on the last call if I remember correctly, you talked about you know, how much you achieved last year and when you first embarked on it and that you were working on 20 potential different concepts.
Now I'm trying to understand you know; what your expectations are around it. Is it something where we see, you know, another round of big improvements in 2021? Or is it something that we have to wait for till 2022? And they're more, a little bit longer-term in nature. You know, just any color around your expectations around that in terms of both from an op ex reduction perspective, but also from a revenue optimization perspective?
Barry Davis
Yeah. Well, you're right. We did a tremendous amount of good work in 2020, and that really showed up in not just in OPEX, but also in G and a, you know, we call it operational excellence, but there's certainly a strong G&A component to it as well. And Pablo and his prepared remarks talked about some of the op ex comparisons. And we talked about some of those too in the, in the earnings release, but when we look forward we do have a very robust pipeline of operational opportunities.
I would say that in 2020, we got a lot of the low [indiscernible] 2021. We're doing some of the harder work, some work around technology implementation that we think will pay dividends and, you know, in future periods. So are we going to see another 20% year-over-year reduction though? I don't expect to see that, but I think what you will see is we will continue to grind cost out quarter after quarter on a volume adjusted basis.
So as the business grows, the cost base naturally wants to grow and our operational excellence effort will help to keep that cost base in check or even push it downward.
Shneur Gershuni
Perfect. I have more questions, but I'll pause for now. Thank you.
Operator
The next question will be from Michael Cusumano of Hiking and Energy.
Michael Cusumano
Hey, good morning. So correct me if I'm wrong, but I believe that Emma Rio rattler JV had a processing plant planned that they had tabled through 2020. Is that right?
Barry Davis
Yeah, that's correct. Michael. And so,
Michael Cusumano
You know, if you could just kind of go ahead.
Barry Davis
No, go ahead. Ask the question.
Michael Cusumano
My question was we are starting to run into, you know, capacity restraints to where that plant was going to be revisited from a from a CapEx standpoint?
Barry Davis
Yeah, here's what I would say. They, they had planned to build a small processing plant on that footprint. And I think that as all of us in the energy sector, think through the right way to do our business investing in a small processing facility on a relatively small gathering system that, you know, that maybe doesn't have a ton of visibility to long-term you know, becoming a big system is probably not the right thing to do.
And I think the Diamondback team recognized that and recognized that in the hands of EnLink, we could operate that, that system at much lower costs and integrate those volumes into our broader system that today includes five processing plants and, you know, would one under construction. And so there's both an efficiency benefit and also a reliability benefit from not, you know, not having all of your eggs in one basket, so to speak. Okay.
Michael Cusumano
So there's enough capacity in your system to where no new Greenfield plants needed right now?
Barry Davis
That's right. I mean, we, we have the Warhorse plant under construction. That's our plant relocation project from Oklahoma to the Midland basin. So our near term expectation is that we'll operate the Amarillo assets until the time that war horse becomes available. I'd also say though that one of the best things about our team is when we give them some assets to work with, they find new and creative ways to use them. And that may end up being the case here.
Michael Cusumano
Got you Well good job to your team. I think most will agree that, you know, capital efficient agreements, like this are a big positive for our industry. So kudos to you all.
Barry Davis
I appreciate that in the, you know, the secret is you can appreciate is having some operational synergy and also having some downstream integration and that's what made it possible for diamond back and Amarillo to exit at a price that they felt good about and for us to enter a price that we feel good about.
Operator
The next question comes from T.J. Schultz of RBC capital markets.
T.J. Schultz
Hey, good morning. Let me just start in on north Texas. Some new drilling was successful. So outside of the strong impacts on first quarter, just what are your expectations for that drilling activity and some of the re simulations you talked about to impact kind of the volume declines that we've been seeing?
Barry Davis
Yeah. Thanks TJ. A great quarter in north Texas fighting through the storms operations team all across EnLink did a great job, certainly they did in north Texas. When you think about the volume, we did have four new Wells drilled in the first quarter. They were great. Well, some of the best Wells we've seen in the Barnett probably ever they were lenient as Wells and have been great, great performers.
I don't necessarily expect that that translates into consistent rig activity at this point. I do think that it probably gets the attention of some private operators. And I think that combined with some price deck strings that is sustained over time would bring some activity back to the, you know, back to the footprint.
In the meantime though, BKB has been a wonderful customer for us to have as, as Devin successor on the biggest acreage footprint in, in north Texas they've been extremely active reactivating, a number of Wells that have not been active that added maybe three or 4 billion cubic feet a day, also experimenting with some refracted reach stimulation techniques that have been successful.
And so those two things together over time ought to help stem the decline on north Texas. I think it's probably a little bit too soon to start quoting specific numbers that, you know, that absent, that activity, we expect to see a, sort of a high single digit number. And so to the extent that we see some activity like this school will help to stem that. Yeah.
T.J. Schultz
Okay. Understood. Just my follow-up would be around the storm impact a lot of moving parts in the quarter. My question is just really around the comment or send the billing disputes coming of the storm. What's the potential impact to you all from any potential or outstanding litigation around that? Thanks.
Pablo Mercado
Yeah. Hey, TJ, it's Pablo you know, so as you know, in your forklift from others the storm created quite a mess in our industry. Everyone forced matured everyone else. And so it's going to take some time for those things to get resolved. You know, I think from our perspective we feel good about our position on all that and what we reflected in, in the first quarter or those things that we were able to bring to a resolution pretty efficiently. Thank you. I'm James Kirby of JP Morgan.
T.J. Schultz
Hey, good morning guys. Warren maybe just want to start here with the newly announced emission reduction goals. You know, you guys mentioned the opportunities on the slide and, and it seems, I guess the most immediate would be or I guess the most capital intensive that is near term would be the compressor engines and covering them for electricity. It was wondering if you could allocate, we're talked through kind of what the capital burden would be for that or any kind of early budgeting stages that you talked, you you've gone through in terms of how much capital that would take?
Barry Davis
Hey James, this is Barry. Thank you for the question. Let me, let me again say that the work that the team has done on this has been terrific work. We've had a, a large group across the company from all different departments who have just, just really done extensive work to get a handle on our missions and how we can continue to get better there. And so we're, we're proud of the targets that we've set.
We feel confident that we'll be able to hit those intermediate targets that we've established. And we have a pathway -- a specific pathways to each one of those that being said we're not ready at this point to put a number on the capital. I will tell you that it is going to be a relatively modest amount of capital because we're doing the things that are closest in the things that can be done very efficiently.
I think you hit on the point that is is correct, which is when we start getting into switching out any of the compressor engines to move from you know, from gas fire to electric fired. We're certainly going to see that, but I'm going to ask you for some patients, for us to establish a better capital numbers and, and communicate that to you in the future.
Michael Cusumano
Got it, appreciate that. And then maybe just for follow-up shifts to guidance, you mentioned more color coming in the 2Q you know, earnings, maybe just where we stand now, looking at the commodity price curve you know, oil sands, you know, above where you guys are budgeting for, and maybe just with current activity levels you know, it has messaging chain in terms of what is needed to kind of get into the high end with guidance for slow end, or is that really just activity driven? And I guess, you know, as we start through April and the first few days of may you know, how are we seeing activity relative to kind of the budgeting excavations here?
Pablo Mercado
Yeah, James, it's Pablo a great question, and I'm happy to provide color, you know, activity's been good. And we're optimistic about that. Continuing, particularly with the price backdrop very similar to what we said in the call last quarter the current price environment, if it hangs in there is sufficient to put us towards the high end of the range.
You know, and so we're, we're optimistic. We're off to a good start with a very strong quarter and we continue to gain momentum both on the either the volume side and the Permian that we expect the ramp in the second half, as well as on the cost control side that Ben touched on. Great. Thanks for taking my questions.
Operator
The next question comes from Gabriel Maureen of Mizuho.
Chris Jeffery
Hi, this is Chris Jeffery on for Gabe. We just had one left about the permium crude volumes. We noticed that they were down due to timing of producer completion activity. We just have for more color on that and whether the volumes are now kind of running it former level.
Barry Davis
Yeah. Hey, Chris has been, if you just kind of look at the evolution of volumes. So if you go back two quarters to the third quarter of 20, it was 99,000 a day. Then in the fourth quarter, it popped up 20% to 120,000 a day. And then in the first quarter of 21, we were at 108,000 a day. So a couple of things going on there in the fourth quarter, we had some pretty robust completion activity and we saw some flush production.
So you got the benefit of that. That's what drove the 20% increase quarter over quarter. Now going from one 20 to one oh eight, you didn't have as much flush production in one queue that you did have 10 days of storm impacts that that held us back a bit. And so, you know, maybe that kind of helps you with the, with the trend. I, you know, the crude volumes from my perspective were in line with our expectations by its nature. Just because it's a smaller business for us, it can be a little bit lumpier than our gas volumes are just depending on when Wells get completed and turn to sales.
Chris Jeffery
Great. Thank you very helpful.
Operator
The next question will be from Chris Tillett of Barclays.
Chris Tillett
Hey guys. Good morning. I just wanted to circle back on the JV here for a second. I guess first you mentioned that 6X multiple, there was some operational savings built into that. So I was just learning, you might be able to quantify it. How much of those savings are built in. Yeah. I don't want to get into the nuts and bolts too deep there, Chris, but let me give you a little bit of a, of a sense. I think from Diamondback and Amarillo's perspective, the business today was, was not generating much cash-flow.
From our perspective, we have not only the operational synergies, we also have some downstream integration with our NGL business that provide some value to us that others might not be in a position to capture. And so between those two things, from our perspective, it looks like about a six times on, on next year's EBITDA.
Barry Davis
I'll add, we're not banking on an enormous amount of volume growth to achieve that the volume flowing today is on the order of 13 million cubic feet a day. Our number for next year, something like $17 million cubic feet a day, It's not, not her Relic assumption and a diamond bank actually has two rigs working on a Anchorage dedicated to Amarillo as of today.
So we feel good about it. EnLink. I said earlier, M&A worked well when, when from our perspective, we feel good about the price and 6X to us from Diamondback's perspective, it looks like selling cash-flow or selling, not very much cash-flow at all for 60, $75 million.
Okay. I mean, I guess, is there much capital required to integrate, you know, your existing assets with the system? There's not if you look at the map, you'll see that, that the gathering system lies right on top of us. And so it's a pretty efficient integration plan. We're talking one to $2 million when everything is said and done.
Chris Tillett
Okay. Okay. That's helpful. Thanks. And then I guess last on that, and you guys have mentioned that the gathering agreement was amended. Are you able to provide any color on, you know, what in the agreement was amended?
Barry Davis
Yeah. so the bigger picture here is we have a dedication, a significant dedication from diamond back in this university lands area. I think it's four, actually four different contracts that we've done with diamond back over the years. And that lies right alongside the Amarillo dedicated acreage. And so what we did was we put in place an agreement for the Amarillo Anchorage that is similar to our other agreements. And we also extended the terms of our existing agreements, so that now that most of that area is dedicated to us and we'll be able to serve it more efficiently under, under one consolidated Anchorage position.
Operator
Again, if you have any questions, please press star, then one being no further questions. I'll turn it back to Barry Davis for any closing remarks.
Barry Davis
Thank you Perry for facilitating our call this morning and thank you everyone for being on the call today and for your support as always, we appreciate your continued interest and investment in EnLink. We look forward to updating you with our second quarter results in August. In the meantime, we wish you all well and stay healthy. Have a great day. Thank you for joining.
Operator
Thank you, sir. The conference is now concluded. Thank you all for attending today's presentation. You may now disconnect your lines. Have a great day.
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Comments (5)
I have a different view. Reducing leverage reduces uncertainty and may lead to a higher multiple. I like the direction of the company and will continue to hold (unless valuation gets significantly ahead of fundamentals or company execution begins to lag guidance).