Good day and welcome to the Enable Midstream Partners Second Quarter 2017 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode and the floor will be opened for questions following the presentation. [Operator Instructions] As a reminder, today’s call is being recorded. It’s now my pleasure to turn the floor over to Enable’s Senior Director of Investor Relations, Mr. Matt Beasley. Please go ahead sir.

Thanks, Keith. Good morning and welcome to Enable Midstream Partners’ second quarter 2017 earnings call. I am joined on today’s call by our President and CEO, Rod Sailor; and our Chief Financial Officer, John Laws; as well as other members of management. This morning we issued our earnings press release and filed our Form 10-Q with the SEC. Our earnings press release, Form 10-Q filing and the presentation that accompanies this call are all available in the Investor Relations section of our website. We'll also be posting a replay of today's call through our website. Today's discussion will include forward-looking statements within the meaning of the Securities laws. Actual results could differ materially from our projections and the discussion of factors that could cause actual results to differ from our projections can be found in our SEC filings. We will also be referencing non-GAAP financial measures on today's call, which we have reconciled to the newest GAAP measures in the appendix of today’s presentation. We invite you to review the disclaimers in this presentation for both forward-looking statements and non-GAAP financial measures. With that, we’ll get started and I’ll turn the call over to Rod Sailor.

Thanks, Matt. Good morning and thank you for joining us on our second quarter call. Enable had another great quarter performance and we are on track with other strong year in 2017. We were excited to announce that we recently re-contracted for firm transportation service with the key Oklahoma electric utility customer through 2020 on our EOIT system. This new agreement continues our longstanding relationship with this customer and further strengthens our significant firm fee-based margins. Our second quarter results included increased natural gas gathered and processed volumes as well as increased intrastate average deliveries. Net income, gross margin, adjusted EBITDA and distributable cash flow will all increase for the quarter compared to the second quarter in 2016. Enable also announced the second quarter 2017 cash distribution of $0.318 per unit on all our outstanding common and subordinated units, and a second quarter cash distribution of $0.625 on our partnerships Series A for Preferred Units. On August 30, 2017, we expect that the financial test required for conversion of all of our subordinated units will have been met and that all subordinated units will convert into common units on that date on the one-for-one basis. Slide 5 highlights Enable scale and the operating leverage it provides. Enable has invested in a number of expansion capital projects in recent years that have contributed to a significant presence in the Mid-Continent, which intern allows us to leverage the scale to continue capturing business efficiently from a capital investment standpoint. Our gathering and processing asset footprint includes over 13,000 miles of gathering pipeline and 2.5 Bcf per day of processing capacity in some of the most active place in the country. Our transportation and storage asset footprint includes 10,000 miles of intra and interstate pipeline and 85 Bcf of natural gas storage capacity.…

Thank you, Rod, and good morning everyone. As Rod mentioned, Enable delivered another strong quarter of operational and financial performance. I will cover a few of our key metrics for the quarter on Slides 10 and 11, as always a more detailed and comprehensive overview can be found in our earnings release and 10-Q both of which were released earlier this morning. Turning to Slide 10, the significant number of active rigs dedicated to Enable contributed to a 6.8% increase in natural gas gathered volumes and an 8.5% increase in natural gas process volumes in the second quarter of 2017 compared to the second quarter of 2016. The increase in gathered and process volumes was primarily driven by increases in the Anadarko and Ark-La-Tex Basins. In the Anadarko Basin, both gathered and processed volumes grew nearly 10% compared to the second quarter of 2016. In the Ark-La-Tex Basin, gathered volumes grew 19.3% compared to the second quarter of 2016 and process volumes grew by just over 9% over the same period. Noteworthy is that these statistics mark the sixth consecutive quarter for growth in gathered volumes in these two basins. Finally from an operating perspective, we also saw increases in our natural gas liquids produced in the intrastate firm deliveries in the second quarter compared to the second quarter of 2016, primarily as a result of increased volumes in the Anadarko Basin. Turning to Slide 11, net income attributable to common and subordinated units was $95 million for the second quarter of 2017, an increase of $56 million compared to the second quarter of 2016. The increase in net income attributable to common and subordinated units was primarily a result of increase gross margin in both our gathering and processing and transportations storage segment. The increase in gross margin was…

[Operator Instructions] And we’ll take our first question from a Jeremy Tonet with JP Morgan. Please go ahead.

Just wanted to touch base and kind of reconcile as far as the rig activity that you guys had disclosed in the press release. How does that compare to what you set out -- when you’re setting out guidance and what you’re expecting at that point? Is this rig activity in line? Or is it ahead of your expectations at that point? How does that impact your thoughts going forward?

Jeremy, the activity we’re seeing now is somewhat higher than what we had expected when we put our plan together for 2017. We’re seeing more activity in the SCOOP than what we had expected specifically.

Yes, I would just add Jeremy, I think we’re excited by the level of activity we see in every basin that we’re in. It seems to be an uptick in activity clearly in the SCOOP and STACK areas of the Anadarko, but we’re seeing activity in the Arkoma and as you know we continue to see volume -- volume significant volume growth in Ark-La-Tex. So, we’re excited about the opportunity set in each of those four basins.

So, you would say your activity outside the SCOOP and the STACK as well has exceeded your expectations?

I think the activity we’re seeing, yes, it's exceeding our expectations, and again we think there are more opportunities out there that we can -- we have -- I have a chance to capture.

Of course, Jeremy, as you know in some of our dry gas basins those activity levels don’t translate today directly in the margin, but they do help increase our overall volumetric flows and do close in on MVCs overtime.

Great, thanks. And then picking up and the last point with MVC. Was there any material kind of troupes during the quarter that we should be thinking about?

No, nothing specific along those lines.

And then just going back to the activity that you see there. Could you just update us on how this could impact the timing Wildhorse?

We -- again, we’ll continue to monitor the needs around Wildhorse, but we’re not prepared to make any announcement at this point in time about anything related just to Wildhorse.

Great. Thanks. And then there has been some roles with the -- the transmission segment, I just wondering, what you see you there now. Is this kind of more of a steady state that we should be thinking about going forward? Or are there any other kind of contract roles that we should be thinking about coming up?

Yes, I think. I’m sorry this is Craig Harris. Yes, I believe what you’re seeing now is somewhat getting more back a steady state. We did have some big roles that came up online CP. Those are now -- have now been realized and we’re in the re-contracting mode on that today. So, yes, we believe this is more indicative of what you see on the steady state basis.

Great. Thanks. And last one. Just want to touch base on line 80 expansion there. Is that kind of fully ramped at this point?

Yes, this is Craig. And the original expansion is fully ramped. We got in the case expansion which is somewhat related that. We’ll go into service and next -- meet next year.

We’ll take our next question from TJ Schultz with RBC Capital Markets. Please go ahead.

Just a follow-up on the rig activity. So, it sounds like running ahead of your expectations in the SCOOP and the STACK. Can you just provide some more contexts on timing for how that translates to your Anadarko gathered volumes turning over the next several quarters? At this level activity, is it fair to think that you can exit this year closer to high end of your guidance range near 2 Bcf in the basin?

We’re not going to provide specific guidance on volumes, but I will say that again with the consecutive growth that we’ve had in the Anadarko, the higher rig count there are some pad that we would expect to come on towards the tail end of the year that we think will continue to boost in increase our overall volumes out of the basin. But not providing any specific guidance within the range at this point.

Okay. On MRT of contract to expire -- expiring in '18 and '20, most of split or percentage that’s been terminated here in 2018. And then, if you could just expand on the ability to offset that roll off, what’s the timing for segment line? How much capacity do you think they need even then? And then you talked about the leverage to the quite additional rates, if you could just provide some more color there?

Yes, the contract that's expiring in 2018 that we have been issued notice on as, is one in which there is 437,000 dekatherm a day of total demand. Again, it’s not -- it’s not expired yet, not expiring to the middle part of 2018.

Yes and I would just add that again, we -- we expected that, that they would seek notice to terminate that contract so that they can renegotiate the need of capacity. Again, under the assumption that, the only pipeline will get built, we still believe that after 2018 that the significant amount that -- the volume will need to be re-contracted, we just don’t know yet from discussions with them. And we haven’t really started discussions yet on how much of that capacity that we need. I would also add though that with that notice we can now start talking to other customers too. So, again, it was anticipated. We still think that McLeod will need that a significant piece of that, that capacity and we’ll start looking at other ways to re-contract around that. Or as we said in some previous announcements, we'll work to recover and return back to rate volume.

Okay. Thanks. And just lastly regarding to your points strategic review. What update can you provide? And then related to its most recent filing, what if any or center point limitations on the ability to sell your units in the public market?

Yes, again, I would say that I think they are going to give an update on their earnings call later, later this week. I would say that we really don’t have any updates other than they continue their process and we’ll update investors around it. As it relates to the 13D a couple of weeks ago, clearly the Company disappointed in our unit performance. Since then, well I think the company that really aspiring and also -- and there an operationally is performing very well. We don’t think that’s getting reflected in our current unit price. Again, we can control which again as I think as you saw by this quarter another very strong quarter and year-to-date very strong performance. As it relates to what they -- the addition around some sell out -- sell down of their units, I can only assume, I cannot speak for them, but we'd assume that if that was an option if they would -- they would pursue that it would not be -- it would be a very, a very -- something very orderly and over a significant timeframe. But I think to the point that expectations would provide some clarity around that on their call.

Okay.

I would not anticipate that anything along that line would be in front of our needs to raise debt and equity to fund our business.

We will take our next question from Gabriel Moreen with Bank of America Merrill Lynch. Please go ahead.

Couple of quick questions on the CP line of the contract discretions from Carthage to Perryville, the re-contracting. Just want to make sure that the re-contracting is in the STACK on Slide 17, and then just also thinking -- sorry excuse, me on Slide 18. And I just wanted to make sure everything in larger picture here. Is there a chance or are you in discussions with as more associated cash I think makes it way east is that kind of how you, you think, you may eventually full that line up? And if there is any timing around that?

On the STACK from on 18, I guess the question was. Are they up-to-date? Yes. And on the strategy behind filling that, yes, we do see more gas hitting that area. And it is likely to create an opportunity for us. So, we are in discussion with several parties of our capacity online CP and do think it’s going to be well situated as we see more gas kind of moving its way towards the Golf Coast. We are very optimistic about our ability to re-contract that base.

Great. Thanks. And then on MRT, not to beat the dead horse, I know TJ asked about it a decent amount. But on you know the…

More gas kind of moving its way towards the Gulf Coast. We're very optimistic about our ability to re-contract that base.

Great. Thanks. And then on MRT, not to beat the dead horse, I know TJ asked about it a decent amount. But on you know the potential for the rate case filing. Is that something where just order operations here you want to try to get contracts negotiated for just you know where you stand and then a rate case. At some point, what’s that lot of half of 2018 beginning in 2019?

Well, I’ll just add, yes, we'll require that to go into our rate case in 2018. And so, we had a five year window and we’re at the end of that window. So, we’ll have to go into a rate case regardless of where we stand from a contracting standpoint.

And Rod, is it possible to at all handicap kind of where you are in terms of ROE where you think you might be or is that stuff that you just -- you can’t or maybe where you are right now?

Yes, I don’t think -- I think, it’s too early to comment or anything around that.

Okay. All right. Fair enough. And then last question from me, which is, there an exact CapEx at this point for project Wildcat. I just don’t know, if you'd disclose that? And then if you can talk about that within the context of I guess coming in the low the overall growth CapEx expectations that you would laid out?

Yes, we haven’t really disclosed anything specific as it relates to total capital around Wildcat. And again, I would just say I think we’re very pleased with our ability to capture these volumes and I think it’s been more than anticipated and that’s due I think to largely -- it is due largely to our footprint and our focus on capital efficiency. So, I think we’re continuing to find ways to reduce capital spending on a number of projects where we can take advantage of the scale and the Super Header and the overlaying transportation assets. So, well, the reasons we -- we haven’t put out anything just because I think we can -- right now, we’re doing pretty good job of beating our capital estimates.

We’ll take our next question from Shneur Gershuni with UBS. Please go ahead.

Just want a couple of quick follow-ups. With respect to Arkoma and with the Haynesville, you got some rigs active there now. Are we at the stage now where we can expect the MVC gap to be filled?

Well, I mean I would say that too early to tell although we are seeing positive outlook that would tell us -- we can see a path getting those MVCs largely, largely filed. But again, that’s -- they don’t start rolling off till ‘19, fully off to ‘20, ‘21 in the Haynesville. And there’s still lot of timeframe. That said, I think we’re on a great trajectory right now and very pleased with at this gas price environment, the level of activity we’re seeing both under the MVCs, we’re also starting to see some opportunities outside of those MVCs also.

Okay, great. And just a couple of…

Right now, very pleased with at this gas price enticement the level of activity we're seeing both -- under the MVCs, we're starting to see some opportunities outside of those MVCs also.

Okay, great. And just a couple quick follow-ups. Given the return growth in the Anadarko and recent Wildcat project. Do you see that you have enough processing capacity? Or do you feel that, you may need to add process maybe in the next 12 to 18 months? Is there an opportunity to do some upload agreement like what you did with Energy Transfer, just wondering if you can comment on that?

Yes, I would just say that again, as John mentioned, I think we’ll come out with more robust guidance on our third quarter call. We are and have always been very mindful of trying to stay ahead on capacity. And making sure, we have enough processing capacity to meet our customers' needs. So I think that something we’ll continue to monitor. I’m not going to give any specific guidance around new or additive processing capacity now. But again, as you know we’ve got the Wildhorse, we can deploy that. I was going to say rather quickly that we still got a time, but we got the side work done and we’ve got the processing facility shrink-wrap, so we're ready to deploy that when we need to. But again everything we see, it’s pretty positive outlook on volume growth in and around our Super Header system.

Okay. And then one follow-up question. In terms of contract role, we saw in terms of 2Q. What’s your expectation with respect to the second half of this year? Should we see similar trend, just wanted if you can talk about cadence?

We’ve rolled, Shneur, substantially the larger contracts that we would have otherwise expected to role, near our couple yet still on EGT that will expire in the latter half of the year this year. But again Craig and his team are continuing to be focused on re-contracting that capacity overtime and they’re making great headway there, particularly as we see volume metric growth on the GMP system, which can tend to feed our transportation storage pipeline assets.

Our next question is from Neel Mitra with Tudor Pickering. Please go ahead.

Just had a follow-up question on being on the lower half of the growth CapEx for 2017. Is that mainly driven by Wildcat? Or is it kind of a variety of factors? Can you just kind of expand on how you’ve been able to limit that?

I think it’s across the Board. We’re able to take some cost out of Wildcat, but we’re also reducing our spend, as it relates to just our regular gathering and compression on our system.

And you've kind of noted a positive outlook in all your basins. I know the Arkoma is probably one of the most challenged of the three and it's you’re seeing some volume decline year-over-year. So, how does that kind of play out when you’re looking at the minimum volume commitment through? Or do you expect that to turn back up?

Yes, I would say just a minimum volume commitments in the Arkoma are longer dated than the ones in the Hayneville. So, they run fast 2021, I think they're…

2024.

Yes, 2024. So, we’ve got longer time on that. I think what I was trying to emphasize that again we are seeing more activity in the Arkoma and in fact that some of the new acreage that we had dedicated to us was in that area. So, again new opportunities coming on, again those MVCs are with one customer, and again highly depended on how much more that customer would decide to drill. I think the news that we want to make sure that the impart on this call is that while period of time we’ve seen activity primarily in one area, on our system, we're now seeing activity upticks in all four of our basins.

[Operator Instructions] We’ll go next to Nick Raza with Citi. Please go ahead.

Thank you. Just a couple of follow up questions guys. So, in terms of your ramping up on activity, you mentioned 44 rigs and you also mentioned lower CapEx. I’m trying to reconcile that because the activity is on the higher end. Would you need to spend G&P CapEx to sort of capture a lot of that volume growth? Can you just comment on that real quick?

Yes, I mean I think and I’ll turn it over to Craig or John. But I think, again I think the reason you see us at the upper end of guidance on our earnings and cash flow and lower in on capital again, it relates to something I think we’ve talking to you and many of our investors about it what we called the operating leverage that's built into our business. It's really the fact that we have the scale and our ability to optimize where we place compression, where we build the pipe, there is really starting to pay dividends in 2017 as we’ve been able to capture more volumes and spend less money. And we think that’s a -- we’re not going to always be able to do that, but the significant investment that we have made over the last couple of years is really paying dividends now, with an ability to capture volumes without having to invest more as much capital. And again, so we would anticipate that we’ll see that trend line through 2017, but as we grow the business, we’ll continue to need to spend expansion capital. But this is, I think really related to the scale that we have with our header system and what we’ve been able to deploy over the last couple of years. Again, if you look at Enable’s Anadarko system, we got a custom really -- almost a custom built system for the activity in the SCOOP and the STACK are. And that is again that's saying significant deals on our ability to capture significant volumes with less spend.

Okay. And then I guess the other question I had is that. With the newly nearly announced projects, you certainly on moving a little bit more towards the rich line. Do you sort of see at some point in time actually building out the liquids line out of the area? Or is that something that’s off the table?

Well, again, as you know our liquids are handled with another party at this point in time. I think again, as we continue to match a significant amount of equity barrels that’s -- that is an option that we will look at it at sometime in the future. And it may or may not make sense at that point in time. But, again, I think the fact that we are in a significant with liquids rich area, we have a significant amount of processing capacity that’s going to present upside for us; however, we decide to go in the future.

Okay. And then just turning real quick to two other assets the Bakken gathering system, do you sort of foresee any CapEx being spent there over the next 12 months?

Not a significant amount of capital, but we’ll continue to see I think some activity pick up on that system. Again that is another area where we’re seeing some additional activities.

Okay.

Again we'd not anticipate a significant level if any -- yes. We’d expect to see volumes uptick, but really not a lot of capital.

Okay, okay. That’s helpful. And then I guess last question from me. MRT, you were talked about de-contracting going back for a rate case, but at some point in time, I mean there could be a potential to reverse the line to move gas down now closer to the Gulf. Is that something that you would sort of entertain? And what would be needed for you to actually move something project some of our SCOOP forward?

Well, I would just say this, we move gas now on part of that line to the south, so that it by directional line. And as we have said, publicly, the Board will continue to look at all options around that system, including -- again, we think it’s well placed or gas flows in this Mid-Continent.

We’ll take our next question from Ned Baramov with Wells Fargo. Please go ahead.

Could you provide an update on your appetite to pursue acquisitions or organically expand your current footprint, especially in the context of your currently improving cash flows and the lower CapEx given the scale of your system?

Yes, Ned, thanks for the question. Yes, we continue to look I think off of our footprint. I think you’ve been very active in looking at things. We’ve not been willing to pay some of the prices that we’ve seen or incurred the -- while we just haven't been willing to pay the price that we’ve seen on a number of assets that have transacted recently. But we’ll continue to be very active at looking at, at all nature of acquisitions, opportunities both large and small, as it relates to trying to expand our footprint, looking at trying to get into smooth areas, where we could build the position.

And then going back to line CP, the new contract with XTO. Could you maybe talk about how the rate on that new contract compares to the rate of the contract that rolled off?

The new rate Ned was little bit beneath sort of the effective blended rate. When you take into account, the overall 1.2 or there about Bcf that was expiring on a blended basis, again recall there were some forward haul and back haul capacity there. So, it was all lying around $0.07 or so. The re-contracted capacity was right around the nickel.

We’ll take our next question from Brian Brungardt with Stifle. Please go ahead.

I guess as it relates to the processing side, it looks like good quarter again backing out the fair value adjustments. But on average, what do you guys experiencing in terms of ethane rejection particularly in your Anadarko assets? And how does that relate to first quarter as well as the year ago?

I mean I think on ethane rejection effectively we’re in the same position that we were first quarter in the same position that we were in the second quarter that now. From time-to-time, as an optimization activity, we may elect to take certain of our plants into recovery. But generally there hasn’t been a fee change shift in rejection versus recovery on our systems.

We’ll take our next question from Ross Payne from Wells Fargo Securities. Please go ahead. Ross, please shut the mute function on your phone.

Okay, sorry about that. Thanks very much for the operational input and thing seems to be going quite well. I know some of the points are going to make some comments on Thursday on the GP ownership. I was wondered if you guys had anything that you would like to add at this time?

I think I made the comments, I think at the beginning of the Q&A. We’ll probably stand on what was that there. Again I think they were anticipating trying to give some color around their 13D filing and I would just reiterate that, again I think we’ve seen some erosion in unit price after that came out. And I would not expect whatever option they decide to go down that it would have a material impact on our ability to fund our business going forward.

And it does appear we have no further questions. I’ll return the floor to Rod Sailor for any additional or closing remarks.

Yes, thank you very much. I appreciate that. I would like to thank all of our employees for their contribution and continued focus on safety. And again, I'd like to thank everybody on the call for your continued interest in Enable. Thank you. And have a good day.

This will conclude today’s program. Thanks for your participation. You may now disconnect. And have a great day.