Greetings, and welcome to the Genesis Energy, L.P. Q1 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Dwayne Morley, Vice President, Investor Relations for Genesis Energy, L.P. Thank you. You may begin. Good morning. Welcome to the 2022 Q1 conference call for Genesis Energy. Genesis Energy has four business segments. The Offshore Pipeline Transportation segment is engaged in providing the critical infrastructure to move oil produced from the long-lived world-class reservoirs from the deepwater Gulf of Mexico to onshore refining centers. The Soda and Sulfur Services segment includes Trona and Trona-based exploration, mining, processing, producing, marketing, and selling activities, as well as the processing of sour gas streams to remove sulfur at refining operations. The Onshore Facilities and Transportation segment is engaged in the transportation, handling, blending, storage, and supply of energy products, including crude oil and refined products. The Marine Transportation segment is engaged in the maritime transportation of primarily refined petroleum products. Genesis' operations are primarily located in Wyoming, the Gulf Coast states, and the Gulf of Mexico. During this conference call, management may be making forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The law provides safe harbor protections to encourage companies to provide forward-looking information. Genesis intends to avail itself of those safe harbor provisions and directs you to its most recently filed and future filings with the Securities and Exchange Commission. We also encourage you to visit our website at genesisenergy.com, where a copy of the press release we issued today is located. Press release also presents a reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures. At this time, I would like to introduce Grant Sims, CEO of Genesis Energy, L.P. Mr. Sims will be joined by Bob Deere, Chief Financial Officer, and Ryan Sims, Senior Vice President of Finance and Corporate Development. Thanks, Dwayne, and good morning to everyone, and thanks for listening in. As we stated in our earnings release this morning, the Q1 of 2022 was an exciting quarter for Genesis as the performance of our market-leading businesses exceeded our internal expectations. Strong demand for soda ash drove increased prices in all of our markets, especially the export market, and we're starting to see activity levels in the Gulf of Mexico begin to ramp with first production from Murphy's King's Quay starting last month and first volumes from Argos just around the corner. We continue to see fundamentally driven momentum in our soda ash business, which when combined with the expected ramp in volumes on our Gulf of Mexico infrastructure, will continue to drive earnings growth and improving leverage metrics over the remainder of 2022 and into the years ahead. I wanted to take this opportunity to provide an update on the new opportunities in the Gulf of Mexico that we have mentioned over the past several quarters. Today, I'm excited to announce that we have entered into definitive agreements to provide gathering and transportation services for 100% of the crude oil production associated with two brand-new standalone deepwater upstream developments with a combined production handling capacity of some 160,000 barrels of oil per day, with first oil from both expected in the late 2024 or early to mid-2025 timeframe. In conjunction with these new upstream developments, we expect to spend approximately $500 million net to our ownership interest spread out over the next three years, expanding the capacity of the CHOPS system, as well as building a new 100% owned, approximately 105-mi, 20-inch diameter pipeline, what we call the SYNC pipeline, to connect one of the upstream developments to our existing footprint. Both of these new upstream developments include life of lease dedications to our assets. Additionally, they both include long-term take-or-pay arrangements that represent a roughly 5x build multiple on a combined basis, which multiple would be closer to 4x if the producers hit just 75% of their expected production profiles. It's important to recognize that these calculated multiples assume absolutely zero other production or additional developments ever being tied into SYNC or CHOPS, which is totally unrealistic. In fact, we are already in early discussions with the operators of several additional new opportunities, representing potentially some 150,000 barrels a day of incremental production, which more likely than not will seek to access at least a portion of this new capacity starting as early as 2024. These volumes are newly identified subsea tiebacks or secondary recovery operations like water flood projects designed by the operator to increase and/or extend the production handling at existing standalone developments already connected to or that can otherwise access our pipelines to shore. We are also currently aware of at least one new standalone development that, if ultimately sanctioned, could potentially come our way. Our new 100% owned SYNC pipeline will connect the Walker Ridge area of the Gulf of Mexico directly to the CHOPS system and the Garden Bank 72 platform, with the Shenandoah development serving as the anchored production facility. The Shenandoah project, operated by Beacon Offshore Energy, is located in Walker Ridge blocks 51, 52, and 53. We'll have production handling capacity of approximately 100,000 barrels per day, with first deliveries of oil anticipated in late 2024 or early 2025, and will be further transported to shore through our 64% owned CHOPS pipeline. The second upstream development, Salamanca, is operated by LLOG Exploration and located across multiple blocks in the Deepwater area of Keathley Canyon, with an expected production handling capacity of approximately 60,000 barrels per day and first deliveries of oil anticipated in early to mid 2025. The Salamanca development will be directly connected into our 100% owned SEKCO pipeline for further transportation downstream through our existing pipeline footprint. As we alluded to in our release, we have also entered into an agreement with LLOG to sell our idled Independence Hub platform to serve as the floating production system for the Salamanca development. The repurposed hub will not only accelerate the date of first oil and reduce the total development cost, but will also reduce the environmental footprint of this development relative to the option of constructing a new deepwater production facility. A win-win situation for the producers and us. The sale of the Independence Hub platform for gross proceeds of $40 million will result in a gain and a cash distribution of $32 million, net to our 80% ownership interest. These proceeds, when combined with the gross proceeds of approximately $418 million we received from the sale of a 36% minority interest in the CHOPS system, have effectively allowed us to pre-fund the vast majority of the capital required to expand the capacity of CHOPS and construct the SYNC pipeline. We would expect to use increasing cash flow and availability under our senior secured credit facility to fund the capital expenditures over the next few years. In addition, we will receive project completion credit associated with the capital we spend over the next several years under our calculated leverage ratio for bank compliance purposes. These two new upstream developments, along with the SYNC pipeline and CHOPS expansion, represent a tremendous opportunity for Genesis. We are able to deploy capital at an extremely attractive multiple that is underpinned by life of lease dedications and credit-worthy take or pay arrangements, much the same as our very successful SEKCO pipeline, which was constructed some eight years ago, and it quite frankly, has already contracted two additional fields that were unknown at that time. By extending our reach geographically in the central Gulf of Mexico and adding capacity to the CHOPS system, both of which have effectively been underwritten by these two anchor developments, Genesis is well positioned to attract high margin incremental volumes to our industry-leading network of offshore pipelines at little to no future capital ever required. I'd also point out that the realized margins per barrel, both on our laterals and on the Poseidon or CHOPS systems, are increasing as we facilitate the gathering and transportation to shore from the very active central Gulf of Mexico deepwater areas as pipeline capacity becomes a dramatically more scarce commodity. We believe and have demonstrated it time and time again, that these types of investments will provide long-term value to all of our stakeholders for many, many decades to come. Now I touch briefly on our individual business segments. As we mentioned in our earnings release, the Q1 was challenging in our offshore business from an operational and mechanical point of view. In fact, relative to our expectations, we would estimate that quarterly margin in the Q1 was negatively affected by some $8 million. Most, if not all, of the issues we experienced have since been rectified, and the Q2 so far is reflective of more normal and expected operations. There is no doubt that the rest of 2022 will be exciting for us in the offshore. On April 12th, Murphy announced that they achieved first oil at their King's Quay floating production system, which is supporting their Khaleesi, Mormont, and Samurai field developments in the deepwater Gulf of Mexico, and we have started to receive these volumes on our pipelines. Volumes from King's Quay are expected to ramp to its design capacity of some 85,000 barrels per day and 100 million cubic feet of gas per day as incremental wells are connected in the coming months. As a reminder, we will handle these molecules some 4x, with all of the oil produced being gathered through our 100% owned Shenzi lateral and then split evenly between our 64% owned CHOPS system and our 64% owned Poseidon system for transportation to shore. In addition, all of the associated gas production will flow on our 100% owned Anaconda gas gathering system and then on our 26% owned Nautilus gas system for ultimate transportation to shore. The second major project we expect to come online this year is BP's Argos floating production system, which is supporting their Mad Dog 2 development and remains on track for first oil in the Q3. With a large number of wells pre-drilled, volumes from Argos are expected to ramp to its nameplate design capacity of 140,000 barrels per day over the subsequent six months or so after the date of first production. King's Quay and Argos, combined with Shenandoah, Salamanca, and the newly identified opportunities I referenced earlier, all coming on within the next four or five years, in the coming years. Turning to our Soda and Sulfur Services segment, we continue to see robust demand for soda ash across the globe and specifically in our export markets. The market for soda ash worldwide remains very tight and is leading to strong soda ash pricing in all of our markets. We are starting to see the real effects of strong demand and soda ash supply being impacted by a net decrease in global supply we mentioned last quarter, when a 1.3 million ton synthetic production facility in China closed at the end of 2021. According to our analyses as well as third-party reports, for the global supply and demand of soda ash to balance, the market requires China's installed synthetic production capacity to operate at a roughly 95%-96% rate. Historically, China has only operated around a 90% rate. In January and February of 2022, Chinese operating rates dropped to some 83% and 84% respectively. As a result, the worldwide market is even tighter than what we would have otherwise expected. I'd also note that the situation in Ukraine is not overly relevant to the world's soda ash market, and we have no direct exposure to such terribly unfortunate situation. We do, however, continue to monitor geopolitical events and recognize there could be a slowdown in economic activity worldwide, especially as measured against recent periods where the world was recovering from the policy decisions made during the height of the COVID pandemic. However, it is our view that it would take a heretofore unidentified black swan event to significantly, much less materially, affect the current and forecasted supply and demand dynamics for soda ash. These fundamentally driven market conditions, coupled with the rise in energy input costs and increase in awareness of the environmental footprint of synthetic production, provide, we believe, a very constructive backdrop for soda ash pricing for the remainder of this year. We would expect these current conditions to continue over the near to intermediate term, and importantly, still be in place as we discuss redeterminations for 2023 prices towards the end of this year. Should these conditions hold, and as I said earlier, we believe it's more likely than not that they will, we would reasonably expect to see prices increase another $10-$15 per ton across all the tons we sell, even after taking into account our multiyear arrangements that often contain caps on annual increases. We remain very excited to restart our original Granger production facility and its roughly 500,000 tons of annual production in the Q1 of 2023. Furthermore, our Granger expansion project, representing an incremental 750,000 tons or so of annual production, remains on schedule and on budget for first production in the Q3 of 2023. We continue to believe the expanded Granger facility and its incremental 1.2 million-1.3 million tons per year will be the most significant addition of new, natural baseload supply to the market for several years to come. Assuming prices remain at least where they are today, or quite frankly, even if they pull back some, we would expect that the Granger project will exceed our original forecast for incremental segment margin once fully ramped and online. On the cost side, we have a fair amount of tools already in place to be able to largely maintain our margins per ton sold. Approximately 75% of our existing contracts have a natural gas surcharge already in place, and we will move to 100% as contracts allow and are reopened. We have also hedged a significant amount of our fuel requirements for at least 2022 that aren't already covered by such contractual surcharges. 100% of our export sales have a bunker fuel surcharge. Through ANSAC, we have a very high percentage of our dry bulk transportation costs contracted under favorable terms for the next year or so, and all of our competitors face the same increases we will ultimately face, all of which will ultimately be passed on to and paid by the retail consumer. Our historical refinery services business exceeded our expectation as the demand for our sulfur-based products was quite strong as copper and corrugated paper markets remain robust. Both our Marine Transportation and Onshore Facilities and Transportation segments continue to show improvements. Market conditions in our Marine Transportation segment continue to improve across all classes of vessels as the volatility in crude oil and refined product imports creates opportunities. At the same time, there is continued tightening in overall supply and demand of both the blue and brown water fleets. We remain excited with the trajectory of our marine business and would expect market conditions to continue to improve throughout the remainder of 2022 and into 2023 as the industry deals with net tonnage retirements and rapidly inflating replacement costs. We continue to expect to see increasing volumes at our onshore terminals and pipelines in both Texas and Louisiana over the remainder of the year as new volumes in the Gulf of Mexico from both Kings Canyon Argos come online and need to be further transported to refineries and market demand centers along the Gulf Coast. In addition, the new developments we announced this morning, with expected first oil in late 2024 and into 2025, will potentially add volume growth to these onshore assets in the years ahead. During the quarter, we were also successful in extending our agreements with our main customer in and around our Baton Rouge terminal. The agreements provide a framework for future activity, which further reinforces the integration of our assets into their future operations and plan. The robust outlook for Genesis over the remainder of the year remains unchanged as our businesses continue to demonstrate their resiliency. New volumes in the Gulf of Mexico, combined with strong pricing in our soda ash business and a recovery in our marine segment, highlight the tremendous operating leverage we have to overall improving market conditions. As we sit here today, we would reasonably expect our 2022 financial performance to come in towards the high end of our previously announced segment margin and adjusted EBITDA guidance range of $620 million-$640 million and $565-$585 million respectively, even after the challenging Q1 in our offshore operations discussed earlier. Furthermore, our guidance does not include the gain and cash distribution proceeds from the sale of our interest in the IndependenceHub platform, as discussed earlier. That $32 million gain will be additive to both segment margin and adjusted EBITDA in the Q2 of 2022, and will be included in our bank leverage ratio as calculated in accordance with our senior secured credit agreement. As a matter of fact, had we completed the sale of the IndependenceHub platform by March 31, our calculated bank leverage ratio would have been 4.79x, or some 0.3 of a turn lower than what we recorded for the quarter. In any event, this gain will be included in our financial results next quarter, and will stick with us for both covenant compliance and pricing purposes under our senior secured revolving facility through the Q1 of 2023. The management team and board of directors remain steadfast in our commitment to building long-term value for all of our stakeholders, and we believe the decisions we are making reflect this commitment and our confidence in Genesis moving forward. I would once again like to recognize our entire workforce for their efforts and importantly, their unwavering commitment to safe and responsible operations. I'm proud to be associated with each and every one of you. With that, I'll turn it back to the moderator for questions. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Kyle May with Capital One Securities. Please proceed with your question. Hi, good morning, everyone. Hey. Hey, Kyle. Grant, appreciate all the prepared remarks about the current state of the business. Maybe just to start things off, you indicated that Genesis is trending towards the high end of your guidance for the year. Just wondering if you can provide any additional insight into maybe which aspects of the business are, you know, performing better than expected and kind of where you see that outperformance shaking out. Well, I think clearly the soda ash business massively outperformed our expectations in the Q1. I think that certainly given our prepared remarks around our view of what pricing is for Q2 and the rest of the year based upon fundamentals in the worldwide marketplace, that we would expect that to continue. I mean, if you just look at if you just annualize the Q1 result, I think you get to $575 million or so. Again, let's make sure that we're. It excludes the $32 million gain. As we continue to see the ramp in the Gulf of Mexico and get the operational mechanical hiccups behind us, I think that it's more likely than not, when we visit with you from 90 days from now, that we'll widen the range and increase the range, as we proceed, but through the year. I think that, quite frankly, all of the businesses, even after the operational mechanical hiccups in the Q1 in the offshore, are exceeding our internal expectations, and we hope to be able to share that with everyone as we progress through 2022. That's helpful. You also mentioned, I guess, looking more specifically at the offshore business, that roughly the impact you noticed in the Q1 was about $8 million. Yeah, I think that would have put you closer to $80 million with the segment margin in the Q1. How should we think about that cadence going forward through the balance of the year. I mean, I guess, can you provide any more granular detail about the cadence with those new projects coming on? Well, that's, you know, again, I think, Kyle, your analysis is correct that on a normalized basis, prior to King's Quay and prior to Argos, that we kind of anticipated about an $80 million a quarter run rate as a normalized basis. Obviously, we cut that back a little bit in the Q3 to take into account the potential interruptions from weather-related events in the Gulf of Mexico. You know, with that, we have, as we said on April twelfth, Murphy achieved first oil. I think it's out in the public domain in their investor presentation and earnings release that the first two wells are doing about 30,000 barrels a day, 90% of which, 89% of which is oil. Remember, we get all of that because we take all of the gas also. There's another well imminent to come on and then a number of wells in cadence to you know come on every 40 days, 45 days or so, I think, again, based upon their public announcements this morning. You can do a little bit of the cadence arithmetic associated with that as it ramps up. In the prepared remarks, we tried to explain the value chain of we get 100% on the Shenzi lateral, and then it's split evenly between Poseidon and CHOPS on the oil side, and then we get 100% of the gas through Anaconda and then 26% as it goes to shore in round terms on the Nautilus system. That's a very important ramp for us throughout the year, and we're very excited about it. At this point, I think it's meeting our expectations of the ramp. Argos has a lot of wells pre-drilled. The date of first delivery is we're not 100% certain of. That's a better question for BP. Given that they've pre-drilled all of the wells, I think that we would anticipate a very rapid ramp in that, and as we said, potentially even achieving design capacity within six months once first deliveries start. That's a little bit of an amorphous date, and we'll see when it all kind of shakes out. I would certainly think that by the Q2 call, we'll have a better idea of what the expected first date is and can give a little bit more granularity around that. Okay, great. Appreciate the additional color there. I'll turn it back. Thank you. Our next question comes from the line of TJ Schultz with RBC Capital Markets. Please proceed with your question. Great. Hey, Grant. For the CHOPS expansion and SYNC pipeline, what's the cadence on the $500 million spend, and when does the take or pay begin? The cadence is, you know, there'd be a little bit front-loaded in terms of when. It's kind of a bimodal spend, TJ, cause it'll be a little bit of capital in the front end as you acquire the materials, but the installation itself will occur probably towards the end of the construction period in the late 2023, 2024 type timeframe. You know, it's not necessarily linear, but a little bit lumpy, a little bit more upfront, and a little bit backloaded. The take or pays basically begin in the late 2024 type timeframe. Under our credit agreement or our discussion with the banks, we get project completion credit relative to that amount of take or pay that we have. In other words, if the point that we spend 10% of the $500 million, we get 10% of the value of the take or pay coming in as pro forma EBITDA, so to speak, in terms of calculating our compliance and where we are on the pricing grid under the senior secured facility. Okay. Makes sense. On soda ash, you mentioned the market is tighter than you expected, given in part due to the fact that China capacity was running, I think, 83%-84% at the beginning of the year. Is the expectation that this continues to run lower than, call it the 90% range, heading into your redeterminations, and that's supporting the view on the $10-$15 per ton improvements? I guess I'm just really looking for what's mainly driving the outlook on the market to remain tight. Is it more supply contraction, or is it a demand growth story? Thanks. I mean, it's a little combination of both. As we said, even with a slight reduction or a reduction in economic activity in the back half of the year, we think that it's really primarily a supply story, that it's extremely tight. Inventories have been depleted. There's been a couple of force majeure events by some of the domestic producers in the first four or five months of the year that have again reduced available inventories. We think it's really primarily driven on a supply basis that things are extremely tight. You know, as a result, we believe that things are gonna grind tighter and that these conditions will stay around. Really, the $10-$15 a ton in 2023, that reflects the fact that we have a number of multiyear contracts that, quote-unquote, "can't go up more than $5 or $10," in any annual redetermination period. I mean, if everything we're able to reprice to current market or spot market, then it would be an even more significant increase across all of our tons. Okay. Makes sense. If I can squeeze one more in, just on marine really quickly. We did see like the refining cracks really materialize higher late in the Q1. There's clearly, as you know, a lot of focus to move products into the East Coast. As we think about your fleet and the ability to capture this tighter market, should we expect some type of step change higher in what this segment can contribute? Or was the Q1 a pretty good indication of a run rate there? Thanks. Yeah, no, it's a very good question. I would say that, at least internally, we're looking at the potential of a step change. It really is being driven by the market dynamics, in large part that you pointed out. The ARB vis-a-vis Gulf Coast and Mid-Atlantic, and especially New York Harbor on refined products, has blown out given a lot of geopolitical events as well as the behavior and demand for transportation fuels out of Gulf Coast refiners to go to Latin America, primarily has really opened up and dramatically increased the demand for ocean-going vessels capable of moving refined products from USGC to Mid-Atlantic. You know, we're clearly at 100% utilization. We are seeing rates that are above what we saw in 2015 on a day rate basis in that business. We anticipate that continuing. We don't see what's fundamentally going to change that for quite some time. I think that we're also seeing even demand within our inland fleet again because of the refinery utilization in PADD 3 and PADD 2, trying to take advantage of these crack spreads that the refiners are seeing. We're, for all practical purposes, at or close to 100% on our inland fleet. We are seeing rates. Do the arithmetic real quick, some 30% up over the spot rates, up over the last three or four months. I think quite frankly that Marine is, you know, could be very additive to helping us achieve and exceed the previously provided guidance. Okay. Thanks, Grant. Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. We'll pause a moment to allow for any other questions. It seems there are no other questions at this time. I'll turn the floor back to Mr. Sims for any final comments. Well, thanks very much. Again, thanks, everyone, for dialing in, and we look forward to visiting with you in another 90 days or so. Thanks very much. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.