Kinetik Processes Record 1.94 Bcf/d Of Gas, Expects 2026 Adjusted EBITDA At High End Of Guidance
The Permian midstream company also expects 2026 capital spending about 5% below its $560 million guidance.
Kinetik, which gathers, processes and transports natural gas and other products in the Permian Basin, said in an 8-K filed Wednesday that third-quarter processed gas volumes hit a record 1.94 Bcf/d, and it now expects full-year 2026 Adjusted EBITDA at the high end of its $1.04 billion to $1.1 billion range.
Earnings up on higher volumes
Net income including noncontrolling interest was $50.9 million, up from $15.5 million a year earlier, on total operating revenues of $569.4 million versus $464.0 million. Adjusted EBITDA, the company's adjusted earnings measure, reached $278.1 million, compared with $242.6 million in the third quarter of 2025.
Free cash flow rose to $87.5 million from $13.9 million. Net debt stood at $3.94 billion at September 30, a ratio of 3.71x Adjusted EBITDA, and the quarterly dividend is $0.81 a share.
Midstream Logistics Adjusted EBITDA rose 34% to $203.6 million. Pipeline Transportation fell 18% to $78.5 million, mainly because of the EPIC Crude Holdings divestiture, with higher fuel costs at Permian Highway Pipeline and lower throughput at Shin Oak also weighing.
Guidance nudged up, spending down
Kinetik attributed the stronger profit outlook to better-than-expected well results, stronger equity volumes and commodity prices running ahead of its August assumptions. It expects 2026 capital spending about 5% below that $560 million guidance, which it ties to disciplined execution of growth projects and timing of spend.
CEO Jamie Welch said processed volumes are "tracking toward our approximately 2.2 Bcf/d fourth quarter 2026 target."
Bigger plants, more acreage
In September, Kinetik lifted planned capacity at its Kings Landing II plant by more than 25% to 380 MMcf/d, with cost unchanged at about $260 million and service targeted for mid-2028. It also reached a final investment decision on phase 1 of the ECCC Pipeline expansion, which should raise throughput roughly 50% to about 225 MMcf/d, with service anticipated mid-2027.
New and amended agreements in New Mexico and Texas dedicated more than 30,000 gross acres since the start of August, some prospective for the Woodford formation. One agreement carries a firm minimum volume commitment. The company has ordered long-lead equipment for a next processing expansion with a 400 MMcf/d cryogenic unit; its location, Texas or New Mexico, is not final.
The first of the Lone Star NGL contracts in Texas expired October 31, and the other ends at year-end. Kinetik now forecasts more meaningful margin contributions from system optimization in 2027 than it previously expected.
Kinetik hosts its third-quarter call Thursday at 9:00 a.m. Eastern.
Sources
- 8-K Filing — Kinetik Holdings Inc. (KNTK) — SEC EDGAR
- Exhibit kntkex991pressreleaseq32026.htm — Kinetik Holdings Inc. 8-K exhibit — SEC EDGAR
- Kinetik Reports Third Quarter 2026 Results — businesswire.com
