Kinetik Holdings Inc.

What they do

Kinetik operates through Midstream Logistics and Pipeline Transportation segments. Midstream Logistics provides gas gathering and processing with over 4,200 miles of pipeline, over 825,000 horsepower of compression and eight processing complexes totaling over 2.4 Bcf/d of cryogenic capacity, plus crude gathering, stabilization and storage and produced water gathering and disposal. Pipeline Transportation includes equity interests in the PHP and Breviloba pipelines and the Kinetik NGL and Delaware Link Pipeline systems.

Revenue drivers

• Midstream Logistics — Gas Gathering and Processing — The largest earnings contributor, generating $204.8 million of segment Adjusted EBITDA in Q2 2026, supported by fee-based gathering and processing across the Delaware Basin.
• Pipeline Transportation — Generated $83.0 million of segment Adjusted EBITDA in Q2 2026 through equity interests in the PHP (approximately 55.5%) and Breviloba (33.0%) pipelines, plus Kinetik NGL and Delaware Link systems.
• Crude Oil Gathering, Stabilization and Storage — Part of Midstream Logistics, centered at the Caprock Stampede and Pinnacle Sierra Grande terminals with roughly 290 miles of gathering pipeline and 90,000 barrels of crude storage.
• Produced Water Gathering and Disposal — Part of Midstream Logistics, with approximately 370 miles of gathering pipeline and about 610,000 barrels per day of permitted disposal capacity.

Recent performance

For Q2 2026, Kinetik reported net income including noncontrolling interest of $123.1 million and Adjusted EBITDA of $280.8 million, with Distributable Cash Flow of $194.9 million and Free Cash Flow of $105.2 million. For the six months ended June 30, 2026, net income including noncontrolling interest was $118.0 million, Adjusted EBITDA $532.0 million, Distributable Cash Flow $375.8 million and Free Cash Flow $206.6 million. Quarterly revenue rose to $581.4 million in Q2 2026 from $410.0 million in Q1 2026. The company described the quarter as record financial results, supported by operational execution and commodity margin outperformance.

Strategy

Kinetik reached final investment decision on Kings Landing II, expanding system processing capacity to 2.7 Bcf/d in 2028, and placed the ECCC Pipeline into service in 2026 while procuring right-of-way for an anticipated 2027 expansion. It secured incremental firm Gulf Coast market access for residue gas commencing in 2027 and executed new residue and NGL transport agreements for Delaware North processing complexes. The board authorized long-lead equipment procurement for the next processing expansion beyond KLII. The company also began drilling at the Kings Landing acid gas injection well.

Risks

• Permian Basin concentration — The majority of wholly owned midstream assets are in the Delaware Basin, exposing results disproportionately to regional supply and demand, regulation, weather, water restrictions and infrastructure interruptions.
• Producer development and decline rates — Throughput depends on customer drilling and completion activity on dedicated acreage, and existing well production naturally declines over time, so reduced development could lower utilization.
• Commodity price and margin volatility — While service revenue is supported by fee-based contracts, product sales revenue and commodity margins are exposed to crude oil, natural gas and NGL price swings, including recent Middle East conflict and Strait of Hormuz disruptions.
• Acquisition and integration risk — Acquiring or divesting businesses and assets is part of the strategy, and the company may face difficulties completing transactions or achieving expected benefits, such as with the Barilla Draw Acquisition.

Outlook

Management raised full year 2026 Adjusted EBITDA guidance to $1.04 billion to $1.1 billion, citing stronger volumes, improved margins and operational performance. It anticipates third quarter 2026 Adjusted EBITDA of $260 million to $270 million and fourth quarter of $270 million to $280 million. Capital expenditures guidance is approximately $560 million, driven by KLII, accelerated producer development, optimization projects, long-lead equipment procurement and ECCC Pipeline right-of-way. Management said curtailments have eased and customer activity is pulling forward, with momentum building into 2027.