Kinetik Targets High End of 2026 EBITDA Range

The Tip Desk · November 5, 2026 · 3 min read

The company now expects full-year Adjusted EBITDA at the high end of a $1.04 billion to $1.1 billion range after third-quarter processed gas volumes reached a record 1.94 Bcf/d.

Kinetik Holdings Inc. (KNTK) now expects full-year 2026 Adjusted EBITDA at the high end of its $1.04 billion to $1.1 billion guidance range, after processed natural gas volumes reached a record 1.94 billion cubic feet per day in the third quarter and the company said momentum continued into the fourth.

The Permian-to-Gulf Coast midstream company generated Adjusted EBITDA of $278.1 million for the three months ended September 30, 2026, slightly below the $280.8 million second-quarter record and above the $260 million to $270 million range it had set in August. Net income including noncontrolling interest was $50.9 million. Distributable Cash Flow was $213.7 million. Free Cash Flow was $87.5 million.

The company said it now expects 2026 Adjusted EBITDA at the top of the range because of gas gathering and processing fees from stronger-than-expected well results, equity volumes that exceeded internal expectations, and commodity prices that outperformed the August guidance assumptions. It anticipates full-year 2026 capital expenditures to be approximately 5% below its August guidance of $560 million, citing disciplined execution of the growth capital program and project timing.

Midstream Logistics Adjusted EBITDA was $203.6 million, a 34% increase from a year earlier. The company said processed volumes rose to 1.94 Bcf/d, with an additional estimated 25 MMcf/d of Waha price-related gas shut in. Results also reflected continued system operating performance and favorable commodity margins, partially offset by a reduction in residue gas marketing contributions. All Delaware North processing facilities, including Kings Landing, operated at full capacity for much of the quarter, and the ECCC Pipeline transported surplus volumes to the Delaware South system.

Pipeline Transportation Adjusted EBITDA was $78.5 million, an 18% decrease year-over-year, primarily due to the EPIC Crude Holdings, LP divestiture and, to a lesser extent, higher fuel costs at Permian Highway Pipeline and lower throughput at Shin Oak. Corporate and Other Adjusted EBITDA was a $3.9 million loss.

President and Chief Executive Officer Jamie Welch said processed gas volumes are tracking toward an approximately 2.2 Bcf/d fourth-quarter 2026 target, with margins and costs continuing to outperform internal budgets. He said more than 13 Bcf/d of incremental takeaway capacity is expected to come online between 2028 and 2030, which the company believes will unlock further producer activity, improve residue gas egress, and reduce Waha price volatility.

In September, Kinetik increased planned Kings Landing II processing capacity by more than 25% to 380 MMcf/d. Expected capital cost remains approximately $260 million, and the project is on track for a mid-2028 in-service date. The company reached final investment decision on phase 1 of the ECCC Pipeline expansion, which should increase throughput capacity by roughly 50% to approximately 225 MMcf/d, with in-service anticipated mid-2027.

Commercial activity included new and amended gathering and processing agreements in New Mexico and Texas, with more than 30,000 gross acres dedicated since the beginning of August. Certain dedicated acreage is prospective for the Woodford formation, and first flow is anticipated in the second and third quarters of 2027. One agreement includes a firm minimum volume commitment. Long-lead residue compression equipment has been ordered for a next processing expansion beyond Kings Landing II.

The first Lone Star NGL contract in Texas expired on October 31, 2026, with the remaining Texas contract set to expire at year-end. Kinetik now forecasts more meaningful margin contributions from system optimization in 2027 than previously expected.

Net debt was $3.94 billion at September 30, with a leverage ratio of 3.70x and net debt to Adjusted EBITDA of 3.71x. Liquidity was $1.07 billion. The quarterly dividend was $0.81 a share.