Kinetik shut in about 170 MMcf/d of Permian natural gas production due to low Waha prices during Q1 2026, which was more than offset by “spread-based marketing gains” which helped it post a record quarterly EBITDA of $251 million, the company said during its earnings call this week.
“To date, the Waha-to-Houston Ship Channel spread has been wider than assumed in guidance, enabling stronger-than-expected marketing gains,” Chief Financial Officer Trevor Howard said. “We have approximately 50% of our transport spread exposure hedged in 2026.”
Howard said the company now expects about 220 MMcf/d of curtailments for the year, up from its prior assumption of 100 MMcf/d, but that the price-related shut-ins are “temporary in nature.”
CEO Jamie Welch said Waha pricing has been unusually volatile this year, noting that as of May 7, Waha had been above zero for only 13 days, with six of those days tied to Winter Storm Fern.
“We are dealing with unprecedented volatility,” Welch said. “Even at the beginning of this year, we thought 2026 would be the tale of two halves, but seeing negative pricing for Waha going into October is truly hard to fathom.”
In addition to the wider basis spread, Kinetik said its performance was driven by stronger-than-expected system operating performance that yielded more condensate and NGL recoveries, higher fee-based margins, stronger commodity prices and slightly lower unit operating costs.
Kinetik also said its Kings Landing Complex (#1 in slide below) had received all permitting approvals and construction was underway on the acid-gas injection and sour-gas conversion project, with in-service expected by year-end 2026, and that the ECCC Pipeline (#5), a large-diameter, high-pressure pipeline connecting the Delaware North and South areas, would be in service in Q2 and is expandable to about 300 MMcf/d.
