New Jersey Resources Corp. (NYSE:NJR) Q4 2019 Earnings Conference Call - Final Transcript

Nov 19, 2019 • 10:00 am ET

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New Jersey Resources Corp. (NYSE:NJR) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. [Operator Instruction] Our first question comes from Travis Miller with Morningstar. Please go ahead.

Analyst
Travis Miller

Good morning. Thank you.

Executive
Stephen D. Westhoven

Good morning Travis.

Analyst
Travis Miller

Just questions on Leaf River here, you mentioned accretive, is there anyway that you can give kind of a range that's embedded in your guidance for that?

Executive
Patrick Migliaccio

Yeah, Travis this is Pat Migliaccio, we've indicated it's nominally accretive in fiscal year 2020 after taking into consideration the dilutive impacts of our equity issuance. I think, if you think about this from a long-term perspective the guidance we provided is I think about this. In terms of a double-digit ROE, but on the lower side.

Analyst
Travis Miller

Okay. Okay, and then when we think about strategically, was this just an opportunity that you saw come up at a good price, and good growth potential good return or is this something that you see is more strategic for the non-regulated segment, perhaps expanding more projects down there in the Gulf Coast or other LNG type related infrastructure?

Executive
Stephen D. Westhoven

Hey, Travis. This is Steve. I think we've shared with you before that we've been in this market for quite some time looking at midstream assets, especially in certain areas that provide for growth and where we think there is some significant future opportunity. Leaf River fit that on all counts, so we're able to make the investment, able to meet it at a price that we thought we think is good for us and our shareholders and we're going to continue to pursue these types of assets in the market, it's just a matter of -- it's hard to predict on when we'll be able to achieve the next acquisition or when the next one will come in, but certainly we're going to pursue this in the future.

Analyst
Travis Miller

Sure. Okay. And then just one real other quick one here, the contracts you mentioned that 80% contract that -- what's within those contracts just in terms of variability? Is their price exposure or volume exposure? And what's kind of the sensitivity around those contracts? And then also on the uncontracted part?

Executive
Stephen D. Westhoven

Travis, they are traditional contracts where majority of the dollars coming in are fixed demand charges. And then the portion that isn't contracted are taken to the shorter term market. So I would imagine one year, maybe less type time-frame, park and loan type transactions. I think it's a typical mix for storage facility, but really the attractive part of this are a majority of the revenues are fixed demand charges coming from customers in a longer contracted period.

Analyst
Travis Miller

Got it. Thanks so much.

Operator
Operator

Our next question comes from Shahriar Pourreza with Guggenheim Partners. Please go ahead.

Analyst
Shahriar Pourreza

Hey, good morning guys.

Executive
Stephen D. Westhoven

Good morning, Shahriar.

Executive
Patrick Migliaccio

Good morning, Shahriar.

Analyst
Shahriar Pourreza

So just one question. The incremental equity that you guys announced for 2020, I think some of it was shifted from '21. Have you provided any kind of -- is there any sort of question if we get PennEast gets further delayed?