Genesis Energy, L.P. (NYSE:GEL) Q4 2022 Earnings Call Transcript

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Relative to Argos, as we said, there’s 14 wells pre-drilled and we could expect at least in historical perspective, they’re pre-drilled and completed that mechanically, you could reasonably expect that it would take 2 to 3 weeks in round terms to fully tie in and mechanically get a well going. So once they’re confident in their ability to start ramping up production, we kind of believe that it should be a fairly rapid ramp in these wells, again, are anticipated to, on average, be, call it, 10,000 barrels a day wells given that they got 14 pre-drilled or even greater. And importantly, the other thing from a scale point of view about the Gulf of Mexico is that the recoveries, EURs from most of these wells are anticipated to be in the 20 million to 25 million, even 30 million barrel plus per wellbore to give you an idea of the scale.

So each one of these wells is the equivalent of, call it, at least 30, if not 40 onshore shale wells.

Torrey Schultz: Okay. All makes sense. Just lastly, on soda ash, you have prices locked in higher year-over-year for 2023. Can you just remind me what’s locked in beyond this year? And then what would be open to setting contracts at the end of this year, including the Granger expansion, understanding clearly the view you have for the market to remain tight?

Grant Sims: Yes. All good questions. We continue to have a series of laddered contracts that go out over time and a number of them have been reset into this world or this price deck and are subject to caps and collars on a prospective basis. Others, some residuals are kind of locked in at 2020 pricing or 2021 pricing, in which case we need to get to the end of the 3 to 4 years of their primary term in order to reprice them up. So that’s why everything doesn’t go immediately up given the nature of our contracts, but we feel very comfortable of where we are as we intimated, it sure feels like at this point, and I agree, we’re only 45 days into the new year. But it feels very comfortable that prices could actually hold steady or even continue to increase as we go throughout 2023. And that is — if that indeed turns out to be the case, then we will — over the coming quarters, we will be adjusting our annual guidance if that turns out to be the case.

Operator: . As there are no further questions at this time, I would like to turn the floor back over to Grant Sims for closing remarks.

Grant Sims: Again, we thank everybody for participating, whether or not you’re here live, you’re going to hear it on the tape-delay but we’re very excited about the company and the prospects that we have in ’23 and beyond, and we look forward to sharing that with you in future calls. So thanks, everyone.

Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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