TRGP - Earnings call transcript Q1 2018

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Operator

Good day ladies and gentlemen and welcome to the Targa Resources Corporation First Quarter 2018 Earnings Webcast and Presentation. At this time, all participants are in listen-only mode. Later we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Sanjay Lad, Director of Investor Relations. begin. may you Sir,

Sanjay Lad

Good call welcome for Heather. quarter the XXXX earnings Targa morning you, to and first Thank Resources Corp.

earnings company, first www.targaresources.com. quarter TRC Investors section are first release website Resources the Targa The at our Corp., available or on the earnings along quarter the of with supplement presentations for Targa,

statements Any the updated this forward-looking from call during Please those an projected also are company's could addition, be results made or and presentation In should been differ any posted and that note the provision might include by statement has investor to expectations predictions materially actual Act XXXX. our Safe website. the of covered that of considered Harbor statements. XXXX in Securities forward-looking

factors please SEC. could to XXXX, December filings, of results and Form report SEC recent ended filed that refer the our the for reports actually differ, company's including annual XXst, subsequently XX-K on cause For a year to the discussion with

call Joe Our and Financial for Matt Bob Officer. Jen Kneale, will President; Officer; Executive the Meloy, speakers Chief Chief Perkins, today be

senior on the Joe turn also today's Perkins. Matt Pryor, team prepared Marketing; before will now will we remarks to commercial and Bobby Jen for and XXXX our wrap-up President, I following will over business Commercial Processing; Pat management will update Gathering developments an outlook, Joe quarter begin open the and have and then discuss Q&A. Logistics members available results Scott first call questions. Chief Muraro, Bob up and Bob McDonie, President, will We Officer. for and provide call,

Joe Bob Perkins

Delaware call expansions I well-positioned services that and gathering, Basin and execution our by a busy everyone additional to energy transportation, fee-based our agreements believe thanks announced company. provide that since joining. downstream investment-grade couple related last with are organization. we and Commercially, of supported mid-February made a been since processing to long-term processing across announcements fractionation significant morning of examples the It's Good Sanjay. Thanks the of months and we other strength earnings for

expansion have across new is And our betting the the Importantly, positioning lines Delaware contracted additional to additional part most compete rich gas-gathering fruit pipe to producers, high-pressure new additional not have would of already with construct is that of otherwise, attractive acreage We've from Basin. others, in expect already some able verbal before. been dedications coming the we commitments or and months. over

Southern from needed and the transportation We that private also attractive, put expanding volume our Oklahoma. STACK. expansion announced Valiant Midstream. notes and pipeline a long-term at acreage commitment Valiant our supported is midstream Arkoma position dedicated volumes relief in a day very large, in billion that in over $X The in of Prix brought current is via into senior issued that significant further per that business fractionation Grand Basin. yield plant a together and yield support Arkoma an attractive on-time We which market company high we're April operating XXX strong feet choppy, much early rate to was on-budget investors. of Targa's online. early by announced Plant high in April, plant Joyce capacity We cubic and successfully continued demonstrates provides system Midland million the been the future very a NGL by from north been has our Joyce That and has the

we example And project evaluate retained WhiteWater million. we that strategic XX to logistics that ongoing. to agreements and for enhance about financed coupled process and sold strength assets announced this identify of and highly made in Midstream in Also could to business that continue outlook. the an the identifying our be plant volumes for These our the Oahu April, proceed Barge our public Basin, capital grow on the this flexibility; million feet announced business announced morning, systems. equity attractive our sheet further in our and attractive cubic incremental include; to adding advantage; valuation online and fronts, attractive $XX existing with further that We fund continuing additional also Basin some our base financing capacity strengthen Targa asset which existing program infrastructure investing less Delaware space pursue to petroleum support already per And that Inland other and Delaware small help strategic potential recently XX% us our on and projects opportunities execution further Delaware sell of our an program. executed we a to strategic integrate, day leverage that pipeline. our strategic used competitive Targa to That's year-to-date strengthen, recently with in morning, as is maintain proactively ongoing announcements, Oahu growth we brought an key multiple Evercore to balance secured to divestiture ramp long-term their initiatives,

The Our growth is today. capital projects outlook better expected highly generate provided significant become program visible is term that flow the even longer operational. various we cash to as last June

since included additional developed commercial at was significant additional back that announced year ago. outlook. that at not have oil clearly that the we outlook asset Targa base. had projects that in NGL higher including provided stronger, existing are and and our and And time, growth time, prices leverage has were the outlook the that Looking success Plus nearly activity fundamentals more that year included currently a of we not a

term, focus With that, Matt will best-in-class provide supported We are to and call Matt? to over to execution and the update Matt, returns operational execution an commercial our well-positioned continuing on services business our to on deliver customers. our midstream to I'll attractive the now turn over and outlook. provide and on Targa shareholders by longer

Matt Meloy

progress estimated the to quarter, reducing positive quarter volumes XXXX with have and good activity approximately our fourth expect everyone. even in to throughout impacts by January Permian the to Permian inlet Thanks X% first beyond. production with recovered we more and many average Volume inlet April trend increased of Compared continues quarter operating related Bob Commercial and first freeze-off in Joe X% average. morning Permian regions and first than average increase this inlet quarter volumes above since already X%. the

later estimated day inlet total and capacity XXX add field feet cubic plants execute multiple are to incremental XXX to Wildcat Permian X% our footprint. we volumes other program in Basin and begin the to Basin, systems G&P, month. the continued interconnected a million average In we the above expect across XXXX. new feet our track were online million Delaware average. April growth For cubic processing an quarter this plants and Both first per with per Oahu commissioning of per million Permian, a day In Plant is remain XX plant day our cubic on on

per system to Our gas XXX and be and feet recently second expansion announced two million of quarter high-pressure XXX-mile the Delaware the respectively. cubic header and fourth cryogenic XXXX gas quarter Basin new are Falcon processing. rates include completed The natural in XXXX day the scheduled plants Peregrine of

also at across from our on and Without for midstream for midstream the to Plant. transportation in successful Basin, customers underpinning not majority offering integrated would As best-in-class Permian customer complex have services spans executing Mont exemplified by service, Grand been agreements. we the deal. Prix, Permian that to this in our and our and The we're our these producer the provide reputation service fractionation that assets able the part services NGLs its of is the expansion plan, of a provide Belvieu multi-plant system fractionation Grand and Prix the Targa Falcon agreement, Peregrine will

running some On and the offloading our target Midland and facilities continues of side coming rapid systems above our pace. of provided processing West Joyce Texas Permian, third-parties plant nameplate the to production the capacity needs growth of to online system the some at relief. meet much-needed while also other We're customers, a

similar. Our Johnson feet expectation and expected is when in to million day it to service highly quarter our begin are the cubic online. per third also anticipated utilized It is for comes XXX be Plant

result The experiencing of first being will moving first Midland under trends forecast our substantial our construction, construction per Engineering. quarter NGLs forward operations begin that these production plant, and plants other missed. second new majority also growth Similar late to Targa's we're that of we are on Steve to will and Targa early the after XXXX. multiple history, currently played systems. outlets, day operations announced we're in other the be Houston the named production from After in and plants Mont of other on cubic growth two the feet continued the facility announced he much with plants million fractionation be LPG interconnected and Operations the in in from with quarter, cryogenic the key a channel, development and Pembroke customers time across footprint. a XXX plans plant of in Prix the the Basin. plant very export growth, Belvieu, transported plant will former our will the increasing further plant Grand SVP assets of is A over Hopson the of begin Hopson organic is XXXX. ship The in downstream Targa integrated newly Hopson, Targa's Steve quarter and Hopson role As

our Oklahoma assets. to Moving

supported will of fractionation begin positions and to and Our track and natural Woodford venture extension late Belvieu In of XXXX. the is part the and dedication the the the area system. Southern XXX our is Grand long-term March, operations Arkoma Oklahoma, volumes transportation plant SouthOK by million announced gas MPLX, growing fourth of complex. from North from which in Targa's feet and plant, production will Basin joint Prix in G&P Hills per Targa's extension quarter support Targa's processing cubic Hickory integrate significant in existing on Mont SouthOK Centrahoma with day pipeline future we in to Texas The Arkoma which is

span spanning during installation counties prolific Valiant's this liquid-rich day trunk mutual processing supported of midstream the company the our formation acreage per needs. in the April backed include cubic cryogenic a Little about of day XXX through Missouri over our new in transportation million remains to Estimated Construction and Valiant expected which our plant by The phase is lines venture a will track will the a the to our facility million fairway. activity long-term plant XXX our Bakken basin's sharp over X.X Oklahoma year help committed first in feet initial leading fractionation Valiant Southern from and extension continues per the day, on the to year from system, with year XX-XX representing quarter within position fourth increase per of will Targa in increasing million joint the production multiple benefit private is the second In outlook of of is the is is Midstream. whose be through Additionally, Hess' also highly commitments growth an averaged as and acreage Woodford existing interest. well high dedicated infrastructure, production on cubic LMX strengthen feet highly and area in significant is across it of and early energy complete utilized pressure our quarter levels. crude volumes commences barrels gathering underway expected Hess we operations growing robust be after at quarter over levels. meet is XXX,XXX XXXX. plant and to this next and Midstream

marketing Turning by to supply our strong business The and fundamentals. logistics outlook our supported demand strengthen, continues business. to and downstream for

our volumes trend and over higher Harvey also We of early higher recovery a volumes was last outperformance CBS year The XX% XXXX to this carry to schedule inlet inventory build In in ethane some over that attributable increasing drive as and we turnaround our third-party April. to G&P we field from of our Hurricane did fractionating quarter, expect of the volumes, expect of in higher the continue peers. quarter through the of additional fractionation export fourth fractionation the QX Trains X an some impacts volume. fractionated into in volume first and not inventory X excess quarter fourth our increased completed had beyond. volumes. And We

are increasing operation continue while quarter begins to this volumes growth, to Y-grade barrels the To X receive volumes For and accommodate quarter construction it XXXX. of is and per the G&P we related lower our volumes the expected in Benzene of to is available when first under fractionator first fractionation. expected the result be beyond, XXX,XXX utilized remainder take-or-pay to and for highly to payments were day Train Shifting year the in month EBITDA increasing contractor LNG. through in Park per April The X.X during given repurpose at treating place we're have first for XXXX, deminimus. additional low-sulfur first quarter. the LPG changes business. for demand facilities exports going and our to these we similar benzene the quarter increasing volume barrels reported to the impact from our natural million is into over export volumes treating were We Galena gas averaged of in time

Our growth and the remain fundamentals long-term LPG unchanged is the continued demand in international largely U.S. robust the LPG growing export, supply from driven U.S. long-term LPG outlook for by strength

on concentrated be year on-time on the Grand We have be Galena more including impact on-budget at upon second enhancements during Belvieu to continues. second us volumes, attractive Dock Park. a Park operational customer enhancing at multiyear product and third of interest capacity flexibility stock and Construction operational and size construction continue infrastructure Mont rebuild of will contract the Prix we We're and older this meet the and will the Belvieu The an LPG of our remains in expected and and as minimal rebuild and demand depending to Park Galena capability additional with and quarter These vessel contracts pipeline give at XXXX. fully our multiyear continues project to position at have Park. export quarters our mix. Galena Mont the add in capability and X Galena

by currently expand in increasing significant stage the well-positioned is Prix well-positioned prospectively we expected barrels expansions stations day As to Prix and Grand low-cost that Grand further long-term and economics We're Targa. fee-based over will announced to expected in earnings when adding required. are provide late project March, exceed enhance incremental volumes to are XXX,XXX XXXX. to to per

growth capacity generate the project would Targa will from be As example, in per of announced the expand XXX,XXX day cost that providing than to XXX,XXX from the XXX,XXX Mont costs, estimated and less to capital-efficient Prix an to XXX,XXX attractive Grand Permian barrels originally per fully XX% with the returns. Belvieu day opportunities barrels

largest takeaway, gas is one residue to Targa of relates Permian. of it gas As the natural the aggregators in

the in from the gas direct solve helps and markets. gas of the some GCX investment will Our takeaway to premium basin constraints

to competitive positions Additionally, our in well-positioned are future negotiate our aggregated reliable GCX producers. for excess of gas takeaways and

in XX% from the You Midstream release Blanca seen of also that have now project press Basin. largely we're pipeline the the is owner Agua financed. pipeline yesterday equity in WhiteWater a Delaware at being Construction

So, in Targa's our for call I'll results Delaware first capital, now to amount ability Jen process secured interest that Oahu. enhances we a to to transport an volumes for that, the deminimus over of and discuss quarter. the the attractive With to turn

Jennifer Kneale

$XXX Thanks, same for the adjusted Matt. Good was million, morning everyone. than Targa's reported which higher EBITDA in XXXX. the first period quarter was XX%

was volume and and EBITDA volumes drove by and SouthOK, WestOK million quarter adjusted over more new $XX flow first volumes. dividend fractionation Texas, the complemented higher the Coastal Sequentially, the in margin coverage year, gathering strong quarter with one by EBITDA lower Continued along in assets prior Higher million, expenses operating in than due $XXX volumes fourth X% over to quarter. Reported Distributable gas of the million than system NGL expansions. net the EBITDA commodity first quarter. and and adjusted quarter $XX Permian, million and processing when that Permian the QX offset Hurricane the and prices compared about to decreased decreased the impacts compared in volumes of of about Texas, growth gathering normalize quarter higher by CapEx and lower Badlands, a declining prices Badlands, for maintenance in Harvey, cash quarter times. in segment, as operating to we to was first South of South the XXXX. fourth partially North shifted by the offset first adjusted higher of Texas processing inlet XXXX the X.X% result exclude If our the was $XX higher EBITDA first quarter. natural and fourth for quarter in increase in QX the for first the were resulting from In

contracts First for Midland pro fractionation the experience quarter SouthTX higher the first our and have of approximately decreased Delaware increased margin growth Permian both was volumes offset margin benefited quarter, Galena by volumes in volumes X% first in freeze-off export quarter volumes volumes and by were as per volumes sequentially quarter City oil gathered X.X Flag XX% were as fourth more increased marketing forma logistics the by quarter. the systems up sequentially Permian as in Permian January. and the due operating mentioned, XX% with Inlet higher than volumes from producer X% as been OpEx. assets. largely million segment, in were timing crude in each over with the well to propane outperformance quarter crude as Permian at in Matt from Sanchez our to in compared higher the and acquired we month gathered the from $XX of strong lower completions. averaged Bakken, inlet would fourth In operating quarter Park. volumes from in first mentioned, the lower first the the the unusual and volumes were quarter impacted barrels modestly line fourth and export wholesale In LPG quarter of fourth treating the we million

results financial changes no outlook. and to we XXXX our Our have consistent and with our first quarter expectations operational were

to ramp plants expect begin We throughout continue new XXXX our trend operations. fractionation downstream inlet to growth and expect same volume Permian translate growth we as And continues the business. to volume production Targa to

quarter year. highest to throughout the EBITDA with the ramp XXXX also expect adjusted We fourth was adjusted EBITDA being

the versus with forecasted through the The XXXX. the The April the be to XXXX payment the to our entirety expectations estimate is contingent in matters. estimated is is March discount attributable acquisition for an consideration period. measurement of payments increase fourth No the volume fair million a $XX million February related XXXX to in Permian underlying value quarter for now related increase payment of the earn-out financial $XXX Moving and to shorter period. due currently

additional During NGL current condensate, G&P the we of and XX% quarter, and on hedges, field XX% gas, XX% estimate of for of volumes have contracts. our executed XXXX, volumes approximately estimated first our equity from hedged of we we natural based

basis hedges gas regional natural hedges. include Our

and that on estimate XX% condensate, again, based, processing. natural XXXX, For of hedged of gathering XX% from approximately XX% volumes and we of we of volumes field NGL current estimate gas, our have

we Pro issued Net senior leverage forma Joe April a TRP's On notes our TRP the the first versus offering were senior quarter X.XX% borrowings mentioned, of X.X facility. As debt in receivable of April under due from to revolver was times. senior notes proceeds billion offering Bob consolidated in compliance XXXX. $X notes billion. percent ratio approximately accounts end a of and used our approximately for our liquidity X.X the at covenant basis, times compliance $X.X the was reduce

approximately was times. reported consolidated X.X to ratio debt Our EBITDA

highlight to sell and from our agreements accretive of current business focused of Corp. identifying liquidity million $XXX ways EBITDA CapEx us net our given $X.X assets deploy unchanged the approximately believe barge messaging, petroleum we CapEx from fund program to capital our ATM $XX under common growth Our our the Consistent logistics willingness given million. equity year proceeds sell is increasing the that forward. Year-to-date, to XXXX our as approximately growth billion. The visibility ATM to we're a to sale execution since XXXX remains tool the into our is November with is our and divestiture more most and update to for attractive potential capital business, earnings call, we the useful our net looking forecast a program opportunity. Full of our be estimate previous received of on that have maintenance

and approach reduce our XXXX supported in attractive in financing offering DevCo February, at our April, ventures funding that capital multifaceted announced early demonstrates and we joint needs continued course, the confidence by debt capital for access our our both equity and in to significantly early notes Our is XXXX. which private public

the interest We on-time our be on and term financing remain receive additional and of maximize with and have executing we projects, projects in also on underway to and bring on-budget, continue continue us securing on both to that from capital. service future shareholder enhance to sources support value. to focused longer focused provide attractive strong and We sources

shareholders. and published we're As Targa consistent are strengthen we EBITDA our completed and outlook our look the balance very we outlook coverage last to the and long-term that June, sheet and with increases for underway as significantly are excited projects forward its dividend about our expected and

with that, questions. line the up So, please open for Heather,

Operator

[Operator Instructions] first comes Thank Gershuni UBS. from line with you. the question of Your Shneur

line is open. Your

Shneur Gershuni

good everyone. morning Hi,

Matt Meloy

morning. good Hey

Jennifer Kneale

Hey Shneur.

Shneur Gershuni

you nature, you've of June, I realize off. laid out projects a smaller Just five-year then. a wanted start capital increase. plan cumulatively announced one your is it's in each to series When them of last since been large but

there the a dedication large if at I has EBITDA wondering also us give couple see I way on how to if color outlook to give dollars? you any changed. Directionally, signed earlier? could million plan is time. color getting that you you hundred on it, billion characterize some you your wondering another to by the can five-year go just up You $X acreage was was on Or us same that. Do expect a

Joe Bob Perkins

Yes Shneur.

our What for like probably we a rarely our production do the that that crude. since page NGs You're it's often monthly outlook. my investor understandable comments. given is on markets would briefly Significantly activity, in described question presentation industry changed the we update put long-range that I year and and and better ago. a factors that commodity aware get that And have prices the expected in about fundamentals, in

success the over commercial last Secondly, year.

needs. were And articulated the the and success dedications as they've not included created position position the in to leveraging of that that projects occurred, outlook and that that we those to the our of the existing as then continue We when laid better. May making on announced number projects and you existing we year. as downstream have And out midstream then we our customer's last of significant were commercially upstream mentioned, necessary traction, meet

news. is good All of that positive very

the we suggested billion get $X sooner. to probably You've that

we occur investors coming that's very hope get I reasonable many not that But to analysis have to today. their to think I'm and yours. when know providing phone And conclusion. directionally just it conclusion the to done call I that It's on I a sooner. that. has similar own they're a that satisfies

Shneur Gershuni

Great.

As costs you relative up costs volumes fair associated were a Is follow-up that plants startup if operating the G&A full leverage with specially new around look specifically so to forward run to the OpEx these ramp see the and and going to we'll were that quarter, forth. the of it assume and as those plants rates?

Jennifer Kneale

right That's Shneur.

when plants the grow we year the I some that trying other online about year given here. from think reasonable it versus run that assumption online, Joyce this using rate decent plant exponentially are a think a a to is coming we've first quarter got you as just have come

Shneur Gershuni

Okay, up. and Outrigger volumes to great. assume of seem that a volume also it's the going And capacity fair increased. expectations? we frac to finally, lot there then as due continue have Can assume tight there pricing be is liability Is to you've well? And be higher getting to up

Jennifer Kneale

closer the piece through the fair to get to earn-out a related shorter the the that the of payment first of On period value fact time both related as contingent contingent higher payment now of yes, or well. to a acquisition, the volumes end move and discount second you Permian liability the that there's as as result to is

Joe Bob Perkins

a systems we're others seeing happening things, for Y-grade that's other increase then systems to grow. in side volumes and of Yes our from and large the frac on

indeed capacity is tight Mont right fractionation very at now. Belvieu So,

Shneur Gershuni

much the very guys. you Thank color. Great. Appreciate

Jennifer Kneale

Shneur. Thanks

Matt Meloy

thanks. Hey

Operator

Thank you.

Christine Your comes of next Cho Barclays. question from

Your line is open.

Christine Cho

everyone. Hi

Jennifer Kneale

Good morning.

Christine Cho

the expected you are of an flaring? Do idea of the approaching year. The think we to going is behind growth capacity. half quite plan this slow second Permian to system down that your start gas An pipes the takeaway potentially out have till full or what next of Should isn't could incremental do? producers

Joe Bob Perkins

of our our in increased Question that with conclusion a But takeaway. the like are zone each everything to for of we -- provide depend where you is them and liquid about way sort and believe to those out to Permian our the the producer to to to. large them I basin. result positioned get done so on we far term going to our locally the to competitors it's and the medium we've it Targa in try of get aggregated hiding just where driving ourselves as for in are. near broad and was situation function to as relative residue basin. is to of think natural position points I attempting like But can in a generalization. the Also, Permian. do both many producers to come we've That's it, could that

Christine Cho

And as a impression follow-up, the -- flaring like for at this usually the just but I'm that excuse under me my wellhead. ignorance, occurs

the plant curious happen why at back the to end doesn't the as So, of this processing with just residue gas?

Joe Bob Perkins

Yes.

the our live E&P within as relatively are Now, we're a going the ability get as the emissions under producers requirements customers than facilities. requirements trying is regulatory centralized broadly And requirements wellhead requirements. to with processing can There the live gathering plant. wellhead within will to are frameworks. processing their just talking operator Targa the to regulatory at and temporary we're Targa emissions speaking, at regulatory about centralized midstream and waivers that comply flare on different wherever continue at

Christine Cho

I see.

Okay. That's South some very And helpful. have you numbers in big then growth seen guys Texas.

as much richer is volumes what's cadence much City in that? that volumes Is implies are what it's just as NGL driving Flag historically gas going of should And forward? talk how simple about think segment. Can you've that the richer? that about you turning the that we the than out, growth seen On that

Matt Meloy

Yes.

at year-over-year seen, recovery. we that we've if a Y-grade is more look of lot the volumes, the For increase of

economics, just at look we recovery. as the so And -- economics our you producers' can and see

it's So, just more than the at of think are I factor plants more we gas the richer. what being recovering really a

Christine Cho

see. I

volumes items. Did the long? say much for in that the Permian how plants? you to quantify third-party were of housekeeping two that I how just you heard, then And and Okay. if overflowed being what some could And was

Joe Bob Perkins

It third-parties. the was fourth a gave Yes, about what quarter number we -- been? the had offloads to had in we

Matt Meloy

About XX.

Joe Bob Perkins

some million that. didn't It less was the quantify. quarter. first had or We than XX It's significantly We so. in

most on, the quarter was, we're did quarter XX onto look you Joyce to was the but with of in for it And get first at So, what it coming the quantify provide average able for But our quarter. didn't that it relief. we fourth the systems. some

Christine Cho

Thank you so much.

Matt Meloy

Christine. you Thank

Operator

question Pickering, your Thank Colton from And Tudor, you. comes of next Bean Holt.

Your open. is line

Matt Meloy

Good morning Colton.

Colton Bean

Good morning. processing Delaware wanted the were to flat like just volumes on throughput. effectively quarter-over-quarter. I check Looks

is to somewhat Oahu So, constrained is or came it weather into the impacts? of service that primarily result

Matt Meloy

Yes.

was weather it payments. that see the or for And see that impacts. mentioned the kind But ever with partially related actually as year, to the of We next the that of as potentially we was were increasing up Oahu for outlook really Jen Delaware. think process starting in -- can as well. payment I earn-out strong a So, you the

think but better, So, I impacted by first the is it if not outlook weather as was in quarter. good the

Colton Bean

a more the higher And that risk water seasonality follow-up Delaware an I the from significantly as on from with is you production just standpoint, cut? have to coming guess, operational production there a

Joe Bob Perkins

they what midstream handling systems The higher of would for E&P multisystem water connect each we is What as and at That's us producers. it get a The will the an problematic. cut and at is expect better we happens that. and interesting be provider typically learning observation. our multisystem helps this means better --

Colton Bean

steep switch versus for uptick shows crude gears like gathering in the over updated Okay. a to And gathering. pretty QX. Looks presentation just to April

of You be the of comments that driver Badlands, and guys some on whether or there? Permian was, comments what it have just kind any

Joe Bob Perkins

we mentioned the Yes. uptick in XXX,XXX was We A script of significant up in the day. a -- think -- the barrels that in said I Badlands.

in good Badlands. the uptick a So, it up pretty was

think Midland I more in some side. saw Permian the well, on we as growth the

Colton Bean

then just uplift it. on QX. one an the from Appreciate front. probably from me fourth And that final quarter the volume Got fractionation saw shifting from

I think provided and bit that for QX, looks adjusted further. revised you had like previously number an it a was

just was think that revision the could what guys and you how over talk kind if course the year. about So, the should of the about secondary -- we of trajectory

Jennifer Kneale

Yes.

of built third-party those volumes fact through related had looking Hurricane that also are numbers, Harvey. having third-parties we Colton, fracs to revised result of what when the in was as So, part running inventory we a also quarter fourth number at of the we our a the

impact fourth quarter. felt inventory that So, we of impact Targa that to into quantify accurate the inventory impact you also fourth to quarter, the of Harvey was show depiction was but to more moved the a into moved not like for just the also the of Hurricane third-party that

Colton Bean

sense. makes Appreciate right. All time. That the

Matt Meloy

Okay. Thanks.

Operator

And Schultz next Markets. you. TJ Capital from comes with Thank question RBC your

open. is line Your

TJ Schultz

Hey morning. good

Joe Bob Perkins

Hey good morning.

TJ Schultz

received at point? along and program? far splitter process in this on How loan the you term asset this been Hey. the sale Have are

Matt Meloy

of guess I signed just that CAs. progressing. There process were so there's that, potential I lot is would a interest, that -- have is lot Yes. bidders of say a

the say progress I'll that well, very early far kind a that's as interest. of progressing part is the as and as there's So, process. of are indications But lot

TJ Schultz

will Okay. on for dock Thanks. what capacity Park that The Galena can impact rebuild, you operational quantify have exports?

Joe Bob Perkins

the might point would went on. we have to the significant trying customers work Let it better. through was our that was I What were things were a to to or script, to others to as was question. be that me We provide that not left trying not a impact quick and noticed that, point to going while we one. debottlenecking answer the it making

script, some just more of what Scott to thought it. I'd So, color the clarify I can intention the and add

Scott Pryor

second sell is what marketplace customers, our obligation from in again, throughout some will those that point associated the quarters. fact to the Certainly, But spot the X contractual to standpoint, we our to have is third we ability where Yes. continue Dock and and that to availability there rebuild during will frankly, with quarter. downtime a continue the

see impact us. again, very we So, to minimal -- we

Joe Bob Perkins

on what quantified We're effective providing. constantly working it's positive adding haven't capacity. we And

TJ Schultz

Okay. Thank you.

Matt Meloy

TJ. Thanks

Operator

question comes you. And next Thank Craig Tuohy Brothers. from your Shere with

Your line is open.

Matt Meloy

Good morning Craig.

Craig Shere

morning. Good

Matt Meloy

Hey good morning.

Craig Shere

develop Appreciate and area. competitive robust kind enhanced edge for LPG your starting the over integrating continued to into potential talk years? market that you might same and about more the the with two, competition of peers of kind outlook on vertically We're that next exports. more three the hear Can opine

Scott Pryor

when Grand that This the upstream are through again, we into pipelines connecting we Prix future which say Train integrated to the is the position, all our increased to have we at is, through ability X, capacity is fractionation fractionation, looking downstream Mont that our you of is, at the I upstream it expansion, Scott, What look Craig. facilities, and especially that now position Galena at currently the construction, look tied our through again, announcement for permits time will in we production, would under in Park over have, tied our additional like when to store Belvieu.

what's to customer very just platform is going really very our well. that or looks and good comment So, with I I integrated concentrate on marketplace, the would service on say competition. as attractive can't our

And things And like we our in So, we growth to look to the and at facility. do in for future. those a like. our own the at we're that expand have position constantly we ability potential opportunities we

Craig Shere

Are at product looking diversifying the in you at years? all future

Scott Pryor

XXXX with concentrates concentration the more Certainly years recent we the integration where back some Dock the butanes, the opportunities. over over on expansion our first some has most little pipeline with of of our in see on new a been years. announcement propane the since growth announced bit and more And X

our those enhancing of abilities concentration again, going write-off past don't But potential possibilities look other currently we're the we at today, any We've but products. to propane capabilities. on in mentioned and So, is ethylene. our We're the products. other on butanes, increasing always

Craig Shere

of you specifics, some months. you Joe additional helpful. opportunity? book-end proportionality Without incremental That's dedications last provide coming Bob, kind expected commercial of foreshadowed you. And acreage Thank or your this in of prepared range kind question. can in Permian remarks, any for

Joe Bob Perkins

I our of with there deal I'm of that. that in we that pipe prepared and we off And assets. the header And the script, remarks than running don't is higher energy incremental that very that's I'm in provide. team but place. part Delaware on associated That's activity the the our that return very trying company's whitespace. first were put accretive, attractive assets, to to are pleased would leveraging I about. pressure large because to with through sometimes proud footprint to leverage focus, that's investment-grade point deal, doing the the Others, of out dedication, very our those first that benefits in the pipe and go if high very we commercial they're working was the talk they and then incremental being traction have the The leveraging of existing around

Craig Shere

you. Thank Understood.

Operator

Thank you.

Your next question James. comes from Darren Raymond Horowitz with

Your line is open.

Darren Horowitz

for your side, built as higher you what On From to opportunity fracs, into you and an had have level impact mentioned to your throughout And on progress pricing ethane ethane what your and higher do going is this that's guidance? perspective, interest? the equity specifically recoveries frac volumes. lead we that think ethane to recovery logistics the year net to spreads,

Matt Meloy

Good Dan. question, Yes.

we of So, we longer that amount had we range had into built outlook, recovery -- significant forecast. ethane had that when a

and -- mix. a it's So,

for rejection. recovery, our are in of Some others plans partial in -- are a full

And areas, some if be constraints to -- if that lead it's go operational oftentimes, into capacity we rejection in issues even have -- could we'll that.

a double One, getting online, some kind fees more us. and But would fractionation. is mix comes frac the to go going upside that There side benefit benefit into to and some mode. once volumes forecast, Prix through get to Grand we'll were we for of be of transportation So, on the fractionation. in it's it's get going that we additional recovery really if the as forecast. upside There full

really Grand the than there's I'd online, more the in post-Grand upside, is you those kind it's into of as go So, Prix when later pre. years commencement Prix say,

Darren Horowitz

upcoming you -- about requirement, Jen, you do sort on construct growth are there? CapEx, should do ratio propensity say, think the Because if you take what about you forecast including And to you the guys question. you maybe the gap, standalone think that the and are for debt? excluding additional you asset ATM cost level on perspective the asset -- And did I XXXX a call one to get outrigger extremely the payment I coverage I basis can a what funding option thinking any earn-out DevCo when the financing should could, of think or equity sale, hypothetically, attractive on capital. remaining And then logistics in then, petroleum XXXX about for Okay. as you April financing derisking what's how or the is comfortable? JVs, just from an up to quick obviously,

can there? some So, give just color you us

Jennifer Kneale

Sure.

in It's I think ATM a game of MLP, a our the C just Corp. bit is liquidity as that a perspective, useful from daily of changer the have. very been a terms obviously an tool. versus we

the course through tool the the us. available fund just to over that's to that's wanted ATM we if year, of a certainly, So,

multifaceted think for approach us you heard we are funding use to XXXX. that a our and I consistently going say to XXXX very

evaluation execute we of us level more ways asset joint DevCos, the sale seen a number the of potential have the log's and the ventures, different do strategic already obviously You've barge in pet a in terms or ongoing. of sale,

our EBITDA be have That's be our So, our very I can think and that the efficiently long-term on way thoughtful out fund a and that approach we it to unchanged. looking to and capital much forward. continue effectively will focus. outlook focused given figuring we We're multifaceted most program, the to visibility that continue will being very prudent and

Joe Bob Perkins

very and answer good Jen. from good Colton a a that question was very

Jennifer Kneale

Darren.

Joe Bob Perkins

was there have that scenario. wouldn't logistic in I'm you question, that, trouble the We the -- were sorry, exclude the the the We place. gone sale. Down beginning if Down the process likely Darren. was first petroleum of thinking the of through in most

there likely So, some be proceeds. to is

Some would or those assets would do. the are case have That sell. got of very to be to to likely expected better we've things -- we

Jennifer Kneale

and we have interest And That's four-year mean, a or option lot interest of buy tried structure and to the very wait it the and then how whole. all And that related consistent back can more buy to I put well. us take of we part won't together about We'll that we we back. out as why take won't in flexibility, we the be thoughtful end that very with prudent Targa we be past once. think a the sort period assume I till would it why to to DevCos, in that's thoughtfully very a out practice approach to gave at

Darren Horowitz

you. Thank

Jennifer Kneale

Darren. Thanks

Operator

you. Thank

Bagri with question Vikram comes next Your Citi. from

is line open. Your

Matt Meloy

good Hey morning.

Vikram Bagri

or growth can volume Permian XX% factor guidance taking your follow inlet on earlier terms in on way? Anything does steps constraints can The mitigate of do an customers. you've takeaway Quickly things you're to impact wanted mitigate Hey you you've mentioned you steps impact? natural question. to that in takeaway that have Basin, any of you up taken share gas to constraints the for And the guys.

Matt Meloy

sure. Yes,

market. So, when to able the that's Permian the those gas at producers. the expectation from and moved we'd get our to away be market growth, And from gave was XX% that our we it levels bottoms-up build

the gas rights serving done and our securing and We're good of movers tight. various think a are basin. We job one pipes at It needs. producers' get may constantly we've larger on access to we in the working

there mentioned, growth the have and done the some Bob could Joe takeaway just to and and capacity proactive at in we've potential a flaring. see progresses job at We'll As are. be the securing various the But around Permian. where how points pinpoints additional

Vikram Bagri

one-time? going ethane Okay. was up recovery? was on something Understood. picked in Or it that And in terms Basin of GPM, Midland else to was due XQ, which there

Matt Meloy

in ethane It was essentially more QX. recovery

Vikram Bagri

incremental contract could for front. levels? of up services. also this Okay. existing shifted downstream volumes in final some with G&P the And TRGP around Is Basin be Or and the company future? was about systems the contract share that clarity the that can Anything question above for to current production had your you get I to signed the IG-rated I want Permian on

Matt Meloy

too be contract to want any producer. getting about any one I with specific careful much Yes. into

expected a think that very just producer have with long-term expect we and announced our and I'll this volumes. volumes falling associated we've I be attractive say capital significant we those with contract will system, for down

volumes very those available to fact, we us. feel be, in So, good going for are that

Vikram Bagri

very Understood. That's Thank all had. you I much.

Matt Meloy

you. Thank Okay.

Operator

you. Thank

Tonet comes Your JPMorgan. from with question next Jeremy

is line open. Your

Jeremy Tonet

first the expand bit strong there the on you to extend question. for kind Good due contract opportunities of might exports in quarter morning. be LPG In under wondering taking able what if a lease from there. little where your if you dynamics slides, environment I Thanks short-term exports that just my profile? and additional was can noted were you an

Joe Bob Perkins

seen for in to The forward. an and in into other extending at today continue Americas, April what lean not provide about contracts some not about would quarter. we've that that that, in to first We we could our had script of a or first indication that ship the contract on to that to both in that looking talked quarter diversified Jeremy, portfolio we that we We or did whether every saw the success going products led resulted were just give constantly, similar long-term but the we earnings. you I'm very that in that anything saw the Europe, portfolio. like call We're also other demand areas to. we saw we've expect or has we that in volumes the that

Jeremy Tonet

the very then That's just And you. there. freeze-offs, you to be Thank dollar as as helpful. quantify the I'm far impact if wondering might able

wondering volumes. you that. if if that think But -- could the just I share you you had gave

Matt Meloy

use your I that to growth the of think relate in would kind to X% Permian, just of and what have estimate model kind in for you No, out-margin. another

Jeremy Tonet

enough. stop Thank you. there. Fair I'll

Matt Meloy

Okay. Jeremy. Thanks

Jennifer Kneale

Thanks Jeremy.

Operator

Thank you.

comes Sunil with next Securities. Global from Seaport question Your Sibal

Your line is open.

Sunil Sibal

for guys colors the all Yes, hi the good morning on call. thanks and

Just had one clarification.

in so far then the QX? out spent year? should growth CapEx how XXXX, the cadence for we the billion about So, how $X.X of much was the think And net for of remainder

Jennifer Kneale

would be indicate $XXX Sunil. for ratable. cadence think the I that the And million fairly through was quarter, as first it then to around million potentially $XXX think about year you that

Matt Meloy

Yes. it breakout growth, then Q, CapEx, have in have maintenance and in there And filing will well. growth for we'll the as total that which will be the

Sunil Sibal

Thanks Okay, That's had. I got it. guys. all

Sunil Sibal

thanks. Yes,

Operator

question of comes Bank America. next Coleman your from And you. with Dennis Thank

is line open. Your

Dennis Coleman

morning Thank you. everyone. Good

sorry. was review million Prix. you But million. Grand quick was a scribbling to a I can capability $XXX fact-check bunch just There the Just $XXX for of think I'm quickly. me. for I expansion numbers,

Matt Meloy

go up Okay. to I'm pull Sure. going my notes.

Joe Bob Perkins

than pumped-up Western leg. and can where the you and a had is one And numbers. short worth presentation on initial we the capabilities the see Southern those pump the announcement segments give capacity The fully the that announced But he up. leg and those it then consistent required described capital, And him only with pulling for the our increase then un-pumped page the can pipe. He's $X.X in expansion across a two it the you up billion it's capacity to did. investor initial were capacities less was of said for those that for that, to XX%

Dennis Coleman

Yes.

Okay, perfect.

Matt Meloy

in are XX. numbers slide The

Joe Bob Perkins

you. current Thank XX the Slide deck. with

Dennis Coleman

That's check fine. and The I wanted to, the numbers, what get to back it was XX% to the on I'll slide.

Thank okay. So you.

Joe Bob Perkins

remember only most of some can't them, can remember I but of I them.

Dennis Coleman

quickly. them through got You

Operator

for over no I'd further I'm And call like closing Lad at Sanjay this the remarks. you. questions to back showing Thank turn time. to

Sanjay Lad

this everyone Thanks available will any Thanks interest may appreciate in was Jen morning Great. follow-up great questions and to day. on we I the have have. Resources. for call Targa and a be your you and that

Operator

and thank a for may you and conference. Everyone, you Ladies wonderful disconnect. the gentlemen, day. program This have in all participating does today’s conclude

Targa Resources (TRGP) 3 May 182018 Q1 Earnings call transcript