TRGP - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Targa Resources Corp First Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now turn the conference over to your host, Sanjay Lad, Director of Investor Relations. Please go ahead, sir.

Sanjay Lad

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

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

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

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

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

will call Commercial begin a senior before Marketing few members Bobby Pat Chief for take results who provide Q&A: outlook Logistics now strategic outlook Bob your Joe and highlights, management President, with will Pryor, will and followed have questions. by quarter to then following we the Gathering and business turn We CapEx available Jen, over Bob. McDonie, and Processing; Muraro, and Matt team discuss first an on I'll today's Joe Scott update the call will Officer. also President,

Joe Perkins

XXXX call. for everyone you quarter Good first Thanks, thank Sanjay. morning. the to And joining

long-term consistent morning, April board of recent acknowledge friend, of we our Mike the Heim, and the into team retirement this XX, I like would to prepared succession management the Before get directors. our our effective with planning remarks

Mike's build our team or mid-stream behalf and Vice impact Mike Targa Directors provide It S&H major the and Targa's privilege in of Board founding functions. thank almost team, to involved been a On role it has enormous and operations develop on advice served endure our counsel. engineering, and Officer, and oversight as what alongside throughout for Mike XX-year acquisition Chief we on Chairman company. Mike today. this on Operating of create as been been of is wisdom, and position founding project history. it continue commercial his and developing recently major the executive our will to company as to every had Most in work has into Targa's continued As Targa helped we Mike leading

We will miss him, will always the be but family legacy. of he part Targa's

in X and facility Train for export our year, execute our a in Belvieu in have in this Galena on priorities LPG plant pipeline Galena export the including to the fractionators operations X, Belvieu, of on and new excuse our Hopson closing XX% me. we Mount continued Midland business, on Park, Badlands facility LPG completing XX-inch commencing So our Mont for interest strategic Permian the our Belvieu Park. in Mount sale

including our continue year that million capital this future this $X Grand going processing day spend new XXX processing that cash of and right projects cubic discipline total, year, trajectory cubic projects, means the capacity online capital to cash the billion relative to Permian. our per expected over self-lending moves this capital as metrics online cash The in million flow a increasing come with will to incremental feet spending and increase way natural can in we our coming a which of flow versus day forward. continued we prioritization per In projects our have heightened to all about under so strengthen feet XXX scrutiny is of very flow. Targa incremental and model other NGL several significantly time financial capacity have Badlands, Prix also We pipeline, of to positive size free with on

activity turn We rigorously align capital CapEx growth to the levels Jen with our prioritizing of the strong and over years. spending result expected for will enhances discuss capital pursue around rigor officiated that, around a Targa very for I core to our first several customers flow With continue the strategy. to spend cash well in positions a with Targa's backlog opportunity our heightened next to call now quarter. focus This the integrated

Jennifer Kneale

$XX was fourth was Good Bob. result quarter million Joe of Targa's in the weaker crude for GMP the recognition gains, segment, $X quarter splitter. and the million commodity of lower fourth million largely everyone. which $XX million than morning, a from XXXX, quarterly $XXX quarter In for gross reported hedge of the margin the first condensates the lower net Thanks, adjusted EBITDA was payment as first quarter prices.

prices realized the the NGL experienced increased segment, labor costs Operating were Waha quarter since million where gas GMP First XXXX. were been Permian of quarter labor we the $XX higher prices from have and in first primarily field weakest expenses the have average in Natural increasing.

start risks operational Over expect online we our unit per hiring facilities in in by of advance which our means operating expenses utilization higher unit that increases. our decline. new have coming until expenses reduced have per up operating time, to facilities we We

staff SouthOK, appropriately increased sequential business. our positive in March, our operating employees, we headcount volumes businesses, Badlands, Permian, the headcount, prices and evidenced is were as XXX and and GMP volumes over to side, XX% and volumes lower to commodity a higher coastal offset significantly were our while higher expenses Year-over-year, of On and higher fundamentals business which significantly in as downstream in time, we Xst, representing our the ramp. has operating expenses downstream end were by and by through increase continue G&A improve positive frac G&A about the From added G&A. the OpEx higher in per XXXX But increased unit metrics have in January scale. expect

found payment proceeds equity our in calculation out acquisition transaction, forma compliance commodity leverage $XXX April X.Xx final earn hedging, approximately presentation. a related covenant the this which Permian billion is On disclosures Badlands of for positions of Turning percent are month. in to compliance be basis, matters. X.Xx. for be from $X.X the respect quarter other our hedged a at early the to updated well and pro was million, With our will our can ratio received TRP's paid finance of first investor hedged debt the the end The versus of

was consolidated ratio Our pro approximately forma X.Xx. reported debt-to-EBITDA

to metrics then year. As projects contribution initially described on to as expected are peak the third quarter the EBITDA from begin our in February, service our decline XXXX, throughout leverage and placed increases in in will call of the

about for Our CapEx $XXX million. $XXX net approximately XXXX estimate quarter. CapEx millions growth projects spent first XXXX $X.X the through is still be maintenance billion remains with Full-year at forecasted approximately announced to

growth announced, construction our quarter of sale at The providing partial land interest numerous consolidated approximately sales was billion $X.X underway. finish us XX% XXXX, equity in as of proceeds the April. business, cash closed Pro first substantially of Badland we previously we the billion. the estimated flexibility, projects the forma received satisfies a needs and with on Badlands key $X.X end liquidity As in early on our for

oil composite affirm year, average Hub per assumes per previously balance MMbtu per barrel the gallon, provided average crude averaged gas operational Henry of barrel, for prices for $X.XX XXXX, and financial our the $X prices outlook and we the natural to $XX forward NGL Looking which year. prices

the our and of attributable XXXX, minimum associated affirm to sale payable our quarter also be distribution predominantly We the expectation that the EBITDA partner. to Badlands adjusted will second lowest quarter quarterly

the will second call with and improving Additionally, to year we Targa over turn visibility the through anticipate dividend to half I that, Matt. increase increasing leverage With of meaningfully XXXX now EBITDA with exiting metrics. to the coverage

Matthew Meloy

Plant Commercial solid. highly Permian quarter. facility feet XXX new Permian Thanks, production day our everyone. Jen, many across cubic operating Hopson and a continued the in levels regions large through operational, our Delaware per heart operations production running In Midland, cubic investment operations in we per to region, substantial expect in next new expect the a and company. activity we robust, In and pressure of grade commenced basins. and begin with on Permian of high is good energy growth the remain both the XXX of The million portion our morning April, the XXXX we Pembroke day utilized. is In expected late to activity pipeline deal Delaware, early Midland Delaware remain third already the plant is underpinned feet our million in and by

feet feet is in completed fourth the our of XXXX. per million expected be second to XXXX, at XXX in Peregrine million be remains completed per cubic the XXX day quarter of track day on plant and Additionally, quarter Plant to cubic Falcon

since the Targa enhancing flow in takeaway on last early plants focused year. Permian We the have been revenue gas of Basin for from surety

until the in expect in tight residue landscape We of quarter GCX extremely gas begins Permian remain operations the year. the this fourth to

We Little at our business very complex and benefiting have gathering takeaway weeks North Due Missouri adequate perform to into gas lost early previous well. a of XXXX. intra-basin expectations relative and the Badlands, X third Missouri Targa slipped weather our and capacity, time crude secured Dakota, facilities pipeline on both capacity conditions quarter harsh and we of the in plant from winter volumes. Little startup out-of-basin few target our part in has continues very In the continues operate customer our to to construction to

Turning quarter. facilities downstream during remain our business, first to in Mont highly continue to utilized the fractionation our Belvieu

in fully is May, Targa Train and Our long-term is per third contracts. XXX,XXX X party day and barrels this be by growing and and operational quickly will fractionator production in from expected ramp to facilities backed startup is

realize to and to quarter fractionation trains, into new third timing through market Train They our online XXX,XXX construction the two are tight and decided the expected quarter to per be quarter savings. Construction XXXX cost XXXX. slightly barrels our day and X of X now respectively. We the continues the expect fractionation We first push remain in of some X. third optimize modest on schedule Train the of Train to XXXX

expect Targa initial year. agreements trains with our arrangement X option savings. to relative provides earlier Train acquire and We which exercised for is highly the additional us frac announced this interest recently utilized, both in their Williams a Williams to capital be an XX% we attractive fractionated

year. propane Belvieu Permian fully of We The Dock which quarter from our are up enhancing vessel completed Park Prix segment between this third of Mont Our our is effective LPG increase complete new our of butane pipeline and capacity upon track originating per track the operational transporting recently and already barrels the third butane pipeline NGL the availability be supply and LPG $XX on will NGL and Galena export export is projects to in supply. XXXX. Dock of Grand capabilities, our our and the our is complete in to month Pipeline to business. on million depending quarter increase mix X These rebuild and will demand primarily X of loading we to

next previously at continues to phase the month XXXX. Gulf capacity expected Coast effective As gas and capacity of GCX Basin provide $XX some fourth export which XXXX the in fully pipeline to with will the the be Construction from our of to residue quarter is per Waha $XX to increase Midland residue expansion rates our announced needed facility Dulce. on Express Galena much in gas quarter the takeaway of pipeline million operational Park approximate will third load million Agua barrels our and/or or to increase underway and the refrigeration

splitter by long-term third view and we tested and working assets. of is commercialization on are Our the contracts is channel and party tuned operational and engineering being

prioritize focused our core investments Turning strategy. to down top an to future we Bob future employing CapEx, noted, and approach CapEx control around as are increasingly Joe

the Galena enhanced outside GMP Our in Prix higher is into is projects export strategic NGL core the supply projects Targa from facilities highly up integrated our focuses caught product Targa's our the Targa Park. for There LPG midstream on Mont Grand and of a and near-term, an aggregating the significant projects even new participation evaluation which of for of in scrutiny the supply for executing strategy. value associated hurdle have CapEx into to any downstream number new core fractionation and our transform long-term on is is and result Maximizing across strategy The focus Targa will chain. longer-term on having our future provider, to increase and shareholder priorities Belvieu, on in to our our outlook strategic premier positions, on spec service cusp integrated directing infrastructure service complex critical bringing investments of XXXX. we in over remains beginning value. compelling, moderation will and that

line questions. the over for So with that,

Operator

Instructions] [Operator first line with Our Wells question coming of Michael Blum the from Fargo.

now line open. Your is

Michael Blum

Hi. Good morning.

probably interest to on be your your are they're going a capital public core majority it's you and Can in But made you I'm to discipline? plants about Pioneer to those So you're overall of that sure going partner in your just that's which I that of question, their obviously that footprint. capital process in is course expecting lead about probably has of discipline, terms guess, in to just selling remaining own. thinking thought the versus talk terms balancing your comments

Joe Perkins

able Thanks it's acreage The Michael, some like operations. our call-in System in to that is important go call. is+ previous of on with We through WestTX call our great the and and other Permian straight haven't and an their answers Basin know their very quarters, a to I detail. went been Pioneer customer. top listeners that some from Permian is integrated answer our attractive But obviously is partner

as focused for is right scrutiny acquisition. one mentioned scripted new growth us ever all and now comment very execution much and but we bar it's project transaction not been have possibility, them, this of shown Permian internally in Outrigger are you opportunities, been Basin any for specifically us done organic remarks, across Targa, opportunities haven't higher The to M&A of stepping a to years and Targa. on our M&A we into For - process increased many since for than speaking

come doing across probability higher right prepared would any a remarks You didn't If have. a of and the now. to that say should much have in transactions M&A bar us it lower

Michael Blum

think Then thanks. ramp on. you as going that be to second mean Thanks. you Great that's comes in six I quickly of to question expect terms of frac very is or multi would kind quarter up utilization a deal. do

Matthew Meloy

you is to Yes. over take and Matt. if I'll fill kick in you in. that want it Michael, this Scott,

been capacity. So we NGL our We've over have of really our receiving been capacity. running frac over kind

being we now. be to excess So six But kind in first y up inventory. be comes train we off back will right we're quickly that receiving of we have we'll because off, that getting built worked in inventory grade our see work we can very some inventory, working so fully off, once of handle in off utilized Bellevue after we've already what we

part X outlook for the get good why in the Train of which is XXXX. So X to on very Train is we're first eager

Michael Blum

thanks. Great

Scott Pryor

remarks, that will tightness XXXX. this we I X May This And be as continue operational to would Scott is and would just month. in throughout add our we said in Train of see the balance

on first we come stated quarter line. As X of Train XXXX, will

We as the expect one executed from highly growth contracts in not only already with as that and target see utilized we've party facilities be as continue third or plants we to on. activity up ramp but well initiated our to that also a

Operator

from the with Tonet question of Morgan. comes next Our line Jeremy J.P.

line Your open. is now

Jeremy Tonet

morning. good Hi,

fast you to for could could soon? exactly how volumes start be how Prix, of will with or to the expectations wondering if color little bit more want regards Just now off with and was online is much provide pipeline your I Grand a ramp

Matthew Meloy

Hey, North now, have from move of the Jeremy. good because we all what the gave Yes. that the point Belvieu. we're in the a receiving previously barrels guidance the Grand west actually way see are is into amount XXX,XXX barrels Right some way for of got of feel in about really we've or we're third moving Grand This and the and once We a ability XXXX. of to into extension. Texas now line really we're at that we first number. volume Yes. most on Oklahoma just yes of Prix number. significant for when what very about complete now, fraction Right on Prix only But is Prix Belvieu, we're We Grand right moving complete a all up I lot you'll volumes line is talked the piece the to into number report Oklahoma providing furthest what the will think quarter we and Matt. connected

from still into the then Texas Belvieu expect be shortly. Belvieu completed And piece to North be piece which third it's we're Mont done working the quarter. So on that'll in that here we

Jeremy Tonet

notably helpful, thanks. seems others possibly activity and be there some piece following M&A Anadarko to There suit. That's among Permian

Just target impacting developments wondering if anyway. see you these

Joe Perkins

with. start I'd

in with process. have relationships We involved parties good all the that

get potential So we the don't outcome really want what could into to be there.

of growth have We out that in existing regardless good on system with really a really our customers, And relationships position lot a out. the target have of good Permian them. see plays we how with the

Jeremy Tonet

Great, just a little small bit. ticked one. last G&A up

forward? good going organization, a You was about of kind think larger said rate your to run this

Jennifer Kneale

Jeremy, this Jen. is

we actually in the the difficult classes We're it G&A this bit quarter certainly fourth is to apples year larger in a G&A but call far it of at we our current I organization we higher on our and the G&A year. little a to on rate. I a think expect not third to re that ticked When here assets of bit oranges. are service. that some first of are going least and that fourth a much about earnings we as lot run rest It's based fourth a said and that in But lower. bit was that little trend quarter think the number compare lower forecast. maybe placing makes fine move quarter, balance a the through we do quarter from little the

Operator

line with of Shneur And our UBS. Gershuni next the question coming from

Your line open. now is

Shneur Gershuni

everyone. morning, Hi, good

or in us question, guess CapEx increased comfortable scrutiny Is what to and reduction in this billion XXXX. there remarks if flows? spend of scrutiny on $X return kind down as you're of a process it prepared about expand context to about Just a match raising mentioned hurdles? color on in cash also around CapEx Is is itself. level terms essential well. CapEx? like slowing you giving substantial can pace you less? decrease And something it about Is it talk for returned the to I maybe the Is your Just of the in more

Jennifer Kneale

Jen. is This Sure.

look as we've announced if we I projects at think that through the you that recent move time.

had also they The meet grade that strengths where our think the having organization deals in investment export. an we're sort example and opportunities available and I company Williams the transportation for have deal of The looking highlight is fractionation really across scrutiny volumes organization. energy those for of increased large core example. an that we for as Delaware our both

that was think to bar projects I higher. scrutinize compete have is So approved continue internally. if getting we They there of new the our multiple for value that get part were And project and a this point continues for parts in to to project at typically interested touch touch us. the versus more our only that time for deals those one chain in that capital parts then touches multiple it's that

a of metrics strengthening got into leverage half we've to XXXX and visibility of into increasing I year when we beyond. So this coverage, then and think lot reducing improved get leverage, back metrics, the

really we so think our as capital. rightsizing about And it

above So and sand be be beyond to forecasting want we're self-funding is to now XXXX will April in is another says of we're difficult have comfortable X, as XXXX we're go the capital to or to or and XXXX positive point out CapEx sustained are time, it, flow not but that May period we we this not want we particularly this in what going relative and over increasing of to do. line at EBITDA, that putting a cash free

Shneur Gershuni

prepared Matt of I just in on this think remarks. the to extend touched and sort a that And bit little Okay.

and some sort can to. forth, this and the of some managing you comments there around forth so as be and to in-service some scrutiny that savings also was about to cost Some slippage that of of seem due on spend you expand part is can delays so but well

Matthew Meloy

when is related. Matt This the little Badlands, weather say on the I Yes. was Missouri would here. the margin, yes, saw margin on that a you

just but utilized. into that still of yes, this getting for just challenges build bit as Pembroke kind construction there of Believe on we okay a looked, little be more a But that's You we are slipped the bit. It's and schedule Permian. put we from highly done. out fast there me, slip a situation. tight bit NGL QX we on over hot X, labor receipt was can and Pembroke move Hopson look little the so time inventory that said, from market saw kind as it to the want little QX, save of Train an end and could a as and we project

looked in modest of at of forecast bit it said, So move have line. slowed get saving little It's down and little a cost not money but the a the time some capital yes, lot cost to think on savings. then it bit of we you we get and savings we some and our a value can over spend a little bit from time savings

Shneur Gershuni

Are of you're this in-service dates there of, couple is and a other the opportunities here? at Or slip match where looking that kind potential is can the you route of spend? save end CapEx money to

Matthew Meloy

that the soon at Grand we're to very Paragon projects Yes. those right. all as the come really remaining Hopson, And and lot look have, other Falcon online projects We going quickly. to need that Prix. our of as The online already already-- a online need will possible. then you be plants Pembroke, we come When

So way backlog. pretty our long when you through that's look at a project our -

nearly going forward as So it there's there right as in is as and now. XXXX on not beyond much

Shneur Gershuni

and you contract incremental And last is has to sort now add-on for months. to base been one contracts been LPG arm Have export wide able to enough. terminals that your Fair already on expansion? and pretty final right of question. you the any The have LPG couple export of the lock-in

Matthew Meloy

then over it more. he some fill in Scott, if wants start to I'll kick to wants here. to and Sure. This is Matt it

doing the quarter. Right and catch channel, second restrictions contracted now For this with think are the Houston and we'll that and for on I highly ship to trying this delays year, we through year customers' on contracted needs. be we up are our

but trying there catch to to Scott some volumes really right us for now. - to anything potentially, do be customers up want on could that you So we're opportunities

Scott Pryor

closure say the some channel a seen we've for challenges along I'd was subsequent the just absolutely the Certainly correct. unexpected within the us. as the of the challenges that fire and caused that's channel result Houston ship contamination

very on we're on the I So very our existing focused adding term in that as renewing also that with focused customers, relative we're well contracts much we've our expansions would contracts. that long-term add fill to contracts announced. as

the on As got pipeline And for Park. third we've quarter, Difficulty] we've said, as to Belvieu come all incremental Mont all new upside now way those a from Dock operational the of X Galena online that's in in us addition of [Technical comes provide that projects additive line. the before the the part refrigeration of during on reiterating also earnings will that middle one during come additionally, the said this third And year quarter then provides online just units that us next incremental capacity. call next as last of we've year,

focus our is So on long-term contracts.

growth is focus expanded we've that got to across very structure on with competitive those being projects. ensure fee our Our

Shneur Gershuni

touched really contract improving you the that? And for haven't so is environment contracts long-term those on or

Scott Pryor

Park environment is fact our Prix purposes. facility assets Galena about pipeline, going will that confident include from steered gas see processing to The that we're export very our feel improving bringing And know projects to and fractionation the expanding for given our toward that the we we're into continued our online. Grand growth be and those we

Operator

the next Dounis Spiro coming Our line of Suisse. with question from Credit

Your now line is open.

Spiro Dounis

Hey, everyone. good morning,

that maybe far? could been you bit you quarter? so the about a Could commercializing. little this by guess if And talk happening the I expect more splitter that on have and to constraints complete Just

Matthew Meloy

tanks have to commercialize product termination our beginning against start Vitol constraints. contract I'll you asset running. as had that first, and Scott can our Sure. fill getting moving of that out the moving up in. where some was and we Yes, At and facility really in the their ourselves we of and for it product

that were and had As soon then down. shut Channel Ship Bayou where Houston out to via the the up barge. running, unable product We're we containers move getting as we're

that So ability we run to facility. had limited

making that move as the are out. the constraints up and get can working value those tanks, the high all to those a it we running, try with facility facility now we us, purchasing and tweaking into getting products and and supply So the on aggregating as behind products,

So we're facility. process. we to we're still learning We're working going this. so on to through continue as I think And do on still go that that

Spiro Dounis

first unexpected Great. But just I like guidance maybe a few it's business quarter sounds well. the but hiccups year. pretty sounded of think we as maybe is then And some early a on. I it about going the mean realize only for base

think could curious now Just here the stand been feel of quarter the forward tailwinds some you are like we as what of the as go and year? on first far do has budget so you throughout they sort offset they

Jennifer Kneale

Jen. Spiro, is this

consistent our I were. think expectations the with was first quarter performance what

for lowest realized in first expectations But pluses some minuses, marks. I that were As our year our natural of quarter Those prices affirmed you the with out said the quarter shaping up we consistent guidance. that's is NGL think point would the rightly minuses and be since and prices why we our had a have we've high that while as scripted gas XXXX. prices with

third into we'll where will be EBITDA will for get move which MQD be us, the the lowest quarter when second help the Badlands the transaction leverage. Blackstone. payable increasing quarter to year projects quarter the important GSO EBITDA to of as a rapidly online for And some coverage and then with contributing through come fourth we'll so And and result this the and will very we'll and

been. why expectations and pluses have it's what difficult there year out putting are any that's with always forecast, consistent but think and So minuses I sort is the of always our shaping relatively up

Spiro Dounis

one Great. from quick me. Last

we think expected. than bit I skewed volume had Delaware a lower little

of issues sort any were there if curious to Just items there. call timing out onetime or

Matthew Meloy

volumes. is were March Sand for There part Matt. Hills of for which maintenance this impacted down Sure, was the couple taken a issues; Yes. of

volumes aggregated Permian Hills in are getting Delaware. Sand Our the

March volumes down of was out our So also higher of on from there. HXS we've and some in customers experiencing from been then that some -

growth we're on it's some just I and reduced hitting other and there out things, . of really reduced the treading on the HXS permitting the field kind out the growth because as and of limits I kind so And guess of

Spiro Dounis

the Yes. it. color. appreciate right, Got All

Scott Pryor

We will in solve will later have an of acid be gas facility them. some this that year completed that

an [indiscernible]. at adding API we're So well

Operator

question Next coming Bean Tudor from a Pickering with Colton Holt.

open. line is Your

Colton Bean

Good morning.

of that capital to program you're So thinking right maybe in the plus project the more Is any to Jen change sizing saw digest to the Permian those in preliminary XXXX to the there you just time changes that with bit timeframe? up plants of time. mentioned follow adjusting upstream to XXXX a we were three some capital spend XXXX and about QX. how in guided timing to discussion

Jennifer Kneale

the where are think we're timing of come taking capital we're make online the our meet plants those needs I a look producers. to sure sure to at our will that that of an to hard really make And prudently. Permian example facilities additional spending

those year. we'll what on and but when they just producer speak really on into to need forecast. I'll break guide only that to won't them. when ultimately I timing to be So around And dependent whether online this speak it's to of into activity moved be need will to that; plants not ground the decision year, largely next that's and or out going out through levels

Colton Bean

of Gulf to I on Coast be just think the Express gas after QX how equity current And clarify market maybe Can the constraints. Targa's volumes then able GCI Coast much reach the noted Gulf and helping Perfect. some will alleviate starts there up? to natural in-service temporarily you future of basin of you

Matthew Meloy

say NBC We that. interest have ability the, pie. the a out into XX% equity Coast in do we Gulf to have our We Yes, volumes have we significant into down move piece I a the Gulf the our would I and haven't we'll would both say that but that gas given Coast gas a substantial market total Targa access of on markets. it's to and producers specifics gas quantified haven't but

Jennifer Kneale

It is the like firm. one got market us GCS of softest because to we the reasons it

Operator

Our line Citi. Schneider the next from Timm question coming with of

open. Your line is now

Timm Schneider

morning, good guys. Hey,

a question. Just quick

from some slipped the export QX the said into You volumes of facility on QX.

means not. a the terms side? what Given specific the more be you fire actually what of in that and Can on bit volume

Scott Pryor

good be slippage you the as a quarter with we And dock. as some second volumes contracts quarter. quarter we expect think period we'll the up second that this of When was Yes. moving the Timm, across of say Scott. I most that would about indicated, that well be Matt catch playing our term that is the for to are had.

volumes with very the outages indicative is but which out, at on second quarter today. think can be, recover had to And how think and contamination. we've indicator to as we've very that want We if it's that the when utilization the EPA the quarter channel We of fire look hear recovering of during across how And several recovery well. were quickly good I it work facility during through this. say quarter at good challenges high with predominantly of the had you we in, closely that like worked you and quarters, expect the will the So as it And where and the contracted I channel. be saw runway we're flexible we're a we they people the can a closely very there channel fact that. the the the Guard. from that about from Coast we've subsequent situations the with at I strong process also just Dock the going the had and on the nimble

testament worked can how the really the flexible very it's to in be just Houston local that. with And So ship like a we times well channel authorities.

Timm Schneider

guys April. I I on you point? had reports some A are it. believe guess loading this fixed follow a issues couple out, on arm Got at been was quick Has up guess with, that. in that a early industry there it I

Scott Pryor

but well. that pipes This as Scott We've docks. have challenges Recognize got recovering that we've arm got are from again. multiple to and a we multiple We docks. and out is loading some with did our facilities

though even a loading got as may from times well. that we very So of challenges, there if situation, can quickly arm recover we've be

Timm Schneider

for it. the me. last Got And one

that looking be a the mean bit you So out here pretty that I aggressively apply keep you're kind what side, know on trying would international necessarily and LPG offer contracting don't any but and just competition you on export one but of I entrants trying I out are think I'd could to growth the said of came you. margin pretty potential know constructive, comments demand I'm how said, out helpful? guys how to entrants your up competition and competitors around new made beef not. doesn't new details versus figure domestic you balances? at incremental I to about some

Scott Pryor

I export would coming docks toward these existing docks, when today. going are pointed say an that, again, industry, be just upstream barrels from you the look at to of production as

going that. to markets I for competitive very think be the

our it's players the that on capacity of strategic the added the for lot potential you additive at that's of mostly see players a It's look part. easier I existing think that existing pipeline, out reason us facility. today. their to have integrated that And come With projects of with new existing when An part dock going incremental a why leveraging they to refrigeration. expansions, from are very refurbishment our add platform an basically there, you

continuity we need be play to that and So we've well got play it's docks very to good assurance. and will to going we competitive to what flow our ensure role

Operator

next Our Schultz the RBC. from with coming TJ question

Your line now open. is

TJ Schultz

morning. Great, thanks, good

Just the unit should advance and improvements for you How far the per expecting ahead coming online. expect to you regarding kind first in Are Permian see future? foreseeable remain of in when on of hiring that tight we to the and labor are a facilities hiring basis?

Matthew Meloy

maybe Even out that remain Permian. be processing side, pipelines growth I'd to it expectations incremental tight moderation with going of incremental producer in on to Yes. the our going it's still say going expectation they're there in. incremental is plants, the facilities, pretty some

tight. remain pretty forecasted not going as our but that tight, it's have maybe still as would think XX-months it's to does I we tight be So expectation ago,

as because we've contract, through producer expectations unit There's move we you'll to also year. to well. going Delaware increase think investment this and to margins that kind grade company really move start talked improve starting The see I as large the year. of through about is ramp, be other contracts the the large as out to of that going but volume largely we on it's

coming So on. we have Falcon

coming Peregrine have We on.

So down over I And unit ramped, even to is start as see you'll XXXX beyond volumes those come time. some think really right. really margins

the gets XXXX earlier, of here that field are OpEx Joe that well. mentioned summer. in time the well that's over AGI the HXS. we there's relatively also over for Bob and There as that and And summer, - see this then should some So high treating on OpEx thereafter. When on coming XXXX improve our

TJ Schultz

Okay, got it.

question the raptors any that new just system expectations Eagle expectations trends the general then color outside there. just on some there. general Ford in in the commitments just as second Just Ford, maybe reviews, producers JV the would the have primary strategic bought through going into And current producer Thanks. be Eagle play, volume some as into into

Matthew Meloy

and expectations look Sure. they our seen I expectations reduced. volumes forecast than been think are you've our a down South for near-term I'd volumes say year at we were ago When have Texas, lower and come our so. internal or our

those I think in over a be some point, an good to there's term volumes. growth going opportunity the there's for that around and pressure near rock, time, on at in there's asset but some

Operator

with the Barclays. line question Cho of coming Christine from Our next

line is Your now open.

Christine Cho

a just with guys. partner the sale quickly WestTX process. morning. Good for formally guess your now Hey, and I system that is on out me

any that back system? on an opportunity that system? to hear any liquid guess of up the maybe or you some commercial directing be if guys renegotiate I that curious you to gives to, for renegotiation fee Whether volumes your ability terms the So on opens of

Joe Perkins

contact contracts definitely commercial with not us terms. not it's talk potential an have and for those we're Appreciate is of free M&A Very any renegotiations in same were the partner, negotiations customer terrific on. going question about and transaction that them. good terms appropriate constant to about contracts are talk of without producer discussions And sort to with and we or Pioneer or unlikely, commercial would

Operator

Markets. Danilo line BMO coming Our from with question Capital of next Juvane the

Your now line open. is

Danilo Juvane

good first Thank ultimately provide its coverage thoughts question. do midpoint importantly, where where My the guidance you guidance metrics? morning. target on see year? you up achieving, the question see you this EBITDA can follow is and more ultimately target Jen, landing leverage for Jen; and the on any you relative And

Jennifer Kneale

guidance sort point the out I as to Danilo. think of we're remain our guidance affirmation going there, of let standalone

related metrics in We're So, say feels are early, guidance. little track if operational you a going little terms of look to that where we're a out. to so shake at to we think and we on where premature it

and forward already do ultimately the without as Prix our online some and But looking As Expect through to and a call bit fracs additional outlook we material exposure and to to been it commodity guidance having earlier, the there exposure that year. four commodity prices minuses year. price we we of decreases the through have move first this Grand our XXXX as little time. some have move to said past pluses on to months continue forward is for be we

shakes And so ultimately we'll see everything have to where out.

Danilo Juvane

Understood.

Whistler, Second potentially as that no FID? when for longer can know I you. you any do have question. have Thank insights CapEx you earmarked project but this reach

Matthew Meloy

to working it. those that that on parties know commercialize are process We

Permian said has want from built project in get to --that residues we value before, us. for market. As the strategic we We the more Gulf Coast

an project, give an So to interest those on are project kind that of going have update our for we'll parties support that and we wait there. for equity are lending to status

Danilo Juvane

to you expect have contracting some well? we pipeline Should as

Matthew Meloy

we of that project. could think the one ways the I that's support

Operator

of the line from Dennis with America. Bank coming question next Our of Coleman

now is line open. Your

Dennis Coleman

allocation for thanks my a question. think and about how here taking of assets. Quite lot the Hi of the strategic you and process capital conversation about new nature

asset does the way in of what picture own portfolio? the you've on to different a rethink sort you Obviously, into as quite on it Given about but well? a done rethink maybe a that the lot think bring potential sales there,

Jennifer Kneale

Jen. is this Dennis,

new say a wouldn't that it's process. I Firstly,

haven't projects. scrutinizing potential as just investors spent talking our lot about I think spend time that our as capital we we would liked with it We time investors and much a earlier. of have

we you is a through seeing lot what are to thinking provide world And to how about and capital time. really spending growth world move with so we the we're trying do as relative clarity on more that's the

enter the portfolio been joint have additional it if sales. see constantly any if some to with and/or We're We ventures. to looking successful makes sell into it asset assets makes sense sense across to

we like Badlands right or have now active did we sale. changed, for don't that underway And but disclosed prior when that petroleum processes example process any logistics we to so the the hasn't

actively underway So this we have at of nothing sort time.

Dennis Coleman

guess spent? first quarter in here about XXXX Okay, the to little you. and talked is cades, in the the this the a quarter. spent projects amount with from XX% but budget lower in the I - in think onstream And the first that just obvious you've there second about maybe maybe down more coming into then winding similar the the obviously should the we thank CapEx then this bit half,

Jennifer Kneale

directionally that's expect And Outrigger time second payment for as we our expectations beyond CapEx both right, to we'd amount down you quarterly quarter. Denis, giving plus dollar quarter. that And the this absolutely, then sort quarter. We've without the trend for got exact an of through this move

Operator

closing At this like now for turn time, the Sanjay I question. would to am to back remarks. Lad I further call over showing

Sanjay Lad

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

Operator

Ladies And in and thank you may the today's conference. disconnect. now your gentlemen, This concludes program. participation you for

Targa Resources (TRGP) 7 May 192019 Q1 Earnings call transcript