TRGP - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Targa Resources Corp Fourth Quarter 2019 Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions]

to Lad, conference Relations. Senior like speaker to now Sanjay today, Director would hand over the your I of Investor you, ahead, go and Thank sir. please

Sanjay Lad

to full-year Thank are fourth fourth available supplement section with quarter Targa Investors Targa and the Good for you, The of welcome on release at Corp, Chris. Resources Corp. the quarter earnings targaresources.com. XXXX our presentation, Resources and earnings call fourth for morning, earning the website along quarter

has also presentation posted In to addition, investor an website. been our updated

statements reminder projected might XXXX. the of the A forward-looking in forward-looking should this include of Targa made Act those within that during be Actual statements. call results Resources' meaning statements predictions XXE Exchange that of could Section expectations differ or Securities from considered materially

actual of differ, For factors to to latest cause could that SEC results our discussion filings. refer please a

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

have Muraro, management Processing; Scott also following and Logistics Transportation; and will senior President, Commercial Gathering available Bobby Officer. and team for Pat President, Pryor, the We Chief Q&A. McDonie, members

And now with call the to Bob. that, turn Joe over I'll

Joe Bob Perkins

a XXXX. Targa for their Thanks, projects focus and every executing as exciting on company's thank the day. and from Good facilities long to It integrated priorities, on the Those transformed over from customer say long-term execution, you numerous record operating infrastructure the term. for company. on leading you benefit most into these I an safely midstream commenced we Sanjay. to in very continued exceptional continues to flows service have our full-year projects importantly, that thank be and time well everyone best-in-class and projects our operations with cash effectively want to strategic and morning, Targa Targa position Completed EBITDA, at projects joining. quarterly adjusted projects Targa and major successfully team

already look and Jim officially am in fine CFO a the role, CEO the team, we the executive for enthusiastic strong about leadership As in forward in by XXXX Targa a weeks, very Matt very I is seat, to up Targa hands. entire complemented in wrap performing With the XXXX, of future. couple and so the

now I'll to that, turn the With over Matt. call

Matthew Meloy

Thanks, Bob, morning and good Joe everyone. to

train I our out like no I founding midstream of for of a few and of minute assets, develop take about is say into individually created original work, as others premier today, collectively a their over are integrity, founders years. their to past vision Before our leadership, direct get hard XX Targa team result management the XXXX started plus and the results the a the results with leadership, would year, integrated and it and one to strong willingness dedication, to made and in companies. what Targa. executive words a team The They through

and Jeff with late that, the current Bob, Heim, Jim Paul team Joyce, McFarland. Roy Joe So to we thank Johnson, Whalen, employees, Chung, Rene and you, Targa like executive would and all on the personally Mike of behalf

our gas pivotal Targa, investment significant with with to Even turning the businesses. additional Permian and began for was adjusted NGL from as benefited cycle. we volumes, So XXXX that, and and with by expectations natural results billion. of now Prix in EBITDA associated of opportunities our much in flow Grand record cash $X.XX lows our XXXX, a results. and full-year gas posted our outperformed ramp we at our XXXX, driven benefit optimization We from to natural historic throughout year NGL we've prices

the NGLs Galena Belvieu in to facilities. with volume our Park this growth forward down and carry Grand momentum We Mont XXXX positive strong expect throughout Prix Permian, driving to

exceeded our XXXX processing and gathering Let's our first discuss initial volumes Overall, estimates. in business. G&P Targa's

sequentially Pembrook increased volumes plant. utilized, new in and as and contribution from XX%. Permian total XX%, quarter a fourth remain our Midland full-quarter benefited systems Permian, X% volumes volumes the highly field Permian the Our increased In our we increased from

Permian will comes next needed Midland be much quarter of the in fourth it when plant Our gateway XXXX. online

the assessing the are timing when in We will of plan. Midland we XXXX Permian next need

late in In the completed Falcon ramping quarter the which quarter. the as Permian plant, Delaware, throughout sequentially volumes increased was fourth XX% fourth our new was in September,

Our remains to begin the of quarter operations on next schedule Peregrine, plant, Permian in second XXXX.

gas much Pipeline from quarter Express from Gulf fourth the in after late in full benefited residue September. Permian, the takeaway needed also Coast We incremental commenced the operations

Permian and in strong across volume expect growth Midland we XXXX. Delaware systems forward, our Looking

forecasting largely is large the and growth. majors growth continued underpinned Our are by volume independents who

also have to and, our to strategic Permian XXXX which fee-based or in and continue margin fee will a contracts, floors continue additional success beyond. G&P in We priority, adding

the volumes our Badlands volumes to Moving takeaway gas Little to new continue basin December, Four in the Missouri the to to forward. Badlands, increased our ramp. XX% in as are from fourth increase gathered With sequentially our incremental online NGL continued quarter, looking expected capacity plant

business of and completion from XX% more of fee-based the mix in about rapidly increasing margin fee-based our With towards margin Grand will margin increase to both G&P that our downstream. fee-based we shifted our downstream has Driven XXXX. is businesses, our and Prix, increasing, estimate by estimates

increased We as and the from average increase to XXX,XXX our volumes. benefited day quarter, very Prix continues XXXX. day into pipeline into transportation Falcon well, barrels Mont shorter-term XXX,XXX fourth Mont anticipate to to during some to average Grand we as per barrels and volumes NGL per Prix Grand Belvieu Belvieu new Our XXX,XXX deliveries perform plant in

utilization flexibility to track in in increased year, And and from the increased sequentially Mont export to our highly third loading our over per is utilized to previous export LPG our start we business, fractionation high have overall debottlenecking be XX% XXXX where on to XX our continues up. load fourth Targa's XXXX. Construction remain benefited capabilities be Train we to up March recently complex be quarter the operate we at enhanced rate. XXXX, higher continues anticipated X, at fractionation online which robust. a on late Turning LPG volumes million fractionation to complete barrels to fundamentals X completed to month, expect is continue business, during continue and can in and loadings Belvieu quarter. our our Train business to and late projects,

Our depending next will vessel third month phase this of the to export expansion track, mix, our per to capacity and Galena increase and product up barrels at our other facility of in size, on quarter year, on remains effective factors. XX million Park

remain productive well contracted, facilities our and customers. team active with continues export dialogue Our our as commercial

previous export to year. We in expect increase volumes over LPG XXXX the

XXXX $X.XX organization, billion, than billion core our future with to net We to our CapEx capital earnings to continue prioritize continue investments our for in billion Our we'll the discipline $X.X billion. $X.X on guidance less expect November of and between growth and was total XXXX. $X.X remain net we across on Consistent growth around focused maintaining strategy. call, spend capital

I and will that, our With discuss to present XXXX now to results turn the over call quarter Jen outlook. Targa's for the

Jennifer Kneale

Matt. adjusted times. Targa's was quarterly for coverage $XXX approximately reported dividend Thanks, EBITDA million of the quarter with X.X fourth

our Prix, completed segments. meaningful quarter was market during in processing growth and logistics the both and favorable particularly from recently contributions and and by transportation fourth performance projects, Grand conditions gathering driven Our

and partner million from certain and general benefits quarter We items included approximately and fourth operating administrative would $XX I also one-time one-time as adjustments characterize expense related that in to These estimates, of benefited reimbursements. nature.

We shortly. provide I first more quarter some guidance fourth will color when versus quarter describe XXXX on XXXX our

Our guidance full-year XXXX reported range. the billion, adjusted of our exceeding $X.XXX financial was EBITDA high end

service more headwinds than price the were year, assets, the existing during of our offset placed significant full in commodity assets For the outperformance year. by and

Turning G&P of are may in the we segment included of we equity better realized volume aligns associated hedges evaluate segment. couple have now with to in housekeeping release that G&P our items morning, a margin, how you G&P this our with losses gains our gross performance hedge which noticed believe earnings

and segment previously segment. renamed align also change Prix, the did the performance, completion logistics of impact segment's in with transportation the naming to Grand not logistics recent and reported level and results the to for given better We convention asset marketing our

have full-year gas, XX% XX% XXXX, NGLs. hedging of approximately Turning to condensate, of hedged XX% for of we and approximately approximately natural

flow by with fee-based margin, provides increasing Our program, cash complemented our us hedging stability.

XXXX be earnings in disclosures, found supplement our related percentages can including by commodity, Additional presentation. hedge

quarter, used of to were $X in billion due issued XXXX. $X.X notes X.X% notes TRP successfully under liquidity off senior of as the March we senior borrowings offering of the pay our billion During Net December XX. had fourth available proceeds approximately We from revolver.

quarter at end times. the basis, a fourth a the versus approximately of of debt X.X compliance On X.X was covenant times leverage TRP's ratio compliance

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

in assets service, service, increasing recently improve our expect time, were through to will lower be expected placed leverage contributions that capital as margin growth We in placed from spending. we benefit and from profile

sale accelerate asset crude the work also Midland sales sale million, assess Permian our leverage of We continuing gathering to January on to through are improvement our potentially of our in the continuing the Permian and evaluation gathering of ratios. the $XXX for assets potential approximately We of are Delaware selected to closed crude assets.

to in performance natural gallon, $X.XX MMbtu $X let's oil natural gas gas turn the per Henry to to $X.XX prices barrel Waha per average MMBtu, our year. expectations which XXXX, of per for average prices average prices assume composite XXXX, off Building crude to per Hub prices and our NGL $XX to barrel, average for

Permian natural expectations approximately volumes natural operational XX% expect inlet for region. total increase over volumes, Badlands Overall, our inlet In inlet crude and processing modest gathered Central in XXXX gas and in gathering we XXXX, on total gas total field increase growth with inlet G&P volumes. declines volumes for over we in XXXX gas volume. XX% to our estimate segment, average estimate on Beginning XXXX we average Permian to XXXX field G&P the continued and approximately

downstream Matt and anticipate XXX,XXX Belvieu Mont between with Grand to average mentioned, XXX,XXX segment per throughput XXXX. in and our to day we beginning Prix, as into Moving barrels

will to largely volumes, continued increase year-over-year LPG X also by our and the of expectation driven growth G&P expect increasing export support and Permian fractionation which addition year-over-year, We volumes. the Train X, of in also volumes

EBITDA Shifting range. flat to of XX% between a full-year over assuming coverage around increase representing $X.XXX X.X XXXX, be to $X.XX our billion, is an estimated and XXXX the billion annual financial estimate our expectations, dividend midpoint adjusted based times, be dividend. we $X.XX on to Full-year

XXXX particularly versus first of of the fourth on We would additional fourth the the in quarter for like one-time of XXXX, benefits also provide given $XX quarter. the to million color some quarter expectations

through EBITDA the XXXX quarter associated will XXXX quarter, that combination in G&A, be hedge adjusted quarter and first are gains, higher operating given commodity prices, first of lower and the expected one-time the expect EBITDA. headwinds We fourth the adjusted we than items fourth with lower quarter now halfway lower expenses in with

in service, operating higher during the First ad fourth over are and in expenses all quarter in largely XXXX XXXX. operating given of operations Overall, valorem, our XXXX, additional online be placed per assets and are higher costs. completed will expenses new improve than benefits expansion XXXX, as leverage higher increase in assets and service quarter, operating to from insurance those expenses estimated the full-year we while operating unit, from projects this year, expected benefit increased in from to and coming G&A

range also CapEx spending the net we non-consent even provisions, plant and to growth remains evaluate mentioned, under Tex of for assumptions This Wes will there billion of $X.X the billion. as Matt project. another also in Pioneer's $X.X be our As for year capital ventures continue will be timing a includes Midland, for the some that to we funding joint Permian XXXX that XXXX in the unchanged estimate with during

our Given million. XXXX for asset increasing estimate our for CapEx maintenance $XXX net base, approximately is

review of our to page please on outlook, few a for related additional For earnings that, details posted now the our our XXXX slides, closing I it to back are will remarks. Investor which website. supplement turn With Matt estimated

Matthew Meloy

In outlook. Jen. remain Targa's we long-term excited Thanks, closing, about

global While the commodity markets other in is to there can may core business see coronavirus for and there be macro related some what factors, we strength in uncertainty XXXX. in

that, for operator, questions. please with line open the And

Operator

from Instructions] of [Operator the Tristan Richardson question with comes And our you. Thank first line SunTrust.

is now open. line Your

Tristan Richardson

Can morning. good me? you hear Hey,

Matthew Meloy

morning. Yes, we Good can.

Tristan Richardson

you. Thank

floors, it's frame supply could quantify - or the a quantifying guys the or way potential a reduce about outright exposure, escalators, on seems Is there? quick side, be it the have talked whether commodity it just real general opportunity Just theme up revenue like you contract there from to to the renegotiations? you

Matthew Meloy

need are commodity to no where increase XX% I margin XXXX. opportunity those. us meaningful continue percentage to good us fee-based just additional want to between downstream Well, prices there our for volumes. protection where fee-based spend had to on is for dollars investment. low the Really, in and and all included Waha, the we we're zero At for And side, in increasing NGL one that those had to continue for their infrastructure, fee-based at spending producers need we've hand think gas fee-based be also fees our into that to the sensitive contracts and to us margin $X prices, move fee-based capital. some going but And to on on success who with going some that we're going continue our we're going understand to protection for

progress we want So, our And good a and say, to from able continue that aligned progress, to plants, hook that in move I'd we're perspective, and to XXXX. in we've up continuing and be to so, lot those had those we're of XXXX.

Tristan Richardson

business - is online? remain that represent downstream enhanced - that or marketing Helpful. is And if And on opportunity the XXXX Prix is reflected opportunity follow-up in outlook, the side. that the should opportunities downstream now could about then upside? talk Grand spread in the margin you just resilient, Can

Matthew Meloy

So, result into a Grand our partially being system. Prix NGLs say, more we a I would coming lot of as have online,

more on. fractionation capacity have We coming

As which us infrastructure, of allows related we're marketing opportunities. adding other market things storage for advantage and and take contango we add fractionation, to

more I'd our of estimates of as overall So, opportunities have conservative volumes those the say into I'd in, opportunities. put guidance. we We increase, say, those

not there, relatively is a those there So, but of of zero modest some it's in expectation opportunities.

Jennifer Kneale

if to opportunities a other Tristan, consistent, present online of as through the with move of through forecast we have And the we as the significant quarter generally conservatism, million opportunities XX then year. those did and the in highlighted year is assets we year XXXX how downstream one-time the hope that Which we second themselves. nature and we as opportunities, additional was business elements to in try quantified with came opportunities outperform had

point. at some It's this quantify just we this year. So expect difficult to

Tristan Richardson

Very guys you helpful, much. thank very

Operator

is And you. with Gershuni UBS. Thank next line question of Shneur from The comes our the line open. now

Shneur Gershuni

those the so guys. good seems It is interest from or fee opportunity of based. they're and renegotiation? the what clarify are that respect follow-up Maybe fee like and is here just to is answer. getting collars gotten But of you I said there part to adding to to you've more of morning Adding assets is just question, there with base trying forth adjust what's first contracts incremental just from or fee-based, types ahead add schedule. Hi, in there the think to

Joe Bob Perkins

Sure. adding I'd volumes terms Yes, we good Permian. have existing components really fee-based for the contracting say coming we're had, to and, in movement of fee-based floors new in as and contracts

So and to it's that. ability able see to of new more contracts existing really the we both. do and Its be

stages producers protection various our we to So to continue going fee-based we're them their the their and to how in discussing be needs needs. with need with we're meet that able to can meet and

Shneur Gershuni

talked you to about you just adding clarify, fee And assumption [indiscernible]. Okay. that if the

Jennifer Kneale

have well. fee-based then we additional bought the margin if we would DevCos right That's in as

Shneur Gershuni

Perfect.

LPG little facility. was we wondering a I the switching talk about if export bit. Just

a capacity obviously refrigeration to we if online, just there more that customer was later new requirements further there you added of was from of quarter this Where to can demand? so, optimize year that out that of you're better fact were a if this the does butane in add related as was mean wondering when very now see but of ARBs and it quarter, you exceptionally well third and capacity optimizations propane strong and some able You to that there. strong the the some actually is had the more function that

Scott Pryor

had from quarter, have third quarter Scott. quarter. our we a in you increase is nice When our at XX% a quarters. We look across volumes did those fourth over dock about this Shneur,

was is predominantly as debottlenecking bring quarter third XX% benefited we ourselves script that. fourth to really projects said contracted. so the highly the to increase, saw pretty of molecule, of was Additionally, online we much We saw from a related debottleneck those result a butane Much XXXX as butane XXXX to facility. from from and as we in our that helped improvements quarter continue the we've we us that around projects view

to through As volumes we're will our increased to bringing our the through assets barrels the put the the we're dock. this our across refrigeration third dictate the more why That's we going opportunities adding quarter way we're that Grand all capacity whole, which from of in capacity with benefit our Prix upstream year XXXX, systems, increased reason roll as a online. of additional this Downstream through from year through flowing

that away that the so across in maybe view of in we've that us quarter, have With take we the ourselves projects first contracted. issues you put mitigate put to with stock seen we that on will, contracts we we've place assets highly that the it performing really we still opportunity, with sure dock So want if that even because said, helped where we're the delays times fog our with delays kind as fog today. had and place, some in in make the to from participate we market

have expansion our the term of will the contracts great half of year added contracts We've all related success in in on across dock. toward had new renewing of business latter we So that come the project. with this kind

way on wellhead provides all producers, the that highly we've flowing of increased feel going flow the and again way are So done we to our all the term related comfortable that We're dock, assurance, to that systems the very the - systems. we're the volumes back have with their contracted with our we for with will through find fees which benefit definitely business. way to the

Shneur Gershuni

final on and see market, other optimize to people's you forth down you X there other I capacity the a for strategy opportunity sounds and amount sense, our spare space out for and just it's there if in for the way using you a a like and question may, some go-forward asset-light capitalize basis so little one is on need to perfect given while where of an capacity. effectively CapEx an the bit utilize potentially that's makes That fracturing step Okay. delay Then spare frac be can delayed for ratable.

Joe Bob Perkins

Yes.

will opportunity call we X say opportunity utilized system having coming on. on have kick would in we I there give go in commitments as said X. fracturing and customers to and capacity light for as on from we volume We is when an comes and future that be excess just coming the be also it with us our others of will NBC's some X and with as and be before our Train Train to we in. need so in a say Train add will us wait bit we in little So our necessarily highly ahead fractionation don't it time give need to nine, green growth

we're XXX,XXX I better another our think and Frac. thing barrel a is benefiting in Train this fracs that you day than are We QX, saw anticipated. call from even running

volumes QX, it XXX. If over we're was That's to able than higher nameplate. run fractionation you it at look looks like because what the X for Train at

So we're out push capacity, could which a as X well. more little also creating Train

good to our Train feel looking further little So assets own optimization move elsewhere, our able of and bit pretty out. I potentially a say through X about being we

Shneur Gershuni

again on the sense. color volume guys. much All once you right, very And growth. makes congratulations for perfect. Thank That perfect

Operator

with Morgan. our J.P. next And you. Jeremy of comes from line question Tonet Thank the

now is Your open. line

Jeremy Tonet

morning. of over things I wondering and year. could trying Prix. and side that start far playing route, see growth how just as you out the as was you wanted what a on both on rate get that- cadence for good the you exit for Grand type to Any to type a just of also the look level color the kind like bit G&P model about there. provide talk I encouraging that thoughts of could as see what of we sense are here that growth to if with the Hi, guidance more it's

Jennifer Kneale

of there relative Jen. little is little to really related bit comments. benefits morning. that metrics this get of also detail that bit we've on our to quarter, our press with EBITDA $XX to million certainly any a into Jeremy, related not scripted commentary tried to first We're and one-time particularly those this in you quarter in as tried to or to guidance providing of provide we color quarter-by-quarter a discuss fourth put of result other We going a release the the in of out

Excellent I when year execution, assets they think how in assets great have coming did fronts, performed. XXXX a well and hope that We've and you new as got as well the those was XXXX that XXXX and online online year all across just that our we'll came company. for how really online about think perform came out. additional see to that those in plays particularly

had some generally XXXX far seasonality January. in We sort with and headwinds the prices in early of have typical we already commodity have freeze-offs with thus that

quarterly You of never that guidance and that one minuses really can generally quantify will all the like that's year pluses versus the to annual provide during we the occur guidance. and reasons

Jeremy Tonet

That's lower XXX? on maybe that QX versus QX number exclude those or the helpful. Just XXX quantify just that And versus impact is that being the of trying items was the some then one-time to there. the than clarifying

Jennifer Kneale

to more and color to in we back there. go have bit re-read provide tried chance the script, little you a If a

So it's really- it's versus the XXX.

items. includes yes, one-time So the

you well to QX bit QX with than So those Consistent a OpEx you expectation G&A it in fourth relative to also will direct in well. quarter think when be and little detail XXXX as certainly as remove will higher that than be of XXXX. higher trying about QX and and provided the we're was to OpEx G&A the that

Jeremy Tonet

just but a the helpful, assets really I divesting share see know assets GCX one but going could, to selling, on see- don't seems types capacity whether nice the need like and job know have pipe deleveraging what ownership pipe on accelerate you it's could not the us there some just look own around see I process. thanks. wondering just That's we you're the I tell good I some necessarily help to and portfolio done thought non-core to last And guys to I now wondering, raise bill, of something to if opportunities recently in anymore I there. that the funds anymore you're like it if the just wondering If you've and you of

Jennifer Kneale

that sale have underway currently asset the only Permian The related we is one business, Midland the process crude to Jeremy.

So the opportunities to this all there's assess at else we'll across continue portfolio, other active time. nothing but

clearly, if consider are we've available there a willingness So for will demonstrated the of more not third what we exports supply we to of be we consider asset is aggregation Permian assets volumes of core hit a are. frac the of owner supplier likely to aggregation would G&P to whether party than transport than that a

Jeremy Tonet

That's me. taking all Thanks question. my from for

Operator

Thank Blum comes line Fargo. with you. Michael the our of from And next question Wells

Your is line now open.

Michael Blum

your expectation? or just morning, Was Good Prix. just of explain volumes Can that your or either those prior something everybody. had keep causing plans third versus moving on sort conservatism you're the that's I questions, seeing on volumes to Grand you two with is one numbers Great. own higher? maybe outperformance party just changing

Joe Bob Perkins

of show not wanting performing. it then before left operating our some point Hey, estimate and it's update that gave at of was a that just a little a factors. one. ago, say it Actually we when start while to wanted guidance barrels Michael, we was initially get it there to to number we and I'd it and we probably that conservative I'd XXXX in say XXX,XXX gave revise

in a the original was others third of we volume pipe conservatism, across we system. I'd we're benefit our I'll say, and also parties, and we've say I'd optimizing. attracting more growth well success That guidance that but expectations, when strong as NGLs guidance in We it gave our original also part saw good plants our system. of has XXXX. on volume Permian our outperformed our had all versus So through say really provided been down going

well. numbers to more recoveries So and in send seeing as trying the plants increased that we'll you're and team our NGLs to engineering out our squeeze

So to putting in recoveries we're we're points as these trying on enhance that well.

a number it's of So factors.

Michael Blum

trending so or Okay, latest obviously very may great. the second and is, your of you're of may in? then start timing thoughts just And not Could get is DevCo question that on back EBITDA when buying some nicely.

Jennifer Kneale

Sure. is Michael, Jen. this

really before pieces around nothing stronger to we see consistent out think we'd third likely the commentary start of XXXX DevCo. expected. we our Ultimately, with performance the back Fourth has than changed. how performance I quarter buying DevCos was quarter shakes like

right focus improving leverage on our metrics. Our is now

So in there is entire no want when structure XXXX assumption. underlying into entered so. change the arrangements the quarter a that we really you the given got modeling really DevCo to that to for we take the of if we do was assume we've That's fourth of as assumption XXXX which X purposes said fine out years to

a with piece piece a well. assumption EBITDA $XXX million assume in pieces can to out want you a derisk taking out earlier fine If given we increments. and as we that or increasing take may That's the overall structure take out by

either consistent at it the we're which those into with think we how again looking I at really looking since how entered are of is transaction. right internally So now, been consistent with we've it

Michael Blum

Jen. Thanks, Right.

Operator

you. Thank

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

is line open. now Your

Spiro Dounis

everyone. Hey, morning,

a First reconcile EBITDA to the the is just us in up strength XXXX It of maybe A than movements. going guidance. follow question lot on just take ends the to lot seems trying that commodity just and of to the more low like the high guidance. range getting

curious down. if major variables that and up some other that just walk the you us flex So of through just

Jennifer Kneale

why to that's producer also very assets half to related have the uncertainty range activity the reflective visibility We opportunities is than estimates outperform is XXXX our year, given so now absolute of year continue in best us. for believe I range on in is year. guidance presented the for be the really there strong to and that the levels, hopefully we think particularly the that there the for XXXX. right of us wider the back into past. that dollars will there a was prices, we But coronavirus, years for have generally our in

Spiro Dounis

the into next getting that ahead sets Understood. hedging question And just some risk. of and of that then around

So just question here. two-part

First XX-ish is you that on second, that or wait Hub today one Is you've now to a this got it for price market in have in hedging that? Waha right clarification call your component telling Henry in Then point? are dollar a put to entry there. you or hedge stronger just model just you

Jennifer Kneale

of into that's On hedges aggregate includes hedges entered the it our basis the we've reflective all hedges. that so

that through really opportunity. hedge fair given to of when continue early related hedges a point see part the the the the from given added you'll we that internally think of I view us of prices. our disclosures bit have we on quarter to Clearly, year, fourth

side, been But for get we hedge a prices, extent at is some that's board. we that of result into, any ethane to with have our point, our the remain where continuing barrel like with do through we just and we'll than hedge hedged strength be of which as NGL time. programmatic sort can the NGL ethane we and of this just that, to the hedge the that we committee well as work largest that our less part program of ideally On would prices really

Spiro Dounis

Jen. Thanks, Very helpful.

Jennifer Kneale

Thanks, Spiro.

Operator

line the Colton Pickering, Holt. you. Thank comes of from next Bean our And Tudor, with question

open. now Your line is

Colton Bean

Morning.

slight the to just LPG shift around looks commentary CX follow So, it the Scott's a up CX implied disclosure like there exports, in on mix.

utilization into now, increase over markets like more basis. to Is that XX% year? the think capabilities potential volumes any it's there of trailing the of a on to weighted propane the course butane India push I loading butane at least

Joe Bob Perkins

growth is are their that the of in we in the of Asian lot mixes at. have where demand would Colton, in the is talked about moving dictate what lifters past. that are. A it I kind the we've a that Clearly And traders, desired with the waterborne obviously East volumes marketplaces. pool say lot to of the

With across butane the propane both lot with developing that larger butane upon to forward, ourselves and how countries, and we third our relative up to fourth We and of vessels. quarter reason a are, give that from kind is so certainly and quarter we are benefit our a that's of have of that percentages dock, as butane we much that going gearing size - did mix. of moving broad a capability the range the versus it is that what why capabilities propane dependent

you'll why our think So, put our dock, in and debottlenecking percentage I see of to perhaps across the reasons place. volume hence increased going we continue butanes projects

Colton Bean

moving you some I timing beyond both think X Gateway. pieces Train the of of next And touched then and it. the the on on Got Matt, Permian plant

billion beyond As capital we look versus for prior at any considerations reconcile that of Bluestone? $X.X try and other and to XXXX XXXX, that

Matthew Meloy

$XX XXX, $X.X to then net a Yes, in processing and relative I three current year just there, we was of over higher they which expectations. the was bring there ago, our last Bluestone, billion our about summer, call in plants, to and at million mean, that were added mentioned we and given I them the were to original

success much as another XX Permian, the of it's And to to to there. volumes bring We've likely is that be, number. still how our how XXXX, that's it would really much So, to Midland you that be out I having kind uncertain. indicated Timing forward in plant dependent going think here. we're look underlying out going CapEx upon

just ramp maybe we X, you dock on, XXXX, that this processing but little how on potential year. going runway I be to side going should be export when Train a okay we and have to plant, spending depend a fractionation going as there probably on plants, Falcon depending With on more our likely a for while. coming think on we But volumes little it's timing. on coming in add of look here, more a to it's timing Delaware just the with Peregrine and

to probably XXXX. going it's be normal CapEx for course a So, regular,

Colton Bean

Got that. it. Appreciate

Matthew Meloy

you. Thank

Operator

Global our And from line with question Sunil comes Securities. you. Seaport Thank Sibal the of last

open. line now is Your

Sunil Sibal

the Couple questions starting Yes, me, out with from guys. CapEx. morning, of hi. Good

I $XXX you that 'XX indicated like came below CapEx maintained. was guidance guided had out and million think what you XXXX to,

is projects? lower So, I some be of the it coming at finding can on cost all Are projects? out was scope curious,

Matthew Meloy

talked and I tied focus our Yes, on and focus the to we would just about, it's that along as every into and it's Grand business and Prix, processing push where capital project, fractionation export. as our in say organization - scrutinize really and continue capital we discipline, core gathering into to

to estimate. our our frankly, we're careful in and XXXX just being changing under able come green as scrutiny, XXXX. at projects, into didn't rollover, level And So, were new, diligent of at we the we very anything I for looking think before lighting that increase

continued some cost, to through organization, pushing everything So, see I it's kind think we're just we're discipline, operating an positive results. G&A, capital starting of as of those

Sunil Sibal

And just Grand to wanted then Okay. Prix NGL reconcile guidance with your the on volumes.

you so full-year modest seems did XXXX, in what XX% quarter, you or like expecting a are uptick. the it from So, for fourth

also made frac anything significant and how was reconcile the talk the those we also, there going on your if are could there? assumptions you XXXX, side, that of two, into full. to fairly new start rejection I on you kind ethane just assumptions if commented any do expect frac However, you about curious,

Matthew Meloy

I Sure. with start fractionation X Train I'll being guess full.

have we nameplate. over been running So,

going volumes to working and have when storage of a working continue inventory, but We have be So, comes we to we're right? on existing inventory going - capacity, be off off we're ramp. as lot X to

they're as think volumes, We'll be said, capacity Grand Delaware. I the some the as in have to on. underpinned. we'll Peregrine I look you But going So, have at coming Prix

coming volumes it's growth capacity the quarter, our on. on. have some so to we - it's that with the third-party increases on So that's highly of fourth Then be do expect Gateway Grand kind fourth We be Prix. utilized the at up, have coming some be we the - but so there And there. excess to modest going until to those then It's coming we we coming now, not really Peregrine start expect in going quarter. see on

our into We that forecast. baked have

which agreements, shorter other some before, did say or agreements, XXXX benefit mentioned I TNF transportation-only from late term And we then I'd year. last the didn't shorter-term in offset,

say, non-contracted think there into related going we those or have opportunities, of our for our Are will opportunities shorter-term factor didn't a, in We a I'd kind there XXXX. assumption barrels those either volumes opportunities on producers basis? customers to some of conservative move but to I be midstream, some of be to XXXX numbers.

Sunil Sibal

one Okay, for housekeeping me. got it. And then

any So, OpEx in other I in in or unit in you've touched those million particular QX. concentrated $XX any you tailwinds upon geography? particular of kind guys that on items and business think Were or focused the got

Jennifer Kneale

talked the and reimbursements. of that that then of fact also a was really is combination estimates, about Jen. made We some G&A partner this Sunil, OpEx up estimates,

combination fourth we a for came with of ad factors estimates really talked board. what in the actuals was we've than in it taxes on so, Generally, the was that had the also quarter, across assumed. And lower third valorem consistent quarter, which our

expected, costs lower less for and did than benefits year from the the year than we through benefited also or hiring we expected We we estimated.

really, any So business corporate more individual level a it's unit. to than specific

Sunil Sibal

it. really That's got congrats color, on Okay, good all for and a quarter. the Thanks I had. all

Matthew Meloy

Okay, thank you.

Jennifer Kneale

Sunil. Thanks,

Operator

back Director like Thank the concludes I Investor Relations, today's call Senior session. to turn further for you. any Lad, Sanjay This to now would question-and-answer the of remarks.

Sanjay Lad

that Well, was this Targa call Great. we morning, the thanks interest to appreciate on in everyone Resources. your and

We available questions over great the day. a have course Thanks will for of and be the any follow-up day.

Operator

gentlemen, Thank this today's you participation. Ladies concludes and your conference for call.

disconnect. may now You

Targa Resources (TRGP) 20 Feb 202019 Q4 Earnings call transcript