TRGP - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Targa Resources Corp.

First Quarter 2022 Earnings Webcast and Presentation. [Operator Instructions]. I would now like to hand the conference over to your first speaker today, Sanjay Lad, Vice President of Finance and Investor Relations. Sir, please go ahead.

Sanjay Lad

RJ. Thanks, welcome Corp. quarter and for earnings the Resources Targa to morning, XXXX first call Good

quarter release, accompany first in presentation available The earnings our the for earnings first on Targa supplement Investors quarter Section. Resources at that website our are along call, targaresources.com with the

Section In updated be the Resources' Targa expectations in has predictions should investor of also our within posted to XXE include addition, Statements that made Exchange statements. forward-looking differ of XXXX. might forward-looking Securities an considered meaning statements results website. Actual projected during materially presentation Act been this the call or those from of could

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

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

Additionally, that, now Muraro, team senior McDonie, Transportation; Gathering will and for Logistics Matt. available Commercial Scott Chief call management Officer. and President, be I'll and Q&A. Pryor, turn with President, the Pat Processing; over to Bobby the following members And

Matthew Meloy

morning. and Sanjay, Thanks, good

We to perform the record to to in million, start number of and continuing on Permian NGL transportation EBITDA volumes. are record fractionation and the a quarterly good fronts. year a of volumes off $XXX and Record well high are

achieved week. completed with ratings the this of during our We redemption DevCo earlier agencies also in We investment-grade and January from preferred corporate quarter. the the X all repurchase simplification, with our stock

repurchase of bottom We our sale, investors. the common acquisition X.Xx our our our Legacy bolt-on of our of is South redemption, our is target plus at the across to Texas as of our repurchased and DevCo Pro the Xx. in to ratio invest range And ongoing forma Texas. our in interest, increasing of leverage stock half of our shares for X.Xx. in leverage Legacy We with preferred Permian, of the Xx South additional assets return part II continue to capital construction and the Midway long-term plants reported GCX businesses I, acquisition

first QX, EBITDA strong quarter. a late really had versus in quarter we began $XX million up prices with While to move the higher commodity

So of quarter. are prices since first as compared lot for relatively realized to benefit, But nice our were see fourth the tailwinds providing of flat then, we did quarter the the some not a price year. prices balance

the to expect if guidance prices Given disclosed businesses, financial for continue around end we previously year our of average top current fundamentals strong underlying exceed would full we Targa's XXXX, the levels of range. that

across across Permian detail. February. let's cubic Let's billion in day in now conditions, now during and the Starting or quickly with systems averaging well, more and our Permian, inlet first Basins March per feet winter in discuss first to our average. and volume turn rebounded, call the January quarter. despite Delaware quarter X the operational by over particularly -- continued nicely increased systems the perform weather volumes impacted April up being Volumes the quarter-over-quarter Volumes over Midland

we across to teams Delaware expect cubic Legacy later near move online to benefit to bring safely per systems positive working continued our through plant our to next this and continued are activity as diligently our XXX and In year. operations footprint, strong and our from this day levels million momentum and see We engineering Midland, XXXX. Permian both full Midland run feet

Permian continuing operations ramp. are XXX In across begin also Permian expected new million Midland, feet plant during to of Our system cubic Legacy II in Delaware, our is to second XXXX. quarter the per day volumes plant, another

region. additional overall of Our flexibility provide Delaware Midland cubic the between new our and in to systems day us plant volumes during Midway per begin flow quarter addition will in the XXXX. with improving XXX is to feet our million to operations expected Midway operational third performance

quarter year full XXXX expect Badlands. and to impacted notably in volumes. regions, we average our In conditions, increase XX% the first most winter to XXXX, were Central to over Badlands inlet our by Permian continue volumes XX% volumes by For weather

across Permian and Transportation increase, price first driven to and the levels sequentially acquisition Belvieu continued activity environment. quickly given regions the stronger we South seeing day contracts in in volumes XXX,XXX X%, and higher completed from integrating volumes assets Shifting rebounded acquired accretive. quarter. in we per helping to expect complex go April, commodity smoothly. and several In the and of unplanned during and parties. following Throughput the Texas quarter the and day during would Targa's at a our Logistics per XXX,XXX South everyone volumes the our are be segment. to our increasing to NGL related Belvieu first Mont quarter's barrels increased third Texas processing at the gathering Fractionation NGL We to are make production involved like assets fourth We integration immediately operations transported plants transportation acquisition record Mont by outage. thank

In LPG strong. we transportation Looking we NGL of million barrels XX.X the Permian from export to average our first loaded ahead, increasing outlook and an G&P volumes to LPG growing The services fractionation export our during position. from at business continue supply business benefit expect per for quarter. remains Galena our month Park,

of incremental propane low-cost per previously for outlook an We project capabilities, X are strong. barrels mid-XXXX. by will announced advancing add to loading expansion The our month capacity Targa million increase longer-term remains which our

employees our provide I complemented on to deliver over With turn call strong NGL to to to services like employees balance that, turn Permian I call position domestically Our would will on And continuing sheet, Jen. their premier the best-in-class and executing our and priorities integrated Targa talented I reliable and energy globally. before our to our while strategic customers. safety, safe, over by Jen, to business, continued the focus thank for

Jennifer Kneale

interest assets, generated joint the in ventures the volumes was our our Targa and lower of the DevCo Coast pipeline Express in margin. of $XXX of $XXX Targa's flow free our marketing and we cash Matt. across offset Gulf by adjusted first EBITDA equity the million, for adjusted sale repurchase million sequentially quarterly quarter. increasing as quarter higher most Thanks, of reported first from benefited XX%

We XXXX for add prices fee exposure higher continue and our above from for while equity beyond, and are across benefiting prices still to floors. volume and significantly unhedged hedges XXXX hedged

ahead, be as of the integration G&P earnings second reminder, Looking South a associated the bolt-on the in for acquired G&P and our will quarter. recently segment consolidated to contracts assets operations midstream Texas reflected

concluded, million end $XXX and consolidated XXXX. due new liquidity. appreciate to $X investment-grade the our really able notes support In pleased notes Our $XXX have and been of inaugural X.XX% first XX-year income for senior our the of and IG offering XXXX quarter, successfully offering of of and we around the expect fixed May in X.X% notes about we X.Xx TRGP the right our sale first than call for senior to access has available in and the previous the receive was performance. this billion Earlier to $XXX time. we respect as structure, completed initial ratio the the had our leverage of redemption final process are at approximately million. million week, due existing simplify market, issuing do in of company April, the of Series we investors We XX. our interest of we market of result a able strong to important sooner of preferred redemption and the stock all our preferred The outstanding on so A to goal strategic or to capital were With an completed expectations GCX, our completes payment

lower, and forma mentioned, with ratio our pro trending X.Xx As leverage which of is excellent flexibility. position financial lot Matt us in puts a

$XXX spend across opportunities spent our volume to attractive million to systems. to in with expect growth organic million support to through on million approximately growth continue We quarter $XXX first XXXX, $XXX continued the capital

opportunistic of an our We to in first repurchased repurchases, additional share common are per been attractive $X.XX paying XXXX, shareholders have and common with $XX million the for to dividend shares return quarter. capital annualized able through

in amount continue continued attractive of excellent our of and macro balance strength Targa's sheet to supported shareholders. means looking to Our an the underlying forward are to investment backdrop return we capital position our in an increasing growing businesses, by

I'd Lastly, back over that, thank turn prioritize the will And for Matt for I continuing our dedication to and like to Sanjay. employees call and echo to safety. their with

Sanjay Lad

RJ, you please open the line [Operator Q&A? for would Instructions]. Jen. Thanks,

Operator

[Operator Instructions].

Barclays. comes line question Theresa the first of from with Chen Your

Theresa Chen

First, your structure ask streamlined that just about common fundamentals to and share like dividend here, from I your to trending you've would given capital well. the repurchases, be and allocation talk seem priorities about so on? increasing you Can

Jennifer Kneale

this is Theresa, Jen.

of kind then us versus February. execute our of sort the forward, increase we'll we that's going dividend we'll from year, have next XXXX common perspective, for are that as the this dividend share XXXX, today, you'll and think and revisit I see

execute to seeing you're in our You're repurchases. continue on share also, us invest business. seeing opportunistic And to us

in going it's that's be matter the where our figure of So formula capital going just we be the out I for then, think spent. going us opportunities us think And front to to best to is a forward. of

Theresa Chen

it. been so macro Got your in story in momentum much tailwinds. there's the And

mind, all from you think pretty your clear. I risks is what here? In key do think are that the of

Matthew Meloy

about We've years, sheet our improvements we over balance to we've think I Theresa, the the simplified a our feel really structure. business. good made of lot

year that better today risks were protected of volumes. the ago. both and downside out insulated in I we're prices better are even are X feel and or commodity we the But inherent like So there from a business those, to our than

that we We've risks look on of business. made recontracting our in a at. I progress G&P fee it's So the think in floors and same lot putting

grow also strong our in And customer really in just to and continue have diverse out hedges, of good we basins a set across significant Permian. customers as across exposure. price amount the we footprints, our our We G&P commodity have have multiple diverse reduces which

a So kind I ourselves we've from job our remain think trying done business, the but protect downside. the to in at of risk good

Jennifer Kneale

Theresa. than has before. any the themselves, risks present starting been ever think so point, I us just never today is it We've if different do stronger, for just been

if So be withstand and even going able I perform we'll to exceptionally those forward. well do risks present themselves think

Operator

with of Your the JPMorgan. next Tonet question line comes from Jeremy

Jeremy Tonet

on in seem January like guidance the just didn't It Just quarter, weather Southcross simple the be from In prices, quarter, benefit. math it's the doing off if weighing you you'd here, think, benefit the if commodity here. with said a there. the it's first had guidance, quarter. some million also, wanted overlay it year. I I something seem could, annualize like freeze-off the But guide. start impact it. includes first And like EBITDA recognize I if seems guide I prices, a end to And $XXX And the you doesn't to of early top spot to the add commodity then as at

there Is know Southcross is right points commodity we offsets quarter it the the where the these should above the reconcile the high but about? things. So end. price all just now, guide first be that different any I into year baked isn't annualizing over of thinking balance to

Jennifer Kneale

The sale only and is it our start of Matt, over our the just was not I'm was turn offset then GCX of that I'll part with, sorry, in guidance. Oh, I'd guidance. was. contemplated it it to just

just I hedges. still us part right think you've is Current of for got spot the continuing we that as but now, of and are out balance directionally correct. pieces we hedged well the to look So are for XXXX backwardation exists the add yes, that prices, the very given unknown

I else? position. an anything just we So think in Matt, are excellent

Matthew Meloy

the Permian Midland, if Jeremy, rebound in I We I and and January us. But it April. flat operational pretty QX up we've volumes increasing really you February, We well. had and look was had bit, issues it like out in a but the for good Yes, in quarter QX. in you QX a winter Permian. volumes was some nicely Yes. March weather laid little almost think feel seen to

year-end. quarter-to-quarter for actually at gas And So us look higher good for realized, know, but up it through NGLs than you now were little now much, growth sets down. us, a are in prices, And QX. as from you bit, average if up much volume prices Waha was our

going and throughout lot to prices uplift we're around go have year. as gas hang we a the So of if here, NGL, between

in due to across volumes regions, the too. impacts lower some We our central weather also had Badlands up and

bit little I prices, a weather, warmer with of really year. nicely for So the think it sets higher balance up the

Jeremy Tonet

Got it.

me away or So $X.X I $X.X billion, if prices... commodity billion anything to walk of didn't kind from more hear

Matthew Meloy

even throughout think good around move that this year we're said, don't as have -- hang kind if think if in just shape I I here, specific. of prices of been we're not We we in the prices rest hang really shape. good here We around

Jeremy Tonet

the logistics solutions, pretty just it. towards tight. seems as Permian basin the there natural well. I guess, The here. that run out is well. it a pretty Egress There's way us Got tight Yes, numbers we number looks side. gas, to of on for as on And capacity like like pivoting egress more maybe processing

takeaway your the Just have customers' expectations hopper, of several in wondering, wondering, to -- gas those And side, you kind overall your match, participate forward on Permian just the X and yours nat gas I equity to production guess, plants appetite on moving fronts? but in then, I G&P the in nat needs. growth your guess,

Matthew Meloy

takeaway little seen good We've pretty here and we continued turn I'm system a to it we bit just Permian, forward. as be residue about the Sure. opportunities. we're just Bobby, the look growth who over to thinking to over months, how think the our growth in aggregate XX on there's about last talk in going and can going

Robert Muraro

Bobby. is This

the the most producer relative announcements of day, the exposure. to on At we our on side, look see expansions. we recent So residue the like to excited a end were the

we will then gas as possible. want to is basis want flows we what flat ultimately, So the that know obviously and

about So time, for known about expectations the supply we've our it expectations where of of a going. we've was where known long

the on side us expect not see announced. times we before just as basis they through come get go. to participate in won't we pipes built, for see don't target get the and there hope even them, to think for you'll But to the any us So us new takeaway, to I or more end it So right? prepped for yes, fully get at be we need and pipes big egress us And in them pipes the if want things, not we're of to in time whether when they we go, see need those And think really, online. we blowouts. it

Jeremy Tonet

very leave Got there. That's it I'll it. helpful.

Operator

with Your Tudor, from the Holt. Colton next of Bean comes question line Pickering,

Colton Bean

I QX. weather kind here mentioned impacts And in on you continuation the we've weather think quarter-to-date. So a all the seen of Badlands severe that of

us update you damage So have that as infrastructure are can you April? you about balance through we then And just the of year? what considerations longer-term the seen move there any as you've and think

Matthew Meloy

answer over to I'm Yes, it sure. Pat to one. going that turn to

Patrick McDonie

know April couple there's a of Yes, mean, up weather the in second the And you I the you're you about obviously, Badlands. significant one, right. been time get in back pretty the from events first everybody's were they to we're almost one across mode, They in back follows we up systems. the severe. Badlands we're fully Certainly, took are And up, coming rebound production behind. pretty the up. nothing across not

the not second we're at on So Sure. We're will in quarter? up help things fully but May, the back April, it the where have hopefully, to relative still some it impact that our we weather But side, weather fully before our impact. be April. to occurrences positive of will of remainder appreciably here we offset closer, least, throughout are that the some year the do up May, impacted. we'll were late getting in was mid,

Colton Bean

maybe Got it. just And to clarify that.

thinking DMP Badlands in aggregate that is offsets, specific? the or On for

Patrick McDonie

Badlands-specific.

Colton Bean

consideration you seeing I Can last update M&A the you that Okay. think still was mentioned be use in and just a are may then, a if in you all time a that first while. for forward? Great. of Jen, going the on cash us And what market quarter,

Jennifer Kneale

an the couple acquisition transaction is Targa I us join saw attractive the employees excited us, buy to years, prices. really the for near strength and the team. we're Southcross where to of over that's medium execute than more market in companies term of we acquisition, and the great understandable have is those example available and and are you last We're going us. There at think certainly today synergies, and term. the given a for both which have of then prices a able well, think been there commodity from on longer over Integration assets benefit

us, have any even And transaction characteristics bar that it. be that are And so unique looking that would in the for continues to very high. consider for a order of very, meet us at means number there to to

very we think see time that us spend on. you'll to I So our anything selective continue be about

Operator

Reynolds line the UBS. from Brian comes of question next with Your

Brian Reynolds

a from release, ahead with adding on Maybe, of to start CapEx curious kind towards but we I'm projects. off thought started many kind build your of the of looking future securing No change frac versus that's in XXX% versus earnings additional around frac hearing of peers the growth process little pursuing just unidling XXXX, of potentially capacity. new currently? Targa's around Belvieu Mont a economics the JV bit

Scott Pryor

Pryor. Scott is this Brian,

feel have like market has us, long-term base, both Just needs as well increased. we do tighten that for The inquiries fractionation is to into frac up. of short-term starting number the come touch as to

folks start And market We the to that. we of by permit we behind Recognize dated to X. will to some get evaluating little hand that we've gas producers be processing secure timing stay back needs ahead tightening what And to that. got are of -- a formally transparency actually of And of need continuously a into that when of trying that result We've the bit are will of the we that start that, a ahead may relative our for of future. a ahead I the to more our good well think trying plant. construction those that fractionation of are. are the that, in well our as Train got

inquiries that to here producers, -- the Again, be at it to feel and I construction feel Train and starting like market view in number the like back tighten that near So X future of up, time look our the in of the will we'll have there is coming starting we that. we a the

Brian Reynolds

guidance then Permian maybe, follow-up inlet volumes. the just as and And on color. specifically, that Great. Appreciate quick a

one, to expectations change year. major to Or seen if that to a And a a Permian outlook? last seems just guidance to really does for through guidance this strong is there So ultimately, be it the little system related as in cadence the wondering back differently, far the said volumes to, any bit relates the increase half year of any your the in quarters. Delaware customer effectively downstream? we've imply change their maybe, just flattish flowing for Midland the production X And this year, is

Matthew Meloy

Yes.

years, get overall I over we've frame. continue warms what strong we seen across see spring/summer it growth footprint. in in tend think system Midland, really to the when summer in of you've that we as Permian the our our Part previous up, activity to Permian more of seen time

So it has had and we January was impacted of in again, March seasonality that kind of April. some by cold February, and And some are we it. and some operational more in which increase already weather seeing and issues,

us continue across their stick have and kind of producers we But previous some of our in terms -- So larger with Midland Delaware. and of they're guidance Permian both telling to growth. seen growth what with expect volume we also stick their

So necessarily going up just prices doesn't it ramp mean there. But because a getting you're mixed is they're to bag higher production.

of the some increasing customers to rate. larger our seen growth point have We

may we more as that's So impact forward. go XXXX but and that XXXX, I perhaps some think have on

We are still seeing good are E&P drill. who continuing activity across our smaller customers private to

think about our optimistic pretty So are from forward. growth here no, going I we Permian

Operator

Stanley from line next with question of Research. Your comes the Keith Wolfe

Keith Stanley

allocation coming to prefs? think of cash with Gulf the take Coast have done First use should we available the the free rest GCX question, sale Should with that Or to over out repay in. the flow you any cash for you might as just we borrowings year? of short-term Express, assume proceeds

Jennifer Kneale

right that Keith. our reduce The now, those use it when we'll receive be expectation proceeds, borrowings revolver to under would we

Keith Stanley

just update give hedging, Okay. second where frame XXXX to volumes gas percent want for you or Permian question, you you're Got particularly can however for of it? equity just at it. And an basis, on

Matthew Meloy

Yes, sure.

when do hedged we do So our on hedge, volumes we're side. the significantly And Permian gas Waha most basis. of are we hedge so related,

NGLs. have kind significantly were we risk try where our at So in hedge as only kind We've Oklahoma, strength and of for of we the we'll those next hedges. added as associated as on and this we've year we've basis additional gas for continued earlier We gas prices we cover well. to can in years. hedges best layer but several not hedged physical points and year, in the with And the seen

around programmatic continue continue hanging prices we'll approach with add say our here, to hedges. with I'd more So to

Jennifer Kneale

published Keith, hedged are today our both and now later you'll will NGLs across condensate. to there see be And able gas, so the that be in XX-Q volumes

Operator

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

Spiro Dounis

me to wanted variance about Just that there. talk to on Slide Two X. things the quarter-over-quarter stuck out

Just just I see I -- on a down and actually for OpEx, was given for looks the we're surprised little inflationary labor like in. costs that it G&P, chemicals, environment guess to come

commodity negative control So factor. the you that, the other pick cost the just to curious, the part of just item on of that was And I broader is that was just sustainable? really contributing was initiative? margin. quarter, that was end know Is Matt, there up mentioned until a a surprised G&P the

So there quarter, be the curious if of? was any a shift aware to mix there impact hedging in

Jennifer Kneale

I'll is this Jen. Spiro, part the question. the take first of

was some in our G&P and of business amount did of time. in We actually quarter. went ahead fairly ahead chemicals So significant of fourth we the bought what

as chemical expect to and certain So costs through inflation the down move first result here, our OpEx costs quarter as went a up I'd we higher really, as just a QX through, are getting of we things. difficulty our as seeing of time QX result step that. for

paying So I bonus the then up side, a on think we the little fourth bit an quarter. anomaly. for compensation that And higher ended a also, of QX, had we

And to the we're and so so we then a that's doing the lower as what tend begin number fourth reflected first a year, that in in quarter. we and at was new quarter, accrue

again, creating QX. is, to QX of little you're anomaly that's I well So a of relative part an as that what in seeing bit think

Matthew Meloy

on When really, to We was versus fourth exposure oil crude relative prices. oil the in look commodity big price directly Yes. quarter you quarter, prices. And mix have crude much the then, to first don't increase shift. that at

almost the It's NGL side and were and was and up We NGLs side down really have offsetting. not but much. gas on the gas that some,

so quarter, April lot of kind of we really March, was run that kind are had in we the saw into it's kind of now. late then the a we benefit but and some in where So of through

So QX. mix prices different those commodity relative just way It's shift. kind the all move X not a of of to

Spiro Dounis

it. Got

That's helpful. Okay. really

quarter Second energy going to some one, transition. just around last from back comments

all a think few evaluating mentioned opportunities. or had I capture renewable carbon you

Just curious if front? been on there's any update that

Matthew Meloy

I'd say we are potential capture continuing to carbon solution. a work on

that us say going take develop ongoing. I'd that. for So is It's to while a to

position I think a in we're to develop good that.

working are can put and with we together COX other move so trying capture and something there others discussions to it down And in there parts out our hole, to we are see if well. Permian the business at around as in

to think a to going progress, think continue anything to I move but going make over too. before we the it's can line, I it's while finish just be

Spiro Dounis

tuned. Great. We'll stay Got it.

Operator

Wells comes of line Your next question Blum Fargo. the with from Michael

Michael Blum

in just I any lockdowns LPG COVID-related markets. demand if from know given wondering the you're any ask been of to China of supply volumes you're I wanted we've to constraints in there. guess, about drop the export the reading about? some I global seeing more And weighted some America, more but to and bottlenecks broadly, heavily then South shipping impact

Scott Pryor

Michael, Scott. this is

chemical our that performance consistent. say, for may we the of there. our like would then, it. solid. the heavily issues logistical times, time that year. in and at There seen plants, Far did and relates of some some very all provides when grow. China feel the the -- demand to South we're for will for some continue diversified continue time. First customers that basis, have it impact to the And we quarter-by-quarter very might have be weighted when will, market capacity, to Places reliability doing. East time, were first that initially is complementary I allow domestic... much to marketplace, good very PDH players still we that for quarter we even America. challenges see growing our are be the there but like business, rest export will the say -- yes, our business, But and are plants in this to It's about of more you a all, market We is that weather and from Since it's expansion on in were we some At incremental heavily, if us which of as to Over off, would yet some small, started it we shipping very very to historical that that the you lifters. I additional towards look

and again, of got LPG's customers. I They're and to good a debottleneck appreciate we they we've it incremental us, to increase ways in we continue stick the as that they think with sense production So look to reliability here the where provide, the will see we those for portfolio push makes strong, across U.S., continue water.

Michael Blum

system how for and year? the of to about that And appreciate seeing the Great. related any balance I just then, and you volumes ethane trending there ask it. what that? your now, Other you're question to right upside to was across I wanted is rejection see

Matthew Meloy

we time. in have we recovery across been are Michael, Yes, systems, and for our some

change don't see I for a there. So us really big

on more side price volume exposure the the really side. is ethane Our than to

but have ethane on that. So up, we do some moves as hedge, we have length some

see higher on benefit really. prices volume from expect ethane, prices a impact, So I but we with much up, wouldn't to moving of ethane

Operator

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

Sunil Sibal

call. on I the had discussion Thanks one the for follow-up on just clarity OpEx. previous all from

commodity way think exposure like that? about wondering, your of versus of to swung chemicals all good around a was I seems especially variable kind and OpEx to bit. OpEx, it buckets, has there think over the a is fixed last quarters, about in So couple when you

Jennifer Kneale

Sunil, related can don't you, I framework there's think I give that that. an that easy to

it's we to I first think to think like about look begin quarter. quarter more that the OpEx fourth likely going the than forward, as QX

give probably right that So increase real But the that's now. prices also time. seeing you can I best visibility we're

So it's to well. bit a as predict tough little

job predict I a think as our to costs an can much you and are suppliers, doing first fourth they trying are more front operations job excellent the as but teams can it's of in quarter working possibly now. is inflation quarter the stay best forward with our and and I and But of the engineering to little think rising teams an than excellent like give just visibility I that will look second difficult quarter. bit right go doing

Sunil Sibal

then the was I the for part in I is of And some drivers too. there to what that think less But you? mentioned are it. way there Got is the Obviously, you a on And that seasonal, optimization side, press think revenues that NGL also marketing release was about of this business? optimization opportunities. curious, good of Okay. your

Matthew Meloy

Yes, sure. the really say in it's comparison. more I'd probably

look trades we you some contango contango were that we trade. quarter, If still we put that had on had when unwinding last some at dated

really there's relative quarter the previous to So less periods. that of in first just

So is driver I that. of the think primary that

Sunil Sibal

going may weaker forward, to seasonally seasonally kind then guess, up, up? normally obviously, you I QX weak are show overlaying than QX, some would which of that contango pick So -- opportunities expect

Matthew Meloy

Well, the seasonality benefit have QX business. some part propane and some from in seasonal of our wholesale it, we both QX we do -- get

really contango opportunities just our that depends off come that QX. will and QX conditions. those the far in Yes, or backwardation present or as that so market And as marketing of on team, kind

QX compared was those us. what there to of and go-forward So see I'd say, periods, QX, just will in the present we'll it -- less prior relatively and quarters

Scott Pryor

just Matt, quick. real -- Scott And to is this add

those see our of areas certain areas fourth wholesale where we the strong in especially side a field have business, we business, pockets of inventory. nice quarter our did of On

did quarter of during they out more than fourth moved in the the volumes quarter. first those So

the where the that, had of result uplift, season inventories. is position a the on as did winter than probably in of winter earlier latter just we in we some part our season, So

Operator

line comes with of Harry question next the from Your Barclays. Mateer

Harry Mateer

question, half to market rates grade in the bit, interest made guys it some inaugural investment you've capital structure opportunities get just like and optimize more ahead deal? curious the for but now seems time a it I'm you second your IG you First done up to to see turnarounds your the expense whether

Jennifer Kneale

Harry, this Jen. is

moving think have I coupon opportunities forward. higher We we'll just notes. have do continued some

be of those but and to positions where notes market is best notes, to think going can issue on cadence in opportunities the savings, try we in we do notes manage those forward. call there the we'll that prices how the of then be and our benefit liquidity that going on to continuing callability depending call So our I out prices largely from forward. and figure to can is going continued to dependent the notes

So But we'll an that see in how to have we're plays out. just I excellent position think anyway.

Harry Mateer

And that towards on proceeds call revolver. the earlier the call, answered on is Okay. paying going be then, GCX you to down the the

to have? a what for to get are sense you'd we some a how it in whether quarter-to-quarter about available structurally keep to plan cash love you'd would basis liquidity? out you think liquidity, Or of like like can on like Just guardrails terms a it's balance that to

Jennifer Kneale

balance cash with you to and the really else. on the joint is the of our when see lot JVs the do that a terms of think those of anything than I sheet and cash more has quarter-to-quarter ventures distributed JVs out

So we're generally trying as we can. as manage optimally to position liquidity our

have, accounts whether we receivable utilizing available or cash tools means the balance facility just that the that And or our revolver on sheet. that be maintaining so

I liquidity give there rule we're interest and possible that best can that a times. and really the have we as to trying It's maximize as fast you. following us expense So just minimize all at hard manage that to isn't

Operator

the Goldman Your John next question from of Mackay line comes with Sachs.

John Mackay

-- where be they the the to your seen you Have back dividend go of comments returns. and kind that to of past cuts get peers some of on process to started or aiming kind of wanted back some used I distribution to now. some capital to saw the they've of questions that in

on a in more that's maybe it could and just detail payout line that's on with if that S&P a framework? XXX thinking about or be whether guys table or little not how for the curious more you're the type you Just

Matthew Meloy

Yes. Sure, question. John. Yes, good

I as an think you our not get we as dividend our we be. part early for year. review to to provide of next Jen we'll It's really goal mentioned, back plan to where to used update payout,

we're market looking think I at indicators.

in XXX we'll S&P that share at -- at yield. with around We XXX, of price. moves look know I terms are looking S&P the

based flow as and well. return on look at other flow we'll free So cash percent cash metrics

be free So that have. to given good dividend our we're flow we I think the cash in move continue a all to really higher going position to

say the kind layering say look peer kind see similar peers then as we to we to and but look time. a the S&P want evaluate say, as to and want also, also I last broader to think we'll year. And we over how 'XX, where I'd do it. we'll XXX. do look decision So paying We'll just will think XXX, at we for what we evaluated way increase our they will out, what want we a to Well, be about we I'd of in S&P payout about multiyear, are it our both but of be? of those at, think of do inform group

John Mackay

for Appreciate camp Maybe more my that, side. Definitely what buyback worth. from Matt. great. it's here, the one just over That's in

some the of of weather the Some issues trends. kind of masked basin

you basins seeing on of give your not in kind of update of So us just you're if of or terms shoots the could an kind in other green Permian? wondering what outside some of

Matthew Meloy

update give do an a Pat, there? to Sure. bit of want you

Patrick McDonie

Sure.

activity all have we've wells. seen in uptick We but that of the uptick, We've side Western pretty a on more and Certainly, X, a basins. so recompletions. We've people employing lot seen not our versus seen southeast nice Oklahoma state Oklahoma. steady, haven't seen the increased level X huge drilled drilling a across rigs years in our regions, of

in lumpy. years. a seeing in declines more stemming So And and, X, over X there decline In haven't the Barnett, some relative the to we I'd grow. past. actually frankly, that's to say, We're the last the areas steady seeing activity we're little we're activity seen frankly, tide offset to enough that past

but So we year, volumes we that you'll up throughout there. positive see have our the some showing as go tailwinds in

it our a such new in of competitive sauce. cetera. gets the is But sour Texas with et to lost certainly, different South environment, capture, gas relative opportunities kind there's acquisition,

best but events, put activity haven't we've see is seen we weather opportunity levels. good, South we've we is had is level our steady, but Badlands region. And steady Certainly, activity to in it. steady. The way the the seen Texas So uptick, a huge

Operator

question comes with from Your Neel Mitra of of America. Bank next line the

Indraneel Mitra

I how I'm will wondering it probably your will XXXX, shippers Grand the the ethane Prix rates should your outlook up your how recovery. for wanted to to fare Grand with recovery specifically relates Prix. move volumes, do ethane In whether basin you this, on And ethane incentive third-party recovery, on up to for basin follow see how full just go the or trending the up?

Scott Pryor

Scott. Neel, this is

into As in system. Belvieu, a Mont both that of as we our facility look at Matt plants operating said contracts ethane their both are their as pipeline don't based whatever fractionation into -- have our of in lot third-party But around are will coming well when on as getting evaluate on earlier, pipelines part, see they're systems system. situation we're plants our swing the recovery all, for we their pipeline few our the that and where, we do located upon a most are third-party that the our all

plants footprint. that, and on have on [indiscernible] is some I most to big that the all, system. see that the And from where going But that the pricing think time say that's should think to in system, our But going would that that our assume look price time advantage we most I for I noise earlier. while. in indicated at side, continue we're kind So some needle there's it's seeing a today, will in a you Matt part the for to not mover. given of when recovery be that we're what petrochemical all we fractionation recovery, be that

Indraneel Mitra

such you've second how XX-plus just But of for know residue do you that? walk in see kind that you planning even far while then XXXX, for lot potential gas every it How volumes year. a producer a advance been started growth early? and tailgate you the at percent on have when your egress question, gas And I through into of issues running massive market you whether Okay. you to you your volumes, for the can issue. plan you've though for And systems, any plan me

Robert Muraro

call transport is of out basin, then, team up both I'd what with, is This I'll your basin of it, do a the to own important in you transport Bobby. their basin. of but have vast that partners own What we we the it's is out the majority tell have

call we're when we to the our there that we you you Waha-exposed think it think to issues look about at go think Waha, long would we it online, of be as basin, we at forward, expect will out get physical coming capacity lots to how we -- sell look transport we -- pipes different of obviously to go and very basin. when be large those online. for we the within will that we So crossing know. that's know have to we're make to of And And sure out when Then us We gas across make -- about we and sell cute people will being sure we that when They're that. focus don't try come counterparties on pipes well months. expansions how get this everyone it. and reasons beyond

we're And take covered. insurance that, out need doing that that So we time. still over beyond we we've that, been even think doing some we've got we everything

as as it. as And able sell to plan want so buy people it we're it's match to for we're long there as do yes, think So -- it to we one the issues. could far we with when gas to willing the try out where then, because up be and we want

Operator

next question Mizuho Mosca Your Robert of Securities. the comes from line with

Robert Mosca

grown Prix Just quarters. question volumes one last me. the Grand strongly over for have pretty few

would residue get gets required, Just that think just an the the thoughts on And hoping to in expanded that latest medium Permian segment constraint you expansion potential how pipeline be assuming your addressed? early term? the be on could how

Scott Pryor

been continuation business, have quarter we Yes, of our pleased out. Scott. in the is of this transportation side with and very on volumes our increased Robert, quarter

Mont First Belvieu a day quarter out complex. averaging into barrels XXX,XXX

producers transparency had the and our good we Permian. again, plants in and and gas behind our of -- the So to our plant back additive customers processing

applications throw in of our and Texas We've continue into remember, North along sector. that from operating coming add contribution stats out quarter, when And will again, from is that pipeline today. we to the So to area. got leverage those pumps that barrels, Oklahoma the we around first XXX,XXX -- good part

need So expansions. pipe we will pipe additional and evaluate the for

behind well system. be will our relative and our needs to that are We ahead what producers of the

it's when ahead we're well be of to necessary. So something going that it's

Operator

to further this there at the back I now And call Sanjay. turn like would to questions are no time.

Sanjay Lad

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

Operator

all thank you Ladies gentlemen, and call. We for conference concludes participating. this today's

You may now disconnect.

Targa Resources (TRGP) 5 May 222022 Q1 Earnings call transcript