Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the Targa Resources Corporation Second Quarter 2023 Earnings Webcast Presentation [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Sanjay Lad, Vice President of Finance and Investor Relations.

Sanjay Lad

Thanks, Tes. to Corp. Quarter welcome for Earnings and Resources Targa morning, the XXXX Second Call Good

quarter release, accompany second targaresources.com presentation available The earnings our in for earnings second on Targa supplement the quarter Investors Resources site that Web our section. are along call at with the

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

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

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

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

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

Matt Meloy

Thanks, good Sanjay, morning. and

The XXXX gains billion. with EBITDA expect the $X.X over marketing lower our second year Adjusted previous really a was as the in year. us for our estimate volumes first given up expectations consistent quarter, year confident to but set balance the of billion and strong disclosures, our were in drove record of adjusted well the business EBITDA EBITDA consistent full with our of strength quarter $X.X for we to ramp the we sequentially remain significant results quarter which

Midland in Midland we million Permian plant We of $XXX the incremental grow Legacy transportation systems in our volumes the recent our business which handle for driving on record Permian of forward. to record fully to downstream Natural volumes Plants is and our repurchases, capacity our and our in downstream. provide ramp NGL share record a and Delaware Legacy continued our commenced conviction volumes integrated volumes executed through in second continue II completion reflective with in Permian the across operations Plant processing and quarterly the Midway gas NGL and incremental had our and During strong brought assets. II common volumes a online inlet Delaware, on driving we of fractionation outlook quarter, Midway going Permian, us

the we Permian increasing our ordering Permian our long consistent producer next the Given officially and of items, customers. Permian our and support in our our are the today, lead that needs with next plant messaging plant previous infrastructure volumes announced in we Midland to Delaware already

CapEx spending track We previously continue on projects all estimate to remain and our and budget. $X.X and XXXX billion growth on announced of $X of between billion

will the we downstream already the NGL XX, XXXX. us down shareholders. beyond return provides pipeline footprint Frac business to core likely will will and with growth spend projects major think position of our similar side about levels incremental have as returns five Targa projects in growth may capital including to Permian have of our and attractive spending spending Investing on a capital, capital continue is capital integrated continue our underway, XXXX complete. As number caught to come projects a major we Growth up plants of those for organic which majority to our 'XX to strong puts XXXX, across as approximate the growth be driving complete in to capital expenditures and X Trains on to we gas Daytona

detail. the more Starting in activity continue our operations in our Permian, discuss across high levels dedicated acreage. now Let's

Plant II near activity capacity. system the reported quarter new our became second fully the continue feet Midland, and basins X% and is through inlet producer operate per we during Our day full. running to to systems record across continues X.X the volumes currently Permian for sequentially. cubic partway Midland and near of increasing averaged strong available quarter, see of Legacy In Capacity Delaware second our billion

and Our utilized fourth and it Permian next to Midland XXXX late plant, across strong. be expected Greenwood also volumes remains on In is when footprint track in comes operations online. to highly Delaware, running are of quarter begin activity our the

in recoveries customers. this Midway will our quarter commenced the fully processing These much actions Hills enhance we Our became plant operations and idled increase providing reliability Midway late and is Sand for second and incremental our facility. capacity. plant operational needed operational week

to utilized and our II expected begin in entire Wildcat remain Plants robust and footprint. II of up plants Roadrunner the and operations both respectively, the on highly Delaware given to Our track quarters XXXX, across start are first second activity

confidence of gas natural volumes material not XXXX lower fourth We In to see in inlet strong over to that currently prices. our volumes in producer activity day offloading customers million sequentially, cubic significant are per process are Badlands, for compression we gas and Permian XXXX. during region the of our combined and gas the feet XX track and an balance remain Permian the our us X% across the are gives commodity continuing the seeing Central producer change XX% average the of across horsepower acreage, of the we on average in year which around our adding of any in despite increased activity quarter our increase currently are

and transportation. in and Targa's per quarter. barrels sequential second record Logistics in Permian parties a transportation during day systems pipeline were our from and our supply record NGL volumes were to the fractionation Transportation XXX,XXX The ramp NGL volumes record per the Shifting increase third barrels a volumes XXX,XXX segment. drove day

Additionally, medium third expiration on pipes. certain term benefited party Grand of the had volumes we from Prix commitments also pipeline

provide in commences remain utilized XXXX, GCF quarter much to restart is expect second we to highly operations be and the our -- of and to the we during fully highly utilized it when facilities Mont some fractionation continue capacity and X Our it will XXXX. the needed of when quarter in Belvieu Train of first continue expect restarted fractionator

million X.X quarter much of Park, fractionator growth loading In be portion continued month LPGs At month to the track of XXXX. XX our reduced loaded plant Our a needed an our expected will we capability undergoing barrels its expansions recently on expected the about remains our given Galena the announced first due of and in be business average and G&P to facility quarter. for Train the XX inspection. of a third quarter, for during second year required per is

X XXXX. balance expansion our the and complete ramp million quarter inspection project loading an and Our after capacity increased per loadings we low be barrels capabilities complete to cost will our is with of month expect incremental propane of through the this

long shareholders, Targa offer remain target believe range. reducing and executing a and on at EBITDA, our the dividend about our excited while proposition our leverage strategic priorities. the term value focused shareholders are share We count growing potential growing unique outlook for within and We that we maintaining

the results on Jen their second team while like to our quarter to a and safety to continuing more extend and I the to over turn service provide to continued Targa I discuss detail, customers. our Before to in would focus execution for call thank you reliability best-in-class

Jen Kneale

prices opportunities million. lower first realized natural export predominantly EBITDA reported attributable morning, quarter to and significant we in Higher Thanks, NGL the LPG higher optimization expenses. gas for volumes benefited $XXX businesses and and was Targa's second everyone. marketing operating sequential was from our The offset during the by quarter. adjusted decrease Matt. the Good were

estimate adjusted fourth we EBITDA with be strong year benefit our in adjusted mentioned, quarters downstream full XXXX and EBITDA $X.X and we billion. to Matt volume comfortable assets, expect across as the and billion As our of $X.X from higher third tailwinds and Permian are between

the our of Inclusive flow XXXX for our We all the newly while and increase. XXXX and Coupled upside outlook and Greenwood $X.X balance cash fee Bull the hedges of are no Moose for between contracts, estimate well derisked billion capital change significantly growth spending preserving announced to floor there across of in when XXXX have add II commodity $X and to we billion. earnings with continue prices commodities and Permian, is hedged our beyond. plants our for

of year flexibility with had of remains liquidity forward. looking $X.X long billion range, estimate which leverage our end, and of lot capital target Our midpoint net current we us At ratio for at our million. forma the term $XXX spending was maintenance a pro available provides quarter leverage

leverage grade balance investment We year around midpoint our term cycles the long strong of of across leverage range target X a to continue ratio end to sheet be expect Maintaining times. priority. continues X to a

investing the of projects million sheet million in at common through average We to that Our place high increasing and strength half $XX.XX on is the recognized our integrated affords Targa balance strategic amount foundation that strength second of by continue execute per to us year. a both capital our to of the Fitch returning repurchased on of returning sheet in and shares and quarterly a recently first repurchased shareholders. record $XXX that $XXX watch. of were priorities, of our The the over balance positive an outlook flexibility have quarter in prudently weighted price and remains share financial the stock S&P common

our $XXX of quarter, XXth. repurchase share program $X program the million had $XXX about as million repurchase remaining our During we exhausted June share billion and under

significant our of time. and framework flexibility increase to share execute to reduce further over Looking we have shareholders count to return ahead, repurchase and our continue opportunistic our capital under

Targa. their our continued a safety focus Lastly, Matt and commitment thank employees I'd on extend like and to to echo to for you

I with call that, turn will the Sanjay. And to over back

Sanjay Lad

Jen. Thanks,

please Q&A For ready if would Q&A up additional for you the Q&A? we the kindly and Tes, one session, questions. line one question follow we’re and you limit line have that reenter you to for up Tes, the open ask the session.

Operator

Chen Theresa from Barclays. Instructions] [Operator

Theresa Chen

the you you XXXX and could and First, becomes dividend cap on as that in term. a return expectations on comments visible? post beyond shareholders that, that allocation, XXXX step terms the long view the between capital similar And generation earlier, down. run of to you CapEx think capital I'd your Do of do have like being outlook free to about then split Matt, heels for of over touch to look the the what a growth XXXX, in of cash buybacks more do like? what to CapEx sense To to the then rate flow medium

Matt Meloy

the about I talked really major projects. some for and to of capital XXXX pointed

Daytona. on talk to spending the Daytona So Most of let's going we're year. about is next have

money some X spending we're this Train Train and year fractionators, two have also We GCS. on XX, and

normal. a added, So we're cadence share of fractionation have than is being being that -- higher added the kind NGL to normal pipeline of a lion's transportation not that's much --

Now spending we have a XXXX, in of lot that too.

the look fractionation the And capital, 'XX the be. we that ‘XX. so look Once and of through course and we to stepping are we of in kind of in ones run plants of been And by really Daytona don't large going I a then line down end off then see in X you like would come do capital down have lion's rate, major because the spending some of that a and our step the have. do 'XX, as see returns what that that's core return focus the terms those it's that projects, business XX projects at gets what has normal those on why adding good for exactly for thereafter. our Train process But of and of see we other when that the our kind us. processing through investing are in it's share

And our to volumes side buying growth for capital us and continue good focus side downstream on investing that in ability increasing for both shares. to the So of meaningfully meaningfully back the good customers. take G&P dividend, continue to the we're shareholders, should to provide return our to EBITDA and to care then going

be repurchasing quarter. in second little to in the a significant of of all dividend And so going shares. of business, And saw I a above us shares our investing amount and it's you bit the approach, think repurchase increasing the

I it's those all going things. to think of be So

Theresa Chen

contribution of hit And on or of guidance the second been different to the half looking the chain half terms the lot pricing then in XXXX, volumes to parts value your industry. the What NGL marketing the implied in a clearly, your for second or of there's across year? is NGL volatility of whether side, for

Matt Meloy

us had NGL I second We in modest of say look in of really at a really low we terms business. some a for quarter, and relatively seasonality across amount In quarter marketing, our kind wholesale marketing, have marketing strong probably across you year. the the gas through would it marketing, export marketing the it was of first point business, if

kind in quarter So of and marketing at we fourth we have third for kind but some of into of where some, the expectation some third the second part second up there's outsized the see capture not go as normalized We're -- into year. kind of like to more but the the nothing saw and you we beginning spreads amount can baked year. any for open starting of opportunities to half for

Jen Kneale

the parts of a may as that be heard you XX on export of And on or a the the the on complete to export required we this down facilities. side, the review for facility that we side we call have year LPG announced month expect facility

impact demand additional additional flexibility LPG inspection lot on export a will extent, that the behind that see cargoes Park, that to month internationally have third we'll is for Acalina per that the extent So global have the the to side And and to more in barrel the move we volumes. completed the demand expansion, quarter. we quarter, in good our fourth though, quarter us. million fourth will We'll have there

Operator

next JPMorgan And Tonet will then have we Securities. our from Jeremy question,

Jeremy Tonet

we accretive wondering out are 'XX future little could at guidance just help very Targa you could like, being more. deployed, post of if could of not us but flavor just of that give bit a a what this appreciate lot the capital is the us trajectory deployed? being growth you giving juncture, there in I sketch amount the look Clearly, given lot terms, capital Permian. any a But XXXX for

Jen Kneale

we But certainly, in that of expect that for this to don't XXXX. as our very part think with think see receive we're through forecast when fact things our that's all facilities, right come year. right I such will morning. it this that this certainly we anything we articulate of guidance volume the they utilized side. now that to conviction EBITDA would we we growth advanced And where we underlying have meaningful a assets multiyear point we have we be I on those we environment EBITDA around now looks filling strong in Targa planning the the fall. that outlook highly the is part like want commodity what forecast producer Really, largely said growth online, at growth be expect a progress any seen on dependent that a go do

Jeremy Tonet

deliver is hedging strong So this with say to it fair down that's offset. not would year-over-year, the the big growth step a book, volumes like is a

forward here. think takes as gives and to we Just trying look

Jen Kneale

year, to As for approximate down, right and hedge step prices they natural that I there's I of where for say think wouldn't in now gas both a about NGL relative XXXX sort 'XX are this prices same prices XXXX.

of having positions market Targa that but well those EBITDA in domestically volumes is or either export not for think volumes, available into what So XXXX then Permian and then and I going that part the to to and the story. the of conviction only significant really us course, driving Permian is Basin what our our sell the volumes so is and us. beyond moving increasing assets drive through really for it's growth transportation in fractionation are underlying Basin Begins

Jeremy Tonet

bigger midst period industry And the if we've just take kind seen more about And that, Targa's of just how wondering a think out of does mergers some place, of some what's Targa there. moves here? broadly, role at industry forward in moving we're looking the consolidation, midstream

Matt Meloy

Jeremy, investing on core really are business. in focused we our

billion this well. budget for attractive volume good organic year significant $X.X $X to capital year billion spending We of Those really significant us. have growth a really opportunities as of a growth. We've next with lot seen projects and are

in saw NGL really up across the volumes footprint our the quarter. Permian, second move here You across

the 'XX growth half 'XX. into back of continued expect and We and 'XX

do we're to what going best the the That's So we're focus, really growth returns. can where organic on an get that's basis. on we focused

others but our we so it's are doing, what And pay our business. focus attention, is on interesting, core

Operator

And Michael then from we Blum Fargo. question, will Wells have our next

Michael Blum

in demand exports to the the wanted to you wondering I you're in planned I second, what speak LPG of end just balance go just seeing was year? QX. notwithstanding market to a the back if could for for downtime

Scott Pryor

good quarter, our less second communicated the the see across and Matt quarter, first to seen earlier dock. in we've outline in continue demand opportunities. we benefited spot Obviously, that then We from the

we that with we online, will a the with the our good second typically have we the a our for to be the our fourth facility, and the then look really of as in positive ramp-up Some what economics quarter alluded relates less of to just mandatory or driven think we we were for quarter. quarter the we And have when the in in the that that some headwinds When we overall a have, up, into the we We've adding contracts marketplace. some have that as and quarter. go benefit third we third continue seasonal quarter quarter, freight going through When ramp we inspection again, we portfolio, by systems overall. continue been our this fourth today. up see we better Volumes expansion it because we demand came to that's that. demand that in coming has quarter just expansion to saw the we it that about tightened the outlook and downtime we of you on arb third demand, seen the a Jen as just things the existing project see look to getting that that quarter, as some despite off than on from especially of would at overall first the third when just volumes the where extend relates quarter during first as very similar just seasonal vessels view expect contracts us are to at to to, at

Michael Blum

in some some plant some frac this ask recent prices. ethane impacts wanted outages. spike processing It's Also just efficiencies, had we've seen about to on

all or Targa that at Just impacted QX curious either for negative? if positive

Scott Pryor

I rejection July us market would of ethane was on above improved did operating just a XX% not in and the and brought itself as with weeks say likely pinched in with month negatively. and operating rates. July of rates petchem of operating some were it during between petrochemical exports. that, increased Ethane the found impact that probably The volatile rates along was of month market really the

as As that. of recovery, ethane recovery ramped rejection time economics that lags some but to relates the with some price up the improved it there's

opportunities itself where for positions. So I think cover the in order some market spiked in it folks various found to

we take advantage we our For storage the have. can can of those that storage, as us, see we utilize opportunities, position we

would a probably I it certain So a the degree that later that was say but month. year I may the would to be in of some come benefit than it would net us prompt of in kind that to suggest

balanced. September So more a more overall, with little a tightness. currently, moderate come little little mild may feel economics to they're They is have more which back again, I $X.XX some there down stronger bit trading morning. improving. things August really the level recovery now be a things a balanced would have around themselves out But than gallon suggest feel like of this per Prices balanced. think

Operator

And will have then Mitra we America. our next Bank of Neel from question,

Neel Mitra

to wanted just on more I the bit and ongoing topics. needs two little particular down a drill CapEx

you Daytona plants getting Belvieu, and be you from trending acquired maybe First, necessary that? behind when Grand would Prix? North that then Grand it to Prix expansion two the leased look from seemed volumes Are the like them. at were And you're we on from Texas that we when processing second, when on

Pat McDonie

capacity pretty announcement Obviously, after Listed running Bull on Moose. we've we've catch still now and up. Hills added shortly Red we've with was hard Roadrunner, and we're Wildcat plant and acquisition, came -- made and on the capacity behind at quickly adding frankly the Midway, to II, we're the

a connected we're things from of the to level the of our Frankly, in just the we hopefully get those is we're there, the to compression seeing is getting of set there. out and and year the little execute got to a and year. that. it get production All the get by front producers activity of ton on up, in have catch online. playing bit We We're of now expect the end Delaware and between still Basin. end are behind activity caught and we drilling The up

So really in to that producer capacity activity of related the seeing have to. Delaware are adds we directly line the you're sight direct the levels

not we're we're up there. caught So but getting

Scott Pryor

Prix our that we complement project to Recognize that Belvieu. moved it Grand coming have Grand barrels Daytona, welcome of that X portion a Belvieu, we second As Mont online South just with expansion our over relates has barrels the into XXX,XXX of moving that and Xjust feeds the we into Daytona in western Lake certainly, million into quarter, will South Prix pipeline over the capacity day a leg day. over moving the Mont --

Daytona a of stations online, project. So that leverage to part day we've comes got roughly have it they that announced would a expansion had a lot barrels lag. pump as of XXX,XXX of operating initially a capacity a couple that with we relates South be of When would

got what leverage obviously, of a evaluating lot are us. to we operating we've as next step for So that that. the With relates is it said,

when requirements, evaluate For be additive that. up we'll on in how to see it's going we're plants continue to plants ramp Permian pipeline watch a the Western and expand in to the but necessary additional over [paths] position the certainly and time, time, of over side certainly

Neel Mitra

then in of We for I were a quick rejection, And ethane as follow-up guess, most question. the June. on

ethane impact you was that and commentary results higher that XQ? I and And behind think how of I negatively I would from did prices, then the just would later benefit the So benefit wondering that. some for you heard year in some

Scott Pryor

year the what actually think opportunities to saw marketplace we some priced XXXX. there and would that some was ethane the actually I later we where saw I on contango in into is allude in

storage, So that contango we were market to from presented. was benefit able our that utilizing

per the we benefits that's when That's with not those where get that of some moves would this in slight to have advantage the take market at our obviously, say the something but we, plays ability Those levels directions. in I marketplace. contango storage today So moderate when present there se that point. are it's is

Neel Mitra

on systems And negative hit in a otherwise heat volumes on wouldn't have there from the rejection that we from June? in was just seen your Texas

Scott Pryor

our system. pipelines Mont facility as than ethane comes usually it in Belvieu more say it the would we Certainly, that of not really that's contained and the into impactful the is is watch party our I percentage raw third Prix the percentage than that say that I latter Prix. in in the more a will bit, and August Grand pipes probably up pipeline. of we saw Grand on July the third has moved the party on part little here on on

So indicator that over that the as a and of ethane which is benefit industry an the field, recovering certainly should more time. whole is us

that other month the we've a will, of the that of ethane. couple think spikes that saw on that have down, I July the additional brought some frac industry thing you the calming also to is lends you'll players if we that see capacity, given on fact in had

Operator

Colton Bean, question Instructions] [Operator please proceed from your & to Company. TPH

Colton Bean

any comment relative on the for sit floors, expectations fee Can margins you a year? the of margins. sequential then results drop on balance just QX the segment, where in G&P processing to decent general and Just through

Jen Kneale

floors In quarter, that the kicked think, in, importance the fee I I'd of second them. reflecting, our say

the $X.XX. across where environment, of we a illustrative saw think lower April, is first quarter how even was perform Waha I Targa commodity month $X.XX, can price of print even prices in well second

that those with on a sit rate reflective return minimum floors is that prices are floors can it of least the third in the quarter. I able get here So fee place, of improved invested required we capital. we we're again, invest in think at the importance because today, seeing to continue us we But where to to of

For out. lower the are, X% natural side it, full year, commodity that on and say we guidance set gas NGL I'd than that call the prices

the the given year given, the be of we again, in of So levels. out. a very hedged can more were than fee And plays at how and we'll have floor prices second to rest we are hopefully, well quarter, see tailwind a headwind

Colton Bean

Logistics And segment. then to Transportation shifting over the and

average drop rate the it lower for drove throughput but again, basin and and impacts trajectory looks Any had weighted that some or forward? very fleet, You the Grand expectations mix impressive like then moved that across moving F&P shift frac rate your NGL recontracting the quarter-on-quarter. Prix

Matt Meloy

So segment. volumes the Downstream yes, good across had we really

ramp saw organic it was a of contract. significant You transport. on the growth, a roll-off just part Prix, was of was part in Part contract we Grand had a which

a overall And kind frac. good saw on our don't No, or margins. a really there I TNF also mix so of Typically, are up. in time move these over you really was escalate degradation think contracts increase volume and

So overall there how volatility to attributing in what be marketing the and including frac. might or and with much transport some margin just L&T you're all you're

Operator

Wolfe We Research. [Operator have Instructions] Keith Stanley from

Keith Stanley

do is about and your that about I wanted of to ask fell in pace opportunity May or the think going QX. stock unique because kind kind buybacks step-up of view capacity and to that forward? a June, big as you buybacks during Should this in possibly we the normal a how and

Matt Meloy

step remainder we're have our not think say -- strong at to it's for really of buybacks a I'd look the outlook underpinned leverage quarter. cash at shareholders. business, out profile, returning us of outlook and for our the 'XX been but as overall profile by just our second I We our part look to the led 'XX, the for we it up way 'XX capital we flow look really, our repurchases only

So In the just of in the quarter, attractive in interest the the had acquisition Prix. was completed very XX% past, to we first that us. Grand

in only we what's multiyear think up us quarter. it's step of confident year, half feel of a what's the the for but our outlook and And then led really second and very kind repurchases mix that not of the outlook. So to the so back of our overall I kind for quarter Targa, spending for

Keith Stanley

really in roll-off through on I are that volumes volumes? of Prix transportation. next there other contract cause Grand another year should major that end the be guess, mindful of roll-offs just question, in part Second from contract big as Prix said, coming up, a Are could any high, the pop we you Grand

Scott Pryor

would I say of large benefited as the in midterm really. not We contracts had second forward, up. really those we had that off. there's say quarter step a not no, that I would that some certainly rolled going

going from two will the will new benefit of Grand that plants Basin pipeline the on Permian over the are Prix our something announced time. We basically today additive that that contribute Certainly, were plants are next in us. for to

Operator

your proceed from Reynolds Brian UBS, with please question.

Brian Reynolds

follow-up CapEx [Apex]. outer the Targa's focus outer decline pipe quick takeaway whole kind in update to perhaps years Is of the fund the you and a in on gas with perhaps Just ability opportunities that this the nat us own? included cadence takeaway in gas year on opportunity on or its natural CapEx can equity on interest

Jen Kneale

side, financing think that nicely was project really project finance. to that I JV partners consider one the said, lends itself commercialized, Apex also if in we've consistently bring that it's On got that to and a Brian,

we've utilize be financing. been a bulk does consistent very forward, portion likely is the move that of joint the think is that would if of the either the and/or small outcome we equity of project with funding would that I So finance then that for the project and it a ventures project

Bobby Muraro

in itself around the door the is parties who to on When great of do and side, capital [indiscernible] shipper multitude of at side to lends the raise kind it's and you producer the to the talking about, to both on ability table, market line Jen the out parties, which sitting it. relative what the ways who's look a a

Brian Reynolds

a the relative for around We're you But curious just lows historical And little prior to trading at the on market. more provide of follow-up maybe can propane a NGL bit color. for outlook. your kind Thanks quick just propane if WTI. all color

naphtha, seeing curious winter of lot going into and the interest in terms year? system your Just going into winter in looking competition online China PDH this with of time of demand just you're and is a of kind across what ahead

Scott Pryor

months contango. Fourth we slight pricing today, sits Currently, today is the is $X.XX. view outer around currently $X.XX quarter around

First challenge propane quarter million which year. $X.XX. current is has around is that time The above that stand inventories million XX today barrels, about last XX around is this our barrels

relative that WTI reason of down of part So seeing to basis, from what why late. is you're from the percentage pricing seen you've a

obviously moving think up. really, look production you it, at I when is

But a that. you times demand China some I time. that -- overall see mentioned, is PDH albeit think that propane where increase, PDH the plant pool you are as additives big obviously, of to in see global over in you continues lulls there

it's think higher historically. I adequate that will we've have The So provide and certainly, I industry, think I for inventories got us, as think an been inventory, us.

watermark not So able high to the it's inventories pull a like and been down. for we've this us is

when you from for an other The the XXX thing export look VLGCs. add perspective, at vessels fleet continue industry LPGs, is around it to size current you're market seeing

or With exceed year, XXXX, XXX the adding another so second the probably we're vessels water. of XX we'll this on vessels half in and

as an indication market that that as is up demand and as So increased industry market is demand globally an a markets gearing the for clearly mature. more

Operator

have We Tristan from Richardson Scotiabank.

Tristan Richardson

a question. Just

think those just you're mentioned Should we year, or see of sort currently as just on you of part anticipation are thoughts offloading portfolio? those now. given of any Roadrunner? in that would perhaps Maybe You the in offloading on of levels your seeing as Greenwood, levels normal that Wildcat, a elevated

Pat McDonie

right, plant periods, see process to to incremental going adding it started in where we're we our gas system some need of until you're think and up. [indiscernible] capacity I we move off in get mean I the

out that our growth, know front lot. a that capacity robust even built lot that we're outlook there's of to don't capacity a building take we a built. of with we're even normal are outperformed we're cadence have we've I they've their growth of hopes in producers, going our -- XXX% though and it. producer to on needed So we've we've we And means Obviously, be it that. But the to that more than able additional and frankly, plant obviously, a

our and on for an that, place those only emergency plant to we'll outside have situation. in needed And of of and provide remain kind periods as capacity time will services our of short hopefully, offloads So own.

Tristan Richardson

activity, just this and And are then dynamics in and customer on your drivers. major your the anything smaller your et large point inlet view just just and on customers always on customers, Like the there kind shifts maybe producer But hasn't change certainly, changed about to activity. year behavior, customers of curious in cetera. know on midsize we growth scale

Pat McDonie

both even No. across on is Midland We market. you've consolidation inconsequential. the it impact. impact the high of the And level growth seen no continued really basin. Short mean, our little and seen of have a obviously, systems has bit on the longer activity I a term, term, through Delaware acquisition sides

So no will change. material

Operator

from Securities. Dingmann Truist have We Neal

Jake Nivasch

Nivasch Jake on is for Neal. This

on quick and kind Just of of for times. know a touched me, couple one I here a we've this

I a So can it tackle if different way.

Just a like the what comments that you sound with I'm M&A that the is especially CapEx CapEx spend trying today, cash a and the down doesn't guys on the outer just that implies, it guess, coming from allocation capital big flow generation. backdrop years, the there's have appetite to and a get fundamental strategically I given standpoint, sense

you from Just I guys thinking get that what standpoint, either going bring a I if that down how sense Just a guess, that think get guess, just in maybe of, would target a into a even general. trying the trying to buyback about consider program? for you sense leverage ratio, you means or are formulaic to of

Jen Kneale

really free continuing in help higher and and allocate of all to to return down. growth, from capital we've we expect lot begins larger got on have side what with how means we'll cadence term service in based and That flow call customers and the invest coming medium infrastructure need we our is longer through manage conviction those part and also our to growth EBITDA story certainly, But system. to then we'll a Permian growth that volumes assets additional while target out capital on of it, much business. our it our more XXXX why cash need to the growth much beyond, significantly more think rate the shareholders downstream as so I perspective, integrated available the look and that, to we’ll that Permian Permian

is heard particularly we performing think very, growth the us very perform well this and the that long basis Lucid medium did a on us very, for last I the you've acquisitions really term. as And very for appetite are M&A we well year. to that currently very for expect, low. assets short, two excellent We year move through forward

of setting repurchases. opportunistic all repurchase also excellent us to that's in right the increasing think out now. dividends we'll have an looking be program mix and share forward then like We ideal position figure to I the and up

a us, the leverage I target ratio our are think of today we ratio long leverage that to midpoint leverage, range. it's as term of particularly for about working trying manage

underpin that's bottom I times. X in And think that we've of flexibility spoken gives to more shareholders leverage between going forward invest ratio of ways. and says leverage our the preference flexibility to above business our on manage the that, approach balance we I help will of comfortable multitude to to half range, think that lot a all running to in term returning in us but a strong long the this X of we're exceptionally return sheet with that an very capital business will the attractive target what again, projects continue across ratio to really

Operator

have Global. Seaport We from Sunil Sibal

Sunil Sibal

a So I situation to bit takeaway just little wanted gas better Permian. the understand in

you're obviously, your also processing number of developing you So project a and additions. announced

service basin? pipelines to really this to see a of from need gas rate basically take we new announced do gas So out the perspective, when

Bobby Muraro

takeaway, means two this then the those that enough you on next say online else of side, feel needs we pipe, away whether not with needs define the is basin. on year, we've led gas probably ends that said something a another we FID, in whole I'd coming before. the it's it. that like to that the short you minds being side to there that it meeting are then -- see Targa gets the online wants of week market to in we went short Apex as pipe pipe earlier Targa What pipeline down day, over And for short over that so up on you time party does will the see the something early XXXX Tight think shipper work end goes it's to built, and grade. leading be infrastructure depending another a the short expansions the those. way frame, weekend. service If relatively the another medium is coming term for going But a not, pipeline If term [indiscernible] the see, see medium in how the we satisfy and term the term, comfortable 'XX. comfortable or and Apex just at it's Hopefully,

in next make that else's to pipe, year, very pipe time we sure XXXX that or gas flowing there's So sure our supportive is will all sometime if takeaway that someone making of be frame. adequate it goes

Sunil Sibal

my was then And question returns. second to related

What's for in of threshold at you've returns last think years, on approving looking a projects. posted So you're [proven] your when few of the XX% projects? thinking way investments, was ROIC. curious, obviously, I new you're new good I about

Matt Meloy

through Targa our The Prix frac export. and have very and NGL gathering then processing been and good following returns for across integrated molecule the Grand

I So our ROIC said business, we're when what together, you put that investment slide core investing in is in now. XX% and that's

are term, a contracts, XX, lot of contracts XX same contracts. really those long year the So

kinds the doing we're of did that of So cycle. similar things we build last kind very

the kind multiple, growth X of in sand going in we described Typically, perhaps cost capital. as returns about being the So we good times organic bit of feel past, a forward there's X excess our to of well in of have there. little

execute exactly of do to times hit kind were what I we'll times. us on. saw X was X about know able don't that You we

I on our of we if of move get becoming But we're can commodity way, either X think commodity will multiple. throughout down, that to price end be period when Part overall prices up, you're of move investing something say think that that X, is that what perhaps of less doing move can sensitive. that target I time kind can to be kind and kind dependent could the we lower it of able there.

molecule With and core then GMP the the there, we to investing really see NGL in in our on margins have fee business, water. strong fee for based the returns and we these projects, following us

Sunil Sibal

one And clarification just that. on

constant towards new just contracts they fixed are the push it fee you the or is? So fixed that helping more keep commodity are where basically you're versus the sensitivity fee signing

Matt Meloy

side on on Well, entering on the contracts. extending, amending, into into new downstream we're entering the G&P -- the always side. new we're We're and contracts

our our with successful putting we're exposure, where continue floors changing direct constantly producer we going talking fee and we're had gathering push place. a But customers, to in are we POP based components have and as contracts for it's and now more processing moving dynamic. been we straight in So to just

as Some of come fee they it's them a mix. moving there's hybrids, up, to we're based,

we come fee And based those as those we'll as up, be modify adding more extend, contracts, as so we component.

So to I that fee and continue move just more to move we based more forward. expect as

Operator

conference showing back I'm Relations, Investor no turn this now further Sanjay now closing questions to Finance And would time. Thank of Lad, remarks. for to the you. like President and at I Vice

Sanjay Lad

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

Operator

conference This call. for participating. concludes today's Thank you

You may now disconnect.

Targa Resources (TRGP) 3 Aug 232023 Q2 Earnings call transcript