TRGP - Earnings call 3 2023 | Targa Resources Corp.

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Operator

Good day, and thank you for standing by. Welcome to the Targa Resource Corp.

Third Quarter 2023 Earnings Center presentation. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sanjay Lad, Vice President of Finance and Investor Relations. Please go ahead.

Sanjay Lad

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

earnings along our quarter the for on Third release website Investors Targa supplement quarter our Resources presentation section. earnings that targaresources.com accompany at call available with are in the third

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

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

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

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

Matt Meloy

morning. and Sanjay, Thanks, good

We proud of employees quarter. third very of efforts the across our the are

an level, battling NGL an export by stretch X While and transportation continued by incremental weather, our adjusted in at completion month. facility pipeline Park, million sequential X% EBITDA demonstrated volumes, higher record propane Galena capacity a loading at of of to operate LPG barrels our we expansion extended high hot our per increasing

share ESG our pillars ESG commencement annual organization, than to million current of positive to of volumes outlook XX% operational third plant common and per XXXX on come transportation amount critical an increasing quarter a share stability meaningful and repurchases, and announcement increasing continued sustainable NGL credit from XXXX looking our demonstrating publishing additional fractionation in questions reducing ESG framework. We around count and to report rebound strong return ratings our around quarter, a of The over that a in a unique end the common and of capital annual some annual annual of inlet, outlook of floor provide dividend day for across and G&P increasing Which to will cubic increases gas the return flow of $X capital of the an how our shareholders best-in-class thoughts commitment our high progress in continued wanted our opportunistic and receiving business, sustainability as repurchases. Since our with in share, progress a continue operations, from early XXX our expectation recommend across XXXX. online average continues footprint infrastructure, clarity of increase our dividend around today is to to expect around value natural asset million and our in as strength our of will with share potential forward. And about AA, in of an continued offer our to higher return contracts fee opportunities, consistent common cash reflective budget. demonstrating to believe to per momentum for proposition NGL investors, schedule cash why rating profile in our outlook balance provide EBITDA, free to excellent our has MSCI projects integrated given a operator an current feet our Greenwood organic by of further expectations going Midland we stable our expected Permian ahead we that for growth upgrade that and Permian forward. of reported the margin continue our new also our our common and the the shareholders of XXXX and strength board some an in We sheet fee-based quarter XXX an operations dividend highlighted adjusted level. The from resulted XXXX our increase Targa the to investment competitive investors with financial dividend we large significantly X-notch flow investors capital third today return the

lot from not S&P broader with place we we scenarios, informed capital flow we on XXX. Our or return external -- are of a our strategy Across of S&P our flexibility, our to along the balance forward. XX% that is positioning operations framework flexibility, of of believe peers, including can through to a priority proposition information, is going bright XX% and adjusted in helpful relative is holders. to it a sheet return return a our capital high as target thinking Energy a be by and This capital of and leverage to return base modeling ability our internal midstream equity cash line but

by operations high detail. in in discuss activity the Texas. of our quarter driven lower-than-expected Let's levels acreage Permian, periods extended volumes, across more heat dedicated and our the Mexico across largely continue now third Starting despite New

about million of feet in cubic had per system XXX our lower-margin the Delaware day off Basin. move also high-pressure We volumes

was comparison reported Permian year, and Our X our quarters system flat average across increased fourth have XXXX. volumes per cubic over Midland resulting volumes. Through inlet Permian by to volumes first in volumes average inlet X% day increased XXX quarter feet reduced offset in Delaware the million this of sequentially Permian

a in XXX the A to for commenced in Permian now quarter. In materializing new ahead day about ramping Midland, thank Permian this is is and bit Our in we million past operating on operations October operating and summer. despite quickly challenging as schedule operations million XXX big Greenwood conditions to of third day engineering year up. bringing you per safely at than are our online a fourth cubic plant feet higher Greenwood budget our our and volumes the expected average quarter earlier growth currently see the team

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

per volumes transportation per to NGL increased fractionation averaging XXX,XXX X% and II well. Shifting Wildcat quarters in our combined and needed expected on day plants second and much start-up. In a Gas 'XX, remained segment, third strong, of Central Roadrunner region Natural plants Transportation day record sequentially, to volumes XXX,XXX are quarter. performing Logistics to remain respectively, Targa's and Our be our systems operations the the barrels our our barrels the at are first pipeline and both track begin volumes Badlands, during and and were II

deliveries sequentially X% volumes. benefited we NGL higher Our pipeline Mont into from Grand increased Belvieu Prix as supply third-party

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

Train In a for per the remains of market due XX-year during Our be corresponding much improved our barrels to first given our sequentially growth increased also export fractionator on previously of month plant third for additions an Galena to to disclosed million in XXXX. Park, of quarter anticipated quarter needed our inspection. of business XX% part our was at the the We LPG and track G&P though is the expected conditions. loading average LPGs XX loadings business quarter XX.X required reduced due even loaded capability and

to at Our low-cost momentum completed month the XXXX. during quarter, ramp end loading capabilities X third we million of loadings capacity for strong the per our was expansion barrels to and quarter, project increase propane incremental fourth by providing our the an expect of

long-term to on strategic at and Targa priorities. We focused are excited on about the continuing our outlook execute remain

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

Jennifer Kneale

$X.X Targa's second tracking to across quarter are and X% and a million, environment expenses. With operations. Thanks, G&P volumes prices, of was XXXX higher of EBITDA range the we third our $X.X towards integrated was the we the Sequential over resiliency believe partially successful our EBITDA adjusted increase attributable price higher fee adjusted year end X our reported and business, the for a to to the guidance reflective adding quarters made, higher our morning, everyone. our our commodity businesses by operating operating Matt. relative of to quarter. system the but offset that $XXX billion, environment completed, our quarterly hedging billion lower of NGL a tough commodity increase floors performance G&A significant Good that of lower have is program assumptions progress through

were and our believe have benefited financial retain we if of as and a environment of where floor a the levels. structure the commodity the with we lower fee below fee good of of floor move durability business We floor gas margin part prices year, commodity prices example upside contracts provides XXXX natural fee an in higher. benefits price this For from associated NGL that

hedged commodities balance and range. our of $X quarters, hedges of us towards $X.X balance billion to our beyond. Through higher We spent for lead all year year we the $X.X projects, million growth are approximately across X the capital current have add on and XXXX well the for and spending for of to continue estimates end billion

than higher is expectations Our had of well to is our capital third spending liquidity leverage XXXX within initial we for to allocation. quarter, of $XXX current Targa a leverage billion net Xx. Shifting forma approximately bit the and At our of little available X approximately and X.Xx, our net maintenance ratio long-term pro range million. is ratio estimate the end capital tracking $X.X

continue of remain are investment-grade and increasing across sheet to to invest priorities maintain a high-returning cycles. capital balance to the return projects strong an amount to integrated same, in our Our which shareholders to

are core Our business. our to projects progress in major

XXXX Daytona Train expansions gas we Train in business. is lumpier XX Permian NGL while meaningfully growth and new spending will levels XXXX, pipeline. in For to completed continue fractionators the to approximate be processing project our And XXXX downstream spend our expected lower have spending similar X to to we plants, capital as and

increase expect the able As common per beyond, described, underpinned by thereafter. dividend our outlook to and annual we annual we strength XXXX $X XX% grow to recommend meaningfully for dividend Matt a to business the and to XXXX our be Board to common share, to the plan of

We also repurchase continue in to common our to to expect position under execute remain opportunistically share program. a

price repurchased $XXX quarter, about average third the we billion repurchased $XXX year-to-date through long-term million September. about repurchase excited program have shares at a the of remaining the had $X common third million outlook the of under our weighted at of at $XX.XX share end We and remain During million quarter. We $XXX Targa.

energy the lives. And Our talented execute turn enhances strategic priorities I to our our back that, on Sanjay. safely deliver everyday operate continues call will our the over to that and to team assets with

Sanjay Lad

Thanks, Jen.

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

Operator

Instructions]. [Operator

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

Theresa Chen

framework, to framework, you XXXX? XX% within balance there while arrive new Is see dividend very growth sheet. you ops a new all that to about strong capital from this, Can a how would anything. the at of growth talk within increase a view like share generally framework healthy balance with yield in XX% your increase to dividend you It's achieve? did dividend cash you capital maintaining over repurchases plan if a great accountability return your really how And

Jennifer Kneale

is this Theresa, Jen.

really we and there capital in that our evidenced think especially And can we in from consistent we where under we said potential to and we strength are morning, believe most by we've repurchase scripted As continued the we've how our is our strong investors of intend forward. underlying return see related about investors, to going investors. a that gotten that as got this significant the question activity story our are when you got our to we share we've where today Clearly, conviction program. business remarks,

us activities floors cash in NGL fee producers which environment, upstream numerous with invest are hopefully, the support resiliency increasing more stability the and price Waha to our of despite Our it's really and on a across meaningful begins our positioning be multiyear to increasing lower business becoming able lower to us, to that flow G&P and also fees environments. commodity while capital evident are strategy and return scenarios

for to a adjusted look cash we years, got increasing operations XX% we we've So to line where as how think of to XX% we're But the over strength we're in our part amount an call sheet the of and bit about flexibility look it's important as provide not really we saying certainly think return to world bright from It's CFFO. our that continue across it's we're that's to And and do multi and prioritize little Targa thinking the of flexibility. how balance out dividend. years multiple more around return balance it, at of flow to I a and Directors transparency position Board us shareholders.

start return S&P then XXX that, at given of how demonstrating of an relative end believe a opportunity. strategy very Beyond that. been we shareholder opportunistic of in Targa's maximize we of and can of our and that positioning of want repurchase And look broader to capital Energy activity instituted program day, the track returning when that transparent S&P capital to We've and share program. that at the are across we that is hopefully, really, have peers, October value. informing since record a we the XXXX we they're And all all

As And we to really supplement repurchases. indication themselves think that see and stable through will to and We'll look I do to above approach opportunistic the think we an that position shareholders. through a return also continue time. ultimately But is I on. to you're opportunities and dividend be what and in can continues that the with that execute to the growing us clearly, It this more approach repurchases. that can capital of seeing all that in meaningfully forward move then market, to dividends are balance and a important have the present

Theresa Chen

underlying the your and topic the of the of to announcements in growth, all trajectory means continued especially consolidation volume acreage. duration news the this related do just think for shipper. the anchor partner of in recent resource you of with volume upstream JV Targa Permian, on the And the Midland growth terms and your What

Matt Meloy

Matt. is this Theresa,

we've the With recently, we they those announcements, seen good really previous with in relationships transactions. consistent the the involved announcements with are have parties

volumes Chevron or you're it, the have with least we talking relationships a whether their good We about place them. And we So as today. parties and handle relationships have about mentioned. all at we term, really growing contracts Exxon in short or think those of others, in with lot

And so contracts those are contracts. typically long-term

at they have how parties growth see strong. the over of We those to have outlook in just Basin growth be very we'll When it the to you out plays So think Permian for outlook. look time. robust some continues mentioned, pretty

out. we're think So kind means optimistic we'll over the that of see for it longer I business. on what our ultimately think I term, But plays underlying to just have how

I time. think play over it's going to out

Operator

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

Michael Blum

a operational to volume I drive your trajectory real views wanted would producer on you to that were of now of really seeing change quarter, which these you understand growth? the say the wanted the ask in growth. would just future about slope change just Are just Permian temporary issues? I material third activity, in any

Matt Meloy

the Permian. growth seeing strong Michael, yes, from question. We're good

about on our that in the Really the So Midland guidance of get the tracking Midland gave line talking will with beginning Delaware. at first volumes are we and year. then

growth and we've in the Continued here really fourth quarter. even that is on strong seen track, ramp

So did averages. it kind a into XXX We you Delaware. the really when day and at have of look comes QX QX roll kind the off of of in kind between million

in had lot adding, we We're little going the factored scheduled quite was But offset coming rolling were Now activity a was we year. underlying was XXX to online that and the now the illustrate, million that beginning it's a in so $XXX third to going in lot that come to quarter. We've happen, -- enough was of seeing knew it of that bit to the we compression in at just place that that day thought to year-end. than got a it's the had but does have frankly, later got million we're of Delaware. We've we in off. guidance. our not between a growth

very So the frankly the there. behind and are handle little little but We're to catch it's QX, bit outlook, in the the still a volumes. But underlying grow, bit XXXX, a we're and and think just to there all are to Midland side Delaware 'XX be volumes continue not to trying later, the coming up just volumes and as you but beyond. on that I in confident out look for both Permian side, going

Michael Blum

No, pipeline perfect. takeaway that's And is, that just into then ties question, NGL as and actually you're have announced my I'm which sure second others you many expansions. aware,

getting clearly competitive. pretty it's so And

future? flag general, we to there Is about position. thinking major should contracted your XXX wondering in your just the market? how about contracted other off position in are roll obviously the in roll-offs So any think And you You had quarter. this how that just

D. Pryor

to And the Grand Prix specifically pipeline, Michael?

Michael Blum

Yes.

D. Pryor

is Okay. Scott. This

just quarter, improvements Those some third-party volume clarify. we I in quarter. Sorry, we -- the third the When the predominantly to came wanted across that had look quarter were volumes.

we're Our indicated, quarter. upstream flat to volume growth continue relatively we Matt on volumes, as the overall. see But

As expect of on mature not announcements or of in have us allow gives the fourth the volumes evaluate for we and of both as our will our as looks that into third-party runway. coming well to on it number with in the move volume of leverage late. in that marketplace, to those beginning. With the the contracts basically That XXXX, us, and online very volume as us quarter we from a what we relative would grow. people's pipes a pipeline into our the with roll leverage volumes as to that growth our growth have there's really we But lot Daytona volumes opportunities look XXXX continue some to whether pipeline quarter we will other operating runway and into we Mont the Belvieu, to coming growth, like with their West timing that seen online next moving Daytona into comfortable will leg, obviously, year, of feel the fourth our operating in we've get on upstream

So we've evaluate what to looks got of lot time. like a time that over

Operator

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

Sanjay Lad

anything. We I can. can't hear else know anyone if don't

Operator

Reynolds? Hello, Mr.

Sanjay Lad

would go you the Brittney, ahead person Q&A, to next please. and the in

Operator

line mean, Dounis Citi. comes -- next I'm sorry, from line next comes of our Our Spiro the I question with

Spiro Dounis

volumes Maybe back NGL back pipeline -- to coming going to just maybe quickly.

before guys of coming You Daytona volumes are still a online. record to this quarter, the third-party time comes system. hit But levels on lot

between to you're you offloading that like secure now any just feel volumes? So pretty on be front. and could you chance guys Do Daytona,

D. Pryor

feel is the say from time this well Spiro, Scott as the managing seen side. to again. We maintenance on would or stations I on comfortable. side as West start-up the along our Prix Grand where on that time, of pipeline pump we've the south

the into from of We us availability long pump certainly But of where to time, capacity getting runway to what that the stations, with XXXX. necessary those offload. energized, have, time going that evaluate start-up fully We'll taking gives industry a volumes, it next that the to with like, fourth timing we'll be can feel year. in quarter we look necessary may coming that comfortable of Daytona facilitate we looks ramp-up the offloads the of forward online but how where of the

Matt Meloy

the is to Permian, moved there's maybe is the the like the it, -- in when a still terms XXX-ish, just West Texas, pump that per amount And on that the coming up from of significant get kind from barrels North Oklahoma but the can we day, per of low from that day XXXs most all leg. to We barrels to that, of too, add move, segment. in North from stations of XXX of call

on. when room have now some still running comes we and So Daytona between

Spiro Dounis

real like And [indiscernible] spot with bit That's seems open. arb once the gears to helpful color. again switching a a bright

a like Just sense just for what guys. if of you can you looks today that us wonder give

now. inspection passing You're

You've going imagine got capacity the I online. pretty that's new well.

D. Pryor

benefited with third inspections pleased export for in quarter improved having outage We volume that of the increased spot the were opportunities. obviously quarter-to-quarter around our and work volumes the required improvement from saw, project. expansion demand completion the despite Our and certainly planned to very we

are quarter. we seeing in project we'd with and the through Now see fourth end already that of to online, expect that benefits expansion that,

be equal in we what third volumes saw to improved. So quarter or we ARB would as than fourth quarter, have the our opportunities better them in expect the to the

relative First contracts we and foremost, performing we're around optimize we're advantage our term our to opportunities squeeze taking spot that and going to of lineup into can that sure the we as the for schedule make facility.

what quarter to the to frankly, capabilities continue quite this around ways optimize into learning, fourth moving full and we and will XXXX. expansion, look be still are through will forward of We that in for and the

Operator

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

Keith Stanley

an are and do this constraint to want sure and future just -- Matt, saw that we make any to QX in event want a as that you should in issues expected expectation First, see lingering thing Or I of going a kind onetime you pop-up was a have onetime good of any to sure of sustained quarters? QX. bounce view kind no back of issues there's in could this a the just make impact I there's forward? the

Matt Meloy

or? And side the referring I Delaware in guess, on the are you the volumes to G&P

Keith Stanley

right. that's Yes,

Just to G&P you volumes quarter. in and what the referred

Matt Meloy

the of -- part year and just more of made wait volumes to back behind field, offloading think out of lot frankly, there system. I laying we on immediately the to And Luca, of goes getting kind last the was Targa. time compression, a in it's and we a it on And growth of lot compression. It's a were acquisition when year pipelines to was get about it

be a it fixed. to days, want adding compression in be, and a come XX bit those too. year, So everything more make of we bit it coming later lot compression, like are the than but is don't were frankly We're a behind to want we volumes lot a next we're going sound adding in of just little to little year. I

but of are issues throughout Delaware out adding in out resolve So seeing lot next trying handle year. not field. the to the to going the We're next in pressure and a this we're quarter in quarter, we that be and compression, only

and operational we that issues the was that of part had. and exacerbated heat because of upsets So

to of get we're of are where and really kind going. ahead producers trying the So address

add to that? want you anything Pat, to So

Patrick McDonie

Well, is I going be. of discussions plants in showed getting Matt under volume in plant of done think there behind through our the construction as And think the the to building we're not we to, we in volume site. X got confidence the clearing because what level is what that a third We've cetera. growth have we alluded and we certainly don't and getting we're seeing think place, we're et producer process compression

Some producers weeks lag there's equipment of the a delays, cetera. et few

would investing look Certainly, the I as third has on weather the answer key that business high, solid. when lot have for anomaly. quarter's levels indicated we confidence, at there you is underlying we're But activity So of future think the what growth. you volume is know Delaware The don't impact production. walk and by what I into are winter, a and in what a the expectations

Keith Stanley

just capital I clarify to Second, framework. want return the

effectively it XX% just you company allows So keep and the equity buybacks growth XX% to frameworks of dividends. to its still target I'm meet operating sounds objectives cash holders, the -- because leverage It pretty overall. just big step X change. it asking X in like seems to to could flow feels like that a and of be which

would as XX% XX% well. and buybacks hike to a also have big step-up imply pretty dividend You XX% in this

right. So sure just I'm want to that understanding make

Jennifer Kneale

Keith, this Jen. is

provide just metrics that to look the target trying we're some at. specific of some we into is what visibility do think I

you'll than the that the of flow than operations, lower average. the over percent cash If from LTM Energy at S&P peers, lower months, as we're XXX, capital XX here S&P you look lower of see our than a last return

that return on continued EBITDA total this strong return part going believe forward, so return to projects. indicating, performance to more capital because high we capital is the And we've to proposition and ability And had return really return the and performance really which think significant also and have is we strong that having shareholders. of growth strong provide based total balance value we organic sheet, ability growth, that, of will a

out horizon, look the inform I support then effective our what reasonable capital this look the we continue over how and much articulate Board first to one and to how can and that bright we we've And isn't will trying looking much like expectation 'XX, it? we multiyear this years. we across over could are we X-year quarter as we multiple believe we've dividend and we that is, that those 'XX, a decision we a of you forecast to at capital think and ultimately, believe think planning just shareholders that And our today, we're thinking metrics metrics our more so says It's So across a returning are to this to at. XXXX, But years questions instructive one and that's framework, looking quantitative as elements well, one a of made or important to of 'XX, the scenarios. we'll that are about get That's return it's must. of for approval why different 'XX, that we'll we look about say evaluate. really line that it isn't the multiple we is how does I of business important is that have that that announced multiyear recommend really one think big 'XX, number the which

Operator

next Our from question Tristan comes of Scotiabank. Richardson the line with

Tristan Richardson

maybe the how have solution? that in first updates then a prepared project? the updates potential with I talk on it maybe market side, planted can any commercial your gas evolved on you're the of And remarks, specific you but since flag seeing may about your broadly you development has any market solutions missed in

Robert Muraro

This is Bobby.

and So solutions the Targa. residue not what Permian I'd tell on you does is for the effort message and around the Basin change for APEX APEX

that too solutions We've options solutions. And there, of the needed APEX. in pushing that been that is for that's sure but the that. to has out you been fruition to tell the why time to the which why make of is end investment-grade design be started we've day, positive, multiple APEX. is one maybe is a I'd of gets of But sure for It's word, at really say we that has priority are make are what and Targa driven talked have Our changes, a the of I'd the about solution at counterparties, which and Basin that built. of opportunities have I other basin. been a 'XX-ish priority, group strong frame, the And some to come think, shippers pushing the get markets gas

So we'll built or something sure whether goes, pipe if pipe it's being -- us counterparties to frame. Again, that gas works we where Basin for need sure be that and NGLs APEX will doesn't it gets that system. the in or 'XX whether and another stand not, be goes to down can get flow help and a 'XX another ready our built has for time or the APEX if out go, ends that gets another that APEX it make pipe and there. solution APEX that's framework in our make works or takeaway they because built is up continue back the our in plants for But we integrated are to that to such

Tristan Richardson

the think the and see headroom, now we've that market about does assuming for expansion export that frac, tighten asset your into And I But in allow really gotten ramping export Bobby. 'XX. 'XX today up? reasonable once utilization Daytona we late on starting online. to know capacity volumes a Daytona you then of the then as third-party and And coming context, into Appreciate we've just do been

D. Pryor

around market are say look timing earlier, export very tight. as were to Tristan, again, expansion we today, of I ways continue seeing better optimize the the our to to with And recent this that pleased the would ways across for and stated movements most because We we coming capacity online feels benefits. facilitate will dog. is Scott. Yes, I that,

that pleased look while that at capital with we very our debottlenecking we're small With of as in look facility, continuously facility or explore So provide we that opportunities being Galena Park the being our meaningful improvements to online. will form projects we at further efficient. said, projects as expansions at capacity

provide are us very have capabilities efficient have capital an runway lot moving we that projects facility are will to forward. fortunate We to to a that today add that very existing of

very accordingly. we'll continue that So watch already to existing the we we'll of have and to very system, growth effectively. time bolt those through an again, can projects our volume kind to and facility But various in on fortunate we're

Tristan Richardson

Congrats Appreciate capital the plan. allocation it, Scott. on

Operator

the Neel -- comes Bank apologize Mitra of America. question Our Mitra from with of next or -- line I

Indraneel Mitra

I speak some you are cubic contract the think alluded that probably area smaller dynamics in know competitive Can Mexico just you kind another player some Delaware. acreage away concentrated million it's on of to in to off XXXX. the you Red in because XXX a undercutting so roll I to Matt, feet off big there's of rolling competitors New want is the in very Or area? win dedications? complex, just the to and few big producers try versus kind so Hills a that players price to have diversify

Matt Meloy

question. Yes, sure. Good

me just Let clarify.

not where to I third-party midstream. think to I volumes did contracted was off. say And went. that It's to we're roll us contracted really really for That's that we losing that coming not move. it it have

So Bobby, to? want do you

Robert Muraro

Bobby. is this Yes,

that producer more debt. up, that million a online, producer plant move a And when plant that we and plan. goes get day clarity, to For own own came XXX

part of that didn't off, expire, no roll takes online. change, it's came producer contracts -- our didn't it's third-party So plant gas all And didn't planning along. contracts contracts

Matt Meloy

so we're -- we the XXX down million just highlighting million and quarter-to-quarter. were reason is because And the XX

system. just of an it moved that see from quarter kind the of We strength. was said, why XXX million the underlying as there growth we contractually, in business. It growth see Bobby off So was

Patrick McDonie

backfilling gas higher-margin we're bread gas, right? frankly, of with are low-pressure what butter our low-margin kind is And and high-pressure, which

Sanjay Lad

Yes.

Indraneel Mitra

maybe Could maybe to willing terms lower of 'XX you the down? than CapEx being year Apex, a be kind you maximum about that then would be you just Apex in go you look opportunities. would end take the you if of a small at the in undertake the would operator, that to would about capital 'XX. interest? spend on keep looking investment for And How And equity would a needed, book you just potential follow-up

Matt Meloy

-- me producers. Permian think next I'd then others Yes, Yes, a going sure. likely between APEX I'll joint want be if I midstreams, to multiple here of out either midstream in. let say pipe jump of the start to is and venture kind or and the

interest ownership partial have and the if an participate be in we we have done. will not ownership there so could JV gets a something, an we interest So in could if on a ownership, frankly, volumes it, it or pipe move

book say I'd capital if no be putting pipeline. the next could So we and low end, the into the

we I a We then in like example. own have is that, good have value and it XX%, creates GCX to We've think seen it. monetize Targa. we'd ultimately an that ownership our where options open, invested could for we interest.

is it, are to in to the think door, opportunities project else, up or -- it, those would holding Apex if is we're we pipe build pipe getting capital whether be that Bobby be it ends options end whether finance it ability another level, trying our we it is to as give led on finance we to focus and and by we discussions pipe invest that very our how all and the I out someone like which those is primary us. right? So where what what up open and going, project said, that, ownership depends it that we have So a all would us operate percentage little whether it,

spend, forward in as the being a our I and Jen past, in as kind see down. area, in has coming 'XX look spending we of similar on we we capital 'XX think see is mentioned

get much be past once works that how and we of and in of I should of optimize that all XXXX, look kind trajectory the kind spending down think to we'll framework. our capital how

Operator

Securities, Our next question LLC. Tonet line Jeremy comes with the of JPMorgan from

Jeremy Tonet

you're the Targa's trends a XXXX our largely Targa sit. just and kind moving 'XX talked general? granted volume from some track moving when of at about? not puzzle would kind level, are from pieces are EBITDA But should caveat about to -- giving you we maybe big organically pieces how if think in of being guidance high should trend think, talked any just we about, there's there you and think thoughts with other And a other where number growth pieces, maybe able to Or So the see where outlook. trends Permian LPG growth about shaping we're here, wondering you've I the upfront, we of that

Matt Meloy

question. good Jeremy,

be As only we that not just 'XX and out growth optimistic mentioned, look is really XXXX, beyond. it's shaping we're you into look -- kind what's going like. have think And as that to of going to of good I EBITDA 'XX the timing,

are in that's the think the and fractionation for export. business. provide volumes through does I What to volumes Delaware both more NGL transport and Midland, for going into G&P it us the start the moving Permian available

'XX, strong X So overall And of look I years kind we even the X-plus gas side. to Permian for really and see longer, a starts think pretty it's like. say, I'd 'XX is with what and outlook I XX years, think on

think looks good. the and about have only I it term, on thing to a fractionation do is other short of good lot term, So looks I'd say think XXXX. coming longer it in we

We of on coming Train have and XX. then X have GCF the at end We'll the quarter. Train

of growth we're outsized volume that an that's seeing. kind amount normal So of relative to just fractionation

just expansion done. export the have We

be back XXXX. primary I gathering ultimately, will of driver. think for well processing and the kind we're in Permian set comes to But up exports it growth

Jeremy Tonet

about to upstream and And makes towards there. midstream. talked in sense consolidation focus the earlier the want call just shift That you

now? a I industry see Targa this the with And forward have the you you do point? just is rule, industry. consolidation do in I guess, sits going see from now, Targa's business in guess, how where wondering Or -- bit We right consolidation at uptick seen of an how comfortable right in do you feel

Matt Meloy

Yes, sure. internal look our prospects where I said think say -- business I'd very good. we is

good is continue business. afford to to us very our growth. years G&P multiple and in We have in in footprint Basin just largest Permian, going to a operate of Gathering core case Processing the the Permian

So we in very fortunate fractionation. just sit and G&P. fractionators We're I We're a in X to in transport to focus going invest are to in going like just export. invest Targa. in to Daytona, we invest position continue on invest on We're think with being in

of So tack-ons, us priority kind bolt-ons of terms think looking in far I that's or our list. down really at capital

increasing have distribute and then and on of that an want we to execute think organic the in growth we us to I of as and increase our about, amount then talked Jen projects shareholders, front XX% to leverage, in being time. XX% XX% lower of one over our business. those to all our year, in but things not up any XX%, do to able we see invest distribute It's exact

right of in focused now we're just on our think Targa executing and I plan So front us.

Operator

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

Sunil Sibal

cetera, first third that talked question et the So about. operational you the some issues, to my in related of quarter

COX is also some In higher of the an streams. with. operators about addition compression, to, pretty concentration gas I Targa weather familiar have that's and think, the the believe in issue talked I

COX And So was solution? curious you that handle kind do I going accelerate also how does forward? of your it sequestration

Patrick McDonie

issues Pat. is COX operational really quarter. wasn't This us third major a the contributor to in for

a things expensive and gas. do that growing specifically. to production at We them of Delaware adding lot frankly, of HXS for in handle lot have the capabilities inefficient see sour to capital We capabilities a the COX do There producers do. that Basin, COX and are are are and wellhead

time, infrastructure mean issues, you pipeline system compression, I far as to we hit late little is but with gas, move with as will have Midland. production plant we flowing. and/or high and sour gas move the volumes, that residue other have specific X But don't It's in We're where we handle can handling And get the fungibility Delaware sequestering place sites, as integrating benefit from and move building forward, gas the that on gotten have which operational Northern more our COX, our issues a we around other it. we are COX in a Lucid we system more HXS of It's or we on as that that now. us infrastructure, can from putting keep fungibility right a components that our weather, better. sites systems. compressor forward, capital exacerbated So in allows Delaware little in quite will see felt when the over spend. We've do issues Delaware as you because dealing Delaware lot

of now, it forward. kind So where right looks at that's better and we're

Robert Muraro

Bobby. is this -- then And

projects of forward. a pushing COX bunch side, the we've sequestration been On

that your I to those that in have forward. out continues there. place MRP public on wells business. concentrations being additive have COX an of do to and/or the seen permitted But -- already filings to the That time, are question, think the point people businesses to plans over stream. that would predicated relative COX up if we And amount and move that be not are increasing in come

injection business wells expect in and up up coming put and already profitability together. got the were the And again, to getting XXQ and those in starts year. this assets go that credits COX start over of that and composition will capability We that to stream, just XXQ time, place, we've

Sunil Sibal

the of curious then also that guardrails guardrails I around to front, just And we was put range about that impact multiples. that Xx investments? putting I clarity. know now capital that kind in for you some that change targeted that any around? talked on providing the previously, thanks allocation your on X way Does returns with you're does

Jennifer Kneale

to returns even to as our lower activities of lower across in lot capital support floor allowing across look commodity at producers' growth been organic important, investment so our has a have us we to continue price part that environment. think out and why footprint. higher structure That's I fee opportunities we the of invest

ultimately, investments ways stability, Targa we to ultimately of that each wouldn't where as think thinking and is everything approach assessing call we year. balance be is about business, capital in including I forecasts from flow a cash the about or it, we'll described XX% as XX% to growth can forecast certainly that look decisions it the those of everything one anything then it. say believe that opportunities. we distribute, that's we So a described We've of today sensitivities around across return of return changing drive organic sheet we're that we've the opportunities, forward, But multiyear investment capital of operations. But how involved

Operator

Truist of the Dingmann Securities. from with line Neal next question Our comes

Jacob Nivasch

one on Jacob Nivasch Neal. for I just is one This had here. quick

I these several you years. have the for given past strategically, how guys all Just over contracts fee-based up know ramping been

Or great. -- are at ramp percent a feel transition we I'm a contracts being you that fee-based? state bit strategically, Have high of as you're expect level, of thinking at a can would quantify now good kind really do be going where here. that a you curious, with in more Just if should of But little forward? just that that, just your a you we

Matt Meloy

at you business And if both to of floors adding up. business contracts, of Jen, Yes, are we really want floors our a fee progress those and G&P come contracts our This as having year, fee-based into as components fee-based hybrid through on. look you kind at but and is Yes, lot really business, at or in our or we've G&P putting had downstream where Matt. this then below add and we've made growth also floors. in the

just about think of you going are as below. So kind power at earnings most forward, or of those

commodity a be contracts, if those of we just not there's floor as But here. tailwind, prices, from would some tailwinds we some so that fee on lot from get get upside. downside And

spot. we a we're good So think in

Jennifer Kneale

fee just is in add of ultimately, margin producers are job and to invest business great down that by of a done a our prices going position But I'd place. to from fee processing has higher ourselves for continue getting team putting percentage if our because commercial floors and commodity in higher. gathering are our prices those And commodity

cash structure. Ultimately, of that, environment. floor provides all contracts price stability to I us because and really we lot where be combined us across think and have with floors to them that's huge more our downstream processing that gathering like fee-based like of shareholders, commodity be flow will one fee is for our our that and with or win really a the business, get fee a having reasons the fee-based and we'd just

sort our of So pushing a heading towards of the And have in. that direction that. done we're teams ultimately, great us that's job

Jacob Nivasch

to I and just something. want one Got few on know this but clarify it. could squeeze a If I more in, we've I times, touched just

XXXX delayed, guys issues coming because I know and the does more of bit improved in pushed given little things been Or Does it well. as just XXXX expect acceleration in -- here. guys amount the just more seen, XXXX, like you sounds have guess, you delays should that mean a I So initial mentioned mean have the have compression a or back we that delays good orders? have -- these things but that you an

to here. get trying Just clarification

Matt Meloy

the delivery was been have Part I delays. those most mean, part, for it of ordered.

know that -- don't just to the really CapEx I it and that adding shifts necessarily we're shift much. buying of compressors all So kind constantly inventory.

one producers for note but there. thing we're initial part, some we from we're to of coordinated And most some time such just there. there, production those can kind compression the the take too, capture there's waiting our still So delays, that flex it with on does as then

with working to we're IP them we're sure production. make that there getting that we're the So and for

it's So deferred of other just not really it's pushed kind lost into and periods.

Operator

of Brian line UBS. Reynolds final Our from question comes with the

Sanjay Lad

Good morning, hear Brian, can't you. we

Brian Reynolds

you hear me? Can Hello.

Matt Meloy

Yes, can you. there hear We you are.

Brian Reynolds

I'm about that sorry morning. this

potential Just a its it point. this seems like At not to NGL follow-up of haul on Targa Permian. point, GMP full the is this integration close assets to long at

know of I 'XX or think XX%? you Delaware downstream not could to on rolling Targa's 'XX it like about all process on that get to make maybe volumes the system should And those basically volumes long-haul of on talk kind Targa roughly integrated XXX% So we is are kind to how about -- downstream the -- volumes number. are Targa But Midland it the on that transported being system. that

Matt Meloy

is really The pointing I the move, There's know side volumes but G&P are to into of a going we going business. of third-party business say mean be lot liquids pipes. vast say XXX%. on not it's the but to I'd some acquisitions a to think Midland that's to I That's downstream say that ever majority amount our not goal. XXX% of take time. don't have majority, that to onto going we continue. because I'd get on our amount tied I'd I some as just of the And on disproportionate is side. And going But that's and Midland we Delaware, target. in the a dedications pipes, legacy other grow, it's a growth

I as in of go a So think as really But majority I across into Permian volumes you out see have moving downstream majority we're and that number I strong we forward. we capturing -- the go the of position moving north think the assets. just a there. those

Brian Reynolds

Is And intriguing it the processing capital, plants to of seems to would there is if middle like think about need exports to as the a we of G&P based you but you a bit us a X.X, very frac X.X an end Is participate business, 'XX, X ultimately, look CapEx something follow-up, XX we on how Targa value for projects. as bit, little could or I of And chain ahead announced 'XX? if look know ethane kind this curious the an decade? more part getting that? about that as to of the then help sensitize talked and to NGL for competitive perhaps look little at opportunity point be we

Matt Meloy

the rate run I Daytona characterize as normal similar-ish think levels fractionation kind pointed I'd see of on higher CapEx, a because projects being multiple are to which lumpier. with than we of trains, we levels, a downstream 'XX kind bit

So potentially why and have it confidence normalized we more we 'XX into then urgent having that's having a rate 'XX and beyond get some lower be maybe thereafter. as

something past. that number As there's we of you do exports, have is a in at That talked expansions look that. and ethane the parties about

flexibility that We just to market have I'd the to that at focused is I'd the but our of capability for I of of don't say that. Right really say, domestic the to we're on kind put demand. increasing and the out customers that something we our on other, -- ethane right it's pet wouldn't on potential connectivity now, looking front other We the chem list. list we -- do that's what now, there. on are is keep

D. Pryor

to is the out and just again, the petrochemical would Matt, I our improving -- we fact Scott. operators Mont add, continuously surrounding deliverability Matt the our Belvieu are domestic That of around area. this in And and alluded to system

we be large believe years. focus plants, several So a see with our of get own increase upstream growth our into as upon in given ethane that petrochemical just we those of the the proportion continue we'll that assets. a And the and consumption based over volume primary course next growth will

Operator

so like it much would to the I This turn that. for question-and-answer remarks. you closing for Sanjay Thank now to concludes back session. Lad

Sanjay Lad

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

Operator

Thank This in you program. for conference. your does conclude today's participation the

disconnect. now may You

Targa Resources (TRGP) 2 Nov 232023 Q3 Earnings call transcript