MPLX - Earnings call transcript Q2 2018

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Operator

Welcome to the MPLX Second Quarter Earnings Call. My name is Elan and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note that this conference is now being recorded. the to turn Kazarian. now will call Kristina over I Kristina, begin. you may

Kristina Kazarian

this MPLX welcome The XXXX accompany found and tab. morning the second mplx.com synchronized can under on to that call. Good conference the quarter Investors be and earnings slides call webcast

as On team. Heminger, and It We Harbor session to call the Hennigan, Factors are invite be SEC. CEO; the other materially results members follows. statements there, statements actual from in during Gary CFO, that making differ well we differ reminder Safe disclosure could a two. Pam you that forward-looking and is Beall, our and the during today may filings on to and today. the of the Mike question-and-answer included results call that with what Chairman President; cause the expect slide we non-GAAP are management read will Actual as

turn opening to the Gary Now, over for Heminger call I’ll remarks.

Gary Heminger

to the This $XXX another MPLX with to Thanks, Kristina, I exceptionally business, everyone. pleased adjusted EBITDA is record for quarter and during impressive well our report performed am that million. and midstream second morning of good quarter

to growth hydrocarbons, and robust growth provided oil, business operate. that in cash our first times. our remains and the regions up for across our was distributable sequentially, distribution we we across very will -- look since backdrop this macro the to set and and grow the of and remain NGLs. crude We be forward key remain demand We our XX% opportunity continued of We continues times G&P strong positive. segments. the gas, strong. year, forward, global all all believe which natural And as business U.S. production Our of L&S our coverage quarter Not last prospects look X.XX a which but level flow leverage experienced has solid record strong X.X only to year volumes compared of

of in Additionally, as also Northeast shortly. plants Mike STACK, new and new some infrastructure discuss commenced announced we which quarter, exciting Permian the will projects of this operations well as both

set, As maintain review focus equity lower coverage sustainable believe With organic an intend we growth emphasis our leverage we position on assess higher our on operational me highlights. the this turn over with self-funding our long-term to of as the value. and us opportunity help our to will needs approach drive well partnership Mike we that, let shareholder the call and to

Mike Hennigan

by Gary. $XXX recent X.X averaged segment and Thanks, adjusted of of reported increased the L&S Total Ozark expansion. of EBITDA pipeline included two pipeline impact million Drivers and an the throughputs these the quarter after investments, of day XX% and expected adjusting for MPLX. the day, we and as the system’s expansion Both current revenue the The and end is per approximately XX% increase XXX,XXX major fee-based additional projects to Wood over barrels which per incremental River-to-Patoka to completed XXXX, our quarter Slide Storage Logistics four provides systems. on second throughputs for per Bakken day barrels pipeline segment. increase create our is barrels pipeline dropdowns. quarter. capacity pipeline XXX,XXX second increase Ozark The of third of overview of million, the which year-over-year, work

X% shipments the barges MPC decreasing our our capabilities opportunity capacity, increase to which the increase in XX marine third-party quarter, providers. to added fleet, taking its also we a During overall with is while

operations overview the highlights segment. and of Moving Slide five for some our to quarter. Gathering an our provides and Processing

last over Within an year. the same the we quarter G&P million, reported of segment, EBITDA second increase $XXX period adjusted XX%

billion our across growth cubic total new feet the of commenced processing to day. plants on eight planned our to see system, bringing for X.X operations continue we've demand per we year, As our system five capacity

the increased same X.X average day, Slide feet We prospects enthusiastic on projects volumes. input an being get growth new underpinned not representing cost in into the the from volumes last service talk about forecast specific X, both The internal also producer and an We quarter remain of partnership. number to shortly Utica that for customers, the economics Permian, second our quarter volumes the overview regions. I'll Marcellus/Utica feet higher increase primarily per the the year, have year. in our the that plants driven of cubic of first shale over per Sherwood only Utica averaged the year United X.X during Gathered commenced XX% The Marcellus over operations but new cubic the was by which last the was placed as from driven I the announced the increase based provides multiple last operations record Marcellus/Utica, States. the Houston a same a quarter. in plants billion the quarter, we including in six in day by and X new about over lowest Processed quarter. across setting increase resulting it approximately by XX% the primarily dry-gas from and region our developed billion

To seven ethane the quarter, year-over-year the our planned Creek increase. a complexes. provides day barrels and cubic XX% year a and day July. plant the continues, in to feet XXX Northeast, the pleased volumes record of per in-basin we heavier fractionated additional Marcellus feet to Utica cubic at As in of add the of half of additions per the second of per region. and in growth commence We produced of X the Harmon Sherwood were capacity day NGLs our support summary million million expect growth XXX,XXX operations we incremental XXX Majorsville through during Slide

the representing position capacity of day expect day propane per per ethane in barrels During plus at the the Gathered quarter. will which X.X nearly of eight second Harmon the half capacity, day activities new capacity consists our of Sherwood Southwest barrels at Northeast. These capacity and in of XX,XXX of fractionation additions highlights XX,XXX per XXX,XXX for we year, of per some Complex. to and Hopedale fractionation the fractionation the both billion strengthen add feet averaged Creek, day our volumes cubic over a Slide further over up July. volumes in in MPLX’s Oklahoma, barrels plant XXXX. processing Omega its quarter feet same we million continued of Basin, XX newly increase to In Argo per increase during of play quarter, operations constructed for day STACK Processed X.X volumes cubic cubic by of Delaware shale this the ramp the an driven X% year. quarter. the averaged at the which over per feet facility day in commenced volumes billion increase second second last the quarter quarter, our X% the Much was

additional County, announced to in the Tornado pleased a additional will long-term our currently in in associated Basin. plant Southwest per we’re Permian These include the pipeline cash Orla, system expand and and strategy system that gas gas projects Project Also country. interconnect a basins day our growth on gathering will some progress provide million day Texas equity the in XX% Agua a Loving has the to of Lastly, commitments both and Texas. high pressure footprint and diversification in Delaware Waha, runs billion with cubic the with XXX important Blanca MPLX processing cubic processing and gathering infrastructure Tornado plant These and other the to along X.X connect of growth region. called in feet the feet system Permian report Basin. from in additional pipeline connecting to gas midstream interest per the flows continue most assets of in

moment a Before to I summarize are call we over turn to the take strategically. I to Pam, where want

expand in cash and by contracts the underlying are Logistics flows. operations also and third-party These assets base segment, but First on services integral as infrastructure of are and deliver identifying to increasingly with industry services stable growth Storage long-term incremental opportunities a provide solutions MPLX our business provide to a market. significant of and we the focus MPC, and assets the supported strong profile to

gas a adding in desire and haul as focus have long the capacity well on both Also, for natural side. NGL the invest be crude export a to partnership. pipelines to as side the in continues We the Permian,

evaluate U.S. Gathering to long and runway and key crude In regions. on of We but the about potential all disciplined opportunities investment enthusiastic approach. bullish segment, production, are Processing our opportunities, continue in and investment gas our natural remain we remain across

bullish to be We the Marcellus/Utica. on continue

backed our on Sherwood to capacity and While new associated growth lower the Hopedale the that important belief believe gas be Obviously, importance an provide the well shift will by capital will forecasts lateral Northeast. Northeast investments. capture the to confidence as line the IV Creek cost plants this commissioning investments U.S. commentary of increasing Sherwood economics, around structure and as the volume end gas of Harmon our long-term out lowest towards continue we plan gas Permian in-basin XXXX. rich Industry to attractive transportation for we contribute all fractionated is takeaway infrastructure gas continue as costs and real-time as the processing in market production XX to length, structural the of in comes for XX, producer and natural has on opportunities dynamic,

are named In processing Antero six can located has Smithburg plants includes and begun supporting demand as additional for Smithburg, within plants XX, and of in XXXX, region this capacity Sherwood bcf the is new easily sanction a Site addition, an the and couple which dictate. X.X Resources XX, additional one. site, already of of miles that Sherwood new accommodate on conditions for preparation three Sherwood layout

issuing approximately self-funding We $X a and continue our to to execute organic without intend equity. finance of billion growth model

the to premier this and of strong over distribution some to We investors. and grade an will financial cash positioned profile Pam is fund long-term the with now Our sustainable in the to while MPLX to and our Pam? I is investment highlights one turn quarter. call coverage. space offerings believe midstream is on plan the to credit deliver maintaining growth cover growth retained distribution debt

Pam Beall

Yes. Thanks, Mike.

quarter, quarter year increased Since prior the $XXX the the $XXX of of slide EBITDA Turning and second quarterly while of contributed Storage million, $XXX Processing services both million from second the million. here We slide quarter assets by to third on are waterfall. bridge second to of broken nine. $XXX quarter was partnership. financial XXXX. on shows Petroleum out The and XX the EBITDA XXXX change increase The separately the in in on for adjusted adjusted adjusted adjusted Marathon the highlights an and acquired we in Logistics reported from million million segment and of EBITDA of The Gathering XXXX, adjusted of $XXX first the EBITDA in of segment EBITDA. cash the million, each contribution flow with quarter generated the XXXX the for adjusted and dropdowns our which $XXX of quarter, records distributable EBITDA

of the the The the benefited in dropdowns, the from segments by record the primarily completion the also and of Bakken of was Excluding fleet. marine quarter the Robinson our the throughputs and impact pipeline driven in increase pipeline cavern the Storage the butane and expansion and Logistics systems. investments Ozark

supported our our on our record Lastly, approximately for approximately equity our the from also model, segment end provides facility was the the distributable in in self-funding to Slide volume, Processing million was quarter, select intent $XXX summary X.XX Gathering commodity sheet issued with of flow the liquidity with Consistent a $X.X available by And financial but public had of bank primarily prices. intercompany quarter. and on XX to revolver, we the cash with increase the highlights a We nearly billion times of manage $X.X driven coverage billion and no at higher balance the second and key MPC. information. at benefited quarter. available

leverage grade committed a to growth opportunities, ended for investors. per unit. of strong expect With distribution declared holders. proposition X.X and of And This our track approximately $X.XXXX record maintaining in the sheet We’re growth within and yesterday, calendar Board sheet. a call our And quarter appropriate a credit distribution turn growing with to Kristina. profile. has we common times, the XXXX the And now, a we distributions to XX%. value long-term ratio our an back of robust remain year me to guidance investment of our confident over distribution we balance Directors levels of continue MPLX supports prior let comfortably organic strong partner for balance general strong unit of our

Kristina Kazarian

Thanks, Pam.

and ANDX, we Before taking we the plans questions from combination that any and of today request to will note the want future you doing not MPLX the start refrain so. parent companies, I around be concerning Q&A, following the

We this will appropriate provide the updates market to when topic. on

one plus you one question Additionally, we ask that yourself follow-up. to limit

that, With we as You may now additional time will reprompt open to questions call Operator? for questions. permits. the

Operator

Thank you.

first Tonet [Operator begin our today now JP will session. from We the is And Morgan. from Jeremy question question-and-answer Instructions]

Jeremy Tonet

year-over-year were the And to I it off dive quarter-over-quarter. a a Is I ratable? in the that up? XQ step that XQ, of about just quite there was big more, in be if the should that quarter? seems L&S How drivers ‘XX. we with bit want what level like could step Good you little versus or start led morning. and there achieved up to segments. wondering is What thinking you seasonality this

Mike Hennigan

Jeremy. Yes,

We’re feeling really the in good our quarter, L&S. in results about specifically

and large pipeline of As our were pipelines well was mentioned, the record throughputs crude we product side. contributing we to Ozark both Also contribution. had as a as on the the DAPL portion

Mentioned the were volumes addition, we’ve In terminal on additional that call up. bought equipment. marine our

the and cavern. Robinson Pam contributing, was So, marine butane mentioned

all activities contributing. pipelines, were marine So, and terminals, cavern

good the the feeling contribution for quarter. So, about pretty L&S

Jeremy Tonet

Great.

sounds that you investment on nature kind ratable going at there thoughts this XXXX Mike, past run with guess. also looking distribution -- the leverage. -- that's MPLX coverage in business mix of just I growth, or and how the distribution pretty take thoughts kind kind balance touch kind kind of what and sees could I growth of optimal like is is with beyond? you where optimal point of you’ve it’s that of base wondering for our the year this So discussed your was of community if and on to influence how

Mike Hennigan

Jeremy. Yes,

guidance going For XXXX, to obviously, point. that this we're give not at

been we the the end previous from have bit. I year for goal. a half. our in we're we're want have to as our you that is And And Analyst our first our saying But Day. self-funding number X.XX We when the of X.XX we know at investors you talking quarter, coverage. get saw one think results, show for basically, quite to at strong the meetings, You'll

strong So, that commitment were coverage. a that made show was we going to we continue to

But, X.X sheet balance not at be as level that as growth to space. far pretty strong, previously. continues we've about, offering leverage talked as EBITDA attractive we're that valuing are very same concerns. they And the were Our debt investors the to growth still in

variations with end Gary the of to have think and we where the on to But, with going we'll any be So, want year see talk towards year. I up don't the next you're come to a to want want to we first show have we and out couple the of good then, self-funding, coverage, sheet, going balance want optimum We what's find we'll to components. be good forward. to have growth

Operator

Thank you.

from Our from UBS. Shneur next question Gershuni is

Shneur Gershuni

Hi. Good morning, guys.

dropped? before for typical were Just were forth. remarks as about and a the talked to the of my your us quick that Did XX, you and drop from average with On available $X questions. have contracts well contracts assets clarification the about what contracts slide talking L&S duration you the length as prepared of you are share so billion the

Mike Hennigan

Shneur. Yes,

numbers. So, what do at we up and typically related try market contracts is set

as be typical longer. years variations little there they have might are tend and have a something a goal typically where you So, market-related five-year is shorter XX where Terminals pipeline a see, to are. in is. the or the rates with to where in you'll Obviously, are world, pipeline that and be consistent depending make on But, our market we that sure terms commitment. duration,

Shneur Gershuni

as Did length you of stands right it the now? the portfolio average have

Mike Hennigan

Shneur. head, top have off my don't I that the No, of number

Pam Beall

Yes, This Shneur. is Pam.

XX-year be significant were the first contracts were of And So, the And pipeline the were assets first very our their operations. those dropped mature. partnerships contracts. that into amount have would to those a

is when XXXX IPOed the partnership. So, we October

looking start kind contracts mature. to date at our some as XXXX first the that we're will So, of of

that, contract first very the in dropped of are we billion the just long years. the assets. here those saw partnership life and of And on the $X quarter, EBITDA we considering average So, XX lives

Operator

you. Thank

Our next Abrams Tom Morgan is from from question Stanley.

Tom Abrams

Smithburg. Thanks. One question on quick

one ‘XX have believe for XX I it slide but your think you there's in in was I You in six [audio indicated plant your ‘XX. indicated comments, are that and gap]

just or in is wanted the come of to ‘XX all that just what timing So, if means I those? know

Mike Hennigan

Tom. Yes,

said, a there five second. you do already completed. were just So, in we've what me eight plants orient going of to We backtrack we're is for which we saying XXXX, let -- to

still is key a us. execution So, goal for

on plans Creek come still additional which to is three have Harmon X. XX Sherwood and line We XX,

XXXX. the that’s So,

XX we up to We’re XXXX that’s and not you, we’re already Northeast. site. plant in But, XXXX down Tornado full we’ve sanctioned next in giving a which the And and X sanctioned new guidance, plan, wanted Permian already tell but what also the in the commenting about XX, is we’ve Basin. Smithburg our

in and hear that additional more plants. us as Smithburg everybody this in an we going handle this we about itself it growth, telling to site You’re were additional the for can And site future. talk prepare six go

the this to at we already of wanted color plan get even we’re you’ll year. the sanctioned though of end So, we’ve full plants midpoint more the on market, year. into show But next XXXX year, towards the four this

to expect that executing more, we’re that going obviously XXXX. out. as the it do in And we’re more eight on we’ll on do color plays you give We plants to

what that’s that So, was.

Tom Abrams

And bit participation if Permian the I press goes in just unrelated, model infrastructure expansion to a positioning And on to the elaborate partnership evolve is follow-up in that, gas number you that. business your then, wondered, which was and could pipelines. its oil of my to include release. little a phrase

Mike Hennigan

of Yes, take Tom. G&P and it. said to few calls strong goals is our for I’ve model strategic a very a here, one expand

to the model, get me which and want side on NGL G&P side, model. the haul which that expand both residue into pipelines, as gas means as to to well long want we I be So, can

down well the as the expanding in We’re still in world also very interested into crude Permian.

Hopefully, a tell you on a long crude haul to couple that have quarters something continue that’s shortly talked progress. we So, to potential for projects, one. assess still in project how we’ll we’ve crude a

goal. That’s we long out have strategic our In to strategic a want we’re that addition, goal. Permian small a get That’s picked We That’s is, to going pipeline into strategic We interest disclose what to more really, the comment presence. expand haul the a side. model in a a G&P residue goal. the on equity did the want pipelines. refers up we expand But Permian. in to

those mention then to trying and all So, things on. execute we’re

Tom Abrams

in have Ozark a with it make to years? you into you particularly of for dynamic a sense that have Cushing, Cushing couple now Capline Does out of like and

Mike Hennigan

definitely It’s at. to that Yes. look to an going continue area we’re

to you hope going Ozark future barrels. expand to some XXX,XXX the XXX,XXX we’re today; Capline up that As that know, part on an but to date we’re progress. of portfolio, up continues to We at important becomes

I We yes, thinking to at right. report there new have about it point. But, think nothing this you’re

We’re bullish production. on U.S. crude

the for other We’re to be as bullish type expansions we’ve to look far on activity it whether crude or Permian. to Gulf the that opportunities, Coast. We been doing the some want Ozark the as pipelines

an That’s we how exports. give we in that out. that interested But area And on very that is over hope continue we’re City on. we progresses. put guys going starting that a you time, have we’re exports just build focus focus to also on. We’re to update mentioned Texas We’ve area farm that to tank to another

Operator

And from have do Shneur UBS. Gershuni you. from question we Thank follow-up a

Shneur Gershuni

Thanks, guys.

asked. so follow-up activity and forth. Tom Permian acquisitions In through overpay, like the where sort the Just is of obviously, you in lot Can question you that of certainly such on a always can pursuit a a footprint acquisitions your walk with just Permian, kind of purchased or do around fear where in there's the of you of potential strategy us have and the won't building because the dissuade that you can out have for assets -- what mean, a or an you that fears of in fears Have position there over you concerns end acquisition? you've looked up a overpaid I and the there price? not to that market your bunch that? been that

Mike Hennigan

Yes, to there. the active that’s Shneur. To out looking first package we part, every are get

you the family But, disciplined, in Permian there's is in been is Permian. fears right, and alleviate to of that best doing to you're So, The and elsewhere. the that's continue evaluations inside I a that’s tell model we a stay we are to can our way lot lot Marathon what occurring do. the the asset

how end it bid? we partly we not our close the we of So, winning? Yes, to have this because, successful, not that not. discipline. higher much And we on unhappy that's price. have come at we're No, day, is says we’ve on we for evaluate, approach did goes we're a if taken if And based assets. the Have

been We we above continue to that believe place the the on that the pricing that's has values assets. occurred

So, we’ll we to overpaid to we’ll position for opportunity, an going where for a not continue ourselves in we're put an look asset. but participate,

Gary Heminger

the best think, haven’t illustrate is, way I to we that anything. bought

capital right to been So, very get it might capital be disciplined continue disciplined, and head. we'll we've on

Shneur Gershuni

Can you doing Northeast? quarter, and in it second to during may perfect. of your so on your a can on are out to are versus follow-up Northeast. acreage dry? quarter. they're looks as acreage, thesis for then, the picking maybe if were falling have I wondering about your talk about Northeast what It talk like producers color concerns Any things Perfect, playing moving And they there been there's rigs Northeast. and was about gas of about the during one how forth. like on last the out movements you the sort wet looked the Obviously, first in up if they acreage

Mike Hennigan

Shneur. of I’ll you comments. give couple Yes, a

to you natural the free, the will continue with in And pleased times, the we that We I've we're obviously, associated the growth is there continue free. said a Marcellus/Utica in gas recognize to area the for is concept see But off, growth we be Permian First out production cost Northeast. U.S. be can't gas many in the the after area of free. believe us. lowest and

our invest seeing continue to capital. we as seeing you're To-date it it You're results. in

them service, are the next you plants that are sanctioned plants in four mentioned we're earlier, putting in We've in six I eight already Northeast. the Northeast. them three As we’ve in year, told XXXX of of

all of two the comments. the one the is you of in as right far things parameters. being track rigs, that's As you length give obviously, the on now One laterals is, in spaces. industry specifics the deployed that's common But, I'll the

same So, or because produce rigs, what's more you And here. pad wells of could amount laterals. gas, rigs, of have is also have going part important yet that on happening you the longer amount the are of even with less

I wouldn't parameter. So, look one that just at

look parameters. to have multiple at You

count pad So, of important. is laterals number length wells per important, is important, rig of is

So, is things feeling together. all we constant have, customers, about particularly with those in mentioned. kind all to And know in going good of what you our do we're so how we we service them obviously come that Northeast, of communication producer that we're runway really forward. the as the And

Operator

you. Thank

is Our Markets. from next question from RBC TJ Schultz Capital

TJ Schultz

to out Just But, additional you and on There Do haul come a in impact on a long line. your gas would your for flaring timing follow-up those ramp obviously on on in projects that have interest participating view, need line any increase the assets, of your projects. of perspective on from takeaway interest for outlook several level in those are the that just And any just did then, Permian line options? as or now? they’re some there. coming to or

Mike Hennigan

develop plan this going point. think the line another. today strategy to able don’t some next is be on at plan Hopefully, our the that to this project, later I roughly that that No. be date, if more we’re should we on we’ll point. at we And give on Tornado color, a need disclosed XXXX. you is at What impact and plan, phenomenon to we our building or

continue the signal we’re we’re player bullish, to sending that -- the We’re Permian. in area still going be the pretty a is, to

We’re that business. additional to over going more our our more time, into flows other haul activity have to in and the we plants Permian. of in participate as to we’re and show expansion up pipes, down Northeast, And look we have also a continue hopefully, And want in the long very but bigger of and to proud cash we expand of better presence in that diversify facets the you the model the area. position have we

TJ Schultz

at be investors the what as me evolves think for would distribution broadly, view would you market, follow-up give I on a in coverage this market far just what type the mean, distribution guess, term want, comfort that you back on a of has changed just most growth. I coverage longer moving for your versus just to or as more self-funding? forward all

Mike Hennigan

Yes.

earlier, I mentioned TJ. As

We’re we’re strong the showing model, coverage. self-funding committed to and to committed

north X.X today. We’re of

looking model. we’re as model, business for, our far So, our as I they’re think what giving investors

attentive also We’re to the balance sheet. very

X.X showing ratio. leverage We’re a on

feeling So, about really good we’re that.

We strong we to evaluate will we distribution tell growth? a pretty when frustrated meantime, offering we are continuing live market I where do this better it trades word our average a what to is we wanted growth year. does But, we’re offering. our XX% think to the for midstream In up remain of little long-term that a equity you, think

Operator

Our from next question is Chris Sighinolfi Jefferies. from

Chris Sighinolfi

movement noticed about a in you plants of next But, was you have asking to the some for pipe number sequential wanted Obviously, volumes. growth, announcements your talked the of just Mike, else Just year. that? other process from with Shneur Antero could to the it follow and moving any that up Seneca, on the question regard looked sequentially on in is drop dry day or the at and a be would specifically of quarter. just areas help. there you to something cubic about looking XX was like feet last Is there to color speak million

Mike Hennigan

that going Yes, a on. of are couple things Chris. area, In

dry is concentrating on are movement it as we’re seeing But Antero Marcellus wet The and that they've some obviously we Utica producer acreage a dry acquired today, out we announcement I pricing area and June know, about Smithburg. the customers from the is move where in expecting wet additional big their As at Sherwood activity, put been activity area. related. has mostly you Utica. talk would the rigs the of end our to also one comment, in of the

right And that as as continuing forward to point you're areas. growth So, one area additional is But, going we volumes up move there. the area in you're where that it's in still to I our not utilization think looking other to some some come we're as see out high the forward.

Chris Sighinolfi

I me aggregate of this terms in rise length the remind at think you And price. had then, you thanks. from in Could period just NGL NGL in the the mentioned benefiting Okay, point?

Pam Beall

of providing been that about increase year the every that Well, price the rule worth NGL in is thumb in $X.XX is we've bcf. million $XX a

from quarter from XXXX prices first quarter so to the we second, had nice in from as a And of well the to second NGL the second quarter -- sequentially the as XXXX. move

that's one think way about So, it. to

Operator

you. Thank

Our next Holder from question Goldman Jerren from is Sachs.

Jerren Holder

Thanks.

a is off Just method distributions quarter? into equity second quite equity going maybe drove from that What And with use up a bit to earnings. good runway starting investments from the first quarter forward? the

Pam Beall

control. that just are are Yes. We a investments people, of that reminder third for or -- in method made that out for a equity the part Obviously, of detail of there break then not the we operate be we that's don't that low variations company loop, provide distributions included get by timing. cap, that includes equity of business we and some can typically And the year. last There and that don't drops other level particular set from. that in it method quarter in

variability. we as assets we can much that there necessarily be that We we don't to have can operate variation do control. into that. ourselves. line some assets some of be sight But, don't Again, those as there So, those are the

Jerren Holder

And Okay. volumes the then, expect we were what quarter, second on in the third the in what should quarter? Ozark and

Pam Beall

that either level volumes by of specific Yes. detail, We on the pipeline. don't provide

Operator

you. Thank

from of Bank Lynch. question America Merrill from Dennis next Coleman is Our

Dennis Coleman

Yes. Good morning.

swing maybe just back the and the other on Permian a the for minute. Permian to expansion, questions to Just

for pieces have obviously One producer, to commitments be of foothold possible a sponsorship from been is of I a from is you, just might the that not that to avenue And support producers the while able that available sponsor. through these takeaway get or projects capturing as wondered ways mostly a MPC?

Gary Heminger

Yes.

that at, Permian things big purchaser that the has big have of crudes, not One in producer, of very we while we be based is a and certainly requirements day. may a every look we Galveston a refinery Bay

get the and can has producer, the can we're demand look you it Cushing, I to area. you question strong in not sponsor earlier, you in Cushing while And So, that a anywhere. barrels a over get at the in way have interest as a as

in So, the the sense. sponsors most is always what very makes interested

Dennis Coleman

know reasonable prices. maybe big packages somewhat But, have at follow-up, more transacted quite And don’t bit been a little seems recently. it to how that this. that and of perhaps couple related there’s a I then, And phrase midstream

you And get package the some a do you’re smaller today. or question But, a you acquisitions is, so, -- announced billion can package? billion if think $X you’ve guess about prices, to buy I $X willing better

Mike Hennigan

in unitholders, it create what disciplined. that’s approach, think I don’t stay to bid we’re day, look at large and package, we’re going then make Dennis, think we’re our bid. Whether sense it at can and each end value, tune in think packages we continue interested us. earlier makes the we appropriate the And to we we a we at all numbers. What we determines to I and level our asset a think the value a reasonable have is, package, the I miss tell there. package would second value. Gary value you shareholder for Yes. small of or create of going mentioned package disciplined is due-diligence the number at If it would to we I a is the of we where size is, the acquire that round, mentioned say, to unitolder that out earlier, we And them it’s value, that looking we the fine when for what

Operator

Phillips Our is from next Guggenheim. question from Matthew

Matthew Phillips

expansion the questions. is couple a or XQ The and XQ materially during contributed event? Ozark it A model Woodpat of more expansion

Pam Beall

contribution it up. will continue quarter, volumes Definitely, to Yes. a we second ramp expect the the and in was nice

end from going is -- development. the the X.XX been of to tail So, at really that’s X.XX

to expect some in higher benefit we prospectively. continue see volumes, So, to would

Matthew Phillips

shut-in then, is Mariner the G&P the been it than impact that at shut-in? mean, due frac East side, on volumes G&P X and And the have up. But, I should utilization both were to utilization all? lower

Mike Hennigan

plus. Yes. Ethane We smaller get to more railcar diverted have ME shut-in had for a X on to movements line. the had CX us. obviously arrange did additional impact on to

a it a bit did it an So, it impact on major some us. say impact, to but have have would us. did was not little impact I of

Operator

question Michael Blum Wells from Fargo. next from Our is

Michael Blum

in X the just XX and in broadly Northeast are East NGL delayed further becoming and even to issue on terms takeaway going hear where reason. topic. where there situation see doesn’t on Is they’re growth that’s any of takeaway for Mariner extent same on you NGL rail more a your wanted that there? the support an the Follow-up to the point thoughts the I

Mike Hennigan

impacting if handling been were way Yes. said to adjust. don’t at We just right, near continue see to-date would rail we’ve delays the we’ve it’s that us Obviously, Michael. us point, you’re is have At we’ve it times growth we’re in occur, the in been Complex. some cars the future. The impacting this at Hopedale up. we And point. the our handling past to very supportive additional to of But, ME X not starting many

As of of the Hopedale on quarter. the line the IV, you end year to in in we’re the fourth expect building know, come process that towards

see planning. to the coming to looking keep If on it impact to and eye our updated you line. So, just as adjust progresses. keep X we're situation forward on an area. we date, And NGL obviously we on in any us, To continue to continue then, have had and we'll it growth the ME hasn't time doesn't,

Operator

is question Fargo. Ross Wells next Payne Your from from

Ross Payne

Xish you Gary, see at that you are we right kind future, that and How obviously the attractive get we tick lower, potentially below both mentioned maybe targets or of guys? slightly in earlier times can could is or obviously recent can and expect Pam, or very leverage range you're a Thanks. X.X that down now. below? of doing,

Pam Beall

Yes.

around to said So, grade we're equity. committed X. is, also profile. really not comfortable we're committed What maintaining to issuing you We're credit an investment

than that. there X, higher could leverage see could where up with be So, and quarters even we'd be these tick comfortable you

long be total also leverage X we that really the the to view So, we manage that know something able low less. or prefer as would had We Xs. at the investors the around

there. though, that on we pursue grade we we the a and an the found a and had maintaining see the profile, to leverage profile. is we situation appropriate flow profile. not that plan we us. what said had But, the issue needed organic a maintain conservative And strategic was investment where between a and if credit balance to acquisition to opportunity we ourselves if it's opportunities we profile, thing maintain we view significant it wanting Ross, right felt equity equity the would And we equity that again, in funding, right the ahead have pretty where funding, to the depend cash do So, of will earnings business, really all

Ross Payne

Great.

Gary Heminger

we business, not one as credit the in And is the amazed the of if best step has business. I sponsors sense. of in option the that, the in one growth of always But, still investment that beyond us the given am profile our is have to the community that's one profile is makes risk it lowest things the the for but that

look can a you I recognized, the justify to what has And we having very our I in think much multiple profile, achieving And be a been we're certainly not If at that risk sponsor think to strong certainly I value. that than supporting something believe needs MPLX today. recognized. don't due higher equity to that's

Ross Payne

certainly step big sponsors and to And point. guys have as that needed . adds when good seen need we've it other I mean, like needed a that growth a you that's in backstop Gary, enterprise

Gary Heminger

you. Thank

Operator

you. Thank

next Brothers. Craig Tuohy Our from question is from Shere

Craig Shere

how you the might be perspective, to to your rallied you're Keeping have and across XX of has $X.XX in recovery? couple morning. the last months. Could in G&P sensitivity pricing would full ethane uplift price million constraints takeaway incremental Good was if really this? ethane impact, NGL bcf And side, much you discus that system

Mike Hennigan

Craig. Yes,

wet that bullish it it’s on and volume. And pricing So, side. ethane CXs, is stronger, liquids for follow-on the We in NGL move as all you of lot on matters composite growth pricing, given have additional But, economics and really you’re CXs, see continues general But, all as system. move our get created in value get you as we wet breakdown but we as by are I to a because CXs a us. you the is economics been where component it. of good as the on producers mentioning much gave hitting equity we side. to CXs, that pricing. But of color of NGLs. just think, towards in remain as kind CXs, supported us What economics the the people for put dry of of one a think rule start regard much between area I the The haven't together, obviously CXs were wet thumb if to the Pam more the more becomes you’re been effects up, earlier. story in mentioning to the good, the

Craig Shere

might contribution side? have fractionation on specific that Any the

Mike Hennigan

two One Complex that just think plans before end are I one of the of and about in we one is the the year. Well, Complex. Harman things we Sherwood Creek talked of adding process our at our de-ethanizing the in

with stronger, as to So, we’ll de-ethanizers. I’m that agreeing do have you ethane opportunities kind you’re gets more of right.

basin well. much continues We as that’ll provide more think to as a this committed couple the we towards the opportunity year. more And have us of grow end ethane, to and recoverable there’s

Operator

Instructions]. you. [Operator Thank

Kristina Kazarian

in any questions it Well, right. like looks we have other All the queue. don’t

joining questions you your on operator. additional any for us as clarification thank interest Should today, or Thank in well. available you, you MPLX. be today. would you team for like calls discussed thank our call the have will on So, we to topics And take

Operator

Thank you. does today’s this conclude And conference.

You disconnect time. at may this

MPLX (MPLX) 26 Jul 182018 Q2 Earnings call transcript