MPLX - Earnings call transcript Q2 2024

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Operator

Welcome to the MPLX Second Quarter 2024 Earnings Call. My name is Sheila, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Kristina Kazarian

Good morning, and welcome to MPLX's Second Quarter 2024 Earnings Conference Call. this under be the accompany website on that mplx.com at Investor slides call found can our The tab.

during from of what CFO; Actual differ Joining call are to materially me safe be I and over X. well Maryann. call other harbor results Hagedorn, session on could non-GAAP filings read we will It's that that, Maryann follows. the today team. We statements are our members and Slide turn Mannen, President the with statements making you as on to expect and the CEO; during may the the we to the executive call a disclaimer that cause question-and-answer invite that and there as results Factors in the will SEC. With Kris forward-looking today. differ actual reminder included

Maryann Mannen

for morning, record tremendous midstream CEO call. moment industries a recognize value Mike you Thanks, Hennigan's take has partnership. and nearly to Kristina. years. want thank for a as joining both Good been the to accomplishment MPLX in X to our leadership downstream and the I of of Mike's

During with growth tenure, flexibility positioning of billion, over execute we us to DCF annual on have $X and his EBITDA our our deliver strategies growth capital. and to commitment financial delivered return

some the Northeast, flow to the the are opportunities Marcellus remains to where Volume robust crude, In cash MPLX's and X% the distributable Whistler of across economically in cash of and continues fortunate In executive natural Permian both believe laterals Progress Utica second acquired to quarter, supported a the completed to barrels are our reflecting transaction day, and has consistent chairman X% lowest activity The second acreage. in pipeline, ownership of growth. MPLX Gas while another wellhead-to-water higher our grew This additional on targeting accretive gas longer EBITDA the growth The of Permian the Producer providing the break-evens BCF closed in of capital. our connecting growth is for flexible first XXXX. continues return MPLX strategic return expected offers as project interest objectives. BANGL the growth in is proposition compelling to access. supply $XXX are million and crude the the which within of to of MPLX create Natural with commitment continues to of basin NGL have unitholders, We capital second Pipeline, domestic Production its leveraging country. FID be Marcellus, NGLs. the resulting in our and This Utica, volumes. in basins. the our the to Blackcomb shippers our flow Mike in advantaged adjusted the step MPLX liquids-rich transaction. Last expected in XXXX. producers region asset per week, strategy mid-teens reached Coast. quarter, board. In be year-over-year. the its value across export XX%. grew partners bringing the return should Permian Blackcomb X.X is value markets expansion and is market immediately BANGL is pipeline has a in NGL half XXX,XXX and Gulf along also this platform with We quarter generate for in deployment a chain. to this a service

potential this confident future of value in growth are the We chain.

continuation recent to an Webster the strategic interest acquired are pipeline. to flows. cash approach oil our a also of transactions crude in additional We growing Wink These

remain a Over return, capital primary and our invested and business. on the X on last are of peers we of a MPLX years, return has on distributions return led return method capital,

for results as growth over turn the and me the quarter. to well Kris to our let discuss as call financial Now operational

Carl Hagedorn

plants in Once growth primarily highlights Delaware increased in Logistics were maintenance X.X the second for second higher expansion current quarter the we or outlines partnership the ADCC customer Permian, expected volumes MPLX ventures the to Thanks, producer we the Permian performance placed processing debottlenecking and processing plant year-over-year, meet due the operations be of are into primarily plant, up Secretariat X integrated our service program compared segment, in growth segment. XXXX. to was contributing new growth processing and Segment the in half approximately quarter NGL which assets. pipeline gas smaller, in operational our natural to mostly organic are the is positions gas delivering increases increasing activity. Slide remainder feet volumes third capital progressing we basins, II bringing to operational, affiliates. by Preakness gas of and will rates, capital of in billion EBITDA Permian Marcellus million L&S capacity in effects plan In the year. Pipeline through to targeted gas driven in per higher-return in The G&P basin July, are existing day. projects, is demand. and XXXX, be early the and related when our progressing our of year our quarter. Anchored In $X.X and the opportunities including projects segment, and our investments, refinery second adjusted Storage prior its to is comprised bolt-on $XXX investments the footprint online the projects planned from spending expected The at additional Maryann. with financial began assets, cubic processing with online total of billion. opportunities. In grow XXXX natural and joint equity

EBITDA Gathering Slide increased G&P XXXX. on X. to Moving Processing $XX highlights The our adjusted quarter segment and compared million second to segment

were primarily by from a drilling in offset Marcellus the higher largely increased year-over-year, million up volumes, assets. assets. Processing up The recently in X% This Taking operating the driven volumes G&P second is increased gas sale EBITDA were Marcellus expenses the quarter second in production higher segment X% volumes XXXX. as and to including of of as Rockies. our of acquired of recent into volumes and well Utica by the XXXX included gain primarily Total volumes this from $XX the addition from and account, on year-over-year. contributions increased acquisitions, due dry X% Utica gathered year-over-year, quarter

increasing feet Southwest have hallowing volumes ramp to XX% profile recent volumes by as In Permian day was on II plants Creek more -- XX the XXX the due second an volumes producer of Oklahoma XXXX, XX% acreage. Utica, or million declined lower since growth to Volumes in activity. the the on and than the the in processing with offset cubic per increased months. liquids-rich expected value up are Harmon II quarter processing are in of seeing producers Preakness reduced

basin and GMP Fractionation due operations, grew largest XX% increases year-over-year increased production ethane our for processed far, volumes by Marcellus, the by of we gathering XX% and to X% growth. volume higher driven on drilling of saw and recoveries for Focusing higher processing, volumes.

We ethane as are start-up Valley for Mountain by as the strong encouraged Pipeline. well in-basin demand of the

As are to and processing our MVP is connected the customers. operations origin of Mobley positive producer MPLX plant, its for its

centers of the and monitor in Southwest. development Northeast to the data continue We

natural for plans development we demand As our gas-powered the customers. producer of increases will support electricity,

the prior to first billion the financial repurchases. project-related due years, unitholders flow seasonality quarter the $X.XX second million and expenses spend. MPLX were million $XX quarter, million to up to through returned second the quarter million to $XXX compared and unit distributions approximately $XX $XXX of in Similar and in $X.X X. in of distributable billion, adjusted Moving year. from of on X% to highlights X%, Total cash prior EBITDA the our increased Slide respectively,

expect the balance leverage to During billion notes issued leverage XX-year second the cash, the of X.Xx. quarter, and due to which use retire senior cash MPLX notes, ended MPLX $X.X XXXX in billion February X.Xx. senior December of was of a $X.XX was with we and in quarter proceeds Net XXXX.

thoughts. it Maryann let Now some final for me hand to back

Maryann Mannen

Thanks, Kris.

a We X-year DCF annual over compound have X% basis. delivered on growth

in they this relationship strategic in years. an and these activity opportunities and We expect Marcellus footprint. the is opportunities able enhanced. across our and provides opportunities; remains our our increase each cash to value as is by high-return gas, Utica, to growth supporting us In distributions last on Permian, flows future. we chains. and crude NGL, advancing processing a our of are Strong to each Based our to growing for of value growth In the growth we of X the see the coverage, cash growth leverage, distribution cash projects, pursue continue placing continue chain. low our natural gathering growth strategy MPLX flow. MPLX our have excellent to the in grow investment been our position the producer XX% of value further strategic flexibility, grow executing MPC, and By we in growth flows, financial advancing robust,

back turn me to let Now the call Kristina. over

Kristina Kazarian

Thanks, Maryann.

questions you X open follow-up. may ready we questions. Sheila, time ask question plus questions, for As for we're for to we call that additional permits. With the yourself as a that, the We limit re-prompt

Operator

Instructions] will from first Mackay John with Our Sachs. Goldman [Operator come question

John Mackay

I lot should that fits $X think of you and about of think in over just a this the on year. going if pace? of Maryann. bolt-ons the how average, level mid-single-digit how last again, start that done into general put just billion want high inorganic do Congrats front, we maybe organic level strategic to the spend I of on spend forward the growth your you context

Maryann Mannen

here, about things $X and our strategy our we've forward, of been annually as about capital as investing But in in think JVs So shared billion also programs. well. last underutilized a for couple going as out our you filling we years, few the capacity and

meet of mid-single-digit inorganic as to these see and for to continue goal organic growth. our us opportunities We opportunities

BANGL last in so, done with If ownership, JV increased the you excuse Bravo. Tornado or we've or our buyout me, Summit expansion platform the Rio with the look Utica, of transaction Tornado, Permian over year Whistler transactions the or

regardless to being the ensure we we whether organic, capital-efficient on inorganic, in focused think unitholders. growth a capital reinvest or our return manner. business, be we continue capital the employing strict We'll of to it's to are So execute what JVs full with of able to discipline the intent strategy, that

John Mackay

Maybe pivoting.

when and maybe if And across gas guys expect year? macro around remarks, bit basins just that a hear in touch trending we earlier touched a the more the bunch expectations side. on maybe how 'XX, go guys in on your the pick we to this You volumes of G&P just up? horn, versus little but you the you'd fulsome see broadly would to the can better if are footprint different start love inflection in to prepared I wondering more maybe look

Gregory Floerke

Good morning, is Greg. John, this

the look If gas, in Haynesville. and dry hedging we're dry have and announced and you gas curtailments, areas, footprint processing in led takeaway The some And also, at in the in in, prices, in low to and price some with some in lean pipelines the to -- our crude particularly really cases, has particular but the particularly tend gas example, NGL. strategies residue in areas we're Utica, areas production that rich on areas environment Northeast, commitments is gas to versus focused liquids, dry the gas the production. is on Marcellus drive continue lean for gas where that producers

So the areas. rich gas we footprint, move continuing we're see particularly really production NGLs. gas, associated our rigs that gas crude in seeing from the and impact. more rich crude are the What into not is And dry comes in with it's to areas

with in Preakness places area, Permian, superrich mentioned, Maryann day really processing plant. almost by online high also a far content taking another BCF we Kris the our gas. So is advantage that and in we X and II a there, and added which as we're with of coming largest, And growth, NGL Marcellus with the like just see

existing on areas that condensate seeing is going not customers Utica, it liquid-rich rigs and with a built even oil the into great. But window. window it's the gas Utica, because is we're really is gas light and beyond those unique years and that's there So -- it areas, out we one and new about ago, been that excited now. Not over only what's move overlooked rich area other are but growth we're light in rich over oil seeing has now the we the XX bit that's to

customers only but seeing acreage. seeing move handful there, existing -- new in producers moving also So up some and a of we're new not we're buy

there, resource a untapped an oil crude have you really light is resource. which So

capacity, we're activity. it's and surplus the positioned lot So a Northeast, unique capacity. really it's fractionation with driving and CX+ gathering processing, And to of de-ethanization fractionation prebuilt both and

capacity. in existing this really counts we're use now the seeing increasing about So we're excited opportunity that to And Utica. rig overall,

Operator

Next, Gupta UBS. will from we hear Manav with

Manav Gupta

pipeline? a very little Congrats, both very It Maryann is, MPLX the looks MPC interesting My start on we a more get on strong first like can project. Blackcomb details question side. and on a

see could are So this what as How us on the it? If project? more you developing? details of some give you this do benefits

Maryann Mannen

happy wellhead-to-water some Blackcomb. an give share to I'll piece you around Yes, as opportunity strategy the to to Dave But growth be continues long-term of specifics the that. do of the important of know, our MPLX.

taking the quarters, Rio announced -- it transaction, gave access connects JV been another we've for in is Dulce Agua steps We several Blackcomb Over basin, important through this think you Texas. just last the Permian pipeline, Bravo the us it know the the piece the Whistler as South FID.

continue growth David let more here we've specifically hopefully, to us to for this give over continue that to an of again, the to demonstrating outstanding you years is to So put together few little a elements what wellhead-to-water us that going strategy. I'm the are on it key give Blackcomb. him we're color platform strategy pass mid-single-digit will last we and able and done allow that

David Heppner

Maryann. Thanks,

So way And relationship. think on Blackcomb, continued just think of all and about the foundationally think evolution it's on gas it, best you the built nat is the when touched Maryann Blackcomb, wellhead-to-water of strategy. Whistler to our I

in at And out a is which got to also of Gulf runway, as of the with out get growth capacity the come you can Coast. Blackcomb. But see has believe, the the we along to think to Whistler the a basin the the pipes you foundation else necessary, lot of coming So with which basin. was Permian, everybody is just incremental first of continued of the Blackcomb the

the think pipeline, we're about have of we chain those and Bravo chain, you our chains, all because capacity lengths It's long-term the that value of not value Blackcomb in of service, that part the just in LNG remaining the but getting came which whether and Rio the there. facilities. excited integrated only strategy buildup ADCC, value So the partners of

down grow continue Coast. see you'll Gulf the those export think I value to in the to so and continues And demand capacity chains basins as has the

we to look forward give you to So continue updates.

Manav Gupta

million. My flow $XXX quick follow-up is free cash adjusted was here distribution after

you turn uses And to cash it continues So this then is the the want it building. Anything cash grow? over. say to as of on I'll

Maryann Mannen

business. several we've that think continued of one on over is quarters financial about things a so capital flexibility. Yes, our build of the we talk a last return to I and the return

of that a in be X we the years, return I mentioned, our capital. distribution increased to ability our XX% As to last and continues primary source

and do the Second, undervalued putting repurchase of to that certainly distributions those capital share you've we did this with again certainly about this high-return there. the talking the the Permian We been quarter. believe return as particularly seen future, projects, in equity and Marcellus the and is use another of work cash intent here, these for that's in another we've growing in mechanism capital. Growth, anchored

of So the us cash on balance. to some think, pass that. I'm that allow more share specifics the we financial a critically it little important going to flexibility, is Kris to allow him to to and bit do of

Carl Hagedorn

the Maryann. of about folks what balance seen, the of highlight at Manav, I cash $X.X as the is end we have billion Yes, on you've quarter, Thanks, to would sheet.

number, of maturities the So up December of off that will coming or of just with and have in that that big of balance. cash cash XXXX February some balance reminding pay XXXX we

our that as continued capital. again, we distributions. allocation return about of the adjusted capital it return cash articulated, are free returning flow of cash Maryann And after As is, it growth and in excited our framework builds, on to

Operator

will Our Jeremy with JPMorgan. question from Tonet next come

Vrathan Reddy

up on participated that that previous is frame appreciate MPLX you EBITDA we historical has the wanted how of is and comments, Reddy Jeremy. future growth the Vrathan could I in, growth about just smaller number for mid-single-digit some guidance. a that think to But not might This up figure on and accretive follow of that future above any there? deals given potential I

Maryann Mannen

Certainly.

last look as EBITDA X you've over distributable it in X%. So X% you and never quarterly that targeted our we've distribution excess the But annual growth of in adjusted you indicative said in if and growth guidance. almost flows compound X% our of know, years, cash been has necessarily

if have certainly in earlier has worked key year last the been fashion, our target. transactions execute of some the mentioned similar so. on it or are able I we in a to So But we that

continue the obviously, would to these that and of beyond been goal, intent that as growth you. seeing target that be we capital to of put Our to with work with some EBITDA key projects our sharing execute we've

opportunity growth the return unitholders think manner shared. just but we which the see, we commitment So achieve, in again, given we which certainly ensuring in executing to able we to number again, to that strategy goal, projects a been of capital and and that the our we've

Vrathan Reddy

then need guess, point investment additional do strategy, you might on capital you where how as whether see that upstream And you that downstream? think Permian invest, this to be wellhead-to-water about, at it I or

Maryann Mannen

Yes.

a think few there's out strength takeaway work. in and effectively you certainly, continue the given I'll are we in So opportunities basin, few the see, And capital put and for as let it we look thoughts give given we assets But over about evaluating, to few there a particular, build there. you continuing think that that to areas. Obviously, that next when Dave we particular the capacity that at that side of to the well, years, us getting to the are MPC getting on opportunities then water. to

David Heppner

Yes.

provides flexibility. of Permian X think road only laid that our We chains. of of but gas of the So nat optimal strategy also achieves maybe value wellhead-to-water, that nat footprint. we're think Go shippers kind what on not back I the to I'll the touch out that out We side, building gas. with or map

think shippers. When flexibility those to and you chain, talked BANGL capital our with about project NGL and the you expansion how about and we've value talked So incremental the frac ensure in as think for we I Texas about investment, about our potential we ownership incremental also about continue there. think our you opportunities that can think BANGL, especially that City

when think the leg of capital BANGL and processing, the long-haul the way we fractionation achieve about term. pipe value into We'll gathering and terminal I and the you capital alternatives last other that you So continue and think all project through are that how and about that strategy to of evaluate think for the long the chain, tankage. there discipline export strict evaluate we'll versus us evaluate out that lens options from to

couple just those whether you are capital think, investments, think a level ways, and of at those as So the forward be will out down value chains. we I continue MPLX build to or look about level at that JV the it

Operator

Next, Chen will Theresa from Barclays. hear we with

Theresa Chen

First, I both also to Maryann wanted to express Mike. and congratulations

the sure the Texas wellhead-to-water as current would time online a export on think on it earlier to you I'm in Following line to interest provide infrastructure, Dave's the And water not piece the progress Permian you bit bring comments, And of related a little incremental detail to about in then just to would also the be the could BANGL. up build? that market, to speed on we economics your able if NGL City terms last be XX% frac. price? brownfield assuming that purchase share to more strategy,

Maryann Mannen

and your Theresa, you morning, Good thank comment. for

of compete generate The chain. us first, accretive, expect transaction, again, that ROFO out that that believe, the a our effectively a to strategic return. the wellhead-to-water build immediately we're of term, think BANGL transaction total strategy. growth we ability importantly, value had and to really transaction. we ownership. We look, is mid-teens asset longer and BANGL Also, on of more be as confident that an we piece basin. BANGL key important again, And And been has XX% and it continues NGL on to profile in a So in we gives that

on wellhead-to-water As City, it to we we're that ensure relates Texas to there. optionality your in our trying question maintain strategy

bring around we alternatives have evaluated And we'll do other as to continue any have build you that to further well. how well, we'll conclusions We so. that as continue out, to as

Theresa Chen

project, the to anticipated economics on any related build are to Blackcomb, then multiples And either you or able share returns?

Maryann Mannen

the of to we're at but stages early confident to that as its Again, this any the put this returns not critical anticipated We've itself have No. not contribution Theresa. at this in our really at in shared point continuing shared point. strategy, pipeline point we've not that but together, yet,

Operator

Wolfe Our Research. next Keith question comes from Stanley with

Keith Stanley

the to on $X.X first on wanted cash sheet. follow-up the of billion I balance

is So below is Xx well your nicely. EBITDA growing target. leverage

You're generating free a lot excess cash flow. of

billion of December So at from balance a repay, cash view on why in I the and maturing as you capital And instead what level perspective. February $X.X sheet use of to structure point cash think debt a would refinancing. of inefficient it's

Carl Hagedorn

Thank you, Keith, for the question.

see towers. an and we $X.X look What we earmarked sat you But to that effective we indeed, we've is X.X%. liability in you leverage the that, we do tell sheet. ratio we do continually have earmarked as our we cash way. it we will sure do continually the As That's February you something We manage to -- as billion, as fungible. balance and December mentioned, that strength about that I make at notes. noted, a I'd our for tell the in tremendous of net try do

communicated room leverage. So our in we've think that we XX the up to past, we as have in

our the strategy sheet the cash talked about continue wellhead-to-water our Whistler, opportunities forward, sits where NGLs. how talked that with work. cash about So we'll to we've expansion We've we we evaluate for going as potential and put and evaluate doing to balance we're

Maryann Mannen

on Maryann. of Kris' few a I well. to as up wanted Keith, just comments maybe follow it's

growth One leverage, of seen is as the our the because frankly, state improvement why, EBITDA. reasons our is we've the in what that appropriately we've you in seen

you or belief if financial going That's important. our stepping I forward. your from important target. our an point, will, our financial we piece the of leverage not So around think flexibility, take that away is We're flexibility commitment,

that in So no whatsoever. change

Keith Stanley

moving follow-up a and NGL exports. strategy the question integrated possibly frac just Second, and on into

then have we've on, competitors some had Some of lifted too. export working the restrictions your capacity and they're chunky additions nighttime that

entering the like building seems export on of that there. aggressively competitors factor does are So your business? into potentially your pretty thinking kind It how

David Heppner

Yes, is Dave. Keith, this

a bit. that kind of on me expand Let little

So out yes, volume the capacity we and competitors the to right. we're with capacity think you're there And aligned be referencing it export able international to exactly you're building to signal, a the need that the I clear more export is that market.

bit back little a question, on it's to too, Theresa's So timing.

our that links it's So from of value radar fractionation, time finalizing that's in of strategy and say remaining other we chain essence, the export I top to as continue as through evaluate our something to options going facilities. us won't that we're but of of do it.

So very similar. LNG little to out facilities I'll gas nat support LNG strategy the the a of nat the also compare the the Permian. in of and it build-out chain to bit coming value of gas the capacity

what a little egg, bit down of chain into the the start you with going taken first. approach build we've part the So the And the backwards. move a versus I of value GMP, the the of out long-haul it's pipes think chicken and fracs docks

and it So market little bit strategy. want supports out bit the you how helps. I wellhead-to-water of to I it's that little of a a your hope think build

Operator

[Operator Michael Blum Instructions] Fargo. Next, from you with Wells will hear

Michael Blum

in wanted I of drill the comments prepared one down to remarks. the on

an Now a you're see seeing been Valley I'm providing additional of potentially the as of upstream your time investment curious you opportunities bit kind Mountain change in system? for do service you producer And has a any pipeline that for this result around if little here. pipeline? in the behavior of

Gregory Floerke

This is Greg Michael. again,

like really that a the $XXX nameplate billion towards, current the the believe, it incremental BCF. the MVP and feet the in of out at look will ramps takeaway that, I of about excited it's of day provide production cubic I Utica, billion Northeast the if total. that XX X as from basin stated capacity you And Marcellus, we're think

in takeaway, ramps already and had of does very little -- as difference over XX% positive, Marcellus a much that's few it that of plants. So particularly next a an XX% We years. make the our utilization terms incremental over

with Creek more And and up to grow, the little as Harmon we're that remaining out XXX and is also II. growing, filling so bit case to focused room on there's a piece

lot So filled. into I that the there's out think go capacity a how of factors is that basin of

earlier One of maybe the the the was mentioned capacity things curtailed That of too. out down. lean dropped production basin of or up being I gas dry opens some

So for and helps a in summary, look still anytime and But us bullish we're any to basin. at Utica. the grow, Marcellus is room on you there constrained now capacity very the

Michael Blum

just providing much, you're you be maybe a X on debt I then expect not but us, you tell Blackcomb. project could project? would there for other question maybe And know to financing this level

David Heppner

thank Michael, Yes, you.

to makes We But financing like that. a usually level will project with continue evaluate sense. this, project

Operator

And our Truist question come Dingmann from Securities. Neal with last will

Neal Dingmann

II first plant. how remind capacity just processing Can maybe on additional there for just the My upsides? the Preakness potential me question you further quickly ramp will and

Gregory Floerke

Yes, Neal, this is Greg.

of our to II new We capacity, secretariat after expect second build plant -- and into year. expect we've continued half we next next out Preakness to come service the in

as we of one next with try with to run plant move to plant, capacity we're these So sort out plants of there where pace to the we into.

you So II. the feel hopefully, that some ramp for Preakness timing gives of

Neal Dingmann

broader just increase notably there. unit. like my I'm gathering there. on And to then second all wondering Love does. you just upside made earlier the could It look continue about talk after some volumes on the you your maybe Marcellus comments just volumes question,

second I think one all as improve XX% volumes. you as of continue we suggest. that volumes can show expand that to quarter I'm assume to that steam the continues play year-over-year wondering, operators there can just

Gregory Floerke

area are third II gathering area that's question. parties that online gather that's be the gather to where plant areas There up. In not even process. gas and where the the Harmon only case gas. production. ramping a we're the come other of is an particular the the one growing, we which actually in is is Marcellus The That of we happens XX% of we're where great majority the Yes, this also Creek

gas growth you're why production you're seeing that's that that's So actually rich -- seeing.

to So with along expect to II. grow the volume in Harmon continue Creek that ramp-up we

Kristina Kazarian

clarifications All right, is in MPLX. call. the any joining you at additional any time interest for Sheila, the other you you or you. and for team Relations discussed like Should thank if we on have topics to your today, Investor us today, any of you take questions don't available thank your have further questions, would Thank

Operator

today's Thank conclude That Thank you. participating. does you conference. for

You time. at this disconnect may

MPLX (MPLX) 6 Aug 242024 Q2 Earnings call transcript