The following is a summary of the Targa Resources Corp. (TRGP) Q1 2024 Earnings Call Transcript:
Financial Performance:
Targa reported a record quarterly adjusted EBITDA of $966 million in Q1, which is a 1% increase from the previous quarter.
Despite current commodity price challenges, they maintain full-year 2024 EBITDA estimates between $3.7 and $3.9 billion.
Capital spending is projected at $2.3 to $2.5 billion for 2024, and $1.4 billion for 2025.
Targa repurchased $124 million of common shares during Q1 at about $104 per share.
The company saw volume growth throughout the quarter, enhancing the results and facilitating a positive outlook.
Shared revenue has shown consistent growth across all their infrastructural and production activities.
They reported a strong balance sheet which is expected to improve as 2024 progresses and into 2025 with reduced growth capital spend next year.
There was notable quarter-over-quarter increase in share buybacks, reflecting the company's confidence in their current status.
Business Progress:
Targa experienced significant volume growth throughout Q1.
To cater to the increasing volumes, Targa plans to add significant compression throughout the year, promoting continued Permian volume growth.
They have two major growth projects in the pipeline: Pembrook II and Train 11, with no alterations to the net growth capital spend estimates for 2024 and 2025.
A small capital project is planned at their Galena Park facility to enhance LPG export capacity by about 650,000 barrels per month in the second half of 2025.
No operational updates were given, but they did continue to focus on managing fee-based volume growth and fee floor growth in its Gathering & Processing business.
Targa expects an increase in the need for infrastructure from the Permian business because of stronger gas prices, despite the decreased volumes from other areas due to weaker gas prices.
Increased activity is anticipated in the Badlands business later this year and next year.
They are preparing for the construction of another full pipe projected to be needed out of the basin by 2026.
With the commissioning of expansion projects, they will support exporting products, creating mutual benefits for involved parties.
More details: Targa Resources IR
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