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spk07: fourth quarter 2023 earnings conference call. The slides that accompany this call can be found on our website at MPLX.com under the investor tab. Joining me on the call today are Mike Hennigan, Chairman and CEO, Chris Hagedorn, CFO, also with us is John Quaid as our CFOs transition into their new roles and other members of the executive team. We invite you to read the safe harbor statements and non-gap disclaimer on slide two. It's a reminder that we will be making forward-looking statements during the call and during the question and answer session that follows. Actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included there as well as in our filings with the SEC. With that, I'll turn the call over to Mike.
spk02: Thanks, Christina. Good morning, everyone. Thank you for joining our call. I'd like to acknowledge Chris Hagedorn, MPLX's new CFO, joining our call. We look forward to Chris's financial leadership, having served in various roles in the midstream sector, previously being the controller of MPLX, and most recently, controller of MPC. 2023 was a strong year as we successfully executed our strategic priorities. Full year adjusted EBITDA was $6.3 billion, distributable cash flow was $5.3 billion, and adjusted free cash flow was $4.1 billion. Our results reflect the continued growth of the partnership and its cash flows. In our L&S segment, strong operational performance and customer demand drove record pipeline throughput and strong growth in terminal throughput, demonstrating the value of our relationship with MPC. In our GMP segment, we saw record throughput in our gathering, processing, and fractionation operations, driven mainly by our assets in the Marcellus and Permian basins. Our focus on cost management, strong operational performance, and growth from recent capital investments resulted in adjusted EBITDA growth of nearly 9 percent and DCF growth of over 7 percent for the year. In line with our commitment to return capital, the growth of MPLX's cash flow supported the return of $3.3 billion to unit holders through distributions. We've increased our quarterly distribution 10 percent each of the last two years which now stands at $3.40 per unit on an annualized basis, and we still have strong distribution coverage of 1.6 times. Turning to the macro, the United States continues to be a low-cost producer of energy fuels needed across the globe. Our expectations on the long-term production outlook in our key basins are unchanged. We expect strong demand for hydrocarbons will support growth across our asset footprint. In our largest base in the Marcellus, the cost to develop is at the low end of the cost curve and below current commodity prices. In the fourth quarter, process utilization reached 96 percent, and we expect producer drilling activity to support continued volume growth in the Marcellus. We've seen similar growth rates in the Utica, where processing utilization increased 10 percent year over year. Both basins are seeing wells with longer laterals, which are resulting in higher volumes, highlighting the strength and opportunities we see in our northeast footprint. In the Permian Basin, crude prices remain attractive, and associated gas production continues to grow as producers execute drilling and completion activities. As part of our Permian growth strategy, we acquired the remaining interest of a gathering and processing joint venture in the Delaware Basin for approximately $270 million at an attractive multiple. This acquisition illustrates our ability to grow the cash flow of the partnership through the lens of strict capital discipline. We're confident in our ability to grow the partnership and are focused on executing the strategic priorities of strict capital discipline, fostering a low-cost culture, and optimizing our asset portfolio, all of which are foundational to the growth of MPLX's cash flows. Turning to our capital plans, today we announced the capital expenditure outlook of $1.1 billion for 2024. Our plan includes $950 million of growth capital and $150 million of maintenance capital. We remain committed to capital discipline, and our 2024 growth capital outlook is anchored in the Marcellus and Permian basins. Our integrated footprints in these basins have positioned the partnership with a steady source of opportunities to expand our value chains, particularly around natural gas and MGL assets. We plan to continue growing these operations through organic projects, investment in our Permian joint ventures, and bolt-on opportunities. In the L&S segment, construction is progressing on the Whistler-Aguadulce to Corpus Christi, or ADCC, natural gas pipelines. which is expected to be in service in the third quarter of 2024. We're also progressing the expansion of the Bengal Joint Venture NGL pipeline to approximately 200,000 barrels per day, which is expected to be completed in the first half of 2025. These projects are largely financed at the JV level. Therefore, our portion of the JV finance capital spending is not reflected in our capital outlook. In a GMP segment, we're bringing new gas processing plants online to meet increasing customer demand. In the Marcellus Basin, we advanced construction of the Harmon Creek II gas processing plant, which is expected to be online at the end of the first quarter. Similarly, in the Permian Basin, we progressed construction of Preakness II, which is expected to be online early in the second quarter. Additionally, we are building our seventh gas processing plant in the basin, Secretariat, which is expected to be online in the second half of 2025. Once operational, our total processing capacity in the Delaware Basin will be approximately 1.4 billion cubic feet per day. Outside of these strategic basins, the remainder of our capital plan is mostly comprised of smaller, high-return investments targeted at expansion or the bottlenecking of existing assets and projects related to expected increased producer activity. While our capital outlook is primarily focused on our L&S and G&P footprint, we will evaluate low-carbon opportunities to leverage technologies that are complementary with our asset footprint to create a competitive advantage. Moving to capital allocation, we're optimistic about our opportunities in 2024. First, maintenance capital. We are steadfast in our commitment to safely operate our assets protect the health and safety of our employees, and support the communities we operate in. Second, we're focused on delivering a secure distribution and expect this will remain our primary return of capital tool. Third, we'll invest to grow the business. This is both a return on and a return of capital business. As we look at 2024, our priority is to invest to grow the business at superior returns. After these priorities, we will assess the opportunistic return of capital to unit holders. Recent industry consolidation has not changed our perspectives on the structure of MPLX. MPLX is a strategic investment for MPC, and MPC does not plan to roll up the partnership. Now let me turn the call over to Chris to discuss our operational and financial results for the quarter.
spk13: Thanks, Mike. Slide seven outlines the fourth quarter operational and financial performance highlights for our logistics and storage segment. The L&S segment reported its fourth consecutive quarter of $1 billion adjusted EBITDA. Adjusted EBITDA increased $110 million when compared to the fourth quarter of 2022, primarily driven by higher rates and throughputs, including growth from equity affiliates. Improved pipeline volumes were up 4%, primarily because of refinery maintenance schedules in the prior year. Product pipeline volumes and terminal volumes were flat. Moving to our gathering and processing segment on slide eight, the GMP segment adjusted EBITDA increased $59 million compared to fourth quarter 2022. This was driven by higher gathering and processing volumes. Total gathered volumes were up 1% year over year, primarily due to increased production in the Marcellus and the Southwest. Processing volumes were up 9% year over year, primarily from higher volumes in the Marcellus and the Utica, driven by increased customer demand. Focusing in on the Marcellus, by far our largest basin of GMP operations, we saw year-over-year volume increases of 10% for gathering and 9% for processing, driven by increased drilling and production growth. Marcellus processing utilization reached 96% in the fourth quarter, illustrating the need for our Harmon Creek II facility. Fractionation volumes grew 1%, due to higher processed volumes which were offset by lower ethane recoveries. Moving to our fourth quarter financial highlights on slide nine, total adjusted EBITDA of $1.6 billion and distributable cash flow of $1.4 billion increased 12% and 9% respectively from prior year. Turning to our balance sheet on slide 10, growth of our cash flows has continued to reduce MPLX leverage, which now stands at 3.3 times. We believe the stability of our cash flow supports leverage in the range of four times, and while MPLX has just over $1 billion of notes maturing later this year, we currently do not expect to structurally lower our debt. When evaluating the short-term maturity, we'll consider all opportunities available to us to optimize our cost of debt. MPLX's strong balance sheet, including a year-end cash balance of $1 billion, plus the ability to utilize the intercompany facility with MPC, provides us with financial flexibility to invest in the business and optimize capital allocation. Now let me hand it back to Mike for some final thoughts.
spk02: Thanks, Chris. In closing, MPLX has a strong history of growing the partnership's cash flows by executing strategic priorities all while maintaining strict capital discipline. We continue to aim for mid-single-digit growth rate over multiple year periods. It's what we believe is appropriate to aim for given our commitment to capital discipline and the size of our partnership within our capital allocation framework, but this should not be interpreted as annual guidance. And as you can see in our results, we've achieved this growth in adjusted EBITDA and DCF. By deploying capital wisely, controlling our costs, and optimizing operations to get the most out of our assets, we have grown DCF by 7.1 percent on a four-year compound annual basis. Our growth tends to come in stair steps as we develop and bring projects online, and this disciplined approach to growing cash flows creates financial flexibility and underpins our commitment to returning capital to unit holders. We've increased our quarterly distribution 10 percent each of the last two years, and the business continues to generate free cash flow after distribution of over $800 million annually. So, we believe we are in a strong position to continue to consistently grow our distributions. MPLX is a strategic investment for MPC. And as MPLX pursues its growth opportunities, the value of this strategic relationship will be enhanced. We're confident in our growth opportunities and ability to generate strong cash flows. In 2023, we saw total unit holder return of 22 percent underpinned by annual adjusted EBITDA growth of nearly 9 percent and DCF growth of 7 percent. In fact, we have grown EBITDA by nearly $1.2 billion over the last four years and have over 7 percent DCF growth CAGR over the same timeframe. By advancing our high-return growth projects anchored in the Marcellus and Permian basins, along with our focus on cost and portfolio optimization, We intend to grow our cash flows, allowing us to reinvest in the business and continue to return capital to unit holders. Now let me turn the call back over to Christina.
spk07: Thanks, Mike. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. We may reprompt for additional questions as time permits. With that, we'll now open the call to questions.
spk08: Thank you. We will now begin the question and answer session. If you have a question, please press star then 1 on your touchtone phone. If you wish to be removed from the queue, please press star then 2. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then 1 on your touchtone phone. Our first question will come from John McKay with Goldman Sachs. Your line is open.
spk10: Hey, good morning, everyone. Thank you for the time. I just wanted to start on the quarter. I mean, it was pretty strong across the board versus where we were. Just wondering, were there any kind of one-offs in the quarter, or is this a kind of healthy enough run rate that we can think of MPLX growing off of from here?
spk13: John, I would say we really did not have any significant one-offs up or down. You'll notice in our adjusted EBITDA, we did have insurance proceeds, but those were adjusted out. So really nothing significant to point to.
spk10: Fair enough. Thank you. Follow-up. Just on the CapEx guidance, slightly higher than last couple of years, acknowledging it's only $100 million. But is that any shift that you're seeing in opportunities? Or is that a kind of maybe a change in willingness to spend? Maybe you can just kind of frame up how you got to the 24 budget versus maybe 23 or 22.
spk02: Yeah, John, this is Mike. It's a good question. So as you know, we're a service provider. And, you know, at the end of the day, we react to the producer needs, you know, especially on the GMP side of the business. And As I said in the prepared remarks, you know, sometimes it can be a step change. You know, we do have a couple plants coming on, Harbin Creek, too, Preakness, too. We've got Secretaria coming next year. So, you know, we have a little bit of a growth spurt in processing plant construction, so that's part of it. But the main reason, though, that we've been spending this, I'll say roughly around a billion dollars a year, is, you know, we have a large enough footprint that we believe over time that we can generate you know, better than normal returns and continue to grow. And as I said in my prepared remarks, you know, one of the things we're proud of is, you know, we've grown DCF about 7% consistently over the last four years. And a lot of that has to do with, you know, the term we use is strict capital discipline, you know, continuing to really look for better return projects. I know for you guys, a lot of times it doesn't come off as, you know, big announcements and, But hopefully the results show you that, you know, we're getting good deployment of capital, getting good returns. And like I said, we're kind of proud of, you know, 7% growth for the size of our partnership over a four-year CAGR hopefully speaks for itself.
spk10: That's clear. Thanks, Mike. Thanks, everyone. Appreciate the time.
spk02: You're welcome, John.
spk08: Our next question comes from Brian Reynolds with UBS. You may proceed.
spk12: Hi, good morning, everyone. Maybe to start off on the operations and the multi-year mid-single digit earnings growth cadence, while understanding this is not 24 earnings guidance, just kind of curious if you can unpack some of the main drivers for earnings growth in 24 relative to 23. It seems like marathon throughput volume should be up year over year, even with some of the 1Q turnaround activity, but curious if you could maybe unpack some of the other drivers of the base business for the year. Thanks.
spk02: Yeah, Brian, this is Mike again. Yeah, I think similar to the way John was asking the question is, the way we look at this is we obviously have a multi-year lens that we're looking at stuff and we're trying to figure out where it's the best way to deploy capital. I keep having this funny conversation about it's not guidance, but I'm kind of telling you that we're looking to make sure that we can grow our cash flows consistently year on year. As I just said, it's been 7% for four years in a row. So So we look at the plan. You know, the team is constantly looking, you know, at organic growth. We haven't done a lot of M&A, but as you saw, you know, we just recently, you know, bought out a JV partner, and Dave and his team are constantly looking at assets to help the portfolio. So we kind of look at all that together and kind of look out over a couple years and say, you know, do we, you know, fulfill our goals of continuing to grow the cash flows because we want to keep You know, moving that distribution up, you know, we've shown you, you know, 10% the last couple years. At the end of the day, you know, our lens tends to look out further compared to what you see, but hopefully you're seeing in the results. And let me let Dave make a couple comments on the market in general.
spk04: Yeah, Brian, this is Dave, as Mike said. So as we think about M&A and growth, one thing I want to make clear is that Growth through M&A for us isn't just buying assets for the fact of buying assets. We look to pursue opportunities, number one, high-quality assets, number two, align with our long-term strategies, and number three, allow us to, I'll use the word bolt-on or capture synergies and integration value along our value chains, whether it be crude, nat gas, or NGL. So With all that said, that's kind of how we look at it, and the overriding Mike touched on it. We continue to touch on it through the lens of strict capital discipline or acceptable risk-adjusted returns. So, you know, as we've looked through a lot of the opportunities out there, and there is a lot of activity, it really gets back to we feel we have a lot of high-return organic projects to utilize our capital versus some step-out M&A opportunities that we've evaluated up to this point.
spk12: Great. Thanks. Appreciate all that color. And I guess maybe through, you know, the broader context of organic growth and, you know, potentially strategic bolt-on M&A, as you alluded to in the prepared remarks. Do you have an updated view on maybe the corpus market in Bengal? Clearly it stands for, you know, Mount Bellevue alternative. So kind of curious if there's other opportunities, maybe downstream, either for further gas or maybe some frack downstreams outside of Mount Bellevue that you'd be interested in growing into over time. Thanks.
spk04: Yeah, Brian, this is Dave again. So, you know, we've been, as we just talked about here, you know, we're very public about our plans to expand all of our value chains. And I'll touch on NGL, specifically the Bangla expansion all the way down to the markets. And as, you know, whether we're going to extend these value chains either independently or via partners as we have with our JV partners out there, the strategy is really, you know, getting all the way down to the water and having export optionality. So, as you might have heard, you know, in mid-December, MPLX submitted an air permit application for NGO fractionation storage down in the Texas City market. So, you know, that filing, as you would expect, is a step we take as any project manager, evaluate optionality and through the project development to submit those permits. That kind of gives you a view of how we're thinking about it, but, you know, also it doesn't imply that the project has received FID approval and we're proceeding with it and we'll continue to evaluate all options as we achieve that value chain build-out, ensure that we're getting the highest and most acceptable rate of return on those investments. So hopefully that gives you a little more color on, you know, the NGL fractionation side of it. Maybe I'll turn it over to Sean to talk a little bit about the Bengal side.
spk03: Hey, Brian. This is Sean. Hey, as Dave mentioned, you know, I'll speak a little bit to the Bengal pipeline there. You know, if you look at Bengal itself, it's really the strength of the partnership that ties the acreage into it. You know, we've got an integrated play, as Dave and Mike have mentioned, with the GMP gas plants plus other partners that are in it. So we feel really good about the partnership of Bengal that is driving the demand. The other part that we really are pleased with is the capital discipline and the capital efficiency of the Bengal project over time. Last year we announced the 200,000 barrels per day expansion. Again, as the volume comes on, we're ready to expand and continue on down that path. So we feel good about positioning the pipeline to set up for some of the opportunities that Dave talked about.
spk12: Great. Thanks. Appreciate all the commentary this morning. I'll leave it there. Thanks. You're welcome, Brian.
spk08: Our next question will come from Teresa Chen with Barclays. Your line is open.
spk01: Good morning. A quick follow-up related to the Bengal commentary, if I may. Can you just help us walk through the economics behind the expansion? And given that it seems to be quite a bit of Permian NGO capacity coming online between multiple projects, including yours, how do you view the evolution of rates over the next few years, or are you not really susceptible given the integrated strategy?
spk03: Hey, Teresa, this is Sean. Hey, you know, good question. I think there's been a lot of, you know, discussion about that. I'll just really speak to, you know, again, our view of Bangle of how, again, it's really two things, the strength of the partners that really are driving the volume on Bangle, and then also the capital efficiency aspect. And we really feel we're positioned to be, you know, really competitive in that market. So feel really good about that. Again, bringing on the expansion as the volume is there. We know it's there. We've got the integrated, you know, win-win or value with our GMP business and other partners that are attached to Bengals. So we feel good about all those things that is driving it.
spk02: Teresa, this is Mike. Can't give you a lot of detail on the economics, but You know, the capacity is there, so the capital investment is relatively low. You know, we're adding horsepower as an example. So this is an example of one of those projects where the amount of capital deployed is relatively low. And as Sean mentioned, you know, we have dedication. We know volumes are going to come. So it fits into, you know, what we call the higher return bucket, you know, compared to, you know, other type of investments. Hope that helps a little bit.
spk01: Thank you. And then maybe turning to the residue side, so after Matterhorn begins service this year, there's still a visible need for additional long-haul residue egress out of the basin, right? And thus far, none of the projects under development have moved forward. When do you see residue takeaway becoming a problem for the basin? And given your interest in Whistler or Matterhorn, what do you view MPLX's role in the incremental build-out of Permian residue capacity?
spk04: Hey, Teresa, this is Dave. So I'll tackle that one. So you touched on a lot of it, and Sean, and we have, as you know, you know, we're participating in those long-haul pipes, whether it be, you know, Whistler that came on originally in 3Q 2021 and then the expansion in September 2023, Weatherly Matterhorn, which will be coming on in 3Q 2024, and subsequently ADCC, which is coming on at the same time frame. So all those are supporting the are participating in long-haul pipes in that value chain from Basin down to the Gulf Coast. So, you know, as we look forward, number one, we continue to see strong production forecasts out of the Permian, which will continue to, you know, allow us to evaluate and analyze expansion projects or new projects going forward. With all that said, maybe back to your question, You know, based on our current forecast, you know, we would expect to see after our projects come online that I referenced, probably around the late 26, early 27 timeframe, that additional, you know, long-haul expansion capacity is going to be needed based on those forecasts. Hopefully that helps a little bit.
spk02: Teresa, it's Mike. I just wanted to add, aside from the Permian, I think the market is underappreciating the growth potential up in the Marcellus. You know, it's been talked about being in maintenance mode for some amount of time, but if you look recently, you know, there's starting to be a growth spurt occurring up in that area as well. And I think, you know, if people look at it over time, you know, eventually MVP will come online, and it's going to unlock some more growth. And I think, you know, that's another area that probably hasn't been appreciated as much. But if you look over even just the last year or the last couple quarters, you You know, in our results in general, you know, the processing volumes have really kicked up compared to where they've been recently. So aside from the Permian growth, which gets a lot of attention, I think, you know, the Marcellus and also the Utica. Again, Utica was an area that probably was a little less, you know, thought of recently, but it's also, you know, starting to go into a growth mode as well. I'll let Greg give a couple comments on that because I don't want people to miss that, you know, that thought.
spk06: Yeah, thanks, Mike. Yeah, this is Greg. Teresa, in terms of the volume that we process, well, over 6 billion cubic feet a day, which is nearly 6% of the U.S. total gas, of the 9.5 that we process in total is in the Marcellus. And that drove our utilization of our processing plant fleet up to 96%, which is a new record for us. All of that process gas generated a lot of C3 plus liquids in particular, so that drove our fractionation utilization up to 82% in growing. We have a unique integrated system in the northeast that's totally different than what we have in the southwest in that we have to fractionate our own liquids and then find outlets. Fortunately, we have outlets to the east coast for export. and as well as into the Midwest for our Cornerstone pipeline. And we have access for gasoline into Canada, as well as butane into the Midwest. So we have a really good position there. And Harmon Creek, too, coming online is much needed at the utilization point we're at now. We've also, as Mike mentioned, brought our Utica utilization up to 49% and growing after a period of time where there wasn't growth. And we see a lot of good tailwinds with new producers moving into Utica and new state land auctions coming up expected this year. And we have existing capacity, not only the processing plants, but fractionation and liquid and gas pipelines to fill. So that's leveraging those existing assets and without a lot of new capital is a big focus for us.
spk01: Thank you for that detailed answer across multiple regions.
spk02: You're welcome, Teresa.
spk08: Our next question will come from Jeremy Tenet with JP Morgan. Your line is open.
spk09: Hi, good morning. Good morning, Jeremy. Just wanted to touch base on the acquisition a little bit more, if I could. If you're able to share a bit more color on the JV interest acquired, are these existing assets in the Permian or assets otherwise that are kind of can be relocated to the Permian? And I guess, you know, just thoughts on the type of synergies that could be captured here, what that could mean for economics.
spk02: Yeah, Jeremy, I'll start. So this particular situation, $270 million to buy out our partner. Obviously, we were the operator of the assets, so we're very familiar with the operations. You know, we know what, you know, volumes and contractual dedications we have to it. You know, we said it was an attractive multiple. It was a little under seven just to give you a flavor as to, you know, where the economics of that were. So, you know, these are things that, you know, Dave and his team are always talking to our partners about. If there's an opportunity where somebody is willing to, you know, get out, you know, for their reasons and we see it as a good opportunity for us, you know, that's how these transact. You know, we go into these types of things just looking to be a good partner with all of our JV partners But there are times when, like in this case, you know, the partner wanted to exit at a time when we thought it was a good opportunity. So that's how those kind of play themselves out. You know, we don't count on them, but, you know, when those conversations come up, you know, we're certainly willing to look at it. And then in general, you know, we, as you know, in this space, we have quite a bit of JVs across our footprint. So most of the time we're just trying to work with our partners on how to grow the interest so that both of us or three of us or however many partners are in it are all getting a win. And that's kind of the way we look at it, you know, from, you know, the partnership standpoint. And then aside from that, you know, our teams are looking, you know, how do we bolt on? Where can we do some, you know, little bit of capital, you know, organic capital investment such that we can add to it, whether it's a JV asset or just, you know, one of our own assets. So it's kind of like what I said at the beginning, you know, we're kind of looking out, you know, throughout the year, we're looking at where can we bolt on, where can we add stuff, I know fold-on isn't sexy, you know, when it comes to the earnings calls, but it's really good returns. So, you know, those are the types of projects we really like.
spk09: Got it. That makes sense. And just to clarify, are these assets currently in the Permian, or could they be relocated to the Permian? Just wanted to make sure it was clear there.
spk02: No, they're in the Permian today. They're in the Delaware.
spk09: Got it. And as far as M&A, a lot's been talked about today, but it sounds like you're saying these bolt-ons are more likely than anything larger in nature is how we should generally think about potential M&A activity?
spk02: Yeah, Jeremy, it's a balance. Obviously, if you're going to get involved in M&A to a large extent, if you get into bigger, the returns are going to be much more competitive because a lot of people are going to be involved in that process. You know, the ones that we like better, as long as they continue to be there for us, is, you know, where we can just, you know, organically invest and get a much higher return than the M&A market will typically give you. And as long as we continue to have those, that's why, like, when we announce, you know, our total capital, a large majority of it we don't talk about on earnings calls or press releases or things like that because they're smaller projects, but they're much higher returns. So, you know, we tend to favor those just because of the return that they give us. And that's why, you know, some people keep scratching their head a little bit of, you know, how you guys grow in the partnership, you know, 7% CAGR over four years. And a lot of it has to do with self-help, things that we're doing internally, these bolt-ons that we're doing, and then occasionally adding, you know, stuff that meets, you know, earnings call discussions, et cetera. So it's a combination of all those. But what I hope investors are realizing is we're sitting here behind the scenes looking at it over multiple years, and seeing that we think we can continue to grow the partnership. We have in the back of our head what that means for how we're going to return capital. Obviously, it starts with you've got to get a return on that capital, and then we think about what's the best way to return it. And that's kind of the internal discussions that we're having all the time.
spk09: Got it. Very helpful. Appreciate that. Thank you.
spk02: You're welcome, Jeremy.
spk08: Next, we will hear from Keith Stanley with Wolf Research. You may proceed.
spk11: Hi. Good morning. I wanted to follow up on some of the good growth that you saw in Marcellus and Utica in Q4 and through last year and some of the positive commentary on 2024. Would you say your integrated footprint across Appalachia is allowing you to take market share over time in that market, and that's part of why you're able to see a little better growth? Or do you see the basin kind of inflecting positively with MVP and you're just kind of maintaining your market share overall?
spk06: Keith, this is Greg. I would say it's some of both. You know, we have the most extensive integrated footprint in the basin, both across the Utica and the Marcellus. They're interconnected. We have access to multiple fractionation facilities. We have a distributed deethanization plant, so we have a lot of flexibility there. But we also are, it's just good rock. The Utica and the Marcellus basins in terms of uniformity are really good. And I think there's some combination of existing producers that are drilling longer laterals that are driving more production per pad. And then there are, you know, the Utica is a good example of some new producers moving into the region and taking advantage of particularly the light oil and condensate window over there, which brings associated gas and NGLs as well. So really a combination of both our scale and integration as well as new production, new producers.
spk11: Great. Thanks. Second question, I guess just on the growth outlook, and Mike, you've talked about this a lot already, but the company's investing a billion a year of capital. If we're in a world without kind of inflation escalators anymore and assume kind of you know, flattish commodity prices. Is a billion a year of capital enough to hit your growth targets, or do you need to continue to find self-help type mechanisms, whether it's costs and efficiency improvements, tuck in M&A, et cetera, in order to hit the growth target? So is a billion enough per year, or do you need to find other things to get there as well?
spk02: Yeah, Keith, it's Mike again. You know, it's a combination. So, you know, what I was saying, if you look at the history, we've been spending around a billion, even slightly under the last couple years. And recall that, you know, that number also includes that $150 million-ish of maintenance. So we take a look at our portfolio, and we try to examine where do we think we have opportunities. And it's really what I was saying to Jeremy's question. It's a combination of all of it. But I think, you know, if you look at the results, you know, 7% over four years, you know, we're about a $6 billion, you know, EBITDA business. So, you know, you're looking roughly at about $400 million a year of growth, you know, at that 7%. So we look at, you know, what we have on paper and we try and think about, you know, how do we get to those kind of levels. That's why I kind of just generically call it mid-single digit, you know, just as a generic number. But But we're really thinking for our size of partnership that if we can continue to grow 3, 4, 500, you know, those kind of numbers we think is sufficient to keep what we think is a very steady growth in return of capital, which we think the market, you know, would like. So we look at all of it. We look at our self-help. We look at efficiencies. We look at different things that are occurring as far as capital. But up until this point, that's about the level that we've needed to spend to be in that range. To your point, if we thought, you know, at times we need to deploy more capital, you know, that's something that we would have at our hand, you know, at our toolbox, so to speak. So, you know, we look at it all. We try and figure out our plan. I know it's probably frustrating for your side of the fence because you don't get to see the mold a year, you know, but that's what we're trying to do. And it's all to try and show that the market that, you know, we're going to continue to grow the cash flows. We're going to continue to increase the distribution. We're going to continue to return capital. And hopefully that, you know, is a good day for investors. You know, last year we talked about total unit holder return of 22%. We're pretty proud of that. And hopefully, you know, investors have found that to be a good outcome. Thank you. You're welcome, Keith.
spk08: Our next question comes from Michael Bloom with Wells Fargo. Your line is open.
spk00: Thanks. Good morning, everyone. I wanted to ask, you know, there's been a lot of M&A consolidation in the upstream space. And I'm wondering if that's had any impact on you either directly or indirectly. Some of your producer customers maybe are involved in some of those. And just curious if there's, you know, positive or negative or maybe no impact. But just curious if that's had any impact on you guys.
spk06: This is Greg. I would say that there really has been no impact, or at least no material impact. We have, there is consolidation, but for the most part, we have agreements with one party or the other, and in some cases, longstanding agreements. So I would, yeah, the answer would be really no impact there.
spk02: Yeah, Michael, similarly on the crude side, there hasn't been anything that we could say directly correlates to that. Obviously, we gather in a lot of basins, and whether it's a single producer or a consolidated producer, it's really the area and the dedications that come with that that really impact it, as opposed to who the owner is.
spk13: Yeah, and I might add, with one of the recent consolidation activities we saw, we actually did see an uptick in credit profile. So that was actually helpful to us as we thought about our credit profile.
spk00: Got it. Okay, thanks for that. And then I know this has been asked on prior calls, but you're sitting there with a billion dollars of cash on the balance sheet. You didn't do any buybacks in Q4. It sounds like you're going to maintain the same level of debt, so it's not going to go away. So maybe just some comments on how you're thinking about maintaining that level of cash and what type of financial flexibility that will give you. Thanks.
spk02: I think you hit it on the head with your last comment, Michael. It gives us flexibility. As we started into the year, as I said, we always have a plan in place, but we had a pretty strong year. We had record throughputs in the L&S side of the business as well as the G&P side of the business. EBITDA turned out to be 9% year-on-year growth, so it falls into the category of a good problem to have. Like you said, at the end of the day, we spent a little bit of money on the acquisition that we talked about. We deployed capital. And, you know, I made the statement that, you know, last couple of years we've been generating, you know, roughly about $800 million beyond, you know, our commitment. So it's been a good problem to have. I know people are wondering, you know, what our plan there is. And short term, it's just having that flexibility. You know, we haven't done a lot of buybacks. We've told the market that, you know, we're going to err on the side of distributing through increasing the distribution, which we've done a couple of years in a row. We've We still think that's our primary tool is the term that we've used. We've talked on previous calls about volatility in the equity price. It's been a factor in some of our decisions. But at the end of the day, it does give us a little bit of flexibility. And hopefully over time, you'll get to see how we deploy it.
spk08: Thank you. And our final question for today will come from Neil Dingman with Truist. Your line is open.
spk05: Morning, all. Thanks for, excuse me. And my questions on the Permian that you've talked a bit about specifically, I've seen a little bit, I guess, year-to-date on some weather weakness just in some areas and whether maybe how it had an impact there. And then secondly, you know, it sounds like, and I just want to double-check, your longer-term, you know, you've got a lot of attractive projects such as our plan, such as Wink to Webster and others. although it's still right on plan.
spk02: To your first question, Neil, obviously there's always weather issues that occur every year, but nothing significant compared to what we've seen in the last years. But, you know, certainly it's the type of thing that we battle at this time of the year in general, but I wouldn't say there's anything major that we needed to discuss. Yeah.
spk03: Hey, Neil, this is Sean. Regarding your question regarding Wink to Webster, you know, we continue our pleas with the ramp up and the volume we've seen come across Wink to Webster in 23. And, you know, likewise, in 24, we expect to see a little bit of increase. So, you know, going forward, so really pleased with that investment and that JV partnership going forward in 24 and beyond.
spk05: Great details. And then just secondly, you guys touched already on the Utica, but I'm just wondering, it looks like you're spending a bit more on the Utica Gather. I'm just wondering, is it perceived growth there or what's driving this project?
spk06: Yeah, this is Neil. This is Greg. It is perceived growth. We've already seen growth in the Utica. We're filling up existing processing capacity, liquid capacity, and transmission and compression. But there is always going to be in areas where we gather additional capital to connect new well pads, which is, you know, a sign of growth from multiple producers. So, yeah, that is a sign of more growth, and we're excited to see it.
spk05: Look forward to it. Thank you all. You're welcome, Neal.
spk07: All right, well, thank you for joining us today, and thank you for your interest in MPLX. Should you have additional questions or would you like clarification on any of the topics discussed today, members of the IR team will be available to take your call.
spk08: Thank you. That does conclude today's conference. Thank you for participating. You may disconnect at this time.
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