Targa Resources, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Targa Resources Corp's Quarter 2022 Earnings Webcast and Presentation. At this time, all participants' lines are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your first speaker today, Sanjay Ladd, Vice President of Finance and Investor Relations. Sir, please go ahead.

Thanks, RJ. Good morning and welcome to the first quarter 2022 earnings call for Targa Resources Corp. The first quarter earnings release along with the first quarter earnings supplement presentation for Targa Resources that accompany our call are available on our website at targaresources.com in the investor section. In addition, an updated investor presentation has also been posted to our website. Statements made during this call that might include target resources, expectations, or predictions should be considered forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in forward-looking statements. For discussion of factors that could cause actual results to differ, please refer to our latest SEC filings. Our speakers for the call today will be Matt Molloy, Chief Executive Officer, and Jen Neal, Chief Financial Officer. Additionally, the following senior management team members will be available for Q&A. Pat McDonough, President, Gathering and Processing, Scott Pryor, President, Logistics and Transportation, and Bobby Mararo, Chief Commercial Officer. And with that, I'll now turn the call over to Matt.

Thanks, Sanjay, and good morning. We are continuing to perform well and are off to a good start to the year on a number of fronts. Record high quarterly EBITDA of $626 million, record volumes in the Permian, and record NGL transportation and fractionation volumes. We also achieved investment grade ratings from all three agencies during the quarter. We completed our corporate simplification with the Devco repurchase in January and with the redemption of our preferred stock earlier this week. We continue to invest across our businesses with the ongoing construction of the Legacy I, Legacy II, and Midway plants in the Permian, plus the acquisition of Bolton Assets in South Texas. We repurchased additional common shares as part of our increasing return of capital to investors. And our reported leverage ratio at 3.4 times is in the bottom half of our long-term target range of three to four times. Pro forma for the repurchase of our DEVCO interests, our preferred stock redemption, our South Texas acquisition, and our GCX sale, our leverage is 3.3 times. While we had a strong first quarter with EBITDA up 55 million versus Q4, commodity prices really began to move higher late in the quarter. So we did not see a lot of first quarter price benefit as our realized prices were relatively flat compared to the fourth quarter. But since then, prices are providing some nice tailwinds for the balance of the year. Given the strong underlying fundamentals of Targa's businesses, we continue to expect that if prices average around current levels for 2022, we would exceed the top end of our previously disclosed full-year financial guidance range. Let's now turn the call or let's now discuss operational in more detail. Starting in the Permian, our systems across the Midland and Delaware basins continued to perform well, averaging over 3 billion cubic feet per day inlet volume during the first quarter. Volumes across our Permian systems increased quarter over quarter, despite being impacted by winter weather conditions, particularly in January and February. Volumes quickly rebounded, with March and April volumes up nicely over the first quarter average. We continue to see strong activity levels across both our Midland and Delaware footprints and expect to benefit from this positive momentum as we move through 2022. In Permian Midland, our systems continue to run near full, and our engineering and operations teams are working diligently to bring our next 275 million cubic feet per day legacy plant online safely later this year. Our Legacy II plant, another new 275 million cubic feet per day plant in Permian Midland, is expected to begin operations during the second quarter of 2023. In Permian, Delaware, volumes across our system are also continuing to ramp. Our new 275 million cubic feet per day Midway plant is expected to begin operations during the third quarter of 2023. Midway will provide us with additional flexibility to flow volumes between our Midland and Delaware systems, in addition to improving our overall operational performance in the region. For full year 2022, we continue to expect our average Permian inlet volumes to increase by 12 to 15 percent over 2021 volumes. In our Central and Badlands regions, first quarter volumes were impacted by winter weather conditions, most notably in the Badlands. We are seeing stronger activity levels across several regions given the higher commodity price environment. In April, we completed the acquisition of assets in South Texas and are quickly integrating the assets and related contracts acquired in our South Texas gathering and processing operations and expect the acquisition to be immediately accretive. We would like to thank everyone involved in helping make the integration go smoothly. Shifting to our logistics and transportation segment, NGL transportation volumes continue to increase, and we transported a record 460,000 barrels per day to Mont Belvieu during the first quarter. Throughput volumes sequentially increased 6%, driven by increasing NGL production from Targa's Permian plants and third parties. Fractionation volumes at our Mont Belvieu complex during the first quarter rebounded to 3,000 barrels per day, following fourth quarter's unplanned outage. Looking ahead, we expect NGL transportation and fractionation volumes to continue to benefit from increasing supply from our growing Permian GMP position. In our LPG export services business at Galena Park, we loaded an average of 10.2 million barrels per month during the first quarter. The outlook for our LPG export business remains strong, We are advancing our previously announced low-cost expansion project to increase our propane loading capabilities, which will add an incremental 1 million barrels per month of capacity by mid-2023. The longer-term outlook for Targa remains strong. Our premier integrated Permian NGL business, complemented by our talented employees and strong balance sheet, position Targa to deliver safe, reliable energy domestically and globally. And before I turn the call over to Jen, I would like to thank our employees for their continued focus on safety while executing on our strategic priorities in continuing to provide best-in-class services to our customers. With that, I will turn the call over to Jen.