Good day, and thank you for standing by. Welcome to the Targa Resources Corp. Q4 2021 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, a question and answer session. To ask a question during that session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded, and if you require any assistance during the call, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Sanjay Lad, Vice President of Finance and Investor Relations. Mr. Lad, the floor is yours. Thanks, Chris. Good morning, everyone, and welcome to the Q4 2021 earnings call for Targa Resources Corp. The Q4 earnings release, along with the Q4 earnings supplement presentation for Targa Resources that accompany our call are available on our website at targaresources.com in the investors section. In addition, an updated investor presentation has also been posted to our website. Statements made during this call that might include Targa Resources expectations or predictions should be considered forward-looking statements within the meanings of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in forward-looking statements. For a 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 Meloy, Chief Executive Officer, and Jen Kneale, Chief Financial Officer. Additionally, the following senior management team members will be available for Q&A. Pat McDonie, President, Gathering and Processing, Scott Pryor, President, Logistics and Transportation, and Bobby Muraro, Chief Commercial Officer. With that, I'll now turn the call over to Matt. Thanks, Sanjay, and good morning. This is an exciting time at Targa, where our operational and financial execution in 2021 provided a lot of momentum for 2022. I would first like to recognize and thank Targa's employees that worked tirelessly across another year of challenges in 2021 to help drive record financial and operational performance. Let's quickly mention some of the highlights from 2021. Record gathering and processing volumes in the Permian, safely bringing the Heim plant online on time and under budget, record volumes across our logistics and transportation assets, record adjusted EBITDA of $2.05 billion, a 25% increase over 2020. About $1.2 billion of year-over-year debt reduction and a year-end leverage ratio of 3.2x, and increasing return of capital to our shareholders through a higher Q4 dividend and Q4 common share repurchases. Turning to 2022, we already have a number of highlights to mention, repurchased our DevCo joint venture interest in January, executed agreements to sell our 25% equity interest in Gulf Coast Express Pipeline, or GCX, for approximately 11x EBITDA, upgraded to investment grade by Fitch and moved to positive watch by S&P and Moody's, and refinanced our revolving credit facility to a five-year $2.75 billion facility at TRC. We continue to execute on our strategic priorities and have visibility to volume growth across our assets, which is driving increasing EBITDA as we look forward. For 2022, we estimate full year adjusted EBITDA to be between $2.3 billion and $2.5 billion, which is a significant increase over 2021. This guidance is based on forward prices where there continues to be backwardation. If prices averaged around today's levels for 2022, we would expect to exceed the top end of our full year financial guidance. With the repurchase of our DevCo interest and our flexibility to accelerate redemption of our preferred stock, given the sale of GCX, we have already simplified and will continue to simplify our capital structure. We are also demonstrating our increasing ability to return capital to our shareholders with the execution of common share repurchases in the Q4, in addition to the Q4 common share dividend increase. As previously discussed, we expect to pay a common dividend of $0.35 per quarter, $1.40 annualized to our shareholders for 2022. The strength of our balance sheet provides significant flexibility to redeem our preferred shares faster than we previously anticipated and to continue to assess opportunistic repurchases of common shares. Let's now turn to our operations. Starting in the Permian, our systems across the Midland and Delaware basins continue to perform well, averaging a record 3 billion cubic feet per day reported inlet during the Q4. Our average 2021 Permian inlet volumes increased 12% over 2020, exceeding the top end of our 2021 guide growth range. 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. For full year 2022, we expect our average Permian inlet to increase between 12%-15% over average 2021. In Permian Midland, our system continues to run near full, with our next 275 million cubic feet per day Legacy plant on track to begin operations during the Q4 of this year. With robust activity levels expected to continue into next year and beyond, we are moving forward with the construction of our Legacy II plant, another new 275 million cubic feet per day plant in the Permian Midland. Legacy II is expected to begin operations during the Q2 of 2023. In Permian Delaware, volumes across our system also continue to ramp. Today, we announced the construction of a new 275 million cubic feet per day plant, the Midway plant. The new Midway plant is expected to begin operations during the Q3 of 2023. Midway will provide us with additional flexibility to flow volumes between our Midland and Delaware systems. We are idling an older plant, which is more prone to operational upsets, has higher operating costs, higher maintenance costs, lower recoveries, and is limited in capacity. The Midway plant improves performance on all of those items, and will give us the ability to flow current volumes being processed at Sand Hills and an additional 110 million cubic feet per day of capacity that can be filled from the Delaware, Central, or Midland basins. This project is a good example of how to improve overall environmental performance while also providing attractive returns. The strong outlook across our Permian Basin footprint will continue to drive incremental volumes through our NGL downstream businesses and our recently announced expansions in both the Midland and Delaware position Targa to realize very attractive integrated returns and continue to benefit from our embedded operating leverage with modest capital spending. In our Central and Badlands regions, we are seeing stronger activity levels given the higher commodity price environment and expect 2022 average Central and Badlands volumes in aggregate to be flat relative to 2021 as higher production is expected to largely offset legacy decline in our systems. Shifting to our logistics and transportation segment, NGL transportation volumes continue to increase, and we transported a record 433,000 barrels per day to Mont Belvieu during the Q4. Throughput volumes sequentially increased 4%, driven by increasing NGL production from Targa's Permian plants, including our new Heim plant and third parties. Q4 fractionation volumes at our Mont Belvieu complex averaged 612,000 barrels per day and were lower sequentially due to an unplanned outage and associated repairs and maintenance, which impacted volumes by about 50,000 barrels per day. The unplanned outage was associated with cooling water exchangers that support a portion of our CBF fracs, which resulted in reduced operating rates for the quarter. We have excess fractionation capacity, so we are handling all incoming NGL volumes as well as some volumes that normally would have been fractionated in Q4, so our Q1 average volumes are expected to be higher. We expect to be operating back to normal by the end of the quarter. This outage resulted in higher OpEx in Q4 and is also expected to impact OpEx in Q1 of this year. Looking ahead to 2022, we expect higher year-over-year Grand Prix and fractionation volumes as our downstream systems continue to benefit from increasing supply from our growing Permian GMP position. In our LPG export services business at Galena Park, Q4 volumes rebounded following maintenance completed during the Q3 and increased 19% sequentially as we loaded an average 10.7 million barrels per month during the Q4. The outlook for our LPG export business in 2022 remains robust, complemented by our contracted portfolio and supply position in Mont Belvieu. In response to growing international demand for cleaner feedstocks and U.S. LPGs, we are undertaking an additional low-cost expansion project to increase our loading rates at our Galena Park facilities. This refrigeration expansion will increase our propane loading capabilities more than an incremental one million barrels per month by mid-2023. The longer-term outlook for Targa is strong. Our premier integrated Permian NGL business, our talented employees, complemented by our strong balance sheet and financial flexibility, we remain in position to grow our footprint and return increasing capital to our shareholders over time. With that, I will now turn the call over to Jen. Thanks, Matt. Targa's reported quarterly adjusted EBITDA for Q4 was $571 million, increasing 13% sequentially as we benefited from higher volumes across most of our assets and higher commodity prices. Our full year 2021 adjusted EBITDA was $2.05 billion and exceeded the high end of our full year financial guidance range. Targa generated adjusted free cash flow of approximately $1.13 billion in 2021, which allowed us to reduce our leverage significantly across the year. At year-end, our consolidated leverage ratio was 3.2x. We spent $408 million in net growth capital during 2021, with spending largely focused on our gathering and processing business as we continue to benefit from operating leverage downstream. We also had some spending shift from the Q4 to 2022, which is included in our 2022 growth capital estimate. Our net maintenance CapEx was about $130 million in 2021. During the Q4, we recognized an approximate $452 million non-cash pre-tax impairment charge of our South Texas assets attributable to a lower outlook on future volumes. We are significantly hedged for 2022 and continue to add hedges for 2023 and beyond, while still benefiting from higher prices across our unhedged equity volume exposure and prices now well above C floors. We repurchased approximately $40 million of common shares in the Q4 and as of December 31st, had approximately $369 million remaining under our $500 million share repurchase program. At year-end, we had over $3.2 billion of available liquidity, which put us in excellent position to close on the repurchase of our DevCo joint venture interest for $925 million in January. As Matt mentioned, we executed agreements to sell our 25% equity interest in GCX for $857 million. We expect to receive the full proceeds from the sale of GCX in the Q2 of 2022, and our current expectation is that we will utilize the GCX proceeds to redeem our outstanding TRC preferred shares. Last week, we closed on a $2.75 billion credit facility at Targa Resources Corp, eliminating the dual credit facilities at TRC and TRP as we continue to simplify our corporate structure. Turning to our 2022 financial expectations, we estimate pro forma for the sale of GCX full year 2022 adjusted EBITDA to be between $2.3 billion and $2.5 billion, a 17% increase over 2021 based on the midpoint of our range. Comparing 2022 versus 2021, key drivers for EBITDA growth year-over-year include a full year benefit from the repurchase of our DevCo interest, higher commodity prices, and continued volume growth across our operations, led by higher GMP volumes primarily from our Permian assets, driving higher volumes across our transport, frac, and export assets, and also higher fees across our contracts from inflation. Offsets include the sale of GCX and higher estimated operating and G&A expenses from inflation and increasing volumes. As Matt described earlier, we are continuing to invest in attractive organic growth opportunities, including spending related to additional Permian plants, well connect and compression capital on the GMP side, additional pump station capital for Grand Prix, and the expansion of our propane loading capabilities at Galena Park. We estimate 2022 net growth CapEx to be between $700 million and $800 million and net maintenance CapEx for 2022 of approximately $150 million. We currently expect year-end 2022 leverage to be well within the bottom half of our long-term target range of 3-4x, providing us with significant flexibility. For additional details related to our estimated 2022 outlook, please review our earnings supplement slides accompanying our webcast this morning, which are also posted to the investors page of our website. Supported by our excellent operational and commercial performance through some very difficult environments over the last couple of years, we have been able to execute on our key strategies. As Matt described, that means we are in an excellent position going forward. Lastly, I would like to echo Matt's thank you to our employees that have continued to perform exceptionally well for our customers and have done so with a continued focus on safety. With that, I will turn the call back over to Sanjay. Thanks, Jen. For the Q&A session, we kindly ask that you limit to one question and one follow-up and reenter the Q&A lineup if you have additional questions. Chris, would you please open the line for Q&A? Yes, sir. As a reminder to ask questions, you will need to press star one on your telephone. To withdraw your question, please press the pound key. Again, we ask just one question and one follow-up, and stand by as we compile the Q&A roster. Our first question comes from John Mackay of Goldman Sachs. Your line is open. Hey, everyone. Thanks for the time. I wanted to start on capital allocation. I think you mentioned the GCX proceeds would kind of go first towards the pref. You talked about kind of buying those back over a kind of, you know, slightly longer period of time before. Should we think about that as, you know, you guys are trying to get them done kind of sooner now and then, maybe the H2 of the year, the common buyback can pick up? Just how do you think about the balance of those two? I think our current assumption right now, John, is that with the proceeds received from GCX, we will be able to accelerate and potentially repurchase all of the preferred interests in the Q2. That's the base case assumption that we're currently running. Of course, we'll maintain the flexibility to change course if we want, but that's the current assumption. Then related to common share repurchases, you saw us active in the Q4, based on our outperformance for 2021. Certainly, our expectation is that we'll be able to re-return an increasing amount of capital to our shareholders as we move through 2022 and beyond. We've got the common dividend set for this year. That means that our assumption is we'll continue to be opportunistic around common share repurchases. It isn't necessarily that because we're accelerating the TRC pref takeout to the Q2 that changes our assumptions around common share purchases. We think we've got a lot of flexibility to execute across all parameters. Thanks for that. My follow-up is kind of on the CapEx side that feeds in there. Can you just kind of frame up how much of the growth CapEx guide is going to the two new processing plants and also to the new export expansion? Just trying to think of those contributions above maybe a run rate level. Yeah, sure. Yeah, you know, we announced the Legacy II plant and the Midway plant this morning. We had, you know, highlighted we were already ordering long lead time for Legacy II on our prior call. You know, for this year, you know, the Midway plant really was kind of an incremental from maybe what we had signaled previously. There was about $150 million of capital for that Midway plant. Almost all of that spending is in this year, and then there's a little bit of capital which would move into 2023. We'll still have significant spending on Legacy and Legacy II this year. Then we'll also have, you know, some capital for Grand Prix, the export project. That export project is really more kind of a debottlenecking or a bolt-on. It's a relatively small CapEx. Which is why we really like that project. It gives us an incremental one million barrels a month of ability to load, increase our capacity on the propane loading side, for relatively modest capital. The large movers are Midway and then the spending on Legacy one and two. That's great. Appreciate the time. Thank you. Okay, thanks. Thank you. Our next question comes from the line of Michael Blum of Wells Fargo. Your line is open. Thanks. Good morning, everyone. Just wanted to stay on Grand Prix. Can you just give us a sense of where utilization sits on the kind of the MidCon and the Permian pieces of that pipe? How much are you planning to expand it, and what's the timing? Hey, Michael, this is Scott Pryor. I'll first just state that, you know, we've got tremendous operating leverage, you know, when it comes to our downstream assets, and that's inclusive of our pipeline capacity relating to Grand Prix. When you look at the 433,000 barrels a day that we did in the Q4, which was a record for us, we do have contributions that are coming from the north. We don't describe what those volumes are, but I would say that we still have a lot of leverage on our west leg and our south leg as well. We'll add pumps to the west leg and the south leg dependent upon the production growth that we see in the Permian and from the north. We're gonna stay well ahead of that to make sure that we can move all the volumes that are necessary. We can look at possibilities of loops in the future based upon the cadence as we add gas processing plants on our upstream side, again, with a lot of focus on the Permian Basin. We'll also look for commercial opportunities that may present themselves with other existing pipes that might be in the basin. Adding pumps, looking at future opportunities puts us in a great position to leverage into what we have today in future growth. Okay, great. Appreciate that. Maybe a question on the LPG export expansion you're announcing. Can you just remind us roughly kind of where you are on a contracted basis and kind of what's leading your decision to expand here? Will you continue to add contracts? In other words, will the contracted level as a percentage kind of stay the same as you increase the total capacity? Again, Michael, this is Scott. I'll restate kind of what Matt said. When you look at this project, it is a low capital type project. I would describe it less than $50 million. Barrel-for-barrel basis, it's our cheapest expansion that we can put in our system to debottleneck around Galena Park. When we look at the facilities that we're adding, we've got tremendous contract structure today. We continue to have success with renewing contracts and adding contracts where necessary. The market growth potential continues to be strong when you look at domestic use of LPG products, where people, you know, developing countries are looking for clean burning fuels. This certainly supports that opportunity. You obviously you're gonna see continued growth on the PDH side in the east, with more focus on China. When you think about that, and the continued success that we've had, really this is a complementary type addition for us. It puts us in a position to be more flexible, more reliable for our customers and our lifters that we have out at our facility. It gives us the ability to rebound from times of weather delays or fog delays or shipping delays that may happen. But it also provides us early, prior to increased production that we would see coming from the Permian in and through our assets. It provides us the ability to participate more heavily in the spot market when the market dictates and presents itself. Again, a nice bolt-on project. Barrel for barrel, it's the cheapest add that we can do at this time. We like how it complements, provides reliability to us and our customers that lift from us. Thank you very much. Okay. Thanks, Michael. Thank you. Our next question comes from the line of Spiro Dounis of Credit Suisse. Your line is open. Thanks, operator. Morning, guys. First question, maybe just sticking with downstream CapEx, focusing a little bit more on fractionation. I believe you all have Frac Nine that's permitted. I'm just curious, given the rate of growth we're seeing here, is that something that's become a little bit more front of mind right now? Maybe just general thoughts on how you're thinking about the lead times for when that could come online and when you need to start acting on it. This is Scott. I'll just start with the fact that we've got leverage on the downstream side as it relates to fractionation as well. We've got current capacity today. We do have a permit in hand for frac train nine. We will pay, you know, particularly close attention to the cadence of the processing plants that we add in the Permian Basin, as well as third-party production that will be steered toward our downstream assets. With that permit in hand, we can trigger startup on that frac when necessary. We also have the ability to look at the restart of our Gulf Coast fractionator as it relates to our needs or the demands that we have with our partners at that facility. Again, we'll stay well ahead of the need. Having a permit in hand for train nine certainly helps us, and the ability to restart the idled frac with our partners is also a possibility. Yeah, just to add to that too, Scott, I'd say we would also continue to look across Mont Belvieu. If there's some excess capacity from some of our competitors, that could give us some more time to evaluate when we need to do train nine, we can look at those solutions as well. We're kinda looking at the volume growth and trying and really have all options on the table for us. Great. That's helpful. Switching gears a bit, can't let you all go without asking about natural gas egress out of the Permian going forward. You know, I think there's obviously a lot of projects potentially contending to be that next natural gas pipeline, whether it be expansion or greenfield. Just curious, you know, is it a concern of yours that somehow some of that growth gets stunted in any way? Do you think the industry will resolve the issue, and how? You've obviously participated in some of these projects in the past, recognizing you just sold GCX, but is Targa interested maybe in participating in the future as well? Yeah, sure. You know, to start, I would say, yeah, we do see one certainly being needed, and it looks like it's coming sooner than maybe, you know, previous expectations. We are looking to be part of the solution. You know, we have a lot of gas. We want additional infrastructure to get built, so we're talking to a number of the pipes that are, you know, trying to basically get geared up to get to FID. We wanna get something done, so we wanna be supportive to be able to get something done. You know, I guess just stay tuned on that. We think, you know, the industry will solve it. It's added pipes before. You know, just stay tuned on how and when Targa is gonna participate in that. Got it. Helpful as always. Thanks, guys. Okay, thanks. Thank you. Next, we have the line of Jeremy Tonet of JPMorgan. Your line is open. Pardon me, sir. If you- Hi, this is Steve jumping in for Jeremy. Sorry about that. Really just kinda one question for us, most of them have kind of already been hit. Just looking at the 2022 EBITDA guide, commodity prices bring your guide to above the high end, and we just kinda wanna know what other main moving pieces of the high end versus the low end of the guide are there. Yeah. You know, I'd say as we gave a range, you know, commodity prices is I'd say the largest variable. Then we also had a range in our Permian volumes, 12%-15%, so depending on where volumes from the Permian shake out. You know, we are seeing some drilling across the Central and in Badlands. If prices stay here, we could see some additional, you know, upside to our Central as well. I'd say those are the main drivers, you know, on the GMP side. I'd say on the downstream side, you know, the export, you know, we see a continued strong export market. You know, I think there's still some upside to our assumption and our guidance number to exports. If there's a real weak market, there's, you know, some potential. It's not all contracted, so there's some variability in exports as well. We're doing a really good job of managing costs. Hopefully there's upside to some of the conservative assumptions that we've made around costs, but we'll have to see how those play out through the year. All right. Really appreciate it, guys. Thank you. Okay, thank you. Thanks, Steve. Thank you. Next, we have a question from the line of Tristan Richardson of Truist Securities. Your line is open. Hi, good morning, guys. Just curious on the contracting environment, just in what we're seeing in the strong commodity today and as you bring on additional plants. You know, are you seeing from producers a desire to retain more of the economics, pushing more towards fee? Obviously, you guys have done a lot over the past couple of years, incorporating some changes in the contracting styles. Maybe just the landscape today in this current environment, you know, what type of structures are your customers looking for? Yeah. I'd say, you know, most of our growth is happening out in the Permian. Yeah, there are some differences between the Delaware and the Midland. You know, on the Midland side, that has been traditionally more POP, although we've done a good job at putting more fee-based components and fee floors in those POP. We have a lot of acreage dedicated to us under long-term contracts, and so a lot of the growth that we're seeing is under already existing longer-term contracts in and around that area. On the Delaware side, we do have more fee-based components on the Delaware side, but I'd say a lot of the volumes there and for the growth is under long-term contracts. It's really, you know, keeping the mix kind of similar to what we've had there. You know, Pat, I don't know if there's anything you'd wanna add to that. I think the only thing I would add, Matt, is that, you know, it's, there's so many variables that affect how you contract, right? Is it sour gas? Is it sweet gas? Is it high pressure? Is it low pressure? Certainly, the Midland Basin and Delaware Basin have some nuances related to, you know, some of those variables. Generally, the contracting hasn't materially changed. As Matt described it was kind of spot on relative- Simple sensitivity provided you with the most clarity relative to all the moving pieces around our gathering and processing contracts and positions. Appreciate it. Thank you guys very much. Okay, thanks, Tristan. Thank you. Thank you. Up next, we have questions from the line of Colton Bean of Tudor, Pickering, Holt & Co.. Your line is open. Hey, Colton. Good morning. Oh, sorry about that. Morning. Just on the balance sheet, would love to understand any shifts in how you're thinking about optimal leverage. I think you've said previously you wouldn't wanna drop below 3x debt to EBITDA, but it looks like you closed out 2021 at 3.2. Then just the year-on-year EBITDA increase alone looks like it'll drive leverage below that threshold before considering retained free cash flow. Are you thinking about a lower target at this point, or considering an alternative cash outlay that might offset that? I think we're really comfortable within the target range of 3-4x, and I've said that our strong preference is to sit towards the bottom end of that range. That doesn't mean that we have to stop before we can identify the best use of that available cash flow or leverage capacity and then go execute on that strategy. Got it. Looking out over the next couple of years, is it reasonable to assume that the incremental leverage capacity from, you know, that organic growth and then the amount of free cash that the business is throwing off, if first call might be capital returns and then second, opportunities to M&A? I don't think that we exist with if you do A, then you can do B. If you do B, then you can go to C, right? I think you've seen us over the last couple of years really just execute across opportunities. That's going to be the strategy going forward, Colton. To the extent that we've got more organic growth or M&A opportunities that are attractive, we're definitely planning on continuing to invest in this business. We think that's what sets Targa up best for the short, medium, and long term for our investors. We also believe that we'll be able to return increasing capital to our shareholders year-over-year, 2022 common dividend versus 2021 dividend. We're doing that. We've talked about the fact that we expect that we'll be able to increase the dividend going forward as well in 2023. That's definitely part of how we'll return incremental capital to our investors. We'll continue to be opportunistic around our common share repurchase program. It's gonna be a combination of everything that's available to us. Got it. Appreciate the time. Thank you. Okay. Thank you. Thank you. Next we have the line of Keith Stanley of Wolfe Research. Your line is open. Hi. Good morning. Two follow-up questions. First one, just to clarify on hedging and appreciate the policy is the same and the percentage targets for each year. Can you just remind us how you typically hedge gas basis? Is it at the same time you're hedging your broader gas price exposure, or are you more open on gas basis? Yeah, sure. When we hedge our equity volumes, we hedge really as close to where we sell the physical as we can. For example, we'll sell Waha and other indices out of the Permian, and we'll sell other MidCon indices where we have length on gas. We cover out the basis as best we can for the volumes that we are trying to hedge. Great. Second follow-up was on the commentary about, you know, not really being in the market for acquisitions as much in the past few years and maybe being more open to that. Can you give a little more color on things you would look at? I assume tuck-in type Permian NGL opportunities. Would you look at anything outside the Permian? I guess one thought I had too is there any potential with the DevCo now done to buy in the rest of the Grand Prix stake, or is that unlikely? Sure. I'll give you some color there. You know, we've, I'd say, kind of been actively looking at bolt-on, tuck-in acquisitions across our footprint. I'd say we just continue to have a high hurdle. It's not that nothing can cross over that hurdle, but as we look at acquisitions, we wanna make sure we're staying within our leverage range. We wanna make sure that we have good synergies on the GMP side and on the NGL side. We're in a good position where we don't need to acquire anything, so it's really gotta be additive. It's gotta be at a good value for us with synergies that drive that value down even more. So I'd say there are opportunities and, you know, things we're looking at, but that really hasn't changed. We've been looking at things for the last several years. You know, there's opportunities in the Permian. There's also opportunities in other basins as well. If it checks all those boxes of keeping our leverage where it needs to be, good upfront value, with GMP synergies and downstream synergies, a lot of those bolt-on or tuck-ins could look a lot like organic growth projects by the time you're done with them. That's kinda how we're thinking about it, how we're looking at it. I think, you know, stay tuned. We'll see if, you know, if anything meets all those. It's a pretty high bar. We'll see if anything meets that. If it does, you know, there you know could be something there. Thank you. Okay. Thank you. Thank you. Next on the line, we have Theresa Chen of Barclays. Your line is open. Hi. I just wanted to follow up on the M&A line of commentary, if you don't mind. In terms of valuation of the things that you have been looking at for years now, how has that trended recently, given the commodity price outlook? Just more specifically, are there areas of the value chain or region-specific aspects that you're considering that would be most complementary to your existing footprint? Yeah. I'd say on the valuation trends, it really depends on what you're looking at. I consider us to be opportunistic on the buy side, but we're also opportunistic on the sell side, right? We sold GCX at 11x multiple. We thought that was a strong market there for that. I would say for other assets that don't have that cash flow, you know, kinda take or pay cash flow feature, it's you know over time, I think those multiples have trended down, but you know we haven't transacted on anything, so I can't really say how they've you know moved over the years. For non-highly contracted assets where it makes sense for a financial buyer, I would expect the multiple to be significantly less than where we transacted GCX. Just to repeat, there really isn't a difference in the strategy here. As Matt, I think, importantly articulated, we've been looking at M&A opportunities all along, and the hurdle has continued to be very, very high. That hasn't really changed. All that's changed is our balance sheet is a whole lot stronger now than it was a year ago or two years ago, and that just provides us with more flexibility as we consider opportunities. The strategy really hasn't changed. Thank you. Okay, thank you. Thank you. Next, we have the line of Chase Mulvehill of Bank of America. Your line is open. Yeah, hey, thanks for squeezing me in here. A few questions. I guess the first one is really just a follow-up to Keith's questions about the question around Waha basis spread. How much do you actually have hedged in 2023 for basis risk? When we have our equity hedges, you know, we call it 75 and then 50% hedged, you know, for our position on our equity position. We have some transport that also, you know, provides us ability to move our gas out, you know, in various directions. We have a gas marketing team that manages that portfolio very actively to make sure we have contracted takeaway. Okay. All right. It sounds like you got some FT on some pipes and maybe you could actually benefit from that. Would you say that the benefit is greater than the risk when you think about Waha basis for you? Yeah. Chase, our primary focus for our gas is to make sure volumes are moving out of the basin. For us and for our producers, that is our focus, to make sure we have market that we can get to. That is our focus, and that is kinda how we manage that overall gas position. We want gas to move, and we try and do it as best we can for us, and for our producers. Okay. All right. Follow-up question, and apologize if this was asked, but I don't think it was. 4Q Midland volumes were down a smidge in the Q4. Delaware volumes were actually up pretty strongly, up 12% quarter-over-quarter. I guess, you know, two questions. Number one, you know, you dropped below nameplate capacity, so should we think about in the Midland should we think that kinda running above nameplate capacity is tough to do, you know, consecutive quarters? You know, number two is, were you able to move some Midland volumes over to Delaware, and that's why Delaware really saw a nice uptick in the Q4? Yeah, sure. I'll start on that. Then for Q4, if you're comparing to our reported in Q3, it would look like it's down. If you look at what we reported, it's in the supplement. It's actually we see an increase of about 2% on our Midland volumes. There was a kind of production month accounting change from some volumes that were from September into October, which changed that. We actually saw, when it was corrected, volume growth in Q4 on the Midland side. As far as nameplate, we have the ability to run over nameplate. You know, you've seen us do that. It provides us good flexibility. We actually updated what we estimate our nameplate really to be for our plants. We used to call these 250s. We've been running them for over that and haven't seen a degradation in NGL recoveries or operational performance, so we're calling them 275s now. We still have good flexibility across our system to continue to operate. To be clear, you know, we saw growth in the Midland in Q4, and we expect to see growth in Midland, you know, kind of throughout the balance of the year. Okay, perfect. Thanks, Matt. Okay, thanks, Chase. Thank you. Next we have the line of Sunil Sibal of Seaport Global Securities. Your line is open. Yeah, hi. Good morning. My first question was a little bit of a follow-up on Permian. When we think about that 12%-15% volume growth in 2022, could you give us a sense whether that's kind of skewed more towards Delaware versus Midland, especially in light of, you know, some of the commentary we are hearing from some of your producers in the Midland? Sure. You know, we did not provide a detailed breakout of that. I'd say we see growth on both Delaware and the Midland. We see pretty strong activity across, you know, both areas of our system. Yeah, we see growth in both areas. You wouldn't handicap the 12%-15% to be weighted towards any specific part of Permian? We haven't given that color. I think you'll see it as we report going forward, but no, we haven't provided a kind of basin-level detail, breakout. We do see meaningful growth in both. We see strong growth continuing in the Midland, which is why we're adding those plants, but we also see growth in the Delaware. Got it. Thanks for that. One bit of a broader question. I think in the past you have talked about, you know, some of energy transition investment opportunities. Obviously, you know, I think the solar generation that you're looking at, you're doing it to provide this balance sheet. I was just curious, you know, has that kind of opportunity set expanded for you guys? Or what is on your radar screen currently? Yeah. I'd say we are continuing to look at opportunities in and around energy transition. We're continuing to look at, you know, renewable deals, whether it's additional solar or additional wind deals. We're continuing to be active to see if we can be part of the solution that way. Like I said before, I think for those projects, it's unlikely we put our capital in those projects, but we could provide some offtake to help get those underwritten. We're currently evaluating additional, you know, renewable projects on that front. We're also continuing to develop our, you know, carbon capture out in and around our assets. We're continuing to make progress on that. That is gonna take a while, so we are making progress. You know, there are some, you know, hurdles. There's some, you know, there's permitting. There's just things that need to get done, but we are working through those, and I think we still are optimistic that we can get something done there on carbon capture. Part of it does, you know, depend on where is the 45Q gonna settle out, and there was talk for a while of it going up to 80. You know, so is it gonna be 80 or is it gonna be 50? Those kind of things, you know, matter as well. We're gonna continue to work to try and develop the operational hurdles and get through that, and then we'll have to make the call on whether it makes, you know, financial sense for us or we need to go source third-party capital. Got it. Thanks for that. Okay, thank you. Thank you. I see no further questions in the queue. I will turn it back over to Mr. Sanjay Lad for closing remarks. Thanks to everyone that was on the call this morning, and we appreciate your interest in Targa Resources. The IR team will be available for any follow-up questions you may have. Thanks, and have a great day. This concludes today's conference call. Thank you all for participating. Now disconnect and have a pleasant day.