Good day, thank you for standing by. Welcome to the Targa Resources Corporation Second Quarter 2023 Earnings Webcast Presentation. At this time, all participants 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 one one on your phone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sanjay Lad, Vice President of Finance and Investor Relations. Thanks, Tess. Good morning, and welcome to the second quarter 2023 earnings call for Targa Resources Corp. The second quarter earnings release, along with the second quarter 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 meaning 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 also 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. Good morning. The second quarter results were consistent with our expectations as the strength of our business drove record volumes for the quarter, which really set us up well for a strong year. Adjusted EBITDA was lower sequentially, given our significant marketing gains in the first quarter. Consistent with previous disclosures, we expect EBITDA to ramp over the balance of the year. We remain confident in our full year 2023 Adjusted EBITDA estimate of $3.5 billion-$3.7 billion. During the second quarter, we had record volumes in the Permian, driving record NGL transportation and fractionation volumes downstream. We fully brought online our Legacy II plant in Permian Midland and commenced operations on our Midway plant in Permian Delaware. We executed on a quarterly record $149 million of common share repurchases, which is reflective of our strong conviction in the outlook for our business going forward. Natural gas volumes across our Permian systems continue to grow. The recent completion of our Legacy II and Midway plants provide us with incremental Midland and Delaware processing capacity to handle a continued ramp in inlet volumes, driving incremental volumes through our integrated NGL downstream assets. Given our increasing Permian volumes and consistent with our previous messaging that we are already ordering long lead items, today, we officially announce our next plant in the Permian Midland and our next plant in the Permian Delaware to support the infrastructure needs of our producer customers. We continue to estimate 2023 growth CapEx spending of between $2 billion and $2.2 billion, all of our previously announced projects remain on track and on budget. As we think about 2024 growth capital, we will continue to have spending to complete a number of our major projects already underway, including Frac Trains 9 and 10, the majority of capital on our Daytona NGL Pipeline and five Permian gas plants, driving expenditures for 2024, which may approximate spending levels similar to 2023. Growth capital spend beyond 2024 is likely to come down as we will have caught up on the downstream side of the business as those major growth capital projects will be complete. Investing in organic growth projects across our core integrated footprint provides Targa with attractive returns and puts us in a strong position to continue to return incremental capital to our shareholders. Let's now discuss our operations in more detail. Starting in the Permian, high activity levels continue across our dedicated acreage. Our systems across the Midland and Delaware basins averaged a record 5.1 billion cubic feet per day of reported inlet volumes during the second quarter, increasing 5% sequentially. In Permian Midland, we continue to see strong producer activity, and our system continues to operate near capacity. Capacity for our new Legacy II plant became fully available partway through the second quarter and is currently running near full. Our next Midland plant, Greenwood, remains on track to begin operations in the late fourth quarter of 2023 and is expected to be highly utilized when it comes online. In Permian, Delaware, activity and volumes across our footprint are also running strong. Our Midway plant commenced operations late in the second quarter and is providing much-needed incremental processing capacity. Midway became fully operational this week, and we idled our Sand Hills facility. These actions will increase operational reliability and enhance plant recoveries for our customers. Our Wildcat II and Roadrunner II plants remain on track to begin operations in the first and second quarters of 2024, respectively. Both plants are expected to start up highly utilized, given the robust activity across our entire Delaware footprint. We are currently offloading an average of around 70 million cubic feet per day of gas in the Permian, and are in the process of adding significant compression horsepower during the balance of the year, and are continuing to see strong producer activity across our acreage, which gives us the confidence that we remain on track for our average 2023 Permian inlet gas volumes to increase 10% over the fourth quarter of 2022. In our central region and the Badlands, our combined natural gas volumes increased 3% sequentially, and we are currently not seeing any material change in activity across our producer customers, despite lower commodity prices. Shifting to our Logistics and Transportation segment, Targa's NGL pipeline transportation volumes were a record 621,000 barrels per day, and fractionation volumes were a record 794,000 barrels per day during the second quarter. The ramp in supply volumes from our Permian systems and third parties drove the record sequential increase in NGL transportation. Additionally, Grand Prix pipeline volumes also benefited from the expiration of certain medium-term commitments we had on third-party pipes. Our fractionation facilities in Mont Belvieu remain highly utilized, and the restart of GCF will provide some much-needed capacity when it is fully restarted in the first quarter of 2024, we continue to expect our Train 9 fractionator to be highly utilized when it commences operations during the second quarter of 2024. Our recently announced Train 10 fractionator is expected to be much needed, given the expected continued growth in our G&P business and plant expansions, and remains on track for the first quarter of 2025. At Galena Park, we loaded an average of 9.2 million barrels per month of LPGs during the second quarter. In the third quarter, our loading capability will be reduced for about a month due to a portion of our facility undergoing its required 10-year inspection. Our low-cost expansion project to increase our propane loading capabilities with an incremental 1 million barrels per month of capacity will be complete this quarter, and we expect our loadings to ramp after the inspection is complete and through the balance of 2023. We are excited about the long-term outlook at Targa and remain focused on executing our strategic priorities. We, we believe that we offer a unique value proposition for our shareholders and potential shareholders, growing EBITDA, growing the dividend, and reducing share count while maintaining leverage within our target range. Before I turn the call over to Jen to discuss our second quarter results in more detail, I would like to extend a thank you to the Targa team for their continued focus on safety and execution while continuing to provide best-in-class service and reliability to our customers. Thanks, Matt. Good morning, everyone. Targa's reported Adjusted EBITDA for the second quarter was $789 million. The sequential decrease was predominantly attributable to the significant optimization opportunities we benefited from in our marketing and LPG export businesses during the first quarter. Higher volumes were offset by lower realized natural gas and NGL prices and higher operating expenses. As Matt mentioned, we expect Adjusted EBITDA to be higher in the third and fourth quarters as we benefit from strong volume tailwinds across our Permian and downstream assets, and are comfortable with our full year 2023 Adjusted EBITDA estimate of between $3.5 billion and $3.7 billion. We are well hedged across all commodities for the balance of 2023 and continue to add hedges for 2024 and beyond. Coupled with our fee-for contracts, we have significantly de-risked our earnings and cash flow outlook while preserving the upside when commodity prices increase. Inclusive of our newly announced Greenwood II and Bull Moose plants in the Permian, there is no change to our estimate for 2023 growth capital spending of between $2 billion and $2.2 billion. Our current year estimate for net maintenance capital spending remains $175 million. At quarter end, we had $2.2 billion of available liquidity, and our pro forma leverage was at the midpoint of our long-term leverage ratio target range, which provides us with a lot of flexibility looking forward. We continue to expect year-end leverage around the midpoint of our long-term leverage ratio target range of 3x- 4x. Maintaining a strong investment-grade balance sheet across cycles continues to be a priority. Our balance sheet strength remains the foundation that affords us the financial flexibility to continue to execute on our strategic priorities. That is, investing in high-returning integrated projects and prudently returning an increasing amount of capital to our shareholders. The strength of our balance sheet and outlook were recognized recently by both Fitch and S&P, that placed Targa on positive watch. We repurchased a quarterly record, $149 million of common shares in the second quarter at a weighted average price of $71.37 per share, and have repurchased over $200 million in common stock through the first half of the year. During the quarter, we exhausted our $500 million share repurchase program and had about $943 million remaining under our $1 billion share repurchase program as of June 30th. Looking ahead, we have significant flexibility to continue to execute under our opportunistic repurchase framework and further increase our return of capital to shareholders and reduce our share count over time. Lastly, I'd like to echo Matt and extend a thank you to our employees for their continued focus on safety and commitment to Targa. 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 lineup if you have additional questions. Tess, would you please open the line for Q&A? Tess, we are ready for the Q&A session. Thank you. We will now conduct a question-and-answer session. As a reminder, to ask a question, please press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. Please stand by while we compile the question-and-answer roster. Theresa Chen from Barclays. Thank you for taking my questions. First, I'd love to touch on the CapEx outlook over the medium to long term. To your, you know, comments earlier, Matt, about 2024 being similar to 2023, and then beyond that, the expectations for CapEx to step down. Do you have a sense of, you know, what do you think a post 2024 run rate CapEx could look like? Then, on the heels of that, in terms of capital allocation, you know, what do you view the split in the return of capital to shareholders between dividend growth and buybacks as that free cash flow generation becomes more visible? Yeah, sure. Hey, Theresa, good morning. You know, I talked about, you know, capital for 2024 and pointed to really some of the major projects. Let's talk about, you know, Daytona. Most of the spending we're going to have on Daytona is next year. We have two fractionators, Train 9 and Train 10, and we're also spending some money this year on GCF. You know, that, that's not a normal cadence to have that much fractionation being added. The line share of a transportation, you know, NGL pipeline being added is kind of higher than normal. We have a lot of that spending in 2023, too. That's when you look at the major projects, those are the ones we see in process through 2023 and then through 2024. Once the Fractionation Trains 9 and 10 in Daytona are online by the end of 2024, we do see a step down kind of thereafter. I don't have that exact, what it's going to look like, as a run rate, you know, what that would be, but we do see that stepping down because the lion's share of the spending for those large projects come off. Then it's adding our processing plants, and some of the other, you know, kind of normal course capital that, that, that we have. Then in terms of return of capital, you know, our focus has been investing in our core business. That gets really good returns for us. We're going to continue to focus on investing in both the G&P side and the downstream side to take care of our, you know, volumes for our, for our customers. That should provide good EBITDA growth and good ability for us to continue to return capital to shareholders, meaningfully increasing the dividend, meaningfully buying back shares. I think it's going to be a little bit of all the above approach, investing in our business, increasing the dividend, and repurchasing shares. You saw us repurchase a significant amount of shares in the second quarter. I think it's going to be all of those things. Thank you. Then looking to the second half of 2023, clearly, there's been a lot of volatility on the NGL side, whether in terms of pricing or, you know, volumes for different parts of the value chain across the industry. What is your implied contribution in the second half for NGL marketing to hit, you know, your guidance for the year? Yeah, you know, we had a really strong first quarter in terms of marketing, really across our export business, across gas marketing, NGL marketing, and we have some seasonality in the wholesale marketing business. In the second quarter, I would say it was, you know, relatively modest amount of marketing, kind of probably a low point for us if you look at it through the year. We have some expectation for more normalized kind of marketing as you go into second and third, sorry, into the third and fourth quarter, but nothing like we saw kind of at the beginning part of the year. We're starting to see some opportunities for spreads to open up, or we can capture some, but there's not any kind of outsized amount, you know, baked in for the second half of the year. On the LPG export side, you may have heard that we announced on this call that we expect the facility or parts of the facility on the export side to be down for a month as we complete a required 10-year review of the facilities. That will impact the third quarter. To the extent, though, that we see good demand internationally in the fourth quarter, we will have completed our 1 million barrel per month expansion at Galena Park, and we'll have that inspection behind us. We'll have a lot more flexibility to move additional cargoes in the fourth quarter on the LPG export side to the extent that there is global demand for additional volumes. Thank you. Okay, thank you. Thank you. One moment for our next question. Jeremy Tonet from JP Morgan Securities. Hi, good morning. Hey, good morning, Jeremy. Appreciate that we are not giving 24 guidance at this juncture, but just wondering if you could help us sketch out the future a little bit more. Clearly, a lot of capital being deployed, very accretive terms, a lot of growth in the Permian. But is there any flavor you could give us for what a post-2023... Targa trajectory could look like, just given the, the, the amount of capital being deployed? Jeremy, this is Jen. I think that part of our conviction around all things Targa right now is the fact that we do see such a strong multi-year growth outlook on the EBITDA side. I don't think we're at a point where we want to articulate any advanced guidance for 2024. It will largely be dependent on the producer forecast that we receive as we go through our planning forecast this fall. Certainly, we expect the assets that we have in progress right now to be very highly utilized when they come online. That's part of what we said this morning. With that volume growth, filling those facilities, we would certainly expect meaningful underlying EBITDA growth in a commodity environment that looks anything like we have seen this year. Got it. Is it fair to say the volumes would deliver strong growth year-over-year? There's not like a step down with the hedging book, that's a big offset. Just trying to think gives and takes as we look forward here. As I think about hedge prices right now for 2024 relative to where they are this year, I wouldn't say that there's a step down. Both natural gas and NGL prices sort of approximate same prices for 2023 and 2024. I really think it's the volumes that are going to drive significant underlying EBITDA growth for us, begins in the Permian Basin, then increasing Permian Basin volumes, of course, moving through our transportation and fractionation assets, then having those volumes available either to sell domestically or into the export markets, is really what positions us so well, not only for 2024, but beyond that, is part of what is driving our conviction in the Targa story. Got it. That's very helpful. Thank you for that. You know, just looking at the midstream industry more broadly, we've seen some kind of bigger moves take place, some, some mergers out there. Just wondering if we're in the midst of a period of industry consolidation, how does Targa think about that? What's Targa's role moving forward here? Yeah. Hey, Jeremy. We are really focused on investing in our core business. We have a lot of really attractive organic growth opportunities, you know, with a budget of $2 billion-$2.2 billion this year and significant capital spending next year as well. Those are really good projects for us. We've seen significant volume growth. You know, you saw our volumes really move up across Permian, across the NGL footprint. Here in the second quarter, we expect continued growth, the back half of 2023 and into 2024 and 2025. We're really focused on what we can do on an organic growth basis. That's the focus, that's where we're going to get the best returns. You know, what others are doing, you know, it's interesting, we pay attention, but our focus is on our core business. Got it. That's helpful. I'll leave it there. Thanks. Okay. Thanks, Jeremy. Thank you. As we proceed to our next question. Michael Blum from Wells Fargo, please proceed with your question. Thanks. Good morning, everyone. I wanted to just go back to LPG exports for a second. Notwithstanding the planned downtime in Q3, I was wondering if you could just speak to what you're seeing in end market demand for the balance of the year. Yeah, Michael, this is Scott. I would- We continue to see good demand, across our dock. I-- obviously, in the first quarter, we benefited from, from the outline that Matt, you know, communicated earlier. In the second quarter, we've seen less spot opportunities. Some of that's just been driven by, a less arb in the overall marketplace. We've seen some headwinds as it relates to, freight economics that has tightened things up. Just, you know, when you think about just the overall seasonal demand that we came off of from the first quarter. When we go into the third quarter, again, we continue to extend existing contracts that we have, adding contracts. Excuse me. Excuse me. Adding contracts to our portfolio, especially as we have the expansion project coming on during this third quarter, where we are getting some benefit as it relates to that today. When we look at the third quarter, you know, despite the downtime that we were going to have because of the mandatory inspection that we have on some of our vessels at the facility, we would expect our third quarter volumes to be similar or better than what we saw in the second quarter. As Jen alluded to, when we look at the fourth quarter with the expansion online, with a ramp-up in demand, the seasonal demand that we typically see in the fourth quarter and the first quarter, we just really see a good outlet, outlook for that. Volumes through our systems, will continue to ramp up, and, we, we just view that as a very positive for us overall. Got it. No, thanks. That's helpful. Also just wanted to ask about this recent spike we've seen in ethane prices. It's had some impacts on some processing plant efficiencies, some frac outages. Just curious if that impacted Targa at all for Q3, either positive or negative. I would say it did not impact us negatively. You know, ethane found itself really in a volatile market during the month of July. Some of that was brought on as the market was pinched between weeks of rejection and improved petrochemical operating rates. The petchem operating rates probably were likely, you know, just above 90% operating rates in the month of July, along with that, with increased ethane exports. As the price ramped up, that improved some of the recovery economics as it relates to ethane rejection recovery, but there's some time lags with that. I think the market found itself in some opportunities where it spiked in order to, for folks to cover various positions. For us-- you know, as we see those opportunities, we can, we can utilize our storage, we can take advantage of the storage position that we have. I would say that it was probably a net benefit to us to a certain degree, but I would suggest that some of that may come later in the year than it would be in, you know, in kind of the prompt month. Things feel like they're a little more balanced. Prices have now, you know, really come back down to more of a moderate level, around $0.27 per gallon this morning. They feel a little more balanced. September is trading a little bit stronger than August currently, which would suggest there may be some mild tightness. Again, I think overall, things have balanced themselves out, with the recovery economics improving. Great. Thank you. Okay. Thanks, Mike. Thank you. Then we'll have our next question. Neel Mitra from Bank of America. Hi, thanks for taking my question. I just wanted to drill down a little bit more on the ongoing CapEx needs and two particular topics. First, seemed like you were, maybe tw processing plants behind on Lucid when you acquired them. How are we trending on that? Then second, when we look at the Grand Prix expansion from North Texas to Mont Belvieu, when would that be necessary, from the volumes that you're getting from Daytona and Grand Prix? Hi, Neel. This is Pat McDonie. I'll answer the first one. Lucid was behind, frankly, you know, we're, we're still running hard to catch up. Obviously, the Red Hills VI plant came on shortly after the acquisition. We've added capacity at Midway. We're adding capacity pretty quickly with Wildcat Two, and now we've... And Roadrunner, and we've made the announcement on Bull Moose. All of those things are to get out in front of the activity level we're seeing from our producers in the Delaware Basin. Frankly, we have a ton of compression getting set between now and the end of the year. We're still behind a little bit, and we're playing catch up, and we expect to get hopefully caught up by the end of the year on that. The production's there, the drilling activity is there. We just got to execute and get it connected and, and online. The capacity adds you're seeing in the Delaware are really directly, related to the producer activity levels that we have direct line of sight to. We're not caught up, but we're getting there. Neal, this is Scott. As it relates to Grand Prix and Daytona, certainly, we welcome the expansion project that we have with Daytona coming online that will complement the western portion of our Grand Prix pipeline, that feeds into our south leg, moving into Mont Belvieu. You know, recognize that the south leg has over, just over 1 million barrels a day of capacity, moving into Mont Belvieu. In the second quarter, we moved just, just over 600,000 barrels a day. We've got a lot of operating leverage as it relates to that south leg. When Daytona comes online, we had announced initially, they would have a capacity of roughly 400,000 barrels a day, with a couple of pump stations that would be a part of that expansion project. We've got a lot of operating leverage as it relates to that. With that said, obviously, we are evaluating what is the next step for us, when it, for additional pipeline requirements. We're certainly gonna watch and see how Pat's plants on the western side in the Permian continue to ramp up over time, the additive of plants over time. We'll certainly be in a position to expand when it's necessary and evaluate that. Got it. Thank you. As a quick follow-up on the ethane question, we were in rejection, I guess, for, for most of June. Did that impact results negatively for Targa? I think I heard that, that you would benefit later in the year from some of the higher ethane prices, and I was just wondering how you would benefit and some commentary behind that. Yeah, I think what I would allude to there is, is we saw some opportunities, where we actually saw some contango in the marketplace on ethane, that was priced later in the year and actually into 2024. Utilizing our storage, we were able to to benefit from that contango market that was presented. I would say that it's, it's moderate levels at this point, and that's something that we obviously, with our storage, have the ability to take advantage of when there is contango plays in the marketplace. Those are not present today per se, but that's where we get some slight benefits when the market moves in those directions. Got it. Was there a negative hit on volumes on your systems just from, from rejection that you wouldn't otherwise have seen from the heat in Texas in June? I would say not really on our system. Certainly, as we watch, the percentage of ethane that's contained in the raw that comes into our, into our Mont Belvieu facility, it usually is more impactful on the third-party pipelines than it is on the Grand Prix pipeline. I will say that, you know, we saw in the latter part of July and here in August, that the percentage has moved up a little bit, probably more on the third-party pipes than, than on Grand Prix. That is certainly an indicator that industry as a whole is recovering more of the ethane in the field, which should benefit us over time. I think the other thing that you'll see is, is that given the fact that we've had a couple of industry players have brought on some additional frac capacity, that also lends to calming, calming down, if you will, the spikes that we saw in the month of July on ethane. Great. Thank you. Thank you. One moment for our next question. Colton Bean, please proceed with your question from TPH and Company. Morning. Just on the G&P segment, a decent drop in sequential processing margins. Can you comment on where Q2 results sit relative to fee floors, and just any general expectations for margins through the balance of the year? Colton, this is Jen. In the second quarter, I'd say that our fee floors kicked in, reflecting, I think, the importance of them. I think the second quarter is illustrative of how well Targa can perform even across a lower commodity price environment, where we even saw Waha prices first a month in April, print what? $0.08-$0.09. Again, I think it is reflective of the importance to us of the fee floors, that we are able to continue to invest, because with those floors in place, we can at least get a required minimum rate of return on that invested capital. Where we sit today, we're seeing improved prices here in the third quarter. For full year, I'd say that commodity prices on the NGL and natural gas side are, call it, 5% lower than the guidance that we set out. We'll have to see how the rest of the year plays out, and hopefully, prices can be more of a tailwind than a headwind, given we are very well hedged and given, again, in the second quarter, we were at fee floor levels. Got it. Then shifting over to the Logistics and Transportation segment, it had some very impressive NGL throughput across Grand Prix in the frac fleet, but it looks like the weighted average F&T rate moved lower, quarter-over-quarter. Any basin mix shift or recontracting impacts that drove the drop? Then again, your expectations for that rate trajectory moving forward? Yeah, Colton. So yeah, we had really good volumes across the downstream segment. You saw a significant ramp in Grand Prix, which was part of a contract. Part of it was just the organic growth, part was a contract roll-off we had on transport. And then, so you saw also a really good volume increase on frac. No, I don't think there was really a mix, or a degradation in our overall margins. Typically, these T&F contracts are, you know, kind of escalate over time and move up. So there just might be some, you know, volatility with marketing or what all you're including in the overall LNT margin and how much you're attributing to transport and frac. Okay, understood. I'll follow up. Thank you. Thank you. One moment for our next question. We have Keith Stanley from Wolfe Research. Please proceed with your question. Hi, good morning. Wanted to ask about the big step-up in buybacks during Q2. Should we view that as kind of a unique opportunity because the stock fell in May and June? Is this possibly kind of a normal pace in how you think about buybacks and your capacity to do that going forward? You know, I, I think our buybacks have, you know, been a part of the way we're returning capital to shareholders. You know, we look at. Really, I'd say it's underpinned by just our really strong outlook for not only the remainder of 2023, but as we look out 2024 and 2025, we look at our overall cash flow profile, our leverage profile outlook for the business. It led us to step up our repurchases for the second quarter. That was very attractive to us. You know, in the past, in the first quarter, we had just completed the, you know, the acquisition of the 25% interest in Grand Prix. It's kind of a mix of what's our overall spending for the quarter and then what's our outlook? I think we feel very confident, in not only back half of the year, but really kind of multi-year outlook for Targa. That led us to step up the, the repurchases for the second quarter. Great, thanks. Second question, the Grand Prix volumes are really high, as you said, in part from a contract roll-off on transportation. Are there any other major contract roll-offs coming up, I guess, through the end of next year, that we should be mindful of, that could cause another big pop in, in Grand Prix volumes? Keith, this is Scott. I would say that, no, not really. We certainly benefited in the second quarter as we had some, you know, some of those midterm contracts that had rolled off. I would say that going forward, there, there's not really a large step up. We will basically benefit from the additive of new plants that are, that are going on in the Permian Basin for us. Certainly, the, the next two plants that were announced today are something that will contribute to our, to our Grand Prix pipeline over time. Thank you. Okay, thank you. Thank you. One moment for our next question. Brian Reynolds from UBS, please proceed with your question. Hi, good morning, everyone. Just a quick follow-up on the CapEx cadence in the outer years, with the focus on that gas takeaway opportunities in Apex. You know, is this natural gas takeaway opportunity included in that kind of outer year CapEx decline? Perhaps can you update us on perhaps, you know, Targa's, you know, equity interest or, or, or ability to, you know, fund the whole pipe on its own? Thanks. On the financing side, I think that we've consistently said, Brian, that if Apex was a project that got commercialized, it's one that lends itself really nicely to bring in JV partners and also to consider project finance. I think we've been very consistent that if that is a project that does move forward, the likely outcome is that we would be funding it with a small portion of the equity of the project. Would then utilize either joint ventures and or project finance for the bulk of the financing. This is Bobby. When you look at the, the parties sitting around the table, both on the producer shipper side and on the market side, it's kind of a who's who, that's the great parties, which lends itself to what Jen is talking about. There's a line out the door relative to the ability to raise capital in a multitude of ways to do it. Great, thanks. Appreciate that. Maybe just a quick follow-up on, on the NGL market. Thanks for all the, all the prior color, kind of just curious if you can provide a little bit more color around your propane outlook. You know, we're trading at mult- or historical lows for propane relative to WTI. I just looking ahead into winter and a lot of the PDH demand that's coming online in China and its competition with Naphtha. Just kind of curious of, of what you're seeing across your system in terms of interest going into wintertime this year. Thanks. Yeah, this is Scott. You know, currently today, pricing sits around $0.72. We are, we view the outer months currently today are, is slight contangos. Fourth quarter's around $0.78, first quarter's around $0.79. You know, the challenge that propane has today is, is that, you know, our current inventories stand around 88 million barrels, which is about 25 million barrels above this time last year. That is part of the reason why you're seeing, you know, pricing relative to WTI, from a percentage basis, down from what you've seen, you know, of late. I think really, when you look at it, production obviously is moving up. I think as, overall global demand continues to increase, albeit, you know, there are times where you see some lulls in that. The PDH to plant, to plant, PDH additives that you see in China, that you mentioned, obviously, is a big pull of propane over time. For us, I think it's as an industry, I think, we've got adequate inventory, certainly, and I think that will provide us. The inventories have been higher historically, so this is not like it's a high watermark for us, and we've been able to pull the inventories down. The other thing, when you look at it from an export market perspective, you're seeing the industry continue to add vessels for LPGs. Current fleet size is around 360 VLGCs. With the second half of this year, we're adding another 25 or so vessels, and probably in the, in 2024, we'll exceed 400 vessels on the water. That clearly is an indication that as an industry and as a market demand, that the market is gearing up for, for increased demand globally as more markets mature. Great. Really appreciate it. Thanks for the time this morning. Thank you. Thank you. One, one moment, please for our next question. We have Tristan Richardson from Scotiabank. Hey, good morning, guys. Just a, a question. You just mentioned on offloading levels that you're seeing now. Should we, should we think of those as sort of normal, normal levels that you would see in any given year, or are those perhaps elevated currently in anticipation of Greenwood, Wildcat, Roadrunner? Maybe just your thoughts on, on offloading as, as a part of the portfolio. Yeah, I mean, I, I think you're going to see it in pinch periods, right? Where we're in the process of adding capacity, and we need to move some gas off system until we get our incremental plan started up. I don't know that there's a normal cadence to that. Obviously, we're building a lot of additional plant capacity with the hopes that we're out in front of our producer growth and that we're going to be able to take 100% of it. Frankly, our producers, even though we are robot-- we have a robust outlook on their growth, they've outperformed, and it means that we've needed more capacity than we've even built, and obviously, we've built a lot. Hopefully, our offloads will remain only as needed and for short periods of time in kind of an emergency situation. Outside of that, we'll have plant capacity in place to provide those services on our own. That's helpful. Then just on your point there on customers, just always kind of curious about the producer dynamics and customer activity. Like, certainly, your view on inlet growth this year hasn't changed, and we know your large-scale customers are the major drivers, but maybe just anything on the smaller to mid-sized customers and a change in behavior, shifts in activity, etc. No. I mean, obviously, you've seen a little bit of consolidation through the acquisition market. Short term, it has no impact, and even longer term, the impact on growth on our system is inconsequential. We really have seen a continued high activity level across both the Delaware and Midland sides of the basin, so no material will change. Thank you guys very much. Okay, thank you. Thank you. One moment, please, for our next question. We have Neal Dingman from Truist Securities. Hi, thank you. This is Jake Nivasch on for Neal. Just a quick one here from me, and I know we've kind of touched on this a couple of times, so you know, if I could tackle this a different way. Just the, the CapEx on the outer years, I'm just trying to get, get a sense, you know, strategically, what that implies, I guess, from a capital allocation standpoint. You know, it doesn't sound like, you know, especially, you know, the comments today, there's a big M&A appetite, you know, and, and given that the CapEx spend is coming down, and, you know, the fundamental backdrop that you guys have with cash flow generation, just trying to get a sense of what that means, either for, you know, the target leverage ratio, if you, if you think, you know, maybe bring that down? I guess even from a buyback standpoint, you know, would you consider going into a formulaic program? Just trying to get a sense of, I guess, how you guys are thinking about that, just in general. Thank you. This is Jen. I think from our perspective, it really all begins with the Permian growth and the cadence of Permian growth, how much additional infrastructure that we'll need to service our Permian customers based on that, call it, medium and longer term growth rate, then what larger assets we'll need on the downstream side to help manage those volumes through our integrated system. Certainly, part of why we've got so much conviction in our Targa story is, as we look out to 2025 and beyond, we expect significantly higher EBITDA, growth capital coming down. That means that we'll have a lot more free cash flow available to allocate and return more capital to shareholders, while also continuing to invest in the business. I think that you've heard currently, the appetite for M&A is very, very low. We did two excellent acquisitions last year that are performing very, very well for us this year, and we expect, particularly the Lucid assets, to perform very well for us on a growth basis as we move forward through really the short, medium, and long term. I think that's all setting us up to be in an excellent position looking forward. We'll have to figure out the ideal mix of increasing dividends and also repurchases. We like the opportunistic share repurchase program right now. I think that it's working for us, particularly as we are trying to manage leverage, a leverage ratio today of about the midpoint of our long-term leverage ratio target range. I think we've spoken to our preference to manage our leverage ratio in the bottom half of that long-term leverage ratio target range, but we're very comfortable running this business between 3x-4x. I think, again, that's what gives us a lot of flexibility going forward on that all-of-the-above approach that says, we will continue to invest in the business in really attractive returning projects, and that will help underpin an exceptionally strong balance sheet with the flexibility to return more capital to shareholders across a multitude of ways. Gotcha. Perfect. That's it for me. Thank you. Thank you. Okay, thank you. Thank you. As we move to take our final question, we have Sunil Sibal from Seaport Global Securities. Please proceed with your question. Yeah, hi, good morning, everybody. I just wanted to understand a little bit better the gas takeaway situation in Permian. Obviously, you know, you're developing your project, and you also announced a number of, you know, processing additions. From a gas takeaway perspective, when do we need to see, you know, new pipelines announced to basically really service this gas out of the basin? This is Bobby. What I'd say is we are, you know, relatively comfortable over the short term, short to medium term for gas takeaway. You see something like, a pipeline that went down earlier this week, in the weekend, tight enough that a whole pipeline going away does not work for the basin. As you see, two expansions coming online in the short term and then Matterhorn coming online next year, we feel comfortable that those will satisfy the needs, you know, over the short to medium term, depending, depending on how you define those. The way we see it, we think another pipe needs to be in service in the 2026 timeframe. That probably means early 2024. Hopefully, something else goes FID. We've, we've said it before, if there's a meeting of the minds on the shipper side with the market side on Apex, and Apex ends up being that pipe, great. If it's not, it's another pipe. At the end of the day, Targa just wants to see that infrastructure get built, whether it's Targa-led or, another party, leading it. Sometime next year, we will be very supportive of our pipe or someone else's pipe, making sure it goes, to make sure that all that gas is flowing, that there's adequate takeaway in that 2026 timeframe. Got it. Thanks for that clarity. Then, my second question was related to returns. You know, obviously, I think in the last few years, you've posted 26% of ROIC. I was curious, you know, when you're looking at new investments or you're approving new projects, what's a good way of thinking about, you know, your threshold on returns for approving projects? Yeah, I, you know, the returns have been very good for Targa across our integrated footprint, gathering and processing, and then following the NGL molecule through Grand Prix, frac, and export. When we put that slide together, it said 26% ROIC, you know, as investment in the, you know, our core business, and that's what we're investing in now. A lot of those contracts are the same contracts, really long-term, 10, 15-year contracts. We feel good about the returns going forward, being well in excess of our, of our cost of capital. You know, typically, in the past, we have described our organic growth as kind of 5x-7x multiple. There's perhaps a little bit of sand in there. You saw us do about four times was, you know, kind of what we were able to execute on. You know, I don't know that we'll hit, exactly four times. You know, I think, you know, if we say five to seven, you know, perhaps kind of the lower end of that is something I think we could, you know, kind of target and be able to get there. Part of it will be dependent on when you're investing, what are commodity prices doing throughout that time period? They can move up, can move down, that can kind of move that overall multiple. Either way, we're becoming less commodity price sensitive. With the fee base and fee margins we have in there, we see, you know, really strong returns for us on, on these projects, you know, investing in our core business, GMP, and then following the NGL molecule to the water. Got it. Just one clarification on that. The new contract that you're signing on are basically helping you push more towards fixed fee, or they just keep the fixed fee versus the commodity sensitivity constant where it is? Well, we're always entering in to new contracts. We're amending, we're extending, entering into new, you know, new contracts on the GMP side and on the downstream side. It's a, it's a constantly moving and, and changing dynamic. As we're talking with our producer customers, we have been successful, and we're going to continue to push for more fee-based components in our gathering and processing contracts. Where we had just direct, you know, straight POP exposure, we are now putting floors in place. Some of them, as they come up, we're moving to fee-based. There's hybrids, it's a mix. As those come up, as we extend, as we modify those contracts, we'll be adding more fee-based components. I just expect that to continue to move more and more fee-based as we move forward. Got it. Thanks for all the clarity. Okay. Thank you. Thank you. I'm now showing no further questions at this time. I would now like to turn the conference back to Sanjay Lad, Vice President of Finance and Investor Relations, for closing remarks. Thanks to everyone that was on the call this morning. We appreciate your interest in Targa Resources. The IR team will be available for any follow-up questions you may have. Thanks. Have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.