Q4 2023 MPLX LP Earnings Call

Good morning, and welcome to MPLX as fourth quarter 2023 earnings conference call. The slides that accompany this call can be found on our website at MPLX Dot com under the Investor Tab, joining me on the call today are Mike Hennigan, Chairman and CEO, Chris Hagadorn CFO also with US is John Quaid as our CFO transition into their new roles and other.

The executive team, we invite you to read the Safe Harbor statements and non-GAAP disclaimer on slide two it's a reminder, that we will be making forward looking statements during the call and during the question and answer session that follows actual results may differ materially from what we expect today factors that could cause actual results to differ are included there as well as in our filings with the SEC.

With that I'll turn the call over to Mike.

Mike: Thanks, Christina and good morning, everyone. Thank you for joining our call.

Mike: I'd like to acknowledge Chris Hagadorn, MPLX as new CFO, joining our call. We look forward to Christmas financial leadership, having served in various roles in the midstream sector previously being the controller of MPLX and most recently controller of M. P C.

2023 was a strong year as we successfully executed our strategic priorities full year adjusted EBITDA was $6 $3 billion distributable cash flow was $5 $3 billion and adjusted free cash flow was $4 $1 billion.

Mike: Our results reflect the continued growth of the partnership and its cash flows.

And are all in that segment strong operational performance and customer demand drove record pipeline throughput and strong growth in terminal throughput demonstrating the value of our relationship with M. P C.

Mike: And our GMP segment, we saw record throughput in our gathering processing and fractionation operations, driven mainly by our assets in the Marcellus and Permian basins.

Mike: Our focus on cost management strong operational performance and growth from recent capital investments resulted in adjusted EBITDA growth of nearly 9% and DCF growth of over 7% for the year.

Mike: In line with our commitment to return capital the growth of MPLX is cash flow supported the return of $3 $3 billion to unit holders through distributions.

Mike: We've increased our quarterly distribution, 10% each of the last two years, which now stands at $3 40 per unit on an annualized basis, and we still have strong distribution coverage of one six times.

Mike: Turning to the macro the United States continues to be a low cost producer of energy fuels needed across the globe.

Mike: Our expectations on the long term production outlook in our key basins are unchanged, we expect strong demand for hydrocarbons will support growth across our asset footprint.

Mike: In our largest base in the Marcellus.

Mike: The cost to develop is at the low end of the cost curve and below current commodity prices in the fourth quarter process utilization reached 96% and we expect producer drilling activity to support continued volume growth in the Marcellus.

We've seen similar growth rates in the Utica, we're processing utilization increased 10% year over year.

Mike: Both basins are seeing wells with longer laterals, which are resulting in higher volumes, highlighting the strength and opportunities we see in our northeast footprint.

Mike: In the Permian basin crude prices remain attractive and associated gas production continues to grow as producers execute drilling and completion activities.

Mike: As part of our Permian growth strategy, we acquired the remaining interest of our gathering and processing joint venture in the Delaware basin for approximately $270 million at an attractive multiple.

Operator: Good morning, and welcome to NPLX's fourth quarter 2023 earnings conference call. The slides that accompany this call can be found on our website at NPLX.com under the Investor tab. Joining me on the call today are Mike Hennigan, Chairman and CEO; Chris Hagedorn, CFO; also with us is John Quaid, as our CFOs transition into their new roles, and other members of the executive team. We invite you to read the Safe Harbor Statements and Non-Yap Disclaimer on slide two. It's a reminder that we will be making forward-looking statements during the call and during the question and answer session that follows. However, actual results may differ materially from what we expect today. Factors that could cause actual results to differ are included there, as well as in our filings with the SEC. With that, I'll turn the call over to Mike. Thanks, Christina. Good morning, everyone.

Mike: This acquisition illustrates our ability to grow the cash flow to the partnership through the lens of strict capital discipline.

Mike: We're confident in our ability to grow the partnership and are focused on executing the strategic priorities strict capital discipline, fostering our low cost culture, and optimizing our asset portfolio all of which are foundational to the growth of MPLX as cash flows.

Mike: Turning to our capital plans.

Mike: Today, we announced our capital expenditure outlook of $1 $1 billion for 2024.

Mike: Our plan includes $950 million of growth capital and $150 million of maintenance capital we.

Michael J. Hennigan: Thank you for joining our call. I'd like to acknowledge Chris Hagedorn, MPLX's new CFO, joining our call. We look forward to Chris's financial leadership, having served in various roles in the midstream sector, previously being the controller of MPLX, and most recently, controller of MPC. 2023 was a strong year as we successfully executed our strategic priority. Full year adjusted EBITDA was $6.3 billion.

Mike: We remain committed to capital discipline, and our 2020 for growth capital outlook is anchored in the Marcellus and Permian basins are integrated footprints in these basins have positioned the partnership with a steady source of opportunities to expand our value change, particularly around natural gas and NGL assets.

Mike: We plan to continue growing these operations through organic projects investment in our Permian joint ventures and bolt on opportunities.

Michael J. Hennigan: Distributable cash flow was $5.3 billion, and adjusted free cash flow was $4.1 billion. Our results reflect the continued growth of the partnership and its cash flow. In our L&S segment, strong operational performance and customer demand drove record pipeline throughput and strong growth in terminal throughput, demonstrating the value of our relationship with MPC. In our GMP segment, we saw record throughput in our gathering, processing, and fractionation operations, driven mainly by our assets in the Marcellus and Permian Basins.

Mike: Neil N S segment construction is progressing on the Whistler, Agua Dulce to Corpus Christi, or a D. C. C natural gas pipeline, which is expected to be in service in the third quarter of 2024.

Mike: We're also progressing the expansion of the Bangles joint venture NGL pipeline to approximately 200000 barrels per day, which is expected to be completed in the first half of 2025.

Mike: These projects are largely financed at the JV level. Therefore, our portion of the JV finance capital spending is not reflected in our capital outlook.

Michael J. Hennigan: Our focus on cost management, strong operational performance, and growth from recent capital investments resulted in adjusted EBITDA growth of nearly 9% and DCF growth of over 7% for the year. In line with our commitment to return capital, the growth of MPLX's cash flow supported the return of $3.3 billion to unit holders through distribution. We've increased our quarterly distribution by 10% each of the last two years, which now stands at $3.40 per unit on an annualized basis, and we still have strong distribution coverage of 1.6 times. Turning to the macro, the United States continues to be a low-cost producer of energy fuels needed across the globe. Our expectations for the long-term production outlook in our key basins are unchanged. We expect strong demand for hydrocarbons will support growth across our asset footprint and our largest base in the Marcellus. The cost to develop is at the low end of the cost curve and below current commodity prices.

Mike: The GMP segment, we're bringing new gas processing plants online to meet increasing customer demand.

In the Marcellus Basin, we advanced construction of the Harmon Creek, two gas processing plant, which is expected to be online at the end of the first quarter.

Similarly in the Permian Basin, we progressed construction of Preakness, two which is expected to be online early in the second quarter.

Mike: Additionally, we are building our seventh gas processing plant in the basin Secretary, It which is expected to be online in the second half of 2025.

Mike: Once operational our total processing capacity in the Delaware basin will be approximately $1 4 billion cubic feet per day.

Mike: Outside of these strategic basins, the remainder of our capital plan is mostly comprised of smaller high return investments targeted at expansion or the bottlenecking of existing assets and projects related to expected increased producer activity.

While our capital outlook is primarily focused on her illness in G&P footprint, we will evaluate low carbon opportunities to leverage the technologies that are complementary with our asset footprint to create a competitive advantage.

Michael J. Hennigan: In the fourth quarter, process utilization reached 96%, and we expect producer drilling activity to support continued volume growth in the Marcellus. We've seen similar growth rates in the Utica, where processing utilization increased 10% year over year. Both basins are seeing wells with longer laterals, which are resulting in higher volumes, highlighting the strength and opportunities we see in our Northeast footprint. In the Permian Basin, crew prices remain attractive, and associated gas production continues to grow as producers execute drilling and completion activities. As part of our Permian growth strategy, we acquired the remaining interest of a gathering and processing joint venture in the Delaware Basin for approximately $270 million at an attractive multiple. This acquisition illustrates our ability to grow the cash flow of the partnership through the lens of strict capital discipline. We're confident in our ability to grow the partnership and are focused on executing the strategic priorities, strict capital discipline, fostering a low-cost culture, and optimizing our asset portfolio, all of which are foundational to the growth of MPLX's cash flow. Now, turning to our capital plans. Today, we announce the capital expenditure outlook of $1.1 billion for 2024.

Moving to capital allocation, we are optimistic about our opportunities in 2024.

Mike: First maintenance capital, we are steadfast in our commitment commitment to safely operate our assets protect the health and safety of our employees and support the communities we operate in.

Mike: Second we're focused on delivering a secure distribution and expect this will remain our primary return of capital tool.

Mike: Third we will invest to grow the business.

Mike: This is both a return on and return of capital business and as we look at 2024, our priority is to invest to grow the business at superior returns.

Mike: After these priorities, we will assess the opportunistic return of capital to unitholders.

Mike: Recent industry consolidation has not changed our perspectives on the structure of MPLX MPLX is a strategic investment for M. P. C. N N P. C does not playing the role of the partnership.

Mike: Now, let me turn the call over to Chris to discuss our operational and financial results for the quarter.

Chris Hagadorn: Thanks, Mike.

Chris Hagadorn: Slide seven outlines the fourth quarter operational and financial performance highlights for our logistics and storage segment.

Michael J. Hennigan: Our plan includes $950 million of growth capital and $150 million of maintenance capital. We remain committed to capital discipline, and our 2024 Growth Capital Outlook is anchored in the Marcellus and Permian Basins. Our integrative footprints in these basins have positioned the partnership with a steady source of opportunities to expand our value chains, particularly around natural gas and NGLS. We plan to continue growing these operations through organic projects, investment in our Permian joint ventures, and bolt-on opportunities. In the L&S segment, construction is progressing on the Whistler Agua Dulce to Corpus Christi, or ADCC, natural gas pipeline, which is expected to be in service in the third quarter of 2024. We're also progressing the expansion of the Bengal Joint Venture NGL pipeline to approximately 200,000 barrels per day, which is expected to be completed in the first half of 2025. These projects are largely financed at the JV level. Therefore, our portion of the JV finance capital spending is not reflected in our capital outlay.

Chris Hagadorn: The LNR segment reported its fourth consecutive quarter of $1 billion adjusted EBITDA.

Adjusted EBITDA increased $110 million when compared to the fourth quarter of 2022.

Chris Hagadorn: Primarily driven by higher rates and throughput including growth from equity affiliates.

Chris Hagadorn: Crude pipeline volumes were up 4%, primarily because of refinery maintenance schedules and the prior year.

Chris Hagadorn: Product pipeline volumes and terminal volumes were flat.

Chris Hagadorn: Moving to our gathering and processing segment on slide eight the.

Chris Hagadorn: The GMP segment, adjusted EBITDA increased $59 million compared to fourth quarter 2022, This was driven by higher gathering and processing volumes.

Chris Hagadorn: Total gathered volumes were up 1% year over year, primarily due to increased production in the Marcellus in the southwest.

Processing volumes were up 9% year over year, primarily primarily from higher volumes in the Marcellus and the Utica driven by increased customer demand.

Chris Hagadorn: Focusing in on the Marcellus by far our largest basin G&P operations, we saw year over year volume increases of 10% for gathering and 9% percent for processing driven by increased drilling and production growth.

Chris Hagadorn: Marcellus processing utilization reached 96% in the fourth quarter illustrating the need for our Harmon Creek two facility Frac.

Michael J. Hennigan: In the GMP segment, we're bringing new gas processing plants online to meet increasing customer demand. In the Marcellus Basin, we advanced the construction of the Harmon Creek 2 gas processing plant, which is expected to be online at the end of the first quarter. Similarly, in the Permian Basin, we progressed the construction of Preakness II, which is expected to be online early in the second quarter. Additionally, we are building our seventh gas processing plant in the basin, Secretariat, which is expected to be online in the second half of 2025. Once operational, our total processing capacity in the Delaware Basin will be approximately 1.4 billion cubic feet per day. Outside of these strategic basins, the remainder of our capital plan is mostly comprised of smaller, high-return investments targeted at expansion or at the bottlenecking of existing assets and projects related to expected increased producer activity.

Chris Hagadorn: Fractionation volumes grew 1% due to higher processed volumes, which were offset by lower ethane recoveries.

Moving to our fourth quarter financial highlights on slide nine total adjusted EBITDA of $1 $6 billion and distributable cash flow of $1 $4 billion increased 12% and 9% respectively from prior year.

Chris Hagadorn: Turning to our balance sheet on slide 10 growth of our cash flows is continue to reduce MPLX leverage which now stands at three three times.

Chris Hagadorn: We believe the stability of our cash flow supports leveraged in the range of four times and while MPLX is just over $1 billion of notes maturing later this year. We currently do not expect to structurally lower our debt.

Chris Hagadorn: When evaluating the short term maturity, we will consider all opportunities available to us to optimize our cost of that.

Chris Hagadorn: Mplx's strong balance sheet, including a yearend cash balance of $1 billion.

Chris Hagadorn: Plus the ability to utilize the intercompany facility with MPC provides us with financial flexibility to invest in the business and optimize capital allocation.

Michael J. Hennigan: While our capital outlook is primarily focused on our L&S and G&P footprint, we will evaluate low-carbon opportunities to leverage technologies that are complementary with our asset footprint to create a competitive advantage. Moving to capital allocation. We're optimistic about our opportunities in 2024. First, maintenance capital. We are steadfast in our commitment to safely operate our assets, protect the health and safety of our employees, and support the communities we operate in. Second, we're focused on delivering a secure distribution and expect this will remain our primary return of capital tool. And third, we'll invest to grow the business. This is both a return on and a return of capital. As we look at 2024, our priority is to invest to grow the business at superior returns. After these priorities, we will assess the opportunistic return of capital to unit holders. Recent industry consolidation has not changed our perspectives on the structure of MPLX. MPLX is a strategic investment for MPC, and MPC does not plan to roll up the partnership.

Chris Hagadorn: Now, let me hand, it back to Mike for some final thoughts.

Mike: Thanks, Chris.

Mike: In closing Mplx's strong history of growing the partnerships cash flows by executing our strategic priorities all while maintaining strict capital discipline. We continue to aim for mid single digit growth rate over multiple year periods. It's what we believe is appropriate to aim for given our commitment to capital discipline and the size of our partnership.

Mike: Within our capital allocation framework, but this should not be interpreted as annual guidance and.

And as you can see in our results. We've achieved this growth in adjusted EBITDA and DCF.

Mike: By deploying capital wisely controlling our cost and optimizing operations to get the most out of our assets, we have grown DCF by seven 1% on a four year compound annual basis.

Mike: Our growth tends to come in stair steps as we develop and bring projects online and this disciplined approach to growing cash flows creates financial flexibility and underpins our commitment to returning capital to unitholders.

Mike: We've increased our quarterly distribution, 10% each of the last two years and the business continues to generate free cash flow after distributions of over $800 million annually. So.

Now, I will turn the call over to Chris to discuss our operational and financial results for the quarter. Thanks, Mike. Slide 7 outlines the fourth quarter operational and financial performance highlights for our logistics and storage segment. The L&S segment reported its fourth consecutive quarter of $1 billion adjusted EBIT, a Jeopardy bid that increased $110 million when compared to the fourth quarter of 2022, primarily driven by higher rates and throughputs, including growth from equity affiliates. Crew pipeline volumes were up 4% primarily because of refinery maintenance schedules in the prior year. Product pipeline volumes and terminal volumes were flat.

Mike: So we believe we are in a strong position to continue to consistently grow our distributions.

MPLX is a strategic investment for MPC and as MPLX pursues its growth opportunities the value of this strategic relationship will be enhanced.

We're confident in our growth opportunities and ability ability to generate strong cash flows.

Mike: In 2023, we saw a total unit holder return of 22% underpinned by annual adjusted EBITDA growth of nearly 9% and DCF growth of 7% and.

Moving to our Gathering and Processing segment on slide 8. The GMP segment adjusted EBITDA increased $59 million compared to fourth quarter 2022. This was driven by higher gathering and processing volumes. Total gathered volumes were up 1% year over year, primarily due to increased production in the Marcellus and the Southwest. Processing volumes were up 9% year-over-year, primarily due to higher volumes in the Marcellus and Utica, driven by increased customer demand. Focusing in on the Marcellus, by far our largest basin of GMP operations, we saw year-over-year volume increases of 10% for gathering and 9% for processing, driven by increased drilling and production. Marcellus processing utilization reached 96% in the fourth quarter, illustrating the need for our Harmon Creek II facility.

Mike: In fact, we have grown EBITDA by nearly $1 $2 billion over the last four years and has over 7% DCF growth CAGR over the same timeframe.

Mike: By advancing our high return growth projects anchored in the Marcellus and Permian basins, along with our focus on cost and portfolio optimization, we intend to grow our cash flows, allowing us to reinvest in the business and continue to return capital to unitholders.

Mike: Now, let me turn the call back over to Christina Thanks, Mike as we open the call for questions. We ask that you limit yourself to one question plus a follow up we may re prompt for additional questions as time permits with that we'll now open the call up to questions.

Speaker Change: Thank you we will now begin the question and answer session. If you have a question. Please press Star then one on your Touchtone phone.

Fractionation volumes grew 1% due to higher processed volumes, which were offset by lower ethane recovery. Moving to our fourth quarter financial highlights on slide 9, total adjusted EBITDA of $1.6 billion and distributable cash flow of $1.4 billion increased 12% and 9%, respectively, from the prior year. Turning to our balance sheet on slide 10, growth in our cash flows has continued to reduce MPLX leverage, which now stands at 3.3 times. We believe the stability of our cash flows supports leverage in the range of four times. And while MPLX has just over $1 billion of notes maturing later this year, we currently do not expect to structurally lower our debt.

Speaker Change: Just to be removed from the queue. Please press Star then two.

Speaker Change: You are using a speaker phone you may need to pick up the handset first before pressing the numbers.

Speaker Change: Again, if you have a question. Please press Star then one on your Touchtone phone.

Speaker Change: Our first question will come from John Mackay with Goldman Sachs. Your line is open.

John Mackay: Hey, good morning, everyone and thank you for the time I just wanted to start on on the quarter. I mean, it was it was pretty strong across the board versus where we were just wondering were there any kind of one offs in the quarter or is this a kind of healthy enough run rate that we can think of MPLX trailing off of from here.

When evaluating the short-term maturity, we'll consider all opportunities available to us to optimize our cost of that. MPLX's strong balance sheet, including a year-end cash balance of $1 billion, plus the ability to utilize the intercompany facility with MPC, provides us with financial flexibility to invest in the business and optimize capital allocation. Now, I hand it back to Mike for some final thoughts. Thanks, Chris.

Speaker Change: Yeah, John I would say, we really did not have any significant one offs up or down youll notice in our adjusted EBITDA. We did have insurance proceeds, but those were adjusted out so really nothing significant to point to.

John Mackay: Fair enough. Thank you follow up just on the Capex guidance lately higher than last couple of years acknowledging it's only 100 million, but is that any shift that you're seeing and opportunities or is that a kind of maybe a change in willingness to spend maybe you can just kind of frame up.

Michael J. Hennigan: In closing, MPLX has a strong history of growing the partnership's cash flows by executing strategic priorities all while maintaining strict capital discipline. We continue to aim for a mid-single-digit growth rate over multiple years. It's what we believe is appropriate to aim for given our commitment to capital discipline and the size of our partnership within our capital allocation framework, but this should not be interpreted as annual guidance. And as you can see in our results, we've achieved this growth in adjusted EBITDA and DCF. By deploying capital wisely, controlling our costs, and optimizing operations to get the most out of our assets, we have grown DCF by 7.1% on a four-year compound annual basis.

John Mackay: How do you got to the 24 budget versus maybe 23 or 'twenty two.

John Mackay: Yeah. John This is Mike it's a good question.

Mike: As you know were service provider and at the end of the day, we react to the producer needs you know, especially on the G&P side of the business and as I said in the prepared remarks, you know sometimes it can be a step change.

Mike: We do have a couple of plants coming on Harmon Creek two Preakness two we got secretary would come in next year. So we have a little bit of a growth spurt in processing plant construction. So thats part of it but the main reason, though that we've been spending this I'll say roughly around a $1 billion. A year is you know we have a large enough footprint.

Michael J. Hennigan: Our growth tends to come in stair steps as we develop and bring projects online, and this disciplined approach to growing cash flows creates financial flexibility and underpins our commitment to returning capital to unit holders. We've increased our quarterly distribution by 10% each of the last two years, and the business continues to generate free cash flow after distribution of over $800 million annually. So we believe we are in a strong position to continue to consistently grow our distribution. MPLX is a strategic investment for MPC, and as MPLX pursues its growth opportunities, the value of this strategic relationship will be enhanced. We're confident in our growth opportunities and ability to generate strong cash flow. In 2023, we saw a total unit holder return of 22%, underpinned by annual adjusted EBITDA growth of nearly 9% and DCF growth of 7%.

Mike: And that we believe over time that we can generate better than normal returns and continue to grow and as I said in my prepared remarks, one of the things. We're proud of is we've grown DCF about 7% consistently over the last four years and a lot of that has to do with.

Mike: You know the term we use is strict capital discipline, you know continuing to really look for better return projects I know for you guys a lot of times it doesn't come off as you know big announcements, but hopefully the results show you that we're getting good deployment of capital getting good returns and like I said, we're kind of proud of 7% growth for the size.

Mike: Our partnership over a four year CAGR hopefully speaks for itself.

Speaker Change: That's clear thanks, Mike Thanks, everyone. Appreciate the time.

Speaker Change: Youre welcome John.

Michael J. Hennigan: In fact, we have grown EBITDA by nearly $1.2 billion over the last four years and have had over 7% DCF growth CAGR over the same time frame. By advancing our high-return growth projects anchored in the Marcellus and Permian basins, along with our focus on cost and portfolio optimization, we intend to grow our cash flows, allowing us to reinvest in the business and continue to return capital to unit holders. Now, let me turn the call back over to Kristina.

Our next question comes from Brian Reynolds with UBS you May proceed.

Brian Reynolds: Hi, good morning, everyone, maybe to start off on the operations and the multi year mid single digit earnings growth cadence no.

Brian Reynolds: Understanding this is not 24 earnings guidance, just kind of curious if you can unpack some of the main drivers for earnings growth in 'twenty four relative to 'twenty three seems like marathon throughput volume should be up year over year, even with some of the the <unk> turnaround activity, but curious if you could maybe unpack some of the other drivers of the base business for the year. Thanks.

Kristina: Thanks, Mike. As we open the call for questions, we ask that you limit yourself to one question plus a follow-up. We may prompt for additional questions as time permits. With that, we'll now open the call to questions. Thank you. We will now begin the question and answer session. If you have a question, please press star then 1 on your touchtone phone. If you wish to be removed... Press start. You are using a speakerphone. Hold the hand set first before pressing.

Brian Reynolds: Yeah, Brian This is Mike again, Yeah, I think similar to the new way John was asking the question is the way. We look at this is we obviously have a multiyear lens that we're looking at stuff and we're trying to figure out where it is the best way to deploy capital.

Brian Reynolds: I keep having this funny conversation about it's not guidance, but I'm kind of telling you that we're looking to make sure that we can grow our cash flows consistently year on year as I. Just said, it's been 7% from four years in a row. So so we look at the plan.

Operator: If you have a question... Press star then 1 on your touchpad. Our first question will come from John Mackay with, Hey, good morning, everyone. Thank you for the time. I just wanted to start on the quarter. I mean, it was pretty strong across the board versus where we were. Just wondering, were there any kind of one-offs in the quarter?

Brian Reynolds: The team is constantly looking at organic growth.

We haven't done a lot of M&A, but as you saw we just recently bought out a JV partner and and Dave and his team are constantly looking at assets to help the portfolio. So we kind of look at all of that together and kind of look out over a couple of years and say you know do we fulfill our goals of continuing to grow the cash flows because.

John Mackay: Or is this a kind of, you know, healthy enough run rate that we can think of MPLX growing off of from here? Yeah, John, I would say we really did not have any significant one-offs up or down. You'll notice in our adjusted EBITDA, we did have insurance proceeds, but those were adjusted out.

Brian Reynolds: We want to keep moving that distribution up we've shown you 10% the last couple of years.

Brian Reynolds: At the end of the day, our lens tends to look out further.

Brian Reynolds: Compared to what you see but hopefully you have seen in the results and let me, let Dave make a couple of comments on the market in general.

So, really nothing significant to point out... Fair enough, thank you. Follow up, just on the CapEx guidance slightly higher than the last couple years, acknowledging it's only 100 million. But is that any shift that you're seeing in opportunities? Or is that maybe a change in willingness to spend? Maybe you can just kind of frame up how you got to the 24 budget versus, you know, maybe 23 or 22? John, this is Mike.

Yeah, Brian This is Dave as Mike said, so as we think about M&A.

Dave: And growth one thing I want to make clear so.

Dave: Growth through M&A for us isn't just buying assets for the fact of buying assets.

Dave: We look to pursue opportunities number one.

Dave: High quality assets, a number to align with our long term strategies and number three allow us to I'll use the word bolt on or capture synergies and integration value.

Michael J. Hennigan: It's a good question. So, as you know, we're a service provider. And, you know, at the end of the day, we react to the producer needs, especially on the GMP side of the business. And as I said in my prepared remarks, sometimes it can be a step change. You know, we do have a couple of plans coming up on Harbin Creek to Preakness, and we've got Secretariat coming next year.

Dave: Our value change, whether it be crude nat gas or NGL. So.

Dave: With all that said that's kind of how we look at it and the overwriting Mike touched on it we continue to touch on it through the lens of strict capital discipline.

Dave: Or acceptable risk adjusted returns so as we've looked through a lot of the opportunities out there and there is a lot of activity.

Michael J. Hennigan: So, you know, we have had a little bit of a growth spurt in processing plant construction. So that's part of it. But the main reason, though, that we've been spending this, I'll say roughly around a billion dollars a year is, you know, we have a large enough footprint that we believe, over time, we can generate, you know, better than normal returns and continue to grow. And as I said in my prepared remarks, one of the things we're proud of is that, you know, we've grown DCF about 7% consistently over the last And a lot of that has to do with, you know, the term we use is strict capital discipline, you know, continuing to really look for better return projects.

Dave: It really gets back to we feel we have a lot of high return organic projects.

To utilize our capital versus some step out M&A opportunities that we've evaluated up to this point.

Dave: Yeah.

Speaker Change: Great. Thanks, I appreciate all that color and I guess, maybe through the broader context of organic growth and.

Speaker Change: You know potentially strategic bolt on M&A as you alluded to in the prepared remarks.

Speaker Change: Do you have an updated view on maybe the corporate market and bangle clearly it stands for it you know Mount Belvieu alternative so kind of curious if you if theres other opportunities maybe downstream either for further gas or maybe some frac downstream outside of Mount Belvieu that you'd be interested in growing into over time. Thanks.

Michael J. Hennigan: I know for you guys, a lot of times it doesn't come off as, you know, big announcements, but hopefully, the results show you that, you know, we're getting good deployment of capital, and getting good returns. And like I said, we're kind of proud of, you know, 7% growth for the size of our partnership over a four-year CAGR should speak for itself. That's clear. Thanks, Mike. Thanks, everyone. I appreciate the time.

Speaker Change: Yes.

Speaker Change: Yes, Brian this is Dave again so.

Dave: We've been as we've just talked about here you know were very public about our plans to expand all of our value change.

Dave: And I'll touch on NGL, specifically the bank lot expansion, all the way down to the markets.

Dave: And as you know, whether we're going to extend these value chains, either independently or via partners as we have with our JV partners out there. The strategy is really getting all the way down to the water and having export option optionality.

Brian Reynolds: You're welcome, John. Our next question comes from Brian Reynolds with UBS. Hi, good morning, everyone.

Michael J. Hennigan: Maybe to start off on the operations and the multi-year mid single-digit earnings growth cadence. You know, while understanding this is not 24 earnings guidance, just kind of curious if you could unpack some of the main drivers for earnings growth in 24 relative to 23. You know, it seems like marathon throughput volume should be up year over year, even with some of the one-cue turnaround activity, but curious if you could maybe, you know, unpack some of the other drivers of the base business for the year. Yeah, Brian, this is Mike again.

Dave: So as you might have heard.

Dave: In mid December MPLX submitted an air permit application for NGL fractionation storage down in Texas City market.

Dave:

Dave: So that filing as you would expect is a is a step we take as any any project manager evaluate optionality.

Dave: And through the project development.

Dave: Those permits so.

Michael J. Hennigan: Yeah, I think similar to the way John was asking the question is that we, you know, obviously have a multi-year lens that we're looking at stuff, and we're trying to figure out where it's the best way to deploy capital. You know, I keep having this, you know, funny conversation about it's not guidance. But I'm kind of telling you that, you know, we're looking to make sure that we can grow our cash flows consistently year on year. As I just said, it's been 7% for four years in a row. So, we look at the plan. You know, the team is constantly looking, you know, at organic growth. We haven't done a lot of M&A, but as you saw, we just recently bought out a JV partner, and Dave and his team are constantly looking at assets to help the portfolio.

That kind of gives you a view of how we're thinking about it but.

Dave: Also it doesn't imply that the project has received approval and we're proceeding with it and we'll continue to evaluate all options.

Dave: As we achieve that value chain buildout.

To ensure that we're getting the highest and most acceptable rate of return on those investments. So hopefully that gives you a little more color on.

The <unk>.

NGL fractionation side of it maybe I'll turn it over to Shawn talk little bit about the banking side.

Shawn: Hey, Brian This is Sean Hey, as Dave mentioned.

Shawn: Speak to a little bit the bangle pipeline. There. If you look at bangle itself, it's really the strength of the partnership that ties the acreage into it.

Michael J. Hennigan: So, we kind of look at all that together and kind of look out over a couple years and say, you know, do we, you know, fulfill our goals of continuing to grow the cash flows because we want to keep moving that distribution up? You know, we've shown 10% the last couple years. At the end of the day, you know, our lens tends to look out further compared to what you see, but hopefully, you're seeing in the results. And, and let me let Dave make a couple comments on the market in general. Yeah, Brian, this is Dave, as Mike said.

Sean: Got an integrated play as Dave and Mike have mentioned with the GMP gas plants plus other partners that are in it. So we feel really good about the partnership of bangle that is driving the demand. The other part that we really are pleased with is the capital discipline and the capital efficiency of the Bangle project over time.

Sean: Last year, we announced that 200000 barrels per day expansion.

Sean: Again as the volume comes on we're ready to expand and continue on down that path. So we feel good about positioning the pipeline to set up for some of the opportunities that Dave talked about.

Dave: So as we think about M&A and Groves, one thing I want to make clear is to... The growth through M&A for us isn't just buying assets for the fact of buying assets. We look to pursue opportunities, number one, high-quality assets, number two, align with our long-term strategies, and number three, allow us to, I'll use the word, bolt on or capture synergies and integration value along our value chains, whether it be crude, nat gas, or NGL. With all that said, that's kind of how we look at it, and the overriding, Mike touched on it, we continue to look at it through the lens of strict capital discipline or acceptable risk-adjusted returns. So, you know, as we've looked through a lot of the opportunities out there, and there is a lot of activity, it really gets back to we feel we have a lot of high-return organic projects to Great, thanks. I appreciate all that color.

Speaker Change: Great. Thanks, I appreciate all the commentary this morning I'll leave it there. Thanks.

Speaker Change: Youre welcome Brian.

Our next question will come from Theresa Chen with Barclays. Your line is open.

Theresa Chen: Good morning, a quick follow up related to the Bengal commentary, if I may and can you just help us walk through the economics behind the expansion and and can energize seems to be quite a bit as Permian NGL capacity coming online between multiple projects, including Europe, how do you view the Evan.

<unk> rates over the next few years are you not really susceptible given the integrated strategy.

Theresa Chen: Hey, Theresa this is Sean.

Good question I think there's been a lot of discussion about that.

Sean: Just really speak to you know again, our view of bangle of how again, it's really two things the strength of the partners that really are driving the VAT. The volume on <unk> and then also the capital efficiency and we really feel we're positioned to be really competitive in that market. So feel really good about that again, bringing on the expansion has the volte.

Dave: And I guess maybe in the broader context of organic growth and, you know, potentially strategic bolt-on M&A, as you alluded to in the prepared remarks. Do you have an updated view on, perhaps, the corpus market in Bengal? Clearly, it stands for, you know, Mount Bellevue alternative. So kind of curious if there's other opportunities, maybe downstream, either for further gas or maybe some frack downstream outside of Mount Bellevue that you'd be interested in growing into over time. Yeah, Brian, this is Dave again.

Sean: Is there we know its there we've got the integrated.

Sean: Win win or value with our G&P business and and other partners that are attached to our Bangalore. So we feel good about all of those things that is driving it.

Mike: So this is Mike.

Can't give you a lot of detail on the economics, but you know.

Dave: So, um, you know, we've been, as we just talked about here, very public about our plans to expand all of our value chains. And I'll touch on NGL, specifically the Bangla expansion all the way down to the market. And whether we're going to extend these value chains either independently or via partners, as we have with our JV partners out there, the strategy is really getting all the way down to the water and having export optionality. So, as you might have heard, in mid-December, NPLX submitted an air permit application for NGO fractionation storage down in the Texas City market.

Mike: The capacities there so the capital investment is relatively low you know, we're adding horsepower as an example, so this is an example of one of those projects where the amount of capital deployed is relatively low and as Sean mentioned, we have dedication we know volumes are going to come.

Mike: It fits into what we call the higher return bucket.

Mike: <unk> two other type of investments I hope that helps a little bit.

Speaker Change: Thank you and then maybe turning to the rescue side. So after Matterhorn begin service. This year, it's still possible need for additional long haul prestige egress out of the basin right.

Dave: So you know, that filing, as you would expect, is a step we take as any project manager to evaluate optionality and, through the project development, to submit those permits. That kind of gives you a view of how we're thinking about it, but, you know, also, it doesn't imply that the project has received FID approval and we're proceeding with it, and we'll continue to evaluate all options as we achieve that value chain build out, and ensure that we're getting the highest and most acceptable rate of return on those investments. So hopefully, that gives you a little more color on, you know, the NGL fractionation side of it. Maybe I'll turn it over to Sean and talk a little bit about the bangle side. Hey Brian, this is Sean.

Speaker Change: And thus far none of the projects under development has moved forward and when do you see residue takeaway, becoming a problem for the base and then given your interest in Whistler at Matterhorn, What do you view at MPLX. This roll in the incremental build out of Permian residue capacity.

Hey, Theresa this Dave so I'll tackle that one so you touched on a lot of it and Sean and we have as you know you know where we're participating in those long haul pipes, whether it be whistler that came on originally in <unk> 2021, and then the expansion in September.

Speaker Change: 2023, whether he matterhorn, which will be coming on in <unk> 2024, and subsequently a DCC, which coming on at the same time frame. So all of those are supporting.

Speaker Change: Or participate in the long haul pipes and that value chain from from basin down to down to the Gulf Coast. So you know.

Sean: Hey, as Dave mentioned, you know, I'll speak a little bit about the Bengal pipeline there. You know, if you look at Bengal itself, it's really the strength of the partnership that ties the acreage into it. You know, we've got an integrated play, as Dave and Mike have mentioned, with the GMP gas plants, plus other partners that are in it. So we feel really good about the partnership of Bengal that is driving the demand. The other part that we are really pleased with is the capital discipline and the capital efficiency of the Bengal project over time.

Speaker Change: As we look forward I'm number one we continue to see strong production forecast out of the Permian, which will continue.

Speaker Change: Two.

Allow us to evaluate and.

Speaker Change: And analyze expansion projects or new projects going forward with all of that said maybe back to your question.

Based on our current forecast, we would expect to see after our projects come online that I referenced.

Sean: You know, last year we announced the 200,000 barrels per day expansion. Again, as the volume comes on, we're ready to expand and continue on down that path. So we feel good about positioning the pipeline to set up for some of the opportunities that Dave talked about. Great, thanks.

Speaker Change: Probably around the late 'twenty six early 2007 timeframe that additional.

Long haul expansion capacity is going to be needed based on those forecasts hopefully that helps a little bit.

Speaker Change: I'm curious, it's Mike I, just wanted to add aside from the Permian I think the market is underappreciated the growth potential up in the Marcellus, it's been talked about being in maintenance mode for some amount of time, but if you look recently you know theyre starting to be a growth spurt occurring up in that area as well.

Brian Reynolds: I appreciate all the commentary this morning. I'll leave it there. You're welcome, Brian. Our next question will come from Theresa Chen with Barclays on peer mining. Good morning. A quick follow-up related to the Bengal commentary, if I may.

And I think if people look at it over time, you know eventually MVP all come online and it's going to unlock some more growth and I think that's another area that probably hasn't been appreciated as much but if you look over even just the last year or the last couple of quarters.

Theresa Chen: Can you just help us walk through the economics behind the expansion? And given that there seems to be quite a bit of Permian NGO capacity coming online between multiple projects, including yours, how do you view the evolution of rates over the next few years? Are you not really susceptible given the integrated strategy? Hey, Theresa, this is Sean.

Speaker Change: Our results in general you know the processing volumes have really kicked up compared to where they've been it's been recently so aside from the Permian growth, which gets a lot of attention.

Sean: Hey, you know, good question. I think there's been a lot of, you know, discussion about that. I'll just really speak to, you know, again, our view of Bangle, of how, again, it's really two things: the strength of the partners that really are driving the volume on Bangle, and then also capital efficiency. And we really feel we're positioned to be, you know, really competitive in that market. So I feel really good about that.

Speaker Change: I think you know the Marcellus and and also the Utica again Utica was an area that probably was a little less.

Thought of recently, but it's also starting to go into a growth mode as well I'll, let Greg give a couple of comments on that because I don't want people to miss that.

Speaker Change: What.

Speaker Change: Yeah.

Greg: Yeah. Thanks Martin.

Greg: Yeah. This is Gregg Teresa.

Michael J. Hennigan: Again, bringing on the expansion as the volume is there. We know it's there. We've got the integrated, you know, win-win or value with our GMP business and other partners that are attached to Bangle. So we feel good about all those things that are driving it. Theresa, this is Mike.

Greg: In terms of the volume that we process well over 6 billion cubic feet, a day, which is nearly 6% of the U S total gas.

Greg: As of the nine and a half that we process in total was was.

Michael J. Hennigan: I can't give you a lot of detail on the economics, but, you know, the capacity is there, so the capital investment is relatively low. You know, we're adding horsepower, as an example. So this is an example of one of those projects where the amount of capital deployed is relatively low. And as Sean mentioned, you know, we have dedication. We know volumes are going to come, so it fits into, you know, what we call the higher return bucket compared to, you know, other types of investments. I hope that helps a little bit. Thank you. And then maybe turning to the residue side. So after Matterhorn begins service this year, there's still a visible need for additional long-haul residue egress from the basin, right? And thus far, none of the projects under development have moved forward.

Greg: As in the Marcellus and that.

Greg: Drove our utilization of our processing plant fleet up to 96%, which was a new record for us.

Greg: All of that process gas generated a lot of C. Three plus liquids in particular, so that that drove our fractionation utilization up to 82% and growing.

Greg: We have a unique integrated system in the northeast that's totally different than what we have in the in the in the southwest and that we have to fractionate our own <unk>.

Greg: Liquids and then find outlets Fortunately, we have outlets to the east coast for export and as well as into the Midwest from our cornerstone pipeline and we have access for gasoline into Canada as well as butane into the Midwest.

Theresa Chen: When do you see residue takeaway becoming a problem for the basin? And given your interest in Whistler and Matterhorn, what do you think MPLX's role will be in the incremental build-out of Permian residue capacity? Hey, Theresa, this is Dave.

Greg: So we have a really good position there.

Greg: And Harmon Creek, two coming online is much needed at the utilization point. We're at now we've also as Mike mentioned brought our our Utica utilization up to 49% and growing after a period of time, where there wasn't grows and we see a lot of good tail wins with new producers moving in the Utica.

Dave: So I'll tackle that one. So you touched on a lot of it, and Sean and I are, as you know, we're participating in those long-haul pipes, whether it be Whistler that came on originally in 3Q 2021, and then the expansion in September 2023, whether it be Matterhorn, which will be coming on in 3Q 2024, and subsequently ADCC, which is coming on at the same timeframe. So all those are supporting and participating in long haul pipes and that value chain from the Basin down to the Gulf Coast. So, you know, as we look forward, number one, we continue to see strong production forecasts out of the Permian, which will continue to, you know, allow us to evaluate and, and analyze expansion projects or new projects going forward.

Greg: And a new state land auctions coming up expected this year and we have existing capacity not only the processing plants for fractionation and liquid and gas pipelines to to fill so that's leveraging those existing assets and we.

Greg: Without a lot of new capital is a big focus for us.

Thank you for that detailed answer across multiple regions.

Oh Youre welcome Teresa.

Our next question will come from Jeremy Tonet with J P. Morgan Your line is open.

Jeremy Bryan Tonet: Hi, good morning.

Jeremy Bryan Tonet: Good morning, Jeremy.

I just wanted to touch base on the acquisition a little bit more if I could if you're able to share a bit more color on the JV interest acquired these existing assets in the Permian our assets otherwise that are kind of can be relocated to the Permian and I guess.

Dave: With all that said, maybe back to your question, based on our current forecast, you know, we would expect to see after our projects come online that I referenced, probably around the late 26, early 27 time frame, the additional, you know, long-haul expansion capacity is going to be needed based on those forecasts. Hopefully that helps a little bit. Theresa, it's Mike.

Just thoughts on.

Jeremy Bryan Tonet: The type of synergies that can be captured here, what that could mean for economic.

Speaker Change: Yeah, Jeremy I'll I'll start.

Speaker Change: This particular situation $270 million to buy out our partner obviously, we were the operator of the assets. So we're very familiar with the operations.

Michael J. Hennigan: I just wanted to add, aside from the Permian, I think the market is underappreciating the growth potential up in the Marcellus. You know, it's been talked about being in maintenance mode for some amount of time, but if you look recently, you know, there's starting to be a growth spurt occurring up in that area as well. And I think, you know, if people look at it over time, eventually, MVP will come online, and it's going to unlock some more growth. And I think, you know, that's another area that probably hasn't been appreciated as much.

Speaker Change: No what volumes and contractual dedications, we have to it.

Speaker Change: We said it was an attractive multiple was little under seven just to give you a flavor as to where the economics of that were so you know these are things that Dave and his team are always talking to our partners about if theres, an opportunity where somebody is willing to.

Greg: But if you look over even just the last year, the last couple of quarters, you know, in our results in general, you know, the processing volumes have really kicked up compared to where they've been recently. So aside from the Permian growth, which gets a lot of attention, I think, you know, the Marcellus and also the Utica. Again, Utica was an area that probably was a little less thought of recently, but it's also, you know, starting to go into a growth mode as well. I'll let Greg give a couple of comments on that because I don't want people to miss that, you know, that thought. Thanks. Yeah, this is Greg.

Speaker Change: Get out for their reasons and we see it as a good opportunity for us.

That's how these transact.

Speaker Change: We go into these types of things just looking to be a good partner with all of our JV partners, but there are times when like in this case.

Speaker Change: The partner wanted to exit at a time when we thought it was a good opportunity. So so that's how those kind of play themselves out we don't count on them, but when those conversations come up we're certainly willing to look at it and then in general we as you know in this space, we have quite a bit of jv's across our footprint. So most of the time, we're just trying.

To work with our partners on how to grow the interest so that both of US are three of US are however, many partners oriented are all getting a win and that's kind of the way we look at it from the partnership standpoint, and then aside from that our teams are looking how do we bolt on where can we do some some a little bit of capital.

Greg: Theresa, in terms of the volume that we process, a little over six billion cubic feet of gas a day, which is nearly 6% of the US total gas of the nine and a half that we process in total was, is in the Marcellus, and that drove our utilization of our processing plant fleet up to 96%, which is a new record for us. All of that process gas generated a lot of C3 plus liquids, in particular, so that drove our fractionation utilization up to 82% and growing. We have a unique integrated system in the Northeast that's totally different from what we have in the Southwest in that we have to fractionate our own liquids and then find outlets.

Speaker Change: Organic capital investments such that we can add to it whether it's a JV asset or just one of our own assets. So it's kind of like what I said at the beginning you know we're kind of looking out throughout the year. We're looking at where can we bolt on where can we add stuff I know Paul Don isn't sexy when it comes to the earnings calls, but it's really good returns so.

Speaker Change: The other types of projects, we really like.

Got it that makes sense and just to clarify are these assets currently in the Permian or could they be.

Speaker Change: Catered to the Permian just wanted to make sure it's clear there.

Greg: Fortunately, we have outlets on the East Coast for export, and as well as into the Midwest through our Cornerstone pipeline, and we have access to gasoline into Canada, as well as butane into the Midwest. So we have a really good position there. And Harman Creek, too, coming online is much needed at the utilization point we're at now. We've also, as Mike mentioned, brought our Utica utilization up to 49% and growing after a period of time where there wasn't any growth, and we see a lot of good tailwinds with new producers moving into Utica and new state land auctions coming up expected this year. And we have existing capacity, not only the processing plants, but fractionation and liquid and gas pipelines to fill. So that's leveraging those existing assets and without a lot of new capital is a big focus. Thank you for that detailed answer across multiple regions. You're welcome, Theresa. Our next question will come from Jeremy Tonet with JP. Hi, good morning.

Now they're there they're in the Permian today, they are in the Delaware.

Speaker Change: Got it and as far as M&A, a lots been talked about today, but it sounds like you were saying these bolt ons or more likely than anything larger in nature as how we should generally think about potential M&A activity.

Speaker Change: Yeah, Jeremy it's a balance obviously, if youre going to get involved in M&A and to a large extent if you get into bigger you know the returns are going to be much more competitive you know because you know a lot of people are going to be involved in that process. You know the ones that we like that are as long as they continue to be there for us is where we are.

Speaker Change: And just you know organically invest and get a much higher return than the M&A market will typically give you and as long as we continue to have those that's why when we announce.

Our total capital a large majority of it we don't talk about on earnings calls and press releases or things like that because they are smaller projects, but they're much higher returns. So we tend to favor those just because of the return that they give us and that's why you know some people keep scratching our head a little bit of how you guys grow and the party.

Speaker Change: Your ship, 7% CAGR over four years and a lot of it has to do with self help things that we're doing internally. These bolt ons that we're doing and then occasionally adding stuff that meets earnings call discussions et cetera. So it's the combination of all those but what I hope investors are realized and as we're sitting here behind this.

Jeremy Bryan Tonet: Morning, Jeremy. I just wanted to touch base on the acquisition a little bit more, if I could. If you're able to share a bit more color on the JV interest acquired, are these existing assets in the Permian or assets elsewhere that can be relocated to the Permian? And I guess, you know, just thoughts on the type of synergies that could be captured here, and what that could mean for equity. Yeah, Jeremy, I'll start.

Looking at it over multiple years and seeing that we think we can continue to grow the partnership we have in the back of our head what that means for how we're going to return capital.

It starts with you've got to get a return on that capital and then we think about what's the best way to return it and that's kind of the internal discussions that we're having all the time.

Michael J. Hennigan: So, this particular situation, $270 million to buy out our partner. Obviously, we were the operator of the assets, so we're very familiar with the operations. You know, we know what volumes and contractual dedications we have to it. We said it was an attractive multiple. It was a little under seven, just to give you a flavor as to where the economics of that were.

Speaker Change: Got it very helpful. I appreciate that thank you.

Speaker Change: Youre welcome Jeremy.

Speaker Change: Next we will hear from Keith Stanley with Wolfe Research you May proceed.

Keith T. Stanley: Hi, Good morning wanted to follow up on some of the good growth that you saw in the Marcellus and Utica in Q4 and through last year.

Michael J. Hennigan: So, you know, these are things that Dave and his team are always talking to our partners about. If there's an opportunity where somebody is willing to, you know, get out, you know, for their reasons, and we see it as a good opportunity for us, you know, that's how these transactions transact. You know, we go into these types of things just looking to be a good partner with all of our JV partners. But there are times when, like in this case, you know, the partner wanted to exit at a time when we thought it was a good opportunity. So that's how those kind of play themselves out.

Keith T. Stanley: Some of the positive commentary on 2024.

Keith T. Stanley: Would you say your integrated footprint across Appalachia is allowing you to to take market share over time in that market and that's part of why you're able to see a little better growth or do you see the base and.

Keith T. Stanley: Kind of inflected positively with MVP and Youre, just kind of maintaining your market share overall.

Keith T. Stanley: Keith This is Greg I would say, it's it's some of both.

Michael J. Hennigan: You know, we don't count on them, but, you know, when those conversations come up, we're certainly willing to look at them. And then, in general, you know, we, as you know, in this space, we have quite a few JVs across our footprint. So most of the time, we're just trying to work with our partners on how to grow the interest so that both of us or three of us or whatever number of partners are in it are all getting a win. And that's kind of the way we look at it, you know, from the partnership standpoint. And then aside from that, you know, our teams are looking, you know, how do we bold on?

The most extensive integrated footprint in the basin.

Greg: Both across the Utica and Marcellus they're interconnected.

Greg: We have access to multiple fractionation facilities, we have a distributor D S innovation plant.

Greg: We have a lot of flexibility there, but we also are just.

Greg: Good rock, the Utica and the Marcellus basins in terms of uniformity of really good and I think.

There is some combination of existing producers that are drilling longer laterals that are driving more production per pad and then there are the.

Michael J. Hennigan: Where can we do some, you know, a little bit of capital, you know, organic capital investment such that we can add to it, whether it's a JV asset or just, you know, one of our own assets? So it's kind of like what I said at the beginning, you know, we're kind of looking out, you know, throughout the year; we're looking at where we can bold on, where we can add stuff. And bold on isn't sexy, you know, when it comes to earnings calls, but it's a really good return. So, you know, those are the types of projects we really like. Got it; that makes sense.

Utica is a good example of some new producers moving into the region and taking advantage of particularly the light oil and condensate window over there, which which brings associated gas and Ngls as well so so really.

Greg: A combination of both our scale and integration as well as <unk>.

Greg: New production new producers.

Speaker Change: Great. Thanks second question.

Speaker Change: I guess just on the growth outlook and Mike you've talked about this a lot already but the company's investing $1 billion a year of capital.

Jeremy Bryan Tonet: And just to clarify, are these assets currently in the Permian, or could they be relocated to the Permian? Just wanted to make sure I was clear there. No, they're not in the Permian today; they're in Delaware.

Speaker Change: We're in a world without kind of inflation escalators anymore, and assume kind of flattish commodity prices.

Speaker Change: Is $1 billion a year of capital enough to hit your growth targets or do you need to continue to find self help type mechanisms, whether its cost and efficiency improvements tuck in M&A et cetera in order to hit hit the growth targets. So it is a 1 billion enough per year or do you need to find other things to get there as well.

Michael J. Hennigan: Got it. And as far as M&A is concerned, a lot has been talked about today, but it sounds like you're saying these bolt-ons are more likely than anything larger in nature. That is, how we should generally think about potential M&A activity. Yeah, you know, Jeremy, it's a balance. Obviously, if you're going to get involved in M&A, and to a large extent, if you get into bigger, the returns are going to be much more competitive, because, you know, a lot of people are going to be involved in that process. You know, the ones that we like better, as long as they continue to be there for us, are ones where we can just, you know, organically invest and get a much higher return than the M&A market will typically give us.

Yeah, Keith this is Mike again.

It's a combination so you know what I was saying if you look at the history, we've been spending around 1 billion, even slightly under the last couple of years.

Mike: And recall that that number also includes that 150 million ish of maintenance. So so we take a look at our portfolio and we try to examine where do we think we have opportunities and it's really what I was saying to Jeremy's question. It's a combination of all of it.

Michael J. Hennigan: And as long as we continue to have those, that's why when we announce our total capital, a large majority of it we don't talk about on earnings calls or press releases or things like that because they're smaller projects, but they have much higher returns. So we tend to favor those just because of the return that they give us. And that's why some people keep scratching their heads a little bit about how you guys grow the partnership at 7% CAGR over four years, and a lot of it has to do with self-help, things that we're doing internally, these bolt-ons that we're doing, and then occasionally adding stuff that meets earnings call discussions, et cetera. So it's a combination of all those.

Mike: But I think if you look at the results 7% over four years were about a $6 billion EBITDA business. So youre looking roughly at about $400 million a year of growth at that 7%. So so we look at what we have on paper and we try and think about how do we.

Mike: We get to those kind of levels, that's why I kind of just generically call it mid single digit.

Just as a generic number but what we're really thinking for our size of the partnership that if we can continue to grow three four or 500.

Mike: Those kind of numbers, we think is sufficient to keep what we think is a very steady growth and return of capital.

Michael J. Hennigan: But what I hope investors are realizing is that we're sitting here behind the scenes looking at it over multiple years and seeing that we think we can continue to grow the partnership. We have in the back of our head what that means for how we're going to return capital. You know, obviously, it starts with you got to get a return on that capital, and then we think about what's the best way to return it. And that's kind of the internal discussions that we have all the time. Got it. It was very helpful.

Mike: Which we think the market would like so we look at all of it we look at our self help we look at efficiencies. We look at different things that are occurring as far as capital, but up until this point that's about the level that we needed to spend to be in that range.

Mike: To your point, if we thought at times, we need to deploy more capital.

Mike: That's something that we would have at our at our hand at our toolbox so to speak so.

We look at it all we try and figure out our plan I know, it's probably frustrating for your side of the fence because you don't get to see the multi year.

Jeremy Bryan Tonet: I appreciate that. You're welcome, Jeremy. Next, we will hear from.... Stanley with Wolf.

Mike: That's what we're trying to do and it's all to try and show that the market that we're going to continue to grow the cash flows we're going to continue to increase the distribution, we're going to continue to return capital and hopefully that is a good date for investors last year, we talked about total unit holder return of 22%, we're pretty proud of that and hopefully.

Keith T. Stanley: Hi, good morning. I wanted to follow up on some of the good growth that you saw in Marcellus and Utica in Q4 and through last year and some of the positive commentary on 2024. Art, would you say your integrated footprint across Appalachia is allowing you to take market share over time in that market, and that's part of why you're able to see a little better growth? Or do you see the basin kind of inflecting positively with MVP, and you're just kind of maintaining your market share overall? Keith, this is Greg.

Mike: Investors have found that to be a good outcome.

Speaker Change: Thank you.

Speaker Change: Youre welcome Keith.

Speaker Change: Our next question comes from Michael Blum with Wells Fargo. Your line is open.

Michael Blum: Thanks, Good morning, everyone.

Greg: I would say it's some of both. We have the most extensive integrated footprint in the basin, both across the Utica and the Marcellus. They're interconnected. We have access to multiple fractionation facilities. We have a distributed de-ethanization plant. So we have a lot of flexibility there. But we also are, it's just good rock. The Utica and Marcellus basins, in terms of uniformity, are really good.

Michael Blum: Wanted to ask you know theres been a lot of M&A consolidation in the upstream space and I'm wondering if that's had any impact on you either directly or indirectly some of your producer customers. Maybe are involved in some of those and just curious if there's you know positive or negative or maybe no impact.

Michael Blum: But just curious if that's had any impact on you guys.

Greg: And I think there's some combination of existing producers that are drilling longer laterals that are driving more production per pad. And then there are, you know, Utica is a good example of some new producers moving into the region and taking advantage of, particularly, the light oil and condensate window over there, which brings associated gas and NGLs as well. So really... a combination of both our scale and integration as well as New Production, New Producers. Great, thanks.

Michael Blum: This is Greg I would say that there really has been no impact or at least no material impact we have.

Greg: There is consolidation, but for the most part we have agreements with with one party or the other and in some cases long standing agreements.

Greg: So yes, the answer would be really no impact there.

Greg: Yeah, Michael Similarly on the crude side and there hasn't been anything that we could say directly correlates to that you know obviously, we gather in a lot of basins.

Keith T. Stanley: Second question. I guess just on the growth outlook, and Mike, you've talked about this a lot already, but the company's investing a billion dollars a year in capital. If we're in a world without kind of inflation escalators anymore and assume kind of flattish commodity prices, is a billion a year of capital enough to hit your growth targets, or do you need to continue to find self-help type mechanisms, whether it's costs and efficiency improvements, tuck in M&A, etc., in order to hit the growth target? So is a billion enough per year, or do you need to find Yeah, Keith. It's Mike again.

Greg: And whether it's a single producer or consolidated producer.

Greg: It's really the area and the.

Greg: The dedications that come with that that really impacted as opposed to who the owner is.

Greg: And I might add with one of the recent.

Consolidation activities, we saw we actually did see an uptick in credit profile. So that was actually helpful to us as we thought about our credit profile.

Greg: Yeah.

Speaker Change: Got it okay. Thanks for that and then.

Speaker Change: I know this has been asked on prior calls, but you're sitting here with a $1 billion of cash on the balance sheet.

Speaker Change: You didn't do any buybacks in Q4, it sounds like youre going to maintain the same level of debt. So you're not it's not going to go away. So just maybe just some comments on how you're thinking about maintaining that level of cash in and what type of.

Michael J. Hennigan: You know, it's a combination. So, you know, what I was saying, if you look at history, we've been spending around a billion, even slightly under the last couple years. And recall that, you know, that number also includes that $150 million initial maintenance. So we take a look at our portfolio, and we try to examine where we think we have opportunities. And that's really what I was saying to Jeremy's question; it's a combination of all of it.

Speaker Change: Financial flexibility that that would give you. Thanks.

Speaker Change: I think you hit it on the head with your last comment Michael It gives us flexibility as we started into the year as I said, we always have a plan in place, but you know we had a pretty strong year, we had record throughput in the O&M side of the business as well as the G&P side of the business.

Michael J. Hennigan: But I think, you know, if you look at the results, 7% over four years, you know, we're about a $6 billion, you know, EBITDA business. So, you're looking roughly at about $400 million a year of growth at that 7%. So, we look at what we have on paper, and we try and think about, you know, how do we get to those kind of levels?

And it turned out to be 9% year on year growth. So it falls into the category of a good problem to have.

Like you said at the end of the day, we spent a little bit of money on the acquisition that we talked about we deploy capital and I've made the statement that you know last couple of years, we've been generating roughly about 800.

Speaker Change: Beyond our commitments so it's been a good problem to have.

Speaker Change: I know people are wondering.

What our plan there is in short term it is just having that flexibility.

Michael J. Hennigan: That's why I kind of just generically call it mid single digit, you know, just as a generic number, but we're really thinking for our size of partnership that if we can continue to grow three, four, 500, you know, those kind of numbers, we think are sufficient to keep what we think is a very steady growth in return of capital, which we think the market, you know, would like. So we look at all of it; we look at self-help, we look at efficiencies, we look at different things that are occurring as far as capital is concerned. But up until this point, that's about the level that we've needed to spend to be in that range.

Speaker Change: We haven't done a lot of buybacks, we've told the market that we're going to err on the side of distributing through increasing the distribution, which we've done a couple of years in a row. We still think that's our primary tool is the term that we've used.

Speaker Change: We've talked on previous calls about volatility in the equity price. It's it's been a factor in some of our decisions, but but at the end of the day. It does give us a little bit of flexibility in and hopefully over time, you'll get to see how we deploy it.

Speaker Change: Yeah.

Michael J. Hennigan: To your point, if we thought, you know, at times we needed to deploy more capital, you know, that's something that we would have at our disposal, you know, in our toolbox, so to speak. So, you know, we look at it all, and we try and figure out our plan. I know it's probably frustrating for your side of the fence because you don't get to see the long-term, you know, but that's what we're trying to do.

Thank you and our final question for today will come from Neal Dingmann with Truest. Your line is open.

Good morning, all and thanks for squeezing me in my questions on the Permian, you've talked a bit about specifically seen a little bit.

Year to date on some weather weakness just in some areas and whether it had any.

Any impact there and then secondly.

Michael J. Hennigan: And it's all to try and show the market that, you know, we're going to continue to grow the cash flows, we're going to continue to increase the distribution, we're going to continue to return capital, and hopefully, that, you know, is a good day for investors. You know, last year we talked about a total unit holder return of 22 percent. We're pretty proud of that, and hopefully, you know, investors have found that to be a good outcome. Thank you. You're welcome, Keith. Our next question comes from Michael Blum with Wells Fargo. Thanks. Good morning, everyone.

Neal Dingmann: It looks like and I just wanted to double check your longer term you have got a lot of attractive projects such as our plan such as weight to Webster and others. Although it is still right on right on plan.

Neal Dingmann: Yeah.

Neal Dingmann: To your first question Neil obviously, there is always weather issues that occur every year, but nothing significant compared to what we've seen in the in the last years, but.

Certainly the type of thing that we battle at this time of the year in general but.

But I wouldn't say, there's anything major that we needed to discuss.

And.

Speaker Change: Okay, Yes.

Michael Blum: I wanted to ask, you know, there's been a lot of M&A consolidation in the upstream space. And I'm wondering if that's had any impact on you either directly or indirectly; some of your producer customers maybe are involved in some of those, and just curious if there's, you know, a positive or negative impact, or maybe no impact, but just curious if that's had any. This is Greg.

Speaker Change: Hey, Neil this is Sean on regarding your question regarding Wink to Webster. We continue are pleased with the ramp up in and the volume we've seen come across at Wink to Webster in 'twenty, three and likewise in 'twenty four we expect to see a little bit of increase so.

Speaker Change: Going forward, so really pleased with that investment in that JV partnership going forward in 'twenty four and beyond.

Speaker Change: Great details and then just secondly, you guys touched already on the Utica, but I'm just wondering it looks like you're spending a bit more on the Utica gather I'm just wondering is it.

Greg: I would say that there really has been no impact, or at least no material impact. Uh... there is consolidation, but for the most part, we have agreements with one party or the other and, in some cases, long-standing agreements, so I would say the answer would be really no impact there. Michael, similarly, on the crude side, there hasn't been anything that we could say directly correlates to that. Obviously, we gather in a lot of basins, and whether it's a single producer or a consolidated producer, it's really the area and the dedications that come with that that really impact it, as opposed to who the owner is. Yeah, and I might add that with one of the recent consolidation activities we saw, we actually did see an uptick in the credit profile. So that was actually helpful to us as we thought about our credit profile. I got it. Okay, thanks for that. And then I know this has been asked on prior calls, but you know, you're sitting there with a billion dollars of cash on the balance.

Speaker Change: Perceived growth there, what's what's driving this project.

Speaker Change: Yes. This is Neil this is Greg.

Greg: It is perceived growth we've already seen growth in the Utica.

Speaker Change: We are filling.

Greg: Filling up existing processing capacity liquid capacity in transmission and compression, but there is also always going to be in areas, where we gather additional capital to connect new well pads, which is <unk>.

Greg: Sign of growth from multiple producers. So yes that is a sign of more growth in.

Speaker Change: We're excited to see it.

Look forward to it thank you all.

Speaker Change: Youre welcome Neal.

Speaker Change: Alright, well, thank you for joining us today and thank you for your interest in MPLX should you have additional questions or would you like clarification on any of the topics discussed today members of the IR team will be available to take your call.

Michael J. Hennigan: You know, you didn't do any buybacks in Q4. It sounds like you're gonna maintain the same level of debt. So, you're not, it's not gonna go away, so maybe just some comments on how you're thinking about maintaining that level of cash and and what type of financial flexibility that you hit on the head with your last comment, Michael. It gives us flexibility. You know, as we started the year, as I said, we always have a plan in place. But, you know, we had a pretty strong year. We had record throughputs, you know, in the L&S side of the business, as well as the G&P side of the business. EBITDA turned out to be 9% year-on-year growth. So it falls into the category of a good problem to have.

Speaker Change: Thank you that does conclude today's conference. Thank you for participating you may disconnect at this time.

Michael J. Hennigan: Like you said, at the end of the day, we spent a little bit of money on the acquisition that we talked about. We deployed capital. And, you know, I made the statement that, you know, in the last couple of years, we've been generating roughly about $800 million dollars beyond, you know, our commitment. So it's been a good problem to have. I know people are wondering, you know, what our plan there is. In the short term, it's just having that flexibility. You know, we haven't done a lot of buybacks.

Michael J. Hennigan: We've told the market that, you know, we're going to err on the side of distributing through increasing the distribution, which we've done a couple years in a row. We still think that's our primary tool is the term that we've used. We've talked on previous calls about, you know, volatility in the equity price. It's been a factor in some of our decisions, but at the end of the day, it does give us a little bit of flexibility, and hopefully over time, you'll get to see how we deploy, and our final, today will come from Neil Dingman with, Here's what's next! Morning, all. Thanks for, excuse me, and my questions on the Permian that you've talked a bit about, specifically, seem a little bit, I guess, year-to-date on some weather weakness, just in some areas, and whether heavy hail had an impact there, and then secondly, you know, sounds like, and I just want to double-check, your longer-term, you know, you've got a lot of attractive projects, such as, or plans, such as Wink-to-Webster and others, are those still right on, right on plan?

Michael J. Hennigan: To your first question, Neil, obviously, there's always weather issues that occur every year, but nothing significant compared to what we've seen in recent years. But, you know, certainly it's the type of thing that we battle at this time of the year in general. But I wouldn't say there's anything major that we needed to discuss. Yeah. Hey Neil, this is Sean. Regarding your question regarding Wink to Webster, you know, we continue to be pleased with the ramp-up and the volume we've seen come across Wink to Webster in 2023, and you know, likewise, in 2024, we expect to see a little bit of an increase, so you know, going forward, so really Great details.

Neil Mehta: And then, just secondly, you guys touched on Utica, but I'm just wondering, it looks like you're spending a bit more on the Utica Gather. I'm just wondering, is it perceived growth there? What's driving this project? Yeah, this is Neil. This is Greg.

Greg: It is perceived growth. We've already seen growth in Utica. We're filling up existing processing capacity, liquid capacity, and transmission and compression. But there is also always going to be areas where we gather additional capital to connect new well pads, which is, you know, a sign of growth from multiple producers. So, yeah, that is a sign of more growth, and we're excited to see it and look forward to it.

Neil: Thank you all. You're welcome, Neil. All right. Well, thank you for joining us today and thank you for your interest in MPLX. Should you have additional questions or would you like clarification on any of the topics discussed today, members of the IR team will be available to take your call. That does conclude today's conference. Thank you for participating, and connect at this time.