Q1 2024 MPLX LP Earnings Call

Operator: Welcome to the MPLX first quarter 2024 earnings call. My name is Sheila, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Press star one on your touchtone phone to enter the queue.

Welcome to the MPLX first quarter 2024 earnings call. My name is Sheila and I will be your off.

Sheila: For today's call at this time all participants are in a listen only mode. Later, we will conduct a question and answer session Press Star one on your Touchtone phone to enter the queue. Please note that this conference is being recorded.

Operator: Please note that this conference is being recorded. I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Sheila: I'll now turn the call over to Kristina Kazarian Kristina you may begin.

Kristina Anna Kazarian: Good morning, and welcome to the MPLX First Quarter 2024 Earnings Conference Call. The slides that accompany this call can be found on our website at MPLX.com under the Investor tab. Joining me on the call today are Mike Hennigan, Chairman and CEO, Chris Hagedorn, CFO, and other members of 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.

Kristina Anna Kazarian: Good morning, and welcome to the MPLX first quarter 2024 earnings Conference call.

Kristina Anna Kazarian: But are you 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 and other members of the executive team we.

Kristina Anna Kazarian: Invite you to read the safe Harbor statements and non-GAAP disclaimer on slide two.

Mind, you 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.

Kristina Anna Kazarian: 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.

Michael J. Hennigan: Thanks, Kristina. Good morning, and thank you for joining our call. Earlier today, we reported first quarter results. Our business continues to grow and deliver an adjusted EBITDA of $1.6 billion and distributable cash flow of $1.4 billion, each an 8% increase year over year. In line with our commitment to return capital, the growth of NPLX's cash flow supported the return of $951 million to unit holders. On a macro level, the United States continues to be a low-cost producer of energy fuels needed across the globe. Oil demand is at a record high globally.

Michael J. Hennigan: Thanks, Kristina good morning, and thank you for joining our call.

Mike: Earlier today, we reported first quarter results.

Mike: Our business continues to grow and delivered adjusted EBITDA of $1 $6 billion and distributable cash flow of $1 $4 billion, each an 8% increase year over year.

Mike: In line with our commitment to return capital the growth of MPLX is cash flow supported the return of $951 million to unit holders.

Mike: Turning to the macro.

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

Mike: Well demand is at a record high globally, we expect oil demand to continue to set records into the foreseeable future.

Michael J. Hennigan: We expect oil demand to continue to set records into the foreseeable future. Forecasted outlooks for this year estimate 1.2 to 2 million barrels per day of incremental demand over 2023, primarily driven by the growing need for transportation fuels. Our expectations for the long-term production outlook in our key basins remain unchanged in the Northeast.

Mike: Forecasts and outlooks for this year estimate of one point to two 2 million barrels per day of incremental demand over 2023, primarily driven by the growing need for transportation fuels.

Mike: Our expectations on the long term production outlook in our key basins remains unchanged.

Mike: In the northeast.

Michael J. Hennigan: Longer laterals are resulting in higher volumes, highlighting the strength and opportunities we see across our footprint. We continue to expect volume growth in the Marcellus, as well as in the Utica, where producers are targeting economically advantaged, liquid-rich acreage. In the Permian Basin, crew prices remain attractive, and associated gas production continues to grow as producers execute drilling and completion activities. In the first quarter, MPLX announced two strategic transactions. First, in Utica, we enhanced our footprint through the acquisition of an additional ownership interest in an existing joint venture and a dry gas gathering system.

Mike: Longer laterals are resulting in higher volumes, highlighting the strength and opportunities we see across our footprint.

Mike: We continue to expect volume growth in the Marcellus as well as the Utica, where producers are targeting economically advantage liquids rich acreage.

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

Mike: In the first quarter MPLX announced two strategic transactions.

Mike: First.

Mike: In the Utica, we enhanced our footprint through the acquisition of additional ownership interest in an existing joint venture and the dry gas gathering system.

Michael J. Hennigan: We have already seen growth in the rich gas window of Utica, and we see new producers moving into the region. MPLX entered into a definitive agreement to combine the Whistler Pipeline and the Rio Bravo Pipeline project into a newly formed joint venture. The transaction expands MPLX's natural gas value chain, connects permanent supply to additional Gulf Coast demand, and positions MPLX for future growth opportunities. The transaction, subject to required regulatory approvals and other customary closing conditions, is expected to close in the second quarter.

Mike: We have already seen growth in the rich gas window of the Utica and we see new producers moving into the region.

Mike: Second.

Mike: MPLX entered into a definitive agreement to combine the Whistler pipeline in the Rio Bravo pipeline project into a newly formed joint venture with <unk>.

Mike: Transaction expands MPLX as natural gas value chain connects Permian supply two additional Gulf coast demand and positions MPLX for future growth opportunities.

Mike: The transaction is subject to required regulatory approvals and other customary closing conditions is expected to close in the second quarter.

Michael J. Hennigan: We've remained committed to growing the partnership through our lens of strict capital disinvestment. In fact, over the last three years, MPLX has delivered a peer-leading return on invested capital. The previously mentioned strategic transactions are a continuation of our approach as we seek to grow the cash flows of the partnership. We believe this is a return on and a return on capital business, and we'll continue to use our capital allocation framework to evaluate and optimize capital allocation decisions.

Mike: We remain committed to growing the partnership through our lens of strict capital discipline in fact over the last three years MPLX holds a peer leading return on invested capital.

Mike: The previously mentioned strategic transactions are a continuation of our approach as we seek to grow the cash flows on the partnership.

Mike: We believe this is a return on and return of capital business and we will continue to use our capital allocation framework to evaluate and optimize capital allocation decisions.

Michael J. Hennigan: We're confident in our ability to grow the partnership and are focused on executing the strategic priorities of strict capital discipline, fostering a low cost culture, and optimizing our asset portfolio, all of which are foundational to the growth of NPLX's cash. Now, I'll turn the call over to Chris to discuss our growth as well as our operational and financial results for the quarter. Thanks, Mike.

Mike: We're confident in our ability to grow the partnership and are focused on executing the strategic priorities and strict capital discipline.

Mike: Fostering our low cost culture, and optimizing our asset portfolio all of which are foundational to the growth of MPLX since cash flows.

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

Carl Kristopher Hagedorn: Thanks, Mike.

Carl Kristopher Hagedorn: NPLX's 2024 capital expenditure outlook of $1.1 billion is unchanged and includes $950 million of growth capital and $150 million of maintenance capital. Our 2024 Growth Capital Outlook is anchored in the Marcellus and Permian Basins. Our integrated footprint in these basins is positioned with a partnership that has a steady source of opportunities to expand, particularly around our natural gas and NGL assets. We continue growing these operations through organic projects, investments in our Permian joint ventures, and bolt-on opportunities. In the L&S segment, progress continues on the Argo Dulce to Corpus Christi natural gas pipeline joint venture, which is expected to be in service in the third quarter of 2024.

Carl Kristopher Hagedorn: Mplx's 2024 capital expenditure outlook outlook of $1 $1 billion is unchanged and includes $950 million of growth capital and $150 million of maintenance capital.

Carl Kristopher Hagedorn: Our 2020 for growth capital outlook is anchored in the Marcellus and Permian basins.

Carl Kristopher Hagedorn: Our integrated footprint in these basins is positioned with the partnership with a steady source of opportunities to expand particularly around our natural gas and NGL assets.

Carl Kristopher Hagedorn: We continue growing these operations through organic projects investments in our Permian joint ventures and bolt on opportunities.

Carl Kristopher Hagedorn: And they'll know segment progress continues on the Agua Dulce to Corpus Christi natural gas pipeline joint venture, which is expected to be in service in the third quarter of 2024.

Carl Kristopher Hagedorn: We're also progressing the expansion of the Bengal NGL pipeline joint venture to 200,000 barrels per day, which is expected to be completed in the first half of 2025. In the GMP segment, we're bringing new gas processing plants online to meet increasing customer demand. The Harmon Creek 2 gas processing plant was placed into service in late February, bringing our Marcellus processing capacity to 6.5 billion cubic feet per day. In the Permian Basin, Preakness 2 is approaching startup and is expected to be online in May.

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

Carl Kristopher Hagedorn: In the G&P segment, we're bringing new gas processing plants online to meet increasing customer demand.

Carl Kristopher Hagedorn: The Harmon Creek two gas processing plant was placed into service in late February, bringing our Marcellus processing capacity to $6 5 billion cubic feet per day.

Carl Kristopher Hagedorn: In the Permian Basin Preakness, two was approaching startup and is expected to be online in may.

Carl Kristopher Hagedorn: Additionally, we are progressing the Secretariat Processing Plant, 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, higher-return investments, Targeted Expansion or De-Bottlenecking of Existing Assets, and projects related to planned increases and producer-customer activities. Slide six outlines the first quarter operational and financial performance highlights for our logistics and storage.

Carl Kristopher Hagedorn: Additionally, we are progressing the secretary of processing plant, 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.

Carl Kristopher Hagedorn: Outside of the strategic basins, the remainder of our capital plan is mostly comprised of smaller higher return investments targeted expansion or debottlenecking of existing assets and projects related to planned increases and producer customer activity.

Carl Kristopher Hagedorn: Slide six outlines the first quarter operational and.

Carl Kristopher Hagedorn: Financial performance highlights for our logistics and storage segment.

Carl Kristopher Hagedorn: Adjusted EBITDA increased $72 million when compared to the first quarter of 2023, primarily driven by higher rates and growth from our equity affiliates. Crude and product pipelines and terminal volumes were down year over year, primarily due to MPC's planned turnaround activity in the first quarter of 2024. Through the structure of our contracts with MPC, refinery volume changes have a limited impact on financial impact to MPLA. Moving to our Gathering and Processing segment on Site 7.

Carl Kristopher Hagedorn: Adjusted EBIT increased $72 million when compared to the first quarter of 2023, primarily driven by higher rates and growth from our equity affiliates.

Carl Kristopher Hagedorn: Crude and product pipelines and terminal volumes were down year over year, primarily due to mpc's planned turnaround turnaround activity in the first quarter of 2024.

Carl Kristopher Hagedorn: Due to the structure of our contracts with MPC refinery volume changes had limited impact.

Carl Kristopher Hagedorn: Financial impact to MPLX.

Carl Kristopher Hagedorn: Moving to our gathering and processing segment on slide seven.

Carl Kristopher Hagedorn: The GMP segment adjusted EBITDA increased $44 million compared to the first quarter of 2023, primarily driven by higher volume. However, total gathered volumes were down 2% year-over-year, primarily due to decreased dry cast production in Utica and scheduled maintenance activities in the southwest.

Carl Kristopher Hagedorn: The GMP segment, adjusted EBITDA increased $44 million compared to the first quarter of 2023.

Carl Kristopher Hagedorn: Primarily driven by higher volumes.

Carl Kristopher Hagedorn: Total gathered volumes were down 2% year over year, primarily due to decreased dry gas production in the Utica and scheduled maintenance activities in the southwest.

Carl Kristopher Hagedorn: Processing volumes were up 9% year-over-year, primarily due to higher volumes in the Marcellus and Utica, driven by increased customer production. 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 7% for processing, driven by increased drilling and production. Marcella's processing utilization was 92% in the first quarter, reflecting the need for our Harmon Creek II processing plant, which was placed in service in late February.

Carl Kristopher Hagedorn: Processing volumes were up 9% year over year, primarily from higher volumes in the Marcellus and Utica driven by increased customer production.

Carl Kristopher Hagedorn: 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 7% for processing.

Carl Kristopher Hagedorn: Driven by increased drilling and production growth.

Carl Kristopher Hagedorn: Marcellus processing utilization was 92% in the first quarter, reflecting the need for our Harmon Creek II processing plant, which was placed in service in late February.

Carl Kristopher Hagedorn: Fractionation volumes grew 4% due to higher ethane recoveries and higher processed volumes. Moving to our first quarter financial highlights on slide eight, total adjusted EBIT of $1.6 billion and distributable cash flow of $1.4 billion, each increased 8% from prior years. During the quarter, MPLX acquired additional ownership interest in existing joint ventures and a dry gas gathering system located in Utica for $625 million, and contributed $92 million for the repayment of our share of the Bakken pipeline JV debt due in April.

Carl Kristopher Hagedorn: Fractionation volumes grew 4% due to higher ethane recoveries and higher processed volumes.

Carl Kristopher Hagedorn: Moving to our first quarter financial highlights on slide eight total adjusted EBIT of $1 6 billion and distributable cash flow of $1 $4 billion, each increased 8% from prior year.

Carl Kristopher Hagedorn: During the quarter MPLX acquired additional ownership interest in existing joint ventures, and a dry gas gathering system located in.

Carl Kristopher Hagedorn: In Utica for $625 million and contributed $92 million for the repayment of our share of the Bakken pipeline JV debt due in April.

Carl Kristopher Hagedorn: And PLX also returned $951 million to unit holders through $876 million in distributions and $75 million in unit repurchase, ending the quarter with a cash balance of $385 million. As a reminder, the first quarter is typically our lowest quarter for project-related expenses. Like prior years, we anticipate these expenses will increase $30 million to $40 million sequentially in the second quarter, reflecting more favorable weather to undertake project-related work. Now, let me hand it back to Mike for some final thoughts. Thanks, Chris.

Carl Kristopher Hagedorn: MPLX also returned $951 million to unit holders through $876 million in distributions and $75 million and unit repurchases.

Carl Kristopher Hagedorn: Ending the quarter with a cash balance of $385 million.

Carl Kristopher Hagedorn: As a reminder, the first quarter's typically our lowest quarter for project related expenses.

Carl Kristopher Hagedorn: Prior years, we anticipate these expenses will increase $30 million to $40 million sequentially in the second quarter, reflecting more favorable weather to undertake project related work.

Carl Kristopher Hagedorn: Let me hand, it back to Mike for some final thoughts.

Michael J. Hennigan: Thanks, Chris.

Michael J. Hennigan: In closing, MPLX has a strong history of growing the partnership's cash flows by executing its strategic priorities all while maintaining strict capital discipline. We continue to aim for mid-single-digit growth rates over multiple year periods. And as you can see in our results, we had a strong start again this year with adjusted EBITDA and DCF up 8% versus the first quarter of 2023. By deploying capital wisely, controlling our costs, and optimizing operations to get the most out of our assets, we've grown DCF by nearly 8% on a three-year compound annual basis.

Michael J. Hennigan: In closing MPLX has a strong history of growing the partnerships cash flows by executing our strategic priorities, all while maintaining strict capital discipline.

Michael J. Hennigan: We continue to aim for mid single digit growth rate over multiple multiple year periods.

Michael J. Hennigan: And as you can see in our results we have a strong start again this year with adjusted EBITDA and DCF up 8% versus the first quarter of 2023.

Michael J. Hennigan: By deploying capital wisely controlling our costs and optimizing operations to get the most out of our assets we've grown DCF by nearly 8% on a three year compound annual basis.

Michael J. Hennigan: MPLX is a strategic investment for MPC, and as they each pursue growth opportunities, the value of this strategic relationship will be enhanced. 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. In each of the last two years, we've increased our quarterly distribution by 10%.

Michael J. Hennigan: MPLX is a strategic investment for MPC.

Michael J. Hennigan: And as they each pursue growth opportunities the value of this strategic relationship will be enhanced.

Michael J. Hennigan: 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.

Michael J. Hennigan: In each of the last two years, we've increased our quarterly distribution 10%.

Michael J. Hennigan: The business is expected to continue to generate significant annual free cash flow after distribution, placing us in a strong position to continue to consistently grow our distribution. Now, let me turn the call back over to Kristina.

Michael J. Hennigan: The business is expected to continue to generate significant annual free cash flow after distributions, placing us in a strong position to continually.

Michael J. Hennigan: To continue to consistently grow our distribution.

Michael J. Hennigan: Now, let me turn the call back over to Christina.

Kristina Anna Kazarian: 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, Operator, we're ready.

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 operator, we're ready.

Operator: Thank you. We will now begin the question-and-answer session. If you have a question, please press star then 1 on your touchtone phone. If you wish to be removed from the queue, please press star then 2. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then 1 on your touchtone phone. Our first question comes from John Mackay with Goldman Sachs. Your line is open.

Christina: 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.

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

Speaker Change: You are using a speakerphone you may need to pick up the handset first before pressing the numbers. Once again if you have a question. Please press Star then one on your Touchtone phone.

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

John Ross Mackay: Hey, good morning. Thanks for the time. I wanted to start on the buyback. I think it was the first since 22. Maybe spend a minute or two just elaborating on whether or not this is a one-off or maybe a restart of a more normal cadence, and then also how you're thinking about balancing this with potential distribution increases in the future.

John Ross Mackay: Hey, good morning, Thanks for the time.

John Ross Mackay: Wanted to start on the buyback I think it was the first since 2002.

John Ross Mackay: Maybe you can spend a minute or two just elaborating on whether or not this is a one off or maybe a restart of a more normal cadence and then also how youre thinking about balancing this with potential distribution increases in the future.

Michael J. Hennigan: Good morning, John. Thanks for that question. Let me start, because we get that question often, and I'll try and be as clear as I can. First off, it starts with generating cash. I mean, you heard in our prepared remarks that our three-year CAGR is about 8%, and our first quarter results for DCF and EBITDA were about 8%. So it starts with generating cash. And then the uniqueness to that cache is we kind of color code the cache into two-bucks. You know, those buckets that are continuing, we think are going to be there through all types of markets, and I've called that blue bar cash. The cash flows that are there, intermittent, that could be there sometimes, not always, I call red bar cash flows.

Speaker Change: Hey, good morning, John Thanks for that question.

Speaker Change: Let me start because we get that question, often I'll try and be as clear as I can.

Speaker Change: First off it starts with generating cash.

Speaker Change: You've heard in our prepared remarks that our three year CAGR is about 8% and our first quarter results on DCF and EBITDA were about 8%. So it starts with generating cash.

Speaker Change: And then the uniqueness to that cash as we kind of color code the cash into two buckets.

Michael J. Hennigan: Are those buckets. That's continuing we think is going to be there through all types of markets and I've called that Blue bar cash flows.

Speaker Change: The cash flows that are they are intermittent that it could be there is sometimes not sometimes I call Red bar cash flows. So understanding the type of cash flows that we've generated is really important to go into our capital allocation framework and the way I think about the Red bar Red bar may not be there all the time, but it is.

Michael J. Hennigan: So understanding the type of cash flows that we've generated is really important to go into our capital allocation framework. And the way I think about the red bar, you know; the red bar may not be there all the time, but it is a source of equity. Blubar, I think of as an ongoing cash flow that's going to support our distribution growth. And we've said a bunch of times that our preferred method of returning capital is primarily distribution growth because we primarily drive Blubar cash flows in our system.

Speaker Change: A source of equity lube.

Speaker Change: Blue Bar I think of it as an ongoing cash flow thats going to support our distribution growth and we've set a bunch of times that our preferred method of returning capital is primarily distribution growth because we primarily drive blue bar cash flows in our system, but having the flexibility with red bar for buybacks is.

Michael J. Hennigan: But having the flexibility with Red Bar for buybacks is also important to us. So when we put that all together, you know, the way we think of our capital allocation framework is number one: we're going to take care of our assets. Number two is we're going to continue to grow our distribution, and that's driven by Blue Bar Cash. Number three is we're going to look to invest and continue to grow earnings.

Speaker Change: Also important to us so when we put that all together.

Speaker Change: The way, we think of our capital allocation framework is number one we're going to take care of our assets.

Speaker Change: Number two is we're going to continue to grow our distributions and that's driven by those blue bar cash flows number three is we're going to look to invest and continue to grow earnings and hopefully you've seen our track record on capital discipline and what it's done the earnings we're very proud of growing this sized partnership at about.

Michael J. Hennigan: And hopefully, you've seen our track record on capital discipline and what it has done to earnings. You know, we're very proud of growing this size partnership at about 8% per year over the last three years, and it continued into the first quarter. And then the last piece is our buyback. And although it's fourth in the capital allocation framework, it's still a tool that we have at our disposal, and we continue to think about when that makes the most sense versus when it doesn't.

Michael J. Hennigan: <unk>, 8% per year over the last three years and it continued into the first quarter and then the last piece is our buyback and although its fourth in the capital allocation framework. It's still a tool that we have at our disposal and we continue to think about when that makes the most sense versus when it doesn't.

Michael J. Hennigan: So if you think, if you step all the way back, we color code the cash flows, we prioritize blue, that's the way we run our business, stable, continuing cash flows; they'll be there all the time. Those are more targeted towards distribution. You've heard us say we've done, you know, 10% distribution increases in the last few years. You've heard us say we believe we have strong financial capabilities to continue to grow our distribution. But we also have the tool of buybacks when we think it makes sense. I hope that was helpful.

Michael J. Hennigan: So if you think if you step all the way back we color code to cash flows we prioritize blue that's the way we run our business stable continuing cash flows that'll be there all the time those are more targeted towards distributions <unk> heard to say, we've done 10% distribution increase in the last few years, you've heard us say we bill.

Michael J. Hennigan: We have strong financial capabilities to continue.

Speaker Change: To grow our distributions, but we also have the tool of buybacks when we think it makes sense.

Michael J. Hennigan: I hope that was helpful.

John Ross Mackay: Yeah, thanks, Mike. I appreciate that. Maybe on just following up on wanting to continue to invest to grow, I've obviously seen you guys lean a little bit more towards the kind of bolt-on deals recently with the three announced so far this year. Can you maybe just spend a minute there on kind of the general strategy and then maybe how you think about those competing with organic opportunities and maybe how much capital you're willing to allocate in that direction? Thanks.

Speaker Change: Yeah. Thanks, Mike I appreciate that maybe on just following up on the wanting to continue to invest to grow. So obviously seen you guys lean a little bit more towards the kind of bolt on deals recently with the.

John Ross Mackay: Three announced so far this year can you maybe just spend a minute there on kind of general strategy and then maybe how you think about that.

Speaker Change: Those competing with organic opportunities and maybe how much capital youre willing to allocate in that direction.

Michael J. Hennigan: Yeah, thanks, John. It's another good question.

Michael J. Hennigan: Yeah. Thanks, John So another good question, let me start off and then I'll, let Greg talk about this recent activity so.

Gregory Scott Floerke: Let me start off and then I'll let Greg talk about this recent activity. So, in general, over the last couple of years, you've seen us mainly driving organic growth. That's where we see good return projects. Again, I always say they're not sexy, and they're not big headline projects, but they're good return projects, and we've been executing those well, and that's driven growth. But we're also constantly looking at M&A or organic, inorganic activities. And, you know, during this quarter, we were able to make a strategic transaction in Utica, and I'll let Greg talk a little bit about the details.

Greg: In general over the last couple of years, you've seen us mainly driving organic growth, that's where we see good return projects. You know again, I always say theyre not sexy theyre not big headline projects, but they are good return projects and we've been executing those well and thats driven growth, but we're also constantly looking at M&A or.

Michael J. Hennigan: Ganic.

Gregory Scott Floerke: Inorganic activities and during this quarter, we were able to make a strategic transaction and in the Utica and I'll, let Greg talk a little bit about the detail.

Gregory Scott Floerke: Yeah.

Greg: Thanks, Mike.

Greg: The Utica is interesting we're really excited about what's going on there right now we've had.

Gregory Scott Floerke: right now. We've seen a lot of success over the last few years in the dry lean part of the basin near the Ohio River, and it has built out a substantial dry gas gathering system, but the rich gas area has not gotten as much attention, and it now has a lot of great tailwinds behind it. We're really excited about it. The main things in favor of the rich gas are the fact that there's a light oil window and a condensate window, the fact that right now we have a frac spread that favors liquids, whether in the crude oil-producing regions or in the NGL-heavy regions like we have in Utica.

Gregory Scott Floerke: We've seen a lot of success over the last few years and the dry lease part of the base in the Ohio River.

Gregory Scott Floerke: And a buildout of substantial.

Michael J. Hennigan: Dry gas gathering system, but the rich gas area has not gotten as much attention.

Gregory Scott Floerke: Now as <unk>.

Gregory Scott Floerke: Just got a lot of great tailwind behind it and we're really excited about it.

Gregory Scott Floerke: Main things in the favor of the rich gas or the.

Gregory Scott Floerke: <unk>.

Gregory Scott Floerke: The fact that there is a light oil window and the condensate window. The fact that.

Gregory Scott Floerke: Right now we have a frac spread that favors liquids, whether in the crude oil producing regions or.

Gregory Scott Floerke: NGL heavy regions like we have in the Utica.

Gregory Scott Floerke: We also have new drilling technology with long laterals, twice the length of laterals that we probably saw back in the day when Utica was first developed, so you get essentially two or more wells in terms of lateral length for a proportionally less cost. We also have, because of the early build out, we have existing infrastructure. It's fully integrated with our Marcella system. It's connected to the same fractionation, and all the same takeaway pipeline.

Gregory Scott Floerke: We also have new drilling technology with long laterals twice the length of laterals that we probably saw back in the day when.

Greg: Utica was first developed so you get essentially.

Gregory Scott Floerke: Two or more wells in terms of lateral length for.

Gregory Scott Floerke: For a proportionately less cost we also have because of the early build out we have existing infrastructure, it's fully integrated with our Marcellus system is connected to the same fractionation all the same takeaway pipelines. So.

Gregory Scott Floerke: So, the bottom line is, you know, we're bullish about having a system with spare capacity in an area that now new producers are moving into and existing producers are moving their rigs to. So, we're already seeing that growth. The summit acquisition allowed us to further buy into this area where we're really bullish. And we built the entire system and operate it already, so we know it well. And we know the producers and the opportunities.

Gregory Scott Floerke: Bottom line is.

Gregory Scott Floerke: We're bullish about having a system with spare capacity in an area that no new producers are moving into an existing producers are moving the rigs too. So we're already seeing that growth.

Gregory Scott Floerke: The summit acquisition.

Gregory Scott Floerke: Allowed us to.

Gregory Scott Floerke: To further buy into this area, where we're really bullish about and we already built the entire system and operated already so we know it.

Gregory Scott Floerke: And we know the producers and the opportunities there.

Speaker Change: Alright, Thank you very much for that I appreciate it.

Michael J. Hennigan: All right. Thank you very much for that. I appreciate it. You're welcome, John. Next, we will hear from Manav Gupta with UBS. You may proceed.

Speaker Change: Youre welcome John.

Michael J. Hennigan: Thank you next we will hear from Manav Gupta with UBS you May proceed.

Manav Gupta: Good morning, Mike My only question here, but its too.

Operator: Thank you. Next, we will hear from Manav Gupta with UBS. You may proceed.

Manav Gupta: Pipeline thing did you see some <unk> got involved with the JV looks very interesting it looks like a very good growth opportunity help us understand this project a little more in detail and why would this be a strategic fit for MPLX. Thank you.

Michael J. Hennigan: Yeah, thanks, Manav. I appreciate that question.

Michael J. Hennigan: I'm going to let Dave give you a little more detail on that, but I would tell you in general, though, as we've been saying, you know, we're concentrating a lot of our activity on our key bases. And, you know, Greg just mentioned a lot of what's going on in the Northeast, and I'll let Dave talk a little bit about what's going on down in the Permian. So, let me dig a little deeper.

Dave: Yeah. Thanks, Manav I appreciate that question.

Dave: I'm going to let David give you a little more detail on it I would tell you in general, though as we've been saying, we're concentrating a lot of our activity in our key basins.

Michael J. Hennigan: And Greg just mentioned a lot of what's gone up in the northeast and I'll, let Dave talk a little bit about what's going on down in the Permian.

Dave: And Manav, So let me dig a little deeper so as Mike stated the Permian is an addition to our other base with one of our key focus basins.

Dave Heppner: So, as Mike stated, the Permian is, in addition to our other basins, one of our key focus basins. And this JV partnership, which is with MPLX, along with Whitewater and I-Squared as part of the existing Whistler JV, entered into that definitive agreement with Enbridge to strategically combine that JV with the Rio Bravo Pipeline project into this newly formed JV. So that's step number one.

Dave Heppner: And this JV partnership, which is with MPLX, along with whitewater and ice squared as part of the existing Whistler JV.

Dave Heppner: Entered in that definitive agreement with Enbridge.

Dave Heppner: So strategically combine that JV with the Rio Bravo pipeline project into this newly formed JV. So that's step number one and the justification for that while we monetize a small portion of our equity ownership in <unk>.

Dave Heppner: And the justification for that, while we monetize a small portion of our equity ownership in Whistler at a low double-digit multiple, the real key is it enabled us to build out and continue to build out our wellhead-to-water growth strategy of enhancing our value chain from the Permian to the U.S. Gulf Coast. So think of it this way: the Rio Bravo Pipeline Project provides Whistler with that value chain connectivity to the Rio Grande LNG export facility in Brownsville, Texas, which is not a lot different to the strategy around the ADCC Pipeline Project that is under construction right now at Chenier's LNG facility in Corpus Christi. So it's that last mile connectivity to the LNG pole.

Dave Heppner: In Whistler at a low double digit multiple the real key is enabled us to build out continue to build out our wellhead to water growth strategy.

Dave Heppner: And enhancing our value chain from the Permian to the Us Gulf Coast.

Dave Heppner: So think of it this way that the Rio Bravo pipeline project provides whistler with that value chain connectivity to the Rio Grande LNG.

Dave Heppner: Export facility in Brownsville, Texas, which is not a lot different.

Dave Heppner: The strategy around the ADC pipeline project that is under construction right now to Cheniere LNG facility in Corpus Christi. So, it's it's that last mile connectivity to the LNG Paul.

Dave Heppner: So as we look forward, both from our Peruvian supply, which Mike touched on earlier, and the U.S. Gulf Coast LNG demand, which we all anticipate to grow, this strategic partnership provides a strong platform and positions Whistler under the new JV to participate in this growth and the development of incremental pipeline projects, which again, of course, will further enhance NPL's wellhead to water strategy. Let me be clear with that, any potential projects that we look at going forward must provide two things: acceptable financial returns and the right commercial terms through our lens of strict capitalism as we look at all projects, whether they be bolt-on, organic, or these growth projects. So hopefully, that gives you a little more color.

Dave Heppner: So as we look forward both from a Permian supply.

Dave Heppner: Mike touched on earlier in the U S Gulf Coast, LNG demand, which we all anticipate to grow the strategic partnerships provides a strong platform and positions Whistler.

Dave Heppner: Under the new JV to participate in this growth and the development of incremental pipeline projects, which again of course will further enhance npls wellhead to water strategy.

Dave Heppner: Well, let me be clear with that any potential projects that we look at going forward.

Dave Heppner: <unk> provide two thanks acceptable financial returns and the right commercial terms.

Dave Heppner: Through our lens of strict capital discipline as we look at all projects, whether it be bolt on organic or or these growth projects. So hopefully that gives you a little more color.

Dave Heppner: Thank you very much. Sure thing, Mike. So, very similar to NatGas, we've been pretty public about our plans to expand our value chains on the NGL platform. And again, it's all about strengthening our competitive position through forward integration. So think of it from the wellhead to the consumer. So back at the wellhead, Greg and his team, with all our gas processing plants, we got our Bengal Pipeline Expansion Project going. And so whether we extend these value chains independently or with partners, extend them to the water, and have an export optionality as part of that strategy.

Dave Heppner: Thank you very much in line since.

Mike: Since they gave you a little bit of detail on that project why don't you talk a little bit about Ngls as well and so we're talking about natural gas and what we're doing in the Permian.

Speaker Change: Sure thing Mike.

Dave Heppner: So very similar Nat gas, we've been pretty public about our plans to expand our value change in the NGL platform and.

Dave Heppner: And again, it's all about strength of our competitive position through Ford integration. So think of it from wellhead to the consumers. So back on the wellhead, Greg and his team with all our gas processing plants, we got her bangle.

Dave Heppner: Pipeline expansion project going and so whether we extend this these value change independently.

Dave Heppner: Or with partners extended the water and have an export options optionality as part of that strategy.

Dave Heppner: At this time, you know, we don't have any major updates to provide on the Texas City NGO FRAC and storage projects, but that is a project we continue to evaluate. So if you recall, on that project, back in December of last year, we submitted our air permit application to the TCEQ for the NGO FRAC and storage facility in Texas City, Texas. I want to be clear that obtaining these permits is one of the many steps we take in the evaluation of the potential project, and we'll continue to evaluate any commercial framework around them.

Dave Heppner: At this time.

Dave Heppner: We don't have any major updates to provide on the Texas City, NGL Frac and storage projects that the project continues.

Dave Heppner: To continue to evaluate so if you recall on that project back in December of last year, we submitted our air permit application to the text TCE Q for the NGL Frac and storage facility in Texas City, Texas.

Dave Heppner: I want to be clear that filing these permits as one of the many steps we've taken evaluation of the potential projects.

Dave Heppner: And we will continue to evaluate any commercial framework around those.

Dave Heppner: Again, very similar to our net gas strategy, acceptable returns, and the right commercial terms, you know, through the lines of strict capital investment will help us determine if we go that alone or do it with business partners going forward. So hopefully that gives you a little more color on our NGL strategy, which I would say is very similar to our net gas strategy through, for MPLX, well head to water, participate in the whole value chain, both from equity and from commercial optionality.

Dave Heppner: Again, very similar to her Nat gas strategy.

Dave Heppner: Acceptable returns at the right commercial terms.

Dave Heppner: Through the lens of strict capital person, who will help us determine if we go to that alone or the business partners going forward. So hopefully that gives you a little more color on our NGL strategy, which I would say very similar to our Nat gas Nat gas strategy.

Dave Heppner: Through for MPLX as well had the water participate in the whole value chain, both from equity and from commercial off the shelf.

Dave Heppner: Optionality.

Dave Heppner: Yeah.

Speaker Change: Thank you.

Jeremy Bryan Tonet: Thank you. Our next question comes from Jeremy Tonet with J.P. Morgan. Your line is open.

Speaker Change: Youre welcome on our Q.

Jeremy Bryan Tonet: Thank you. Our next question comes from Jeremy Tonet with Jpmorgan. Your line is open.

Jeremy Bryan Tonet: Hi, good morning.

Jeremy Bryan Tonet: Good morning, Jeremy.

Jeremy Bryan Tonet: I want to come back to the banks of the river, if I can, and just how MPOX seems to have achieved single-digit EBITDA growth historically, and it seems like the prospects are there for continued growth. If I think about the, you know, the summit acquisition, kind of these bolt-on acquisitions, I think of them as kind of a... Part, one of the components of staying in that range, and it would be larger acquisitions that would drive you above the range, and it, is that a fair way of thinking about things here? And how do you think about, I guess, other, you know, the potential acquisition environment?

Jeremy Bryan Tonet: Once it come back to the the banks of the river, if I could and just how MPLX teams to achieve mid single digit EBITDA growth historically and it seems like the prospects are there for continued growth in <unk>.

Jeremy Bryan Tonet: If I think about the summit acquisition kind of these bolt on acquisitions I think of it as kind of.

Jeremy Bryan Tonet: One of the components of staying in that range and it would be larger acquisitions that would drive you above the range and it is that a fair way of thinking about things here and how do you think about I guess other.

Jeremy Bryan Tonet: Potential acquisition environment out there.

Michael J. Hennigan: Hey Jeremy, that's a good question. First off, let me correct you: the M&A activity that we do, even if it's on the smaller side, is not included or would be additive to our goal of driving for mid-single-digit growth. So we think of mid-single-digit growth as our organic program in general, and then when these other opportunities come up, you know, through inorganic opportunities like we just talked about, that would be added.

Speaker Change: Hey, Jeremy its a good question.

Michael J. Hennigan: First off let me correct to the M&A activity that we do even if it's on the smaller side is not included or would be additive to our goal of driving for mid single digit growth. So we think of the mid single digit growth as our organic program in general and then when these other opportunities come up.

Michael J. Hennigan: Through inorganic opportunities like we just talked about that would be additive.

Michael J. Hennigan: So, you know, our base is always things that we can control, you know, trying to compete for, you know, growth, Harmoncrete 2, Preakness 2, Secretariat, you just heard Dave talk about our natural gas pipeline strategy down in the Permian and NGL growth, you know, all those things come into our base feeling about growing the partnership to at least mid-single-digit cash flows. When we do something like the acquisition of the JV partner in Utica that Craig talked about, we think of that as an addition to our goal. I got it.

Michael J. Hennigan: Our base is always things that we can control trying to compete for growth Harmon Creek II Preakness. Two Secretariat you just heard Dave talk about our natural gas pipeline strategy down in the Permian and NGL growth all of those things come into our base feeling about.

Michael J. Hennigan: Growing the partnership at least mid single digit cash flows when we do something like the acquisition of the JV partner in the Utica that Craig talked about we think of that as additive to our goal.

Speaker Change: Got it.

Jeremy Bryan Tonet: Got it. That's very helpful. And maybe just digging in on that, you know, acquisition, I think the seller put out certain numbers around there with that implied certain EBITDA for the asset. And I was just wondering if you could provide any thoughts with regard to how, you know, what type of economics you're seeing with this deal and how that could maybe improve over time.

Speaker Change: Very helpful and maybe just digging in on that.

Jeremy Bryan Tonet: Acquisition, I think the seller put out certain numbers around there with that implied certain EBITDA for that asset and I was just wondering if you could provide any thoughts with regards to how what type of economics, you're seeing with this deal and.

Jeremy Bryan Tonet: And how that could maybe improve overtime.

Gregory Scott Floerke: Jeremy, this is Greg. Yeah, we really look at the Utica story. As I mentioned, we're very bullish about it. The rigs are there. The activity's coming up.

Greg: Jeremy This is Greg.

Jeremy: Yes, we really look at the Utica story as I mentioned, we're very bullish about it the rigs are there the activity is coming up we're already seeing growth and we think there is a volume story.

Gregory Scott Floerke: We're already seeing growth, and we think this is a volume story, utilizing facilities that have existing capacity.

Greg: Utilizing facilities that have existing capacity so.

Gregory Scott Floerke: You know, in an ideal situation, you would see new drilling off of even off of existing pads with no new investment, but even in the case of new pads, it's essentially well connected into our system. And then we take advantage of existing trunk pipelines compression and our processing and fractionation facilities that are already there with capacity. So we think there's upside and value related primarily to volume and not having to spend a lot of additional capital to capture that volume.

Greg: In an ideal situation you would see new drilling off of even off of existing pads with no new investment, but even in the case of new pads, it's essentially well connects into our system.

Gregory Scott Floerke: And then we take advantage of existing.

Gregory Scott Floerke: Trunk pipelines compression in.

Gregory Scott Floerke: Our processing and fractionation facilities had already there with capacity. So we think there is upside.

Gregory Scott Floerke: And value related primarily to volume and <unk>.

Gregory Scott Floerke: And not having to spend a lot of additional capital to capture that volume.

Michael J. Hennigan: Jeremy, it's Mike. You know, just to add to what Craig said, obviously we think the multiple is going to be better than what was put out there earlier. We're just, you know, cognizant of not putting our data out too soon. We just want to show it in the results, and then we can talk about it later.

Mike: Yeah, Jeremy it's Mike.

Michael J. Hennigan: To add on to what Craig said that obviously, we think the multiple is going to be better than what was put out there earlier, we're just.

Michael J. Hennigan: Cognizant of.

Michael J. Hennigan: You know not putting R. R.

Michael J. Hennigan: Our data out to too soon we just wanted to show it in the results and then we can talk about it later.

Michael J. Hennigan: Yeah.

Jeremy Bryan Tonet: Got it. That's very helpful. And maybe just kind of circling back to the point at the top there, you talked about, you know, as it relates to capital allocation, red bar, blue bar. I think there might have been some purple bar points in the past. But just wondering, as you think about, I guess, you know, the potential red bar there and further, I guess, bolt-ons. Would you look to retain more for the, you know, to improve the balance sheet if there are future opportunities that materialize, or is leverage low enough at this point, or is buyback really kind of the focus for that?

Speaker Change: Got it that's very helpful and maybe just kind of circling back to the point that top there and you talked about as it relates to capital allocation Red Bar Blue Bar I think there might have been some purple bar points in the past, but just wondering as you think about I guess.

Jeremy Bryan Tonet: The potential Red bar, there and further I guess bolt ons would you would you look to retain more for that to improve the balance sheet. If there are future opportunities that materialized or as leverage low enough at this point or is buybacks really kind of focus for that.

Michael J. Hennigan: Yeah, you know, Jeremy, we always say it's a good problem to have. You know, we think we're in a great position on financial flexibility. Like you mentioned, the balance sheet's in good shape. We're generating excess cash beyond distributions and capital at this point. We also feel like we have, you know, different opportunities for us. And you're right. Thanks for that reference.

Michael J. Hennigan: Yes, Jeremy we always say, it's a good problem to have we think we're in a great position on financial flexibility like you mentioned the balance sheet is in good shape, we're generating excess cash beyond distributions and capital at this point.

Michael J. Hennigan: We also feel like we have different opportunities for us and Youre right. Thanks for that reference.

Michael J. Hennigan: You know, sometimes the cash flows are hard to debate, and we sometimes call them purple. But in general, I'm hoping the takeaway is that we're going to generate enough cash to put ourselves in a good financial flexibility position. You know, that's, you know, that's where it all starts.

Michael J. Hennigan: Sometimes the cash flows are hard to debate.

Michael J. Hennigan: Sometimes call them purple.

Michael J. Hennigan: But in general I am hoping to takeaway is we're going to generate enough cash to put ourselves in a good financial flexibility positions.

Michael J. Hennigan: That's where it all starts and then we debate the color of the cash flows and how do we think we can get the most shareholder value we've been leaning more towards distribution, because it's blue and as you know the way we run the business is to generate cash flows that we think will be their long term. So that's why they're mostly blue.

Michael J. Hennigan: And then we debate, you know, the color of the cash flows and how we think we can get the most shareholder value. You know, we've been leaning more towards distribution because it's blue. And as you know, the way we run the business is to generate cash flows that we think will be there long term. So that's why they're mostly blue.

Michael J. Hennigan: I know people have been asking a little bit about, you know, our buyback strategy, and hopefully, when I answer John's question, I give you a little bit more color around that. But so we'll have, you know, that flexibility. We have the financial flexibility for where we are. We're going to continue to look at our organic growth. We'll evaluate some organic growth as it comes along. And at the end of the day, all we're trying to do, you know, day in and day out, is create more value for our unit holders.

Michael J. Hennigan: I know people have been asking a little bit about our buyback strategy and hopefully when I answered John's question I gave you a little bit more color around that but so will have that flexibility. We have the financial flexibility for where we are we're going to continue to look at our organic growth will evaluate some organic as it comes along and at the end of the.

Michael J. Hennigan: They also were trying to do.

Michael J. Hennigan: Day in and day out is to create more value for our unit holders.

Jeremy Bryan Tonet: Got it. It makes sense. Thank you for that.

Speaker Change: Got it makes sense. Thank you for that.

Michael J. Hennigan: You're welcome, Jeremy.

Speaker Change: Youre welcome Jeremy.

Theresa Chen: Our next question comes from Theresa Chen with Barclays. Your line is open.

Michael J. Hennigan: Our next question comes from Theresa Chen with Barclays. Your line is open.

Theresa Chen: Good morning, Thank you for taking my question.

Theresa Chen: Good morning. Thank you for taking my question.

Theresa Chen: Going back to Dave's comment.

Theresa Chen: Going back to Dave's comments about the expansion and the Permian-NGL platform, in relation to the Texas City FAC and the storage project, can you just help us think about how a long-haul pipeline connectivity solution could come about, whether it would be independent or an extension of the, I believe, 42% UGA that Bangalore has in EPIC-NGL? And then also, differing from that, is there space in Texas City on MPC's Galveston Bay docks for LPG export opportunities if the Texas City FRAC and storage projects do come to fruition, and would it be the parent that would be marketing those volumes and taking the commodity risk? Just help think about how that value chain could play out.

Speaker Change: Thank you.

Theresa Chen: Permian NGL pipe quantity and in relation to the toxicity and that storage project can you just help us think about how a long haul pipeline.

Speaker Change: Hi, Michelle.

Theresa Chen: Michelle could come about.

Theresa Chen: It would be independent or an extension.

Theresa Chen: I've only 42%.

Theresa Chen: And Bangalore pass and epic NGL and then also just extending from that is there space in Texas today on Mpc's Galveston Bay Docs or a L.

Theresa Chen: LPG export opportunity.

Theresa Chen: So the frac and storage projects do come to fruition and would it be the parent that within marketing.

Theresa Chen: Volumes and taking the commodity spreads.

Theresa Chen: Think about how that value chain could play out.

Dave Heppner: Yeah, Theresa, thanks for the question. I'll let Dave give a little more detail there, but you kind of laid out a lot of options that we have, and, you know, we're going to continue to evaluate all the different options, but let me let Dave give a little more color. Yeah, Theresa, I think Mike said it extremely well.

Speaker Change: Yeah Theresa Thanks for the question I'll, let Dave give a little more detail there, but you kind of laid out a lot of optionality that we have and we're going to continue to evaluate all the different options, but let me, let David give a little more color.

Dave Heppner: Yeah. So I think I think Mike said, it extremely well Theres a couple a couple of key things to think about as we look at these large projects.

Dave Heppner: There are a couple of key things to think about as we look at these large projects, multi-year value chain build-out projects. One is, how do we leverage the existing assets we have, either in the ground or, you know, in the vicinity? Number two, how do we leverage and incorporate existing partnerships and JVs we have, such as Bangle? And then... And the third is how do we leverage our parent company, MPC, back to Galveston Bay.

Dave Heppner: Jack multiyear value chain Buildout project, one is how do we how do we leverage the existing assets, we have either in the ground or.

Dave Heppner: No.

Dave Heppner: In the vicinity number one number two how do we how do we leverage and incorporate existing partnerships and JV, we have such as bangle.

Dave Heppner: And then <unk>.

Dave Heppner: Third is how do we.

Dave Heppner: Leverage our parent company MPC back to the Galveston Bay, and so as we look at all of those.

Dave Heppner: And so as we look at all those and think through the scenarios and the options of both near-term build-out and commercialization but long-term value creation, right now, we're going through multiple scenarios. And as you can imagine, we want to make sure we look through all those, both from a financial return perspective, near-term, commercial viability and flexibility, and then also a long-term growth platform. So I think, as you stated, there are a lot of pieces to that puzzle, and we're in the middle of it, doing all the work of doing that right now. But we feel we feel good about our options and our flexibility. And now we're just trying to, you know, determine how we bring it to realization. Hopefully, it helps a little bit.

Dave Heppner: And we think through the scenarios and the options of both near term.

Dave Heppner: Buildout and commercialization, but long term value creation.

Dave Heppner: Right now we're going through multiple scenarios and as you can as you can imagine.

Dave Heppner: Want to make sure we look through all of those are both from a financial return perspective.

Dave Heppner: Near term.

Dave Heppner: Commercial holiday and flexibility and then also.

Dave Heppner: Our long term growth platform. So I think as you stated there is a lot of pieces to that puzzle and we're in the we're in the.

Dave Heppner: All the work of doing that right now, but we feel we feel good about our options and our flexibility.

Dave Heppner: And now we're just trying to.

Dave Heppner: Determine how we bring it to.

Dave Heppner: To realization.

Dave Heppner: Hopefully that helps a little bit.

Speaker Change: Thank you and maybe turning to the rescue side can you just update.

Theresa Chen: And maybe turning to the residue side, can you give us an update on the in-service timeline for Matterhorn? And given your partnership with Everidge and Whitewater and combining Whistler ADCC with Rio Bravo, would you be evaluating participation in another bullet residue pipe that is evidently necessary out of the basin in a couple of years? Yeah, so I'll touch on that.

Theresa Chen: Service timeline for Matterhorn.

Theresa Chen: And given your partnership.

Theresa Chen: With that rich and whitewater, combining with our ADC.

Theresa Chen: Bravo and would you be evaluating.

Theresa Chen: Participation in another bullet resident pipe that is evidently necessary out of the basin.

Theresa Chen: Yes.

Speaker Change: Yes, so I'll touch on that a hard and then I'll turn it over to Shawn He can give a little more update.

Dave Heppner: Yeah, so I'll touch on Matterhorn, and then I'll turn it over to Shawn so he can give a little more update.

Shawn: First of all I think.

Speaker Change: Meta hornack.

Dave Heppner: First of all, I think, you know, Matterhorn. So as you think about clearing natural gas out of the Permian, you can think of Whistler, Whistler Expansion, Matterhorn, you can think of ADCC, not that we're a party today, but you have Blackfin out there, and then you have Rio Bravo. So as you go forward, this is, you know, our view is that you've got You've got the pull coming from these LNG facilities down on the Gulf Coast, which the majority of them, you know, backstopped by 20-year take or pays, which is a nice long-term pull.

Shawn: Is planned to come on <unk> of this year. So I'll start with that so as you think about clearing natural gas out of the out of the Permian you can think of Whistler whistle expansion Matterhorn, you can think of a DCC.

Dave Heppner: Not that we're participate day, but yes black fan out there.

Dave Heppner: And then you have Rio Bravo. So as you as you go forward. This is our view is that you've got two sides of the equation you've got the pull coming from these LNG facilities down to the Gulf Coast, which are majority of them.

Dave Heppner: Backstopped by 20 year take or pays which is a nice long term pole and then you've got the growth platform.

Dave Heppner: And then you've got the growth platform that Mike touched on earlier out of the Permian, and you really look at those by the 2030 timeframe, their substantial growth profile. So to answer your question, whether it be continued expansions that we've done very similar to Whistler and Matterhorn, or is it new pipes, I think you can maybe read the tea leaves that there is incremental capacity needed to clear the barrels out of the Permian to the Gulf Coast.

Dave Heppner: That Mike touched on earlier out of the Permian and you really look at those by the 2030 timeframe. There is substantial growth profile. So to answer your question whether it be a continued expansions that we've done very similar too.

Dave Heppner: Whistler and Matterhorn or is it new pipes I think you can maybe read the tea leaves that there is incremental capacity needed to clear the barrels out of the Permian to the Gulf Coast.

Dave Heppner: Hey, Theresa, it's Mike. I'll just add, you know, the main drive between what Dave has mentioned as far as us, you know, doing these partnerships, etc., is to get to the very point that you just made. You know, there's going to be more takeaway out of the basin. We want to participate in that, whether it's another residue pipe or not, and we're trying to position ourselves to be part of that.

Speaker Change: Hey, curious since Mike I'll just add.

Dave Heppner: The main drive between what David mentioned as far as us.

Dave Heppner: Doing these partnerships et cetera is to get to the very point that you just made.

Dave Heppner: There's going to be more takeaway out of the out of the basin, we want to participate in that whether it's another residue pipe or not and we're trying to position ourselves to be part of that.

Michael J. Hennigan: Thank you. You're welcome. Our next question will come from Keith Stanley with Wolf Research. Your line is open.

Speaker Change: Thank you.

Michael J. Hennigan: Okay.

Keith T. Stanley: Thank you Youre welcome next question.

Michael J. Hennigan: Our next question will come from Keith Stanley with Wolfe Research. Your line is open.

Keith T. Stanley: Hi, good morning. First, I just wanted to ask you about the conversion of some of the preferreds. It looks like it was a lot in Q1. And I just want to make sure, did that factor at all into the decision to buy back stock in Q1 since you had new stock coming into the market?

Keith T. Stanley: Hi, good morning.

Keith T. Stanley: First just wanted to ask can you talk to the conversion of some of the preferreds. It looks like there was a lot in Q1 and I just want to make sure did that factor at all into the decision to buy back stock in Q1, since you had new stock coming into the market.

Carl Kristopher Hagedorn: No, thank you, Keith. You're correct. You did see some significant conversions happen during the quarter. I think with the investor base in those units, they have that ability to do that at their leisure quarterly. It, you know, it did not have any impact on our unit buyback program that that kind of capital allocation strategy is unchanged, as Mike had hit on.

Speaker Change: Thank you Keith but you are correct you did see some significant conversions happened during the quarter I think with the Investor base in those units they have that ability to do that.

Carl Kristopher Hagedorn: At their leisure quarterly.

Carl Kristopher Hagedorn: Okay.

Carl Kristopher Hagedorn: It did not have any impact on our unit buyback program.

Carl Kristopher Hagedorn: And of that capital allocation strategy is unchanged as Mike hit on.

Keith T. Stanley: Okay, great. And sorry if I missed this, but for the JV buy-ins, bolt-ons that you've done, can you say, Summit, it sounds like you were pretty excited about them? Can you say if you initiated these transactions with partners or if partners were looking to sell and came to you? I'm more curious just looking forward. You know, are you optimistic there could be other opportunities? The company has a lot of JVs that, potentially, you could look at buying out other partners' interests. Just any thoughts there? Yeah, Keith, I think you hit the nail on the head. We're excited about all of it.

Speaker Change: Okay great.

Keith T. Stanley: And sorry, if I missed this but for the JV buy ins.

Summit: Bolt ons that you've done.

Keith T. Stanley: Can you say at summit it sounded like you were pretty excited about it can you say if you initiated these transactions with partners or partners are looking are looking to sell and came to you I'm more curious just looking forward.

Keith T. Stanley: Are you optimistic there could be other opportunities. The company has a lot of JV is.

Keith T. Stanley: And that potentially you could look at buying other partners' interests, just any any thoughts there.

Summit: Yes, Keith I think you hit it on the head we're excited about all of them.

Carl Kristopher Hagedorn: and we were able to kind of voice our opinions into the summit, show some real numbers with the first quarter activity. When it comes to the evaluation of additional opportunities, we're evaluating them all. The good thing with these types of acquisitions is that we're very familiar with the assets, and we're very familiar with the partners. You know, with all of these opportunities, though, we view them through the lens of strict capital discipline. So from our perspective, it has to be at the right value for us and our unit holders.

Keith T. Stanley: And we were able to kind of voice into the summer show some real numbers with with first quarter activity.

Carl Kristopher Hagedorn: When it comes to the evaluation of additional opportunities.

Carl Kristopher Hagedorn: We're evaluating them all but the good thing with these types of acquisitions, we're very familiar with the assets and we're very familiar with the partners.

Carl Kristopher Hagedorn: With all of these opportunities, though we view them with the lens of strict capital capital discipline. So from our perspective it has to be at the right value for us and our unit holders.

Carl Kristopher Hagedorn: Thank you. Our last question will come from Neal Dingmann with Truist Securities. Your line is open.

Neal David Dingmann: Thank you.

Neal David Dingmann: Youre welcome Keith.

Carl Kristopher Hagedorn: Thank you our last question will come from Neal Dingmann with true Securities. Your line is open.

Neal David Dingmann: Morning guys, thanks for getting me in. My question is a little bit about what you've been talking about just the return of the capital framework post-SMLP. I'm just wondering, were you all suggesting that sort of post this, you would consider substantially boosting the DPU materially again or you know even more buybacks or you know would you consider even a sizable acquisition? I'm just wondering how you sort of think about things post this.

Speaker Change: Hey, good morning, guys. Thanks for getting me in.

Neal David Dingmann: Question, a little bit on what you've been talking about on just the return of capital framework post. This MLP I'm, just wondering where youll suggestion that sort of post. This you would continue you would consider substantially boosting the DPA materially again or even more buybacks or would you consider even a sizable.

Neal David Dingmann: So I'm just wondering how you're sort of thinking about things process.

Michael J. Hennigan: Yeah, it's all of the above. So, hopefully, we've been clear that we're going to continue to generate more cash. We're going to grow the cash flows, and as a result of that, we're going to continue to increase the distribution as our primary return of capital. We're going to look at buybacks as part of our capital allocation framework, and we're going to continue to invest organically. And then we're going to look at the inorganic stuff that's available. But I'm much more of a believer in organic opportunities because they get us a higher return, more efficient capital, et cetera. And that's what you've seen over the last couple of years, in general.

Speaker Change: Yes, it's all of the above.

Michael J. Hennigan: So hopefully we've been clear that we're going to continue to generate more cash we're going to grow the cash flows as a result of that we're going to continue to increase the distribution as our primary return of capital we're going to look at buybacks as part of our capital allocation framework.

Michael J. Hennigan: We're going to continue to invest organically.

Michael J. Hennigan: And then we're going to look at the inorganic stuff that's available.

Michael J. Hennigan: I'm much more of a believer in the <unk>.

Michael J. Hennigan: Organic opportunities because they get us a higher return.

Michael J. Hennigan: More efficient capital et cetera, and that's what you've seen over the last couple of years in general.

Michael J. Hennigan: But like I said at the start of this, it all starts with growing cash flows. And whether it's doing it organically or through some of these bolt-ons that we've talked about, at the end of the day, grow the cash flows, and invest wisely. That's why I always say it's a return on and a return of business. And then I'm a big believer in returning capital to our unit holders. So, hopefully, we're going to continue to show you that we're going to grow that distribution continually over time, meaningfully, as you've seen over the last couple of years. And that's certainly our goal. No, that's pretty clear.

Michael J. Hennigan: But like I said at the start of this it all starts with growing cash flows and whether it's doing it organically or through some of these bolt ons that we've talked about at the end of the day grow the cash flows.

Michael J. Hennigan: Invest wisely, that's why I always say, it's a return on and a return of business and then I am a big believer in returning capital to our unitholders. So hopefully we're going to continue to show you that we're going to grow that distribution continually over time.

Michael J. Hennigan: Meaningfully.

Michael J. Hennigan: As you've seen over the last couple a couple of years and that's that's certainly our goal.

Neal David Dingmann: No, that's very clear. Just a quick follow-up on the Marcellus gathering. It's really nice to see another significant year-over-year increase there in your last quarter. I'm just wondering, to make sure I understand, what's the capacity situation there? It appears that it already continues to be positively trending. I'm just wondering if there is still... potentially more upside, as you've been seeing.

Speaker Change: No that's very clear.

Neal David Dingmann: A quick follow up on the Marcellus gathering and it's really nice to see another significant year over year increase there on your last quarter I'm. Just wondering what makes you understand what's sort of the capacity situation there as it appears.

Neal David Dingmann: That area continues to be positively trending I am just wondering is there still.

Neal David Dingmann: So potentially more upside as you can see it.

Gregory Scott Floerke: Yes, we do have additional upside, but we run that system at very high utilization, as you've seen. We're over, and we continue to be over 90% utilized for processing in the Marcellus, and that really matches up with our Liberty Gathering System capacity. We don't, we only gather for some customers in Marcellus. We process orders for a lot of customers. We don't necessarily gather for all of them, but when you see gathering numbers, it's typically our Liberty System in Washington County, and we do try to add capacity just in time to match the processing growth.

Gregory Scott Floerke: Yes.

Gregory Scott Floerke: We do have additional upside, but we run that system at very high utilization as you've seen we are over and we continue to be over 90% utilized on processing in the Marcellus in that really matches up with the with our Liberty gathering system capacity.

Gregory Scott Floerke: We don't we only gathered for some customers in the Marcellus, we Prost process for a lot of customers, we don't necessarily gather for all of them, but so when you see gathering numbers. It's typically our liberty system in Washington County, and we do try to add capacity just in time to.

Gregory Scott Floerke: To match the processing growth.

Michael J. Hennigan: The other thing that I would add, Neal, is that we've anticipated the market for a long time with NBP coming online up in the northeast. We think that'll be a significant change to the activity up there, a 2-DCF pipeline coming on, so it has been a, you know, constrained area for some time. And then, as Greg mentioned, we're pretty excited about the renewed interest in Utica, particularly the rich area, as liquids compared to the dry price are certainly pushing people more into the liquids-rich areas, so it's one of our key growth areas, it has been, and will continue to be.

Michael J. Hennigan: The other thing.

Michael J. Hennigan: We've anticipated the market has for a long time of MVP coming online up in the northeast.

Michael J. Hennigan: We think that'll be a significant change to the activity up there two bcf pipeline coming on so what has been a.

Michael J. Hennigan: Constrained area for some time and then as Greg mentioned, we're pretty excited about the renewed interest in the Utica, particularly the rich area.

Michael J. Hennigan: Liquids compared to the dry price is certainly pushing people more into the liquids rich areas. So.

Michael J. Hennigan: It's one of our key growth areas. It has been and will continue to be but.

Michael J. Hennigan: I think you've heard throughout the call today, Greg talked a lot about what's happening on the gas side of the business up in the northeast, and Dave talked a lot about what we're doing as far as natural gas expansion and NGL expansion down in the Permian, so we're pretty confident and optimistic that, you know, our plan is working, our strategy continues to be good, and we're going to grow cash flows and return capital That's a great addition!

Speaker Change: I think you've heard throughout the call today, Greg talked a lot about what's happening on the on the gas side of the business up in the northeast Dave talked a lot about what we're doing as far as natural gas expansion in NGL expansion down in the Permian. So we're pretty confident and optimistic that our plan is working our strategy continues.

Michael J. Hennigan: To be good and we're going to grow cash flows and and return capital to unitholders.

Michael J. Hennigan: That's how we feel at this point.

Neal David Dingmann: It's a great edition. Thank you.

Speaker Change: That's Great addition, thank you.

Speaker Change: Youre welcome.

Neal David Dingmann: Yeah.

Operator: All right. With that, thank you for joining us today and thank you for your interest in MPLX. Should you have additional questions or would like clarification on any of the topics discussed today, members of our investor relations team will be available today to help you with your call. Thank you so much.

Speaker Change: Alright with that thank you for joining us today and thank you for your interest in MPLX should you have additional questions or would like clarification on any of the topics discussed today.

Operator: Members of our Investor Relations team will be available today to help you with your call. Thank you so much.

Operator: Thank you. That does conclude today's conference. Thank you once again for your participation. You may disconnect at this time.

Speaker Change: Thank you that does conclude today's conference. Thank you once again for your participation you may disconnect at this time.