Q1 2024 Enterprise Products Partners LP Earnings Call

April 30, 2024

Okay.

Operator: Thank you for standing by. And welcome to the Enterprise Products Partners first quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode.

Speaker Change: Thank you for standing by and welcome to the Enterprise products Partners first quarter 2020 before earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone for your question.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered, and you'd like to remove yourself from the queue, simply press star 11.

Brad White: Has been answered and you'd like to remove yourself from the queue simply press star. One again, we ask that you. Please limit yourselves to one question and one follow up you may get back into the queue. As time allows as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program, but would be straight senior director of Investor Relations.

Operator: Again, we ask that you please limit yourselves to one question and one follow-up. You may get back in the queue as time allows. As a reminder, today's program is being recorded. And now, I'd like to introduce your host for today's program, Libby Strait, Senior Director of Investor Relations. Please go ahead.

Speaker Change: Go ahead.

Libby Strait: Good morning. Welcome to the Enterprise Products Partners conference call to discuss first quarter 2024 earnings. Our speakers today will be the Co-Chief Executive Officers of Enterprises General Partners, Jim Teague and Randy Fowler. Other members of our senior management team are also in attendance for the call today. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, based on the beliefs of the company, as well as assumptions made by, and information currently available to, Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

Speaker Change: Good morning, welcome to the Enterprise products Partners conference call to discuss first quarter 2024 earnings our speakers today will be co Chief Executive Officer of Enterprise's General partner, Jim Teague, and Randy Fowler other members of our senior management team are also in attendance for the call today.

During this call we will make forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise's management cooler.

Management believes that the expectations reflected in such forward looking statements are reasonable it can give no assurance that such expectations will prove to be correct.

Libby Strait: Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the four written statements made during this call. With that, I'll turn it over to Jim. We have a war in Europe; we have a war in the Middle East. We've got student mobs occupying elite university campuses. A former president is being tried for crimes in courts up and down the East Coast.

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward looking statements made during this call with that I'll turn it over to Jim.

Speaker Change: <unk>.

Jim Teague: We have a war in Europe.

Jim Teague: We're in the Middle East.

Jim Teague: Okay students mobs occupying elite University campuses.

Jim Teague: And our former president being tried for crimes in courts up and down the east coast.

Jim Teague: Chaos reigns. In many ways, what's going on today reminds me of the 1960s. We had a war in Asia called the Vietnam War. We had student anti-war demonstrators occupying campuses throughout the country. And while no president was on trial, one was chased from running for a second term.

Jim Teague: Okay awesome rooms.

Speaker Change: In many ways, what's going on today reminds me of the 19 sixties, who had a war in Asia called the Vietnam War.

Student antiwar demonstrators occupying campuses throughout the country.

Speaker Change: And while no precedent was one trial one was chased from running for a second term.

Jim Teague: And on top of all that, now, like in 1968, we find that the DNC will hold its convention in Chicago. For those of you too young to know what that means, I suggest you Google the 1968 Chicago Convention. But with all this chaos, there is a constant today that should bring calm to investors concerned and this volatile world: Enterprise continues to deliver. On tap to mark. Quarter after quarter, and year after year and first quarter. There's no exception.

Speaker Change: And on top of all that now like in 1960, we found that the DMC will hold its convention in Chicago.

Speaker Change: For those of you too young to know what that means I suggest to Google 1968, Chicago Convention.

Speaker Change: But with all this chaos there is a constant today.

Should bring com to investors' concerns.

Speaker Change: In this volatile world.

Speaker Change: Enterprise continues to deliver.

Speaker Change: Month after month.

Speaker Change: Quarter after quarter.

Speaker Change: And year after year and first quarter.

Speaker Change: It was no exception.

Jim Teague: Our total gross operating margin for the quarter was $2.5 billion, a 7% increase compared to the first quarter of last year. Earnings growth for the first quarter was primarily driven by contributions from new assets placed into service during the second half of last year, along with a 17% increase in net marine terminal volumes. This is due to continued strength in global demand for U.S. energy and higher sales volumes and margins in our octane enhancement business.

Speaker Change: Our total gross operating margin for the quarter.

Speaker Change: First quarter was $2 5 billion.

Speaker Change: A 7% increase compared to the first quarter of last year.

Speaker Change: Our earnings growth for the first quarter was primarily driven by contributions from new assets placed into service during the second half of last year.

Speaker Change: Along with a 17% increase in net marine terminal volumes.

Speaker Change: Attributable or continue.

Speaker Change: Two continued strength in global demand for U S energy and higher sales volumes and margins in our octane enhancement business.

Jim Teague: Our system transported 12.3 million barrels a day of crude oil equivalent, that is, NGLs, crude oil, petrochemicals, refined products, and natural gas. We generated $1.9 billion in DCF during the quarter, providing 1.7 times coverage, which supported a 5% increase in cash distributions to partners compared to the same quarter last year. We retained $786 million in DCF.

Speaker Change: Our system transported 12 3 million barrels a day of crude oil equivalent that's being Ngls crude oils crude oil petrochemicals and refined products and natural gas.

Speaker Change: We generated $1 9 billion in DCF during the quarter, providing a one seven times coverage, which supported a 5% increase in cash distributions to partners compared to the same quarter last year, we retain $786 million of DCF, R&D youre going to get into more.

Randy Fowler: Randy, you're going to get into more detail on all this, right? During the quarter, we expanded our Permian natural gas processing infrastructure with the start of our Leonidas plant in the Midland Basin and our Mentone III plant in the Delaware Basin. Each of these plants has the capacity to process more than 300 million cubic feet of natural gas a day and extract over 40,000 barrels a day of NGL. We currently have three additional 300 million a day plants under construction, two in the Delaware and one in the Midland Basin, along with our Bahia NGO pipeline. 14 is really a 13th fractionator, but we're not going to call it 13.

Speaker Change: Color on all of this right.

Speaker Change: During the quarter, we expanded our Permian natural gas processing infrastructure with the start of our <unk> plant in the Midland Basin.

Speaker Change: And our menton three plants in the Delaware Basin.

Speaker Change: Each of these plants is telco.

Speaker Change: Capacity process more than 300 million cubic feet a day of natural gas.

Speaker Change: And extract over 40000 barrels a day of Ngls.

Speaker Change: We currently have three additional 300 million a day plants under construction two in the Delaware and one one in the Midland Basin, along with our NGL pipelines.

Speaker Change: And <unk> 14, which is really our 13th fractionator, but we're not going to call. It 13 recall at 14 are.

Jim Teague: We call it 14. Our plants and the systems that support them are essentially full on the first day of service. With the completion of the three processing plants under construction, we will have a total of 19 Permian processing plants capable of producing 675,000 barrels a day of NGLs, feeding our NGL systems, including one of the world's largest NGL exports. Capaz.

Speaker Change: Our plants in the systems.

Speaker Change: Port them are essentially pull on the first day of service.

Speaker Change: With the completion of the three process processing plants under construction, we will have a total of 19 Permian processing plants capable of producing 675000 barrels a day of Ngls beat.

Speaker Change: Our NGL systems, including one of the world's largest NGL exports.

Speaker Change: Capacities. We also began service on phase one of our Texas Western products.

Jim Teague: We also began service on phase one of our Texas Western Products pipeline system in March, successfully connecting Gulf Coast refined products in markets in the Permian Basin, with additional phase two destinations in the Albuquerque and Grand Junction markets, as expected, in the second and early third quarters. At the beginning of the month, we received the Deepwater Port license for the SPOT project. This is one of the most significant milestones to date in the development of SPOT.

Speaker Change: Pipeline system in March successfully connecting Gulf coast refined products and markets in the Permian basin with additional phase II destinations in the Albuquerque, and Grand Junction markets expected.

Speaker Change: And the second and early third quarters.

Speaker Change: At the beginning of the month, we received the deepwater port license or a spot project.

Speaker Change: This is one of the most significant milestone to date in the development of spot.

Jim Teague: We put out a press release on April 9, discussing the project and highlighting the accomplishment of the enterprise team that worked tirelessly for over five years to obtain the license. I think SPOT is going to be a valuable and highly strategic addition to our asset base as we continue with commercialization. Last week, the EIA reported that the U.S. exported a record 12.1 million barrels a day of liquids, that is, crude oil, refined products, and natural gas liquids. The world is hungry for our reliable and plentiful resources, that's priced by pre-market. Put that in perspective, the number was 3.6 million in 2014 and less than $2 million in 2010.

Speaker Change: We put out a press release on April 9th discussing the project and highlighting the accomplishment of the enterprise team that worked tirelessly.

Speaker Change: For over five years.

Speaker Change: For over five years to obtain the license.

Speaker Change: I think spot is going to be a valuable and highly strategic addition.

Speaker Change: Our asset base as we continue with commercialization.

Speaker Change: Last week, the EIA reported that the U S exported a record $12 1 million barrels a day of liquids.

Speaker Change: And crude oil.

Speaker Change: <unk> products and natural gas liquids.

Speaker Change: The world hungry for our reliable and political resources, that's priced fruit market.

Speaker Change: To put that in perspective, the number was $3 6 million in 2014.

Speaker Change: Yes, the 10 2 million in 2010.

Speaker Change: Demand for growing U S liquids has been and will continue to be primarily in emerging markets.

Speaker Change: Enterprise will continue to play a key role.

Jim Teague: Demand for growing U.S. liquids has been and will continue to be primarily an emerging market. Enterprise will continue to play a key role. We export around 70 million barrels a month, I believe, and have an initiative to reach 100 million barrels a month, which does not include Spire. We're a significant player in the export market. We expect our growth is going to continue to grow. Randy

Speaker Change: Export around 70 million barrels a month of liquids and have an initiative to reach 100 million barrels a month, which does not include funds.

Speaker Change: We're a significant player in the export market.

Speaker Change: We expect our growth is going to continue to growth.

Speaker Change: Randy Okay. Thank you Jane and good morning, everyone.

Randy Fowler: Starting with first quarter income statement items net income attributable to common unit holders for the first quarter of 2024 increased 5% to $1 $5 billion for 66 per common unit on a fully diluted basis.

Randy Fowler: Okay. Thank you, Jim. Good morning, everyone.

Randy Fowler: Compared to $1 4 billion or <unk> 63 per common unit for the first quarter of 2023.

Randy Fowler: Starting with first quarter income statement items, net income attributable to common unit holders for the first quarter of 2024 increased 5% to $1.5 billion, or $0.36 per common unit on a fully diluted basis, compared to $1.4 billion or $0.63 per common unit for the first quarter of 2023. Turning to cash flow, adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital, increased 6% to $2.1 billion for the We declared a distribution of 51 and a half cents per common unit for the first quarter of 2024.

Randy Fowler: Turning to cash flow adjusted cash flow from operations.

Randy Fowler: Which is cash flow from operating activities before changes in working capital increased 6% to $2 $1 billion for the first quarter of 2024 compared to $2 billion for the first quarter of last year we.

Randy Fowler: We declared a distribution of <unk> 51, five cents per common unit for the first quarter 2024.

Speaker Change: As Jim mentioned this was a five 1% increase over the distribution declared with regard to the first quarter of 2023.

Speaker Change: The distribution will be paid may 14th to common unit holders of record as of the close of business today.

Speaker Change: In the first quarter the partnership purchased approximately $1 4 million common units of the open market for $40 million total purchases for the 12 months ending March 31.

Speaker Change: $211 million or approximately $8 million enterprise common units, bringing total purchases under our buyback program to approximately $960 million.

Speaker Change: In addition to buybacks our distribution reinvestment plan and employee unit purchase plan purchased a combined $6 5 million common units on the open market for $172 million during the last 12 months, including $1 6 million common units on the open market.

Randy Fowler: As Jim mentioned, this is a 5.1% increase over the distribution declared with regard to the first quarter of 2023. The distribution will be paid May 14th to common unit holders of record as of the close of business today. In the first quarter, the partnership purchased approximately 1.4 million common units off the open market for $40 million.

Speaker Change: For $43 million.

Speaker Change: During the first quarter of 2024.

Speaker Change: For the 12 months ended March 31, 2024 enterprise paid out approximately $4 4 billion and distributions to limited partners.

Speaker Change: And with the $211 million of common unit repurchases across the same time period enterprise as payout ratio of adjusted cash flow from operations was 56% for that 12 month period.

Randy Fowler: Total purchases for the 12 months ending March 31st were $211 million, or approximately 8 million enterprise common units, bringing total purchases under our buyback program to approximately $960 million. In addition to buybacks, our distribution reinvestment plan and employee unit purchase plan purchased a combined 6.5 million common units on the open market for $172 million during the last 12 months, including 1.6 million common units on the open market for $43 million during the first quarter of 2024.

Speaker Change: Total capital investments in the first quarter were $1 1 billion, which.

Speaker Change: Which included $875 million for growth capital projects and $180 million of sustaining capex.

Speaker Change: We expect growth capital expenditures for 2024, and 2025 to be in the range of three to five to $3 $75 billion.

Speaker Change: We continue to estimate 2020 for sustaining capital expenditures to be approximately $550 million.

Speaker Change: Which includes planned turnarounds at both of our PVH plants, our IBD H facility.

Speaker Change: <unk> high purity <unk> facility.

Randy Fowler: For the 12 months ended March 31, 2024, Enterprise laid out approximately $4.4 billion in distributions to limited partners. Combined with the $211 million of common unit repurchases across the same time period, Enterprise's payout ratio of adjusted cash flow from operations was 56% for that 12-month period. Total capital investments in the first quarter were $1.1 billion, which included $875 million for growth capital projects and $180 million for sustaining CapEx.

Speaker Change: Previously mentioned these scheduled turnarounds typically occur every three years to four years at this time, we expect the PTH turnaround to be completed in May 2024, we plan to begin addressing the issues on the fourth reactor within PTH to Inge.

Speaker Change: Jim.

Speaker Change: Our total debt principal outstanding was approximately $29 $7 billion as of March 31, 2024, assuming the final maturity date for our hybrids. The weighted average life of our debt portfolio is approximately 19 years, our weighted average cost of debt is four 7%.

Speaker Change: At March 31, approximately 98% of our debt was fixed rate. Our consolidated liquidity was approximately $4 5 billion at the end of the first quarter, including availability under our credit facilities and unrestricted cash on hand.

Randy Fowler: We expect growth capital expenditures for 2024 and 2025 to be in the range of $3.25 to $3.75 billion. We continue to estimate 2024 sustaining capital expenditures to be approximately $550 million, which includes planned turnarounds at both of our PDH plants, our IBDH facility, and our high-purity isobutylene facility. As previously mentioned, these scheduled turnarounds typically occur every three to four years. At this time, we expect the PDH turnaround to be completed in May 2024.

Speaker Change: Our adjusted EBITDA for the first quarter was $2 5 billion.

Speaker Change: And $9 5 billion for the trailing 12 months as of March 31, 2024, our consolidated leverage ratio was 3.0 times on a net basis after adjusting debt for the partial equity treatment of our hybrid debt.

Speaker Change: Reducing.

Speaker Change: The debt outstanding by the partnership's unrestricted cash on hand.

Speaker Change: As a reminder, our leverage target remains.

Speaker Change: 3.0 times, plus or minus two five times.

Speaker Change: I think we can open it up for questions. Thank you operator, we are ready to open the call for questions from our participants if you could please remind them of instruction keep asking questions.

Speaker Change: Certainly as a reminder, if you do have a question at this time. Please press star one on your telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press star one again, we see lease please limit yourself to one question and one follow up our first question comes from the line of Theresa Chen from Barclays. Your question. Please.

Randy Fowler: We plan to begin addressing the issues on the fourth reactor within PDH-2 in June. Our total debt principal outstanding was approximately $29.7 billion as of March 31, 2024. Assuming the final maturity date for our hybrids, the weighted average life of our debt portfolio is approximately 19 years. Our weighted average cost of debt is 4.7%. At March 31, approximately 98% of our debt was fixed rate.

Theresa Chen: Good morning. Thank you for taking my question first congratulations on obtaining the deepwater port license for spot.

Theresa Chen: That puts a labor of love over the past five years.

Theresa Chen: Can you provide us an update on the commercialization progress since you can see the license earlier. This month and also can you help us think about how much capex with the project require and over what period that would be spent.

Randy Fowler: Our consolidated liquidity was approximately $4.5 billion at the end of the first quarter, including availability under our credit facilities and unrestricted cash on hand. Our adjusted EBITDA for the first quarter was $2.5 billion, and $9.5 billion for the trailing 12 months. As of March 31, 2024, our consolidated leverage ratio was 3.0 times on a net basis after adjusting debt for the partial equity treatment of our hybrid debt and reducing the debt outstanding by the partnership's unrestricted cash on hand.

Speaker Change: Yes, I'll talk to the Capex first of all it's not what was in the Reuters Reuters article about long shot.

Theresa Chen: We typically don't share with people what our Capex is I'll turn it over to Brent to answer the other question under the commercialization tracer, it's still ongoing.

Brent: I'd say for.

Speaker Change: For the most part it's positive.

Brent: We're spending a lot of time on the road.

Brent: We expect.

Brent: To have two contracts by the end of call. It next month.

Brent: And then we're in ongoing discussions with other counterparties to commercialize that but.

Brent: Mindset as we're not going to move forward on that project until we have the contracts to support that project.

Randy Fowler: As a reminder, our leverage target remains 3.0 times plus or minus 0.25 times. And with that, Libby, I think we can open it up to questions. Operator, we are ready to open the call for questions. If you could please remind them of the instructions to ask a question. As a reminder, if you do have a question at this time, please press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, please press star 11 again.

Theresa Chen: Thank you and then turning to your onshore activities and can you provide an update on the status of the Texas Western products projects. So far after the initial phase and began service and what are the key gating factors from here until phase two is brought online.

Theresa Chen: Should we look for.

Michael C. Hanley: Yes. This is tug Hanley speaking I will turn it over to Justin on the.

Justin: Future activities, but its current status goes we have two terminals online in West, Texas, We just loaded over 50 trucks yesterday. It seems like every single day I was saying new.

Justin: Record on volumes loaded and as far as the margins, we're getting those have met our expectations or are they are currently exceeding them.

Operator: We ask that you please limit yourself to one question and one follow-up. Our first question comes from the line of Theresa Chen from Barclays. Your question, please. Good morning.

Justin: And then you want to talk about.

Justin: Our Albuquerque.

Justin: When a loan.

Speaker Change: I'd say <unk> is just inquire just thinking about phase two being Albuquerque, and Grand Junction as Jim said in his comments, we feel good where we're on the verge of commissioning Albuquerque.

Theresa Chen: Thank you for taking my questions. First, congratulations on obtaining the Deepwater Port license for Spot. I'm sure that was a labor of love over the past five years.

Speaker Change: As we speak so in the second quarter quarter rolling into early third quarter to get that phase III seems to be pretty good timing.

Jim Teague: Can you provide us an update on the commercialization progress since you received the license earlier this month? And also, can you help us think about, you know, how much capex the project would require and over what period that would be spent? Yeah, I'll talk about CapEx. First of all, it's not what was in the Reuters article by a long shot.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of Christian Richardson from.

Tristan James Richardson: Scotia Bank your question please.

Tristan James Richardson: Hi, Good morning, guys could you talk about a little bit about just the projects you added in the quarter.

Tristan James Richardson: On the midstream side.

Tristan James Richardson: No new dedications these with existing customers or are these new customers.

Jim Teague: And we typically don't share with people what our CapEx is. I'll turn it over to Brent to answer the other question. I mean, the commercialization, Theresa, is still ongoing. And I'd say, for the most part, it's positive.

Tristan James Richardson: Primarily in the Delaware versus the Midland and then should this support.

Speaker Change: Plants that are already currently under construction or is this gathering projects that could support future new plant sanctions.

Brent B. Secrest: We're spending a lot of time on the road, and I expect... I have two contracts by the end of, call it next month. And then we're in ongoing discussions with other counterparties, too, to commercialize that. But, you know, the mindset is we're not going to move forward on that project until we have the contracts to support that project.

Tristan James Richardson: Hey, this is Natalie gaydon.

Natalie K. Gayden: The new dedications.

Natalie K. Gayden: That the gathering expansions in the Delaware.

Natalie K. Gayden: And in Midland are supported by new acreage dedications, some existing customers on new customers.

Natalie K. Gayden: Those gathering expansions, Steve the new plant that was built this morning, I was looking where over 91%.

Natalie K. Gayden: Sure.

Unknown Executive: Thank you. And then turning to your onshore activities, can you provide an update on the status of the Texas Western Products project so far, after the initial phase and began service? And what are the key gating factors from here until phase two is brought online? And what should we look for?

Natalie K. Gayden: Our plant capacity full.

Speaker Change: So a combo of everything.

Speaker Change: That's helpful. Thanks, Natalie just.

Speaker Change: Thinking about on the crude side you saw seminal move back into NGL service.

Natalie K. Gayden: Youre seeing that.

Natalie K. Gayden: Crude volumes in the quarter.

Natalie K. Gayden: What are you seeing increased utilization on the existing.

Natalie K. Gayden: Infrastructure. There can you talk about maybe the use of DRA.

Michael C. Hanley: Yeah, this is Tug Hanley speaking. I'll turn it over to Justin for future activities. But as far as the current status goes, we have two terminals online in West Texas. We just loaded over 50 trucks yesterday. It seems like every single day we're saying a new record for volumes loaded. And as far as margins are concerned, those have met our expectations, or they are currently exceeding them, and that's what you want to talk about. Well, Albuquerque.

Natalie K. Gayden: Squeeze better utilization out of your existing plants with Seminole lines with some element of Ngls.

Natalie K. Gayden: Yes, Tristan this is giovanni.

Giovanni: Yes, I mean, we do a combination and optimization really both for DRA and power.

Giovanni: With Q going out of service you saw a modest increase in variable cost, but it was it was near negligible just in the optimization.

Speaker Change: Appreciate it thank you guys very much.

Speaker Change: Thank you one moment for our next question.

Justin M. Kleiderer: I'm going to learn. Yeah, I'd say Theresa, Justin Kleiderer, just thinking about phase two being Albuquerque and Grand Junction as Jim had said in his comments, we feel good. We're on the verge of commissioning Albuquerque as we speak. So in the second quarter quarter rolling into early third quarter to get that phase two seems to be pretty good timing. Thank you. Thank you.

Speaker Change: And our next question comes from the line of Spiro <unk> from Citi. Your question. Please.

Spiro: Thanks, operator, good morning, Tim maybe if you could just go back to exports.

Spiro: Jim you talked about getting to that 100 million barrels a month without spot I guess I'm. Just curious if you could just maybe dive into that a little bit more and provide a little more color on how you think you can do that and now with spot potentially moving forward curious where that goal goes from here, especially when you consider the ability to free up some of that LPG capacity as well.

Operator: One moment for our next question, and the next question comes from the line of Tristan Richardson from Scotiabank. Your question, please. Hi, good morning, guys. Talk a little bit about just the projects you added in the quarter on the midstream side. You know, new dedications, are these with existing customers, or are these new customers just primarily in Delaware versus the Midland? And then should this support plants that are already currently under construction, or is this gathering projects that could support future new plant sanctions? This is Natalie Gayden.

Spiro: I had a dream one night that we got to 100 million barrels so I made and initiatives.

Spiro: And if you're going to get to the 100 million barrels youre going to get it because you've got a great supplier position.

Spiro: One of the things Natalie's talking about is building your supply position and we know what it takes to get to that number and what we need to do from a supply perspective, and I don't think.

Spiro: I don't think.

Spiro: Zack I don't think we have to spend a heck of a lot of money on.

Speaker Change: R J on our ship channel or any of our docs in order to handle that Bob.

Speaker Change: Not over what we've already committed to.

Speaker Change: So it's all about supply samira.

Speaker Change: Got it I appreciate that second question, maybe just going to see the prices were seeing on <unk>, obviously, a lot of volatility there recently and into the second quarter. It looks like maybe you got some benefit from those negative prices in the first quarter, but I imagine that this rate second quarter impacted even bigger maybe just remind us again.

Tristan James Richardson: The new dedications that the gathering expansions in Delaware and in Midland are supported by new acreage dedication, some existing customers, and some new customers. Those gathering expansions feed the new plants that we've built. You know, this morning, I was looking, and we're over 91% of our plant capacity full. So a combination of everything.

Spiro: Some of the exposure you've got there.

Spiro: Capacity to benefit from that.

Michael C. Hanley: This is tug Hanley.

Michael C. Hanley: So it's puts and takes so from a negative gas price perspective, we are seeing.

Natalie K. Gayden: That's helpful. Thanks, Natalie. Thinking about on the crude side, you saw Seminole move back into NGL service. Just thinking about the crude volumes in the quarter, we're just seeing increased utilization of the existing infrastructure there. Can you talk about maybe the use of DRA to squeeze better utilization out of your existing plants with Seminole or Lines with Seminole Moving in and Into Jail. Yeah, Tristan, this is Jay Bany.

Michael C. Hanley: Lower prices, obviously for our equity volumes.

Tug Hanley: However on the on the positives of the lower gas price.

Tug Hanley: We're seeing wider margins on CTO to gas, so thats higher keep whole margins for us there are over 22, a gallon and.

Tug Hanley: And that means a couple of things for us specifically.

Tug Hanley: <unk> been recoveries across the system. So we're seeing record pipeline volumes and then on the gas transport position, we have around 375 million a day that we can participate in bringing walk down to the Gulf coast, which is a premium market versus the negative price.

Speaker Change: Great I'll leave it there helpful as always thanks, Tim.

James P. Bany: Yeah, I mean, we do a combination and optimization really both for DRA and power. You know, with two going out of service, you saw a modest increase in variable cost, but it was near negligible just in the optimization. Appreciate it, Jay. Thank you guys very much.

Speaker Change: Okay.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of Keith Stanley from Wolfe Research. Your question. Please.

Keith T. Stanley: Hi, Good morning, just a follow up on spot. So you said you hope to have two contracts soon working on others.

Keith T. Stanley: What's the Soonest, you think you can get to an FID.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Spiro Dounis from Citi. Your question, please. Thanks, operator. Good morning, team. Maybe if we could just go back to X-Force.

Keith T. Stanley: Kind of a bull case in a base case on that project, just a sense of how long it could take.

Brent: Hey, Keith it's Brent.

Keith T. Stanley: I think we'd like to target before the.

Brent: Before the end of this year to go forward on that project.

Keith T. Stanley: Okay.

Speaker Change: Thank you.

Keith T. Stanley: The second second question.

Spiro Michael Dounis: Jim, once you talked about getting to that 100 million barrels a month without SPOT, I guess I'm just curious if you could maybe dive into that a little bit more and provide a little more color on how you think you can do that. And now with SPOT potentially moving forward, I'm curious where that goal goes from here, especially when you consider the ability to free up some of that LPG capacity as well. Spiro, I had a dream one night that we got to 100 million barrels, so I made it an initiative.

Keith T. Stanley: The stocks lagged a bit recently your yield plus growth.

Keith T. Stanley: Proposition is very high.

Keith T. Stanley: How are you thinking about the return on stock buybacks versus the returns you get on growth investments is that is that spread narrowing a lot in your eyes or our growth projects still a lot more accretive than what you can do with buybacks.

Keith T. Stanley: Keith over the last three or four years, I mean, the stock prices ebbed and flowed just with the overall volatility in the energy sector in the space. So I mean it.

Keith T. Stanley: It comes and goes.

Jim Teague: Okay. If you're going to get to 100 million barrels, you'll get it because you have a great supply position. So some of the things Natalie's talking about are building your supply position, and we know what it takes to get to that number and what we need to do from a supply perspective. And I don't think, I don't think, uh...

Keith T. Stanley: I think we tried to keep all of the above approach and.

Keith T. Stanley: When we see it attractive to do buybacks, we do that but it's been measured.

Keith T. Stanley: 200, $250 million, a year and I expect it to stay in that in that area, our gross capex or projects that were coming in or.

Keith T. Stanley: Attractive returns on capital.

Keith T. Stanley: Actually grow our business and serve our customers so.

Keith T. Stanley: Yes, I mean, we take a look at it but you don't make allocation of capital issue.

Jim Teague: I don't think we have to spend a heck of a lot of money on our ship channel or any of our doctors in order to handle that, Bob. Not over what we've already committed to. So it's all about supply, Spiro. Got it.

Keith T. Stanley: Allocation of capital decisions day by day, depending on where the stock process. So we've got a longer term view than that.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of <unk> Van <unk> from <unk> <unk> Company. Your question. Please.

Spiro Michael Dounis: Appreciate that. Second question, maybe just going to some of the prices we're seeing out in Oahu. Obviously, there was a lot of volatility there recently and into the second quarter. Looks like maybe you got some benefit from those negative prices in the first quarter. But you know, I imagine at this rate, the second quarter impact could be even bigger. Maybe just remind us again of some of the exposure you've got there and the open capacity to benefit from that. Yeah, this is Tuck Hanley.

Van: Hey, Thanks for taking my question.

Van: Sorry on liquids marketing early and specifically, we've seen domestic storage and production based on the weekly EIA data come in pretty high just curious on your expectations for domestic prices on the propane side and do you see this widening the spreads in the international market and then on that can you just remind us of that.

Van: Activity in exposure you guys happened to that spread.

Michael C. Hanley: Hey, guys, a tug Hanley speaking I'll just comment on the international market.

Michael C. Hanley: So, you know, from the negative gas price perspective, we are seeing lower prices, obviously, for equity volumes. However, on the positives of the lower gas price, we're seeing wider margins on C2 to gas, so that's higher key full margins for us. You know, they're over 22 cents a gallon, and that means a couple of things for us.

Michael C. Hanley: So the barrel here in the U S half the price the clear across the water. So we are seeing lower freight prices, which are leading to higher spot export opportunities for us we're seeing some of those opportunities in the <unk>.

Speaker Change: Low single digit numbers.

Michael C. Hanley: Serialized so.

Michael C. Hanley: That's been a benefit to us on that aspect.

Michael C. Hanley: Sure.

Van: I think overall Zach it's Brad.

Michael C. Hanley: Specifically, higher ethane recoveries across the system, so we're seeing record pipeline volumes. And then on the gas transport position, we have around $375 million a day that we can participate in, bringing WHAHA down to the Gulf Coast, which is the premium market versus the WHAHA negative price. Great. I'll leave it there.

Van: Propane is going to be constrained here domestically until new export capacity comes online.

Van: And so call that next year.

Van: You could probably see storage values start widening out because that's the only place you can go at this point I think it's probably good for some of our other assets of our customers around PTH.

Van: But once you get out till next year and years beyond we.

Operator: Helpful as always. Thanks, team. Thank you. One moment for our next question. And our next question comes from the line of Keith Stanley from Wolf Research. Your question, please. Hi, good morning.

Van: Thank the appetite for LPG is there across the world. We think freight is going to be there. So at some point in time, which is going to come back to the U S producer and for them to catch up to align with the export capacity the freight and the overall global demand.

Keith T. Stanley: Just a follow-up on spot. So you said you hope to have two contracts soon and are working on others. What's the soonest you think you can get to an FID, kind of a bulk case and a base case on that project, just a sense of how long? Hey, Keith, it's Brent. I think we'd like to target before the end of this year to go forward on that project. Okay, thank you.

Speaker Change: Got it that makes sense I appreciate that and then moving to Wink to Webster I saw a note out that you guys might have some downtime at the beginning of Q2 was curious one if you can comment on that and if you can move those volumes to another asset like Midland to Echo one and just the overall impact there.

Brent B. Secrest: Second question. You know, the stocks lagged a bit recently, your yield plus growth, sort of propositions very high. How are you thinking about the return on stock buybacks versus the returns you get on growth investments? Is that spread narrowing a lot in your eyes, or are growth projects still a lot more accretive than what you can do with buybacks? You know, Keith, over the last three or four years, I mean, stock prices have ebbed and flowed just with the overall volatility in the energy sector in the space. So I mean, it comes and goes.

Van: Okay.

Jay: Zach this is Jay.

Zach: Yes. So we've went out this past week to notify our shippers have downtime in June starting the first its estimated around 10 days look until until we get actual nominations come in call. It mid may it's kind of hard to figure out how that's going to impact our customer base.

Speaker Change: Okay perfect. That's all I had thanks.

Speaker Change: Thank you one moment for our next question.

Van: And our next question comes from the line of John Kim from Goldman Sachs. Your question. Please.

Randy Fowler: You know, I think we try to keep an all-the-above approach, and, you know... When we see it attractive to do buybacks, we do that. But it's been measured, you know, call it $200, $250 million a year.

John Kim: Hey, good morning, Thanks for the time I wanted to.

John Kim: Maybe just stay in the Permian I'd be curious to get an update from you guys on how activity levels are trending so far this year versus your base case and fully understand that.

Randy Fowler: And I expect it to stay in that area. Our growth CapEx, our projects that we're coming in on are, you know, attractive returns on capital that actually grow our business and serve our customers. So yeah, I mean, we take a look at it, but you don't make allocation of capital decisions day by day, depending on where the stock price is. So, you know, we've got a longer-term view than that. Thank you.

John Kim: Producers are not making decisions based on the gas price, but would just be curious if you're seeing this.

John Kim: Weak wahaha and kind of gas takeaway issues in the near term effect overall activity levels.

Tony: Yes. This is Tony.

Tony: Essentially you've seen no effect from the weak natural gas prices.

Tony: And we show the slide often show that people understand and if you look at what drives the economics of the producers in the Permian its not natural gas.

Operator: Thank you one moment for our next question. And our next question comes from the line of Zach Van Everen from TPH and Company. Your question, please. Hey all, thanks for taking my question. Starting on liquid marketing, really propane specifically, we've seen domestic storage and production based on the weekly EIA data come in pretty high. I was just curious about your expectations for domestic prices on the propane side, and do you see this widening the spread to the international markets? And then on that, can you just remind us of the productivity and exposure you guys have to that spread? Yeah, this is Tug Hanley speaking.

Tony: And.

John Kim: Sure.

John Kim: You've seen in natural gas prices is not going to cause people to.

John Kim: To shut in or even throttled back oil related natural gas at this point, we haven't seen it I guess proof is a little bit into putting.

John Kim: If you go and look at everybody has different rig counts, but if you go and look at rig counts in the Permian since the first of the year there steady as they can be.

John Kim: Actually same can be said for the Eagle Ford you see rig counts John in the Haynesville and you've seen them down somewhat in Appalachian, but not a new oil basins.

Speaker Change: Alright Thats fair.

Speaker Change: Sir maybe just different pet chems octane was pretty strong maybe just give us a quick read on how you'd expect that to kind of roll out the rest of the year.

Zachary S. Strait: I'll just comment on the international market. So the barrel here in the US has to price clear across the water. So we are seeing lower freight prices, which are leading to higher spot export opportunities for us. We're seeing some of those opportunities in the low single-digit numbers materialize. So that's, that's, that's been a benefit to us on that aspect. And, I think overall, Zach, it's Brent.

Speaker Change: Maybe on the other side, where we could expect kind of the PVH contributions too.

Speaker Change: Ton fall as well.

John Kim: Yes, John this is Kristina.

Kristina: On the octane enhancement side, we benefited.

Kristina: Probably 80% of the of the improved performance was due to volumes and higher higher volumes and higher fees.

Kristina: And then we also had a favorable hedge performance.

Speaker Change: And I guess looking.

Speaker Change: Looking forward if you look at the forward curve for normal or Bob It shows pretty steady. So we have at least for the second quarter of $1 80 spread.

Michael C. Hanley: Propane is going to be constrained here domestically until new export capacity comes online, and so call that next year. You can probably see storage values start widening out because that's the only place you can go at this point. I think it's probably good for some of our other assets or our customers around PDH. But once you get out until next year and years beyond, we think the appetite for LPG is there across the world.

Speaker Change: And just to just a reminder for the biggest contributor for octane enhancement as our MTBE, which is made up of normal or Bob and what we call uplift which is this.

Kristina: The market price.

Kristina: And really the difference between the normal or Bob spread in the end market price.

Kristina: For your second question on PVH.

Kristina: We're expecting when PD H, one and then with the return of PTH two after our outage in June that.

Michael C. Hanley: We think freight's going to be there. So at some point in time, it's going to come back to the U.S. producer and for them to catch up to align with the export capacity of the freight and overall global demand.

Kristina: Both of those assets are contributing back to their full amounts.

Speaker Change: I appreciate that thank you.

Kristina: Okay.

Speaker Change: Thank you one moment for our next question.

Kristina: Okay.

Speaker Change: And our next question.

Speaker Change: It comes from the line of Neel Mitra from Bank of America. Your question. Please.

Brent B. Secrest: That makes sense. Appreciate that. And then, moving to Webster, I saw a note out that you guys might have some downtime at the beginning of Q2. I was curious, one, if you could comment on that. And two, if you could move those volumes to another asset, like Midland Echo One, and just the overall impact there. Hey Zach, this is Jay.

Indraneel Mitra: Hi, Good morning, Thanks for taking my questions I wanted to ask about the activity within the first quarter I think it was kind of universally accepted in the Permian.

Indraneel Mitra: The first quarter would have a little bit of a lag versus the fourth quarter of 'twenty three.

Indraneel Mitra: Just wanted to carrier insight of what you saw in terms of weather.

James P. Bany: Yeah, so we went out this past week to notify our shippers of downtime in June, starting the first. It's estimated around 10 days. And look, until until we get actual nominations come in, call it mid May, it's kind of hard to figure out how that's going to impact our customer base. Okay, perfect. That's all I have, thanks.

Indraneel Mitra: Activity coming back and if you could kind of delineate where youre seeing some hotspots in production within the Permian.

Indraneel Mitra: Where youre seeing some lagging versus your initial expectations.

Indraneel Mitra: This is Brent relative to our first quarter, there was definitely an impact.

Indraneel Mitra: Because of weather and the Midland Basin processing side.

Operator: Thank you. One moment for our next question. And our next question comes from the line of John Mackay from Goldman Sachs. Your question, please. Hey, good morning. Thanks for the time. I wanted to, uh, maybe just stay in the Permian.

Indraneel Mitra: Our Delaware processing plants held up very well.

Indraneel Mitra: On the Midland side, we had some downtime, but it probably extended Graham for 10 days at some point.

Indraneel Mitra: But that's that's the reason there is probably an effect on volumes, but to <unk> point in terms of what we see as we go forward and we have a mortgage supply meeting that you guys are well aware of.

John Ross Mackay: I'd be curious to get an update from you guys on how activity levels are trending so far this year versus, uh, your base case and, you know, fully understand that the producers are not making decisions based on the gas price, but would just be curious if you're seeing this, you know, weak Waha and kind of gas takeaway issues in the near term affect overall activity levels. Thanks. This is Tony.

Indraneel Mitra: It's it's routine for everyday that Natalie pumps and report our processing volumes.

Indraneel Mitra: Thats up every single day.

Indraneel Mitra: So is it fair to say that Theres been a lot of flush production and kind of are in the April timeframe. After the first quarter.

Indraneel Mitra: Natalie I mean, we saw the increase a big jump on our side once our new plant came up.

Anthony C. Chovanec: Essentially, you've seen no effect from the weak natural gas prices. We show this slide often so that people understand it. If you look at what drives the economics of the producers in the Permian, it's not natural gas, and you know you're you're what we've seen in natural gas prices is not going to cause people to to shut in or even throttle back oil related natural gas at this point we haven't seen it I guess proof is a little bit in the pudding you know we if you go and look at everybody has different rig counts but if you go and look at rig counts in the Permian since the first of the year they're steady as they can be actually same can be said for the Eagle Producing rig counts down in the Haynesville and you see them down somewhat in Appalachia but but not in your oily base, All right, that's fair. Maybe just different pet cams. Octane was pretty strong.

Indraneel Mitra: Yes.

Indraneel Mitra: Once our new plants came up we had some producers that as you know.

Indraneel Mitra: I don't have that acreage dedications, rather they just.

Indraneel Mitra: Swing from one market share so we.

Indraneel Mitra: For example, when maintained two came up we were.

Indraneel Mitra: Immediately full so I.

Indraneel Mitra: I don't know if I'd call it flush production from being down after the winter storm rather than just continue on pace.

Indraneel Mitra: Coming back up after the cold weather event.

Speaker Change: Got it and if I could sneak one more in there.

Speaker Change: It seemed like the PGP RVP spreads were especially strong in the first quarter.

Speaker Change: I was wondering how that contributed to the first quarter results and if you see that as an ongoing trend for the rest of the year.

Speaker Change: Yes. This is Chris again.

Chris Stana: Maybe just give us a quick read on how you'd expect that to kind of roll out the rest of the year. And maybe, on the other side, where we could expect the PDH contributions to unfold as well. Thanks. Hi John, this is Chris Stana.

Chris: RGB PGP spreads worldwide for the first quarter and you probably saw in the write up we had some operational issues.

Chris: On both our <unk> and our splitter. So there were some puts and takes there.

Chris: And again I think looking forward we see.

Chris Stana: On the Octane Enhancements side, we benefited. Probably 80% of the improved performance was due to higher volumes and higher fees. And then we also had favorable hedge performance. And I guess, you know, looking forward, if you look at the forward curve for normal RBOB, it shows, you know, pretty steady. So we have, at least for the second quarter, a $1.80 spread. And just a reminder that the biggest contributor to octane enhancement is our MTBE, which is made up of normal RBOB.

Chris: The contribution from our PVH plants, running thats going to kind of help.

Chris: With our overall margin.

Speaker Change: Okay, great. Thank you.

Speaker Change: Operator, we have time for one more question.

Speaker Change: Certainly one moment for our final question.

Speaker Change: And our final question for today comes from the line of Neil Digman from <unk> Securities. Your question. Please.

Neal David Dingmann: Good morning, Thanks for the time my guys. Just my question is on future cap allocation I'm just wondering.

Neal David Dingmann: You all boosted the it looks like 2025, capex a bit based on opportunities out there Im just wondering if you'll have when you look at future years.

Operator: And what we call uplift, which is just the market price and really the difference between the normal RBOB spread and the market price. For your second question on PDH, we're expecting PDH 1 and then with the return of PDH 2 after our outage in June to contribute back to their full amount. I appreciate that. Thank you. Thank you. Please take a moment for our next question. And our next question comes from the line of Neal Mitra from Bank of America. Your question, please. Hi, good morning.

Neal David Dingmann: Consider 2025 sort of the bogey or levels for both shareholder return in projects I'm. Just wondering how we should think about the balance between the two.

Neal David Dingmann: As you start looking at 25% to 26.

Neal David Dingmann: Yes.

Speaker Change: Hey, Neil good morning.

Neal David Dingmann: Good morning.

Speaker Change: We had talked about at analyst day here a few weeks ago was was really from a combination of distributions and buybacks.

Neal David Dingmann: Sort of operating in that 55% to 60% of.

Neal David Dingmann: Adjusted cash flow from operations, we sort of been in that zone since 2021, and that's sort of what we foresee here for the next few years as well.

Neal David Dingmann: As far as organic growth Capex.

Neal David Dingmann: Again seen a lot of opportunities.

Indraneel Mitra: Thanks for taking my question. I wanted to ask about the activity within the first quarter. I think it was kind of universally accepted in the Permian that the first quarter would have a little bit of a lag versus the fourth quarter of 23. Just wanted to hear your insights on what you saw in terms of weather activity coming back and if you could kind of delineate where you're seeing some hot spots in production within the Permian and where you're seeing some lagging versus your initial expectations. This is Brent.

Neal David Dingmann: In the Permian and also what that.

Neal David Dingmann: The downstream benefits that come with that increased supply as it goes through our value chain and now with getting the.

Neal David Dingmann: The license for spot.

Neal David Dingmann: We'll be hustle and to come in and get it contracted so I think we still come back with a bogey of what we put out in 2026.

Speaker Change: And that's early is.

Speaker Change: As to $2 $5 billion of which only $800 million of that is currently approved projects. So we've got some room to.

Speaker Change: To fill that up including.

Speaker Change: Coming in and with spot.

Speaker Change: We're successful in getting that underwritten spot is really a three year construction cycle on that.

Brent B. Secrest: Relative to our first quarter, there was definitely an impact because of weather on the Midland Basin processing side. Our Delaware processing plants held up very well. On the Midland side, we had some downtime, and it probably extended Graham for 10 days at some point. But that's the reason there was probably an effect on volumes.

Speaker Change: And.

Speaker Change: So anyway, I think that would help coming in in <unk>.

Speaker Change: Address that to $2 $5 billion organic growth Capex.

Speaker Change: No that makes sense and just quick follow up I won't keep it just on the buybacks is really your thoughts on.

Speaker Change: Is that sort of it is overall just earnings and cash will keep ramping up just thoughts on what do you do anything different with the buybacks or how that sort of factors.

Brent B. Secrest: But to Natalie's point, in terms of what we see as we go forward, we have a morning supply meeting that you guys are well aware of. It's routine every day that Natalie comes in to report our processing volumes, and that's up every single day.

Speaker Change: Yes.

Speaker Change: No I think we will have more flexibility on on buybacks.

Speaker Change: And again, we look to be opportunistic with it.

Speaker Change: You've seen us do two or $300 million here over the last few years.

Natalie K. Gayden: So is it fair to say that there's been a lot of flush production and kind of around the April timeframe after the first quarter? Natalie, I mean, we saw the increase, the big jump on our side once our new plants came up. Yeah, once our new plants came up, we had some producers that, as you know, don't have acreage dedications; rather, they just swing from, we won market share. So we, for example, when Mintone 2 came up, we were immediately full.

Speaker Change: If there was a market dislocation, we've got the flexibility to do more.

Speaker Change: And then certainly here in 2024 and 2025, we're looking at growth Capex in the three and a quarter to $3 $75 billion range I think once you get back out to 2026 2027.

Speaker Change: And if we're in a more what I would say normalized capex range to $2 5 billion. Then we will have a lot more flexibility to do buy back then as well.

Natalie K. Gayden: So I don't know if I should call it flush production from being down after the winter storm rather than just continuing on pace, coming back up after the cold weather event. And if I could speak one more in there, it seemed like the PGP-RGP spreads were especially strong in the first quarter. I was wondering how that contributed to the first quarter results and if you see that as an ongoing trend for the rest of the year. This is Chris again.

Speaker Change: Perfect. Thanks for the time Randy.

Randy Fowler: Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to be straight for any further remarks.

Speaker Change: Thank you everyone for joining us today that concludes our remarks have a good day.

Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Chris Stana: The RGP PGP spreads were wide for the first quarter. And you probably saw in the write-up, we had some operational issues with both our PDH and our splitters. So there were some puts and takes there. And again, I think, you know, looking forward, we see the contribution from our PDH plants running that's going to help with our overall margin. Okay, great.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: [music].

Operator: Thank you. Operator, we have time for one more question. Certainly one moment, then, for our final question.

Randy Fowler: Okay.

Randy Fowler: Yes.

Neal David Dingmann: And our final question for today comes from the line of Neal Dingmann from Truist Securities. Your question, please. Good morning, thanks for the time.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: [music].

Neal David Dingmann: My question is on future cap allocation. I'm just wondering if you all boosted the, looks like 2025 CapEx bid based on opportunities out there. I'm just wondering, do you all have, you know, when you look at future years, let's just consider 2025 sort of a bogeyman or level for both shareholder return and projects? Just wondering how we should think about the balance between the two, you know, as you start looking at 2025 and 2026. Yeah. Hey, Neal.

Randy Fowler: Yeah.

Randy Fowler: [music].

Randy Fowler: Good morning. What we talked about on analyst day here a few weeks ago was really a combination of distributions and buybacks, sort of operating in that 55 to 60% of adjusted cash flow from operations. We've sort of been in that zone since 2021.

Randy Fowler: Thanks.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: [music].

Randy Fowler: And that's sort of what we foresee here for the next few years as well. You know, as far as organic growth CapEx, again, seeing a lot of opportunities in the Permian and also what the downstream benefits that come with that increased supply go through our value chain. And now with getting the license for Spot, you know, we'll be hustling to come in and get it contracted. So I think we still come back with a bogeyman of, you know, what we put out in 2026.

Randy Fowler: And that's early, is two, two and a half billion dollars, of which only 800 million of that is currently approved for projects. So we've got some room to, you know, fill that up, including, you know, coming in and with Spot, you know, we're successful in getting that underwritten. Spot is really a three-year construction cycle on that. And so anyway, I think that would help, you know, come in and address that two, two and a half billion dollars of organic growth. No, that doesn't make sense.

Randy Fowler: Yes.

Randy Fowler: [music].

Randy Fowler: Yes.

Randy Fowler: [music].

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Hum.

Randy Fowler: [music].

Neal David Dingmann: Right. And just a quick follow-up, I won't keep it just on the buybacks, just Randy, your thoughts on is that, you know, sort of this overall, just earnings and cash will keep ramping up, just thoughts on would you do anything different with the buybacks or how that sort of affects you? Yeah, you know, I think we'll have more flexibility on buybacks, and again, we look to be opportunistic with it. So I mean, you know, you've seen us do $200 million or $300 million here over the last few years.

Randy Fowler: I mean, if there was a market dislocation, we've got the flexibility to do more. And then certainly, you know, here in 2024 and 2025, we're looking at growth capex in the three and a quarter to $3.75 billion range. I think once you get back out to 2026, 2027, and if we're in more of what I would say the normalized capex range of $2.5 billion, then we'll have a lot more flexibility to do by then as well. Thanks for your time, Randy.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Operator: Thank you. This does conclude the question and answer session for today's program. I'd like to hand the program back to Libby Strait for any further remarks. Thank you, everyone, for joining us today. That concludes our remarks. Have a good day.

Randy Fowler: Sure.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: [music].

Randy Fowler: Okay.

Libby Strait: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect.

Randy Fowler: [music].

Operator: Good day. Transcription by CastingWords, [inaudible] , , , , , , , , ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Thank you for standing by and welcome to the Enterprise Products Partners first quarter 2020-24 earnings conference call. At this time, all participants are in a listen-only mode.

Randy Fowler: Alright.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again.

Randy Fowler: Okay.

Randy Fowler: [music].

We ask that you please limit yourselves to one question and one follow-up. You may get back in the queue as time allows. As a reminder, today's program is being recorded. And now, I'd like to introduce your host for today's program, Libby Strait, Senior Director of Investor Relations. Please go ahead.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: [music].

Good morning. Welcome to the Enterprise Products Partners conference call to discuss first quarter 2024 earnings. Our speakers today will be the Co-Chief Executive Officers of Enterprises General Partners, Jim Teague and Randy Fowler. Other members of our senior management team are also in attendance for the call today. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, based on the beliefs of the company, as well as assumptions made by, and information currently available to, Enterprise's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

Randy Fowler: Sure.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Right.

Randy Fowler: Okay.

Randy Fowler: [music].

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the four written statements made during this call. With that, I'll turn it over to Jim. Thank you, Libby. We have a war in Europe; they have a war in the Middle East. We've got student mobs occupying elite university campuses, and a former president being tried for crimes in courts up and down the East Coast.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Yes.

Randy Fowler: Okay.

Chaos reigns. In many ways, what's going on today reminds me of the 1960s. We had a war in Asia called the Vietnam War. We had student anti-war demonstrators occupying campuses throughout the country. And while no president was on trial, one was chased from running for a second term.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Thanks.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Great.

Randy Fowler: Okay.

Randy Fowler: Thanks.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Thanks.

Randy Fowler: Okay.

Randy Fowler: Thank you.

Randy Fowler: Okay.

Randy Fowler: Thank you.

Randy Fowler: Yes.

And on top of all that, now, like in 1968, we find that the DNC will hold its convention in Chicago. For those of you too young to know what that means, I suggest you Google the 1968 Chicago Convention. But with all this chaos, there is a constant today that should bring calm to investors' concerns in this volatile world: Enterprise continues to deliver. On tap to mark. Quarter after quarter, and year after year and first quarter. There's no exception.

Randy Fowler: Thanks.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Sure.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Yes.

Our total gross operating margin for the quarter was $2.5 billion, a 7% increase compared to the first quarter of last year. Earnings growth for the first quarter was primarily driven by contributions from new assets placed into service during the second half of last year, along with a 17% increase in net marine terminal volume. Contributable to Continued Strength in Global Demand for U.S. Energy and Higher Sales Volumes and Margins in our Octane Enhancement Business.

Randy Fowler: Okay.

Randy Fowler: Thank you.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: No.

Randy Fowler: Okay.

Randy Fowler: Thank you.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: Sure.

Our system transported 12.3 million barrels a day of crude oil equivalent, that is, NGLs, crude oil, petrochemicals, refined products, and natural gas. We generated $1.9 billion in DCF during the quarter, providing 1.7 times coverage which supported a 5% increase in cash distributions to partners compared to the same quarter last year. We retained $786 million in DCF.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Yes.

Randy Fowler: Okay.

Randy Fowler: Thanks.

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy, you're going to get into more color on all this, right? During the quarter, we expanded our Permian natural gas processing infrastructure with the start of our Leonidas plant in the Midland Basin and our Mentone III plant in the Delaware Basin. Each of these plants has the capacity to process more than 300 million cubic feet of natural gas a day and extract over 40,000 barrels a day of NGL. We currently have three additional 300 million a day plants under construction, two in the Delaware and one in the Midland Basin, along with our Bahia NGO pipeline. FRAC 14, which is really a 13th fractionator, but we're not going to call it 13, we call it 14.

Randy Fowler: [music].

Randy Fowler: Okay.

Randy Fowler: [music].

Randy Fowler: Sure.

Randy Fowler: Okay.

Randy Fowler: Thanks.

Randy Fowler: Okay.

Speaker Change: Thank you for standing by and welcome to the Enterprise products Partners first quarter 2020 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During this session you will need to press star one on your telephone for your.

Speaker Change: <unk> has been answered and you'd like to remove yourself from the queue simply press star. One again, we ask that you. Please limit yourselves to one question and one follow up you may get back in the queue. As time allows as a reminder, today's program is being recorded and now I'd like to introduce your host for today's program that would be straight.

Our plants and the systems that support them are essentially full on the first day of service. With the completion of the three processing plants under construction, we will have a total of 19 Permian processing plants capable of producing 675,000 barrels a day of NGLs, feeding our NGL systems, including one of the world's largest NGL exports, Capaz.

Straight: Senior director of Investor Relations. Please go ahead.

Straight: Good morning, welcome to the Enterprise products Partners conference call to discuss first quarter 2024 earnings our speakers today will be co Chief Executive Officer of Enterprise's General partner, Jim Teague, and Randy Fowler other members of our senior management team are also in attendance for the call today.

We also began service on phase one of our Texas Western Products pipeline system in March, successfully connecting Gulf Coast refined products in markets in the Permian Basin, with additional phase two destinations in the Albuquerque and Grand Junction markets, as expected, and the second and early third quarters. At the beginning of the month, we received the Deepwater Port license for the SPOT project. This is one of the most significant milestones to date in the development of SPOT.

Straight: During this call we will make forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise's management cooler.

Straight: Although management believes that the expectations reflected in such forward looking statements are reasonable it can give no assurance that such expectations will prove to be correct.

We put out a press release on April 9th discussing the project and highlighting the accomplishment of the Enterprise team that worked tirelessly for over five years to obtain the license. I think SPOT is going to be a valuable and highly strategic addition to our asset base as we continue with commercialization. Last week, the EIA reported that the U.S. exported a record 12.1 million barrels a day of liquids, that is, crude oil, refined products, and natural gas. The world is hungry for our reliable and plentiful resources, that's priced by pre-market. To put that in perspective, the number was 3.6 million in 2014, and less than $2 million in 2010.

Straight: Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward looking statements made during this call with that I'll turn it over to Jim. Thank you Levi.

Jim Teague: We have a war in Europe.

Jim Teague: But we're in the middle East.

Jim Teague: Student mobs occupying elite University campuses.

Jim Teague: At a former president being tried for crimes in courts up and down the east coast.

Jim Teague: Okay awesome rooms.

Jim Teague: In many ways, what's going on today reminds me of the 19 sixties.

Jim Teague: A war in Asia called the Vietnam War.

Jim Teague: Student antiwar demonstrators occupying campuses throughout the country.

Jim Teague: And while no precedent was on trial, one was chased from running for a second term.

Jim Teague: And on top of all that now like in 1960, we find that the DMC will hold its convention in Chicago.

Demand for growing U.S. liquids has been and will continue to be primarily an emerging market. Enterprise will continue to play a key role. We export around 70 million barrels of liquid a month and have an initiative to reach 100 million barrels a month, which does not include Spire. We're a significant player in the export market. We expect our growth is going to continue to grow. Randy

Jim Teague: For those of you too young to know what that means I suggest you Google 1968, Chicago Convention.

Jim Teague: But with all this chaos there is a constant today.

Jim Teague: Should bring com to investors' concerns in this volatile world.

Jim Teague: Enterprise continues to deliver.

Jim Teague: Month after month.

Jim Teague: Quarter after quarter.

Jim Teague: And year after year and first quarter.

Jim Teague: It was no exception.

Jim Teague: Our total gross operating margin for the quarter.

Jim Teague: First quarter was $2 5 billion.

Okay. Thank you, Jim. Good morning, everyone.

Jim Teague: A 7% increase compared to the first quarter of last year.

Starting with first quarter income statement items, net income attributable to common unit holders for the first quarter of 2024 increased 5% to $1.5 billion, or $0.36 per common unit on a fully diluted basis, compared to $1.4 billion or $0.63 per common unit for the first quarter of 2023. Turning to cash flow, adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital, increased 6% to $2.1 billion for the We declared a distribution of 51 and a half cents per common unit for the first quarter of 2024.

Jim Teague: Our earnings growth for the first quarter was primarily driven by contributions from new assets placed into service during the second half of last year.

Jim Teague: Along with a 17% increase in net marine terminal volumes.

Jim Teague: Attributable to.

Jim Teague: Two continued strength in global demand for U S energy and higher sales volumes and margins in our octane enhancement business.

Jim Teague: Our system transported 12 3 million barrels a day of crude oil equivalent that being Ngls crude oils crude oil petrochemical <unk> refined products and natural gas.

Jim Teague: We generated $1 9 billion in DCF during the quarter, providing a one seven times coverage, which supported a 5% increase in cash distributions to partners compared to the same quarter last year, we retain $786 million of DCF, R&D youre going to get into more.

Jim Teague: Color on all of this right.

Jim Teague: During the quarter, we expanded our Permian natural gas processing infrastructure with the start of our <unk> plant in the Midland Basin.

As Jim mentioned, this is a 5.1% increase over the distribution declared with regard to the first quarter of 2023. The distribution will be paid May 14th to common unit holders of record as of the close of business today. In the first quarter, the partnership purchased approximately 1.4 million common units off the open market for $40 million.

Jim Teague: And our mental and three plants in the Delaware base.

Jim Teague: Each of these plants.

Jim Teague: Capacity process more than 300 million cubic feet, a day of natural gas and.

Jim Teague: And extract over 40000 barrels a day of Ngls.

Jim Teague: We currently have three additional 300 million a day plants under construction two in the Delaware and one one in the Midland Basin, along with our NGL pipelines.

Jim Teague: And <unk> 14, which is really our 13th fractionator, but we're not going to call. It 13 recall at 14.

Total purchases for the 12 months ending March 31st were $211 million, or approximately 8 million enterprise common units, bringing total purchases under our buyback program to approximately $960 million. In addition to buybacks, our distribution reinvestment plan and employee unit purchase plan purchased a combined 6.5 million common units on the open market for $172 million during the last 12 months, including 1.6 million common units on the open market for $43 million during the first quarter of 2024.

Jim Teague: Our plants in the system.

Jim Teague: Port them are essentially pull on the first day of service.

Jim Teague: With the completion of the three process processing plants under construction, we will have a total of 19 Permian processing plants capable of producing 675000 barrels a day of Ngls.

Jim Teague: Our NGL systems, including one of the world's largest NGL exports.

Jim Teague: Capacities.

Jim Teague: And so began service on phase one of our Texas Western products.

Jim Teague: Our pipeline system in March successfully connecting Gulf coast refined products and markets in the Permian basin with additional phase II destinations in the Albuquerque, and Grand Junction markets expected.

Jim Teague: And the second and early third quarters.

For the 12 months ended March 31, 2024, Enterprise laid out approximately $4.4 billion in distributions to limited partners. Combined with the $211 million of common unit repurchases across the same time period, Enterprise's payout ratio of adjusted cash flow from operations was 56% for that 12-month period. Total capital investments in the first quarter were $1.1 billion, which included $875 million for growth capital projects and $180 million for sustaining CapEx.

Jim Teague: At the beginning of the month, we received the deepwater port license for a spot project.

Jim Teague: This is one of the most significant milestones to date and the development of spot.

Jim Teague: We put out a press release on April 9th discussing the project and highlighting the accomplishment of the enterprise team that worked tirelessly.

Jim Teague: For over five years.

Jim Teague: For over five years to obtain the licenses.

Jim Teague: I think spot is going to be a valuable and highly strategic addition.

Jim Teague: Our asset base as we continue with commercialization.

Jim Teague: Last week, the EIA reported that the U S exported a record $12 1 million barrels a day of liquids that being crude oil refined products and natural gas liquids to them.

We expect growth capital expenditures for 2024 and 2025 to be in the range of $3.25 to $3.75 billion. We continue to estimate 2024 sustaining capital expenditures to be approximately $550 million, which includes planned turnarounds at both of our PDH plants, our IBDH facility, and our high-purity isobutylene facility. As previously mentioned, these scheduled turnarounds typically occur every three to four years. At this time, we expect the PDH turnaround to be completed in May 2024.

Jim Teague: A world hungry for our reliable and political resources, that's priced freight market.

Jim Teague: To put that in perspective, the number was $3 6 million in 2014 and less than 10 2 million in 2010.

Jim Teague: Demand for growing U S liquids has been and will continue to be primarily in emerging markets.

Jim Teague: Enterprise will continue to play a key role we export around 70 million barrels a month of liquids and have an initiative to reach 100 million barrels a month, which does not include spot.

Jim Teague: We're a significant player in the export market.

Jim Teague: We expect our growth is going to continue to grow.

We plan to begin addressing the issues on the fourth reactor within PDH2 in June. Our total debt principal outstanding was approximately $29.7 billion as of March 31, 2024. Assuming the final maturity date for our hybrids, the weighted average life of our debt portfolio is approximately 19 years. Our weighted average cost of debt is 4.7%. At March 31, approximately 98% of our debt was fixed rate.

Jim Teague: Randy Okay. Thank you Jane and good morning, everyone.

Randy Fowler: Common unit for the first quarter of 2023.

Randy Fowler: Turning to cash flow adjusted cash flow from operations, which is cash flow from operating activities before changes in working capital increased 6% to $2 $1 billion for the first quarter of 2024 compared to $2 billion for the first quarter of last year.

Our consolidated liquidity was approximately $4.5 billion at the end of the first quarter, including availability at our credit facilities and unrestricted cash on hand. Our adjusted EBITDA for the first quarter was $2.5 billion, and $9.5 billion for the trailing 12 months. As of March 31, 2024, our consolidated leverage ratio was 3.0 times on a net basis after adjusting debt for the partial equity treatment of our hybrid debt and reducing the debt outstanding by the partnership's unrestricted cash on hand.

Randy Fowler: Declared a distribution of 51 five cents per common unit for the first quarter 2024, as Jim mentioned this is a five 1% increase over the distribution declared with regard to the first quarter of 2023.

Randy Fowler: The distribution will be paid may 14th to common unit holders of record as of the close of business today and.

Randy Fowler: In the first quarter the partnership purchased approximately $1 4 million common units of the open market for $40 million total purchases for the 12 months ending March 31.

As a reminder, our leverage target remains 3.0 times plus or minus 0.25 times. And with that, Libby, I think we can open it up to questions. Operator, we are ready to open the call for questions. If you could please remind them of the instructions to ask a question. As a reminder, if you do have a question at this time, please press star 11 on your telephone. If your question has been answered, and you'd like to remove yourself from the queue, please press star 11 again.

Randy Fowler: Were $211 million or approximately $8 million enterprise common units, bringing total purchases under our buyback program to approximately $960 million.

Randy Fowler: In addition to buybacks our distribution reinvestment plan and employee unit purchase plan purchased a combined $6 5 million common units on the open market for $172 million during the last 12 months, including $1 6 million common units on the open market.

Randy Fowler: For $43 million during the first quarter of 2024.

Randy Fowler: For the 12 months ended March 31, 2024 enterprise paid out approximately $4 4 billion and distributions to limited partners come.

We ask that you please limit yourself to one question and one follow-up. Our first question comes from the line of Theresa Chen from Barclays. Your question, please. Good morning.

Randy Fowler: Combined with the $211 million of common unit repurchases across the same time period enterprises payout ratio of adjusted cash flow from operations was 56% for that 12 month period total capital investments in the first quarter were $1 1 billion, which include.

Thank you for taking my questions. First, congratulations on obtaining the Deepwater Port license for Spot. I'm sure that was a labor of love over the past five years.

Randy Fowler: $875 million for growth capital projects and $180 million of sustaining capex.

Can you provide us with an update on the commercialization progress since you received the license earlier this month? And also, can you help us think about, you know, how much capital the project would require and over what period that would be spent? Yeah, I'll talk to CapEx. First of all, it's not what was in the Reuters article by a long shot. And we typically don't share with people what our CapEx is. I'll turn it over to Brent to answer the other question. I mean, the commercialization, Teresa, it's still ongoing.

Randy Fowler: We expect growth capital expenditures for 2024, and 2025 to be in the range of three to five to $3 $75 billion. We continue to estimate 2020 for sustaining capital expenditures to be approximately $550 million, which includes <unk>.

Randy Fowler: Land turnarounds at both of our PVH plants.

Randy Fowler: B D H facility and high purity <unk> facility.

Randy Fowler: As previously mentioned these scheduled turnarounds typically occur every three years to four years at this time, we expect the PTH turnaround to be completed in May 2024, we plan to begin addressing the issues on the fourth reactor within PD H two.

I'd say, for the most part, it's positive. We're spending a lot of time on the road, and we expect... I have two contracts by the end of, call it next month, and then we're in ongoing discussions with other parties too to commercialize that, but you know the mindset is we're not going to move forward on that project until we have the contracts to support that project. Thank you. And then turning to your onshore activities, can you provide an update on the status of the Texas Western Products project so far after the initial phase and began service? And what are the key gating factors from here until phase two is brought online? And what should we look for?

Randy Fowler: Jim.

Randy Fowler: Our total debt principal outstanding was approximately $29 $7 billion as of March 31, 2024, assuming the final maturity date for our hybrids. The weighted average life of our debt portfolio is approximately 19 years, our weighted average cost of debt is four 7%.

Randy Fowler: At March 31, approximately 98% of our debt was fixed rate. Our consolidated liquidity was approximately $4 5 billion at the end of the first quarter, including availability under our credit facilities and unrestricted cash on hand.

Randy Fowler: Our adjusted EBITDA for the first quarter was $2 5 billion and $9 5 billion for the trailing 12 months as of March 31, 2024, our consolidated leverage ratio was 3.0 times on a net basis after adjusting debt for the partial equity treatment of our hybrid debt.

Yeah, this is Tug Hanley speaking. I'll turn it over to Justin on future activities. But as far as the current status goes, we have two terminals online in West Texas. We just loaded over 50 trucks yesterday.

It seems like every single day we're saying a new record for volumes loaded. And as far as the margins are concerned, those have met our expectations, or they are currently exceeding them. And then you want to talk about... Well, Albuquerque.

Randy Fowler: And reducing.

Randy Fowler: The debt outstanding by the partnership's unrestricted cash on hand.

Randy Fowler: As a reminder, our leverage target remains.

Randy Fowler: <unk> 3.0 times, plus or minus two five times.

I'm going to learn. Yeah, I'd say Theresa, Justin Kleider, just thinking about phase two being Albuquerque and Grand Junction, as Jim had said in his comments, we feel good that we're on the verge of commissioning Albuquerque as we speak. So in the second quarter of the second quarter rolling into early third quarter, to get that phase two seems to be pretty good timing. Thank you. Thank you.

Speaker Change: Certainly as a reminder, <unk> have a question at this time. Please press star one on your telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press star one again, we see lease please limit yourself to one question and one follow up our first question comes from the line of Theresa Chen from Barclays. Your question. Please.

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

One moment for our next question, and our next question comes from the line of Tristan Richardson from Scotiabank. Your question, please. Hi, good morning, guys. Talk a little bit about just the projects you added in the quarter on the midstream side. You note new dedications; are these with existing customers, or are these new customers just primarily in Delaware versus the Midland? And then should this support plants that are already currently under construction, or is this gathering projects that could support future new plant sanctions? This is Natalie Gayden.

Theresa Chen: First congratulations on obtaining the deepwater port license for spot.

Theresa Chen: That was a labor of love over the past five years.

Theresa Chen: Can you provide us an update on the commercialization progress since you've received the license earlier. This month and also can you help us think about how much capex with the project require and over what period and that would be spent.

Speaker Change: Yes, I'll talk to the Capex first of all it's not what it was in the Reuters Reuters article about long shot.

Speaker Change: We typically don't share with people what our Capex is I'll turn it over to Bret to answer the other question on maybe the commercialization tracer, it's still ongoing.

Bret: I would say for.

Speaker Change: For the most part it's positive.

Bret: We're spending a lot of time on the road.

Bret: We expect.

The new dedications that the gathering expansions in Delaware and in Midland are supported by new acreage dedication, some existing customers, and some new customers. Those gathering expansions feed the new plants that we've built. You know, this morning, I was looking, and we're over 91% of our plant capacity full. So a combo of everything, helpful.

Bret: To have two contracts by the end of call. It next month.

Bret: And then we're in ongoing discussions with other counterparties to to commercialize that but the mindset is we're not going to move forward on that project until we have the contracts to support that project.

Bret: Thank you and then turning to your onshore activities and can you provide an update on the status of the Texas Western products projects. So far after the initial phase and began service and what are the key gating factors from here until phase two is brought online.

Thanks, Natalie. And just, thinking about on the crude side, you saw Seminole move back into NGL service. Just thinking about the crude volumes in the quarter, we're just seeing increased utilization of the existing infrastructure there. Can you talk about, maybe, the use of DRA? Squeeze Better Utilization Out of Your Existing Plants with Seminole or Lines with Seminole Moving in a DJL. Yeah, Tristan, this is Jay Bany.

Bret: Should we look for.

Michael C. Hanley: Yes. This is tug Hanley speaking I'll turn it over to Justin on the future.

Justin: Future activities, but its current status goes we have two terminals online in West Texas.

Justin: Just loaded over 50 trucks yesterday it seems like every single day, we're setting a new.

Justin: Record on volumes loaded and as far as the margins, we're getting those have met our expectations or are they are currently exceeding them.

Justin: And then you want to talk about.

Justin: Our Albuquerque.

Justin: When a loan.

Speaker Change: Yes, I'd say <unk> is just inquire just thinking about phase two being Albuquerque, and Grand Junction as Jim said in his comments, we feel good where we are on the verge of commissioning Albuquerque.

Yeah, I mean, we do a combination and optimization really both for DRA and power. You know, with two going out of service, you saw a modest increase in variable cost, but it was near negligible just in the optimization. Appreciate it, Jay. Thank you guys very much.

Speaker Change: As we speak so.

Speaker Change: Second quarter quarter rolling into early third quarter to get that phase III seems to be pretty good timing.

Thank you. One moment for our next question, and our next question comes from the line of Spiro Dounis from Citi. Your question, please. Thanks, operator. Good morning, team. Maybe if we could just go back to exports.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of Christian Richardson from Scotia Bank. Your question. Please.

Tristan James Richardson: Hi, Good morning, guys could you talk about a little bit about just the projects you added in the quarter.

Jim, once you talked about getting to that 100 million barrels a month without spot, I guess I'm just curious if you could maybe dive into that a little bit more and provide a little more color on how you think you can do that. And now with spot potentially moving forward. Curious where that goal goes from here, especially when you consider the ability to free up some of that LPG capacity as well.

Tristan James Richardson: On the midstream side.

Tristan James Richardson: No new dedications these with existing customers or are these new customers primarily.

Tristan James Richardson: Primarily in the Delaware versus the Midland and then should this support.

Tristan James Richardson: Plants that are already currently under construction or is this gathering projects that could support future new plant sanctions.

Justin: Hey, this is Natalie gaydon.

Natalie K. Gayden: New dedications.

Spiro, I had a dream one night that we got to 100 million barrels, so I made it an initiative. If you're going to get to 100 million barrels, you'll get it because you have a great supply position. So some of the things Natalie's talking about are building your supply position, and we know what it takes to get to that number and what we need to do from a supply perspective. And I don't think, I don't think, uh...

Natalie K. Gayden: That the gathering expansions in the Delaware.

Natalie K. Gayden: And in Midland are supported by new acreage dedications, some existing customers from new customers.

Justin: Those gathering expansions, Steve the new plant that was built this morning, I was looking where over 91%.

Justin: All of our plant capacity for.

Speaker Change: So a combo of everything.

Speaker Change: That's helpful. Thanks, Natalie just.

I don't think we have to spend a heck of a lot of money on our ship channel or any of our doctors in order to handle that, Bob. Not over what we've already committed to. So it's all about supply, Spiro. Got it. Appreciate that. Second question, maybe just going to some of the prices we're seeing out in Oahu.

Justin: Thinking about on the crude side you saw seminal move back into NGL service.

Justin: Just thinking about the.

Justin: The crude volumes in the quarter.

Justin: What are you seeing increased utilization on the existing.

Justin: Infrastructure. There can you talk about maybe the use of DRA.

Justin: Squeeze better utilization out of your existing plants with seminar lines with some element of Ngls.

Obviously, a lot of volatility there recently and into the second quarter. Looks like maybe you got some benefit from those negative prices in the first quarter. But you know, I imagine at this rate, the second quarter impact could be even bigger. Maybe just remind us again of some of the exposure you've got there and open capacity to benefit from that. Yeah, this is Tuck Hanley.

Justin: Yes, Tristan this is giovanni.

Giovanni: Yes, I mean, we do a combination and optimization really both for DRA and power.

Giovanni: With Q going out of service you saw a modest increase in variable costs, but it was it was near negligible just in the optimization.

Speaker Change: Appreciate it thank you guys very much.

Speaker Change: Thank you one moment for our next question.

So, you know, from the negative gas price perspective, we are seeing lower prices, obviously, for equity volumes. However, on the positives of the lower gas price, we're seeing wider margins on C2 to gas, so that's higher key full margins for us. You know, they're over 22 cents a gallon, and that means a couple of things for us.

Justin: And our next question comes from the line of Spiro <unk> from Citi. Your question. Please.

Spiro: Thanks, operator, good morning, Tim maybe if you could just go back to exports.

Spiro: Jim you talked about getting to that 100 million barrels in months without spot.

Spiro: Just curious if you could just maybe dive into that a little bit more if not a little more color on how you think you can do that now with spot potentially moving forward curious where that goal goes from here, especially when you consider the ability to free up some of that LPG capacity as well.

Specifically, higher ethane recoveries across the system, so we're seeing record pipeline volumes. And then on the gas transport position, we have around $375 million a day that we can participate in, bringing WAHA down to the Gulf Coast, which is the premium market versus the WAHA negative price. Great. I'll leave it there. Helpful as always. Thanks, team.

Speaker Change: I had a dream one night that we got to 100 million barrels. So I made it an initiative.

Justin: If you're going to get to the 100 million barrels youre going to get it because you've got a great supplier position totals.

Justin: Some of the things Natalie's talking about us.

Justin: Building your supply position and we know what it takes to get to that number and what we need to do from a supply perspective, and I don't think.

Thank you. One moment for our next question. And our next question comes from the line of Keith Stanley from Wolf Research. Your question, please. Hi, good morning.

Justin: Yes.

Justin: I don't think.

Justin: Zack I don't think we have to spend a heck of a lot of money.

Justin: R J on our ship channel or any of our docs in order to handle that.

Just a follow up on spot. You said you hope to have two contracts soon and are working on others. What's the soonest you think you can get to an FID, kind of a bulk case and a base case on that project, just a sense of how long it will take. Hey, Keith, it's Brent. I think we'd like to target before the end of this year to go forward with that project. Okay, thank you. Second question... Okay, thank you. Second question...

Justin: Bob.

Justin: Not over what we've already committed to.

Justin: So it's all about supply spira.

Speaker Change: Got it appreciate that second question, maybe just go into some of the prices were seeing on <unk>, obviously, a lot of volatility there recently and into the second quarter. It looks like maybe you got some benefit from those negative prices in the first quarter, but I imagine that this rate second quarter impact could even bigger maybe just remind us again.

Speaker Change: Some of the exposure you've got there.

Speaker Change: Capacity to benefit from that.

Okay, thank you. You know, the stocks lagged a bit recently, but your yield plus growth, sort of propositions are very high. How are you thinking about the return on stock buybacks versus the returns you get on growth investments? Is that spread narrowing a lot in your eyes, or are growth projects still a lot more accretive than what you can do with buybacks? You know, Keith, over the last three or four years, I mean, stock prices have ebbed and flowed just with the overall volatility in the energy sector in the space. So I mean, it comes and goes.

Michael C. Hanley: This is tug Hanley.

Michael C. Hanley: So it's puts and takes so from a negative gas price perspective, we are seeing.

Michael C. Hanley: Lower prices, obviously for our equity volumes.

Michael C. Hanley: However on the on the positives of the lower gas price.

Michael C. Hanley: We're seeing wider margins on ctrip the gas so thats higher keep whole margins for us with over 22, a gallon and.

Michael C. Hanley: And that means a couple of things for us specifically ethane recoveries across the system. So we're seeing record pipeline volumes.

Michael C. Hanley: And then on the gas transport position, we have around 375 million a day that we can participate in bringing walk down to the Gulf coast, which is a premium market versus the warhol negative price.

Speaker Change: Great I'll leave it there helpful as always thanks, Dan.

Michael C. Hanley: Okay.

Speaker Change: Thank you one moment for our next question.

You know, I think we try to keep an all-the-above approach, and, you know... When we see it attractive to do buybacks, we do that. But it's been measured, you know, call it $200, $250 million a year.

Michael C. Hanley: And our next question comes from the line of Keith Stanley from Wolfe Research. Your question. Please.

Keith T. Stanley: Hi, Good morning, just a follow up on spot. So you said you hope to have two contracts soon working on others.

Keith T. Stanley: What's the Soonest, you think you can get to an FID.

And I expect it to stay in that area. Our growth CapEx, our projects that we're coming in on are, you know, attractive returns on capital that actually grow our business and serve our customers. So yeah, I mean, we take a look at it, but you don't make allocation of capital decisions day by day, depending on where the stock price is. So, you know, we've got a longer-term view than that. Thank you.

Keith T. Stanley: Kind of a bulk case in a base case on that project, just a sense of how long it could take.

Brad White: Hey, Keith it's Brad.

Keith T. Stanley: I think we'd like to target.

Brad White: Before the end of this year to go forward on that project.

Brad White: Okay.

Speaker Change: Thank you.

Speaker Change: Second second question.

Speaker Change: The stocks lagged a bit recently your yield plus growth sort of proposition is very high.

Speaker Change: How are you thinking about the return on stock buybacks versus the returns you get on growth investments is that is that spread narrowing a lot in your eyes or our growth projects still a lot more accretive than what you can do with buybacks.

Thank you one moment for our next question. And our next question comes from the line of Zach Van Everant from TPH and Company. Your question, please. Hey all, thanks for taking my question. Starting on liquid marketing, really propane specifically, we've seen domestic storage and production based on the weekly EIA data come in pretty high. I was just curious about your expectations for domestic prices on the propane side, and do you see this widening the spread to the international markets?

Speaker Change: Keith over the last three or four years, I mean, the stock prices ebbed and flowed just with the overall volatility in the energy sector in the space. So I mean it.

Keith T. Stanley: It comes and goes.

Keith T. Stanley: <unk>.

Keith T. Stanley: I think we try to keep all of the above approach and.

Keith T. Stanley: When we see it attractive to do buybacks, we do that but it's been measured.

Keith T. Stanley: At 200 $250 million a year.

And then on that, can you just remind us of the productivity and exposure you guys have to that spread. Yeah, this is Tug Hanley speaking. I'll just comment on the international market. So it's a barrel here in the US, half the price to clear across the water.

Keith T. Stanley: I expect it to stay in that in that area, our gross capex or projects that were coming in or.

Keith T. Stanley: Attractive returns on capital.

Keith T. Stanley: Actually grow our business and serve our customers so.

So we are seeing lower freight prices, which are leading to higher spot export opportunities for us. We're seeing some of those opportunities in the low single-digit numbers materialize. So that's, that's, that's been a benefit to us on that aspect. And, I think overall, Zach, it's Brent.

Keith T. Stanley: Yes, I mean, we take a look at it but you don't make allocation of capital issue.

Keith T. Stanley: Allocation of capital decisions.

Keith T. Stanley: By day, depending on where the stock process. So we've got a longer term view than that.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of <unk> Van <unk> from <unk> <unk> Company. Your question. Please.

Propane is going to be constrained here domestically until new export capacity comes online, and so call that next year. You could probably see storage values start widening out because that's the only place you can go at this point. I think it's probably good for some of our other assets or our customers around PDH. But once you get out until next year and the years beyond, we think the appetite for LPG is there across the world.

Van: Hey, Thanks for taking my question.

Van: Sorry on liquids marketing early propane, specifically, we've seen domestic storage and production based on the weekly EIA data come in pretty high just curious on your expectations for domestic prices on the propane side and do you see this widening the spreads in the international market and then on that can you just remind us of that.

Van: Sensitivity in exposure you guys have to that spread.

Speaker Change: Hey, guys.

Speaker Change: Am I speaking I'll just comment on the international market.

We think freight's going to be there. So at some point in time, it's going to come back to the U.S. producer and for them to catch up to align with the export capacity of the freight and the overall global demand. That makes sense.

Speaker Change: So the barrel here in the U S half the price the clear across the water. So we are seeing lower freight prices, which are leading to higher spot export opportunities for us we're seeing some of those opportunities.

Speaker Change: Low single digit numbers.

Speaker Change: Realized so that's been a benefit to us on that aspect.

Appreciate that. And then, moving to Webster, I saw a note out that you guys might have some downtime at the beginning of Q2. I was curious, one, if you could comment on that. And two, if you could move those volumes to another asset, like Midland Echo One, and just the overall impact there. Hey Zach, this is Jay.

Speaker Change: <unk>.

Speaker Change: I think overall Zach it's Brent.

Speaker Change: Propane is going to be constrained here domestically until new export capacity comes online.

Speaker Change: And so call that next year.

Speaker Change: You could probably see storage values start widening out because that's the only place you can go at this point I think it's probably good for some of our other assets of our customers around PTH.

Yeah, so we went out this past week to notify our shippers of downtime in June, starting the first. It's estimated around 10 days. And look, until until we get actual nominations come in, call it mid May, it's kind of hard to figure out how that's going to impact our customer base. Okay, perfect. That's all I have.

Speaker Change: But once you get out till next year and years beyond.

Speaker Change: We think the appetite for LPG is there across the world. We think freight is going to be there. So at some point in time that is going to come back to the U S producer and for them to catch up to align with the export capacity the freight and the overall global demand.

Speaker Change: Got it that makes sense I appreciate that and then moving to Wink to Webster I saw a note out that you guys might have some downtime at the beginning of Q2 was curious wanted if you can comment on that and you can move those volumes to another asset like Midland to Echo one and just the overall impact there.

Thank you. One moment for our next question. And our next question comes from the line of John Mackay from Goldman Sachs. Your question, please. Hey, good morning. Thanks for the time. I wanted to maybe just stay in the Permian.

Speaker Change: Okay.

Jay: Zach this is Jay.

I'd be curious to get an update from you guys on how activity levels are trending so far this year versus your base case and, you know, fully understand that the producers are not making decisions based on the gas price, but would just be curious if you're seeing this, you know, weak Waha and kind of gas takeaway issues in the near term affect overall activity levels. Thanks. This is Tony.

Speaker Change: Okay perfect. That's all I had thanks.

Speaker Change: Thank you one moment for our next question.

Speaker Change: And our next question comes from the line of John Kim from Goldman Sachs. Your question. Please.

John Kim: Hey, good morning, Thanks for the time I wanted to.

John Kim: Maybe just stay in the Permian I'd be curious to get an update from you guys on how activity levels are trending so far this year versus your base case.

Essentially, you've seen no effect from the weak natural gas prices. We show this slide often so that people understand it. If you look at what drives the economics of the producers in the Permian, it's not natural gas, and you know you're you're what we've seen in natural gas prices is not going to cause people to to shut in or even throttle back oil related natural gas at this point we haven't seen it I guess proof is a little bit in the pudding you know we if you go and look at everybody has different rig counts but if you go and look at rig counts in the Permian since the first of the year they're steady as they can be actually same can be said for the Eagle Producing rig counts down in the Haynesville and you see them down somewhat in Appalachia but but not in your oily basin, Alright, that's fair. Maybe, just from Pet Chems, Octane was pretty strong.

Speaker Change: Fully understand that.

John Kim: So not making decisions based on the gas price, but would just be curious if you're seeing this.

John Kim: <unk> kind of gas takeaway issues in the near term effect overall activity levels.

Tony: Yes. This is Tony.

Tony: Essentially you've seen no effect from the weak natural gas prices.

Tony: And we show the slide often so that people understand it if you look at what drives the economics of the producers in the Permian its not natural gas.

Tony: And.

Speaker Change: Your your what we've seen in natural gas prices is not going to cause people.

Tony: To shut in or even throttled back oil related natural gas at this point, we haven't seen it I guess proof is a little bit into putting if you go and look at everybody has different rig counts, but if you go and look at rig counts in the Permian since the first of the year there steady as they can be.

Tony: Actually same can be said for the Eagle Ford you see rig counts John in the Haynesville and you see them down somewhat in Appalachian, but not in your oil basins.

Maybe just give us a quick read on how you'd expect that to kind of roll out the rest of the year, and maybe, on the other side, where we could expect the PDH contributions to unfold as well. Thanks. Hi John, this is Chris Stana.

Tony: Okay.

Tony: Alright.

Tony: Fair, maybe just different pet chems octane was pretty strong maybe just give us a quick read on how you'd expect that to kind of roll out the rest of the year and maybe on the other side, where we could expect kind of the PVH contributions too.

On the octane enhancement side, we benefited. Probably 80% of the improved performance was due to higher volumes and higher fees. And then we also had favorable hedge performance. And I guess, you know, looking forward, if you look at the forward curve for normal RBOB, it shows, you know, pretty steady. So we have, at least for the second quarter, a $1.80 spread. And just a reminder that the biggest contributor to octane enhancement is our MTBE, which is made up of normal RBOB and what we call uplift, which is just the market price and really the difference between the normal RBOB spread and the market price.

John Kim: Ton fall as well.

John Kim: Yes, John this is Kristina.

Kristina: On the octane enhancement side, we benefited.

Kristina: Probably 80% of the of the improved performance was due to volumes and higher higher volumes and higher fees.

Kristina: And then we also had a favorable hedge performance.

Speaker Change #100: And I guess looking.

Kristina: Looking forward if you look at the forward curve for normal or Bob It shows pretty steady. So we have at least for the second quarter of $1 80 spread.

Kristina: And just a.

Kristina: Just a reminder for the biggest contributor for octane enhancement as our MTBE, which is made up of normal or Bob.

Kristina: And what we call uplift which is this.

Kristina: Market price.

Kristina: And really the difference between the normal or Bob spread in the end market price.

For your second question on PDH, we're expecting that PDH 1 and then with the return of PDH 2 after our outage in June will both be contributing back to their full amount. I appreciate that. Thank you.

Kristina: For your second question on PVH, we're expecting when PD H, one and then with the return of PTH two after our outage in June that.

Kristina: Both of those assets are contributing back to their full amounts.

Speaker Change #104: I appreciate that thank you.

Kristina: Yeah.

One moment for our next question. And our next question comes from the line of Neal Mitra from Bank of America. Your question, please. Hi, good morning.

Speaker Change #102: Thank you one moment for our next question.

Speaker Change #102: Sure.

Speaker Change: And our next question.

Speaker Change: Comes from the line of Neel Mitra from Bank of America. Your question. Please.

Indraneel Mitra: Hi, good morning, Thanks for taking my questions.

Thanks for taking my question. I wanted to ask about the activity within the first quarter. I think it was kind of universally accepted in the Permian that the first quarter would have a little bit of a lag versus the fourth quarter of 23. Just wanted to hear your insights on what you saw in terms of weather activity coming back and if you could kind of delineate where you're seeing some hot spots in production within the Permian and where you're seeing some lagging versus your initial expectations.

Indraneel Mitra: Wanted to ask about the activity within the first quarter I think it was kind of universally accepted in the Permian.

Indraneel Mitra: The first quarter would have a little bit of a lag versus the fourth quarter of 'twenty three.

Indraneel Mitra: Just wanted to hear your insights of what you saw in terms of weather.

Indraneel Mitra: Activity coming back and if you could kind of delineate where youre seeing some hotspots in production within the Permian.

Indraneel Mitra: Where youre seeing some lagging versus your initial expectations.

This is Brent. Relative to our first quarter, there was definitely an impact because of weather on the Midland Basin processing side. Our Delaware processing plants held up very well. On the Midland side, we had some downtime, and it probably extended Graham for 10 days at some point. But that's the reason there was probably an effect on volumes.

Indraneel Mitra: This is Brent relative to our first quarter, there was definitely an impact.

Indraneel Mitra: Because of weather and the Midland Basin processing side, our Delaware processing plants held up very well.

Indraneel Mitra: On the Midland side, we had some downtime, but it probably extended Graham for 10 days at some point.

But to Natalie's point, in terms of what we see as we go forward, we have a morning supply meeting that you guys are well aware of. It's routine every day that Natalie comes in to report our processing volumes, and that's up every single day.

Indraneel Mitra: It's it's routine for everyday that Natalie <unk> report our processing volumes.

Indraneel Mitra: Thats up every single day.

So is it fair to say that there's been a lot of flush production and kind of around the April timeframe after the first quarter? Natalie, I mean, we saw the increase, the big jump on our side once our new plants came up. Yeah, once our new plants came up, we had some producers that, as you know, don't have acreage dedications; rather, they just swing from, we won market share. So we, for example, when Mintone 2 came up, we were immediately full.

Speaker Change #101: So is it fair to say that Theres been a lot of flush production and kind of are in the April timeframe. After the first quarter.

Speaker Change #101: Natalie I mean, we saw the increase a big jump on our side once our new plant came up.

Speaker Change #101: Yes.

Indraneel Mitra: Once our new plants came up we had some producers that as you know.

Indraneel Mitra: I don't have that acreage dedications, rather they just.

Indraneel Mitra: Switching from one market share so we.

Indraneel Mitra: For example, when Minto two came up we were.

So I don't know if I'd call it flush production from being down after the winter storm rather than just continuing on pace, coming back up after the cold weather event. And if I could speak one more in there, it seemed like the PGP-RGP spreads were especially strong in the first quarter. I was wondering how that contributed to the first quarter results and if you see that as an ongoing trend for the rest of the year. Yeah, this is Chris.

Indraneel Mitra: Immediately for so.

Indraneel Mitra: I don't know if I call it flush production from being down after the winter storm rather than just continue on pace.

Indraneel Mitra: Coming back up after the cold weather event.

Speaker Change #103: Got it and if I could sneak one more in there.

Speaker Change #103: It seemed like the PGP RVP spreads were especially strong in the first quarter.

Speaker Change #103: I was wondering how that contributed to the first quarter results and if you see that as an ongoing trend for the rest of the year.

Speaker Change #103: Yes. This is Chris again.

Again, the RGP PGP spreads were wide for the first quarter. And you probably saw in the write-up, we had some operational issues with both our PDH and our splitters. So there were some puts and takes there. And again, I think, you know, looking forward, we see the contribution from our PDH plants running that's going to help with our overall margin. Okay, great.

Chris: <unk> spreads were wide for the first quarter and you probably saw in the write up we had some operational issues.

Chris: On both our <unk> and our splitter. So there were some puts and takes there.

Chris: And again I think looking forward we see.

Chris: The contribution from our PVH plants, running thats going to kind of help.

Speaker Change #103: With our overall margin.

Speaker Change: Okay, great. Thank you.

Operator, we have time for one more question. Certainly, one moment then for our final question. And our final question for today comes from the line of Neal Dingmann from Truist Securities. Your question, please. Morning, thanks for the time.

Speaker Change #105: Operator, we have time for one more question.

Speaker Change #107: Certainly one moment for our final question.

Speaker Change #107: And our final question for today comes from the line of Neal Dingman from two Securities. Your question. Please.

Neal David Dingmann: Good morning, Thanks for the time my guys. Just my question is on future capital allocation I'm just wondering.

My question is on future cap allocation. I'm just wondering if you all boosted the, looks like 2025 CapEx bid based on opportunities out there. I'm just wondering, do you all have, you know, when you look at future years, let's just consider 2025 sort of a bogeyman or level for both shareholder return and projects? Just wondering how we should think about the balance between the two, you know, as you start looking at 2025 and 2026. Yeah. Hey, Neal. Good morning. Good morning.

Speaker Change #107: You all boosted.

Neal David Dingmann: It looks like 2025, capex a bit based on opportunities out there and I'm just wondering if when you look at future years.

Neal David Dingmann: Consider 2025 sort of the bogey or levels for both shareholder return in projects I'm. Just wondering how we should think about the balance between the two as you start looking at 25% to 26.

Neal David Dingmann: Yes.

Speaker Change #108: Hey, Neil good morning.

What we talked about on analyst day here a few weeks ago was really from a combination of distributions and buybacks, sort of operating in that 55 to 60% of adjusted cash flow from operations. We've sort of been in that zone since 2021. And that's sort of what we foresee here for the next few years as well. You know, as far as organic growth CapEx, again, seeing a lot of opportunities in the Permian and also what the downstream benefits that come with that increased supply go through our value chain.

Neal David Dingmann: Good morning.

Speaker Change: What we had talked about at analyst day here a few weeks ago was was really from a combination of distributions and buybacks.

Speaker Change #110: Sort of operating in that 55% to 60% of.

Speaker Change: Adjusted cash flow from operations, we sort of been in that zone since 2021, and that's sort of what we foresee here for the next few years as well.

Speaker Change: <unk>.

Speaker Change: As far as organic growth Capex.

Speaker Change: Again seen a lot of opportunities.

Speaker Change: In the Permian and also what that.

Speaker Change: The downstream benefits that come with that increased supply as it goes through our value chain and now with getting the.

And now with getting the license for Spot, you know, we'll be hustling to come in and get it contracted. So I think we still come back with a bogeyman of, you know, what we put out in 2026. And that's early, is two, two and a half billion dollars, of which only 800 million of that is currently approved for projects. So we've got some room to, you know, fill that up, including, you know, coming in and with Spot, you know, we're successful in getting that underwritten.

Speaker Change: The license for spot.

Speaker Change: We'll be hustle and to come in and get it contracted so I think we still come back with a bogey of what we put out in 2026.

Speaker Change: And that's early is.

Speaker Change: As to $2 $5 billion of which only $800 million of that is currently approved projects. So we've got some room to.

Speaker Change: To fill that up including.

Speaker Change: Coming in and with spot.

Speaker Change: We're successful in getting that underwritten spot is really a three year construction cycle on that.

Spot is really a three-year construction cycle on that. And so anyway, I think that would help, you know, come in and address that two, two and a half billion dollars of organic growth. No, that makes sense.

Speaker Change: And.

Speaker Change: So anyway, I think that would help coming in in <unk>.

Speaker Change: Address that to $2 $5 billion organic growth Capex.

Speaker Change #112: No that makes sense and just a quick follow up I won't keep it just on the buybacks is really your thoughts on.

And just a quick follow-up, I won't keep it just on the buybacks, just Randy, your thoughts on that, you know, sort of his overall earnings and cash will keep ramping up. Just thoughts on would you do anything different with the buybacks or how that sort of affects you? Yeah, you know, I think we'll have more flexibility on buybacks, and again, we look to be opportunistic with it. So I mean, you know, you've seen us do $200 or $300 million here over the last few years.

Speaker Change #112: Is that sort of it is overall just earnings and cash flow keep ramping up just thoughts on what you do anything different with the buybacks or how that sort of factors.

Speaker Change: Yes.

Speaker Change #109: No I think we will have more flexibility on our buybacks.

Speaker Change #109: And again, we look to be opportunistic with it.

Speaker Change #109: You've seen us do two or $300 million here over the last few years.

I mean, if there was a market dislocation, we've got the flexibility to do more. And then certainly, you know, here in 2024 and 2025, we're looking at growth capex in the three and a quarter to $3.75 billion range. I think once you get back out to 2026, 2027, and if we're in more of what I would say the normalized capex range of $2.5 billion, then we'll have a lot more flexibility to do back then as well.

Speaker Change #109: If there was a market dislocation, we've got the flexibility to do more.

Speaker Change #109: And then certainly here in 2024 and 2025, we're looking at growth Capex in the three and a quarter to $3 $75 billion range I think once you get back out to 2026 2027.

Speaker Change #109: And if we're in a more what I would say normalized capex range to $2 5 billion and we will have a lot more flexibility to do buy back then as well.

Perfect. Thanks for your time, Randy. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Libby Strait for any further remarks. Thank you, everyone, for joining us today. That concludes our remarks. Have a good day. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Speaker Change #113: Perfect. Thanks for the time Randy.

Randy Fowler: Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to be strength for any further remarks.

Be Strength: Thank you everyone for joining us today that concludes our remarks have a good day.

Speaker Change #106: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

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