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Q4 2011 EARNINGS CALL – Targa Resources Corp.

Targa Resources Corp. · Feb 23, 2012 · 34 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 1
    Targa Resources Partners LP Investor Presentation Fourth Quarter and Full Year 2011 February 23, 2012
  2. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 2
    Targa Resources - Overview 3
  3. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 3
    Targa Corporate Structure Management & Public Warburg Pincus LLC Directors(1) Shareholders 11.2% interest 23.1% interest 65.7% interest (42,444,213 Common Shares) Targa Resources Corp. 100% Indirect Ownership (NYSE: TRGP)…
  4. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 4
    Position in the Midstream Natural Gas Industry The Partnership is one of the few midstream companies with leadership positions in both gathering and processing and NGL logistics Natural Gas Gathering and Processing Logisticsand…
  5. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 5
    The Targa Story Execution and Increasing Growth Industry Dynamics Favor Targas Integrated Midstream Platform Advances in E&P technology and strong oil and NGL prices drive drilling activity and volumes in gathering and processing…
  6. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 6
    Industry Dynamics Favor Targas Platform E&P Activity drives NGL volumes Advances in E&P technology and strong oil and NGL prices drive drilling activity Resulting in increased gathering and processing volumes Shift to oil…
  7. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 7
    Partnership Growth Drivers Strong fundamentals and positive industry dynamics create attractive growth opportunities Organic growth projects and acquisitions contribute to increased scale and diversity Additional growth opportunities…
  8. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 8
    Strong Distribution Growth and Coverage Ratio 2011 Adjusted EBITDA increased NGLS Annualized Distribution Per LP Unit approximately 25% over 2010 2012 Adjusted EBITDA guidance range 2.50 2.41 2.33 of 515 million to 550 million 2.23…
  9. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 9
    Fee-based Contract Mix Increasing Benzene Treating ( millions) Petroleum Logistics CBF Train 3 CBF Train 4 Petroleum Logistics Acquisition 80.00 100% Propane Exports Take or Pay payments Longhorn Project Petroleum…
  10. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 10
    Disciplined and Consistent Hedging Program NGL and Condensate Hedge Arrangements as of 12/31/2011 14,000 2.50 12,000 Weighted average price 2.00 Volume (Bbls/d) 10,000 1.50 (/gallon) 8,000 6,000 1.00 4,000 0.50…
  11. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 11
    Solid Financial Profile Positions the Partnership for Growth Committed to maintaining relatively conservative capital structure to NGLS Leverage Ratio and Unit Price Since IPO underpin access to capital 6.0x 45 Consistent record…
  12. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 12
    TRP Quarterly Update 160 146 Q4 2010 Q4 2011 FY 2010 FY 2011 140 500 491 120 107 114 396 400 in milions 100 337 in millions 80 66 76 300 277 54 232 60 179 200 40 20 100 0 0 Distributions Declared Distributable…
  13. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 13
    Targa Resources Two Public Companies Targa Resources Partners LP Targa Resources Corp. (NYSE: NGLS) (NYSE: TRGP) IPO February 2007 IPO December 2010 MLP C-Corp Owner/Operator of all assets General Partner of NGLS Market Cap: 3.7…
  14. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 14
    Recent Capital Markets Transactions January Equity Offering 4.0 million unit base offering size Issue price of 38.30 per unit Successful offering resulting in full green-shoe exercise of 405,000 units 168.7 total gross proceeds…
  15. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 15
    Business Division and Segment Review 16
  16. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 16
    Targas Integrated Midstream Platform FY 2011 Segment Operating Margin Marketing and Distribution 17% Field G&P 38% Logistics Assets 19% Coastal G&P 26% 17
  17. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 17
    Gathering and Processing Division Gathering and Processing Highlights 20 natural gas processing plants 11,852 miles of natural gas pipeline Leading position across Permian Basin benefitting from oil production North Texas System…
  18. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 18
    Field Gathering and Processing Segment FY 2011 Segment Operating Margin Field Volume Growth Discussion Marketing and Distribution 17% Field G&P business units: North Texas, SAOU, Field G&P Permian and Versado 38% Logistics…
  19. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 19
    North Texas and SAOU Overview North Texas Operating Statistics North Texas 204 174 180 4,200 miles of gathering pipeline and two processing 162 163 plants with gross capacity of 278 MMcf/d 23 Recovered GPM in the 4.0 5.0 range…
  20. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 20
    Permian and Versado Overview Permian Operating Statistics Permian 129 134 1,400 miles of pipeline and one processing plant with 120 118 112 gross capacity of 150 MMcf/d 16 Recovered GPM in the 4.5 5.5 range 15 13 13 Favorable…
  21. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 21
    Coastal Gathering and Processing Segment FY 2011 Segment Operating Margin Description Marketing and Coastal Straddles (including VESCO) Distribution 17% Positioned on mainline gas pipelines and process volumes of Field G&P gas…
  22. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 22
    Logistics and Marketing Division Key Assets 940 miles of NGL pipeline 355 MBbl/d net fractionation in Logistics Segment (including GCF) 64 MMBbl salt dome storage capacity 2.6 MMBbl above ground storage capacity, including 1.8…
  23. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 23
    Logistics Assets FY 2011 Segment Operating Margin Logistics Assets Highlights Marketing and Distribution 17% Second largest operator of fractionation capacity in Mont Belvieu and LA Field G&P 38% Targa Logistics Assets highly…
  24. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 24
    Logistics Assets - Performance Trends CBF Y-grade Volumes MBbl/d Y-grade fractionation at Mont Belvieu 250 Average reached full capacity in 2009 Capacity 225 [234] Targas fractionation expansions Mont Belvieu 200 78 MBbl/d CBF…
  25. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 25
    Mont Belvieu Fractionation and NGL Pipeline Expansions 2,500 New fractionation and pipeline capacity to 2123 accommodate increasing y-grade from Rocky 2,000 Mountains, Mid-Continent, Permian Basin and South MB Frac Capacity NGL PL…
  26. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 26
    Price Environment Favors U.S. Propane/ Butane Export Growth Increasing shale production has filled U.S. U.S. Propane 40 * 0.40 fractionation capacity and encouraged investment 35 in expansions 0.30 30 0.20 Favorably priced U.S.…
  27. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 27
    Petroleum Logistics Majority of revenue generated through fixed-fee contracts based on volume capacity with take-or-pay features Favorable global supply-demand dynamics Portfolio of creditworthy customers Immediately accretive…
  28. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 28
    Marketing and Distribution Segment FY 2011Segment Operating Margin Marketing NGL Marketing and Distribution Manage physical distribution of mixed NGLs and 17% Field G&P specification products using owned and third 38% party…
  29. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 29
    Partnership Investment Highlights Advancements in geophysical drilling and completion techniques drives drilling activity in the oily Favorable and liquids rich plays Industry Strong oil and NGL prices help drive volumes and margins…
  30. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 30
    Appendix 31
  31. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 31
    Pro Forma Credit Metrics & Liquidity Pricing / Actual Jan 2012 Jan 2012 Pro Forma Current Capitalization Maturity Coupon YE 2011 Equity Offering High Yield Offering YE 2011 Cash and cash equivalents 55.6 65.1 120.7 Senior Secured Debt…
  32. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 32
    Non-GAAP Measures Reconciliation The following table presents a reconciliation of Adjusted EBITDA and operating margin to net income (loss) for the periods shown for TRP: Three Months Ended Year Ended December 31, December 31, 2011…
  33. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 33
    Non-GAAP Measures Reconciliation Millions The following table presents a reconciliation of reported distributable cash flow to net income (loss) for the period shown for TRP: Three Months Ended 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar…
  34. Q4 2011 EARNINGS CALL – Targa Resources Corp. – slide 34
    Non-GAAP Measures Reconciliation The following table presents a reconciliation of operating margin to net income (loss) for the periods shown for TRP: Three Months Ended 3/31/2010 6/30/2010 9/30/2010 12/31/2010 3/31/2011…

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