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Q2 2016 Investor Presentation – Targa Resources Corp.

Targa Resources Corp. · Aug 3, 2016 · 47 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. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 1
    Targa Resources Investor Presentation Second Quarter 2016 August 3, 2016
  2. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 2
    Targas Corporate Structure TRC Public Shareholders (166,630,466 Shares)(1) Targa Resources Corp. TRC Closed in March 2016 Term Loan B (NYSE: TRGP) Preferred 1 billion Series A Preferred Stock Revolving Credit Facility (S&P:…
  3. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 3
    Strong Asset Base Poised for Growth A Strong Footprint in And a Leading Position at Drive Targas Active Basins Mont Belvieu Long-Term Growth Premier Permian Basin footprint Fractionation ownership Minimal hedges beyond 2016 will…
  4. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 4
    Attractive Asset Footprint Targas footprint has been impacted by reduced activity, but is positioned in some of the best basins / areas Diversified customer base U.S. Land Rig Count by Basin(1) 2,000 Permian 1,800 Eagle…
  5. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 5
    Producer Activity Drives NGL Flows to Mont Belvieu Growing field NGL production Rockies increases NGL flows to Mont Belvieu Increased NGL production will support Targas expanding Mont Belvieu and Galena Park presence…
  6. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 6
    Business Mix, Diversity and Fee Based Margin Business Mix Field G&P Diversity Q2 2016 Operating Margin Q2 2016 Natural Gas Inlet Volumes 2% 9% 16% 24% 47% 53% 17% 5% 12% 6% 9% Downstream G&P SAOU WestTX Sand Hills Versado…
  7. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 7
    Strategic Focus 2H 2016 In addition to ongoing cost reduction efforts across all businesses (opex and capex), the following reflects Targas second half 2016 strategic focus: Continued Protecting and improving the balance sheet…
  8. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 8
    Leverage and Financial Position (1) Protecting and improving the balance sheet has Senior Note Maturities remained a focus 2,000 Senior Note Maturities ( in MM) TRCs acquisition of TRP on February 17th 1,600 improved Targas…
  9. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 9
    Diversity and Scale Help Mitigate Commodity Price Changes Adjusted EBITDA vs. Commodity Prices Growth has been driven primarily by investing Adjusted EBITDA - Actual YTD Adjusted EBITDA Annualized (2) in the business, not by changes…
  10. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 10
    Fee-Based Margin Provides Cash Flow Stability Increasing Fee-Based Margin Provides Additional Stability to Our Business 275 150% ( in millions) 140% 251 250 235 236 235 130% 227 230 225 219 120% 211 200 110% 187 100% 175…
  11. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 11
    2016 Net Growth Capex Public Guidance Targa has completed two major projects and has two major projects underway, representing approximately 275 million of 2016E growth capex (net) All four projects will provide cash flow in 2016…
  12. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 12
    Counterparty Credit Exposure and Mitigants Area Potential Description of (Predominant Counterparty Payments Contract Type) Credit Risk Mitigants Downstream Targa invoices for fees N/A Low Creditworthiness of due customers…
  13. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 13
    Targas Attractive Asset Footprint
  14. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 14
    Extensive Field Gathering and Processing Position Summary Footprint Over 24,000 miles of pipeline across attractive positions in the Permian Basin, Eagle Ford Shale, Barnett Shale, Anadarko Basin, Ardmore Basin, Arkoma Basin and…
  15. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 15
    Premier Permian Basin G&P Footprint LEGEND 164 ACTIVE RIGS (July 18, 2016) TARGA PROCESSING PLANT SAOU SYSTEM WEST TEXAS SYSTEM SAND HILLS SYSTEM VERSADO SYSTEM NW Shelf Midland Basin Versado SAOU Central Delaware…
  16. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 16
    Permian (SAOU) Summary Summary Asset Map and Rig Activity(1) Footprint includes approximately 370 MMcf/d of Legend Mitchell processing capacity and 1,650 miles of pipeline in the Martin Targa Pipeline Midland Basin Howard 22…
  17. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 17
    Permian (WestTX) Summary Summary Asset Map and Rig Activity(1) Footprint includes approximately 855 MMcf/d of Legend Andrews gross processing capacity and 4,050 miles of Martin Targa Pipeline Howard pipeline in the Midland Basin…
  18. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 18
    Permian (Sand Hills) Summary Summary Asset Map and Rig Activity(1) Footprint includes approximately 165 MMcf/d of processing capacity and 1,550 miles of pipeline in the Loving Winkler Central Basin Platform/Delaware Basin Ector…
  19. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 19
    Permian (Versado) Summary Summary Asset Map and Rig Activity(1) Footprint includes approximately 240 MMcf/d of Roosevelt Bailey Lamb Legend processing capacity and 3,450 miles of pipeline in the Targa Pipeline 54 Active Rigs…
  20. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 20
    Strategic Position in the Core of the Williston Basin Summary Asset Map and Rig Activity(1) Core position in McKenzie, Legend Dunn and Mountrail counties Targa Pipeline Williams Mountrail 26 Active Rigs 374 miles of crude gathering…
  21. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 21
    Leading SouthTX, North Texas and Oklahoma Positions Summary Footprint Four footprints including approximately 13,000 miles of pipeline Over 1.8 Bcf/d of gross processing capacity Announced a joint venture with Sanchez Energy…
  22. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 22
    SouthTX Sanchez Energy Corp. JV Driving Growth Summary Asset Map and Rig Activity(1) JV agreements with Sanchez Energy Corp. (NYSE:SN) Legend Guadalupe executed in October 2015 Targa Pipeline Gonzales Lavaca Bexar 34 Active Rigs…
  23. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 23
    North Texas Exposed to Barnett Shale and Marble Falls Activity Summary Asset Map and Rig Activity(1) 478 MMcf/d of gross processing capacity Wilbarger Wichita 200 MMcf/d Longhorn plant came online in May 2014 Montague Primarily…
  24. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 24
    SouthOK Exposure to Increasing SCOOP Activity Summary Asset Map and Rig Activity(1) 580 MMcf/d of gross processing capacity Cleveland Pottawatomie Seminole Hughes Velma system well positioned to benefit from Grady McClain…
  25. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 25
    WestOK Positioned for STACK Growth Summary Asset Map and Rig Activity(1) 450 MMcf/d of gross processing capacity Legend Targa Pipeline Declining Mississippi Lime activity has impacted 29 Active Rigs Kingman volumes (7/18/16)…
  26. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 26
    Downstream Capabilities Overview Downstream Businesses Assets include: NGL Fractionation / Storage Attractive fractionation footprint at Mont Belvieu and Lake Leading Mont Belvieu (and Lake Charles) footprint with Charles underground…
  27. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 27
    Logistics Assets Extensive Gulf Coast Footprint Fractionators Gross Net Capacity Capacity (MBbl/d) (MBbl/d)(1) CBF - Mont Belvieu(1) Trains 1-3 253 223 Backend Capacity 40 35 Train 4 100 88 Train 5 100 88 GCF - Mont Belvieu 125…
  28. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 28
    Targas Fractionation Assets Domestic Rig Count and NGL Supply(1) 2,000 4,500 1,800 4,000 1,600 LPG Production (MBbl/d) 3,500 1,400 3,000 Rig Count 1,200 2,500 1,000 2,000 800 1,500 600 400 1,000 200 500 Targa…
  29. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 29
    Targas LPG Export Business LPG Exports by Destination (1) Propane and Butane Exports (1) 26% 15% 52% 85% 22% Latin America/South America Caribbean Rest of the World Propane Butanes Fee based business with no direct…
  30. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 30
    Other Downstream Businesses NGL and Natural Gas Marketing Manage physical distribution of mixed NGLs and specification products using owned and third party facilities Manage inventories for Targa downstream business Buy and sell…
  31. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 31
    Additional Information
  32. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 32
    TRC Update Operating Margin 350 1,400 Operating Margin 326 Operating Margin 1,281 1,254 299 1,200 300 1,137 277 250 1,000 in milions in milions 200 800 695 682 162 158 162 164 599 629 625 150 142 600 115 442 100…
  33. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 33
    Consolidated Capitalization ( millions) Actual Actual Cash and Debt Maturity Coupon 3/31/2016 Adjustm ents 6/30/2016 Cash and Cash Equivalents 114.5 56.4 170.9 TRP Accounts Receivable Securitization Dec-16 150.0 75.0 225.0 TRP…
  34. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 34
    Permian (SAOU) Environment (Aggregate County) Permits Historical Daily Production (MMBoe/d) YTD 2016 Detail 0.6 3,368 258 3,024 0.5 231 2,736 2,638 0.4 Q1 Q2 2016 2016 1,811 0.3 1,321 0.2 978 0.1 -- Oct-10…
  35. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 35
    Permian (WestTX) Environment (Aggregate County) Permits Historical Daily Production (MMBoe/d) YTD 2016 Detail 1.4 5,880 687 518 1.2 5,129 5,168 4,621 1.0 Q1 Q2 3,858 2016 2016 0.8 2,882 0.6 2,410 0.4 0.2 --…
  36. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 36
    Permian (Sand Hills) Environment (Aggregate County) Permits Historical Daily Production (MMBoe/d) YTD 2016 Detail 1.4 6,044 736 602 1.2 4,854 5,053 4,573 1.0 Q1 Q2 2016 2016 3,560 0.8 3,343 2,676 0.6 0.4 0.2 --…
  37. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 37
    Permian (Versado) Environment (Aggregate County) Permits Historical Daily Production (MMBoe/d) YTD 2016 Detail 0.6 338 262 0.5 1,829 Q1 Q2 0.4 2016 2016 1,505 0.3 1,216 1,200 1,156 1,121 1,127 0.2 0.1 -- May-12…
  38. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 38
    Badlands Environment (Aggregate County) Permits Historical Daily Production (MMBoe/d) YTD 2016 Detail 1.2 175 2,031 139 1.0 1,812 1,628 1,589 Q1 Q2 0.8 2016 2016 1,164 0.6 1,021 0.4 628 0.2 -- Oct-10 Oct-11…
  39. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 39
    Coastal Gulf Coast Footprint Summary Footprint Asset position represents a competitively advantaged straddle option on Gulf of Mexico activity over time LOU (Louisiana Operating Unit) 440 MMcf/d of gas processing (180 MMcf/d Gillis…
  40. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 40
    Dynamics of the LPG Market VLGC Freight Rates(1) Increasing VLGC Fleet(2) 1.80 0.35 300 +10 1.60 0.30 +44 1.40 250 +32 253 0.25 243 Number of VLGCs 1.20 200 1.00 0.20 199 /gal /gal 0.80 0.15 150 167 0.60 0.10…
  41. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 41
    Reconciliations
  42. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 42
    Non-GAAP Measures Reconciliation Adjusted EBITDA - The Company defines Adjusted EBITDA net income(loss) available to TRC before: interest; income taxes; depreciation and amortization; impairment of goodwill; gains or losses on debt…
  43. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 43
    Non-GAAP Measures Reconciliation Distributable Cash Flow - The Company distributable cash flow as Adjusted EBITDA less distributions to TRP preferred limited partners, cash interest expense on debt obligations, current cash tax expense…
  44. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 44
    Non-GAAP Reconciliations Q2 2016 EBITDA and DCF The following table presents a reconciliation of Adjusted EBITDA and Distributable Cash Flow for the periods shown for TRC: Three Months Ended June 30, 2016 2015 ( in millions)…
  45. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 45
    Non-GAAP Reconciliations Q2 2016 Gross Margin The following table presents a reconciliation of gross margin and operating margin to net income (loss) for the periods shown for TRC: Three Months Ended June 30, 2016 2015 ( in…
  46. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 46
    Non-GAAP Reconciliation 2013-2016 Fee-Based Margin The following table presents a reconciliation of operating margin to net income (loss) for the periods shown: Three Months Ended 3/31/2013 6/30/2013 9/30/2013 12/31/2013…
  47. Q2 2016 Investor Presentation – Targa Resources Corp. – slide 47
    1000 Louisiana Suite 4300 Houston, TX 77002 Phone: (713) 584-1000 Email: InvestorRelationstargaresources.com Website: www.targaresources.com 49

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