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Q3 2016 Results – Targa Resources Corp.

Targa Resources Corp. · Nov 2, 2016 · 41 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. Q3 2016 Results – Targa Resources Corp. – slide 1
    Targa Resources Investor Presentation Third Quarter 2016 November 2, 2016
  2. Q3 2016 Results – Targa Resources Corp. – slide 2
    Targas Corporate Structure TRC Public Shareholders (180,827,459 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. Q3 2016 Results – 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 Premier fractionation ownership Reduced hedge percentages…
  4. Q3 2016 Results – Targa Resources Corp. – slide 4
    Attractive Asset Footprint Targas footprint has been impacted by lower activity levels, but is positioned in some of the best basins / areas Diversified customer base U.S. Land Rig Count by Basin(1) 2,000 1,800 Permian…
  5. Q3 2016 Results – 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. Q3 2016 Results – Targa Resources Corp. – slide 6
    Business Mix, Diversity and Fee Based Margin Business Mix Field G&P Diversity Q3 2016 Operating Margin Q3 2016 Natural Gas Inlet Volumes 2% 9% 16% 44% 26% 17% 56% 5% 11% 6% 8% SAOU * WestTX * Sand Hills* Downstream G&P…
  7. Q3 2016 Results – Targa Resources Corp. – slide 7
    Preliminary Thoughts for 2017 G&P growth driven by producers with assets in some of the most economic basins in the world Permian (Midland Basin, Delaware Basin), Bakken, STACK, and SCOOP Systems already located in active areas will…
  8. Q3 2016 Results – 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 76% of our senior notes are set to mature in Senior Note Maturities ( in MM) 2022 and beyond TRCs…
  9. Q3 2016 Results – 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 WTI Crude Oil Prices - Quarter…
  10. Q3 2016 Results – Targa Resources Corp. – slide 10
    2016E Net Growth Capex Targa has completed two major projects and has three major projects underway, representing at least 275 million of 2016E growth capex (net) In November 2016, announced a new 200 MMcf/d plant in WestTX Total…
  11. Q3 2016 Results – Targa Resources Corp. – slide 11
    Targas Attractive Asset Footprint
  12. Q3 2016 Results – Targa Resources Corp. – slide 12
    Extensive Field Gathering and Processing Position Summary Footprint Over 24,000 miles of pipeline across attractive positions Over 3.6 Bcf/d of gross processing capacity Examples of recent/current G&P expansions: Seven new cryogenic…
  13. Q3 2016 Results – Targa Resources Corp. – slide 13
    Premier Permian Basin G&P Footprint LEGEND Est. Gross Processing Capacity 164 ACTIVE RIGS (October 18, 2016) (MMcf/d) Miles of Pipeline TARGA PROCESSING PLANT SAOU 369 1,650 SAOU SYSTEM WestTX (1) 1,075 4,050 Sand Hills 165 1,550…
  14. Q3 2016 Results – Targa Resources Corp. – slide 14
    Permian (SAOU) Summary Summary Asset Map and Rig Activity(1) Footprint includes approximately 370 MMcf/d of Legend processing capacity and 1,650 miles of pipeline in the Targa Pipeline Midland Basin Active Rigs (10/18/16) Targa…
  15. Q3 2016 Results – Targa Resources Corp. – slide 15
    Permian (WestTX) Summary Summary Asset Map and Rig Activity(1) Current footprint includes approximately 855 MMcf/d Legend of gross processing capacity and 4,050 miles of Targa Pipeline pipeline in the Midland Basin Active Rigs…
  16. Q3 2016 Results – Targa Resources Corp. – slide 16
    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 Central Basin Platform/Delaware Basin One active cryogenic…
  17. Q3 2016 Results – Targa Resources Corp. – slide 17
    Permian (Versado) Summary Summary Asset Map and Rig Activity(1) Footprint includes approximately 240 MMcf/d of processing capacity and 3,450 miles of pipeline in the northern Delaware Basin Three active cryogenic processing plant…
  18. Q3 2016 Results – Targa Resources Corp. – slide 18
    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 Crude Pipeline 374 miles of crude gathering Targa Gas pipelines…
  19. Q3 2016 Results – Targa Resources Corp. – slide 19
    Leading Oklahoma, North Texas and South Texas Positions Summary Footprint Four footprints including approximately 13,000 miles of pipeline Over 1.9 Bcf/d of gross processing capacity Announced a joint venture with Sanchez Energy…
  20. Q3 2016 Results – Targa Resources Corp. – slide 20
    SouthTX Sanchez Energy Corp. JV Driving Growth Summary Asset Map and Rig Activity(1) JV agreements with Sanchez Energy Corp. (NYSE:SN) Legend executed in October 2015 Targa Pipeline Gathering JV interest subsequently acquired by…
  21. Q3 2016 Results – Targa Resources Corp. – slide 21
    North Texas Exposed to Barnett Shale and Marble Falls Summary Asset Map and Rig Activity(1) 478 MMcf/d of gross processing capacity Primarily Marble Falls and Barnett Shale development Combination of larger independent producer…
  22. Q3 2016 Results – Targa Resources Corp. – slide 22
    SouthOK Exposure to Increasing SCOOP Activity Summary Asset Map and Rig Activity(1) 580 MMcf/d of gross processing capacity Velma system well positioned to benefit from increasing SCOOP activity Primary growth driver will be…
  23. Q3 2016 Results – Targa Resources Corp. – slide 23
    WestOK Positioned for STACK Growth Summary Asset Map and Rig Activity(1) 460 MMcf/d of gross processing capacity Legend Targa Pipeline Declining Mississippi Lime activity has impacted Active Rigs volumes (10/18/16) Targa…
  24. Q3 2016 Results – Targa Resources Corp. – slide 24
    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…
  25. Q3 2016 Results – Targa Resources Corp. – slide 25
    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…
  26. Q3 2016 Results – Targa Resources Corp. – slide 26
    Targas Fractionation Assets Targa Fractionation Footprint Domestic Rig Count and NGL Supply(1) 2,000 5,000 1,800 4,500 Liquids Production (MBbl/d) 1,600 4,000 1,400 3,500 1,200 3,000 Rig Count 1,000 2,500 1,796 1,842…
  27. Q3 2016 Results – Targa Resources Corp. – slide 27
    Targas LPG Export Business LPG Exports by Destination (1) Propane and Butane Exports (1) 26% 15% 51% 85% 23% Propane Butanes Latin America/South America Caribbean Rest of the World Fee based business with no direct…
  28. Q3 2016 Results – Targa Resources Corp. – slide 28
    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…
  29. Q3 2016 Results – Targa Resources Corp. – slide 29
    Additional Information
  30. Q3 2016 Results – Targa Resources Corp. – slide 30
    TRC Update Operating Margin 350 1,400 326 1,281 1,215 300 295 287 1,200 1,137 250 1,000 in milions in milions 200 180 800 162 161 695 682 164 599 627 150 600 588 115 126 442 100 400 50 200 0 0 (1) (1) G&P…
  31. Q3 2016 Results – Targa Resources Corp. – slide 31
    Pro Forma Consolidated Capitalization ( in millions) Actual Actual Further Pro Forma Cash and Debt Maturity Coupon 6/30/2016 Adjustments 9/30/2016 Adjustments(3) 9/30/2016 Cash and Cash Equivalents 170.9 (29.8) 141.1 141.1 TRP…
  32. Q3 2016 Results – Targa Resources Corp. – slide 32
    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…
  33. Q3 2016 Results – Targa Resources Corp. – slide 33
    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…
  34. Q3 2016 Results – Targa Resources Corp. – slide 34
    Dynamics of the LPG Market VLGC Freight Rates(1) Increasing VLGC Fleet(2) 1.80 0.35 300 +15 1.60 Baltic Shipping Rate (/gal) 0.30 +47 MB Propane Price (/gal) 1.40 250 +32 261 0.25 246 1.20 Number of VLGCs 0.20 200…
  35. Q3 2016 Results – Targa Resources Corp. – slide 35
    Reconciliations
  36. Q3 2016 Results – Targa Resources Corp. – slide 36
    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…
  37. Q3 2016 Results – Targa Resources Corp. – slide 37
    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, cash tax expense and less…
  38. Q3 2016 Results – Targa Resources Corp. – slide 38
    Non-GAAP Reconciliations Q3 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 September 30, 2016 2015 ( in millions)…
  39. Q3 2016 Results – Targa Resources Corp. – slide 39
    Non-GAAP Reconciliations Q3 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 September 30, 2016 2015 ( in…
  40. Q3 2016 Results – Targa Resources Corp. – slide 40
    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…
  41. Q3 2016 Results – Targa Resources Corp. – slide 41
    1000 Louisiana Suite 4300 Houston, TX 77002 Phone: (713) 584-1000 Email: InvestorRelationstargaresources.com Website: www.targaresources.com 43

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