A.J. O'Donnell

AJ O'Donnell requested more detail on the $1.2 billion step-up in the new capital expenditure budget, specifically how much is driven by new plants and Frac Train 13 versus additional field capital and compression for legacy systems and recent acquisitions. He also asked how rich gas production in the Permian could trend, exit to exit, if overall Permian oil production remains flat in 2026, considering higher GORs.

Answer

President Jen Kneale explained that the CapEx increase includes Yeti Two, Frac Train 13, long-lead items for two additional Permian Delaware plants, and significant field gathering and compression spending for both core contracts and commercial success. She also noted longer lead times for equipment necessitate accelerated spending. CEO Matthew Meloy stated that even with flat to modest crude growth, gas production is expected to grow higher (historically 4% above crude, recently more) due to higher GORs and gassier target zones, with Targa outperforming the basin.

AJ O'Donnell requested more detail on the $1.2 billion step-up in the new CapEx budget, specifically how much is driven by new plants/Frac 13 versus field capital/compression for legacy systems and recent acquisitions. He also asked how overall rich gas production could trend in the Permian in 2026 if oil production remains flat, considering higher GORs.

Answer

Jen Kneale, President, explained that the CapEx increase includes the Yeti Two plant, Frac Train 13, and long-lead items for two more Delaware plants, consistent with prior cost estimates. It also covers significant field gathering and compression for core contracts and commercial success, plus accelerated spending due to longer lead times for equipment. Matthew Meloy, CEO, stated that even with flat to modest crude growth, gas production should grow higher (potentially 4% above crude growth, or more) due to increasing GORs, gassier target zones, and Targa's strong basin performance.

A.J. O'Donnell asked about the timing and approach for expanding the Speedway NGL pipeline to its full 1 million barrels per day design capacity, given Targa Resources Corporation's trending volumes. He also inquired about activity in the Midcon region, specifically if it's shifting to gassier areas and its impact on Targa's central region platform.

Answer

Matt Meloy, CEO, explained that expanding Speedway from 500,000 bpd to 1 million bpd would be highly economical, primarily requiring pump stations at a fraction of the initial capital cost, and would be done ratably over time as volumes ramp, similar to Grand Prix. Patrick McDonie, President of Gathering and Processing, noted increased activity in Midcon's Arcoma and South Oak assets, but not a 'huge surge,' seeing it as a potential opportunity if gas prices strengthen, with favorable capital investment due to existing plant capacity.

AJ O'Donnell from Tudor, Pickering, Holt & Co. inquired about how market-based opportunities, particularly considering Venezuela developments and quality differentials, are trending relative to the $50 million mark outlined in the company's deck.

Answer

Jeremy Goebel, EVP and Chief Commercial Officer, stated that the current market conditions, including the impact of Venezuela developments, are already reflected in the budget. He noted that these developments occurred towards the end of last year, allowing the company to lock in spreads and firm up part of their plan, significantly de-risking the opportunity.

A.J. O'Donnell asked how Venezuela developments fit into the budget timeline and how market-based opportunities, including DIFs and quality DIFs, are trending relative to the $50 million mark outlined in the deck.

Answer

Jeremy Goebel, Executive Vice President and Chief Commercial Officer, stated that the current market, including the impact of Venezuela developments, reflects the company's budget. He noted that these developments occurred towards the end of last year, allowing the company to lock in spreads and de-risk opportunities, thereby firming up part of their plan.

A.J. O'Donnell inquired about how Plains All American views market-based opportunities, specifically whether they are trending above or below the $50 million mark outlined in the deck, considering recent developments in Venezuela and movements in DIFs (differentials) and quality DIFs.

Answer

Jeremy Goebel, Executive Vice President and Chief Commercial Officer, confirmed that the current market conditions, including the impact of Venezuelan developments and differential movements, are already reflected in the company's budget. He noted that these movements, which occurred towards the end of last year, allowed Plains to lock in spreads, thereby firming up part of their plan and de-risking opportunities.

A.J. O'Donnell inquired about Enterprise Products Partners' strategy for managing its natural gas marketing space, particularly in late 2026 and 2027 as Waha differentials narrow, given the Q4 2025 benefit from gas marketing. He also asked for more details on the Haynesville Acadian expansion.

Answer

Tug Hanley, a Company Representative, stated that Enterprise maintains an open position on natural gas capacity, evaluating bundling GMP deals for long-term contracts and monetizing short-term opportunities. Natalie Gayden, SVP of Natural Gas, added that Midland contracts are top-heavy with few floors, benefiting from a stronger Waha basis, and capacity is always paired with GMP. She described the Haynesville Acadian expansion as an increase in gathering system treating and reach, serving a mix of private and public producers.

A.J. O'Donnell of TPH asked for a breakdown of the contributions to the consolidated guidance and whether ONEOK plans to continue with EnLink's growth capital projects, particularly in Louisiana.

Answer

CFO Walter Hulse explained the guidance increase is additive from the acquired businesses, with synergies expected in 2025. He and CEO Pierce Norton confirmed they will review all EnLink projects and have taken none off the table, highlighting that growth in Louisiana will likely be focused on the natural gas business to serve industrial and potential AI-related demand.