4Q21 Earnings Preview: East Daley forecasts Targa 4Q21 Adj. EBITDA of $559 million, up $53 million (10%) Q-o-Q and $10 million (2%) above consensus. We expect continued growth in G&P volumes, exports, fractionation, and Grand Prix volumes. Additionally, we model an uplift from commodity prices and marketing revenues.
To bring greater transparency to markets, East Daley Analytics is undertaking a broad study of G&P system rates. We maintain asset-level financial models for over 1,000 assets owned by public companies. From this asset pool, we’ve identified 200+ G&P systems for which we can confidently assess rates. We’ve created a G&P rate methodology based on our balanced public asset models.
4Q21 Earnings Review: Targa reported 4Q21 Adj. EBITDA of $571 million, $12 million above East Daley and $27 million above Bloomberg consensus EBITDA.
Logistics & Marketing: The L&M segment reported 4Q21 Adj. EBITDA of $344 million, $8 million above East Daley as a result of increased NGL sales/marketing volumes and lower-than-expected operating expenses.
Grand Prix volumes of 433 Mb/d were in line with modeled estimates of 438 Mb/d. Exports rebounded as expected but still lagged estimates by 4% for the quarter. In addition, fractionation volumes were as much as 10% below our 4Q21 forecast due to an unplanned maintenance event. TRGP is also planning a low-cost expansion (~32,873 b/d) at its Galena Park export facilities, targeting a mid-2023 start.
Uses of FCF / Strategy/ Macro Themes: