Targa Resources NYSE: TRGP executives used the company’s fourth-quarter 2025 earnings call to highlight record 2025 volumes and financial results, outline a higher growth capital plan tied to Permian expansion, and provide 2026 guidance that implies another year of growth driven primarily by contracted, fee-based activity.
Record 2025 volumes and earnings performance
Chief Executive Officer Matthew Meloy said 2025 was “another exceptional year,” with record volumes across Targa’s integrated footprint driving record financial performance. Meloy cited 2025 Permian volumes growing 11% for the year—an increase of more than 600 million cubic feet per day—along with NGL transport volumes up almost 170,000 barrels per day, frac volumes up more than 120,000 barrels per day, and record LPG export volumes.
The operational performance translated into record Adjusted EBITDA of $4.96 billion for 2025, which Meloy said was more than $800 million higher year over year. Chief Financial Officer Will Byers added that full-year 2025 Adjusted EBITDA was up 20% versus 2024 and said the company benefited from “stronger marketing,” including approximately $150 million of higher-than-expected optimization opportunities across 2025.
Byers reported fourth-quarter Adjusted EBITDA of $1.34 billion, up 5% sequentially, attributing the increase to higher system volumes and greater optimization opportunities in the marketing business.
Permian volumes, weather impacts, and commercial additions
President Jen Kneale said fourth-quarter Permian volumes averaged a record 6.65 Bcf/d, up 10% from the prior year, as producer activity remained strong. She noted that Targa had previously referenced producer shut-ins tied to sharply negative Waha pricing during the quarter, but those volumes returned to the system, resulting in slightly higher fourth-quarter volumes than expected.
In January, Winter Storm Fern reduced volumes across operations, Kneale said, but she described the company’s assets as “resilient,” staying online and ready to receive volumes when temperatures improved.
Targa also emphasized commercial success and acreage additions. Kneale said the company added approximately 350,000 dedicated acres in 2025 and completed the acquisition of Stakeholder plus “two bolt-on producer transactions,” which added approximately 2 million acres in areas of mutual interest and nearly 500,000 dedicated acres. In the Q&A, management characterized the two bolt-on deals as originating from producers with long-standing relationships with Targa, where it “made more sense” for Targa to own the assets and build out the systems.
New projects: processing plants, fractionation, and downstream buildout
Management framed the current period as an “elevated growth capital environment” as Targa invests in gathering and processing (G&P) and downstream infrastructure. Meloy announced two new projects on the call:
- Yeti Two, the company’s next Delaware processing plant, scheduled to be in service in the fourth quarter of 2027.
- Fractionation Train 13, described as the company’s 13th fractionator in Mont Belvieu, intended to support NGL supply growth into 2028 and beyond.
Meloy also said Targa is ordering long-lead items for two additional Permian plants planned for early 2028. He characterized the next two years as “8 plants,” providing line of sight to incremental processing capacity of 2.2 Bcf/d and gross NGL production of approximately 320,000 barrels per day. Kneale said Falcon Two is currently in startup and is expected to come online ahead of schedule, while other announced plants for 2026 and 2027 remain on track.
On the downstream side, Kneale said NGL transportation volumes averaged a record 1.05 million barrels per day in the fourth quarter and that the transportation system continues to run full. Fractionation volumes averaged a record 1.14 million barrels per day, and LPG export volumes averaged 13.5 million barrels per month. Management said Delaware Express, Fractionation Trains 11 and 12, Speedway, and the LPG export expansion remain on track and “will be much needed at startup.”
2026 guidance, capital spending, and balance sheet
Byers provided 2026 Adjusted EBITDA guidance of $5.4 billion to $5.6 billion, which would represent an 11% increase over 2025 at the midpoint. He said Targa expects approximately $4.5 billion of growth capital spending in 2026 to support major projects and continued volume growth. In 2025, Targa invested approximately $3.3 billion in growth capital, with net maintenance capital of $226 million.
Byers emphasized the fee-based structure of the business, stating that cash flows are more than 90% fee-based and that Targa has hedged the majority of non-fee margin for the next three years. He also quantified commodity sensitivity, saying a 30% move higher or lower in commodity prices based on recent strip pricing would represent less than a 2% change versus the midpoint of 2026 Adjusted EBITDA guidance.
On leverage and liquidity, Byers said the company ended the year with net consolidated leverage of approximately 3.5x, within its 3–4x target range. He also said available liquidity as of Jan. 31, 2026 was approximately $1.9 billion, inclusive of funding the Stakeholder acquisition and redeeming 6.875% notes due January 2029. Byers added that, due to the return of bonus depreciation and based on current assumptions, Targa does not expect to pay “meaningful cash taxes” for the next five years.
Targa also reiterated its shareholder return approach. Byers said the company repurchased $642 million of common shares during 2025 at a weighted average price of $170.45 and expects opportunistic repurchases to remain part of its framework in 2026 and beyond.
Waha volatility, marketing opportunities, and long-term outlook
Management repeatedly returned to the theme of strong contracted growth against a backdrop of volatile Permian natural gas differentials. Kneale said the Permian egress environment is expected to improve as the company exits 2026, but she expects Waha pricing to remain volatile through much of the year. She and other executives described potential marketing upside tied to that volatility, while noting that Targa’s 2026 guidance is conservative regarding marketing gains.
Executives also discussed Permian takeaway projects and market dynamics. Kneale said the Blackcomb and Traverse pipelines—where Targa holds a 17.5% equity interest—are under construction, with Blackcomb expected to enter service in the fourth quarter of 2026 and Traverse in 2027. In the Q&A, Chief Commercial Officer Bobby Muraro said the basin has historically been a “bumpy ride” as new pipes come online and then fill over time, and he expects a similar dynamic going forward.
Looking beyond 2026, Meloy said Targa is nearly two months into 2026 with momentum continuing and estimated “another year of low double-digit Permian volume growth.” He added that while expectations for 2026 were consistent with prior commentary, the outlook for 2027 and beyond “has only improved.” Management also said final investment decisions are based on contracts already in hand, not assumptions of future, unidentified contract wins.
About Targa Resources NYSE: TRGP
Targa Resources Corporation NYSE: TRGP is a U.S.-focused midstream energy company that provides gathering, processing, transportation, storage and marketing services for natural gas, natural gas liquids (NGLs), and condensate. Its operations span the midstream value chain, including gas gathering systems that collect production from wells, processing plants that separate and recover NGLs and other hydrocarbons, fractionation and purification facilities that prepare NGLs for market, and pipeline and terminal assets that move and store products for producers, refiners and other customers.
The company operates a network of pipelines, processing plants, fractionators and storage facilities that serve producers and consumers across major U.S.
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