Targa Resources Q2 Earnings Call Highlights

Targa Resources NYSE: TRGP reported record second-quarter operating volumes and adjusted EBITDA, supported by growth in the Permian Basin, higher marketing optimization opportunities and record activity across its downstream operations. Chief Executive Officer Matt Meloy said adjusted EBITDA rose 38% from a year earlier, while Permian volumes increased by more than 900 million cubic feet per day from the prior-year period and 450 million cubic feet per day from the first quarter. The company said its results were achieved despite first-quarter weather disruptions, natural-gas takeaway constraints, negative Permian gas pricing and broader market volatility.

For the full year, Targa now expects adjusted EBITDA to be toward the upper end of its $5.7 billion to $5.9 billion guidance range. Meloy said that would suggest adjusted EBITDA growth of close to $1 billion over 2025, alongside dividend growth and share repurchases.

Permian Growth and Returning Volumes President Jen Kneale said second-quarter Permian volumes reached a record 7.2 billion cubic feet per day, up approximately 7% sequentially and 14% from a year earlier. During the quarter, Targa had roughly 200 million to 400 million cubic feet per day of gas shut in behind its Permian systems on a given day because of weak Waha pricing.

However, the company said the quarter-over-quarter volume increase despite those shut-ins demonstrated continued producer activity. With the Hugh Brinson Phase I project and GCX expansion now operating, most price-related producer shut-ins returned to Targa’s systems in July, according to Kneale. Kneale said July delivered another strong month of volume growth and that activity is running somewhat ahead of the company’s expectations at the start of the year. The company expects continued growth during the second half of 2026 and said the momentum supports its outlook for 2027 and beyond. Management also said a stronger macro backdrop, including higher crude oil prices and improved natural-gas egress from the Permian, is supporting producer activity. The company noted that a small amount of price-related shut-in volume remained to return in early August, while routine shut-ins can also occur for operational reasons such as frac protection.

Marketing Gains and Downstream Records Chief Financial Officer Will Byers said second-quarter adjusted EBITDA was $1.603 billion, up 14% from the first quarter. The gain reflected higher marketing optimization opportunities and record volumes in Permian gathering and processing, NGL transportation, fractionation and LPG exports. Targa’s marketing businesses exceeded the company’s expectations by about $250 million in the first half, with much of the outperformance occurring during the second quarter.