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Targa Resources (NYSE:TRGP) +6.7% in Thursday's trading to its highest in more than eight years after reporting higher Q3 net earnings compared to Q2 and saying it plans to raise its annual dividend for 2024 by 50% to $3.00/share.
Targa (TRGP) said its plans dividend hike reflects a commitment to return additional capital to shareholders and the strength of the company's outlook.
Q3 net income rose 14% Y/Y to $220M from $193M in the year-earlier quarter, while adjusted EBITDA increased 9% to $840.2M from $768.6M in the prior-year period.
Targa's (TRGP) Q3 natural gas liquids production across all operating regions fell 4% Q/Q but rose 23% Y/Y to 836.3K bbl/day, while total natural gas inlet volumes were roughly flat from Q2 and up 17% Y/Y to 6.92B cf/day.
The Q/Q NGL volume drop occurred almost exclusively in the Delaware portion of the Permian Basin, where NGL production fell 12.3% to 322.5K bbl/day and natural gas inlet volumes slipped 2.9% to 2.48B cf/day; ~2.5% growth in Permian Midland volumes for natural gas and NGLs partly offset the decline.
In Targa's (TRGP) post-earnings conference call, CEO Matt Meloy cited several temporary factors for the Q/Q decline, including at a previously announced shift of 200M cf/day of natural gas to a third-party plant, delays in adding new compression and severe heat that hindered overall operations, according to Oil Price Information Systems.
"The underlying outlook [is that] we're very confident Permian volumes are going to continue to grow, not just for Q4, but as you look out to 2024, 2025 and beyond," Meloy said on the call, OPIS reported.