Earnings call transcript: Enterprise Products Partners Q2 2025 sees mixed results

Enterprise Products Partners LP (EPD) reported its financial results for the second quarter of 2025, revealing a mixed performance. The company exceeded earnings per share (EPS) expectations with $0.66 per share against a forecast of $0.65, marking a 1.54% positive surprise. However, revenue fell significantly short of projections, coming in at $11.36 billion compared to the anticipated $14.49 billion, a 21.6% miss. Despite the revenue shortfall, the stock showed a slight pre-market uptick of 0.48%, trading at $31.70.

Key Takeaways

• EPS slightly exceeded expectations, but revenue fell short by 21.6%.
• Stock price showed a modest pre-market increase despite mixed results.
• Strong operational metrics include high DCF and EBITDA figures.
• Revenue miss attributed to challenging macroeconomic conditions and margin compression.
• Continued investments in growth projects highlight future potential.

Company Performance

Enterprise Products Partners LP displayed resilience in its operational metrics, with an adjusted EBITDA of $2.4 billion and a distributable cash flow (DCF) of $1.9 billion. The company’s net income remained steady at $1.4 billion, unchanged from the previous year. Despite these strengths, the significant revenue shortfall indicates potential challenges in demand or pricing within its markets.

Financial Highlights

• Revenue: $11.36 billion, a 21.6% miss from forecasts.
• Earnings per share: $0.66, a 1.54% beat over expectations.
• Adjusted EBITDA: $2.4 billion.
• Distributable Cash Flow: $1.9 billion.
• Net Income: $1.4 billion, unchanged YoY.

Earnings vs. Forecast

Enterprise Products Partners’ EPS surpassed expectations by a slight margin, achieving $0.66 against a forecast of $0.65. However, the company experienced a substantial revenue miss, with actual figures at $11.36 billion compared to the $14.49 billion forecasted, reflecting a 21.6% negative surprise. This discrepancy suggests challenges in market conditions or competitive pressures.

Market Reaction

Following the earnings announcement, Enterprise Products Partners’ stock experienced a modest pre-market increase of 0.48%, despite the revenue miss. The stock is trading closer to its 52-week low of $27.37, indicating a cautious investor sentiment amidst mixed financial results.

Outlook & Guidance

The company remains focused on its growth trajectory, with nearly $6 billion earmarked for organic growth projects, including two new gas processing plants in the Permian. Enterprise Products Partners also anticipates increasing discretionary free cash flow in 2026 and 2027, bolstered by strategic infrastructure expansions and bolt-on growth opportunities.

Executive Commentary

"We’re not as bearish as others," stated Tony from management, underscoring the company’s confidence amidst market challenges. CEO Jim Teague highlighted the competitive advantage of their export infrastructure, stating, "Our competitive advantage from our existing export infrastructure enables us to meet customer needs." Additionally, Randy Sattler, CEO, noted, "Discretionary free cash flow is really about to take a step up in 2026, 2027."

Risks and Challenges

• Margin compression in the LPG export market could continue to pressure revenues.
• Macroeconomic and geopolitical uncertainties may impact demand and pricing.
• Declines in spot terminal fees could affect profitability.
• High leverage with $33.1 billion in debt may limit financial flexibility.
• Competitive pressures in the natural gas and petrochemical markets.

Q&A

Analysts inquired about the outlook for Permian production, challenges in ethane exports, and capital allocation strategies. The company addressed these concerns, emphasizing their strategic focus on growth and maintaining system reliability amidst a challenging market environment.

Full transcript - Enterprise Products Partners LP (EPD) Q2 2025:

Conference Operator: Thank you for standing by, and welcome to Enterprise Products Partners, LP’s Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. To remove yourself from the queue, you may press 11 again.

I would now like to hand the call over to Libby Strait, Vice President of Investor Relations. Please go ahead.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners: Good morning, and welcome to the Enterprise Products Partners conference call to discuss second quarter twenty twenty five earnings. Our speakers today will be Co Chief Executive Officers of Enterprise’s General Partner, Jim Teague and Randy Sattler. Other members of our senior management team are also in attendance for the call today. During this call, we will make forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 based on the beliefs of the company as well as assumptions made by and information currently available to Enterprise’s management team. Although management believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

Please refer to our latest filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward looking statements made during this call. With that, I’ll turn it over to Jim.

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: Thank you, Libby. Despite facing considerable headwinds, we delivered another good performance this quarter. Seasonally, the second quarter is always tough, but this time we also face macroeconomic and geopolitical challenges. Today, we reported adjusted EBITDA of $2400000000.01900000000.0 dollars of distributable cash flow, providing 1.6 times coverage and we retained $740,000,000 of DCF. We set five volumetric records for the quarter, processed 7,800,000,000 cubic feet of natural gas per day, moved 20,000,000,000 cubic feet per day through our natural gas pipeline network.

We transported over 1,000,000 barrels per day of refined products and petrochemicals. And we have even more plant pipe frac and duct capacity coming online over the next eighteen months. We’ve got nearly $6,000,000,000 worth of organic growth projects entering service and includes two gas processing plants in the Permian that are ramping as we speak and the third plant that is expected to start up in the first part of next year. Altogether these three plants will bring our total Permian processing capacity to almost five Bcf a day producing 650,000 barrels a day of liquids. In the fourth quarter, we expect to start up the 600,000 barrel per day Bahia wide grade pipeline and our Frac-fourteen.

These investments bring more volumes into our NGL value chain. We started operations at our Neches River Terminal. Initially the facility will have the capacity to load ethane at 120,000 barrels a day. In the first half of twenty twenty six, the facility will be fully operational with the commissioning of a second train that is a flex train. This expansion will increase its capacity by an additional 180,000 barrels a day of ethane or 360,000 barrels a day of propane.

This past quarter was dominated by headlines about tariffs and trade, many of this getting close to home, especially regarding ethane and LPG. We managed to navigate these disruptions. That said, we’ve been clear about the risk of weaponizing U. S. Energy exports.

These kind of actions rarely hurt the intended target and often backfire hurting our own industry more. We’re fortunate this administration understands the importance of energy and global trade even if the commerce department may need a little reminder. Unfortunately, we could face similar challenges in the future. There are growing rumors of midstream companies planning to enter the LPG export market. However, this space has become increasingly competitive and the impact is already evident.

Just a year ago, spot terminal fees ranged from $0.10 to $0.15 per gallon. That is no longer the case. In the second quarter, export volumes rose by 5,000,000 barrels quarter to quarter, yet our gross operating margin declined by $37,000,000 This was driven by the re contracting of a legacy ten year double digit term agreement, the current market pricing and by a 60% drop in spot rates. Although increased throughput across our Houston Ship Channel pipeline system help mitigate the decline. It doesn’t change the fact that this market is fundamentally shifting.

Despite the challenges, however, we remain well positioned to succeed. Our competitive advantage from our existing export infrastructure enables us to meet customer needs through brownfield expansions where new build economics simply don’t work and we will aggressively defend our position. The appetite for U. Ethane and ethylene remains strong in both Asia and Europe. As to octane enhancement, we’ve seen margins normalize after a few years of outsized earnings, but the business remains healthy.

Lower margins are a product of new supply in the market, not waning demand. Hydrocarbons is a supply driven business and our network of assets reflect that. The majority of our capital projects currently under construction directly support our supply strategy, but supplies isn’t the whole story. What sets us apart is our extensive connectivity to end users. We are directly or indirectly linked to 100% of the ethylene plants in The U.

S. And 90% of the refineries East Of The Rockies. Our export business continues to be a key part of our strategy. With the addition of the Neches River Terminal, expanded LPG loading at EHT and increased ethylene export capability at Morgan’s Point, We’ve taken the deliberate steps to enhance and expand our downstream footprint, strengthening our access to global markets. And with that, Randy, I’ll turn it over

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: to you. Okay. Thank you, Jim. Good morning, everyone. Starting with the income statement, net income attributable to common unitholders was $1,400,000,000 for both the second quarters of twenty twenty five and 2024.

Net income to common unitholders on a per unit basis increased 3% to 66¢ per common unit in the 2025 compared to 64¢ per common unit for the second quarter of last year, both on a fully diluted basis. Adjusted cash flow from operations, that is cash flow from operations before changes in, working capital was 2,100,000,000.0 for both the 2025 and 2024. Distributable cash flow increased 127,000,000 or 7% to 1,900,000,000.0 for the second quarter of twenty twenty five, primarily due to lower sustaining capital expenditures compared to last year that had a higher level due to modifications and a turnaround at PDH1. Distributable cash flow provided 1.6 times coverage of the distribution declared for the second quarter of this year and Enterprise retained $748,000,000 of distributable cash flow. For the last twelve months, the partnership has retained $3,400,000,000 of distributable cash flow.

We declared a distribution of 54.5 per common unit for the second quarter of twenty twenty five, which is 3.8% increase over the distribution declared for the second quarter of twenty twenty four. The distribution will be paid August 14 to common unit holders of record as of the close of business on July 31. In the second quarter, the partnership purchased approximately 3,600,000 common units off the open market for $110,000,000 Total repurchases for the twelve months ended 06/30/2025 were $3.00 9,000,000 or approximately 10,000,000 common units, bringing total purchases under our $2,000,000,000 buyback program to approximately $1,300,000,000 In addition to buybacks, our distribution reinvestment plan and employee unit purchase plan purchased a combined 5,500,000 common units on the open market for $171,000,000 during the last twelve months, including 1,300,000 common units on the open market for $41,000,000 during the second quarter of twenty twenty five. I’ve highlighted on past calls that almost 50% of our employees participate in the employee unit purchase plan. We did some analysis using our 2024 ks ones.

At 12/31/2024, as a group, our employees, retirees, their families owned over 40,000,000 EPD units or almost 2% of outstanding units and made them our second largest unitholder after privately held EFCO at year end. For the twelve months ending 06/30/2025, Enterprise paid out approximately 4,600,000,000.0 in distributions to limited partners combined with $3.00 9,000,000 of common unit repurchases over the same period. Enterprises total capital return was 4,900,000,000.0 resulting in a payout ratio of adjusted cash flow from operations of 57%. Total capital investments in the 2025 were 1,300,000,000.0, which included 1,200,000,000.0 for growth capital projects and 117,000,000 of sustaining capital expenditures. Our expected range of growth capital expenditures for 2025 and 2026 remain unchanged at 4 to 4,500,000,000.0 for 2025 and two to $2,500,000,000 for 2026.

We continue to expect 2025 sustaining capital expenditures to be approximately $525,000,000 Our total debt principal outstanding was approximately $33,100,000,000 as of 06/30/2025. Assuming the final maturity date for our hybrids, the weighted average life of our debt portfolio is approximately eighteen years. Our weighted average cost of debt was 4.7% and approximately 98% of our debt was fixed rate. At 06/30/2025, our consolidated liquidity was approximately 5,100,000,000.0 including availability under our credit facilities and unrestricted cash on hand. Our adjusted EBITDA for the second quarter was 2,400,000,000.0 and for the last twelve months was 9,900,000,000.0.

As of 06/30/2025, our consolidated leverage was 3.1 times on a net basis after adjusting our debt for the partial equity treatment of our hybrid debt and reduced by the Partnership’s unrestricted cash on hand. Our leverage target remains at three times plus or minus 0.25 terms. With that, Libby, I think we can open it up for questions.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners: Thank you. Operator, we are ready to open the call for questions.

Conference Operator: Thank you. Please limit yourself to one question and one follow-up or two questions to allow everyone the opportunity to participate. Our first question comes from the line of Dounis of Citi. Please go ahead,

Zach Dounis, Analyst, Citi: Thanks, operator. Good morning, team. First question, just want to maybe take a look at second half of twenty five. Jim, you mentioned about $6,000,000,000 of assets coming online in the second half. Just curious, how should we think about the ramp up of those assets?

Are there a lot of volumes behind the systems? Should we expect these processing plants to come online pretty full as well?

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: Zach, what will be your ramp up on 05/14? 05/14 will come up completely full.

Doug, Management, Enterprise Products Partners: NRT will see a ramp as the LEC’s are ordered and Natalie can chime in, but I think the processing plants are gonna

Tony, Management, Enterprise Products Partners: have a pretty quick ramp to them as well.

Natalie, Management, Enterprise Products Partners: Yes, that’s right. And Delaware and Midland combined is probably around a 90% utilization today. But remember, we just brought those two plants up by the end of the year, fourth quarter mainly driven. Should be full and so should have been.

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: What will Bahia come up

Doug, Management, Enterprise Products Partners: at Justin? Bahia should come up probably around 50%, first twelve months probably closer to 60%. Again, that’s middle of fourth quarter start up, so you won’t get a full quarter’s contribution until the first quarter of next year.

Zach Dounis, Analyst, Citi: Got it. All very helpful. Second question, maybe just shifting to capital allocation, stepped up the buyback a little bit this quarter. I imagine that was in response to just some volatility in the price. But as we sort of look forward, you’re still sort of holding off that 2,000,000,000 to $2,500,000,000 for 2026.

So I wonder now, as we’re approaching that timeframe, do you start ratcheting up the buyback in anticipation of 2026 being a lean year or really not till we get into it do we see any sort of, let’s call it step change in the buyback program?

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Hey, Spiro. Good morning. This is Randy. Yeah. We’ve, you know, we had said, actually last quarter that our expectation this year was we would probably do anywhere from $200 to $300,000,000 of buybacks.

You’re right. In the second quarter, we did see some volatility and so we picked up the pace of purchases. Know, and I think we’ll continue to be opportunistic for the remainder of this year. I think the larger opportunity for the buybacks will come in 2026 as we really start throwing off much more free cash flow.

Zach Dounis, Analyst, Citi: Great. I’ll leave it there. Thanks, everyone.

Conference Operator: Thank you. Our next question comes from the line of Jean Ann Salisbury of BofA. Please go ahead, Jean Ann.

Jean Ann Salisbury, Analyst, BofA: Hi, good morning. I wanted to go back to some of Jim’s commentary on the call. LPG export fees have fallen, pipeline and frac might be overbuilt as well and have some pressure there. How do you see this evolving? And how will enterprise balance defending market share with kind of maintaining your excellent return on capital?

Doug, Management, Enterprise Products Partners: Hi, Jean Ann, this is Tug. So from our perspective, specifically on LPGs, stand 8590% contracted through the balance of the decade. And as far as our strategy, we’re all using brownfield economics over here. It’s all built on infrastructure. So it allows us to be extremely competitive to continue to get term contracts, which we continue to sign up additional counterparties and will continue to do so.

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: Jeanine, the other thing I think is important is that export facility as a way of being a magnet for our pipelines and our fractionators and our storage.

Jean Ann Salisbury, Analyst, BofA: That makes sense. Thank you. And then I think as my follow-up, it’s probably for Tony. There’s obviously a lot of concern about potentially slowing oil growth in the Permian next year. If oil growth does slow down or even is flat next year, do you see the rate of gas to oil ratio growth changing, if at all?

And how do you think about that?

Tony, Management, Enterprise Products Partners: Morning, Jean Ann. I think I’ll think about that question first and foremost, we believe the Permian Basin producers have been and will always be looking for oil. That said they’ve been drilling about 5,000 locations a year for the last several years. So I would say it’s clear that the easiest and oil less locations for the most part have been drilled up. Thus we have been and we will be drilling gassier benches and we’ve talked about that for the last year or two.

Add to that that oil naturally declines faster than natural gas does and we have this very large PDP and very large and growing PDP base in the Permian. So Jeanine in any way you cut it all signs point to the Permian Basin continuing to get gassier really for years to come. There’s no question about it. Think while we’re on the topic of the Permian, maybe I’ll just talk about how we see the Permian if maybe this is a good time to talk about it. There’s been a lot

Jean Ann Salisbury, Analyst, BofA: of questions.

Chris, Management, Enterprise Products Partners: What’s that?

Jean Ann Salisbury, Analyst, BofA: It’s a great time, Tony. Thanks.

Tony, Management, Enterprise Products Partners: Okay. There’s a lot of that’s happened over the last sixty to ninety days. First and foremost, OPEC has abandoned their long standing market stability role in favor of market share and on the way to putting a couple of 2,000,000 barrels of incremental production on in just a six month time period. That’s a lot. And then we had the Israel and Iran conflict break out to a full fledged war And all the oil facilities in Iran and throughout The Middle East were unscathed.

So thus we had the war premium taken out. So all that being said, there’s a lot of pressure one could see on oil. Meanwhile, we’re sitting here in summer driving season around the world and strong demand in The Middle East. So the question is, when does strong demand ends, summer driving season ends and Middle East quits using all the oil for electrical generation. What happens to oil?

And I guess Jeanine respectfully I see there’s a lot of people that are that have some pretty dire forecast and we feel differently. And I think I’ll just point out the reason we feel differently is OPEC’s been shorting the market least 2,000,000 barrels a day for two years running and more on top of that. So there is a massive hold to be able to put oil into when and if the price drops. So assuming we have a price drop and if we move from backwardation to contango, oil is going to get a signal to trade and into storage and that’s the way we see it. So we’re probably not as bearish on price, although we don’t have to call price, we’re not as bearish as others.

But from a fundamental standpoint, will say we’re not as bearish as others. So what does that mean for US producers? We had a brief period where we touched $57 but we’re at 65 this morning. And really when you look at 26, 27 all the way up to 30, we’re at $62 to $63 For the Permian producer, which is where we’re focused with our assets, you had the improvement in gas basis because in new pipelines to take away and really demand Permian producers bottom line is extremely profitable. So I think what we’re going to see during earnings season for producers is you’re going to see them hold their guidance and not go down while others are saying the Permian is gonna be flat to down.

Just don’t believe that’s gonna happen. You’ll see them hold their guidance for the year and you’ll see that they’ve been aggressive with hedging ’25, ’26 and maybe even some of them 27. From a fundamental standpoint, that’s how we see it. Natalie, what are you seeing? We

Natalie, Management, Enterprise Products Partners: are not hearing anything different than what we spoke to in our last earnings call. We actually did get a surprise from one of our producers who brought Wells Ford in 2026 and their production plans. There are a few production areas too in our portfolio where it’s not declining as expected. And I’ll just leave you with this in Midland this year we will have brought on four sixty three wells. Next year, we have four ninety eight on the schedule, just to give you some color.

Jean Ann Salisbury, Analyst, BofA: Well, that’s super helpful. Thank you, Tony. You’ve had a really good record at your forecasting, so that carried some weight. So thank you for the very answer.

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: Thank you.

Conference Operator: Thank you. Our next question comes from the line of Theresa Chen of Barclays. Please go ahead, Theresa.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners0: Good morning. I want to go back to the topic of NGL exports. And specifically, what are the lessons learned from the BIS ethane incident during the second quarter? Do you think the views of your customers, suppliers and other stakeholders on U. S.

Ethane exports to China, do you think those of you have structurally changed as a result of this event? And if so, are you likely going to try to find alternate markets or end uses for incremental ethane exports from here?

Doug, Management, Enterprise Products Partners: Doug, do you want to take it? Yeah. So if you look at what happened with the BIS requiring export license effectively for ethane, I will say we were largely unscathed as enterprise, but I’ll remind you that we have a lot of international exposure to other countries other than China, call it Vietnam, Thailand, India, Europe, Mexico, Brazil.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners1: But if it was going

Doug, Management, Enterprise Products Partners: to be sustained, I could see it presenting a challenge for ethane structurally here in The US. But what it has done and where it’s been a problem is you really compromise The US brand for reliable supply and energy security when you just cut off a counterparty like that. In fact, I will tell you, we had a non Chinese based company that we’re in discussions with about contracting ethane with. And they’ve now since made a decision to contract naphtha, which is supplied globally versus is coming to The US to get ethane. So from that perspective, it’s been disruptive, but in the short term, we’re able to manage through it with our diverse contract mix.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners0: Thank you. And then within the petchem and refined product services segment, what’s your forward outlook for PDH? As well as, what is your view for whether it be the second half or into 2026 about the spreads based businesses? Can you touch a little bit on the incremental supply you see in Optane that will persist from here?

Chris, Management, Enterprise Products Partners: Yeah, sure, Theresa. This is Chris. As far as PDHs go, our operating rates have improved quite a bit versus the first quarter. That being said, we’re still not happy and we haven’t met expectations about what our on stream time should be. As far as our beef and Octane enhancement goes, we’ve had really a record last three years high margins.

And as Jim touched on in the opening remarks, we’ve kind of returned to historic kind of margins. So they’re still really good. I mean, still some of the best margins we have in the company, but it’s not what we have had historically. That being said, so far for the month of July, we’ve seen margins improve just part of that probably in driving season. We still see the pressure from China.

Historically, MTBE was more of a regional market where occasionally you would see some cargoes coming from Europe or from Asia and occasionally we would send some cargoes to Europe or Asia, but by and large, it was regional. That’s changed with all the additional capacity coming on from China. We started seeing that pressure and that’s some of the reason why we’ve seen some weakness.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners0: Thank you.

Conference Operator: Thank you. Our next question comes from John Mackay of Goldman Sachs. Your line is open, John.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners2: Hey, good morning, everyone. Thank you for the time. I want to go back to the margin compression conversation. I think the narrative around the LPG export side is clear. I guess if you could just comment, where do you stand in that process for repricing down those LPG exports?

Is that kind of in there now? Or is there maybe a little bit more to work through? And then maybe any comment you can make on a related side for anywhere else in the portfolio, but particularly the Permian NGL pipes?

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: I’ll take it and then, Doug, you take it. I think you heard Doug say we’re 85%, 90% contracted on LPG exports through the end of a decade. We’re gonna be full, pure and simple. And we’ll defend it ever how we have to. Doug, you got anything to add other than we’re damn well gonna be full?

Doug, Management, Enterprise Products Partners: No, full. We are full. We’re in a continued contract pool, but I’ll just tell you that we’re still executing contracts. So whatever we’re gonna lose on margin compression, we’re gonna make up by volume.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners2: And then just anything you can add on the Permian NGL pipe side?

Doug, Management, Enterprise Products Partners: John, this is Justin.

Zach Dounis, Analyst, Citi: I would say generally on TNF, we have very little recontracting to work through to

Doug, Management, Enterprise Products Partners: the balance of the decade. At our core, we still expect production to grow. So long as supply growth is happening, we don’t expect recontracting to play a role because we’re going to continue see volumes increase. All right. That’s clear, guys.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners2: I appreciate it. I’ll leave it there. Thank you.

Conference Operator: Thank you. Michael Bloom of

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners3: Michael,

Conference Operator: please make sure your line is unmuted. And if you’re on speakerphone, lift your handset.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners4: Hey, can you hear me?

Conference Operator: Yes, sir. Please proceed.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners4: Great. Thanks. Good morning, everyone. I’ve been reading a little bit about potentially an uptick in activity in the San Juan Basin. I’m just wondering if there’s much to that.

Are you seeing anything different from your producer customers up there? And is there could that have a meaningful impact for you

Natalie, Management, Enterprise Products Partners: guys? Evelyn? Not necessarily where we locate we are located. I I guess the uptick in activity, I don’t know if you’re talking about the recent acquisition of, a player there. But as far as we can tell, our San Juan’s pretty stable, flat to slight, really small growth.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners4: Okay, great. Appreciate that. And then just maybe just a follow-up for Tony. Appreciate all the commentary. Is it fair to say if I think back to your I think it was like April 1 updated production forecast that if you had to tweak that today, there would be pretty minor tweaks to what you were seeing back in April?

Thanks.

Tony, Management, Enterprise Products Partners: Michael, that’s a great question. I really appreciate it. Yeah,

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners2: there if we had

Tony, Management, Enterprise Products Partners: to tweak it today, profitability of Permian producer, those tweaks would be small. So from a black oil standpoint we were calling from ’25 through ’27. I think we were calling for 800,000 barrels of growth. Could that be seven? Yes, certainly it could.

If prices did go through a low spot, if we had a fall in prices and we go into contango and then waiting for people to start storing, could that be a growth of six? I guess on the outside it could look, we think we grew three fifty last year. So when producers talk about their guidance as we all listen to their calls come in Michael and they say they’re gonna stick to their guidance and their guidance was 3% to 5% growth in the Permian as a general rule. It’s not hard math. Think we’re on target Michael.

I think we’re on target. And we’ve said before that liquid forecast is on target to meet our forecast or producers continue to drill gas here. So we feel great about our liquids forecast also. And then Natalie’s confirmed and Justin’s confirmed, Zach has confirmed. That’s what we’re seeing in the business.

Conference Operator: Thank you.

Tony, Management, Enterprise Products Partners: We’re not we’re just not as sky is falling scenario. Look. The the Permian producer is extremely profitable, especially when you look at what’s happened to natural gas basis out there.

Conference Operator: Thank you. Our next question comes from the line of Manav Gupta of UBS. Your line is open,

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners1: Good morning, guys. There is a lot of announcements on potential LNG projects, and there is a belief that Haynesville Shale could be supplying some of them. Can you talk about your leverage to the Haynesville Shale? Maybe talk about the Acadian gas system a little? Thank you.

Natalie, Management, Enterprise Products Partners: We so we our Acadian gas system, we actually went out for open season on. Our recontract our recontracting efforts on that pipeline actually timing is everything and came up at the right time. The rates we’re going to achieve on that type relative to historical is two to three times what we’ve seen before. So a little bit more increase in activity, obviously, in the Haynesville with the cap price of gas, and we’ll reap benefits from that.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners1: Okay. And quickly, since your CapEx is dropping, can you talk about the criterias you could possibly look at for possible bolt on opportunities as a company?

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Yeah. Nava, think when we came in and sort of gave future guidance of 2 to 2 and a half billion dollars, that’s really taken into consideration some organic growth that we could see in our system in the coming years, whether it’s additional processing plants in Permian or something more on the distribution side of the downstream part of our system.

Natalie, Management, Enterprise Products Partners: Thank you.

Conference Operator: Thank you. Our next question comes from the line of Keith Stanley of Wolfe Research. Please go ahead, Keith.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners5: Hi. Good morning. I want to clarify some of the earlier questions around LPG exports. So you’re 85 to 90% contracted through the end of the decade. Given that, is it fair to assume the more meaningful recontracting headwinds on margins are now over with at this point?

Doug, Management, Enterprise Products Partners: This is Tug. That is correct.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners6: Okay. Great.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners5: And then had one on Natchez River. So the major projects under construction bucket went down $2,000,000,000 from 7,600,000,000.0 to 5.6 It looks like that’s two processing plants in phase one of of the export facility. You know, that implies the capital cost could be maybe a billion dollars or more for phase one of Neches River. Am I thinking about that right? Just as a ballpark?

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Yeah. That’s in the ballpark.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners5: Okay. And would phase two be similar to that?

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Not that much.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners5: Okay. Thank you.

Conference Operator: Thank you. Next question comes from the line of Brandon Bingham of Scotiabank. Brandon, your line is open.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners6: Hi. Good morning. Thanks for taking the questions. I’d like to go back to capital allocation if we could and maybe ask on the inorganic side in a different way. Just given all of the cash in that you guys have and and you have your priorities outlined pretty clearly, would you consider maybe increasing activity and equity investments potentially into areas where you currently do not participate or operate any assets maybe like an LNG or just how should we think about all of the cash in moving forward?

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: I imagine Randy’s gonna try to give it to you guys.

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Brandon, don’t see us and I’m trying to read where you’re going with your question is Are you asking would we make passive equity investments in LNG facilities?

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners6: Right. Like taking a non op stake or an equity interest or just another way to deploy capital that maybe hasn’t been discussed?

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: No. Yeah.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners6: Fair enough. And then maybe just on 2026 growth spend, could you remind us how much is currently committed? And then where do you see the most pressing need to deploy capital? Or maybe ask another way, where’s the greatest opportunity across your operations right now?

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Yeah. I think, you know, when we look at that in 2026, that range of 2 to 2 and a half billion dollars, what’s committed is approximately 2,200,000,000.0.

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: And where we go, I really like what we’ve done in terms of our ethylene. If I look back a few years, we didn’t have anything in ethylene. Now we’ve got a pretty robust storage distribution and export system and those fees are cents per pound, not cents per gallon.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners6: Great, thanks.

Conference Operator: Thank you. Our next question comes from the line of Jason Gabelman of TD Cohen. Please go ahead, Jason.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners3: Hey, thanks. Good morning. Thanks for taking my questions. I’m afraid I’m going to ask another one on LPG exports. And trying to understand it more from a strategic standpoint, given the amount of build out that the industry is pursuing on LPG exports.

Have your upstream customers kind of told you that you need to more or less have that egress to compete for additional volumes from them. So is this LPG export build kind of driven by what the customer needs and to keep you competitive in contracting with those customers?

Doug, Management, Enterprise Products Partners: I can’t this is Tug. I can’t speak for what our competitors are doing relative to their CapEx or how much it costs them to build these greenfield facilities. I can just tell you the success we’ve had on contracting with our brownfield economics. It’s there. You have to remind yourself as well that Enterprise Mont Belvieu is the pricing point for, call it over 95% of total NGL production in The United States.

And that’s another competitive advantage we have and our customers there to continue to take the LPG exports from our facility at a competitive fee.

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: I think it’s worth noting that we’ve been dealing in the international market since 1983 when we put in an import facility and since 1999 when we built our export facility. We’ve created a lot of strong relationships and we’ve performed. So I don’t think I I think I think we’ve got a rather sticky customer base tied to what we’ve been able to to do in the past.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners3: Okay. And my follow-up is unfortunately a topic that has also been already asked on, which is capital allocation. And I guess the question is, the midstream sector broadly has had multiple expansion given all of the growth opportunities that they’ve been pursuing over the past couple of years. And as you think about capital allocation moving forward, how important is it to continue to have a robust growth backlog that really competes with other companies in the industry to continue to attract equity investment? And how much of it does that kind of frame your strategic decisions on capital allocation moving forward?

Jim Teague, Co-Chief Executive Officer, Enterprise Products Partners: Do want to take it?

Randy Sattler, Co-Chief Executive Officer, Enterprise Products Partners: Yeah, let me I think first we feel like we’re in good place. The basins that we operate in, know, focus on the Permian, focus on the Haynesville. You know, the sectors that we support the downstream sectors, Chem is a little soft right now, but again, they’ll cycle through this. So we like our footprint. We like where we are.

We think we’ll have bolt on opportunities from an organic standpoint and an inorganic standpoint as opportunities arise. When you come back in, look over the last 2024 and 2025, you know, our CapEx did step up. A lot of that was a step change in capacity to be able to come in and be able to support the growth of our E and P customers coming out of the Permian. So I think we’re in good shape there. I think we’ve got some low cost expansions that we can do on some of those assets that are coming into service.

And, we’re, you know, here for the next couple of years anyway at that $22,500,000,000.0. You know, our job is to keep our system reliable, keep it up, and we we should throw off a lot of cash flow, from those businesses. And where we see opportunities to deploy it, we will. But honestly, think discretionary free cash flow is really about to take a step up in 2026, 2027 and that’ll give us an opportunity to come and return more capital to our investors.

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners3: Okay, understood. Thanks for the answers.

Conference Operator: Thank you. I would now like to turn the conference back to Libby Strait for closing remarks. Madam?

Libby Strait, Vice President of Investor Relations, Enterprise Products Partners: Thank you to our participants for joining us today. That concludes our remarks. Have a good day. This

Conference Operator: concludes today’s conference call. Thank you for participating. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.