Earnings call transcript: MPLX Q2 2025 earnings miss estimates, stock dips

MPLX LP, a $52.28 billion market cap company known for its attractive 7.26% dividend yield, reported its second-quarter earnings for 2025, revealing a slight miss on both earnings per share (EPS) and revenue compared to analyst expectations. The company posted an EPS of $1.03, falling short of the forecasted $1.06, and reported revenue of $3 billion, below the expected $3.18 billion. This led to a pre-market stock price decrease of 0.42%, with shares trading at $52.49. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value estimate.

Key Takeaways

• MPLX missed EPS expectations by 2.83% and revenue by 5.66%.
• The company reported a 2% year-over-year increase in adjusted EBITDA for Q2.
• MPLX’s stock price fell 2.8% post-earnings announcement.
• Significant investments in acquisitions and expansions, including Northwind Midstream.
• Positive outlook with planned organic growth investments and distribution increases.

Company Performance

MPLX demonstrated resilience in its financial performance despite missing analyst expectations. The company reported a 2% year-over-year increase in adjusted EBITDA to $1.7 billion for the second quarter. For the first half of 2025, MPLX achieved a 5% growth in adjusted EBITDA compared to the same period in 2024. The company’s strategic investments and acquisitions, such as Northwind Midstream, are expected to bolster future growth.

Financial Highlights

• Revenue: $3 billion (missed forecast by 5.66%)
• Earnings per share: $1.03 (missed forecast by 2.83%)
• Adjusted EBITDA: $1.7 billion (2% increase YoY)
• Distributable Cash Flow: $1.4 billion (21% increase)

Earnings vs. Forecast

MPLX’s actual EPS of $1.03 fell short of the $1.06 forecasted by analysts, marking a 2.83% negative surprise. Revenue also missed expectations, coming in at $3 billion compared to the anticipated $3.18 billion, a 5.66% shortfall. This performance contrasts with MPLX’s historical trend of meeting or exceeding expectations, indicating potential challenges in the current quarter.

Market Reaction

Following the earnings announcement, MPLX’s stock price declined by 2.8%, closing at $52.71. In pre-market trading, the stock continued its downward trend, dropping an additional 0.42% to $52.49. Despite this decline, the stock remains near its 52-week high of $54.87, demonstrating resilient price performance. InvestingPro data shows the stock generally trades with low price volatility, with a beta of 0.67.

Outlook & Guidance

MPLX remains optimistic about its future growth, targeting mid-single-digit adjusted EBITDA growth and maintaining a leverage ratio below 4x. The company has committed $1.7 billion to organic growth investments in 2025 and plans to increase distributions by 12.5%, which it deems sustainable for the coming years. This confidence is supported by MPLX’s strong financial health score of 2.96 (rated as GOOD) on InvestingPro, and its impressive 13-year track record of maintaining dividend payments.

Executive Commentary

CEO Mary Anne Mannen expressed confidence in the company’s strategic direction, stating, "We think the economics in this transaction are extremely compelling," referring to the Northwind acquisition. She also highlighted the company’s focus on the Permian Basin and LPG export market, emphasizing MPLX’s competitive advantage in these areas.

Risks and Challenges

• Market volatility could impact MPLX’s stock performance.
• Potential integration challenges with recent acquisitions.
• Dependence on the Permian Basin for growth, which may face regulatory or environmental challenges.
• Fluctuations in natural gas demand could affect revenue.
• Economic uncertainties might impact investment returns.

Q&A

During the Q&A session, analysts focused on the economics of the Northwind acquisition and the company’s growth strategy in the Permian Basin. Questions also addressed the sustainability of MPLX’s distribution increases and its approach to navigating bearish sentiment in the LPG export market.

Full transcript - MPLX LP (MPLX) Q2 2025:

Operator: Welcome to the MPLX Second Quarter twenty twenty five Earnings Call. My name is Ted, and I’ll be your operator for today’s call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded.

I will now turn the call over to Kristina Kazarian. Kristina, you may begin.

Kristina Kazarian, Investor Relations, MPLX: Welcome to MPLX’s second quarter twenty twenty five earnings conference call. The slides that accompany this call can be found on our website at mplx.com under the Investors tab. Joining me on the call today are Mary Anne Mannen, President and CEO Chris Hagedorn, CFO and other members of the executive team. We invite you to read the Safe Harbor statements on Slide two. We will be making forward looking statements today.

Actual results may differ. Factors that could cause actual results to differ are included there as well as in our filings with the SEC. With that, I will turn the call over to Mary Anne.

Mary Anne Mannen, President and CEO, MPLX: Thanks, Christina. Good morning, and thank you for joining our call. Last week, we announced the strategic acquisition of Northwind Midstream for just under $2,400,000,000 Northwind provides sour gas gathering and treating services in Lea County, New Mexico. The system adds over 200,000 dedicated acres in the Delaware Basin, 200 plus miles of gathering pipelines, two operating acid gas injection wells and a third permitted. The system currently has 150,000,000 cubic feet per day of sour gas treating capacity.

We will be completing the expansion to four forty million cubic feet per day expected to be online in the second half of next year. The system is supported by minimum volume commitments by top regional producers. The transaction is expected to be immediately accretive to MPLX’s distributable cash flow and represents a seven times multiple on forecasted 2027 EBITDA after the treating system reaches full capacity. The anticipated mid teen unlevered return is inclusive of incremental capital spend associated within process expansion activity, Increased crude drilling activity in the eastern edge of the Northern Delaware Basin has been enabled by increased sour gas treating and AGI well capacity provided by these assets. The assets will provide prompt treatment solutions for existing and new producer customers.

Our fee structure comprises gathering, compression, processing as well as more extensive CO2 and H2S treating. The higher levels of CO2 and H2S merit a higher fee structure compared to other regions. On average, this gets to an aggregated rate significantly above other regions. These assets are complementary and adjacent to our existing Delaware Basin natural gas system and will expand MPLX’s treating and blending operations. The addition of 200,000 dedicated acres will increase MPLX’s access to natural gas and NGL volumes, The optionality to direct these new volumes through our integrated system will accelerate our growth opportunities in the Permian.

MPLX has also completed two previously announced Permian based acquisitions. In June, we closed on the acquisition of an incremental 5% stake in the Matterhorn Express Pipeline, further enhancing our integrated natural gas value chain in the Permian Basin. In July, we closed on the remaining 55% interest in the BANGL NGL pipeline system. Full ownership of BANGL and its expansion opportunities enhance our Permian platform as we connect growing NGL production from the wellhead to our recently announced Gulf Coast fractionation facilities. The progress and execution of our strategic initiatives give us conviction in the sustainability of our mid single digit adjusted EBITDA growth outlook for 2025 and beyond.

In the second quarter, we reported adjusted EBITDA of $1,700,000,000 a 2% increase year over year. For the first half of the year, we achieved 5% adjusted EBITDA growth versus the 2024. In the Marcellus and Utica, rig counts remain steady and volumes remain strong. Longer laterals are resulting in higher production volumes and we expect volumes to grow in the second half of the year. Producer consolidation further illustrates the value seen in the liquids rich acreage of the Utica where condensate development activity continues to increase.

In the Permian, steady drilling activity, rising gasoil ratios and the progression of export projects will support growth opportunities for our business. More broadly, we expect natural gas demand will accelerate over the next few years to provide increased electricity generation required for data centers and overall electric grid demand. As demand for natural gas powered electricity rises, MPLX is well positioned to support the development plans of its producer customers. MPLX is expanding its core business by constructing processing facilities on a just in time basis, maximizing the utilization of existing assets, optimizing value chains and strengthening its strategic partnership with MPC. MPLX is advancing its strategic growth objectives within the Permian.

Our seventh processing plant Secretariat is expected to be online by the 2025. Secretariat’s 200,000,000 cubic feet per day of processing capacity will increase MPLX’s total Permian processing capacity to 1,400,000,000 cubic feet per day. We are progressing the expansion of BANGL’s mainline from two and fifty thousand to 300,000 barrels per day, which we expect to enter service in the second half of next year. BANGL is an instrumental piece of MPLX’s integrated Permian NGL value chain and it will deliver volumes to MPLX’s two Gulf Coast fractionation facilities, which are being constructed near the Galveston Bay refinery. The first frac as well as our joint venture export terminal is expected to enter service in 2028.

And we anticipate the second frac will enter service in late twenty twenty nine. Once complete, MPLX’s fully integrated NGL value chain will stretch from the wellhead to water on the Gulf Coast and will supply LPGs to a growing global market. Within natural gas, we are advancing our value chain strategy. MPLX and its partners recently upsized the Traverse natural gas pipeline from 1.75 to 2.5 Bcf per day following strong customer demand. The additional capacity for bidirectional service between Agua Dulce and Houston area highlights the value shippers ascribe to assessing multiple premium markets on the Gulf Coast.

The continued build out of our Permian to Gulf Coast natural gas system enhances our ability to provide shippers with premium market access and superior flexibility while enhancing MPLX’s natural gas value chain through additional growth opportunities. MPLX has announced 3,500,000,000 of bolt on transactions in 2025, and we remain on track to invest $1,700,000,000 on our organic growth plans in 2025, have already deployed 40% of this capital in the first half of the year. Over 90% of MPLX’s total growth capital is being allocated to opportunities within our natural gas and NGL services segment. In the Marcellus, our largest operating region, construction of our Harman Creek III processing plant and fractionation capacity align with producer drilling plants. This new complex will feature a 300,000,000 cubic feet per day gas processing plant and a 40,000 barrel per day deethanizer supported by strong producer commitments.

By the second half of next year, we anticipate MPLX’s gas processing capacity in the Northeast will reach 8,100,000,000 cubic feet per day and fractionation capacity will reach 800,000 barrels per day. In our Crude Oil and Products Logistics segment, we are expanding crude gathering infrastructure in the Permian And Bakken Basins, advancing butane blending initiatives at our product terminals, developing new market outlets, driving organic volume growth through our integrated network and pursuing other high return projects aimed at maximizing the utilization of our assets. We are firmly committed to growing the partnership through our lens of strict capital discipline. We expect mid teen returns on our investments and are confident that successful execution of these projects will extend the durability of our mid single digit growth trajectory. This positions us to continue reinvesting in the business while supporting consistent annual distribution increases.

Our strong financial flexibility enables us to pursue strategic acquisitions that complement our organic growth plans. We stay disciplined in our approach and have ample capacity to pursue more opportunities while maintaining leverage below four times. With a pipeline of growth opportunities, we are well positioned to generate resilient cash flows that underpin our commitment to deliver long term value and return capital to unitholders. Now let me turn the call over to Chris to discuss our operational and financial results for the quarter.

Chris Hagedorn, CFO, MPLX: Thanks, Mary Anne. Slide 10 outlines the second quarter operational and financial performance highlights for our Crude Oil and Products Logistics segment. Segment adjusted EBITDA increased $39,000,000 when compared to the 2024. The increase was driven by higher rates and throughputs across our systems, partially offset by higher variable operating expenses. Pipeline volumes were up year over year, primarily due to increased refinery demand and incremental gathering volumes in the Permian.

Terminal volumes were flat year over year. Moving to our Natural Gas and NGL Services segment on slide 11. Segment adjusted EBITDA decreased by $2,000,000 compared to the 2024 as growth from equity affiliates was offset by higher operating expenses and project spending. Higher project spending in the second quarter included significant planned maintenance of 13 plants in the Marcellus, Bakken and Rockies regions, all of which were safely and successfully executed by our operations teams. Gathered volumes decreased 1% year over year as growth in the Southwest was primarily offset by less dry gas production in the Utica and declining production in the Rockies.

Processing volumes increased 2% year over year primarily from increased throughput in the Utica and Permian Basins. Processing volumes in the Utica have increased 13% year over year showing the value of the liquids rich acreage. Marcellus processing utilization was 92% for the quarter, reflecting strong producer activity in the region. Total fractionation volumes declined 5% year over year, primarily due to lower ethane recoveries in the Marcellus due to downstream third party maintenance and outage time. Moving to our second quarter financial highlights on slide 12.

Adjusted EBITDA of $1,700,000,000 and distributable cash flow of $1,400,000,000 increased 21% respectively from the prior year. Project related expense increased over $30,000,000 in the quarter and we anticipate an incremental $40,000,000 increase from second quarter to third quarter primarily due to some planned tank maintenance within refinery logistics. MPLX returned nearly $1,000,000,000 to unitholders and distributions and $100,000,000 in unit repurchases. We retired $1,200,000,000 of senior notes scheduled to mature in June and ended the quarter with a cash balance of $1,400,000,000 Looking forward, MPLX intends to finance its recently completed acquisition of the remaining 55% of the Bengal pipeline system and its announced acquisition of Northwind Midstream with debt. MPLX maintains a strong balance sheet and the ability to keep leverage below our comfort level of four times.

Now let me hand it back to Mary Anne for some concluding thoughts.

Mary Anne Mannen, President and CEO, MPLX: Thanks, Chris. MPLX has demonstrated its ability to grow both cash flows and unitholder distributions by executing on its strategic priorities. Year to date, we have returned $2,200,000,000 to unitholders inclusive of $200,000,000 in unit repurchases as the value proposition for our units remains strong. Through prudent capital allocation, cost control and operational optimization, we’ve achieved a 7% compound annual growth rate in both adjusted EBITDA and distributable cash flows over the past four years. Year to date, MPLX has announced 3,500,000,000 of bolt on transactions.

These assets create immediate value for unitholders and enhance MPLX’s growth platform in a capital disciplined manner. We believe the integration of these assets will further strengthen MPLX’s ability to deliver mid single digit adjusted EBITDA growth. Our strong and growing cash flow profile supported by a robust 1.5 times distribution coverage and low leverage has enabled us to support our quarterly distribution, which most recently increased by 12.5% in the third quarter of last year. Looking ahead, our growing portfolio is well positioned to sustain this pace of annual distribution growth. In summary, MPLX is well positioned to capitalize on opportunities that fit our strategic roadmap as we execute our strategy targeting mid single digit adjusted EBITDA growth.

As a strategic asset for Marathon, MPLX currently provides $2,500,000,000 annually in cash to MPC through its growing distribution. MPLX plays a vital role in advancing shared value creation initiatives further reinforcing the strength of our partnership. Our unwavering focus on safety and operational excellence, strategic growth opportunities and strong financial flexibility enable us to generate resilient cash flows. This in turn supports our commitment to delivering peer leading capital returns to unitholders. Now let me turn the call over to Christina.

Kristina Kazarian, Investor Relations, MPLX: Thanks, Mary Anne. As we open the call for your questions, as a courtesy to all participants, we ask that you limit yourself to one question and one follow-up. If time permits, we’ll re prompt for additional questions.

Operator: Thank you. We will now begin the question and answer session. First question in the queue is from John Mackay with Goldman Sachs. Your line is open.

John Mackay, Analyst, Goldman Sachs: Hey, good morning. Thank you for the time. Can you talk about the ramp on Northwind from here through the 2026? And then after that, how to think about some of the downstream processing and NGL growth opportunities? And maybe as part of that, clarify whether or not those downstream opportunities are reflected in the seven times, 27 multiple?

Thanks.

Mary Anne Mannen, President and CEO, MPLX: Hey, good morning, John. Thanks for the question. So first of all, just want to say we think the economics in this transaction are extremely compelling as you can see. And any incremental capital and I’ll share with you how that should unfold here. Any of the incremental capital that we have assumed is already embedded in those economics as well.

But to answer your question, when we look at, the completion by 2026, so by the end of next year, we should be at the run rate EBITDA referencing that supports our roughly seven times EBITDA multiple, which means by 2027, we will have reached that EBITDA that will be ongoing. So, throughout this time period 2026, these projects to complete to get us to the four forty as well as the permitted third AGI well, all of those activities are well in hand. I’m going to ask Dave to address your second question sort of which is the opportunities on further beyond that.

Dave, Executive Team Member, MPLX: Yes. Thank you, Mary Anne. And so John, just to touch on that, let me be first clear, that those incremental growth opportunities are not in our base economics and our base assumptions of Northwind. With that being said, it does provide the platform for a lot of incremental growth opportunities that we are currently evaluating. And not only just growth, but also incremental optimization and commercial optionality as we go forward with the Northwind.

So I think over the next year or so as we continue to build out and ramp up the Northwind volume, we’ll continue to evaluate those commercial and growth opportunities. And I think those will be all accretive to the base investment.

John Mackay, Analyst, Goldman Sachs: All right. That’s great. I appreciate that. Maybe looking a little wider, you’ve announced a lot of bolt ons and projects over the last year. It’s given some longer term visibility on EBITDA growth.

Could you talk a little bit about the distribution one kind of what you’re thinking for this year? And then looking forward kind of how many years of 12.5% growth could we expect from here?

Mary Anne Mannen, President and CEO, MPLX: Yes. Sure, John. Thank you. So look, we believe our 12.5% distribution increase is supported very durable by the growth that we are trying to deliver. I mentioned 7% growth.

We’ve seen that over the last few years both in EBITDA and in distributable cash flows. So certainly as we’ve been committing, we think that 12.5%, 2026% and beyond certainly for the next few years is very durable. So most definitely 12.5 well within our sites and you can continue to see the opportunities. Dave mentioned a few of them here. You know the work that we’re putting together both on our capital plan.

We’ve got assets in the Permian coming online. I mentioned Secretariat that will be completed by the end of this year. All of these commitments support our durable cash flows and therefore the 12.5% distribution increase that we’ve been committing to.

John Mackay, Analyst, Goldman Sachs: That’s great. Thank you.

Mary Anne Mannen, President and CEO, MPLX: You’re welcome, John.

Operator: The next question in the queue is from Manav Gupta with UBS. Your line is open.

Manav Gupta, Analyst, UBS: Congrats on the good deal. My first question is, Mary Anne, there were some recent comments made about LPG exports being in the bear market and why it probably is not good to invest in these. You are obviously building your fracs and then your partner is going to export some of the stuff. So just trying to understand what gives you the confidence that you and your partner can make the economics work on the new fracs as well as exporting them given some of the bearish market sentiment on LPG exports?

Mary Anne Mannen, President and CEO, MPLX: Good morning, Manav. Thank you for the question. We are very confident in our ability to fill those fracs. As you know, we’ve committed to completion frac 01/2028, frac 02/2029. One of the other elements that we’ve been sharing in addition to that, we’ve got third party contracts that will also expire that will obviously come across our system.

We continue to believe the economics will be there. We recognize sort of some of those comments as well. But we’re highly confident in our ability both to fill those fracs and see the economics in that export model.

Manav Gupta, Analyst, UBS: Perfect. Thank you. And then a quick follow-up. The overall Permian growth strategy, you’re pursuing multiple ways to grow your Permian alone with JV partners. Can you just talk about how you’re looking at this Permian growth strategy for over the next two or three years?

Much.

Mary Anne Mannen, President and CEO, MPLX: You’re welcome. Thank you. As you know, we’ve been working on our Permian growth strategy for the last few years. We think this acquisition that we’ve talked about Northwinds, one, both adjacent and complementary to our current system. We have completed, other acquisitions, the completion of BANGL as an example.

We just closed that giving us 100%. We talked about moving that from $250,000,000 to 300,000,000 That’s well on its way. When you look at our capabilities in this region, obviously, this particular, northern edge of the Delaware has some of the best rock we think in the Permian, lower gas to oil ratios. Obviously, it comes with some complexity given the H2S and CO2 content, but we can provide the processing and treating capabilities here and works extremely nicely with the rest of the commitments we’ve made in the Permian. So we think for the next few years, we can continue to look for other opportunities.

And as we build out this comprehensive system, we should be able to demonstrate our commitment and our ability to deliver on this Permian strategy.

Manav Gupta, Analyst, UBS: Thank you.

Operator: And the next question in the queue comes from Keith Stanley with Wolfe Research. Your line is open.

Keith Stanley, Analyst, Wolfe Research: Hi, good morning. Mary Anne, you said at the end of your prepared remarks that acquisitions will strengthen the ability to generate mid single digit growth. As you get larger, should we think of acquisitions as a component of getting to the mid single digit growth? Or should we think of that as incremental to the growth rate?

Mary Anne Mannen, President and CEO, MPLX: Yes. Good morning, Keith. When we think about our strategy, we’ve said we’ll put capital to work organically. This year, it’s in a range of about 1.7. As you know, we’ve got Secretariat, we’ve got the first phase of our frac, we’ve got Harmon Creek well on its way.

So we clearly see opportunities for organic growth. And then when we look at M and A, we also believe there are opportunities there. So it isn’t as if we start out the year with an allocation of how much is M and A and how much is capital. We look at all of those opportunities. They must meet our strategic rationale.

Obviously, our commitment to mid single digit growth is a critical component. And then lastly, we want to be sure that they can generate mid teens returns. All of those, I mean, way we put capital to work should continue to support our ability to grow EBITDA and then therefore support our distribution. Hope that answers your question.

Keith Stanley, Analyst, Wolfe Research: It does. Thank you. Second one, on Northwind, can you say any sense of how long the existing processing and transportation contracts are for those assets? And maybe walk through the mechanics of how you would eventually control the NGLs as the gatherer and treater? Would you need to add processing to the footprint?

Or any details you can provide?

Mary Anne Mannen, President and CEO, MPLX: Sure. So first, I think your first question was kind of what is the contract duration on processing? And we’re probably somewhere those contracts today somewhere in the range of two to three years on those processing contracts. Keep in mind, overall, and I think I mentioned this in the prepared remarks as well, these contracts that we have for these MVCs are average contract life of thirteen years. So 80% of this revenue is MVC, just to be sure that I was clear, on that.

And then some of the top producer customers that we I mentioned there are actually customers that are operating today on our system. But let me look at Dave and I’m going to ask him to give you a little more color on your question.

Dave, Executive Team Member, MPLX: Thank you, Mary Anne. So Keith, I touched on a little bit earlier. So as these contracts roll off and we have control and access to the NGLs, why we don’t need that volume in our announced Bangla acquisition and our Gulf Coast fractionation and export project, this incremental volume, as I tried to touch on a little bit earlier, gives us flexibility and optionality on how and where and when we want to move those volumes. And that’s probably the most exciting part about this. So as we look forward, not opportunity, but as we think about some of the growth opportunities that Mary Anne touched on, it’s not just grow to grow, but as growth increase the integration, the optionality and flexibility of our entire value chains.

Hopefully that helps a little bit.

Keith Stanley, Analyst, Wolfe Research: That helps and I missed the thirteen year commentary. So thanks for that as well.

Mary Anne Mannen, President and CEO, MPLX: You’re most welcome. Thank you.

Operator: The next question in the queue is from Theresa Chen with Barclays. Your line is open.

Theresa Chen, Analyst, Barclays: Good morning. Following up on the commentary related to Northwind, just a question of clarification on the CapEx. From here, the current capacity to the full four forty MMcf per day, how much incremental CapEx, do you think will be necessary to achieve that?

Mary Anne Mannen, President and CEO, MPLX: Yes. Good morning, Theresa. So we estimate in a range of about $500,000,000, between now and next twelve months that will complete the $440,000,000 as well as the third already permitted AGI well. So two of them currently operating, third is permitted. So within the next twelve months, just under $500,000,000 and most of that’s already been started.

Theresa Chen, Analyst, Barclays: Thank you. And then turning to the residue gas side of things. In addition to your NGL infrastructure build out, you’ve made significant progress in growing this asset base via your JVs. Looking at the long term visible demand drivers for gas, Mary Anne, what do you think are the logical strategic next steps to augment your exposure here? Is it a matter of more gas transmission?

Is it something more direct on the gas to Power side of things? Is it liquefaction? What are your thoughts here?

Mary Anne Mannen, President and CEO, MPLX: Yes. Thanks, Theresa. I’m going to pass it to Dave and he’ll take your question.

Dave, Executive Team Member, MPLX: Hey, Theresa. I’ll kick it off and maybe I can ask some of my peers if they want to add on to it when you think about data centers and some of the other growth. But yes, you touched on it. And as we think about the Permian and specifically and as you know our strategy, a lot of long haul pipelines out of there, We do not think that there is an overbuild situation on long haul pipes. Let me start with that.

So whether it be Whistler, Blackcomb, Matterhorn and our increased equity ownership in that, you could see that we have a lot of confidence in the growth, not only the growth profile of the Permian on the gas side, but also the demand side of it. So as you know, down in the Gulf Coast with a lot of the LNG activity, but also with the increased growing activity around data centers, we believe not only from a supply, but also from a demand perspective. There’s a lot of opportunity. And I think we’ve proven that with the project we’ve announced most recently. So the one we haven’t touched on is Traverse.

So not only just the long haul pipes out of the basin, but giving our shipping customers the utmost flexibility to get those premium markets in addition to getting out of the basin, we think is a key part of our strategy. So as we go forward, it’s an increased growth, optionality, flexibility, and access to those premium markets for the gas coming out of Permian. So hopefully that gives you a little bit of color how we’re thinking about that strategy.

Mary Anne Mannen, President and CEO, MPLX: Thank you. You’re welcome, Theresa.

Operator: Next question in the queue is from Jeremy Tonet with JPMorgan. Your line is open.

Jeremy Tonet, Analyst, JPMorgan: Hi, good morning.

Mary Anne Mannen, President and CEO, MPLX: Good morning, Jeremy.

Jeremy Tonet, Analyst, JPMorgan: I was just wondering if you could expand a bit post the acquisition on your New Mexico strategy here. It’s a bit more difficult to operate in the state given the regulatory framework and the handling that’s needed with this production. But the growth is very strong as noted and it seems like this toehold gives you even more opportunity there and there’s not too many players right now. So just wondering if you could talk a bit more on your New Mexico strategy and competitive backdrop?

Mary Anne Mannen, President and CEO, MPLX: Yes, Jeremy, we’d be happy to because I think you characterized it well and I think it’s consistent really with the way that we think about growth. I’m going to ask Greg to give you some incremental thoughts here.

Kristina Kazarian, Investor Relations, MPLX0: Thanks, Mary Anne. This is Jeremy. This is a really exciting area for us. We have been growing this space organically in terms of our processing plants and producer customers, acreage dedication of starting on the Texas side of the line, but it’s gradually expanded into Leonetti County, New Mexico. And that even though our plants are right on the Texas side of that line, a lot of our growth has continued to be on the Leonetti County, New Mexico side.

The growth is also in terms of crude oil production moved to the North and East towards that North South New Mexico Texas border and that’s because it’s some of the best crude oil rock in the whole basin. Particularly the Avalon formation which is shallower, It’s about 8,500 feet depth instead of 1,200 or 12,000, excuse me. So, it is more economic produced. It’s higher IPs. It’s lower gas well ratio.

So, it’s the most attractive economic crude production area. The issue is that that gas comes with more CO2 and H2S. It’s much more sour and that really is what the Northwind developers recognized when they built that system. Some of our existing base customers are have moved further to that side and we’ve deployed treating throughout our system, particularly on the North on the New Mexico side of our gathering system. This acquisition is really going to augment our ability to treat even more sour gas and also provide blending opportunities because of the proximity and potential connectivity here.

This system, if you look on a map, it wraps around the north and east side of our existing gathering system. So it really is adjacent complementary as Mary Anne has mentioned. So we think there will be more organic opportunities that can take advantage of this expanded treating capability and gathering that we have in one of the most attractive areas to drill in the basin.

Jeremy Tonet, Analyst, JPMorgan: Got it. That’s helpful there. Maybe just continuing, do you see more bolt on opportunities adjacent to your footprint that could offer the types of benefits that you see with Northwinds?

Kristina Kazarian, Investor Relations, MPLX0: I think we looked at if we were to build a system organically, the Northwind system could be one that we would have built. So in terms of looking for bolt ons, I don’t necessarily would say that there’s opportunities there. We’ll always look for those if they’re a strategic fit and make sense. But this one would have made sense as an organic build out just as much as a bolt on and it happens to be that it’s right next to our system and it’s right in the area where we see a lot of growth. So this accelerates our plans that probably organically we would have looked anyway.

Mary Anne Mannen, President and CEO, MPLX: Jeremy, it’s Mary Anne. I would say Greg has already said it, but at the risk of repeating, I’ll say, we’ve said it’s adjacent and it’s complementary. I’d like to say it’s about as perfectly as one could expect. And then you have the economics that I think we’ve tried to share with you. We think they’re pretty compelling, supported by the average contract life of thirteen years, over 200,000 dedicated acres in the Delaware.

And none of the economics when we talk about that roughly seven times multiple reflect any upside from that. So, we’re pretty pleased with this, and we think it will continue to give us opportunities to grow beyond what we’ve been sharing with you here.

Jeremy Tonet, Analyst, JPMorgan: Got it. I’ll leave it there. Thank you.

Operator: And the final question in the queue is from Michael Blum with Wells Fargo. Your line is open.

Kristina Kazarian, Investor Relations, MPLX1: Thanks. Good morning, everyone. Apologies. One more clarification question on the Northwind deal. I guess as it relates to the gas and liquids that you’ll gain access to eventually, can you just clarify, will you be able to accommodate those incremental volumes on your existing planned NGL pipes, fracs, export docks, etcetera?

Or would you need to add capacity? And if so, what type of investment will we be looking at?

Mary Anne Mannen, President and CEO, MPLX: Good morning Michael and no problem. I’m going to ask Chris to share his thoughts to your question.

Chris Hagedorn, CFO, MPLX: Yes. Michael what I would remind you of is that when we announced the Gulf Coast fractionators and related NGL value chain we actually had full line of sight to filling those fracs and BANGL. So as we sit today, those that value chain is full. So when we think about the 70 of liquids that comes with this, and I will say the liquid side of this come immediately. When I say this, the Northwind liquids, so it’s call it between fifty and seventy a day, of liquids.

Those are incremental to the liquids that we already have access to. So we’ll be looking to explore other opportunities how to drive economic value out of those. It does provide optionality, right, as we think about our existing NGL value chain as to how we do most economically utilize that value chain. So that’s something I know the team has been looking at. And Sean, I don’t know if there was anything you might want to add.

Kristina Kazarian, Investor Relations, MPLX2: Yes. Michael, this is On top of what Chris just mentioned, as you know earlier this year, Mary Anne mentioned earlier that we’re at 250,000 barrels per day on Bengal already this year with expansion in the 2026 to go to 300,000. As Chris mentioned, that optionality beyond that will give us tremendous flexibility to continue to execute in our strategy. So we’ve got we feel really good at the spot we’re in and we’ll continue looking to maximize the organic that now Northwind will bring options to us.

Kristina Kazarian, Investor Relations, MPLX1: Got it. Thanks for that. That’s all I had today.

Mary Anne Mannen, President and CEO, MPLX: You’re welcome, Michael. Thank you.

Operator: With no further questions, I’ll turn the call back over to Christina.

Kristina Kazarian, Investor Relations, MPLX: Thank you for your interest in MPLX. Should you have more questions or if you’d like clarification on topics discussed this morning, please contact us and our team will be available to take your calls. Thank you for joining us today.

Operator: This concludes today’s call. Thank you for your participation. You may disconnect at this time.

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