Targa Resources Announces Dividend Reduction, Decrease in 2020 Capital Spending, Provides Initial 2021 Capital Spending Expectations and Provides Insight on Response to Current Market Conditions
Targa is also working through numerous internal initiatives to respond to the current environment, including continuing to identify and implement significant cost reduction measures for other capital expenditures, and operating and general and administrative expenses. As always, Targa remains focused on protecting the health and safety of its employees and communities, and ensuring critical infrastructure continues to operate safely and reliably.
“In this uncertain environment, where we are dealing with the combination of significantly lower commodity prices and lower expected activity levels given recent producer actions, compounded by the evolving impacts of the coronavirus pandemic, we believe that the prudent decision for Targa is to move swiftly in utilizing levers available to us to strengthen our balance sheet. The actions taken by our board and management team and our continued cost reduction and performance improvement efforts position Targa to be able to improve our leverage profile even if this environment continues for an extended period of time,” said
Targa is working with customers across both its Gathering and Processing and Logistics and Transportation segments to further refine expectations for 2020, and implications for 2021, in the context of the current fluid and rapidly changing environment. Based on the best available information today and assuming a similar commodity price environment, Targa’s preliminary estimate for 2021 net growth capital spending would be on the order of
Targa’s current available liquidity is approximately
Relative to counterparty risk, Targa has a large diversified customer base across its operating businesses, which includes large integrated customers and other investment grade counterparties. Approximately 75 percent of Targa’s revenue from its top 25 customers is from investment grade counterparties or from customers which provide credit protections. Targa is largely in a net payable position in its Gathering and Processing contracts, and in its Logistics and Transportation businesses, the Company’s counterparties are largely investment grade, or otherwise required to provide credit protections. Targa is continuing to monitor and manage its credit exposure closely.
Targa expects to provide additional details on its revised 2020 financial and operational estimates, including detail on the expected progress of its cost reduction measures, on its first quarter earnings call.
For more information, please visit the Company’s website at www.targaresources.com.
Certain statements in this release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future, are forward-looking statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties, factors and risks, many of which are outside the Company’s control, which could cause results to differ materially from those expected by management of the Company. Such risks and uncertainties include, but are not limited to, weather, political, economic and market conditions, including a decline in the price and market demand for natural gas, natural gas liquids and crude oil, the timing and success of business development efforts; and other uncertainties. These and other applicable uncertainties, factors and risks are described more fully in the Company’s filings with the
Contact the Company's investor relations department by email at InvestorRelations@targaresources.com or by phone at (713) 584-1133.
Senior Director, Finance & Investor Relations
Chief Financial Officer
Source: Targa Resources Corp.