Targa Resources reports record Q4 2024 earnings as Permian expansion fuels growth

Targa Resources Corp. has delivered a record-breaking financial performance in the fourth quarter of 2024, reflecting the company’s strategic expansion in natural gas and NGL infrastructure. The company reported $351.0 million in net income, representing a 17% increase compared to the same period in 2023, while adjusted EBITDA growth reached $1.1 billion for the quarter, up from $959.9 million the previous year.

The strong quarterly results were driven by Permian volume expansion, higher NGL transportation, and growing demand for LPG exports. The company’s Logistics & Transportation (L&T) and Gathering & Processing (G&P) segments both saw significant increases in operating margin, supported by new infrastructure projects that came online throughout the year.

What Contributed to Targa’s Adjusted EBITDA Growth?

Targa Resources experienced adjusted EBITDA growth of 17% year-over-year, reaching $4.1 billion for full-year 2024, up from $3.53 billion in 2023. The company attributed this increase to higher Permian gas inlet volumes, expanding NGL transportation capacity, and the successful completion of new processing plants and fractionation units.

In the Permian volume expansion segment, the company benefited from rising producer activity, which resulted in record throughput levels. The Greenwood II Plant, with a 275 MMcf/d capacity, was brought online in Permian Midland, alongside the 120 MBbl/d Train 10 fractionator in Mont Belvieu, further strengthening Targa’s processing and fractionation capabilities.

The company also completed the Bull Moose Plant, a 275 MMcf/d facility, and an 800 MMcf/d front-end treater in Permian Delaware, supporting greater gas processing efficiency. As a result, the G&P segment’s operating margin increased 12% year-over-year, reaching $598.9 million for Q4 2024.

In the L&T segment, operating margin increased by 18%, reaching $656.2 million due to higher pipeline transportation and fractionation volumes. The recent completion of the Daytona NGL Pipeline, along with growing LPG exports, played a significant role in driving earnings growth.

What Role Did Infrastructure Expansions Play in Targa’s Growth?

Targa Resources continued to invest heavily in infrastructure throughout 2024, with multiple new assets coming into service to support adjusted EBITDA growth. The company is now positioned for record production in 2025, with additional projects expected to further expand its market reach.

The company announced several new expansions, including the Delaware Express, a 100-mile, 30-inch pipeline extension of the Grand Prix NGL Pipeline in the Permian Delaware. Additionally, Targa unveiled plans for Train 12, a 150 MBbl/d fractionator in Mont Belvieu, and an LPG export capacity expansion at its Galena Park Marine Terminal, increasing capacity to 19 million barrels per month.

These developments reflect the company’s aggressive strategy to enhance infrastructure in response to growing demand for NGL transportation and processing, positioning it as a leading midstream player in the North American energy sector.

How Is Targa Resources Rewarding Shareholders?

Targa Resources remains committed to increasing shareholder value, reflected in both its share repurchase program and dividend increase forecast. The company repurchased 5.93 million shares in 2024 at an average price of $127.20 per share, totaling $755 million in buybacks. Additionally, it paid out $164 million in cash dividends for Q4 2024, with a quarterly dividend of $0.75 per share.

Looking ahead, Targa plans to increase its annual common dividend to $4.00 per share in 2025, marking a 33% rise from 2024. This dividend increase forecast aligns with the company’s strong cash flow generation and confidence in sustained earnings growth.

What Is Targa’s Financial Outlook for 2025?

Targa Resources projects adjusted EBITDA growth of $4.65 billion to $4.85 billion in 2025, a 15% increase over 2024. This growth is expected to be fueled by continued Permian volume expansion, record-breaking NGL transportation, and higher fractionation volumes.

The company expects to allocate $2.6 billion to $2.8 billion in net growth capital expenditures to support these expansions. This includes funding for Delaware Express, Train 12, and the Galena Park LPG export expansion, further solidifying Targa’s long-term growth trajectory.

What Does Targa’s Liquidity and Debt Position Look Like?

As of December 31, 2024, Targa Resources reported $2.0 billion in total liquidity, which includes $1.6 billion available under its revolving credit facility, $270 million under its securitization facility, and $157.3 million in cash.

The company also refinanced $1.8 billion in preferred equity in its Badlands segment, lowering financing costs and improving cash flow. Additionally, it secured a new $3.5 billion revolving credit facility, replacing its previous $2.75 billion facility, providing greater financial flexibility for future growth initiatives.

Why Is Targa Resources Positioned for Long-Term Growth?

Targa Resources has strategically positioned itself for sustained growth, leveraging Permian volume expansion, adjusted EBITDA growth, and NGL transportation infrastructure investments. The company’s commitment to infrastructure development, alongside its dividend increase forecast, signals a robust outlook for investors.

With ongoing capacity expansions, growing global demand for NGL exports, and a strengthened financial position, Targa is well-equipped to capitalize on future opportunities in the midstream energy sector. Its record-breaking 2024 performance provides a solid foundation for continued momentum into 2025 and beyond.