MPLX LP (NYSE:MPLX) Q2 2024 Earnings Call Transcript

MPLX LP (NYSE:MPLX) Q2 2024 Earnings Call Transcript August 6, 2024

MPLX LP beats earnings expectations. Reported EPS is $1.15, expectations were $0.979.

Kristina Kazarian: Good morning and welcome to the MPLX’s Second Quarter 2024 Earnings Conference Call. The slides that accompany this call can be found on our website@mplx.com. under the investor tab. Joining me on the call today are Maryann Mannen, President and CEO; Kris Hagedorn, CFO and other members of the executive team. We invite you to read the Safe Harbor statements and non-GAAP disclaimer on Slide two. It’s a reminder that we will be making forward-looking statements during the call and during the question-and-answer session that follows. Actual results may differ materially from what we expect today. 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 Maryann.

Maryann Mannen: Thanks, Kristina. Good morning and thank you for joining our call. I want to take a moment to recognize Mike Hennigan’s leadership as CEO of MPLX for nearly five years. Mike’s record of accomplishment in both the midstream and downstream industries has been a tremendous value to the partnership. During his tenure, we have delivered annual EBITDA and DCF growth of over $1 billion, positioning us with financial flexibility to execute our growth strategies and deliver on our commitment to return capital. We are fortunate to have Mike as our Executive Chairman of the MPLX board. In the second quarter, adjusted EBITDA grew 8% and distributable cash flow grew 7% year-over-year. The growth of MPLX’s cash flow supported the return of $949 million to unitholders, reflecting our commitment to return to capital.

Producer activity remains robust across the Marcellus, Utica and Permian basins. In the Northeast, longer laterals are resulting in higher volumes. Volume growth continues in both the Marcellus and Utica, where producers are targeting economically advantaged liquids rich acreage. The Permian basin has some of the lowest crude break evens in the country. Production growth in the region continues to create opportunities for our well head to water strategy across crude, Natural gas and NGLs. In the second quarter MPLX closed the Whistler Transaction. Last week, MPLX and its partners reach FID of the Blackcomb Natural gas pipeline, a 2.5 bcf pipeline connecting supply in the Permian to domestic and export markets along the Gulf Coast. This project offers a compelling value proposition while providing shippers with flexible market access.

Blackcomb is expected to be in service in the second half of 2026. This is another step in leveraging this platform for growth. MPLX has also acquired additional interest in the BANGL NGL pipeline, bringing our ownership to 45% BANGL is a strategic asset within our NGL value chain. Progress continues on its expansion to 250,000 barrels per day which is expected to be completed in the first quarter of 2025. We believe this transaction is immediately accretive and should generate a mid-teens return consistent with our capital deployment objectives. We are confident in the future growth potential of this value chain. We also acquired an additional interest in the Wink to Webster crude oil pipeline. These recent transactions are a continuation of our strategic approach to growing cash flows.

Over the last three years, MPLX has led peers on return on invested capital. Distributions remain our primary method of return and we are a return on and a return of capital business. Now let me turn the call over to Kris to discuss our growth as well as operational and financial results for the quarter.

Kris Hagedorn: Thanks Maryann. MPLX is progressing its 2024 capital program with spending expected at $1.1 billion. Anchored in the Permian and Marcellus basins, our integrated footprint positions the partnership with opportunities to grow our natural gas and NGL assets. In the Permian, we are delivering growth through organic projects, investments in our Permian joint ventures and bolt on opportunities. In the L&S segment the ADCC natural gas pipeline was placed into service early in the third quarter. In the G&P segment, we are bringing new gas processing plants online to meet increasing customer demand. The Preakness II gas processing plant began operations in July and we are progressing the Secretariat processing plant, which is expected to be online in the second half of 2025.

Once operational, our total processing capacity in the Delaware basin will be approximately 1.4 billion cubic feet per day. The remainder of our capital plan is mostly comprised of smaller higher return investments, targeted expansion or debottlenecking of existing assets and projects related to planned increases in producer activity. Slide five outlines the second quarter operational and financial performance highlights for logistics and storage segment. Segment adjusted EBITDA increased $107 million when compared to second quarter 2023, primarily driven by higher rates including growth from equity affiliates. Pipeline volumes were up year-over-year, primarily due to the effects of refinery maintenance in the prior year and growth projects contributing additional volumes in the current year.

Moving to our Gathering & Processing segment highlights on slide six, the G&P segment adjusted EBITDA increased $15 million compared to second quarter 2023. The second quarter of 2023 included a $13 million gain on sale of assets. Taking this into account, G&P segment EBITDA increased 6% year-over-year. This is driven by increased volumes, including contributions from recent acquisitions, largely offset by higher operating expenses in the second quarter of 2024. Total gathered volumes were up 7% year-over-year, primarily due to increased drilling and production in the Marcellus and the addition of dry gas volumes from our recently acquired Utica assets. Processing volumes were up 7% year-over-year, primarily from higher volumes in the Marcellus and Utica as well as the Rockies.

Southwest volumes declined as growth in the Permian was more than offset by lower volumes in Oklahoma due to recent reduced producer activity. In the Utica, processing volumes have increased 285 million cubic feet per day or 52% since the second quarter of 2023, highlighting the value producers are seeing in the liquids rich acreage. Volumes on the Harmon Creek II and Preakness II processing plants are increasing with an expected ramp profile of up to twelve months. Focusing on the Marcellus, by far our largest basin of GMP operations, we saw year-over-year volume increases of 15% for Gathering and 5% for Processing driven by increased drilling and production growth. Fractionation volumes grew 10% due to higher ethane recoveries and higher processed volumes.

We are encouraged by strong in basin demand for ethane as well as the startup of the Mountain Valley pipeline. As the origin of MVP is connected to our mobile processing plant, its operations are positive for MPLX and its producer customers. We continue to monitor the development of data centers in the Northeast and Southwest. As demand increases for natural gas powered electricity, we will support the development plans of our producer customers. Moving to our second quarter financial highlights on slide seven, total adjusted EBITDA of $1.65 billion and distributable cash flow of $1.4 billion increased 8% and 7% respectively from the prior year. Similar to prior years in the second quarter, project related expenses were up approximately $30 million compared to the first quarter due to the seasonality of the spend.

MPLX returned $949 million to unitholders through $874 million in distributions and $75 million in unit repurchases. During the second quarter, MPLX issued $1.65 billion in 10 [ph] year senior notes, the proceeds of which we expect to use to retire senior notes due in December 2024 and February 2025. MPLX ended the quarter with a cash balance of $2.5 billion and leverage was 3.4 times. Net of cash leverage was 3.1 times. Now let me hand it back to Maryann for some final thoughts.

Maryann Mannen: Thanks Kris. We have delivered over 7% DCF growth on a three year compound annual basis. We are executing our strategy and advancing growth opportunities across our value chains. In the Permian, we continue to see growth opportunities in our natural gas, NGL and crude value chains. In the Marcellus and Utica producer activity remains robust, supporting growth of our gathering and processing footprint. By advancing these high return growth projects, we expect to continue to grow our cash flow. MPLX is a strategic investment for MPC as they each pursue growth opportunities. The value of this strategic relationship is further enhanced. Based on the growth of our cash flows we have been able to increase our distribution by 10% in each of the last two years.

Strong coverage, low leverage and growing cash flows provides MPLX financial flexibility, placing us in an excellent position to grow our distribution in the future. Now let me turn the call back over to Kristina.

Kristina Kazarian: Thanks Maryann. As we open the call for questions, we ask that you limit yourself to one question plus a follow up. We may re prompt for additional questions as time permits. With that, Sheila, we’re ready for the questions.

Q&A Session

Operator: Thank you. [Operator Instructions] Our first question will come from John Mackay with Goldman Sachs. Your line is open.

John Mackay: Hey, thanks team. Good morning and congrats again Maryann. I wanted to start maybe high level on the strategic front, done [ph] a lot of bolt-ons over the last year. I was thinking if we put this in the context of a billion dollars of organic spend you do on average, how should we think about that level of inorganic spend going forward and how that fits into your general mid-single digit growth pace. Thanks.

Maryann Mannen: Yes. Good morning John. Thanks. So, a couple of things as we think about our strategy going forward and as you shared here, about $1 billion annually in our capital programs. But for the last few years we’ve also been filling out underutilized capacity and investing in our JVs as well. We continue to see these as inorganic opportunities and organic opportunities for us to meet our goal of mid-single digit growth. If you look over the last year or so we’ve done transactions in the Permian with our Torñado transaction or Torñado. Excuse me, Utica the summit JV buyout are increased bangle ownership, expansion of the Whistler platform with Rio Bravo. So we continue to execute the growth strategy, reinvest in the business in what we think to be a capital efficient manner.

We’ll ensure that we are employing strict capital discipline, regardless of whether it’s organic, inorganic, or focused on our JVs, with the full intent of being able to return capital to unitholders.

John Mackay: All right, thanks for that. Maybe pivoting. You guys touched on this a little bit in the prepared remarks, but wondering if we can just go around the horn. Maybe you guys touch a bunch of different basins on the G&P side. Would love just to hear how volumes are trending, maybe versus your expectations earlier in the year. And if we look across the footprint more broadly in a maybe better gas macro in 2025, when you’d expect to see that more fulsome inflection start to pick up. Thanks.

Greg Floerke: Good morning, John. This is Greg. If you look at the gas prices, low gas price, environment versus liquids, particularly crude and NGL, and that has led to some announced curtailments, particularly in the dry lean areas, northeast Marcellus in particular, and the Haynesville, the areas that we’re in, we’re really focused on processing in rich gas areas with some dry gas. But in the areas where dry and lean gas production is in our footprint, in the Utica, for example, producers tend to have takeaway commitments on the residue gas pipelines and also, in some cases, hedging strategies continue to drive production. So we’re really in our footprint, not seeing that impact. What we are continuing to see is more rigs move from the dry gas areas into the rich gas and crude areas.

And the crude production comes with associated gas. It’s particularly rich in NGLs, so we really see high NGL content with that gas. And we’re taking advantage in places like the Permian, as Kris mentioned, with growth and Maryann with Preakness II coming online, and also in the Marcellus super rich area, which is by far our largest, almost 6 bcf a day of processing there and we just added another plant. So we’re seeing growth in those liquid rich areas, and that’s great. But one area, it’s not new because we built it out over ten years ago, but it has been overlooked a bit, is the Utica, and we’re really excited about what’s going on there now. Not only are we seeing existing customers move rigs over into the condensate rich gas, and even now the light oil window.

And that is unique to the Utica beyond other areas with rich gas is that light oil window. So we’re not only seeing existing customers move in there, but we’re also seeing some new a handful of new producers move in and buy up acreage. So you have an untapped resource there, which is really a light crude oil resource. So it’s unique to the northeast and it’s really driving a lot of activity. And we’re positioned with surplus prebuilt processing, gathering and fractionation capacity, both de-ethanization and C3+ fractionation capacity. So we’re really excited about this opportunity to use that existing capacity. And overall, now we’re seeing increasing rig counts in the Utica.

John Mackay: I appreciate the details, Greg. Thanks, everyone.

Maryann Mannen: Thanks, John.

Operator: Thank you. Next we will hear from Manav Gupta with UBS. You may proceed.

Manav Gupta: Congrats, Maryann, on a very strong start on both MPLX and MPC side. My first question is, can we get a little more details on the Blackcomb pipeline? It looks like a very interesting project. So what are the benefits of it? How do you see this as developing? If you could give us some more details on this project.

Maryann Mannen: Good morning, Manav. Thank you. Yes, happy to do that. I’ll give Dave the opportunity to share some of the specifics around Blackcomb. But, as you know, our wellhead-to-water strategy continues to be an important piece of the long-term growth of MPLX. Over the last several quarters, we’ve been taking steps, the Whistler transaction gave us the access through the JV for the Rio Bravo pipeline. Blackcomb just announced FID. We think this is another important piece as it connects the Permian basin, Agua Dulce in South Texas. So again, hopefully, what we’re demonstrating here is we are able to continue to put together key elements of this strategy that will allow us to continue this mid-single digit growth that we’ve done over the last few years and give us an outstanding platform for that wellhead-to-water strategy. I’m going to pass it to Dave and let him give you a little more color, specifically on Blackcomb.

Dave Heppner: Thanks, Maryann. When you think of Blackcomb and Maryann touched on it, I think the best way to think about Blackcomb, it’s just the continued evolution of our nat gas wellhead-to-water strategy. And it’s all foundationally built on the Whistler relationship. So you think of the whistler, the first of the pipes coming out of the basin. And as you can see, with the continued growth in the Permian, which we believe, along with everybody else, has got a lot of runway incremental capacity to come out of the basin was necessary, which is the Blackcomb. But Blackcomb is also just a foundation to get to the Gulf Coast. So whether you think the remaining links of those value chains, ADCC, which just came in service, the Rio Bravo pipeline, getting the LNG facilities.

It’s all part of our long-term strategy of that integrated value chain. And we’re excited about Blackcomb because of not only the capacity and the value chain buildup, but the partners that we have in there. And so I think you’ll continue to see those value chains grow as the basins continues, has capacity to export and, and the demand down in the Gulf Coast. So look forward to continue to give you updates.

Manav Gupta: Perfect. My quick follow up here is adjusted free cash flow after distribution was 574. So the cash is building. Anything you want to say on the uses of this cash as it continues to grow? And then I’ll turn it over. Thank you.

Maryann Mannen: Thanks, Manav. Yes, so one of the things that we think we’ve continued to build over the last several quarters is our financial flexibility. I talk about a return on and a return of capital business. As I mentioned, we increased our distribution 10% in the last two years, and that continues to be a primary source of our ability to return capital. Second, you’ve seen we did do share repurchase again this quarter. We believe this equity is undervalued and certainly another mechanism for the return of capital growth. As I, as we’ve been talking about here, putting that capital to work in these high return projects, particularly anchored in the Marcellus and the Permian, with the intent of growing those cash distributions in the future.

And that’s certainly another use there. So that financial flexibility, we think, is critically important to allow us to do that. I’m going to pass it to Kris and allow him to share a little bit more on some of the specifics of the cash balance.

Kris Hagedorn: Thanks, Maryann. Yes, Manav. What I would highlight to folks is at the end of the quarter, as you’ve seen, we have about $2.5 billion of cash on the balance sheet. So just reminding of that big number, we have maturities coming up in December of 2024 and February of 2025 that will pay off with that cash balance or some of that cash balance. As Maryann articulated, we are excited about the continued growth in our adjusted free cash flow after distributions. And as that cash builds, it is again returning it to our capital allocation framework of return of and return on capital.

Manav Gupta: Thank you.

Operator: Our next question will come from Jeremy Tonet with JPMorgan. Your line is open.

Unidentified Analyst: Hey, good morning. This is Roth [Indiscernible] on for Jeremy. I wanted to follow up on some of the previous comments and appreciate that that historical mid-single digit EBITDA growth is not future guidance, but given a number of the smaller accretive deals that MPLX has participated in. Could you frame up how we might think about future growth above that figure and just any potential there?

Maryann Mannen: Certainly. Good morning. So, as you know, we’ve targeted and you’ve said that it is never necessarily been indicative of guidance. But if you look over the last three years, compound annual growth in our adjusted EBITDA, in excess of 6%, distributable cash flows, almost 8% in our quarterly distribution growth. So, it has certainly been our target. But if we are able to execute in similar fashion, I mentioned earlier some of the key transactions that we have worked on in the, in the last year or so, our goal obviously would be to continue to target that with the intent of seeing EBITDA growth. Beyond that, as we put our capital to work and execute some of these key projects that we’ve been sharing with you. So again, a goal which we think we’ve been able to achieve, but certainly opportunity that we see given the number of projects and again, our commitment to executing the growth strategy and ensuring that we return capital to unitholders in the manner in which we just shared.

Unidentified Analyst: Got it. And then on that Permian to wellhead-to-water strategy, how do you think about, I guess, additional capital investment as you see it at this point where you might need to invest, whether that be upstream or downstream?

Maryann Mannen: Yes. So there’s a few areas, obviously, when we think about continuing to build that out that we are evaluating. And I’ll let Dave give you a few thoughts there. But certainly over the next few years, given the strength of that basin and given the opportunities that we see in particular, getting that takeaway capacity and getting it to water, and then you look at the assets in particular, on the MPC side as well, we think there are opportunities for us to continue to effectively put capital to work.

Dave Heppner: Yes. Maybe I’ll touch on two of the value chains, go back to nat gas. We think of the nat gas side. I kind of laid out that road map or the footprint. We think that what we’re building out not only achieves our strategy of that wellhead-to-water, but also provides Permian shippers with optimal flexibility. So I think as you think about incremental capital investment, you can think about how we continue to ensure that flexibility for those potential shippers. When you think about the NGL value chain, especially with our BANGL expansion that we talked about and also our incremental ownership in BANGL, and we’ve talked about our Texas City frac project and the opportunities there. So I think when you think about capital and you think about how we evaluate that last leg of the value chain all the way from the Gathering, Processing, the BANGL long haul pipe into fractionation and the export terminal and tankage, we’ll continue to evaluate that project through the lens of strict capital discipline and we’ll evaluate versus other alternatives and options that are out there for us to achieve that strategy long-term.

So those are just a couple of ways, I think as you look forward and we think about capital investments, whether it be at the NPLX level or down at the JV level, that we’ll continue to build out those value chains.

Unidentified Analyst: Got it. Thanks for the time.

Operator: Next we will hear from Theresa Chen with Barclays. Please go ahead.

Theresa Chen: Morning. First, wanted to also express congratulations to both Maryann and Mike. Following up on the Permian wellhead-to-water NGL strategy, would you be able to provide a little bit more detail on the economics related to your 20% incremental interest in BANGL? I’m not sure if you could share the purchase price and then also just the current progress on the Texas City frac. And as we think about that last piece to water, to Dave’s earlier comments in terms of speech, market the timeline to bring online export infrastructure, assuming that it would be a Brownfield [ph] fill.

Maryann Mannen: Good morning, Theresa, and thank you for your comment. So on BANGL, first look, we think that BANGL has been and continues to be a key strategic asset as we build out that NGL value chain. And again, longer term, we’re really confident in the growth profile of BANGL and more importantly, our ability to compete effectively in that basin. The transaction gives us a total of 45% ownership and again, an important piece of the wellhead-to-water strategy. Also, that transaction we believe is immediately accretive and we expected to generate mid-teens return. We had a rofo on that transaction. As it relates to your question on Texas City, we’re trying to ensure that we maintain optionality in our wellhead-to-water strategy there. We have evaluated other alternatives as well, continue to do so, and as we have any further conclusions around how we’ll build that out, we’ll continue to bring that to you as well.

Theresa Chen: Got it. And then on Blackcomb, are you to share any economics related to the project, either build multiples or anticipated returns?

Maryann Mannen: No, we’ve not shared any of the anticipated returns at this point. Early stages as we’re continuing to put that together, but we’ve not at this point yet Theresa. Again, confident in the pipeline itself and in its critical contribution, really, to our strategy, but have not shared that at this point.

Theresa Chen: Understood. Thank you.

Operator: Our next question comes from Keith Stanley with Wolfe Research. Your line is open.

Keith Stanley: Hi. Good morning. I wanted to follow up first on the 2.5 billion of cash on the balance sheet. So leverage is well below your 4 times target. EBITDA is growing nicely. You’re generating a lot of excess free cash flow. So why use cash to repay, I think it’s $1.6 billion six of maturing debt in December and February instead of refinancing. And at what point would you view a level of cash on the balance sheet as inefficient from a capital structure perspective?

Kris Hagedorn: No. Thank you, Keith, for the question. As we mentioned, we continually look to manage our liability towers. That’s something that we do continually and try to make sure that we do that in an effective way. What I’d tell you about the 2.5, as you noted, cash is fungible, but indeed we do, as we’ve earmarked that, we have earmarked it for the December and the February notes. I will tell you as we sat at a net leverage ratio of 3.1. We do see, tremendous strength in our balance sheet. So we think that, you know, as we’ve communicated in the past, we, we have room up to 40 in our leverage. So as we evaluate our opportunities going forward, we’ve talked about the wellhead-to-water strategy for NGLs. We’ve talked about the expansion we’re doing with Whistler. We’ll continue to evaluate where our balance sheet sits and how we put that cash, potential cash to work.

Maryann Mannen: Keith, it’s Maryann. I just wanted to maybe follow up on a few of Kris’s comments as well. One of the reasons why, as you appropriately state, that we’ve seen the improvement in our leverage, frankly, is because what we’ve seen is the growth in our EBITDA. So take your point that financial flexibility we think is important. We’re not stepping away from our commitment, if you will, or our belief around the leverage target. That’s an important piece of our financial flexibility going forward. So no change in that whatsoever.

Keith Stanley: Thank you both for that. Second, just follow up question on the integrated NGL strategy and possibly moving into frac and exports. Some of your competitors have some chunky export capacity additions that they’re working on. And then we’ve had the nighttime restrictions lifted, too. So how does that factor into your thinking on potentially entering the export business. It seems like your competitors are kind of building pretty aggressively there.

Dave Heppner: Yes, Keith, this is Dave. Let me kind of expand on that a little bit. So. Yes, you’re exactly right. And I think the competitors that you’re referencing, they’re building out the export capacity is a signal, and we’re aligned with it that we need more export capacity to be able to clear the volume to the international market. So it’s a little bit back to Theresa’s question, too, on timing. So as we’re going through our strategy of finalizing the remaining links of that value chain from fractionation export facilities, I won’t say time of us, in essence, but it’s something that’s top of our radar as we continue to evaluate that and other options to do it. So, very similar compared a little bit to the nat gas value chain strategy in the LNG facilities and the build out of the LNG to support the capacity of nat gas coming out of the Permian.

It’s a little bit of a chicken the egg. What part of the value chain do you build out first? And I think we’ve taken the approach of start with the GMP, move down the long haul pipes into the fracs and the docks versus going backwards. So I think it’s a little bit of the market supports it and a little bit of how you want to build out your wellhead-to-water strategy. Hope that helps.

Keith Stanley: Thank you very much.

Operator: [Operator Instructions] Next we will hear from Michael Bloom with Wells Fargo. You may proceed.

Michael Bloom: Thanks. Good morning, everyone. I wanted to drill down on one of the comments and prepared remarks. Now that Mountain [ph] Valley pipeline has been in service for a little bit of time here, I’m curious if you’re seeing any change in the producer behavior as a result around your system. And do you see this potentially providing any additional investment opportunities for you kind of upstream of the pipeline?

Greg Floerke: This is Greg again. Michael. I think that if you look at current production out of the Northeast and the Marcellus Utica, it’s like 34 billion cubic feet a day of the hundred billion total. And we’re really excited about MVP and the incremental takeaway capacity that that will provide from the basin as it ramps towards, I believe, the stated nameplate of two Bcf. So it does make. It does make an incremental difference in terms of takeaway. And that’s very much a positive, particularly as that ramps over the next few years. We already have 90%, a little over 90% utilization of our Marcellus plants, and so there’s a little bit more room to grow. And we’re focused on filling out that remaining piece up to 100 and also growing, as is the case with Harmon Creek II.

So I think there’s a lot of factors that go into how that capacity out of the basin is filled. One of the things I mentioned earlier was some of the dry lean gas production maybe being curtailed or dropped down. That opens up capacity out of the basin, too. So, in summary, any capacity helps anytime you look at a constrained basin. But there is room for us to grow and we’re still very bullish on the Marcellus and now the Utica.

Michael Bloom: Got it. Thanks for that. And then maybe just one other question on Blackcomb. I know you’re not providing much, but maybe you could tell us, would you expect there to be project level debt financing for this project?

Greg Floerke: Michael, thank you. We will continue to evaluate that, but with a project like this, project level financing usually makes sense.

Michael Bloom: Perfect. Thank you.

Operator: Thank you. Thank you. And our last question will come from Neal Dingmann with Truist Securities.

Neal Dingmann : Morning. Thanks for getting me. And my first question just on the Preakness II processing plant. Can you just remind me how quickly capacity will ramp there, the potential for further, maybe additional upsides?

Greg Floerke: Yes, Neal, this. Greg, we expect, we continue to build out new capacity and we expect Secretariat, our next plant after Preakness II, to come into service in the second half of next year. So we try to pace these plants to where as we run out of capacity with one plant, we’re sort of there with the next plant to move into. So hopefully that gives you some feel for the ramp timing of Preakness II.

Neal Dingmann : It does love the upside there. And then my second question, maybe just broader on your Marcellus gathering volumes. After some earlier comments you made on the Utica, I’m just wondering, could you all talk about just, it looked like volumes continue to notably increase there? I think you all show that 15% year-over-year second quarter volumes. I’m just wondering, can we assume that volumes can continue to improve there as that play continues to expand as one of the upstream operators suggest?

Greg Floerke: Yes, that’s a great question. The Marcellus is one of the areas where we only gather, not even 50% of the gas that we actually process there. Other third parties gather the majority of the gas in the particular area where we’re growing, which in this case is the Harmon Creek II plant that’s come online and is ramping up. That happens to be an area where we’re also gathering the production. So that’s why you’re seeing, that’s actually rich gas production growth that you’re seeing. So we expect that to, we’d expect that continue to grow along with the volume ramp up into Harmon Creek II.

Neal Dingmann : Thanks much.

Kristina Kazarian: All right, Sheila, if we don’t have any other further questions, thank you for joining us today. And thank you for your interest in MPLX. Should you have additional questions, or would you like clarifications on any of the topics discussed today? The investor relations team is available at any time to take your call. Thank you.

Operator: Thank you. That does conclude today’s conference. Thank you for participating. You may disconnect at this time.