PAGP Q3 2026 earnings call transcript, November 6, 2026

Congrats. I wanted to ask you a little bit more. or on the 270,000-acre Midland dedication. As you ramp towards the 225 target of volumes, how should we think about the earnings uplift that this opportunity provides? Manal, this is Jeremy Goble. We're going to give you some more guidance on that in February. But think of that as existing production. So it's not a ramp to production. It's just a matter of timing for connection. So that contribution... ...will likely be late 2027, early 2027 about the opportunity to partner.

Thank you so much.

Thanks, Manav.

Thank you for the opportunity.

Look, a couple things. Maybe just zeroing in and nitpicking. On the quarter itself, 4Q, what's implied here, how do you think a little bit about just implying down? Is there any specific drag here on the forthcoming quarter? And then thinking a little bit more strategically to the last question here, what do you think the timing of evaluating that Cactus 3 expansion is? Vis-a-vis, you talk about that 28 timeline for a brownfield expansion. When do you start moving on that and we're getting a little bit more detail? I presume that that's the brownfield expansion you're getting at here. Julian, this is Al. I'll do the first part. Implied, obviously, in our guidance is about $700 million for the fourth quarter, down about $10 from the third quarter. The real change is the market opportunities that we've experienced in 2Q and 3Q that really... math. That's really driving the $10 million lower number, plus the inclusion of Silver Creek for the fourth quarter. If you recall, our view is Silver Creek's an asset that's going to grow meaningfully over the next few years. 4Q included in our forecast is without the benefit of some of that growth, some transition services costs, integration costs, etc., and without the synergy. So... Those two basically offsets the step-down and some of the market opportunities that we captured kind of as the war started for second quarter and third quarter.

Julian, for your second part, the shorter answer is we're continually evaluating them. Just as you saw this summer, we added 75,000 barrels a day. We're looking at incremental ability to add as the market demands. And so I think you'll see us ramp over that time period. There's segmentation. We have to build to access additional markets. So I don't know that you'll see one grand announcement, just a series of announcements to get the pipeline ready. And then as contracts and rates are appropriate, we'll add the additional capacity. So I don't think it's going to be one step change, another 300,000 barrels a day. I think you're going to see a series of expansions that go based on market demand.

The wells are better, and they cost less, and they're looking to potentially add a rig into the system so we can see the Powder River Basin as the next growth wedge in the Rockies, and that positions well for us not only on the Silver Spur asset from a gathering standpoint, but it also from a pull-through benefit to our pipelines and terminals in the Guernsey area headed south through to Cushing. So it's an integrated play for us. It's growth on a standalone basis, but also an integrated play. So we're excited about the opportunity to work with some of our large producers that they're at home.

Awesome, guys. I'll leave it there.

Thank you very much.

Yeah, I'll go ahead and take that one. This is Willie. Clearly, we've done a lot of bolt-on M&A or bolt-on acquisitions. So I'll speak about bolt-ons and then broader activities. We've actually been the ones that have been executing on a lot of these bolt-ons. We look at everything. I would tell you that I think the bolt-on opportunities are probably a little less than the pace we've gone in the past. I think we've done 15 of these over the last three or four years. So it's been very critical to our piece. A broader M&A is obviously an opportunity. But right now we focus on our crew business. Anything we do focuses on returns. So if we think about assets that we might bring in or things we may do, it's really focused around capital discipline and returns. And it's with that lens that we think about broader M&A. But look at everything. Well positioned. Opportunities come our way. We'll be able to hopefully capture them.

Okay.

Thank you for that.

Maybe just going back to the Permian. Macro. You know, if we start to see this kind of compounding multiple hundred thousands of barrels of growth over the next few years, where do you see the most upside or what part of your system do you get most excited about? Is it like the incremental C3 expansions that you can do or market-based opportunities on your marketing affiliate? Or is the highest torque maybe higher utilization on your northbound assets out of the Permian? A.J., that's a great question. I'd say it's a bit of all of the above because filling the pipes is one thing. What we really get excited about is longer term the additional improvements that the industry makes on recoveries, sustaining this for long periods of time, which is what we hear over and over again from techniques. Investments Exxon, Chevron, and the other integrators are made to extending the tail. That's what really gets us excited, is that the long-term recoveries, there's a lot of gas and a lot of NGLs and there's a lot of excitement, but that's going to make those commodities worth a lot less. These are still going to be oil reservoirs driven by oil, so there's a real investment being made to continue to drive additional recovery. So on the oil side, flattening out the curve, having less capital to go chase this.

I'll go back to the Midland dedication. Congrats on that. I just want to make sure we're thinking about it correctly. I know we'll get color later on kind of associated EBITDA and any associated spend, but given this is production that's already flowing elsewhere, I mean, is there a certain acquisition? opportunity here for you guys over time on kind of whatever this production is touching right now? John, I'd say at this point that's inappropriate for us to talk about, but from our standpoint, we look forward to executing under the contract that we have today. All right. Fair enough. I'm sorry, John. This is Willie. I mean, as I think about at high level, right, our whole business is integrated. So, we've got gathering, interbasin, long haul. So, the thought of getting another 900,000 dedicated acres into the system, this is just what we do. No, absolutely. That makes sense. I'm sorry. I misquoted it. It's 270,000 acres here versus the 900 was up in the Powder River. My apologies on that.

Absolutely. And maybe just on that point, you've probably increased the size of the dedicated acreage on the JV by looks like 30% since you kind of put it together about five years ago. I think we're just past that five year anniversary. Can we take this opportunity to give us your view on kind of the longer term strategic plan here? You know, is there an opportunity to kind of find the other piece at some point? Is this going to be a kind of vehicle you can kind of continue to grow in? Maybe just give us an update now that we're kind of five years past the launch of it. Thank you.

Great partnership.

But we've proven with them that we can grow, like you said, a 30% growth over five years is really a great deal.

We can continue to grow as we've proven with them. As a partner, we can grow with them. Or if the opportunity comes, we can do that. So I think there's no obligation to do it. There's an opportunity to do it, but there's no different than the opportunity to buy in other partners that we've had across our system. Absolutely. That makes sense. Congrats again on the dedication. Thank you.

Thanks, John.

Hey, this is Al.