Targa Resources Delivers Stable Q1

While income dipped year over year, Targa advanced its infrastructure expansion and completed a major acquisition.

May 02, 2025

Financial Snapshot

Targa kept the pace in Q1 2025, executing against its growth plans while navigating a flat revenue environment. With the acquisition of full ownership in Targa Badlands and several major infrastructure projects moving ahead, the company stayed focused on building out capacity and maintaining operational momentum.

Total revenue for the quarter landed at $4.56 billion —essentially unchanged from a year ago. The topline held steady despite lower commodity volumes and weaker hedge performance. Fee-based revenue, on the other hand, moved up 9%, driven by higher midstream service fees and export volumes.

Net income available to common shareholders came in at $200 million, down from $275 million in Q1 2024. The drop reflects a one-time premium paid to acquire the remaining stake in Targa Badlands. Stripping that out, earnings were relatively consistent. Adjusted EBITDA increased 22% year over year to $1.18 billion, and adjusted free cash flow jumped to $328 million —up from $3 million a year ago—thanks to tighter capital spending and lower net interest costs.

Strategic Moves

Targa closed on the Badlands deal in early March, buying out Blackstone’s 45% stake for $1.8 billion in cash. The acquisition gives Targa 100% ownership of the North Dakota-based asset and was treated as effective as of January 1.

To support the transaction and maintain flexibility, Targa:

• Issued $2 billion in senior unsecured notes


• Entered a new $3.5 billion revolving credit facility


• Maintained $2.6 billion in available liquidity at quarter-end

At the same time, Targa continued to return capital to shareholders:

• Repurchased 651,000+ shares at an average price of $191.86


• Exhausted its 2023 repurchase authorization


• Held $890 million in remaining authorization under its 2024 plan


• Raised the quarterly dividend by 33% to $1.00 per share

Segment Performance

Targa’s operations run through two core segments: Gathering and Processing , and Logistics and Transportation. Both delivered solid margins in Q1:

• Gathering and Processing:$602 million in segment margin (up from $556 million)


• Logistics and Transportation:$647 million in margin (up from $532 million)

Upstream operations benefited from better pricing and fee structures despite lighter volumes. Downstream performance was supported by strong NGL transportation, storage, and export demand.

Capital Projects in Motion

In Q1, Targa invested just over $618 million in capital expenditures. Major projects include:

Permian Basin Expansion

• Pembrook II, East Pembrook, East Driver(Midland) – online by late 2025 to 2026


• Bull Moose II, Falcon II(Delaware) – startup expected in 2026

Downstream Growth

• Reactivation of Gulf Coast Fractionators


• New fractionation trains – Train 11(2026) and Train 12(2027)


• LPG export expansion at Galena Park, increasing capacity to 19 million barrels/month by 2027

Pipeline and JV Activity

Targa is part of the Blackcomb Joint Venture alongside WhiteWater, MPLX LP, and Enbridge. The JV is building two pipelines:

• Blackcomb Pipeline: 2.5 Bcf/d capacity from the Permian to Agua Dulce (2026 launch)


• Traverse Pipeline: 1.75 Bcf/d between Agua Dulce and Katy (2027 launch)

Targa holds a 17.5% ownership stake. The pipelines will be operated by a WhiteWater affiliate.

Regulatory and Legal Updates

Targa is addressing several compliance matters:

• A New Mexico enforcement action tied to legacy Lucid Energy facilities, with a proposed fine of $47.8 million and required upgrades (mostly completed by year-end 2024)


• A Clean Air Act violation in North Dakota. Targa is in talks with the U.S. Attorney’s Office and EPA to resolve the matter, including a $500,000 proposed criminal fine

These proceedings are ongoing but are not expected to materially impact financial results.

Looking Ahead

Q1 results show a business focused on execution—balancing shareholder returns with long-term infrastructure investment. Commodity-driven earnings moderated, but fee-based revenues continue to expand. With new gas plants, pipelines, and export capacity on the horizon, Targa is building toward greater scale and resiliency.

Heading into the rest of 2025, the company remains focused on three areas: growth, financial flexibility, and consistent capital return. Based on its current pace, it’s well-positioned to deliver on all three.