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

HOUSTON, March 18, 2020 (GLOBE NEWSWIRE) -- Targa Resources Corp. (NYSE: TRGP) ("Targa" or the "Company") announced today that its Board of Directors approved a reduction in the Company’s quarterly common dividend to $0.10 per share for the quarter ended March 31, 2020 from $0.91 per share in the previous quarter. This reduction provides for approximately $755 million of additional annual direct cash flow, resulting in significant free cash flow available to reduce debt. Targa is also reducing its estimated 2020 net growth capital expenditures to approximately $800 to $900 million from its previously communicated range of $1.2 billion to $1.3 billion, which represents a 32 percent reduction at the midpoint of both ranges. The vast majority of spending is for major ongoing growth capital projects where the capital is already predominantly spent. 

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 Matthew J. Meloy, Chief Executive Officer of the Company.

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 $200 million, a 76 percent reduction on the lowered 2020 net growth capital spending midpoint referenced above, and this will be managed with continued discipline to minimize the absolute level.