Update on ~3% 2026 and 10% 2027 growth, whether the two new plants are additive to 2027, and whether outsized spreads (~$500M) are back.

2026 is shaping up much stronger than expected ('modest' is now a low bar) given commodity/spread upside on top of the fee-based base; 2027 remains ~10%, with the two new Permian plants additive as they come on in 2027. Management expects outsized spreads to return — possibly $500M-$700M — but can't specify which spread; Q1 saw natural gas spreads, with post-conflict spreads expected in Q2. “I've been around a while, and I have never seen a supply disruption like we're experiencing today. that supply disruption creates a lot of benefits that Enterprise is able to capture.”

If discretionary cash grows above the $1B plan, does the incremental all go to buybacks given leverage is already in target?

For 2026, management would still maintain the ~50%-60% buyback split even with stronger results; 2027 could be a different story. “Yes, Michael, I like the way you're thinking this morning... I think we would still, in the near term... probably still maintain that 50% to 60% split.”

How long could it take to replenish crude/product storage given the scale of lost supply?

With ~12-15M bbl/d lost through the Strait (~720M barrels over 60 days), even after normalization only ~1-2M bbl/d of surplus above normal could return, so it could take years to rebuild inventories to pre-war levels — and the extent of war damage to facilities remains unknown. “just take 12 million barrels, for example, multiply that times 60 days. You've lost 720 million barrels through the straight for global supply... it could take years to get back to where we were before the war.”

EPD

Enterprise Products Partners (EPD) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Energy· Apr 28, 2026

Source: earnings call transcript

Executive summary

Enterprise Products Partners Q1 FY26 — Record volumes and a Middle East supply shock reshape a bullish outlook

A short quarter turned exceptional as newly commissioned assets ramped to full utilization and an unexpected Middle East supply shock flipped the outlook from a benign, oversupplied year to one of surging international demand for U.S. energy. Management now expects sustained export strength and a return of outsized marketing spreads to materialize from Q2, layering commodity upside onto a fee-based growth story while holding to disciplined capital returns and debt reduction.

Highlights

Adjusted EBITDA rose 10% YoY to $2.7B in a seasonally short quarter, with 1.8x DCF coverage
New assets ramped fast — fractionator 14 full on day 1, three Permian gas plants full by mid-quarter, and Bahia/Shin Oak system running at 80% of combined 1.2M bbl/d capacity
Marine export demand surged — ~70M barrels/month across docks in Q1, with 88M+ barrels scheduled to load in April
Petrochemical margins jumped post-Iran conflict — ethane-to-ethylene cracking margins rose from ~$0.07/lb to $0.23/lb and ethylene-to-polyethylene spread from $0.20/lb to $0.45/lb
On track for 28 consecutive years of distribution growth; leverage improved to 3.2x net

Concerns

Crude segment Q1 hit by an Eagle Ford JV fee renegotiation and mark-to-market noise, driving lower sales margins and transport revenues
2026 growth capex guidance increased ~$300M (to $2.3B-$2.6B net) on two new Permian gas plants
Demand tailwind hinges on a prolonged Strait of Hormuz disruption (12-15M bbl/d constrained); earliest normalization estimated July, making the upside duration uncertain
Leverage temporarily carries new-asset debt (Bahia, Neches, Occidental) before their EBITDA flows into trailing-12-month numbers

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 growth capital expenditures (net of asset-sale proceeds)	$2.3B-$2.6B high materiality	FY2026 · FY26	High
Full-year 2027 growth capital expenditures	~$2B-$2.5B high materiality	FY2027 · FY27	Medium
Full-year 2026 sustaining capital expenditures	~$580M medium materiality	FY2026 · FY26	High
Full-year 2026 discretionary free cash flow	~$1B area (potentially higher) high materiality	FY2026 · FY26	Medium
2026 discretionary free cash flow allocation — buyback vs. debt retirement split	~50%-60% to buybacks medium materiality	FY2026 · FY26	High
Distribution growth policy	grows commensurate with operational distributable cash flow per unit growth; 28 consecutive years of growth in 2026 high materiality	FY2026 · FY26	High
2026 earnings/EBITDA growth	modest growth high materiality	FY2026 · FY26	Low
2027 earnings/EBITDA growth	~10% growth high materiality	FY2027 · FY27	Medium
Consolidated leverage target	3.0x +/- 0.25x (or $2.75B-$3.25B) medium materiality	ongoing	High
April marine export dock loadings	more than 88 million barrels high materiality	April 2026 · FY26	High
Q2 crude oil export volumes	well over 1 million barrels/day high materiality	Q2 FY26	Medium
Permian natural gas processing plant build cadence	~2 plants per year medium materiality	go-forward	Medium
Neches River Terminal (NRT) Phase 2 commissioning completion	complete for both ethane and propane in May 2026 medium materiality	Q2 FY26	Medium
NRT transition from propane to ethane export service (EHT capacity online)	ethane capacity comes online late this year (2026) medium materiality	late 2026 into 2027 · FY26	Medium
Outsized marketing spread gains for 2026	expected but unspecified (historically ~$500M; possibly $500M-$700M) high materiality	FY2026 · FY26	Low

EPD operating KPIs by quarter

EPD operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Liquid hydrocarbons export volume	2.1M bbl/d In the fourth quarter, we loaded out on -- for export, 2.1 million barrels a day of liquid hydrocarbons against our term commitments of 2.5 million barrels a day. Source: earnings call transcript	2M bbl/d In total, we moved 13.2 million barrels of oil equivalent a day and 2 million barrels a day of liquid hydrocarbon exports. Source: earnings call transcript	—	—	—	—	—	-4.8%
Capital expenditures Growth capital projects	$946M Total capital investments in the fourth quarter of 2024 were $2 billion, which includes $946 million for growth capital projects, $949 million for the acquisition of Piñon Midstream and $113 million of sustaining capital expenditures. Source: earnings call transcript	$964M Total capital investments in the first quarter of 2025 were $1.1 billion, which included $964 million of growth capital -- of growth capital projects and $102 million of sustaining capital expenditures. Source: earnings call transcript	$1.2B Total capital investments in the second quarter of 2025 were $1.3 billion, which included $1.2 billion for growth capital projects and $117 million of sustaining capital expenditures. Source: earnings call transcript	$1.2B Total capital investments were $2 billion in the third quarter of 2025, which included $1.2 billion for growth capital projects, $583 million for the acquisition of natural gas gathering systems from Occidental in the Midland Basin, and $198 million of sustaining capital expenditures. Source: earnings call transcript	$1B Total capital investments were $1.3 billion in the fourth quarter of 2025, which included $1 billion for growth capital projects and $203 million of sustaining capital expenditures. Source: earnings call transcript	$783M Total capital investments were $988 million in the first quarter of 2026, which included $783 million of growth capital projects and $205 million of sustaining capital expenditures. Source: earnings call transcript	$1B Total capital investments were $1.2 billion in the second quarter of '26, which included $1 billion of growth capital projects and $140 million of sustaining capital expenditures. Source: earnings call transcript	+27.7%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

ExxonMobil divestiture / JV interest sale + downstream contract extensions $596M final payment for 40% interest in Bahia NGL pipeline

Sale of a 40% interest in the Bahia NGL pipeline to ExxonMobil; downstream agreements were largely extensions of existing deals, extended naturally during Bahia discussions.

Occidental Petroleum acquisition (midstream assets)

Midstream asset acquisition from Occidental; a key driver of the fee-based 2027 growth outlook.

Eagle Ford JV partner (unnamed) contract renegotiation

Renegotiation of fees on an Eagle Ford JV, plus mark-to-market noise and lower spreads, weighed on Q1 crude results; spread improvement began in April.

Capital programs

Two new Permian natural gas processing plants underway (recently FID'd)

Period spend: drove ~$300M increase in 2026 growth capex guidance

Spent to date: long-lead items already ordered / in prior guide

Funding: funded within discretionary cash flow (buybacks/debt still expected alongside)

Start: FID taken this quarter (Q1 2026)

Benefit:incremental Permian gas processing capacity; additive to 2027 growth outlook

FID came earlier than expected due to Permian volume/GOR growth; long-lead items were already in the guide, so the increment reflects near-term spend. Commercial team underwrote the two plants.

Neches River Terminal (NRT) Phase 2 expansion nearing completion (commissioning)

Start: commissioning began second half of April 2026

Benefit:360,000 bbl/d refrigeration capacity; propane initially, transitioning to ethane as EHT comes online late 2026

Operations team expedited commissioning; ~90% contracted over the longer term; ethane commitments driven by VLEC arrivals late 2026 into 2027. (ASR renderings 'Matas River'/'Nature River' refer to Neches River terminal.)

EHT ethane export capacity underway

Benefit:long-term ethane export capacity to satisfy contract demand transitioned from NRT propane service

Ethane commitments generally driven by timing of VLEC arrivals, largely later this year and into next year.

Bahia NGL pipeline completed

Spent to date: complete

Funding: partly funded via ExxonMobil 40% JV interest sale ($596M final payment received in Q1)

Benefit:with Shin Oak, running at 80% of combined 1.2 million bbl/d capacity

Final $596M payment from ExxonMobil for the 40% interest received in Q1; system ramping well.

Fractionator 14 (Mont Belvieu) completed

Spent to date: complete

Benefit:NGL fractionation capacity — 'full on day 1'

Management noted they were 'probably a little late' on frac 14; would build another fractionator if volumes require, likely at upper end of fractionation guidance.

Midtown West 2 gas processing plant (Delaware Basin) completed

Spent to date: complete

Benefit:set a new gas-processing plant record

Part of three Permian gas plants essentially full by mid-quarter; contributed to multiple Q1 volumetric operating records.

Risks & headwinds

Uncertain duration of commodity price and spread upside from the Middle East disruption through remainder of 2026, possibly into 2027

12-15M bbl/d of supply constrained (~500M barrels/month); earliest Strait of Hormuz normalization estimated ~July, plus unknown time to repair damaged facilities

Mitigation:System flexibility to capture value across products; base outlook underpinned by fee-based businesses; management sees potential for years to rebuild inventories

Crude segment Q1 earnings headwind Q1 2026

lower sales margins and transport revenues from Eagle Ford JV fee renegotiation plus mark-to-market noise and lower spreads (amount not quantified)

Mitigation:Spread improvement began with April business; management expects the headwind to reverse

Elevated leverage carrying new-asset debt before EBITDA contribution near term (until new-asset EBITDA enters trailing-12-month figure)

net leverage 3.2x vs 3.0x +/- 0.25x target; ~$34.2B total debt principal

Mitigation:New assets (Bahia, Port Neches, Occidental) ramping; ~50%-60% of discretionary FCF to buybacks with remainder to debt retirement

Paper (futures) market disconnected from tighter physical market ongoing

not quantified; strong physical premiums (e.g., dated Brent) vs forward curve deemed 'probably not high enough'

Mitigation:Management expects the forward curve to drift up toward physical reality over time

Demand durability once supply normalizes (geographic disadvantage vs Arabian Gulf) post-normalization

not quantified; e.g., India LPG interest may fade given proximity of Arabian Gulf supply

Mitigation:Broadened multi-product 'hydrocarbon dock' offering and system flexibility; long-term contracting (LPG through end of decade, crude through '28/'29)

Limited U.S. producer supply response capping volume growth 2026-2027

not quantified; producers staying disciplined, only modest private/independent incremental activity over last 3 months

Mitigation:Integrated value chain, established Permian footprint and reliability position EPD to capture available volume growth

Octane-enhancement (Oleflex) turnaround limiting near-term capacity near term

unit just coming out of turnaround; historical business delivered north of $400M gross margin in 2022/2023 (analyst-cited)

Mitigation:Management expects strength through the quarter as the unit returns to service

Q&A highlights

How much export capacity is on near-term-expiring contracts that could recontract higher, and how much brownfield expansion room remains?

NGL export docks are significantly contracted: LPG contracts run through the end of the decade, ethane 1-2 years, with ~10% available for near-term spot. Crude has a wide mix of structures with contracts through '28 and '29 and ~10% open capacity for '26, with good conversations underway for '27.

“on LPG, those contracts go through the end of this decade on ethane, they extend 1 to 2 years depending on contracts, so lengthy duration. We had 10% available for spot capacity in the near term”

asked by Theresa Chen · answered by Tyler Cott / Jay Baney

3 min read 6 chapters

Detailed narrative

Exceptional short quarter driven by new-asset ramp

Enterprise generated $2.7B of adjusted EBITDA in a seasonally short quarter, up 10% YoY, with 1.8x DCF coverage. Assets brought online over the past year continued to ramp: the Bahia NGL pipeline, fractionator 14 (full on day 1), and three Permian natural gas processing plants (essentially full by mid-quarter).

Bahia and Shin Oak as a combined system are running at 80% of a combined 1.2 million barrels/day of capacity. The addition of Midtown West 2 in the Delaware Basin set a new gas-processing record, alongside multiple first-quarter volumetric operating records across the system.

Middle East supply shock reshapes the demand outlook

Management entered 2026 expecting steady production growth, oversupplied markets, and benign commodity prices — an outlook that has clearly changed. The Iran conflict and restricted Strait of Hormuz flows have constrained an estimated 12-15 million barrels/day of crude, refined products, LPG and petrochemical supply (~500 million barrels/month, ~720 million barrels over 60 days).

U.S. petrochemical margins improved dramatically: ethane-to-ethylene cracking margins moved from ~$0.07/lb to $0.23/lb and the ethylene-to-polyethylene spread from $0.20/lb to over $0.45/lb. China's PDHs are running at less than 50% of capacity and Asian petrochemicals are destocking inventories. Management sees strong demand persisting through the remainder of 2026 and possibly into 2027, with earliest Strait normalization estimated around July before repair of damaged facilities.

Marine export strength across a broadened hydrocarbon dock

Q1 export dock volumes averaged ~70 million barrels/month, with more than 88 million barrels scheduled to load in April. Crude terminals are benefiting from SPR barrels directed to international markets — Q4 crude exports were up 70k bbl/d, Q1 added another ~70k with SPR barrels, and Q2 could exceed 1 million bbl/d.

Ethane and LPG customers continue to line up at docks, and ethylene exports have run high — roughly 3 million barrels this month. Management emphasized the strategic shift to being a 'hydrocarbon dock' offering ethylene, propylene, LPG and ethane flexibility rather than a single-product terminal.

Capital allocation, distributions and balance sheet

Q1 net income to common was $1.5B ($0.68/unit, +6% YoY) and adjusted CFO rose 10% to $2.3B. The declared distribution of $0.55/unit (+2.8% YoY) keeps Enterprise on track for 28 consecutive years of growth. Over the trailing 12 months it returned ~$5.1B to equity investors (93%/~$4.8B as distributions, ~$356M via buybacks), a 57% payout ratio of adjusted CFO, and has returned over $63B since its 1998 IPO.

Total debt principal was ~$34.2B with a ~17-year weighted average life, 4.7% weighted average cost, and ~95% fixed; liquidity was ~$3.3B. Net leverage improved to 3.2x, temporarily elevated by new-asset debt (Bahia, Port Neches, Occidental acquisition) whose EBITDA has not yet entered the trailing-12-month figure.

Downstream: PDH reliability and octane enhancement

The downstream stack contributed strongly with record product flows, strong margins and high PDH utilization. PDH 2 has run much better and more consistently since its turnaround last year, and PDH 1 reliability has improved through multi-year investment, per the Belvieu team.

On octane enhancement — which delivered north of $400M of gross margin in 2022/2023 per an analyst — the Oleflex unit is just coming out of a turnaround, limiting full capacity near-term, but management expects strength through the quarter.

Producer discipline and paper-vs-physical disconnect

Despite the supply shock, U.S. producers are staying disciplined — some private/independent operators are discussing pulling cadence forward and modest incremental gathering-system growth over the last three months, but the majors are holding. Management flagged that the futures/paper market does not accurately reflect the tighter physical market (e.g., strong physical premiums in dated Brent) and expects the forward curve to drift up over time toward physical reality, even with an eventual resolution in the Strait.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.