Detailed Narrative
Asset Ramps and Performance
Enterprise brought several new assets online in 2025, including Frac 14, Mentone West, Orion, the Neches River Terminal, and the Bahia NGL pipeline. These assets performed well, helping to offset declines in commodity-sensitive businesses and marketing spreads. Notably, the two processing trains brought online mid-2025 in the Permian are virtually full, and ethane export terminals are fully contracted, with ships ramping up earlier than receiving terminals.
Strategic Partnerships and Expansions
A significant partnership with ExxonMobil was announced, involving Exxon's acquisition of an undivided joint interest in the Bahia NGL Pipeline. This collaboration will expand Bahia's capacity to 1 million barrels per day and include a 92-mile extension to connect Exxon's Cowboy processing complex and Enterprise plants in the Delaware Basin. This deal also includes a dozen downstream agreements, strengthening Enterprise's integrated services.
Global NGL Export Franchise
Enterprise continues to expand its NGL export capabilities, loading between 350 million and 360 million barrels across 744 ships in 2025. With the completion of Phase 2 of the Neches River Terminal and the LPG expansion of the Houston Ship Channel, the company expects to export near 1.5 million barrels per day of NGLs, or 550 million annually, by 2027. This growth is supported by highly contracted LPG exports through the end of the decade and strong international interest.
Capital Allocation Strategy
In 2025, Enterprise returned $5 billion of capital to equity investors, comprising $4.7 billion in distributions and $300 million through buybacks, resulting in a 58% payout ratio of adjusted cash flow from operations. For 2026, discretionary free cash flow is projected to be around $1 billion, with 50% to 60% allocated to buybacks and the remainder to debt reduction. The company aims to return its consolidated leverage ratio to its target range of 2.75x to 3.25x by the end of 2026.
Permian Basin Growth and Infrastructure
The company is experiencing strong volume growth in the Permian, with Midland volumes outperforming expectations and well connects reaching a record high of 590 in 2026. The Delaware Basin also shows a steepening growth curve, with an estimated 500 wells turning to production in 2026. This growth supports new infrastructure projects, including a 24-inch trunk line to extend the acid gas gathering system in Northern Lea County and a fifth treater at the Dark Horse facility.
Midstream Contract Management and Volatility Benefits
Enterprise actively manages its midstream contracts, including blending and extending crude pipeline contracts to address roll-offs in 2028. The company also benefits from Waha price volatility, leveraging its gas transport capacity for higher West to East/South spreads during low prices and its storage assets during high prices. This strategy allows them to monetize volatility on both sides, as demonstrated during recent winter storms.