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Targa Resources Partners LP And Targa Resources Corp. Report Second Quarter 2013 Financial Results

Field Gathering and Processing

The Field Gathering and Processing segment's assets are located in North Texas and the Permian Basin on West Texas and New Mexico. With the Badlands acquisition on December 31, 2012, this segment's assets now include the Badlands crude oil and natural gas gathering, terminaling and processing assets in North Dakota.

The following table provides summary data regarding results of operations of this segment for the periods indicated:
  Three Months Ended June 30, Six Months Ended June 30,
  2013 2012 2013 2012
  ($ in millions)
Gross margin  $110.2 $ 85.0  $201.7  $187.3
Operating expenses  42.9  31.1  80.6  60.4
Operating margin  $67.3  $53.9  $121.1  $126.9
Operating statistics (1):        
Plant natural gas inlet, MMcf/d (2),(3)        
Sand Hills  162.4  130.6  157.4  138.2
SAOU  155.1  121.9  147.2  118.6
North Texas System  290.8  242.7  275.9  233.5
Versado  170.8  169.9  165.8  169.9
Badlands  14.1  --   15.0  -- 
   793.2  665.1  761.3  660.2
Gross NGL production, MBbl/d        
Sand Hills  17.5  15.4  17.5  16.2
SAOU  22.7  18.9  21.7  18.5
North Texas System  32.0  26.8  30.5  25.8
Versado  20.6  20.0  20.0  19.6
Badlands  1.8  --   1.7  -- 
   94.6  81.1  91.4  80.1
Crude oil gathered, MBbl/d  38.2  --   34.9  -- 
Natural gas sales, BBtu/d (3)  379.1  312.6  359.3  313.0
NGL sales, MBbl/d  67.3  67.5  69.0  66.2
Condensate sales, MBbl/d   3.6  3.5  3.3  3.2
Average realized prices (4):        
Natural gas, $/MMBtu  3.89  2.02  3.53  2.29
NGL, $/gal  0.69  0.86  0.71  0.96
Condensate, $/Bbl  90.58  86.51  88.40  92.34
(1)  Segment operating statistics include the effect of intersegment amounts, which have been eliminated from the consolidated presentation. For all volume statistics presented, the numerator is the total volume sold during the quarter and the denominator is the number of calendar days during the quarter.
(2)  Plant natural gas inlet represents the volume of natural gas passing through the meter located at the inlet of a natural gas processing plant.
(3)  Plant natural gas inlet volumes include producer take-in-kind volumes, while natural gas sales exclude producer take-in-kind volumes.
(4)  Average realized prices exclude the impact of hedging activities presented in Other.

Three Months Ended June 30, 2013 Compared to Three Months Ended June 30, 2012

The increase in gross margin was primarily due to higher throughput volumes and higher natural gas prices partially offset by lower NGL sales prices. The increase in plant inlet volumes was largely attributable to new well connects across each of our areas of operations. At the same time, volumes at Sand Hills and Versado were constrained by operational issues. NGL sales were flat, impacted by the planned partial curtailment of CBF in May and June 2013 (see Logistics Assets discussion). The planned partial curtailment of CBF also resulted in a temporary build of y-grade inventory, primarily for our third party producer customers, that is expected to be fractionated during the third and fourth quarters.

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