Launch Feedback: Beyond The 3-Plant Per Year Growth Engine; Reit Buy

Research evidence excerpt

Launch Feedback: Beyond The 3-Plant Per Year Growth Engine; Reit Buy

ons framework. Beyond the typical processing plants and frac investments, despite a growth rate 110bp below TRGP

we underscore a 5th refrigeration unit at Galena Park as the next potential FID prospect, in the near-term. EV/EBITDAKNTK 11.3x2026 20279.5x 20288.3x 20297.4x 20306.8x FY26-FY3010.1%CAGR

WES 9.4x 8.8x 8.4x 7.9x 7.5x 7.0%

OKE 10.3x 9.8x 9.1x 8.6x 8.1x 3.8%

Bullish buy-side estimates screen above base JEFe (11.2%) and consensus (10.1%): our upside EPDET 10.5x7.3x 9.7x6.8x 9.2x6.7x 8.9x6.6x 8.5x6.4x 4.2%6.3%

case points to ~12.1% EBITDA CAGR. To address the feedback above, we explore the potential . TRGPAverage 10.3x12.9x 11.8x9.4x 10.3x8.7x 7.9x9.2x 7.4x8.3x 11.2%6%

growth and capital allocation profile under a higher 4-plant per year growth model. The scenario Source: Jefferies; Factset

assumes continued strength at the Delaware basin to support 3-plant per year (similar to what

is already FID'd in FY27) and a modest 1-plant per year at the Midland basin. The model yields

an 'illustrative' CapEx envelope of ~$3.1Bn (4-plants and 1-frac per year) and a modestly higher

maintenance CapEx.

Our analysis supports a ~3.7x return on the additional growth CapEx, but we still see free cash flow

latitude to support meaningful capital return optionality despite the higher CapEx assumptions (~$4.4Bn Julien Dumoulin-Smith * | Equity Analyst

of buyback between FY28-30 vs ~$5.4Bn base case). See details below. +1 (281) 774-2066 | jds@jefferies.com

Paul Zimbardo * | Equity Analyst

Speedway expansion could be even more accretive on a lower cost profile vs our estimates. See +1 (212) 778-8497 | pzimbardo@jefferies.com

details below. Lloyd Byrne * | Equity Analyst

+1 (212) 323-7528 | lloyd.byrne@jefferies.com