MPLX Is Well Positioned in the Appalachian and Permian Basins

We like MPLX's portfolio of refining and Appalachia-based gathering and processing assets, given the propensity for fee-for-capacity and minimum volume commitment contracts, which present a highly secure stream of income over the long run. Further, MPLX still has plenty of opportunities to unlock in its newly enlarged portfolio of assets following drop-downs from its parent and the Andeavor Logistics deal, which has taken the partnership to $5.8 billion in expected 2023 EBITDA compared with just over $550 million in 2015. Already, it has sliced billions in spending from the portfolio as 2023 growth capital spending is just $800 million from the $2.6 billion initially announced at the time of the merger, demonstrating commendable focus on unitholder returns. We expect MPLX to generate over $500 million in excess cash flow after capital spending and distributions in 2023. The management team has prioritized unit buybacks, as buybacks between 2020 and 2022 total over $1 billion, but has shifted to boosting the distribution in 2023.