CALL INVITE -> New Long MPLX, New Short DKL

Long-term, our views on natural gas are positive and we can see MPLX use its position as the largest natural gas processor and fractionator in the Appalachian basins to exercise pricing power. With Henry Hub hovering in the low $2s for much of the past decade, it has been a challenge to exercise any price increases on struggling natural gas E&Ps. There may be margin expansion in the coming in 2025 as new egress is built and more demand for power generation and LNG exports drive up utilization factors in the Marcellus/Utica.

To close the valuation gap to peers, DKL would need to significantly increase its third-party business. The challenge is that its balance sheet is already relatively stretched, meaning any deals would likely require additional equity, creating an overhang on the stock. Delek's potential sale of its retail segment could create enough resources to bolster the balance sheet and potentially make new deals, but the restructuring has taken over two years by now.