Acquisition Overview - Phillips 66 (PSX) has announced a $2.2 billion all-cash acquisition of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, which is expected to be immediately accretive to its EPS and strengthen its presence in the NGL market [1] Strategic Benefits - The acquisition will expand Phillips 66's Permian Basin NGL value chain and provide extensive flow assurance to producers, connecting key fractionation sites near Corpus Christi, Sweeny, and Mont Belvieu, TX [3] - The deal is expected to generate returns exceeding the company's hurdle rates, indicating strong financial confidence [4] EPIC NGL's Assets - EPIC NGL owns two fractionators with a capacity of 170,000 bpd near Corpus Christi, 350 miles of purity distribution pipelines, and an 885-mile NGL pipeline with a capacity of 175,000 bpd [5] - The pipeline assets connect production from the Delaware, Midland, and Eagle Ford basins to fractionation facilities and PSX's Sweeny Hub [5] Future Expansion Plans - EPIC NGL is expanding its pipeline capacity to 225,000 bpd, with a second expansion approved to reach 350,000 bpd, though this will not impact Phillips 66's 2025 capital program [6] - A third fractionation facility is planned, which could increase fractionation capacity to 280,000 bpd, enhancing connectivity to Gulf Coast refiners, petrochemical firms, and global export markets [7] Industry Context - TechnipFMC plc (FTI) has a growing backlog of $14.7 million in Q3 2024, up 11.1% YoY, indicating strong revenue growth potential [9] - Sunoco LP (SUN) is a major motor fuel distributor in the U.S., offering a distribution yield higher than the industry average, ensuring consistent returns for unitholders [10] - Oceaneering International (OII) provides integrated offshore oilfield technology solutions, supporting client retention and new business opportunities for steady revenue growth [11]

Group 1 - NGL reported a second fiscal year quarter with EBITDA of approximately $147 million, which was below expectations due to weakness in the liquids business [1] - The performance of NGL's liquids business was a significant factor contributing to the underwhelming financial results [1] Group 2 - Catalyst Hedge Investing provides its members with early access to articles and a best ideas portfolio, focusing on asymmetric risk/reward investment opportunities [2] - The leader of Catalyst Hedge Investing has extensive experience in the markets, including a successful prediction of the Silicon Valley Bank's implosion [2]

Financial Data and Key Metrics Changes - Consolidated Adjusted EBITDA for Q2 2025 was $147.3 million, primarily driven by Water Solutions and Crude Logistics segments [4] - The company reduced its full fiscal year EBITDA guidance to a range of $640 million to $650 million, reflecting a 2% to 4% reduction [14] Business Line Data and Key Metrics Changes - Water Solutions adjusted EBITDA was $182.9 million in Q2, with physical water disposal volumes increasing to 2.68 million barrels per day, a 9% increase quarter-over-quarter [9] - Crude Oil Logistics adjusted EBITDA decreased to $17.3 million in Q2 from $18.6 million in Q1, with crude oil sales averaging 63,000 barrels per day [12] - Liquids Logistics adjusted EBITDA was $9.4 million in Q2, down from $17.1 million in the prior second quarter, with butane blending performing above expectations [13] Market Data and Key Metrics Changes - The butane blending season began after the quarter ended, and wholesale propane demand is expected to be influenced by winter weather [5] - The company is actively contracting new volumes in the Delaware Basin, DJ Basin, and Eagle Ford, indicating growth opportunities across these markets [19] Company Strategy and Development Direction - The company is pursuing asset sales in the liquids logistics segment and aims to reduce leverage while buying back equity [15][17] - The LEX II expansion project, with an initial capacity of 200,000 barrels per day, was completed on time and is expected to enhance long-term growth [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Delaware Basin's growth potential, with multiple new projects expected over the next 18 months [16] - The company is managing for long-term value creation rather than focusing solely on quarterly results [18] Other Important Information - The company entered into agreements to purchase 92% of the outstanding warrants from Class D unitholders, eliminating a potential 18% dilution event [8] - Total capital expenditures for fiscal 2025 remain unchanged at $210 million [21] Q&A Session Summary Question: Outlook for calendar 2025 - Management indicated ongoing opportunities in the Delaware Basin and efforts to maximize capacity on the LEX II pipeline, with new contracted volumes being added in the DJ and Eagle Ford basins [19] Question: Expectations for water EBITDA and total CapEx for fiscal 2025 - Water EBITDA guidance remains at $550 to $560 million, with total capital expenditures unchanged at $210 million [21] Question: Details on the warrant purchase agreement - The transaction was triggered by the opportunity to eliminate warrants that could become more expensive over time, with plans to repurchase the remaining 2 million warrants [22][24]

Financial Performance - Revenues for the three months ended September 30, 2024, were $1,352,675,000, a decrease of 26.5% compared to $1,841,096,000 for the same period in 2023[171]. - Net income attributable to NGL Energy Partners LP for the three months ended September 30, 2024, was $2,454,000, down 91.3% from $28,028,000 in the prior year[171]. - For the three months ended September 30, 2024, the company reported total revenues of $243.841 million, a decrease of $246.009 million compared to $489.850 million in the same period of 2023[193]. - Net income for the three months ended September 30, 2024, was $3,391,000, compared to $28,285,000 for the same period in 2023, representing a decrease of approximately 88%[294]. - Adjusted EBITDA for the three months ended September 30, 2024, was $147,270,000, down from $176,214,000 in the same period of 2023, reflecting a decline of about 16.5%[294]. - The company reported a net cash used in operating activities of $(11,341) thousand for the six months ended September 30, 2024, compared to $131,100 thousand in the same period of 2023[324]. Segment Performance - The Water Solutions segment reported total revenues of $181,867,000 for the three months ended September 30, 2024, a decrease of 7.8% from $197,244,000 in the same period of 2023[179]. - Operating income for the Water Solutions segment rose to $72,829,000, an increase of 23.2% compared to $59,118,000 in the prior year[179]. - The Crude Oil Logistics segment reported an operating income of $14,840,000 for the three months ended September 30, 2024, compared to $14,778,000 in the same period of 2023, a slight increase of approximately 0.4%[301]. - Total revenues for the Water Solutions segment decreased by $15.4 million, from $197.2 million in Q3 2023 to $181.9 million in Q3 2024, representing a decline of approximately 7.8%[179]. - Segment operating income for Water Solutions increased by $28.7 million, from $128.4 million in the six months ended September 30, 2023 to $157.2 million in the same period of 2024, an increase of approximately 22.4%[233]. Sales and Pricing - Crude oil sales decreased to $225.013 million from $475.103 million, reflecting a decline of $250.090 million year-over-year[193]. - The average service fees for produced water processed decreased to $0.60 per barrel in Q3 2024, down from $0.69 per barrel in Q3 2023[179]. - The crude oil product margin per barrel decreased to $2.935 from $6.282, a decline of $3.347 year-over-year[193]. - Refined products sold decreased by 3,004 gallons, from 209,919 gallons in September 30, 2023 to 206,915 gallons in September 30, 2024[204]. - Propane sold decreased by 21,399 gallons, from 129,988 gallons in September 30, 2023 to 108,589 gallons in September 30, 2024[204]. - The company’s refined products product margin per gallon decreased to $0.012 for the six months ended September 30, 2024, down from $0.043 in the same period of 2023[259]. Expenses and Costs - Operating expenses for the Crude Oil Logistics segment were $10.249 million, slightly up from $9.946 million in the prior year, an increase of $303,000[193]. - General and administrative expenses decreased by $5.1 million, from $13.3 million in September 30, 2023 to $8.2 million in September 30, 2024[222]. - Total debt interest expense increased by $18.8 million, from $58.6 million in September 30, 2023 to $77.4 million in September 30, 2024[228]. - The cost of sales excluding the impact of derivatives for the Crude Oil Logistics segment decreased by $405.3 million, from $872.4 million in the six months ended September 30, 2023 to $467.0 million in the same period of 2024, a decline of approximately 46.4%[246]. - The company’s total expenses for the six months ended September 30, 2024 were $33,081, an increase of $6,663 from $26,418 in the same period of 2023[257]. Asset Management - The company experienced a loss on disposal or impairment of assets of $1,951,000 in Q3 2024, significantly lower than the $23,599,000 loss in the same quarter of 2023[179]. - The company recorded a net gain of $0.4 million from asset disposals during the three months ended September 30, 2024, compared to a net gain of $0.5 million in the same period of 2023[200]. - The company recorded a net gain of $10.5 million related to the sale of certain assets during the six months ended September 30, 2024, compared to a net loss of $16.2 million in the same period of 2023[243]. - The company experienced a loss on disposal or impairment of assets of $1,509,000 for the three months ended September 30, 2024, compared to a gain of $16,207,000 in the same period of 2023, indicating a significant shift in asset performance[299]. Market Conditions and Outlook - The company anticipates continued volatility in commodity prices due to global conflicts and inflationary pressures, which may impact future financial performance[174][175]. - The SEC has adopted new climate-related disclosure rules, which may affect the company's reporting and compliance requirements moving forward[177]. - The company is engaged in collaborative efforts to mitigate induced seismic events associated with water disposal, which may impact operational strategies[176]. - The company expects capital expenditures for the fiscal year ending March 31, 2025, to be approximately $210 million[316]. - The company anticipates that cash flows from operations and borrowing capacity will be sufficient to meet liquidity needs, particularly during the seasonal demand period from June to December[305].

Core Insights - NGL Energy Partners faced challenges during the COVID-19 pandemic due to an unstable capital structure, leading to the suspension of common distributions in late 2020 [1] Group 1 - The company was unprepared for the market disruptions caused by the pandemic in 2020 [1] - By early 2021, the company had taken steps to address its financial instability following the suspension of distributions [1]

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J Studios/DigitalVision via Getty Images NGL First Quarter Earnings Review: NGL Partners (NYSE:NGL) reported an okay first quarter tonight (August 8th). Operationally, it looked similar to the Q4 report that I highlighted in my last public writeup on the company. Water dominated while crude oil logistics and liquids were marginal contributors. Part of this pattern is seasonal as fiscal Q1 and Q2 are the slowest quarters for liquids. The company also reaffirmed the guidance for both water and overall adjuste ...

Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA for Q1 2025 was $144.3 million, showing strong performance across all business units [3] - Water Solutions adjusted EBITDA increased to $125.6 million from $123.2 million year-over-year [6] - Crude Oil Logistics adjusted EBITDA decreased to $18.6 million from $23.8 million in the prior year [7] - Liquids Logistics adjusted EBITDA improved significantly to $11.5 million from $4.7 million year-over-year [8] Business Line Data and Key Metrics Changes - Water Solutions physical disposal volumes averaged approximately 2.7 million barrels per day in July, with total volumes paid for disposal up 4% year-over-year [3][6] - Crude Oil Logistics physical volumes on the Grand Mesa pipeline averaged approximately 63,000 barrels per day, down from 72,000 barrels per day in the prior year [7] - Liquids Logistics experienced stronger butane lending margins and volumes, setting up for a favorable fiscal year [8] Market Data and Key Metrics Changes - The Water Solutions segment is expected to benefit from the expansion in the Delaware Basin, which will increase water volumes [10] - Crude Oil Logistics is seeing potential increases in production volumes in the DJ Basin, although long-term factors remain uncertain [10] - Liquids Logistics remains volatile, heavily influenced by winter weather patterns [11] Company Strategy and Development Direction - The company is focused on managing its balance sheet and reducing debt while pursuing internal growth opportunities [11] - The LEX II water pipeline project is on schedule for an October in-service date, with an initial capacity of 200,000 barrels per day expandable to 500,000 barrels per day [6][9] - The company is reaffirming its full-year EBITDA guidance of $665 million for the partnership and $550 million to $560 million for Water Solutions [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the short, medium, and long-term trends in the Water Solutions business, despite quarterly fluctuations [10] - The company anticipates an increase in crude oil volumes in the DJ Basin, indicating a potential bottoming out of the cycle [10][22] - Liquids Logistics is not expected to expand significantly, but internal growth opportunities are being explored [11] Other Important Information - The company completed the sale of two ranches for approximately $70 million and made its last arrearage payment on preferred shares [4] - A common unit repurchase program was authorized for up to $50 million, although no units have been repurchased yet [5] - The company successfully repriced its Term Loan B agreement, reducing interest expenses by $5.25 million annually [5] Q&A Session Summary Question: Water business volume and fee per barrel - Management noted that revenue per barrel increased slightly and that volumes are starting strong for the second quarter, impacted by recycling in Q1 [12][13] Question: Plans for preferred shares - Management plans to utilize free cash flow in Q3 and Q4 to address Class D preferred shares, with no immediate asset sales planned [17][19] Question: Step-up in disposal volumes - The increase in disposal volumes in July was attributed to producers using water for fracking, leading to higher volumes coming in [20][21] Question: Bottoming out of crude logistics - Management believes that increased efficiency in production and rig additions indicate a potential increase in volumes [22] Question: Strategic alternatives for Liquids business - No updates were provided on exploring strategic alternatives for the Liquids business at this time [24]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-35172 NGL Energy Partners LP (Exact Name of Registrant as Specified in Its Charter) Dela ...

A downtrend has been apparent in NGL Energy Partners LP (NGL) lately with too much selling pressure. The stock has declined 5.9% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround. We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is ...