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 ...

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 ...

Water Solutions Segment - The Water Solutions segment handled approximately 884.6 million barrels of produced water during the year ended March 31, 2024, making the company the largest independent produced water transportation and disposal company in the U.S.[34] - The company has approximately 664,000 acres dedicated to its system under long-term agreements in the Northern Delaware Basin, with several minimum volume commitments and commercial agreements in place[34] - The Lea County Express Pipeline System is set to expand from a capacity of 140,000 barrels of water per day to 340,000 barrels per day, with completion expected in the second half of fiscal year 2025[36] - The company owns 89 water treatment and disposal facilities, with a total permitted processing capacity of 6,412,800 barrels per day across various basins[39] - During the year ended March 31, 2024, the company sold approximately 30.8 million barrels of recycled water[38] - 69% of the revenues from the Water Solutions segment were generated from the ten largest customers, indicating a significant reliance on key clients[45] - The company holds multiple patents for processing technologies, enhancing its operational capabilities in the Water Solutions segment[49] - Segment operating income for the water disposal segment increased to $231,256,000, up $32,332,000 or 16.3% from $198,924,000 in 2023[359] - Water disposal service fees rose to $572,972,000, an increase of $48,283,000 or 9.2% compared to $524,689,000 in 2023, driven by higher produced water volumes processed and increased fees[361] - Total revenues for the Water Solutions segment increased by $152.2 million to $697.0 million, driven by higher water disposal service fees and recovered crude oil sales[418] - Operating expenses in the Water Solutions segment increased by $37.1 million to $212.1 million, influenced by higher utility, royalty, and chemical expenses[427] Crude Oil Logistics Segment - The Grand Mesa Pipeline transported approximately 25.6 million barrels of crude oil during the year ended March 31, 2024, with a capacity of 150,000 barrels per day[51] - The Crude Oil Logistics segment generated 86% of its revenues from its ten largest customers during the year ended March 31, 2024[60] - The company has a network of crude oil transportation and storage assets that allows it to serve customers over a wide geographic area, optimizing sales through long-term contracts[32] - Crude oil sales for the year ended March 31, 2024, decreased to $1,597,238,000, down $779,196,000 or 32.8% from $2,376,434,000 in 2023, attributed to lower sales volumes and crude oil prices[373] - Crude oil product margin per barrel increased to $4.129 in 2024 from $4.014 in 2023, reflecting a positive change of $0.115 per barrel[376] Liquids Logistics Segment - The Liquids Logistics segment sold approximately 2.5 billion gallons of natural gas liquids, refined products, and renewables products, averaging about 166,000 barrels per day during the year ended March 31, 2024[67] - The company owns and operates 23 terminals for Liquids Logistics, with a total storage capacity of 34,710,400 gallons[75] - The Liquids Logistics segment serves approximately 1,200 customers across 48 states, Mexico, and Canada, with 23% of revenues generated from the ten largest customers[82] - For the year ended March 31, 2024, the Liquids Logistics segment reported sales of $2,192.8 million, a decrease of 14.1% from $2,554.1 million in 2023[387] - The segment's operating income fell significantly to $2.5 million in 2024 from $66.6 million in 2023, a decline of 96.3%[387] - The total expenses for the Liquids Logistics segment increased to $132.0 million in 2024, up 59.8% from $82.6 million in 2023[387] - Propane sales decreased by 36.3% to $739.6 million in 2024 from $1,161.1 million in 2023, primarily due to lower volumes and prices[387] - The refined products product margin per gallon decreased to $0.030 in 2024 from $0.054 in 2023, reflecting lower demand and restored supply balance[388][390] Financial Performance - Consolidated revenues for the year ended March 31, 2024, were $6,956,571, a decrease of 20% from $8,694,904 in 2023[349] - The cost of sales for the same period was $5,966,794, down from $7,650,024 in 2023, reflecting a 22% reduction[349] - Operating income decreased to $177,572 in 2024 from $289,163 in 2023, representing a decline of approximately 39%[349] - The net loss attributable to NGL Energy Partners LP for the year ended March 31, 2024, was $143,755 compared to a net income of $51,386 in 2023[349] - A debt refinancing transaction of $2.9 billion was completed on February 2, 2024, including $2.2 billion in senior secured notes and a $700 million senior secured term loan[352] - The company repurchased and/or redeemed $2.1 billion of its outstanding 2026 Senior Secured Notes and $280.7 million of the 2025 Notes during the three months ended March 31, 2024[353] - The company anticipates increased compliance costs due to more stringent environmental regulations, which could adversely affect profitability[126] - General and Administrative Expenses increased from $2.5 million to $36.0 million due to legal matters and write-offs related to LCT Capital, LLC[406] - Total interest expense decreased by $5.5 million to $269.9 million, primarily due to the repurchase of senior unsecured notes and a reduction in debt interest expense[411] - Loss on early extinguishment of liabilities was $55.3 million, compared to a gain of $6.2 million in the previous year, mainly due to call premiums and write-offs related to debt[412] Environmental and Regulatory Compliance - The company is subject to various environmental regulations that may impact operations and future expenditures for compliance[102] - The company has implemented safety protocols and training to ensure compliance with health and safety regulations[100] - The company is subject to various environmental regulations, including the Clean Water Act and the Safe Drinking Water Act, which impose strict controls on pollutant discharges and require permits for construction activities[106] - The company may incur significant costs related to compliance with the Resource Conservation and Recovery Act (RCRA) and similar state laws, particularly if certain non-hazardous wastes are reclassified as hazardous in the future[108] - The company is required to prepare and implement Spill Prevention Control and Countermeasure (SPCC) plans for facilities that could discharge oil into navigable waters, with violations potentially leading to monetary penalties[111][112] - The company faces regulatory scrutiny regarding air emissions under the Clean Air Act, which may necessitate capital expenditures for pollution control equipment[113] - The company must comply with the Underground Injection Control (UIC) Program, which regulates the injection of crude oil and natural gas wastes to protect underground sources of drinking water[115] - The company does not conduct hydraulic fracturing but is affected by legislative proposals that could impose additional regulations on hydraulic fracturing activities conducted by its customers[117][118] - The Endangered Species Act restricts operations in areas where endangered species are present, potentially leading to additional costs and operational restrictions[119] - The company is impacted by growing concerns over greenhouse gas emissions, with new regulations requiring disclosures of Scope 1 and Scope 2 emissions starting in 2026[120][122] - The EPA's final rule effective May 7, 2024, targets reductions in methane emissions from oil and gas operations, requiring monitoring and repair of leaks[121]

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