NGL Energy Partners LP Common Units (NYSE:NGL) Q4 2024 Earnings Conference Call June 6, 2024 5:00 PM ET Company Participants Brad Cooper - Chief Financial Officer Mike Krimbill - Chief Executive Officer Conference Call Participants Tarek Hamid - J.P. Morgan Gregg Brody - Bank of America Jason Mendel - RBC Ned Baramov - Wells Fargo Operator Greetings. Welcome to the NGL Energy Partners 4Q '24 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow th ...

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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TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL) (“NGL,” “our,” “we,” or the “Partnership”) today provided an update on the expected availability of the partnership’s 2023 Investor Tax Packages including Schedule K-1 for its common unitholders. Historically, NGL’s Investor Tax Packages have been available by early March for the preceding tax year; however, the timing of the availability of NGL’s 2023 Investor Tax Packages is dependent upon actions of the U.S. Congress and the Biden administ ...

Steve Satushek/The Image Bank via Getty Images NGL Third Quarter Update: NGL Energy Partners (NGL) reported earnings last night (Feb 8th). They had already given a look at Q3 numbers before the recent bond issues and loan refinancings so numbers weren't a huge surprise on the whole. Adjusted EBITDA came in at $151.7 million versus the guide of $150-160 million. Water volumes were slightly lower than Q2, as the company had warned in the last earnings call. Customers are keeping more water at the wells fo ...

Financial Data and Key Metrics Changes - Water Solutions' adjusted EBITDA was $121.3 million in Q3 2024, slightly down from $121.7 million in the prior year [10] - Liquids logistics adjusted EBITDA increased to $22.4 million from $20.5 million year-over-year, driven by higher margins and demand for butane blending [12] - Crude Oil Logistics adjusted EBITDA decreased to $17 million from $33.3 million in the prior year, primarily due to lower crude sales margins and decreased volumes [32] - Corporate adjusted EBITDA showed a loss of $11.9 million compared to income of $19.5 million in the prior year, impacted by previous year's other income [33] Business Line Data and Key Metrics Changes - Water disposal volumes were 2.38 million barrels per day in Q3 2024, down from 2.43 million barrels per day in the prior quarter, attributed to producers retaining water for completion activities [10] - Operating expenses for Water Solutions remained at $0.25 per barrel, the best in the industry, due to lower chemical and utility expenses [11] - Liquids logistics experienced higher demand for butane blending, although propane margins and volumes were negatively affected by warmer weather [12] Market Data and Key Metrics Changes - The company closed a $2.9 billion refinancing, extending the weighted average maturity of its debt by approximately three years [26] - Rating agencies upgraded the corporate credit rating to single B, reflecting improved financial stability [27] Company Strategy and Development Direction - The company is focusing on internal growth opportunities supported by minimum volume commitments (MVCs) and plans to address preferred arrearages [35] - Future growth will be driven by the Delaware Water Solutions business, with adjusted EBITDA guidance of $500 million plus for water and $645 million for the partnership [36] - The company aims to reduce leverage and improve credit ratings while pursuing organic growth opportunities [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in catching up on preferred arrearages quicker than anticipated, with plans to make the remaining payments soon [8][34] - The company is optimistic about future EBITDA growth, particularly from the Delaware Water Solutions business [36] - Management highlighted the importance of maintaining flexibility in capital structure and addressing debt maturities [9][28] Other Important Information - The company announced the expansion of the LEX produced water pipeline system, increasing capacity from 140,000 barrels per day to 340,000 barrels per day [4][5] - A new five-year MVC was established with a counterparty, releasing $18 million to $20 million in working capital [3] Q&A Session Summary Question: What is the expected working capital change for the fourth quarter? - Management anticipates a working capital number around $40 million to $50 million by March 31 [19] Question: Can you provide an update on the ABL balance? - The ABL balance is expected to be around $50 million for the fourth quarter [39] Question: What are the priorities between paying off preferreds and common distributions? - Management indicated a commitment to addressing preferred arrearages while also pursuing growth projects, ensuring both can be managed simultaneously [44] Question: Will oil skimming daily volumes grow in fiscal '25? - Management confirmed that the relationship between skim and disposal volumes should hold for fiscal '25 [45] Question: Can you provide details on the new pipeline expansion's MVC length and returns? - The new MVC is a five-year commitment, and while specific returns cannot be disclosed, management expressed confidence in attractive returns due to existing right-of-way advantages [74]

TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE:NGL) (“NGL,” “we,” “us,” “our,” or the “Partnership”) today reported its third quarter Fiscal 2024 financial results. Highlights include: Net income for the third quarter of Fiscal 2024 of $45.8 million, compared to net income of $59.0 million for the third quarter of Fiscal 2023 which included income of $29.5 million from the settlement of a dispute Adjusted EBITDA(1) for the third quarter of Fiscal 2024 of $151.7 million, compared to $193.3 ...

TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE: NGL or the “Partnership”) announced today that the Board of Directors of its general partner declared a distribution of 50% of the arrearages earned and outstanding through December 31, 2023 to be paid to the holders of the Partnership’s 12.806% Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Class B Preferred Units”) and the 9.625% Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (“Cl ...