NGL Energy Partners LP(NGL) - 2025 Q2 - Earnings Call Transcript

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$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]