NGL Energy Partners LP(NGL)2025-05-29 22:00Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA from continuing operations for Q4 was 147.9 million in the prior year [5] - Full year adjusted EBITDA from continuing operations was 620 million [6] Business Line Data and Key Metrics Changes - Water Solutions adjusted EBITDA for Q4 was 123.4 million in the prior year [6] - Physical water disposal volumes increased to 2.73 million barrels per day in Q4 from 2.39 million barrels per day in the prior year [6] - Crude Oil Logistics adjusted EBITDA decreased to 15.3 million in the prior year, primarily due to lower volumes on the Grand Mesa pipeline [8][9] - Liquids Logistics adjusted EBITDA was 22.2 million in the prior year [10] Market Data and Key Metrics Changes - Total volumes paid for disposal increased by 11% in Q4 compared to the same quarter of the previous year [6] - Operating cost per barrel for Water Solutions was 0.24 in fiscal 2024 [7] Company Strategy and Development Direction - The company is focusing on core assets after completing non-core asset sales, which will reduce volatility and seasonality of adjusted EBITDA [4] - The strategic shift towards becoming more of a water solutions business, with approximately 85% of adjusted EBITDA expected to come from this segment [14] - Plans to continue reducing leverage and improving capital structure by addressing Class D preferred units [16] Management's Comments on Operating Environment and Future Outlook - Management noted that despite oil price uncertainty, there has been no drop-off in customer activity in the Corita Basin [8] - The company is well-positioned with 90% of volumes committed through acreage dedications and MVCs, with 80% of total volumes from investment-grade counterparties [8] - Future guidance for fiscal 2026 is an adjusted EBITDA of 625 million, with total capital expenditures of 270 million [4][14] - The wind down of the biodiesel business has been completed, eliminating significant working capital requirements [4] Q&A Session Summary Question: Can you offer more color on your expectations by business for 2026 guidance? - Management explained that the water guidance midpoint implies about 20 million decline in skim oil revenues due to lower crude prices and less than $10 million in asset sales not included in future EBITDA [18][19] Question: What are the conversations with customers regarding growth opportunities? - Management indicated that they are recontracting expiring long-term contracts and have seen growth through existing agreements, with no slowdown in volumes currently [20][25] Question: How much lower could capital spending go? - Management stated that while there might be slight flexibility, capital expenditures are already low, primarily focused on water [33][34] Question: How do you view variability in water volumes for the year? - Management noted that while there can be fluctuations based on customer completions, they have a strong base and are currently ahead of budget for the first quarter [37][41] Question: Will there be a reinstatement of common unit distributions? - Management clarified that there are no plans for near-term distributions as the focus is on addressing Class D preferred units and reducing leverage [50][51]