NGL Energy Partners LP Common Units (NGL) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture. Positive aspects include increased EBITDA driven by Water Solutions and successful repurchase plans. However, challenges like declining Grand Mesa pipeline volumes, reduced Liquids Logistics EBITDA, and reliance on butane blending pose concerns. The Q&A shows management's strategic flexibility, but lack of clear guidance and dependency on market conditions add uncertainty. Overall, the positives and negatives balance out, suggesting a neutral stock price movement.
Key Financial Performance
Consolidated Adjusted EBITDA $144 million, a 4% increase year-over-year from $138.6 million. This increase was primarily driven by the performance of the Water Solutions business segment.
Water Solutions Adjusted EBITDA $142.9 million, a 13.8% increase year-over-year from $125.6 million. The increase was driven by higher disposal revenues due to an increase in produced water volumes processed from contracted customers and higher water pipeline revenue from the LEX II pipeline commencing operations.
Physical Water Disposal Volumes 2.77 million barrels per day, a 12.4% increase year-over-year from 2.47 million barrels per day. This was due to increased activity and contracted customer volumes.
Total Water Disposal Volumes (including deficiency volumes) 3.1 million barrels per day, an 18% increase year-over-year from 2.6 million barrels per day. This was driven by higher contracted customer volumes and operational improvements.
Operating Expenses in Water Solutions $0.22 per barrel, a $0.02 decrease year-over-year. This reflects cost efficiencies achieved in operations.
Crude Oil Logistics Adjusted EBITDA $9.6 million, a decrease from $18.6 million year-over-year. The decline was due to reduced sales from lower production on acreage dedicated in the DJ Basin and lower crude oil prices.
Volumes on Grand Mesa Pipeline 55,000 barrels per day, a decrease from 63,000 barrels per day year-over-year. This was due to reduced sales and lower production on dedicated acreage.
Liquids Logistics Adjusted EBITDA $2.9 million, a decrease from $5.7 million year-over-year. This was adjusted for asset sales during the quarter, with the butane blending business being the primary contributor moving forward.
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Operating Highlights
Asset Sales: Closed on the sale of Rack marketing business, Limestone Ranch interest, and majority of wholesale propane business including 17 terminals. Proceeds were used to pay down debt and improve capital structure.
Water Solutions Performance: Adjusted EBITDA increased by 13.8% to $142.9 million, driven by higher disposal revenues and increased water pipeline revenue from LEX II pipeline operations. Operating expenses per barrel decreased by $0.02.
Crude Oil Logistics Performance: Adjusted EBITDA decreased to $9.6 million due to lower production and crude oil prices. However, July volumes were 25% higher than June, indicating potential improvement in future quarters.
Liquids Logistics Performance: Adjusted EBITDA decreased to $2.9 million, primarily due to asset sales. The butane blending business remains the main contributor to this segment.
Debt and Equity Management: Used free cash flow to purchase $19 million of 2032 notes, pay off $17 million of ABL debt, repurchase 70,000 Class D preferred units, and buy back 4.7 million common units.
Strategic Focus: Continuing multiyear strategy to rightsize asset footprint, pay down debt, and reduce leverage. Opportunistic use of free cash flow to improve financial position.
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Risk or Challenges
Market Sentiment and Oil Price Uncertainty: The company has not seen a drop-off in activity from customers in the core basin, but there is ongoing monitoring of macroeconomic impacts on the Water Solutions segment.
Crude Oil Logistics Segment Performance: Adjusted EBITDA for this segment decreased significantly from $18.6 million to $9.6 million year-over-year due to reduced sales from lower production on dedicated acreage and lower crude oil prices.
Liquids Logistics Segment Challenges: Adjusted EBITDA dropped from $5.7 million to $2.9 million year-over-year, primarily due to asset sales. The segment's future performance is heavily reliant on the butane blending business, which is seasonal.
Debt and Leverage Management: The company is focused on reducing leverage and debt, but this strategy depends on market conditions and the ability to generate free cash flow. Temporary bond price declines due to tariff announcements highlight sensitivity to external factors.
Asset Sales and Strategic Execution: The company is shrinking its Liquids segment footprint through asset sales, which could impact future revenue streams. The success of this strategy depends on market conditions and execution.
Grand Mesa Pipeline Volume Decline: Volumes on the Grand Mesa pipeline decreased from 63,000 barrels per day to 55,000 barrels per day year-over-year, impacting the Crude Oil Logistics segment's performance.
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Guidance & Outlook
Full Year Adjusted EBITDA Guidance: The company reaffirmed its full year adjusted EBITDA guidance of $615 million to $625 million. They will reevaluate this guidance after the second quarter closes.
Water Solutions Segment Performance: The Water Solutions segment is performing above expectations. The company expects continued strength in this segment, driven by higher disposal revenues and increased water pipeline revenue.
Crude Oil Logistics Segment Outlook: The company anticipates stronger quarters ahead for the Crude Oil Logistics segment, with volumes on the Grand Mesa pipeline expected to increase. July volumes were approximately 25% higher than June volumes.
Liquids Logistics Segment Outlook: The primary EBITDA contributor for this segment will be the butane blending business, with the majority of EBITDA expected in the back half of the fiscal year.
Potential Guidance Revision: If results continue to exceed expectations, the company will consider raising guidance during the second quarter earnings call in early November.
Debt and Equity Strategy: The company is focused on using free cash flow to purchase and repay debt and equity, prioritizing actions that provide the highest return and greatest benefit to the partnership. They anticipate additional purchases of Class D preferred units this fiscal year.
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Shareholder Return Plan
Repurchase of Class D Preferred Units: Repurchased 70,000 units, approximately 12% of outstanding Class D preferred units. The company has begun the process of redeeming Class D preferred units and anticipates additional purchases this fiscal year.
Common Unit Repurchase Plan: Under the Board authorized plan, repurchased approximately 4.7 million common units at an average price of $4.30 per unit, representing approximately 3.5% of the outstanding common units.
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Key Q&A
Q:Do you expect further common unit repurchases, or will you focus more on Class Ds?
A:Bradley P. Cooper stated that they will remain opportunistic. If unit prices remain at current levels, they may continue repurchasing units. If bonds trade down due to macro events, they may purchase those as well, and they will continue focusing on Class Ds. No specific path was set, and they plan to balance their approach.
Q:Why were the produced water volumes for the quarter lighter than expected?
A:Douglas W. White explained that the volumes were close to expectations. Recycling jobs ramped up in June, and those volumes are now reflected in the current quarter. They came in about 79,000 barrels per day over their internal budget for Q1 and expect this trend to continue based on customer forecasts. H. Michael Krimbill added that not all volumes are recorded in the quarter due to financial volumes and MVCs, which will be reflected in the next quarter.
Q:What are your thoughts on the Ares acquisition by Western?
A:H. Michael Krimbill congratulated Ares for achieving a premium price, which they would not have paid. Their model differs as they do not focus on recycling. Douglas W. White added that consolidation is positive for the industry, leading to fewer parties, reduced duplicate assets, and more efficient operations. This benefits producers by enabling them to drill more wells and create more water.
Q:Review of Unclear Management Responses
A:Management did not avoid answering any questions directly, but some responses, such as the explanation of produced water volumes, included complex details that might require further clarification for a complete understanding.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ABL piece
Basin oil
Bradley Cooper
CEO Director
Capital Securities
Co Research
Compliance Officer
Derrick Lee
Director NGL
Division Conference
Division Nevin
Douglas White
ET Greetings
Energy Holdings
Executive VP
Holdings LLC
II barrel
Krimbill President
LLC Derrick
LLC Douglas
LLC Krimbill
Lee Whitfield
Logistics asset
Mesa system
Nevin Mathew
Officer CFO
Partners Instructions
Research Division
activity
footprint
increase volume
increase water
majority
oil price
proceeds
volume Grand
NGL Transcript
NGL Energy Partners LP Common Units (NGL) Q4 2026 Earnings Call Transcript
Positive5-29
The earnings call highlights strong financial performance with significant EBITDA growth, improved operational efficiencies, and a robust share buyback program. The company's strategic plans, including AI-driven efficiencies and expansion projects, are promising. Despite some risks related to regulatory compliance and customer dependency, the positive outlook on water disposal volumes and beneficial reuse projects, alongside optimistic guidance, suggests a positive stock price movement in the short term.
NGL Energy Partners LP Common Units (NGL) Q3 2026 Earnings Call Transcript
Positive2-3
The earnings call indicates strong financial performance, particularly in the Water Solutions segment, with increased EBITDA and disposal volumes. The company also announced a significant share repurchase plan, reducing dilution. Despite some declines in other segments, the overall guidance is optimistic, with increased EBITDA projections and new growth projects. The Q&A section revealed strong long-term commitments and opportunities in water treatment, although management was vague on AI's financial impact. Given these factors, a positive stock price movement is likely in the short term.
NGL Energy Partners LP Common Units (NGL) Q2 2026 Earnings Call Transcript
Positive11-4
The earnings call summary and Q&A reveal strong performance in the Water Solutions segment and strategic repurchases of units, indicating positive financial health. The reaffirmation of full-year EBITDA guidance and potential for guidance revision add optimism. Risks are acknowledged but seem manageable. The Q&A supports a positive sentiment with clear responses and no evasive answers. The unit repurchase plan and Class D preferred units repurchase enhance shareholder returns, contributing to a positive outlook.
NGL Energy Partners LP Common Units (NGL) Q1 2026 Earnings Call Transcript
Unknown8-8
The earnings call presents a mixed picture. Positive aspects include increased EBITDA driven by Water Solutions and successful repurchase plans. However, challenges like declining Grand Mesa pipeline volumes, reduced Liquids Logistics EBITDA, and reliance on butane blending pose concerns. The Q&A shows management's strategic flexibility, but lack of clear guidance and dependency on market conditions add uncertainty. Overall, the positives and negatives balance out, suggesting a neutral stock price movement.
NGL Slides
NGL Energy Partners Q3 2026 slides: Water Solutions drives 17% EBITDA growth2026-02-03
NGL Energy Partners Q2 FY2026 slides: Water Solutions powers growth amid mixed results2025-11-04
NGL Energy Partners Q1 FY2026 slides: Water Solutions growth masks revenue miss2025-08-07
NGL Energy Q3 2025 slides: Water Solutions drives growth amid strategic transformation2025-05-29
NGL Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
