NGL Energy Partners Q1 2026 Earnings Report

NGL Energy Partners EPS Results

• Actual EPS: -$0.27
• Consensus EPS: -$0.11
• Beat/Miss: Missed by -$0.16
• One Year Ago EPS: N/A

NGL Energy Partners Revenue Results

• Actual Revenue: $622.16 million
• Expected Revenue: $983.50 million
• Beat/Miss: Missed by -$361.35 million
• YoY Revenue Growth: N/A

NGL Energy Partners Announcement Details

• Quarter: Q1 2026
• Date: 8/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 5:00PM ET

NGL Energy Partners (NYSE:NGL) engages in the transportation, storage, blending, and marketing of crude oil, natural gas liquids, refined products / renewables, and water solutions. The company operates in three segments: Water Solutions, Crude Oil Logistics, and Liquids Logistics. The Water Solutions segment transports, treats, recycles, and disposes produced and flowback water generated from oil and natural gas production; aggregates and sells recovered crude oil; disposes solids, such as tank bottoms, and drilling fluid and muds, as well as performs truck and frac tank washouts; and sells produced water for reuse and recycle, and brackish non-potable water. The Crude Oil Logistics segment purchases crude oil from producers and marketers, and transports it to refineries for resale at pipeline injection stations, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs; and provides storage, terminaling, and transportation services through pipelines. The Liquids Logistics segment supplies natural gas liquids, refined petroleum products, and biodiesel to commercial, retail, and industrial customers in the United States and Canada through its 24 terminals, third-party storage and terminal facilities, and nine common carrier pipelines, as well as through fleet of leased railcars. This segment is also involved in the marine export of butane through its facility located in Chesapeake, Virginia. NGL Energy Holdings LLC serves as the general partner of the company. The company was founded in 1940 and is headquartered in Tulsa, Oklahoma.

NGL Energy Partners Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: During the first quarter, NGL closed on the sale of its RAC marketing business, Limestone Ranch interest and majority of its wholesale propane operations, using proceeds to fully pay down its ABL facility and reduce overall leverage.
• Neutral Sentiment: The company reaffirmed its full-year adjusted EBITDA guidance of $615 million to $625 million and said it will reassess after the second quarter, leaving open the possibility to raise forecasts if results stay strong.
• Positive Sentiment: Water Solutions delivered a 13.8% year-over-year increase in adjusted EBITDA to $142.9 million driven by higher disposal volumes (~12.4% growth) and lower operating costs per barrel, with 90% of volumes secured by acreage dedications and MVCs.
• Negative Sentiment: The Crude Oil Logistics segment saw adjusted EBITDA decline to $9.6 million from $18.6 million year-over-year due to lower DJ Basin production and softer crude prices, although July volumes on Grand Mesa rose about 25% sequentially.
• Positive Sentiment: NGL opportunistically repurchased $19 million of its 2.032% notes at a discount, paid $72 million of ABL debt, and bought back 12% of Class D preferred units plus 3.5% of common units to enhance returns and strengthen the balance sheet.

Presentation

[Operator]

Greetings. Welcome to the NGL Energy Partners 1Q twenty six Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.

[Operator]

I will now turn the conference over to your host, Brad Cooper. You may begin.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

Good afternoon, and thank you to everyone for joining us on the call today. Our comments today will include plans, forecasts and estimates that are forward looking statements under The U. S. Securities law. These comments are subject to assumptions, risks and uncertainties that could cause actual results to differ from the forward looking statements.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

Please take note of the cautionary language and risk factors provided in our presentation materials and our other public disclosure materials. During the first quarter, we closed on the sale of our RAC marketing business, the interest in the Limestone Ranch and a majority of the wholesale propane business that included 17 terminals. As discussed on previous calls, we will continue to look for opportunities to shrink the remaining footprint of the Liquids segment with further asset sales. We used a portion of the proceeds to completely pay down the ABL during the quarter. We did end the quarter with a small ABL balance, but this is expected as we begin our butane build within the Liquids segment.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

In addition to paying down the ABL, we opportunistically attacked other pieces of the capital structure with the proceeds. Mike will elaborate on these efforts during his prepared remarks. We continue to execute on our multiyear strategy of rightsizing the asset footprint, paying down debt and reducing overall leverage of the company. Let's get into the quarterly results. Consolidated adjusted EBITDA for the quarter came in at $144,000,000 versus $138,600,000 in the prior year first quarter or approximately 4% higher than the prior year's first quarter.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

This increase was primarily driven by the performance of our Water Solutions business segment. We are reaffirming our full year adjusted EBITDA guidance of $615,000,000 to $625,000,000 Our water segment continues to perform above our expectations thus far, and we will reevaluate our full year guidance after the second quarter closes. Water Solutions adjusted EBITDA was $142,900,000 in the first year versus $125,600,000 in the prior first quarter, a 13.8% increase. Physical water disposal volumes were 2,770,000 barrels per day in the first quarter versus 2,470,000 barrels per day in the prior year quarter, a 12.4% increase. Total volumes we were paid to dispose that includes deficiency volumes were 3,100,000 barrels per day in the first quarter versus 2,600,000 barrels per day in the prior year first quarter.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

So total volumes we were paid to dispose of were up approximately eighteen percent 2026 over 2025. The increase in EBITDA was primarily driven by higher disposal revenues due to an increase in produced water volumes processed from contracted customers, as well as higher water pipeline revenue due to the LEX II pipeline commencing operations during the quarter ended 12/31/2024. Operating expenses for the quarter on a per barrel basis were lower by $02 when compared to the same quarter the previous year. For the first quarter, our operating expenses in Water Solutions was $0.22 per barrel. With the current market sentiment and oil price uncertainty, we have not seen any drop off in activity from our customers in the core of the basin.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

We have continuous conversations with the producers to monitor activity levels and the impacts the macro backdrop could have on our Water Solutions segment. As highlighted in our earnings call presentation, we are well positioned with 90% of our volumes committed through acreage dedications and MVCs. Recall, 80% of our total volumes are with investment grade counterparties. Crude oil logistics adjusted EBITDA was $9,600,000 in the '26 versus $18,600,000 in the prior year's first quarter. During the quarter, volumes on the Grand Mesa pipeline averaged approximately 55,000 barrels per day compared to 63,000 barrels per day for the 2025.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

The decrease was due primarily to reduced sales as a result of lower production on an acreage dedicated to us in the DJ Basin and lower crude oil prices. As we have previously discussed on these calls, we have been anticipating an increase in volumes on the Grand Mesa system for a while now. For the month of July, volumes were approximately 25% higher than June volumes. So we anticipate stronger quarters ahead for the Crude Logistics segment. Liquids Logistics adjusted EBITDA was $2,900,000 in the first quarter versus $5,700,000 in the prior first quarter.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

This is adjusted for the previously announced asset sales that closed in the quarter. The primary EBITDA contributor of the Liquids Logistics segment going forward will be our butane blending business. And recall that a majority of the EBITDA from this segment occurs in the back half of the fiscal year. With that, I would now like to turn the call over to our CEO, Mike Crimble.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

Thanks, Brad. Good afternoon. I have just some brief comments. With respect to the first quarter results, as Brad said, we have exceeded our expectations. Water Solutions experienced a strong quarter, continues to reduce its cost per barrel.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

We expect strength in the back half of the year from our Crude Oil Logistics segment as volumes on Grand Mesa ramp up. The remaining liquids logistics business generates enough adjusted EBITDA to cover our corporate costs. If our results continue to exceed expectations, we will consider raising guidance at the time of our second quarter earnings call in early November. Now as you can see from our first quarter actions, we are exercising an opportunistic strategy with regards to the use of our free cash flow. Cash is being used to purchase and repay debt and equity that provides the highest return and greatest benefit to the partnership while considering liquidity and leverage.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

These opportunities may change as the markets continue to move. So first, during the quarter, we purchased $19,000,000 of our outstanding 2,032 notes at a discount as our bond prices temporarily declined due to the tariff announcement in early April. We paid off $72,000,000 of debt that was outstanding on our ABL at March 31. We then repurchased 70,000 units or approximately 12% of our outstanding Class D preferred units. The successful refinancing in February and the full payment of the preferred arrearages allows us to purchase any of our preferred classes B, C and D in the open market or call them at our discretion.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

We have a couple of years to redeem the Class D preferred, so we are beginning that process now and anticipate additional purchases this fiscal year. And finally, under the board authorized common unit repurchase plan, we have purchased a total of approximately 4,700,000 common units at an average price of $4.3 per unit. This represents approximately 3.5% of the outstanding common units. So in conclusion, as we move forward, the balance sheet remains a priority, but we are very focused on growing our adjusted EBITDA as it reduces leverage and provides additional cash for the balance sheet improvement. And so with that, operator, let's open up the line for Q and A.

[Operator]

Certainly. At this time, we will be conducting a question and answer session. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions.

[Operator]

First question for today is from Tariq Hamed with JPMorgan.

[Nevin Mathew, High Yield Credit Research Associate at JP Morgan]

Hi. This is Nevin on for Tariq. I know you just mentioned that you'd be remaining opportunistic with capital allocation. But just going forward, do you expect further common unit repurchases? Or is this would you consider this quarter more as a one off and you'll be remaining more concentrated on the Class Ds?

[Brad Cooper, EVP & CFO at NGL Energy Partners]

This is Brad. I think we'll continue to be opportunistic. If the unit prices kind of hang out in the same level they've been this last quarter, I think you'll see us nibble at that. If the bonds trade down based on some macro event, we will nibble at those and we will continue to attack the Class Ds. So I don't think we will set a path right now in terms of what we will go after solely.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

It will be a little bit of each at these levels.

[Nevin Mathew, High Yield Credit Research Associate at JP Morgan]

Got it. Thank you.

[Operator]

Your next question is from Derrick Whitfield with Texas Capital.

[Derrick Whitfield, Managing Director at Texas Capital]

Good afternoon, guys, and congrats on the opportunistic purchases.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

Thanks, Derrick.

[Derrick Whitfield, Managing Director at Texas Capital]

With respect to the produced water volumes for the quarter, they were a little bit lighter than what we were expecting. Just want to see if you could add some color as to perhaps some of the moving parts for the quarter itself.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

Doug, you want to take kind of Q1's water volume question?

[Doug White, EVP - Water Solutions at NGL Energy Partners]

Sure.

[Doug White, EVP - Water Solutions at NGL Energy Partners]

They were quite a bit close to where we were expecting. There were some there were in June, there were recycling jobs that ramped up, which we're now seeing, you know, those volumes on the takeaway side this quarter. But we felt pretty good about the volumes in Q1. We came in about 79,000 barrels a day over budget for the quarter, over our internal budget. So we felt those were pretty solid.

[Doug White, EVP - Water Solutions at NGL Energy Partners]

We see that continuing for the balance of the year based on our customer forecast at this time.

[Derrick Whitfield, Managing Director at Texas Capital]

Very good. Then Hey, Please go ahead.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

Derek, me add to that. So Derek, when we look at volumes, we see the physical volumes we move. Then we see the, we call it financial volumes under MVCs get paid for that physically didn't move. And then what we do not record in the quarter are additional MVC volumes we will get paid for next quarter. So you're not seeing all the volumes that the system is actually, I'll say, receiving.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

And you won't see until next quarter when we when, you know, when we sell up on an NBC.

[Derrick Whitfield, Managing Director at Texas Capital]

Got it. That makes sense. And then maybe just higher level. Wanted to get your thoughts on the ARRIS acquisition by by Western. I mean, from our perspective, while we look at it and question the timing from a value recognition perspective, it definitely supports the Delaware Water thesis that we have for for your business and and the revaluing of that core space over time.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

Yeah. I'll start. Doug, you may have some thoughts too. But I think we congratulate ARRIS for getting a premium price for their business. That's a price we would never have paid.

[H. Michael Krimbill, CEO & Director at NGL Energy Partners]

And our model is a little different too, because we do not focus on recycling. There are some other companies out there that do a great job who's really focused on that business. And Doug, do you have any other thoughts?

[Doug White, EVP - Water Solutions at NGL Energy Partners]

Yes, I think it's great for the industry. Great sign. Consolidation has been positive in the Delaware for even on the producer side. Once these the consolidation happens, you know, they start you build and continue to to build a more of a foundation of an asset base, be it whether the producer side or the midstream side. So we welcome seeing consolidation, which also includes, you know, fewer fewer parties at the ballgame.

[Doug White, EVP - Water Solutions at NGL Energy Partners]

You know, the the remaining groups that are out there, I think a couple more of them are looking to be consolidated. So, you know, over time, this will come down to a a few parties in the midstream water business, and it will then eliminate the spending of CapEx on duplicate assets, duplicating such the existing other competitor assets, which I think is good for the good for the industry. You know, larger diameter pipes, more centralized operation of a larger contiguous area of assets. I think that's just good good for the industry. And when it's good for the producers, producers become more efficient, drill more wells, and and create more water.

[Derrick Whitfield, Managing Director at Texas Capital]

Terrific. Thanks for your time and color, guys.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

Thanks, Derek.

[Operator]

We have reached the end of the question and answer session, and I will now turn the call over to Brad Cooper for closing remarks.

[Brad Cooper, EVP & CFO at NGL Energy Partners]

Thanks, everyone, for your interest in NGL. Look forward to catching up with everyone in early November during our second quarter call for fiscal twenty six.

[Operator]

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Brad Cooper, EVP & CFO
• H. Michael Krimbill, CEO & Director
• Doug White, EVP - Water Solutions

Analysts

• Nevin Mathew, High Yield Credit Research Associate at JP Morgan
• Derrick Whitfield, Managing Director at Texas Capital