NGL - Earnings call transcript Q3 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the NGL Energy Partners LP Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode, and the floor will be open for your question and comments following the presentation.

It is now my pleasure to turn the floor over to your host, Linda Bridges. Ma'am the floor is yours.

Linda Bridges

Hi. NGL's fiscal to earnings welcome again third XXXX quarter call. And of your to be our end afternoon. release, start closed like after attention was found partnership's filed which by the can I'd this which calling to market earnings language, safe towards the harbor Securities may remarks Private statements Act of meaning of within Today's Reform the XXXX. forward-looking the contain Litigation

partnership's forth Analysis and In annual March discussed to the by the cause actual factors attention to the to direct accordance your the on factors XX-K together statements. Form with the on SEC that differ partnership, XX, and results with contained those materially risk Discussion report forward-looking act, made are set section which safe such and harbor for I in ended our the the in would the in also important website like website. year filings in and Management's any These the on other XXXX could SEC's statement from available release earnings

turn I'll to remarks. the over that, With opening Mike for mic

Mike Krimbill

Thank you Linda.

quarter to business and of on segment questions with how we today provide phone us leaders like topics. last on the the transition couple spoke first on answer to context the our call. on that I'd an to But the update provide next have certain of and fiscals We

were We slightly disappointed in this quarter.

million we achieved $XX $XX But Solutions achieved We and million we around $XX lower an or to due EBITDA $XXX EBITDA. to disposal this EBITDA. come average water was expected million in Crude million per expected about to November about Water $XX Logistics quarter. a million volumes October, in annually quarter EBITDA

to during benefit fiscal quarter portion and of below December. February could on all October, the normal warmer We that fourth the colder-than-normal we also than can much liquids in see is a the our Logistics the shortfall. temperatures recouping quarter third logistics. expectations the January far, November, Based but thus anticipate quarter due Liquids temperatures

benefits But from adding DJ $XX Basin some count. to sideways, business, seeing is be our first for million differentials December exceeded the time. in Solutions seems Logistics Crude rig not going Water the the but to EBITDA

last than is averaged million day third weeks X.XX of million barrels two This greater received X% produced day we quarter. two For water. the in the a over barrels have the a

As a you month. we may $XX fiscal million which projected per approximately XXXX increase XX% Solutions remember, We're our in already in almost is Water there quarter. EBITDA this EBITDA,

fiscal XXXX level. So $XX at we enter expect to million that

will growth in upside to provide the So fiscal any XXXX Water segment.

quarter price the about respect quarter XX,XXX With at third recovered In costs. in an about month barrels crude which third expect barrel do $XX or above before barrels, average continue price the which forward. is going skim oil, $XX each is price. we oil XXX,XXX to we The per January, we $XX a month realized of transportation $XX.XX, recovered to approximately current about pre-transportation

current highs. EBITDA monthly the at and recovered Skim volumes oil all water So are new

We the reduced have is to to our with which fiscal expectations. in line XXX EBITDA range average XXXX XXX, analyst slightly

another assets, unused asset in our to flow in million real close process far year sales XXXX. and of on we've of and fiscal thus free We XXXX are with before have have we excess sell and augmenting estate cash million $X million we closed end another sales $XX to in identified fiscal $XX

prior notes repaying achieve. expect on be to continues all the to to we maturity, focus which of Our XXXX unsecured

well and the with the as behind and there's think EVP So discuss our to thinking like to seismicity discussion been with a him Midland the of current status about in White Solutions, Delaware of introduce of XRI. collaboration lot which Basins, I'd Doug I that the Water ask as

it to turn I'll over that Doug. with So you

to heard sure I'm injection induced related of aspects seismicity few different everyone's the parties. a quite Mike. from Thanks, different

are not. some accurate of are Some them

educate So on regard facts seismicity. a NGL's would of bit like I you in to to the assets little

acronym Seismic identify in Area Texas areas and there Commission the is increased of both different concerning Mexico. which there the of to -- OCD or utilized Railroad an that's They areas. out SRA seismicity term have that's that Review in New

the Eddy areas; There Reeves. small there's State Lea Odessa NCR are have we County, Delaware Midland Culberson, Basin and Reeves and three which SRA around of sometimes the in Texas, small called in New main the one at also very -- city Line North one then -- Stanton And then then Lea the the them in and then Midland, two County of Mexico. Culberson the at is

on there SRA the Basin, effect business. Midland has neutral water a the our In

one water taken We years. idled about four was not have deep asset. well for there It an has

effect abandon will take P&A of on in very that just in Midland, or the quarter will fiscal a year the to any plug Odessa completely of us. it cost business. this us and today It's course low business, that SRA our we're well that We but out normal for

time in area of a pickup on due this that additional lot of capacity available producer of have a and that them wells fact lot voluntary not at area been many decent the of disposal in shallow a reductions There's of amount that capacity. to-date our to business still there's

wells are to Delaware Culberson SRA. the Culberson go we No Texas, Then within Northern the Reeves. Delaware, Reeves NGL

capacity again were potential there. with Once hundreds know injection no many wells there there. of of of of capacity barrels being thousands limitations any NGL limited As you

have producer. an a We new affected injector, executed medium-term which a deep with is well contract

are in outside that business of course. area to the So our glad of issues and we're positive picking of there being amounts customers help we thereby

Then we get to Mexico, the New Delaware.

six Line State wells barrels voluntary about day XX,XXX all affected six reductions wells. We taken have temporarily per the of approximately across SRA. We've by

So of that's XX,XXX the total a across wells.

the take demand where ability increased our services, because large network greatly through -- have limited. seeing we are for are we others that And to our pipeline water

have there think all limited New XX voluntarily that are XX to Line area in wells total State the in to the I SRA due other been Mexico.

will active XX has XX% we out, think shallow deep wells deep in are continue NGL The seismicity. tied point that Northern been have wells wells the to the wells Delaware. to to the Northern -- important in shallow But be XX of over case. it's Delaware most And likely our wells. and shallow the think I we have

So well side. me on our Anything for mention, you'd the Mike? future that like I to bodes else think

Mike Krimbill

are bit We number, maybe -- and about how just we going a gaining -- Doug to any X.X of capacity million. barrels don't Yes. wells water, we're our little maybe a out so some connectivity, even lose, if pick lose we basically lose XX,XXX

Doug White

Yes. Correct.

the So the grew five we Delaware years our strategy over as last business.

pipelines XX have We we XX-inch and or lines. transportation I -- mentioned always large guess

going of County, are Andrews We that have Andrews ones have County off the Texas. which believe lines we only ability. I County Out into XX-inch Lea system east to Express County and Lea to of

Express position we drilled that there is not that, our deep fact and letting are Texas And Loving with our drilled XX-inch then wells oil Rail injection Many very do see there due our on pipelines, or Loving are our that to be Commission arrangement Texas injection in no Z&T with County. along have course XX-inch County, and permitted Western to and express any wells the for in County, or permitted of Loving well. we seismicity of the Cattle exclusive closely positive big pipeline our one in them deep of

Andrews New to system, south Loving, water the Mexico, Reeves to Texas, and Texas. throughout have both County north move we ability throughout east our both So throughout west to

within of water system, very diameter good So our our we move from quite picking there, pick ability and water the have like and very up we redundancy reliable ability a bit seismic we're the system I mentioned, the up, because pipelines can others SRAs. impacted of interruptible away affected large and the contracts and those of to still but throughout of seismic new areas from

Mike Krimbill

And Great. XRI. then

Doug White

we about we mentioned the are up. our recycling last And it quarters, was that We call time. previously felt XRI. ramping talked how business previous we've as like business on in and

assess reuse, determined a we on was the and As collaborate the that related good best-in-class produced business, with -- utilizing we disposal transfer to returns their the assess that transport recycling to market and with very on services. decided recycling and we XRI then partner abilities our wire we

for to enable those expanse rates dual utilize simul pipeline of and XRI required today. and fracs synergies system, produced we large fracs the of So are these that our high water see that us deliver simul

value that equipment, has to collaboration the our has we're our reinvent business. to at and producer become we more core business the seeing the rates way XRI realized right more high the produced XRI their sizable We process the and demand. than out They those us margins people still amounts to head and count get the to the manage expertise that at sell and is capture and enables specifications, go from with core large wheel business, spend which the people hire go. capital important water then focus And high the that's of on line rather and of water not another And chain. very

expense. those important off as most to without additional don't selling possible. part lots capital -- margins margins cash spend any bottom model we the any much flow capital line achieve High lots water the bringing our and It this. And as fits additional to moving with of of side-by-side our also free large system

Mike Krimbill

right. Thanks Doug. All

our pipeline. over liquids has EVP and on ambassador segment update some jump Jeff comments our and of to Let's that Pinter the

Jeff Pinter

Thanks Mike.

the going share So there. from state the up excited investments state, to do for Michigan customers our where the what area NGL it's some to Mexico up Wolverine to and Texas let's in is and of jump of propane

many states top amount the you in country, is As but own a of one only propane modest the its Michigan of production. of may the has know, state

Michigan Northern in truck from consequently and of more result via the and HDDs. neighboring of Much a is folder Michigan, in located Michigan huge well on dependence volumes as As developed demand railcar which has Central Canada. have a importing from propane and as weather states

that little with to a of share bit our wanted a I bit investments. background, So about

the including XX own which of First and Michigan, a one hour we NGL number and its We wells. to with multi-year for the sizable minutes rack, from and facility gas the in to truck producer entered minutes sources truck. from went production per upgrade with Michigan's which one agreement XX operator a of things, loading a hour partner oil into Kalkaska, anywhere

to So now trucks approximately three per do hour. four can they

number backup inbound in feedback a convenience additional needed. they're love that destinations, their of supply supply We from And also domestic We've for flow made and rack, of had end getting some so when customers positive the certainty customers their closer upgrades which buying the to far. the that very to the rail and has been state. the accommodates fact product the

storage Wheeler finished facility. at Secondly, of The XXX that truck XXX,XXX turns started the Wheeler gallons Michigan's out state-of-the-art gallons with on Wheeler February minutes. near means of a brand-new truck just capable facility XX of two lines loading fantastic we early trucks construction The each some of loading Merrill, the month. facility which they facility facility from truck per Michigan low truck this the and is who can XX pipe love of out and the base retailers, the efficient propane brand-new and to in to feedback X, and trucks lack of top minute,

NGL infrastructure that source which from Michigan. and the existing of an safe, large in customers pipeline, Kalkaska Third Michigan XXX-mile reliable the Northwest with least, we Michigan have state to storage and Ambassador and the supply purchase Northern and certainly named a part pipeline provides connecting the Wolverine pipeline This very Southeast propane propane. of Central Marysville the propane State Northwestern not traverses to existing in efficient

are service. and have X-inch underground parts various Once the X million and repurposed of line storage propane access to transportation state. a bidirectional over ambassador the to method to cheaper of propane distant made line connections the Marysville customers Michigan storage, pipeline is The connections will has a the underground regions faster of final been caverns, barrels for

we more year. providing in this and about the of help hundreds condition needs the pipeline the reduce thousands long-distance our the cannot and grow look Michigan's Overall, Ambassador to railcars later opportunity safety improve and models. in additional by newest from Importantly the We the be truck of roads details and business forward will excited trucks state eliminating help to will emissions terminal Michigan. of for

Mike Krimbill

back to you Thanks And hand Jeff. Linda. Great. it

Linda Bridges

Okay.

So for diving financial the into quarter. the results

preceding EBITDA compared reported the million. approximately totaled the segment day XX% XX,XXX per $XX.X adjusted and and million X.XX quarter last per barrels third quarter of approximately of barrels or Solutions over when barrels year. approximately per barrels day to XXX,XXX Water growing Our Processed day

this the the all our of continue of primary the which to in as growth of Mike still quarter. number see expected the two already operate as we to water the growth in is with -- and We pointed expect day driving exit a basins is we of Basin all a million year volume which approximately we've fiscal However out seen processed Delaware barrels majority

compared $X.XX. customers prior lower barrels the the flowback volumes averaged contracted barrel the barrel received quarter slightly per and more at rates. from lower per were barrel day per for the by Skim than to to completions processed OpEx receipt driven prior water. oil remained $X.XX quarter timing Revenue due $X.XX with related constant of of per

sales these at the were impacted water timing uneven It Additionally annualized that year is should on an producer by note of be be of completion and subject are to through important water producers' the looked sales can basis schedules. to completions.

second XXXXX $XX.X barrels in day Logistics quarter. The segment as and our pipeline per Transportation day per underlying fiscal positive million reported well Oil businesses Crude we our quarter. of for business Our Grand on compared the during adjusted to results reported EBITDA and Mesa barrels XXXXX Marine saw performed

our impacted That curve impact to said quarter on and the in second profits positions embedded in the recoup and inventory that due our we XX. $X quarter million valuations. approximately hedging to segment with December by negatively first impact million in fourth on results associated this saw we were the its of gains and deferred Similar approximately $X through the negative were to crude effect in in backwardation inventory our the expect

fiscal the and previous on of on fiscal into be mentioned oil results the XXXX production remainder DJ year As in Basin. for calls will dependent crude the

in business anticipated extended products exports adjusted driven Liquids as demand in were $XX positive margins diesel our was million have increases margins, markets Our have supply results as for well. increased bio by differentials in businesses well refined downtime tighter benefited market primarily and segment our favorable EBITDA of by as product location reported butane which as certain driven refinery and

weather battled most Propane than the quarter, third experienced Our of start winter business during of headwinds the normal the some in US as season. warmer the

weather by volume. positive for cold has always, results quarter demand as been However, recent fourth and be driven will

for was $XXX.X is EBITDA a shy hoped adjusted been bit would total, quarter quarter. we as the for have of In Mike mentioned the million, have which where to

the and we As I'm expenditures million to a $XXX are of $XXX sorry $XXX Capital million, to million for EBITDA to is quarter million. Due unexpected are such, million adjusting million guidance guidance $XXX -- totaled to insurance million our year-to-date. totaled fiscal to $XXX our for range updating reimbursement. million of adjusted anticipated we $XXX net capital $XX to certain spend repairs, from $XXX million XXXX which certain $XX.X

inventory Quickly elevated due the sheet. turning Working to capital have balances balance remained high to commodity build. prices and

see $XXX next the senior typical is down we to under for quarter, inventory expect capital months, total of spring. repurchased As to liquidated XXXX working the $XX the over during of going size notes partnership into the The to couple our million its balances seasonal million. tranche leading businesses, bringing lower due

As balance to our will notes, previously outstanding remains stated, to continue decrease which we it priority do the going forward. of so these

working next currently year's thoughts update We're on market guidance. and our the our Lastly, earnings some on next call. Mike provided last through process call, we'll our regarding budgeting

this to remains flat of the in in Crude a view in year unchanged, pipeline our increase and time, liquids increase at ambassador a segment. logistics small Solutions our next segment, Water performance Logistics related XX% However,

With happy for the open that, line we're to questions. up

Operator

Ladies coming Instructions] Tarek Your and questions. is gentlemen, from Hamid. [Operator is the first open floor for question

line live. Your is

Tarek Hamid

water process, stay are you kind rules the how same of us your from like sort in opportunity sort if you comments induced point. place? kind temporary an current this view Good much can threat sort I of as potentially seismicity as a any you rules the more to it of can that on. I of give it incremental way the head afternoon. guess guess context of addressing of Thanks at issues for reads than

Mike Krimbill

Doug?

Doug White

think we in And million expect I if estimated rules may per somewhere contract, the where to increase X.X I million the you if if That the firm the for term I I day. mentioned X.X stayed in delivery that somewhere additional water, to we're would I is as to X%. strength of Delaware prior temporary handling X% place led can say obligations is between which that activity. from -- incremental very that around didn't seismic to when anywhere some I'll medium really producer expand.

Tarek Hamid

more Got and that recycled you sticking I a business. volumes, the Any of And but I that, One I disclosing guys it. then explanation schedules? guess just completion water recycled on have is just thing water noticed the on substantially for notice function that to the thank appears did quarter. dropped pretty water December or in

Doug White

can quarter, actual in disciplined November Yeah. producers the surprisingly last November. we in The I And in yeah, volumes in and that -- were I an were water you October, think October, think see really December certainly month. which we little it saw period the unusually we things or period and the got But then a busy slow -- sorry into I'm down, surprised November at. was that

volumes recycle the quarter certainly December quarter is outpaced during fourth this unusual. expectations. increasing that the -- we then which reuse we've late very this in really really accordingly And down, So saw holidays, it went but our seen fiscal

Tarek Hamid

of look I dropped And water that that per to it. of kind guess appears Got combination a bit through have you Is a revenue barrel kind sequentially. as little touch of of who's being a that lower decent lower? Is way put recycled about to for skim think being you the oil and public bit someone bit on a edge? volume a it

Doug White

Yeah.

larger do we accurately, some contracts. of more think the have I

Those We disposal increases the our those obligation end rates. incremental fee at of of annual in are volumetrically takeaway contracts. have disposal lower

to it barrel down agreements the per those and as So revenue those volumetrically, grow somewhat. pull contracts tends

than lower our But as fees reuse disposal to we margins more fees. those actually do as recycle engage be -- tend those we or

you EBITDA sustain OpEx is per coming down per barrel But see down. So is and barrel helping I you noticed the our our targets. that us hope come also will revenue

Tarek Hamid

appreciate I helpful. it. That's

for one last me. Just

to You of give you at seasonally. the on expectations kind touched look that your look context Obviously XXs? for important like? it's you of paying terms release can what as inventory Any down of in reverse should objectives

Linda Bridges

Sure. I can take that one.

our facility look if So at million. That way balances last is $X was year-to-year capital on you our it XX, I look the typically at working XXXX. March balance

but forward to prices. inventory similar you see this what is March, think higher levels you'll I If that at

from we facility outstanding year. you this may a compared a ABL the March to same volume more of see perspective relatively of year place. our last XX March in on XX speaking So little at should be But

Tarek Hamid

context. Thank you in It's Okay. very back a helpful much. jump queue. I'll a

Doug White

Thank you.

Operator

TJ question next Your is coming from Schultz.

Your line live. is

TJ Schultz

system. Great. numbers the just some said Doug, you is you clarify if SRA, wells. to do of if to day than offsets had that XX six even State total think understand XX,XXX I'm just those advantages the Are Line from the impacted have expected need wells of more to that, the in of grow? reduce on I to voluntarily our you from all or trying connectivity you within may barrels wells, a deep some the

Mike Krimbill

Mexico The operators X interesting The center which the noticed from near thing was is than different approach within of the the more in miles approach XX stepped those wells aggressive OCD of TJ of -- is has the Texas deep regulatory earthquake taken well. X.X up side. has a Paduca the a our very epicenter to New from SRA

asking to all reduce. send orders they reduce create very nicely totally to then or if things nice would don't letters, get they And better us

multiple meetings. in that ongoing operators, area have disposal we Of the working commercial, producers, numerous stakeholder stakeholders all multiple course had

the and well so minute-by-minute the remained has able pressure track shut in. shut a bottomhole minute deep pressures XX reservoir earthquake. depths. gauge Paduca that every we slurry was And near a that hole that well. On Devonian reported of the X is and July deep because temperature bottom in the it gauge our in are data put positive The in, NGL to of it's we

and together And be and is are injection. six-mile the we technical the working within some of to nailing working impactful. injected the group the that And which expect we seeing most to groups down certainly to area area really of -- basis seismicity. volumes we're And led has correlations very strong lower what amount been has of correlation raise would in the

no And that are the earthquakes said, are X.X small are of or have greater area scheme That in almost months. now X.X six there sub that of in been the which rumblings there things. most going in out very

the letters but it -- the that in been comfortable to then they once very sent wanted is And managed reduced and seismicity manage it by feel they the being we ascertain SRAs everyone was OCDs So is and to stakeholders has wishes. OCD managed. now regard out how the already managed voluntarily

confident good at this State Line frequency of We that. to that continue area. and it seems feel very magnitude sure really events will feel about that reduce in point. crowd We the And

that. deep subsurface the Of XX,XXX, we course and could feet of the and good XX,XXX happen things earth it's but more feel about

your side State they of a metered Line, that of that, Midland. a have the concern because of we area from that standpoint grow, SRA Reeves more Texas other will Culberson approach think much little than area about your have there's in bit question, On in possibility has the we taken a of the potentially

I very both the would by Line existence nonetheless the there it's is area, not the regulators. in the Road good the we working Culberson specifically because really about with as and Reeves are Culberson out been State in But industry handled the But feel directly by other area it’s talk with to on Commission we along Reeves. populus mostly stakeholders the stakeholders in how well. about also the say

TJ Schultz

water then you we No, agreements new there in think that's we the anything producers scale with the Poker if next think And that's on horizon Okay. or about Lake Is about size as year potential so? similar all. to or helpful. for

Mike Krimbill

have history. is but As largest -- perspective, the update in last we very was that Delaware, our very large has would the I in NGL that is say that I in the tuned mentioned on It that an And process. stay that water anywhere is call on for a soon. quarter, been not there dedication a last done, dedication only

TJ Schultz

Okay, great. you. Thank

Operator

[ph]. Cypher coming Jim Your from next question is

Your live. is line

Unidentified Analyst

question. going of is understand XRI the the just the comprise? and Thanks rolls to magnitude out we trying of or how that Permian to recycled the be Basin going I'm Hi. that that Is is you're agreement, taking relative underway, percentage -- water when of what size the about it, majority in water think Yes. doing should to what to for total?

Mike Krimbill

the water answer I amount a question recycled been daily a a say to of That's volumes That's what a south reuse, on nail from basis Northern previously on is day. recycle, in to XXX,XXX we've have will where -- barrels actual in one Delaware. seen tough down. we tough average south of

Our believe goal barrels about that this of of XXX,XXX a year and excess in will pretty but barrels And feel even a we XXX,XXX is is day, there. that. to collaboration us get be day we we maybe good the double have XRI a goal

as it's a like reported. have the producers producers say and tough -- aren't said, the numbers systems tough because I that those some on And have to it's percentage, to of own you their and

in others our do. of midstream estimates what business water maybe have line of We

we what Of course, then know are. ours

to basis a think NGL, this as So we more with to year. and next And most I that, what can continue say likely just expectations in percentage be double we to fiscal grow multiples. for than

Unidentified Analyst

your that and about? That's should or continue there thinking some $XX price, are chip balance? cash ability out governors Is on the And those are that XXXX million separate buyback more there a what know notes, drivers free be notes other it then and Great. gives an a simply on you away to we function idea. buyback helpful. flow at It me the to just of I Okay. bought topic, during quarter,

Linda Bridges

point. just Yeah. Really cash free price at and this flow

repurchase. We how are limited XXXX we the not of on much can tranche

repurchase maturity. we off to look or tranche that by entire And so, pay obviously would

I We million. $XXX on XX. believe limited XX basket are the original was the and

think we've used date. about $XX of that to I million

Unidentified Analyst

one going Okay. cost Is ask. you And just guys XRI. to I the then XRI's there Great. more for assets? on any back recycling using to was

Mike Krimbill

we collaborative maintain press definitely cost things have synergistic are continue the no arrangement. those is produce for still -- if sell release, you we same press our does or and -- cost at to we But our There it doing seen recycle when to they on ability have and a to think own. a water And I reuse release, do the come collaboration in the is separately party either their not projects. ability may to

Unidentified Analyst

Okay. very Great. Thanks much.

Operator

Your next Patrick question Fitzgerald. from is coming

Your live. line is

Patrick Fitzgerald

the doing quite and But Thanks you going anything margins the on wasn't taking for margins gave sure more Hi. were quarter last little changed? any maybe all explanation themselves segment, And -- you kind if on have that be and of that. customers I -- like said your or kind water your you recycling would the when could the different Water weaker flat forward, you questions. guidance, of grow. for just Wondering a the would are behaviors that volume

of forward, rate? run second going kind expect you So the do margins the of is this kind at fiscal quarter level, new or

Mike Krimbill

Yeah.

have customers the not So changed.

in that aspect. change no there's material So

spend normal say, X start the I chemicals, tank into on you austerity that our cut as, basis. down our Q is cut I different If then of oil-cut bottoms, recovery our tanks less corner you was cetera, to the bit. your That certainly And per when systems really a revenue oil the the revenue and barrel prior from previous effect you'll think that to believe months. of an in affected the out turning do that dig hangover oil see of did the of our even has of cut it chemical reduction to internally of -- months really back spend our We spend impact I per XX was a took on efficient. in thereby hangovers price we become and oil from opportunity buildup oil little a a to et by really dialed with will internal bit barrel, back one you of of And that. things quarter third-party a bit our also little the on systems. our on the to degree go collapse, back clean-outs

since and cleaned-out. of we process. in a We've getting oil and We engaged time of recover it waste, actually lot from that our spent our systems process

at process oil but throughout higher seeing this actually quarter, we're those high of additional with water, cuts processing selling these our So standard we're materials. oil prices in also

We is – due impact per I of or fees really probably due contracts lower – the on – are does to pretty – large to you're question answer that the asking increase increase the at has mentioned important QX the that the to that is of revenue the some most so it's norm, QX our average. is the large a as the – barrel our

volumes to somewhere between continue I Patrick so answer answer and And grow. where we the is And land. – you QX the is QX to

maintain $XX and have And then you work back a average. at is impact our add we $XX, coming able per tank we EBITDA barrel on were mentioned, $X.XX. And dropping we're hard at per as increased positive oil also, that barrel to to while and OpEx that say clean-outs by look and still down, that chemicals, then achieve I very number. OpEx have our What will to

it, answer long-winded are a that's go it. So there but variables many about into that

very down here fractions volumetric Meanwhile, we per cent. our lower tend think that on to on oil the growth, of have come I with with by going of tailwind, with to the long-term price those not the by those the large barrel. fees pennies, it is to but growth bring contracts be revenue our positive continue disposal

Patrick Fitzgerald

– that's really No there. the appreciate detail all Awesome. I

third it cold the I see seasonal weather fourth that in situation closer is And is could Now you quarter to a the EBITDA warmer the it fiscal kind fiscal have you being quarter? drop going – but seen normal guys. where in it typical in than to of the that best, not typically is mean, business, third Liquid fourth highlighted or we've flat, or – fourth the that you quarter the in the the in Logistics is quarter. very then was helping

Linda Bridges

been trend – I before. a products seen if I EBITDA refined for I see similar up what – fiscal again lower third weakness you'll you'll I you than strength actually The think in we've for you've quarter think bit made this this Patrick, in I we our last year's fiscal think, a segment at to has quarter. year margins. and propane what by reported was propane think quarter this look would year's to now, last compared third

into forecast the quarter fourth we weather. again normal going on So typically winter

I expect we've weather would So, we past. for seen averages your in normal going to what we yes that just to I volumes to results historical forecast say, similar would typically look would and forward. the see

Patrick Fitzgerald

massive flat about it's capital, any of already you and then been fourth quarter? get sense in back working mean big And And how I think a that to the kind obviously. would volumes of headwind be an unwind here? stay I somebody of if Okay. prices but inventory asked volumes,

Linda Bridges

should north it Yes of be $XXX north million. would -- it be

Patrick Fitzgerald

Okay. At levels? current price

Linda Bridges

levels At yes. current price

Patrick Fitzgerald

Okay. And that's mean then still... I

Linda Bridges

the from ABL about I'm facility. talking

this total of in about is and year be I So a prices on unwind fiscal you last cause $XXX increase The a should remainder just facility. million guess be see going the the to $XXX to fiscal closer the between year. would reduction million ABL commodity

Patrick Fitzgerald

Got you.

you very much. Okay. Thank

Linda Bridges

Sure.

Operator

Your next question is coming from Philipp Duffner.

is line Your live.

Philipp Duffner

guys. Hey

Just capital. on working a topic of

provide So context And your accounts that? receivables you next also quarter. increased in Could we a this reversal significantly quarter? on that some whether expect

Linda Bridges

Yes. Yes.

see should a should you see -- see you reversal -- that. will of You

going be in you're to Some increase is to the segment. the season, into winter higher as come receivables of going we propane have that

butane cause see going season. being most increase in the an higher in receivables AR. ending is kind they're prices going to their likely as higher segment blending also to of also You're Commodity

should your But would this an corresponding by quarter. see your AR to in increase increase AP basically in offset a You margin see typical it commodities. on be

Philipp Duffner

you Got a or could year? provide And more context it. guidance Thank repeat is the this this this a one-off on CapEx what next And you. caused could be increase for year? like in event some the

Linda Bridges

think on I call. earnings guided year for Yes. we've CapEx our the don't next softly last

an on say Mike unexpected if would anything our fiscal guidance reimbursed that, else chance that I to update XXXX there's was out information. to be impacting have detail primarily quarter budget of had guidance than insurance market we and from call our through we But We'll get why sure that earnings or the repairs all we once haven't Other that. in to would proceeds I'm which to the is expect CapEx a quarter. provided next related update. to not we've that We provided increase this some part this

Mike Krimbill

think go-forward majority vast out. we've is drop I built of for next our the built everything And under majority years. each the year nearly No, is, of The several systems CapEx contracts. required to going the the

Philipp Duffner

we've question. last And saw the one during pointed Mesa, reporting volumes number I to securities you. slightly actually quarter. it. the been Got Grand of the think Thank we quarter-over-quarter, weaker like increase production

and So, this not more their you your sending producers of because by is volumes Civitas are the larger Civitas you are it the within the quarter case impacted or you declined exposure that other that impacted the or increase, footprint? caused just not were by

Linda Bridges

correct. did you're barrels than Mesa quarter We this more moved on spot quarter. last No, we Grand Yes.

Philipp Duffner

Got it. That’s you. Thank it.

Operator

from Fernando question Your [indiscernible]. is next coming

is live. Your line

Unidentified Analyst

or already Good the viable, my inventory as because that those was permits, question. One for answered. are the good? the second were taking had one question XX increase, they still skim on basis afternoon. no past? the points volumes if still the saltwater same Thank the know in oil. partnership longer as deposit basis I to are And that points Is permits for you the quick

Mike Krimbill

Doug do permits? you want to talk your about

Doug White

Yes.

on and We basin. folks the because that's material have Basin Delaware -- our the

additional have We approximately XX inventory permits.

to continue and We our permits. ladder applications

are those of a continue they we inventory inventory. ladder And constant three-year to to that Some a have typically extendable keep life.

have that the we XX laddering quite began of of a month bit explorations. We this

per with a out -- maximum. injection little exploration. our psi those a And from over And foot of typically permits to day anywhere is a per approved thing capacity them barrel ladder are are within XX,XXX very period a half XX,XXX pressure we important permits the year

The a not that's per Hours other and the a ones very pressure. maximum foot of newer applications, and lot day quarter -- as impacted being for we maximum barrel new vintages brand per them new psi receiving ladder important note. are by issued out those are of to new XX,XXX that completely

XX,XXX per complete day, that what So, related three and take. someone to else will getting costing drill per capacity four barrel the inventory our to it's them barrel of amount times to it with well

when spread see and in we and to. ready and as those mind are And So them pop keep as to very SRAs also and hot need that's drill go we happen. we have wells ready to things important always out up across well basin the

Linda Bridges

And just to…

Doug White

that you answer than you answer I. Linda skim may to if that be better Yes. question could

Linda Bridges

was the this points say going Sure. relative quarter points referenced. was XX.X I you basis basis to the oil to skim for XX Fernando

Unidentified Analyst

generating everybody is I heading cash the lately years with just I used And with Because that debt the to four two forward? of and for But used past that the going in be flow. their flow driver. know the preferred Okay. versus improve know creditors lever balance dividends. the internal cash And mind. balance the Is the can being the sheet can guess three, main to is what back have next question other I accumulating improve main the that going interest other any levers forward pretty there much immediate business financed quarters? sheet be

Linda Bridges

Yes.

think asset I So referencing you're sales.

it's impact the low the EBITDA are would I last been a underutilized what or million think we've which next dollar. in be $XX very assets but and Mike to ton sales scrubbing had mentioned in this call, asset year isn't forecasting no portfolio on and we consider $XX admittedly to for every idle year million

in with. dollar-to-dollar pay comes Quite can frankly a that debt down we

we've to hard pretty those So working numbers. been

sales. year. in been being additional million in it million. go are way plan the and but bit assets As $XX Mike have more process handicapping to year currently $XX We've a identified than this mentioned those about though actually We're of next to in and little sold identified we've got a asset bring

this that running something up been this pop we nothing we've we would point, formal asking to is time point. historically value does market Something larger, that process can assets but needed derived you're if that obviously all at which said, at alert nothing If we probably actually have see them. on. our identified the about a the from There's we be as nothing there's at that's identified look have what

Unidentified Analyst

you. Very more well. questions. No Thank

Operator

is Your question next from Stein [ph]. Craig coming

is live. line Your

Unidentified Analyst

All my Thanks. questions answered. have been

Operator

Okay.

Your Horton is coming from question last [ph]. John

line live. Your is

Unidentified Analyst

Thank mentioned to for opportunity. at and you the the the for investor connection you. Good little potential thank more bit pipeline Marysville. that the and a impact? the and provide on Could afternoon you timing Earlier you color pending

Jeff Pinter

Yes.

state are for Michigan the working We of process currently with connection. through that the permitting

come We expect state the in that in XQ or process. to delays possibly permits depending any on XQ

Unidentified Analyst

-- permitting having or the following a then the to for is capital a lay time infrastructure of simple And investment? connect additional matter it an just

Jeff Pinter

line It's investment. very XXX a The itself existing is line is miles. modest

additional of then couple a we connection. make pipe have to to We pumps. roughly that final mile to of have And lay, install a

pretty permit a we it's once we simple think process the So, get quickly. I achieved

Unidentified Analyst

last that for No right-of-way considerations mile?

Jeff Pinter

hand. in that have We

Unidentified Analyst

become surprised as the within or guess alluded you quarter, when of as X Very I potential said good. anything a Line further getting done. for to permitting upcoming has is QX QX was clarification? believe it last I you be fiscal Michigan, there that year far I And State the controversy the may

off that the little given Line government the a was would hot thought So permitting. to table I have perhaps so heavy on time X, and more move aggressive maybe

Jeff Pinter

Sure. We're we to permitting fast position are we say that our possibly process comment but Line working as I'm will really not I X a on as in can.

Mike Krimbill

run to what like for you're and very in you logical is we'd think I saying office Michigan.

Unidentified Analyst

anything bigger very and do what it I was say. to was yes, about out read modest it a so it is opportunity. hear lines with it them $XX.X make say has and I great between you're they because like seems the they but than saying they what sell and it a deal to million want believe – I But a it's it investment. I don't of

the your in has Given $XX.X this million past met it investment, expectations year?

Mike Krimbill

and happy the piece year we this in get with The We're the that last better. talked very Yes. the that connection running is earlier performance done everything far. the to mile the get we've so about execution and key

Jeff Pinter

at both sales volume Kalkaska out asset at would the at expectations. and exceeded up which of Yes Wheeler our be that

Unidentified Analyst

given place? season And this far as miss you come being line in the the timing permitting, the upcoming that Okay. will opportunities of as that with would

Jeff Pinter

No.

Unidentified Analyst

Okay.

Jeff Pinter

to Michigan pipeline know we And ratio the as to use we'll you of supply high We additional summer winter have – that fully have has a is market. the until operational. market do augment very sources

Unidentified Analyst

like second after one might somber. tonality the giddy would and noting Okay. That's Mike, quarter like just struggles change say seemed that tone may. I can seems presentation? anything almost this the the a it reflect that quarter, last in if thank activity hours Is call do. of it line. there the a have you little minus. I somber of And the is that Nobody you. for business share for this Mike. knows you But a This of

Mike Krimbill

Well, I for you see can't help dancing but would could start me. that you

Unidentified Analyst

only imagine. can I

Mike Krimbill

years. outcome the if that we $XXX scheme it the of what and disappointed million last X.X did But change million. is I of mean things we're somber for the the fixed in we do next expected we doesn't quarter didn't just $XXX

a it's little no frustrating. just So

You get impacts. three those pickup month The are a any we we're DJ is $XX though XXX,XXX day extremely barrels EBITDA EBITDA in a doing at in warm in crude. perhaps or again, those But – smaller fantastic. are row. activity of better than months We're Over real barrels million X the now even million a seeing not $XX what as a water weeks, in expected. oil is for We're two month. good

Unidentified Analyst

with structure and and partnership. It total – investor as should But and makes as for excited next I to recommendations be shift? still sense was per back an analyst on may about margin I should out And excited online barrel. same it reduce you here? this announcement your see your shift of it's make your total about that an that just further a what matter coming to will still? what these myself operating it's going the do quarter? the results, it's we be revenue enhance Did solid path. the capital recommendation even with needs mean overall feel Did or we path it

Mike Krimbill

XXXX all. free pay off from cash plus -- it sales. for million some still operations asset of fiscal get and of of these flow we $XXX XXXX free shifted out haven't I will cash at the our XXXX expect It's flow and

where all really at that I'm in XX all XX they're positive. affects -- it's or just the prices. it's So no with And changed crude -- picture get really and it's patience much not whipsawed game. activity we the we're that nothing's how the But very big sure these producers

we're growth are It's are that their we I And anticipated. ours than think all of upstream announce positive CapEx been to these customers and kind starting had watching their we others et positive. and of And cetera. more

we going I sideways not I go growth. think we're we're we which factored this with a went prices think to thinking that they into to that X% But all season our or haven't but... these double-digit see -- something are going growth, -- numbers okay into are

Unidentified Analyst

Yes. Thank that's yet. think effect not I that for the in that thing one had be gap that was clarifying factored to that. Because today that's is missing

So that that was very good. That's all had. I

Mike Krimbill

Okay. Thank you.

Operator

to like lines further We now no from the remarks. this at turn time. have the Bridges I questions floor for to would back Linda closing

Linda Bridges

joining the Well thank earnings right. our see quarter just with again again for in fourth want you to will Thank third we call you. All quarter the call you spring. and we

Operator

today's Thank concludes you, ladies This gentlemen. event. and

You may disconnect at a your participation. this time and have day. for wonderful Thank you

Linda Bridges	Executive Vice President & Chief Financial Officer
Mike Krimbill	Chief Executive Officer, President & Director
Doug White	Executive Vice President-Water Solutions
Jeff Pinter	Executive Vice President, Liquids Logistics
Tarek Hamid	JPMorgan
TJ Schultz	RBC Capital Markets
Patrick Fitzgerald	Robert W. Baird
Philipp Duffner	Aurelius

NGL Energy Partners (NGL) 10 Feb 222022 Q3 Earnings call transcript