NGL - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to the NGL Energy Partners 1Q 2024 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Brad Cooper, CFO of NGL Energy Partners. Brad, you may begin.

Brad Cooper

Good afternoon, and thank you to everyone for joining us on the call today. today, our an XX-Q. closed presentation release, market filed and the we earnings issued investor After Comments estimates statements that will are today include forward-looking under plans, the forecasts and U.S. law. securities that to forward-looking the subject comments differ statements. These cause results to could risks are actual and assumptions, from uncertainties SEC note our the provided of materials. earnings take language and and Please factors risk cautionary in filings With that, let's get results. into the quarterly

fiscal fiscal XXXX. our continued the into have XXXX momentum from quarter We of first

and record Our volumes Water the on is million of adjusted with disposal Solutions EBITDA in pace for $XXX.X year quarter. adjusted another business EBITDA for

We are guidance plus. reaffirming our $XXX EBITDA full-year consolidated of adjusted million

We increasing are by more efficient free the for our guidance to XX% we and growth by spending million getting cash this flow year, capital monetization capital increasing year. from thus our million, are $XX less $XX

Our of first leverage debt reduce million and the leverage XXXX we the as X.Xx notes to absolute at reduced of continues the quarter purchased early quarter. end in $XX.X unsecured total strategy to and the

our will fiscal and year no March As discussed straight unsecured this cash pay the sheet go balance XXXX XX, last free the on than off the notes to us will flow to allow later all call, XXXX. earnings

year. remains permanently earlier strong liquidity $XXX time life of for our of this year, the Our we ABL through this Recall, extended million to commitment the ABL.

half in calendar leverage level the for operational us the to and XXXX. under and at of borrowings the million performance This of $XXX line on of over a the end X work X/XX, of liquidity fiscal positioned have entire sight our $XXX had we continued 'XX. have years, first ABL. With of leverage As last of company of strong million global approximately the the refinancing we will hard Xx

Butane working blending our segment, these and butane season of We Liquids and in on As inventories discussed the fiscal fiscal in to propane butane and significant second quarter the businesses. those starts and working as capital first second before, there draws especially built propane company our Logistics we our capital down, inventories seasonality quarters, have is in quarters. during which those drawn are come the weather third quarters. typically inventory cooler the is Northeast their starts regions from the lower in associated similar butane and the starting benefited back sales spreads. and year to with and in States. of season to butane margin season as Propane inventory Midwest propane in upper draws attractive builds and with The this during prices November fourth us with United have the

for container quarters lock and fiscal of course both our strong prices in in back positioned current shift can the decline over fixed-price year. in future are When fiscal hedge how to due year. half market, butane we shifted the a are the into with propane across of margins the earnings moves With and prices earnings the quarter, Sizable contracts.

the producers. on well. of X. lower Crude basis. call, crude saw and the EBITDA lower certain earnings prices the contracted Logistics simple by last the softest the of volumes were barrels Mike both per rates XX,XXX year strain. Mesa impacted consolidated EBITDA taking guide and As resulted I Internally, was a with to mentioned quarter quarter. dividing day as not first as on the first our of $XX.X Grand million first the in averaged EBITDA as as that full-year the quarter for in adjusted in the Margins quarter by always It's we quarter year the spoke seasonality

heavier grades pipeline. for lower saw that volumes lower resulted also We crude demand on Mesa the in oil Grand

volumes. X.XX million from adjusted day the average approximately which in averaging the Water the for year. well in the have fiscal driven quarter interruptible in contracts XX of is $XXX.X adjusted signed quarter, and approximately equates increase same as hit barrel XX% growth job our water quarter system volume contracted produced that versus operating record disposal the another XX% Solutions volumes EBITDA for The to As earlier, XX% spot million, as to EBITDA the Water compared months, I pace continues over barrels expenses in The great prior Also, holding fee mentioned $X.XX, strong year. doing we is achieved on quarter. new by increase a year in This Water the team disposal the increase past team per quarter. handled prior we was XXXX. a water have a per down, volumes $X.XX of the

in and tighter For of recoveries have far. barrels sold so in skim Ford oil the skim Early quarter operate quarter. averages the Eagle half the stored end the the oil of basin the we in. specifications, at we the the oil due across which to pipeline storage quarter, did historical XX,XXX issue from approximately in were skim specification line the our with of amount oil quarter, reduced during of sold we solved skim oil the We second

storage on we expecting oil a sell end forward strong in going production prices second segment. selling volumes our quarter of Eagle the track higher quarter and are from crude oil the since by Solutions increasing to June with volumes and Water skim in expect remaining We disposal Ford, the the XX, the be back

the call turn over to will Mike. I Now

H. Krimbill

Good Great. and Thanks, welcome. afternoon, Brad.

ones we summer EBITDA $XX first million adjusted not quarter. This is know, these are typical with the provide slower the As a above months quarterly adjusted prior first EBITDA approximately quarter you for and typically NGL. year's do guidance,

is current As fiscal change it we early guidance. too to are months only X the into year,

you've estimated which we million. adjusted plus, quarter this our million Note EBITDA of $XXX guidance guidance $XXX Solutions year. This heard. need If increase is exceeds to better, the or times our similar that we full-year current was full our full-year reaffirming guidance. second our as is Water quarters $XXX, Solutions million previous Solutions the of EBITDA quarter for $XXX Water EBITDA So X will adjusted are Water

have if you water? Doug, do done on I light any we think color have you're there, on.

Douglas White

Mike. Yes,

important of shy in X.X I new think in out a barrels. is the we day the to June, point million peak just hit thing record quarter

which our shows abilities, to that growth the forecasted and capacity, pretty are take the and is but not have some is that the that that showing Back the heavy water The showed just believe come. we we to producers robust ready quarter half negative. So recycling necessarily recycling, heavily of are also one, completions volumes in. number the also positive means thing new when new

H. Krimbill

Okay.

in As last requirements. reduced accelerated earnings debt our possible core working sales was asset capital made call, and I reduction non by the discussed the

of quarter, assets. such first this During we $XX sold million non-core

since end of quarter for call up sold total million. been have timing of to the a this million the $XX Another $XX this of

year savings disposal and to our our This Brad we're water With respect our million. growth maintenance million to reduction to reducing growth the as $XX from So million, we're increasing takes additional for million. down capital million be of from $XX $XX said, to core of full million. And these proceeds $XX CapEx, course, $XXX of $XXX both expenditures, impact deployed for a not $XX volumes. growth year our any sheet total will million This capital asset this guidance will sale sales further in improvement. non balance from

of on and achieve EBITDA debt So adjusted free up, flow track are we our finally, reduction. generating further guidance, are to cash it we $XX an to sum for million additional

and further. focused be reducing to continue on increasing adjusted EBITDA, deleveraging indebtedness We

repaying XX notes Our the bonds. goal secured and remains unsecured XX refinancing the

a the we of we the not financial such, when As year. in I time any think measure paying dividend approaching preferred regain That will do anticipate arrearages current said, flexibility. fiscal we're

I think questions. that, for for open we up

Operator

Sunil from is Instructions] [Operator question Seaport Sibal And from our first Global. coming today

Sunil Sibal

So the the to trends. wanted trend I understand especially little a sequential just bit the water in business,

we margins quarter, a you the little about essentially talk bit So Could on impacted. midstream little in flat you what your players that challenges some was I I other volumes believe was that, regard? but heard in address too? have water the from a about were commentaries Permian. going bit versus previous think Could

H. Krimbill

that? Doug, do take to you want

Douglas White

close Sunil, X were QX, almost the and exact between correct, volumes you QX the we are those difference quarters. different Yes. in very to

metrics in, very The a we EBITDA $XX QX, in different. amount did the but not main adjusted is see, coming with we over QX. have could us year-end. driver if of smaller in see other with QX, But which the you million improvement we you was payments difference fiscal business, in those As had the felt an MVC MVC That's QX deficiency within for different. EBITDA typical that the volumes for look of was QX the the the that making

Sunil Sibal

of in do are there's couple What rig been Doug, in back this you sure I you of read, expect the the not But do I'm mean quarters? activity-wise? What the think you U.S. volumes? what the to your all half quarter Permian. seeing we and I about reductions what next seeing much --

Douglas White

Yes.

those Delaware, be back with We're completions entire to recycling going biggest a in fiscal We actually for and swing We've September the be of our see expect early half our volumes are we XXX,XXX the the to online, volumetric QX on month with to produced XXX,XXX year. quarter of starting forecasted water. back swings for year. of currently here. barrels quarter coming QX highest fiscal the day lot There's seen second a and of to the

changed. for So are has our completions, investment the the track still the forecast we are the upcoming and much the That on recycling but very lower not volumes in with year.

Sunil Sibal

about mentioned with then Logistics little you logged Liquids and quantify hedges where years? And in Okay. a the that segment, regard your or in now right you the could I was Contango terms think of And the have versus propane you previous stands butanes. Contangos what in wondering if I to bit

H. Krimbill

start Contango? storage we're that have Conway, the cost I storage. gallon, around Why we more than think, pleased a at its in, with have which $X.XX don't margins storage for with our we we main same the very and blocked So the

anything, going a If have the... it's Brad, Did you So on net be to that's... positive.

Brad Cooper

see don't the right We now. market

H. Krimbill

selling frustrating where [ at a falls end word, to HOG, price year. difference up ] months, very it's It's but back when second get we just loss, on then purchase hate and gaining that it you the the in a because we Wake the I of which we that profits. We've a X several half actually timing in the referred and for next if market are price you're at Yes. the as

Operator

[Operator today Instructions] JPMorgan. coming is Our from from next Hamid Tarek question

Nevin Mathew

little a begin just I to the This ask bit on the start. focus the more to to the wanted profit Tarek. paying is whether on paying redeeming timing the for press dividend is about and we're Nevin

H. Krimbill

Yes.

at each I looking we we're think other... --

those. the refi, think I that and for that's will to I obviously, the partnership over think we're on where to first, But I we we're around. X probably and the the guess and executing operationally X continue contemplate position to next hyper-focused. post a caught quarters something will first kick it's we're My probably hyper-focused and averages where decision up on laser-focused, refi try refi, that's think and be and I get think is

Brad Cooper

clarify, to and just the equity we we have buy allowed investors. open I with the the trade, at to but are and go private into market So know these not want Bs we pref. are some And Cs

go it's those. out So difficult to and buy

an would the Cs Ds. You to and Bs, all make have to offer

So it would pref. be difficult buy back the to

Nevin Mathew

second your Got you. in Basin. industry water get to want the the around thoughts in And Delaware potential consolidation

H. Krimbill

We have good means I guess are lot a around silence questions. of here. these that

some that We're unit with I at position do a sense. makes we not $X. price think it in can where a

away. it that's, don't think a to I So I to it, lot know right but there's of make logic it that -- happens again,

Operator

this no time. for like Brad are at would further Cooper queue comments. turn there to closing back questions And to I floor in the now

Brad Cooper

we'll for be joining you progress quarter. first guys Thank to continue the We're more here talk laser-focused a on the with Again, guys, to It's you, few the us we've made. And refinance. today. months. you. Thank in happy

Operator

call. does conclude today's This conference

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

NGL Energy Partners (NGL) 9 Aug 232024 Q1 Earnings call transcript