NGL — NGL Energy Partners LP

NGL Energy Partners Q3 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted EBITDA: $172.5 million, up 9.2% from $158 million in Q3 2025.
• Water Solutions Segment EBITDA: $154.5 million, a 16.5% increase from $132.7 million year-over-year.
• Crude Oil Logistics EBITDA: $15.4 million, down from $17.3 million in the prior year.
• Liquids Logistics EBITDA: $15.2 million, decreased from $18.6 million year-over-year.
• Water Disposal Volumes: Record of 3.07 million barrels per day, up 17.1% from 2.6 million barrels per day in Q3 2025.
• Operating Expenses: Reduced to $0.18 per barrel due to nonrecurring expense reductions.
• Common Unit Repurchases: 1.6 million units repurchased this quarter; total of 8.7 million units repurchased since inception of the program.

2. Strategic Updates and Business Highlights

• Continued focus on water solutions, with plans to eliminate higher-cost Class D preferred equity and further repurchase common units.
• Successful execution of growth projects in the Delaware Basin, including the Western Express pipeline expansion.
• Implementation of AI and machine learning initiatives aimed at improving operational efficiencies.
• MOU signed with Natura Resources for a nuclear power-based water treatment project, progressing towards a discharge permit.

3. Forward Guidance and Outlook

• Full-year EBITDA guidance maintained at $650 to $660 million for fiscal 2026.
• Anticipation of exceeding $700 million in EBITDA for fiscal 2027, supported by new contracted volumes coming online.
• Continued focus on securing additional disposal contracts and expanding operational capabilities.

4. Bad News, Challenges, or Points of Concern

• Crude Oil Price Volatility: Concerns about the impact of fluctuating crude prices on producer commitments and future growth projects.
• Declining EBITDA in Certain Segments: Notable decreases in EBITDA for Crude Oil and Liquids Logistics segments compared to the prior year.
• Weather Impact: Temporary reduction in disposal volumes due to extreme cold weather in January, though not expected to materially affect full-year guidance.

5. Notable Q&A Insights

• Management expressed confidence in the stability of growth projects despite crude price volatility, citing long-term volume commitments from customers.
• Discussions around the Natura project highlighted that there are no immediate capital obligations for NGL, and the focus remains on scaling treatment capabilities over time.
• AI initiatives are expected to yield improvements in operational efficiency, although quantifying the exact financial impact remains challenging at this stage.

Overall, NGL Energy Partners reported a solid quarter with strong performance in water disposal, while navigating challenges in certain segments and external market conditions. The company is strategically positioning itself for future growth through operational improvements and innovative projects.