Ngl Energy Partners Lp Stock Price, News & Analysis

NGL Energy Partners LP (NYSE: NGL) is a Delaware master limited partnership that operates a diversified midstream energy business. According to its public disclosures, the partnership focuses on transporting, treating, recycling and disposing of water generated in oil and gas production, and on transporting, storing, marketing and providing logistics services for crude oil and liquid hydrocarbons. NGL’s activities span multiple segments that support the broader energy production and transportation value chain.

Business Model and Segments

NGL Energy Partners LP reports three primary operating segments: Water Solutions, Crude Oil Logistics and Liquids Logistics. Together, these segments provide midstream services that connect upstream oil and gas production with downstream markets, while also managing byproducts such as produced and flowback water.

Water Solutions

The Water Solutions segment transports, treats, recycles and disposes of produced and flowback water generated from crude oil and natural gas production. The partnership states that it operates the largest integrated network of large diameter wastewater pipelines, disposal wells and produced water handling systems in the Delaware Basin, and it also operates wastewater disposal in the Eagle Ford and DJ Basins.

Within this segment, NGL sells produced water for reuse and recycle to producer customers for use in their crude oil exploration and production activities. As part of processing water, the partnership aggregates and sells recovered crude oil, also referred to as skim oil. Water Solutions also handles solids such as tank bottoms, drilling fluids and drilling muds and performs ancillary services such as truck washouts.

NGL notes that activities in the Water Solutions segment are underpinned by long-term, fixed fee contracts and acreage dedications, some of which contain minimum volume commitments with oil and gas producers, including large, investment grade customers. These contractual structures are intended to support the stability and visibility of volumes and fees in this segment.

Crude Oil Logistics

The Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries or to other market points for resale. This is done through pipeline injection stations, storage terminals, barge loading facilities, rail facilities and other trade hubs. The segment also provides storage, terminaling and transportation services through owned assets.

NGL’s disclosures highlight that this segment is supported by certain long-term, fixed rate contracts with acreage dedications and minimum volume commitments on storage tanks and on owned and leased pipelines. The partnership also notes that its crude oil logistics activities are supported by its ownership of the Grand Mesa Pipeline System, a crude oil pipeline system whose physical volumes are periodically discussed in its financial reports.

Liquids Logistics

The Liquids Logistics segment conducts supply operations for natural gas liquids for commercial, retail and industrial customers across the United States and Canada. These operations are conducted through five owned terminals, third-party storage and terminal facilities, nine common carrier pipelines and a fleet of leased railcars, as described in the partnership’s proxy materials.

Within this segment, NGL provides services for marine exports of butane through a facility located in Chesapeake, Virginia and also owns a propane pipeline in Michigan. The partnership explains that it seeks to reduce exposure to price fluctuations by using back-to-back physical contracts and pre-sale agreements that allow it to lock in a margin on a portion of its winter volumes. It also enters into financially settled derivative contracts as economic hedges of physical inventory, physical sales and physical purchase contracts.

Geographic Footprint and Assets

According to recent press releases, NGL’s produced water infrastructure is concentrated in key U.S. shale basins. The partnership operates a large integrated network of wastewater pipelines, disposal wells and produced water handling systems in the Delaware Basin, and it also operates wastewater disposal in the Eagle Ford and DJ Basins. In crude oil logistics, NGL’s activities are supported by the Grand Mesa Pipeline System, a Cushing terminal and other Gulf Coast terminals. In liquids logistics, the partnership uses a combination of owned terminals, third-party facilities, common carrier pipelines and leased railcars, along with its marine export facility and propane pipeline.

Partnership and Capital Structure Features

NGL Energy Partners LP is organized as a master limited partnership, with common units representing limited partner interests. The partnership has also issued multiple classes of preferred units, including Class B, Class C and Class D preferred units, for which its board of directors periodically declares quarterly cash distributions in accordance with the partnership agreement. Public announcements describe floating rate cumulative redeemable perpetual preferred units in the Class B and Class C series, and separate quarterly cash distributions for Class D preferred units.

The partnership’s public communications discuss non-GAAP financial measures such as EBITDA, Adjusted EBITDA and Distributable Cash Flow. NGL defines EBITDA as net income or loss attributable to the partnership plus interest expense, income tax expense or benefit, and depreciation and amortization expense. Adjusted EBITDA is defined as EBITDA excluding items such as net unrealized gains and losses on derivatives, lower of cost or net realizable value adjustments, gains and losses on disposal or impairment of assets, gains and losses on early extinguishment of liabilities, revaluation of liabilities and other items. Distributable Cash Flow is defined as Adjusted EBITDA minus maintenance capital expenditures, income tax expense, cash interest expense, preferred unit distributions paid and other items.

NGL explains that these measures are used by management to evaluate financial performance, to assess the ability to make quarterly distributions to unitholders and to compare cash flows to planned distributions. The partnership notes that these non-GAAP measures should not be considered as alternatives to GAAP metrics and that definitions may differ from similarly titled measures used by other entities.

Governance and Unitholder Matters

As a publicly traded partnership, NGL Energy Partners LP holds meetings of unitholders to vote on matters such as long-term incentive plans and the ratification of its independent registered public accounting firm. A recent definitive proxy statement describes a special meeting of unitholders to consider approval of the NGL Energy Partners LP 2025 Long-Term Incentive Plan, ratification of the appointment of Grant Thornton LLP as independent registered public accounting firm for a fiscal year, and a proposal to approve the adjournment or postponement of the special meeting if necessary to continue soliciting votes.

The proxy materials explain that only holders of record of common units as of a specified record date are entitled to notice of and to vote at such meetings. They also describe how beneficial owners whose units are held by brokers must provide voting instructions, and how broker non-votes can occur under New York Stock Exchange rules when brokers lack discretionary authority on certain proposals.

Tax and Regulatory Disclosures

Certain NGL press releases are identified as qualified notices under Treasury Regulation Section 1.1446-4(b). In these notices, the partnership states that brokers and nominees should treat 100% of NGL Energy Partners LP’s distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business, and that such distributions are subject to federal income tax withholding at the highest applicable effective tax rate.

The partnership also announces the availability of Schedule K-3s reflecting items of international tax relevance for unitholders who may need detailed information for their federal income tax reporting, such as foreign unitholders, unitholders computing a foreign tax credit and certain corporate or partnership unitholders.

Financial Reporting and Guidance

NGL Energy Partners LP regularly reports financial results for its fiscal quarters and fiscal years, including income from continuing operations, Adjusted EBITDA from continuing operations and segment-level operating income and Adjusted EBITDA. The partnership also discusses produced water volumes processed in its Water Solutions segment, physical volumes on the Grand Mesa Pipeline in its Crude Oil Logistics segment and operating income trends in its Liquids Logistics segment.

In its communications, NGL sometimes provides guidance for future consolidated Adjusted EBITDA and capital expenditures, and explains that it does not provide reconciliations of forward-looking non-GAAP measures to the most directly comparable GAAP measures when such reconciliations are not practical due to the difficulty of forecasting event-driven and non-core items. The partnership notes that the exclusion of such items may have a significant impact on Adjusted EBITDA and that forward-looking non-GAAP measures may vary materially from corresponding GAAP measures.

How NGL Fits Within the Midstream Energy Sector

Based on its own descriptions, NGL Energy Partners LP positions itself as a diversified midstream energy partnership with operations that span water management, crude oil logistics and natural gas liquids logistics. Its Water Solutions segment focuses on handling produced and flowback water and associated byproducts, supported by long-term contracts and acreage dedications. Its Crude Oil Logistics segment connects crude oil production to refineries and market hubs through pipelines, terminals and other infrastructure. Its Liquids Logistics segment manages the supply and movement of natural gas liquids and related products using terminals, pipelines, railcars and marine export capabilities.