This article first appeared on GuruFocus .
Release Date: May 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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NGL Energy Partners LP ( NYSE:NGL ) reported a strong finish to fiscal 2026 with record performance in its water solutions segment.
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Adjusted EBITDA from continuing operations reached approximately $660 million, at the high end of guidance, driven by the water solution segment.
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The company successfully completed a $950 million refinancing transaction, extending maturities and reducing high-cost capital.
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NGL Energy Partners LP ( NYSE:NGL ) bought back 8.7 million common units at an attractive price, reflecting confidence in its multi-year strategy.
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The Water Solutions segment achieved a 10% increase in physical volumes disposed in the fourth quarter, with operating expenses per barrel improving.
Negative Points
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The company incurred a goodwill impairment charge, impacting income from continuing operations.
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Despite progress, the capital structure still includes high-cost Class D preferred units, which the company aims to reduce further.
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The crude oil logistics segment reported relatively low adjusted EBITDA of approximately $17 million for the quarter.
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The Liquids Logistics segment has been significantly streamlined, resulting in a smaller, less volatile business with reduced seasonality.
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Growth capital expenditures for fiscal 2027 are substantial, with $200 million planned, primarily for the LEX II expansion.
Q & A Highlights
Q: With regard to the growth CapEx of $200 million for 2027, does that include growth projects beyond the LEX 2 expansion? A: A bulk of that $200 million is for the LEX 2 expansion. There are some incremental projects embedded in that $200 million. - Brad Cooper, CFO
Q: How would you characterize the split between new and existing clients for underwriting the LEX 2 expansion capacity, and is there a need for further expansion up to 650,000 barrels? A: We amended and extended an existing agreement, which included longer-term, additional barrel count, volume commitments, and a large four township dedication. There is an incredible amount of demand for additional capacity in the basin. - Doug
Q: What are you hearing around plans of acceleration beyond just the pull forward in activity that most independents announced during Q1 earnings? A: The pull forward has been significant. More importantly, the dearth of available capacity with at least 10% growth in water volumes has driven a lot of interest in new underwriting and projects. - Doug
Q: How would you characterize the opportunities for beneficial reuse and other next-gen opportunities, particularly on the water desalination side? A: We are making progress on previously announced projects. We expect our draft permit from TCEQ soon, and we are advancing the energy campus project, which includes nuclear power and a data center addition. - Doug
Q: How are you thinking about the crude logistics segment and production outlook for 2027? A: We are seeing very good activity in the DJ Basin this year, with smaller players consolidating acreage and having a more cohesive development plan. We expect this uptick in activity to continue into the next fiscal years. - Doug
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
