NGL Energy Partners saw drop in quarterly net income

NGL Energy Partners LP saw its net income fall in the third quarter of Fiscal 2024.

The Tulsa company reported net income of $45.8 million compared to $59 million for the third quarter of Fiscal 2023. Adjusted EBITDA was $151.7 million, down from $193.3 million a year earlier.

Still, company leaders are optimistic since announcing an open season for its Grand Mesa Pipeline in Decemberand closing with a five-year minimum volume commitment contract. They believe total asset sales in Fiscal 2025 will be $150 million plus compared to the previous guidance of $100 million plus.

There are other happenings that give optimism to the company leadership.

• On January 19, 2024, we delivered notice to the holders of our 2025 and 2026 senior unsecured notes and to the holders of our 2026 senior secured notes of our intention to redeem all of the existing notes. The 2026 senior secured notes were redeemed on February 6, 2024, and the 2025 and 2026 senior unsecured notes will be redeemed on February 20, 2024 and April 14, 2024, respectively.
• On January 22, 2024, we announced that our Water Solutions business is commencing expansion of its Lea County Express Pipeline System from a capacity of 140,000 barrels of water per day to 340,000 barrels per day in 2024, with the ability to expand the capacity to 500,000 barrels of water per day. This project is fully underwritten by a recently executed minimum volume commitment contract that includes an acreage dedication extension with an investment grade oil and gas producer. We expect the pipeline expansion to be completed during the second half of our 2025 fiscal year.
• On February 2, 2024, we closed a debt refinancing transaction of $2.9 billion consisting of a private offering of $2.2 billion of senior secured notes, which includes $900.0 million of 8.125% senior secured notes due 2029 and $1.3 billion of 8.375% senior secured notes due 2032. We also entered into a new seven-year $700.0 million senior secured term loan “B” credit facility. The net proceeds from these transactions were used and will primarily be used to fund the redemption of the 2026 senior secured notes and the 2025 and 2026 senior unsecured notes.
• On February 6, 2024, the Board of Directors of our general partner declared a distribution of 50% of the outstanding arrearages earned for Class B, Class C, and Class D preferred unit holders through December 31, 2023. The distribution will be made on February 27, 2024 to the holders of record at the close of trading on February 16, 2024.

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