NGL Energy Partners LP

What they do

NGL Energy Partners operates through three segments: Water Solutions (transporting, treating, recycling, and disposing of produced water, plus selling recovered crude oil), Crude Oil Logistics (purchasing and transporting crude oil to refineries and trade hubs), and Liquids Logistics (supplying NGLs to commercial, retail, and industrial customers). The company is actively divesting non-core assets to simplify its business mix.

Revenue drivers

• Water Solutions — Generates revenue from long-term, fixed-fee contracts with minimum volume commitments, water disposal fees, pipeline revenues, and sale of recovered crude oil. Segment operating income increased $53.6 million in the latest quarter due to higher disposal volumes and pipeline revenues.
• Crude Oil Logistics — Revenue comes from purchasing and reselling crude oil, with storage, terminaling, and transportation services. Segment operating income increased $5.2 million in the latest quarter, driven by derivative gains partially offset by lower product margins.
• Liquids Logistics — Provides NGL supply operations through owned terminals, common carrier pipelines, and leased railcars, with a focus on butane and propane. Segment operating income decreased $7.4 million in the latest quarter due to a prior-year asset sale gain, partially offset by higher butane margins and service revenue.

Recent performance

For the three months ended June 30, 2026, revenue was $989.992 million, up from $622.156 million in the prior-year period, driven by higher water disposal volumes and pipeline revenues. Operating income rose to $145.319 million from $97.450 million, and Adjusted EBITDA from continuing operations increased to $186.218 million from $143.972 million. Net income attributable to NGL was $78.732 million versus $68.922 million in the prior-year period. The company recorded $80.046 million of income from continuing operations, with $35 thousand from discontinued operations.

Strategy

Management is focused on becoming a 'pure play' water solutions company, divesting refined products, wholesale propane, and other non-core assets. The company completed dispositions in April 2025, including the sale of certain water solutions assets, refined products business, and most of wholesale propane. In May 2026, NGL announced a further expansion of its Lea County Express Pipeline System (LEX II) to increase capacity by 165,000 barrels of water per day, underwritten by a new long-term volume commitment contract. The expansion is expected to be in service by the end of calendar 2026 and is expandable up to 650,000 barrels per day.

Risks

• Liquidity and debt — As of June 30, 2026, long-term debt was $3.26 billion with only $5.1 million in cash, and the company may not have sufficient cash flow to fund operations, repay debt, or pay distributions.
• Dependence on oil and gas producers — Operations depend on the willingness and ability of third parties to drill and produce crude oil and natural gas; any reduction in drilling activity could lower volumes and revenues.
• Commodity price and demand risk — Declining demand for hydrocarbons, lower commodity prices, and reduced production volumes can adversely affect margins and asset utilization.
• Interest rate exposure — Higher interest rates increase financing costs, which could impact common unit price, preferred distributions, and the ability to raise capital.

Outlook

Management expects the LEX II expansion to add 165,000 barrels per day of water disposal capacity by the end of calendar 2026, supported by new minimum volume commitments. The company continues to execute its strategy of simplifying the portfolio, with recent divestitures reducing the number of segments and focusing on water solutions. There are no forward-looking quantitative guidance figures provided in the filings beyond the expansion timeline.