NGL Energy Partners LP (NGL) 2025 Q1 法說會逐字稿

Thank you for standing by. My name is Max, and I will be your conference operator for today. At this time I would like to welcome everyone to NGL Energy Partners' first-quarter 2025 earnings call. (Operator Instructions)

謝謝你的支持。我叫馬克斯，今天我將擔任你們的會議操作員。現在，我謹歡迎大家參加 NGL Energy Partners 的 2025 年第一季財報電話會議。（操作員說明）

I would now like to turn the call over to Brad Cooper, CFO. Please go ahead.

我現在想將電話轉給財務長 Brad Cooper。請繼續。

Good afternoon, and thank you to everyone for joining us on the call today. Our comments today will include plans, forecasts and estimates that are forward-looking statements under the US securities law. These comments are subject to assumptions, risks, and uncertainties that could cause actual results to differ from the forward-looking statements. Please take note of the cautionary language and risk factors provided in our presentation materials and our other public disclosure materials.

下午好，感謝大家今天加入我們的電話會議。我們今天的評論將包括根據美國證券法屬於前瞻性陳述的計劃、預測和估計。這些評論受到假設、風險和不確定性的影響，可能導致實際結果與前瞻性陳述不同。請注意我們的簡報資料和其他公開揭露資料中提供的警告性語言和風險因素。

Let's get into the quarterly results. Our results for the quarter were strong across all three business units. Water solutions, crude oil logistics, and liquids logistics all met or beat our internal expectations. Consolidated adjusted EBITDA for the quarter came in at $144.3 million in the first quarter. I'm happy to report the performance from the first quarter has carried over to the start of our second quarter.

讓我們來看看季度業績。我們本季所有三個業務部門的業績均表現強勁。水解決方案、原油物流和液體物流都達到或超越了我們的內部預期。第一季合併調整後 EBITDA 為 1.443 億美元。我很高興地報告第一季的業績延續到第二季​​初。

The butane blending season will begin soon while wholesale propane is dependent on winter weather and heating demand, as you are very well aware. The water solutions segment continues to perform quite well with physical disposal volumes averaging approximately 2.7 million barrels per day in the month of July. When you include deficiency volumes in July, we will be paid on approximately 3 million barrels per day.

丁烷混合季節即將開始，而丙烷批發取決於冬季天氣和供暖需求，這一點您非常清楚。水解決方案部門持續表現良好，7 月的平均實體處理量約為每天 270 萬桶。如果算上 7 月的短缺量，我們每天將獲得約 300 萬桶的報酬。

As mentioned on our year-end call in early June, we also achieved other nonoperational milestones during the quarter. First, we announced the sale of two ranches in Eddy and Lea Counties for a total of approximately $70 million. Second, on April 25, we made our last arrears payment on the preferred Class B, C, and D. This made us current on all preferred classes. On June 21, the Board of Directors of our general partner declared a quarterly distribution for the preferred Class B, C, and Ds that was paid on July 15.

正如我們在 6 月初的年終電話會議中提到的，我們在本季也實現了其他非營運里程碑。首先，我們宣布以總計約 7000 萬美元的價格出售埃迪縣和利縣的兩個牧場。其次，4 月 25 日，我們支付了首選 B、C 和 D 類的最後一筆欠款。6 月 21 日，我們的普通合夥人董事會宣布對 B、C 和 D 類優先股進行季度分配，並於 7 月 15 日支付。

Third, on June 5, the Board of Directors authorized a common unit repurchase program, which allows us to repurchase up to $50 million of our outstanding units. This program does not have a fixed expiration date. Currently, we have not purchased any common units under this program as we have been managing the LEX II spend as well as our seasonal liquids inventory builds.

第三，6 月 5 日，董事會批准了一項普通單位回購計劃，該計劃允許我們回購高達 5,000 萬美元的已發行單位。該計劃沒有固定的到期日。目前，我們尚未根據該計劃購買任何通用設備，因為我們一直在管理 LEX II 支出以及季節性液體庫存建設。

Fourth, after the quarter ending June 30 and under the terms of the Term Loan B agreement, we repriced and amended the SOFR margin from 450 basis points to 375 basis points which reduces our interest expense by $5.25 million per year. We closed the repricing earlier this week on August 5.

第四，在截至6 月30 日的季度之後，根據定期貸款B 協議的條款，我們重新定價並修改了SOFR 利潤率，從450 個基點調整為375 個基點，這使我們每年的利息支出減少了525 萬美元。我們於本週早些時候於 8 月 5 日結束了重新定價。

Water solutions' adjusted EBITDA was $125.6 million in the first quarter versus $123.2 million in the prior first quarter. Physical water disposal volumes were 2.47 million barrels per day in the first quarter versus 2.4 million barrels per day in the prior first quarter. Total volumes we were paid to dispose that includes deficiency volumes were 2.59 million barrels per day in the first quarter versus 2.49 million barrels per day in the prior first quarter. So total volumes we were paid to dispose of were up 4%, first quarter of fiscal '25 over first quarter of fiscal '24.

Water Solutions 在第一季調整後 EBITDA 為 1.256 億美元，而上一季為 1.232 億美元。第一季的實際水處理量為每天 247 萬桶，而上一季的實際水處理量為每天 240 萬桶。第一季我們收到的處置總量（包括不足量）為 259 萬桶/日，上一季為 249 萬桶/日。因此，25 財年第一季我們支付的處置總量比 24 財年第一季成長了 4%。

The team continues to find ways to keep operating expenses low in the face of rising costs. Operating expenses in water solutions in Q1 were $0.24 compared to $0.25 for the same quarter of one year ago. The LEX II water pipeline project with initial capacity of 200,000 barrels per day that is expandable to 500,000 barrels per day is on schedule with an in-service date in October.

面對成本上升，團隊不斷尋找保持較低營運費用的方法。第一季水解決方案的營運費用為 0.24 美元，而去年同期為 0.25 美元。LEX II輸水管道計畫初始容量為每天20萬桶，可擴展至每天50萬桶，並按計畫於10月投入使用。

Crude oil Logistics adjusted EBITDA was $18.6 million in the first quarter of fiscal '25 versus $23.8 million in the prior year's first quarter. Crude oil margins were lower 1Q over 1Q primarily due to lower volumes from production on acreage dedicated in the DJ Basin. This was partially offset by higher tariff revenue on the Grand Mesa pipeline from signing up a new shipper during the open season that ended on January 5, 2024, as well as higher quality differentials realized in the current quarter. Physical volumes on the Grand Mesa pipeline averaged approximately 63,000 barrels per day compared to approx 72,000 barrels per day for the same quarter in fiscal '24.

2025 財年第一季原油物流調整後 EBITDA 為 1,860 萬美元，去年第一季為 2,380 萬美元。第一季原油利潤率低於第一季度，主要是由於 DJ 盆地專用面積產量減少。這被 Grand Mesa 管道在 2024 年 1 月 5 日結束的開放季節期間簽約新托運人帶來的更高關稅收入以及本季度實現的更高質量差異所部分抵消。Grand Mesa 管道的實際交易量平均約為每天 63,000 桶，而 2024 財年同一季度的實際交易量約為每天 72,000 桶。

Liquids logistics adjusted EBITDA was $11.5 million in the first quarter versus $4.7 million in the prior first quarter. Butane lending margins and volumes were stronger than our expectations for the quarter. This has set the butane business up for a nice fiscal '25. Product margins, excluding derivatives for refined products, were lower as the supply issues seen in certain markets in the prior year, resulting in higher margins were resolved and supply and demand was more in balance. The first quarter is typically the low point of the EBITDA stream for the Liquids segment. So it's nice to see a strong first quarter from this business unit.

第一季液體物流調整後 EBITDA 為 1,150 萬美元，上一季為 470 萬美元。丁烷貸款利潤率和數量強於我們對本季的預期。這為丁烷業務奠定了良好的 25 財年基礎。產品利潤率（不包括成品油衍生品）較低，因為上一年某些市場出現的供應問題導致利潤率上升，供需更加平衡。第一季通常是液體部門 EBITDA 流的最低點。因此，很高興看到該業務部門第一季的強勁表現。

I would just like to summarize how you should think about our first-quarter results before I turn it over to Mike. All three segments exceeded our expectations for this quarter. LEX II construction is on track and is expected to go in service as planned. We are managing our balance sheet during our butane and propane build season and during the buildout of the LEX II pipeline have opportunistically reduced interest expense on the term loan B. We are reaffirming our full year guide of $665 million of EBITDA for the partnership and $550 million to $560 million for water solutions.

在我將其交給麥克之前，我只想總結一下您應該如何看待我們第一季的業績。這三個部分都超出了我們對本季的預期。LEX II 建設已步入正軌，預計將按計劃投入使用。我們在丁烷和丙烷建設季節以及LEX II 管道建設期間管理我們的資產負債表，並伺機減少了定期貸款B 的利息支出。 550 美元100 萬至 5.6 億美元用於水解決方案。

With that, I would now like to turn the call from our CEO, Mike Krimbill. Mike?

現在，我想轉接我們執行長 Mike Krimbill 的電話。麥克風？

Thanks, Brad. Good afternoon, everyone. We are pleased this quarter and off to a good start this new fiscal year. That said, we do not manage NGL on a quarterly short-term basis, as you would expect, we are looking out over multiyear periods of time. For instance, in the Water Solutions business, we see positive trends for the short, medium and long term.

謝謝，布拉德。大家下午好。我們對這個季度感到高興，並在新的財政年度取得了良好的開端。也就是說，我們不會像您所期望的那樣按季度短期管理 NGL，而是在多年的時間內進行管理。例如，在水解決方案業務中，我們看到了短期、中期和長期的正面趨勢。

We have this year's EBITDA guidance above last year actual. But quarterly, it is impacted by customer recycling, drilling programs and completion schedules. Medium and long term, we are seeing the Delaware Basin expanding north in Lee County, which will bring additional to these water volumes in the future. We are working on continued expense reductions and new revenue streams, but do not announce them until proven to generate EBITDA.

我們今年的 EBITDA 指引高於去年的實際值。但按季度來看，它會受到客戶回收、鑽探計劃和完工時間表的影響。從中長期來看，我們看到特拉華盆地向李縣北部擴張，這將在未來帶來更多的水量。我們正在致力於持續削減開支和創造新的收入來源，但在證明可以產生 EBITDA 之前不會宣布這些內容。

With respect to crude oil logistics in the DJ Basin, we see positive signs for the short and medium terms. It appears that volumes produced and are flowing into the basin could be increasing. The long term is still influenced by politics, environmental and regulatory factors. We have not been willing to contract our Grand Mesa capacity at rates below $1 to $1.25 per barrel before expenses. We do believe that we are close to or at the bottom of the cycle with the segment.

就 DJ 盆地的原油物流而言，我們看到短期和中期的正面跡象。看來生產量和流入該盆地的量可能會增加。長期來看仍受政治、環境和監管因素影響。我們不願意以低於費用前每桶 1 至 1.25 美元的價格承包 Grand Mesa 產能。我們確實相信，該領域已接近或處於週期底部。

Regarding liquids logistics, this is our most volatile segment, especially with a portion being dependent on normal to cold winter weather, which hasn't shown up for several years. This is not a business we anticipate expanding nor do we expect significant growth, but we do have some internal growth opportunities. We continue to focus on the balance sheet, debt reduction and internal growth at attractive multiples. Remember that reduced leverage is a function of both lower debt balances and increased EBITDA.

關於液體物流，這是我們最不穩定的部分，特別是其中一部分依賴正常到寒冷的冬季天氣，而這種情況已經好幾年沒有出現了。這不是我們預期會擴張的業務，也不會顯著成長，但我們確實有一些內部成長機會。我們繼續關注資產負債表、債務削減和具有吸引力倍數的內部成長。請記住，槓桿率的降低是債務餘額降低和 EBITDA 增加的結果。

So operator, with that, please open the line for Q&A.

那麼接線員，請開通問答線。

(Operator Instructions) Sunil Sibal, Seaport Research Partners.

（操作員指示）Sunil Sibal，海港研究夥伴。

So I just wanted to start off on the water side of the business. It seems like your volumes versus fee per barrel handle has been -- especially the fee has been moving around a bit. Could you talk a little bit about some of the moving parts there? And more importantly, I think you talked about next quarter your fee-based volumes seems like it will be pretty strong. But how should we think about per barrel fee number going forward?

所以我只想從水方面的業務開始。看起來你的交易量與每桶處理費用的關係一直在變化——尤其是費用一直在波動。您能談談其中的一些活動部件嗎？更重要的是，我認為您談到下個季度您的收費量似乎會非常強勁。但我們該如何考慮未來的每桶費用？

I had a little hard time hearing the question. I think it was around revenue per barrel for the quarter, which I think if we're up about $0.01, I think, from the previous year's quarter. I think as we -- we've been very clear in how we contract. As we contract on the water side of the world, we're obviously looking for MVCs and acreage dedication. Those MVCs were willing to give a little bit, I guess, on rate to get a longer-term contract within MVC.

我聽這個問題有點困難。我認為這與本季每桶收入有關，我認為如果我們比上一年季度上漲約 0.01 美元。我認為我們對於如何簽訂合約已經非常清楚了。當我們在世界的水一側簽訂合約時，我們顯然正在尋找 MVC 和麵積奉獻。我想，那些 MVC 願意在費率上付出一點點，以獲得 MVC 內的長期合約。

We did have recall the Poker Lake step-up January 1 of '24, another 100,000 barrels. That rate is probably a little bit lighter relative to other contracts in the portfolio. So it's a little bit hard to truly reconcile to the penny. But yes, volumes are starting off really strong for the second quarter. Q1 probably a little bit impacted by recycling, but the start of Q2, July looks really strong.

我們確實記得 Poker Lake 於 2024 年 1 月 1 日增加了 100,000 桶。相對於投資組合中的其他合約，該利率可能會更低。所以要真正與一分錢協調起來有點困難。但是，是的，第二季的銷售量開始非常強勁。第一季可能有點受到回收的影響，但第二季開始時，7 月看起來確實很強勁。

Okay. And then since you mentioned that your MVCs are probably higher percentage of the total volumes, how should we think about the average remaining length on the contracts that you have with the MVCs?

好的。既然您提到您的 MVC 可能佔總交易量的比例較高，那麼我們應該如何考慮您與 MVC 簽訂的合約的平均剩餘期限？

Yes. I think it's in the presentation materials, I believe, it's what, roughly nine years, I think, on the contract life?

是的。我認為在演示材料中，我相信，合約期限大約是九年？

Yes. Yes. This is David Sullivan. Yes, we have the MVCs, the percentage of MVC volumes will happen the water disposal will go up. We will be about 40% to 45% once the LEX II project comes on. That's where we'll be as long as percentage of our volumes that are MVC-related. It will be some -- yes.

是的。是的。這是大衛·沙利文。是的，我們有 MVC，MVC 體積的百分比將發生水處理將會上升。一旦 LEX II 專案啟動，我們的比例將達到 40% 到 45% 左右。這就是我們與 MVC 相關的捲的百分比。是的，會有一些。

Patrick Fitzgerald, Baird.

派崔克·菲茨杰拉德，貝爾德。

Congrats on getting caught up with the preferred, but those are pretty expensive instruments at this point. Could you talk about your plan to deal with those going forward? And in particular, the Class D, what it costs to take those out? And would you consider doing something with that to take those out potentially.

恭喜您找到了首選工具，但目前這些工具都相當昂貴。您能談談您未來處理這些問題的計劃嗎？特別是 D 級，去掉它們要花多少錢？您是否會考慮對此採取措施以消除這些潛在的可能性。

You bet. Yes, the way that our free cash flow builds through the year, it's really back-end loaded. So a bulk of our free cash flow comes in, in Q3, Q4. Obviously, with the LEX II project this year, heavy capital burden in the first couple of quarters. But as we see the free cash flow unwinding or coming to us, I guess, in Q3 and Q4 and the working capital unwinding the back end of the fiscal year, our plan would be to utilize those dollars and start making redemption payments on the Class Ds.

你打賭。是的，我們全年自由現金流的成長方式，確實是後端負載的。因此，我們大部分的自由現金流來自第三季、第四季。顯然，隨著今年LEX II計畫的實施，前幾季的資本負擔很重。但當我們看到自由現金流在第三季和第四季逐漸減少或來到我們身邊時，以及營運資金在本財年末逐漸減少時，我們的計劃將是利用這些美元並開始對該類別進行贖回付款Ds。

I think our free cash flow over the next couple of years can comfortably address the Class Ds. If there was a market opportunity, I guess, to take out some debt to look at additionally knocking down the Ds, we would consider it. But I think for us right now, just being very, very pragmatic with how we spend our free cash flow and attack the Ds through free cash flow and asset sales.

我認為我們未來幾年的自由現金流可以輕鬆解決 D 類問題。我想，如果有市場機會，可以拿出一些債務來考慮進一步降低 Ds，我們會考慮它。但我認為現在對我們來說，我們要非常非常務實地對待我們如何使用我們的自由現金流，並透過自由現金流和資產出售來攻擊 D。

Okay. But you have nothing on the horizon in terms of, like, big asset sales to -- so you're going to be paying those for -- in all your preferreds for a while, I guess, is the intel free cash flow is generated enough to take them out?

好的。但在一段時間內，在你所有的偏好中，你沒有任何東西，比如大規模資產出售——所以你將支付這些費用——我猜，是英特爾自由現金流產生了足夠把他們幹掉嗎？

That's correct. Yes. That's our current base plan.

這是正確的。是的。這是我們目前的基本計劃。

Okay. Could you just talk about the step-up to 2.7 million barrels a day in July from the average in the fiscal first quarter? And then you're getting paid on 3 million barrels a day. What did you get paid on in the first quarter, I guess, is would be the question. And then why did it step up so significantly?

好的。您能否談談 7 月日產量較第一財季平均上升至 270 萬桶的情況？然後你每天就能得到 300 萬桶的報酬。我想，你在第一季獲得的報酬是什麼，這將是一個問題。那麼為什麼它的增幅如此之大呢？

Yes. Yes, really, the first quarter, I think, as I mentioned earlier, impacted by recycling. So as producers are using water on location to frack wells. At some point, that flush water production is going to come our way. That's what we're seeing at the start of the second quarter.

是的。是的，確實，正如我之前提到的，我認為第一季受到了回收的影響。因此，生產商在現場用水壓裂井。在某個時刻，沖廁的生產將會到來。這就是我們在第二季初看到的情況。

I think Mike hit on his comments, we will see some lumpiness in volumes day-to-day, month-to-month as a result of producers in their completion cadence. For the quarter. First quarter, yes, for the quarter, we got paid on -- about almost 2.6 million barrels, 2.59 million barrels.

我認為麥克談到了他的評論，由於生產商的完成節奏，我們會看到每天、每月的銷售量出現一些波動。對於本季。第一季度，是的，我們在這個季度獲得了付款——大約 260 萬桶、259 萬桶。

All right. And then I guess you talked about this last quarter, you talked about this quarter, but like why do you think we're at the bottom here for crude logistics in the DJ?

好的。然後我想您談到了上個季度，您談到了本季度，但是您為什麼認為我們在 DJ 的原油物流方面處於底部？

I just think that producers are starting to -- it's more efficient that add rigs, we are anticipating an increase in the volume.

我只是認為生產商開始——增加鑽機效率更高，我們預計產量會增加。

Jason Mandel, RBC Capital Markets.

傑森‧曼德爾，加拿大皇家銀行資本市場。

I just wanted to follow up from a comment, I think, from the last conference call about exploring strategic alternatives on a portion of the Liquids business. Any updates to that? It sounds like you may be thinking about some asset sales but not the whole business? So just any clarity would be helpful.

我想我只是想跟進上次電話會議上關於探索部分液體業務的戰略替代方案的評論。有更新嗎？聽起來您可能正在考慮出售一些資產，而不是整個業務？所以任何清晰度都會有幫助。

Yes. No updates at this time. I think we'll just continue to look at opportunities to come our way. But no updates on that business at this point in time.

是的。目前沒有更新。我認為我們將繼續尋找機會。但目前尚無該業務的最新消息。

(technical difficulty) questions. I will now turn the conference back over to Brad Cooper for closing remarks

（技術難度）問題。我現在將把會議轉回布拉德·庫柏致閉幕詞

Thanks, everyone, for your interest in NGL. We look forward to catching up with everyone in a couple of months on the fiscal '25 second-quarter call. Thanks, and have a nice weekend.

謝謝大家對 NGL 的關注。我們期待在幾個月後的 25 財年第二季電話會議上與大家見面。謝謝，祝週末愉快。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。