NGL Energy Partners LP (NGL) 2025 Q2 法說會逐字稿

Greetings. Welcome to the NGL Energy Partners second quarter '25 earnings conference call. (Operator Instructions) Please note, this conference is being recorded.

問候。歡迎參加 NGL Energy Partners '25 年第二季財報電話會議。（操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Brad Cooper, CFO. You may begin.

我現在將會議交給主持人、財務長布拉德庫柏 (Brad Cooper)。你可以開始了。

Good afternoon and thank you to everyone for joining us on the call today.

下午好，感謝大家今天加入我們的電話會議。

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.

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。

Consolidated adjusted EBITDA came in at $147.3 million for the second quarter. The consolidated adjusted EBITDA was primarily driven by our water solutions and crude logistics segments. The butane blending season began after the quarter ended and wholesale propane is dependent on winter weather and heating demand, as you are very well aware, and should contribute to the third and fourth quarter's results.

第二季綜合調整後 EBITDA 為 1.473 億美元。綜合調整後 EBITDA 主要由我們的水解決方案和原油物流部門推動。丁烷混合季節在季度結束後開始，丙烷批發取決於冬季天氣和供暖需求，這一點您非常清楚，並且應該對第三季度和第四季度的業績做出貢獻。

In early August, 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 approximately $5.25 million per year.

8 月初，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約 525 萬美元。

On September 19, the Board of Directors of our general partnership declared a quarterly distribution for the preferred Class B, C, and Ds that was paid on October 15. The LEX II expansion project with initial capacity of 200,000 barrels per day and is expandable to 500,000 barrels per day was placed in service in October on time.

9 月 19 日，我們的普通合夥企業董事會宣布對 B、C 和 D 類優先股進行季度分配，並於 10 月 15 日支付。LEX II擴建工程初始產能為20萬桶/日，可擴展至50萬桶/日，已於10月按時投入使用。

As we've mentioned on previous calls, this project is fully underwritten by a minimum volume commitment with an investment-grade producer. We are excited to have completed this project as it consumed much of our free cash flow over the last six months. I want to thank the folks in the field for the great work executing this project in a timely fashion.

正如我們在先前的電話會議中提到的，該項目由投資級生產商的最低數量承諾完全承保。我們很高興完成這個項目，因為它在過去六個月中消耗了我們的大部分自由現金流。我要感謝該領域的工作人員及時執行該專案所做的出色工作。

After the close of the quarter, we have entered into agreements to purchase 92% of the outstanding warrants from the Class B unitholders. These warrants were granted to the Class B preferred holders at the time of their investments back in 2019. The warrants have expiration dates in the summer and fall of 2029 with strike prices from $13.56 to $17.45. The 92% represents 23,375,000 warrants or roughly 18% of our common units outstanding today.

本季結束後，我們已達成協議，從 B 類單位持有人購買 92% 的已發行認股權證。這些認股權證是在 2019 年投資時授予 B 類優先股持有人的。認股權證的到期日為 2029 年夏季和秋季，執行價格為 13.56 美元至 17.45 美元。 92% 代表 23,375,000 份認股權證，約占我們今天流通的普通單位的 18%。

Said differently, we have eliminated a potential 18% dilution event to the common unitholders over the next five years with the purchase of these warrants. Eliminating these warrants has been a component of our long-term strategy.

換句話說，透過購買這些認股權證，我們已經消除了未來五年普通單位持有人潛在的 18% 稀釋事件。取消這些認股權證一直是我們長期策略的一部分。

Let's get into the quarterly results for the business units. Water solutions adjusted EBITDA was $182.9 million in the second quarter. Physical water disposal volumes were 2.68 million barrels per day in the second quarter versus 2.47 million barrels per day in the first quarter of this fiscal year, approximately a 9% increase quarter over quarter.

讓我們來看看業務部門的季度業績。水解決方案第二季調整後的 EBITDA 為 1.829 億美元。第二季的實體水處理量為每天 268 萬桶，而本財年第一季的實際水處理量為每天 247 萬桶，較上季成長約 9%。

Total volumes we were paid to dispose that includes deficiency volumes were 2.77 million barrels per day in the second quarter versus 2.59 million barrels per day in the first quarter of the year. So total volumes we were paid to dispose of were up approximately [7%].

第二季我們收到的處置總量（包括不足量）為 277 萬桶/日，而今年第一季為 259 萬桶/日。因此，我們支付的處理總量大約增加了[7%]。

The team continues to find ways to optimize both sides of the margin calculation. Expenses in the water solutions segment came in at $0.22 per barrel for the quarter compared to $0.24 per barrel for the first quarter of this year. The decrease in Q2 is due to lower repairs and maintenance expense as well as lower chemical expenses as we are using chemicals more efficiently.

團隊不斷尋找優化保證金計算雙方的方法。本季水解決方案部門的費用為每桶 0.22 美元，而今年第一季為每桶 0.24 美元。第二季的下降是由於維修和維護費用的減少以及化學品費用的減少，因為我們更有效地使用化學品。

Crude oil logistics adjusted EBITDA was $17.3 million in the second quarter of fiscal '25 versus $18.6 million in the first quarter of this year. Crude Oil sales averaged approximately 63,000 barrels per day for the quarter, in line with the first quarter of this fiscal year. We continue to remain optimistic on the basin and hope to have some contracting updates by the end of the calendar year.

2025 財年第二季原油物流調整後 EBITDA 為 1,730 萬美元，而今年第一季為 1,860 萬美元。本季原油銷售量平均約為每天 63,000 桶，與本財年第一季持平。我們繼續對該盆地保持樂觀態度，並希望在年底前獲得一些合約更新。

Liquids logistics adjusted EBITDA was $9.4 million in the second quarter versus $17.1 million in the prior second quarter. Our butane blending business is performing above expectations. It's too early in the year to project how wholesale propane business will play out. To date, it's been a warm start to the demand season for propane.

第二季液體物流調整後 EBITDA 為 940 萬美元，上一季為 1,710 萬美元。我們的丁烷混合業務的表現超乎預期。今年預測丙烷批發業務將如何發展還為時過早。迄今為止，丙烷需求季節已經迎來了一個溫暖的開始。

The other two businesses within liquids have underperformed versus expectations. With these second quarter results in the books, we are where we expected to be at this time of the year. We are in line with our internal expectations and consolidated budget on a year-to-date basis.

液體領域的另外兩項業務的表現低於預期。有了這些第二季的業績，我們就達到了每年這個時候的期望。年初至今，我們符合內部預期和合併預算。

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

現在，我想將電話轉給我們的執行長 Mike Krimbill。麥克風？

Thanks, Brad. Good afternoon, everyone.

謝謝，布拉德。大家下午好。

As Brad just mentioned, our first half EBITDA results are in line with our expectations. The second half may have a few challenges such as warm weather and lower crude oil prices. We are slightly reducing our EBITDA guidance for the full fiscal year to a range of $640 million to $650 million. This is a 2% to 4% reduction, which does not in any way impact our strategy going forward.

正如布拉德剛才所提到的，我們上半年的 EBITDA 表現符合我們的預期。下半年可能會面臨一些挑戰，例如天氣溫暖和原油價格下跌。我們將整個財年的 EBITDA 指引小幅下調至 6.4 億至 6.5 億美元。這是 2% 到 4% 的減少，這不會以任何方式影響我們未來的策略。

Strategically, we are, one, pursuing asset sales in the liquids logistics segment as well as a couple of smaller asset sales in the $15 million to $40 million range. In crude oil logistics, we are close to signing up additional producers on Grand Mesa that, if successful, will provide a meaningful crude oil volume increase by the start of the next fiscal year.

從戰略上講，我們的目標是，第一，尋求液體物流領域的資產出售，以及一些 1500 萬至 4000 萬美元範圍內的較小資產出售。在原油物流方面，我們即將與大梅薩的更多生產商簽約，如果成功，將在下一財年開始時大幅增加原油產量。

Water solutions segment continues to be our growth engine currently and in the foreseeable future. We have grown our out-of-basin capacity, offering optionality to our customers and thereby providing a long-term solution for the development of the Delaware Basin. We continue to believe in the growth of the Delaware Basin as producers have approached us with multiple new projects over the next 18 months. We are evaluating and expect to provide solutions for them.

水解決方案部門目前和可預見的未來仍然是我們的成長引擎。我們增加了流域外產能，為客戶提供了選擇，從而為特拉華盆地的開發提供了長期解決方案。我們仍然相信特拉華盆地的成長，因為生產商在未來 18 個月內向我們接洽了多個新項目。我們正在評估並期望為他們提供解決方案。

Fourth, finally, reducing leverage while buying back equity is a priority. We began our common unit buyback program with limited purchases this quarter and have nearly eliminated all future dilution with the warrant purchase agreements that Brad mentioned earlier.

第四，最後，在回購股權的同時降低槓桿是當務之急。我們本季開始了有限購買的共同單位回購計劃，並透過布拉德之前提到的認股權證購買協議幾乎消除了所有未來的稀釋。

The purchase of these warrants marks another milestone in our strategy of creating long-term value to the common unitholders. We are not focused on quarterly results, but are managing the partnership to create long-term value by improving asset quality, increasing long-term contracted revenues, growing our water system, repurchasing equity, and strengthening the balance sheet.

購買這些認股權證標誌著我們為普通單位持有人創造長期價值的策略的另一個里程碑。我們不關注季度業績，而是管理合作關係，透過提高資產品質、增加長期合約收入、發展供水系統、回購股權和強化資產負債表來創造長期價值。

So with that, let's go to Q&A.

那麼，讓我們進入問答環節。

(Operator Instructions) Tarek Hamid, JPMorgan.

（操作員指令）Tarek Hamid，摩根大通。

Hi. This is Nevin on for Tarek. Thank you for your time. We were just wondering how are your conversations going with customers regarding the outlook for calendar 2025.

你好。這是塔里克的內文。感謝您抽出時間。我們只是想知道您與客戶就 2025 年日曆展望的對話進展如何。

Doug, are you on the line? Doug, are you there?

道格，你在線上嗎？道格，你在嗎？

I am. Yeah, I can answer that. (multiple speakers)

我是。是的，我可以回答。（多個發言者）

You want to take that one from a water perspective?

你想從水的角度來看這個問題嗎？

Yes. The Delaware Basin continues to provide us opportunities to increase volumes. We're working very hard to maximize all the capacity on the LEX II pipeline. We're also working to create new strategies for demand in areas where our system may not be -- have as much capacity. We're also -- and lots of people forget about, we're in the DJ Basin and the Eagle Ford, both providing new opportunities.

是的。特拉華盆地繼續為我們提供增加產量的機會。我們正在非常努力地最大化 LEX II 管道的所有容量。我們也致力於為我們的系統可能不具備那麼多容量的領域的需求制定新的策略。我們也——很多人忘記了，我們位於 DJ Basin 和 Eagle Ford，兩者都提供了新的機會。

In the DJ, we're adding new contracted volumes, and we're underway amending and extending some of our existing long-term commitments. And then the Eagle Ford, with the new entrants, new producers in the Eagle Ford, we've been very successful and focused this year on increasing the volumes there as well. So across all three basins in which we operate in the Water business, we are very actively contracting new volumes for 2025 and beyond.

在 DJ 方面，我們正在增加新的合約量，我們正在修改和擴展我們現有的一些長期承諾。然後是 Eagle Ford，隨著新進業者、Eagle Ford 的新生產商，我們非常成功，今年也專注於增加那裡的產量。因此，在我們開展水務業務的所有三個流域中，我們都非常積極地簽訂 2025 年及以後的新水量合約。

Ned Baramov, Wells Fargo.

內德·巴拉莫夫，富國銀行。

Hi. Thanks for taking the question. Can you maybe just provide the latest on your expectations for water EBITDA and total CapEx for fiscal '25?

你好。感謝您提出問題。您能否提供您對 25 財年水務 EBITDA 和總資本支出的最新預期？

Yeah. The water guide, the $550 million to $560 million, I believe, is still intact. Total capital, same. It's unchanged from where it was earlier in the year, $210 million total for capital.

是的。我相信，5.5 億至 5.6 億美元的水指南仍然完好無損。總資本，相同。與今年稍早相比沒有變化，資本總額為 2.1 億美元。

Thanks for that. And then on your agreement to purchase warrants, can you maybe provide a little bit more on what triggered this transaction now? And what your plans are for the remaining 2 million or so of warrants?

謝謝你。然後，關於您購買認股權證的協議，您能否提供更多關於現在觸發此交易的原因？對於剩下的200萬左右的認股權證，你們有何計畫？

Yes. I think over the last couple of years, we've been thinking through what the strategy is and long-term strategy for the common but warrants were always part of the thought process, being able to eliminate those. I think the opportunity really presented itself. We made an announcement here a few weeks ago at 8-K. EIG did sell down their Class D position. And when they sold down that Class D position, those warrants became available. And so we just worked an arrangement with them and one of the other Class D holders to take out those warrants.

是的。我認為在過去的幾年裡，我們一直在思考策略是什麼以及普通股的長期策略，但認股權證始終是思考過程的一部分，能夠消除這些策略。我認為機會確實出現了。幾週前，我們在 8-K 上宣布了這一消息。EIG 確實出售了他們的 D 級職位。當他們出售 D 級頭寸時，這些認股權證就變得可用了。因此，我們只是與他們和其他 D 類持有人之一達成協議，取出這些認股權證。

So I think, Ned -- this is Mike. I would add to that. If you run Black-Scholes model to determine what options and warrants are worth, these had five years remaining. So we felt like they wouldn't get significantly cheaper. They could only get more expensive. So better get to buy them today than wait a year or two years.

所以我想，內德——這是麥克。我想補充一點。如果您運行布萊克-斯科爾斯模型來確定哪些選擇權和認股權證有價值，那麼它們還剩五年。所以我們覺得它們不會變得更便宜。它們只能變得更貴。因此，最好今天就購買它們，而不是等待一兩年。

Understood. And then plans for the remaining 2 million or so?

明白了。然後剩下的200萬左右有什麼計畫嗎？

Yeah. We've been in contact with the holder of those and offered to repurchase those at the same price, and we're waiting to hear back.

是的。我們已與這些物品的持有者聯繫，並提出以相同的價格回購這些物品，我們正在等待回應。

(Operator Instructions) With no questions left in the Q&A, we have reached the end of our question-and-answer session, and I will now turn the call back over to your hosts for any closing remarks.

（操作員說明）由於問答中沒有任何問題，我們的問答環節已經結束，我現在將把電話轉回給主持人，以供結束語。

Thanks, everyone, for your interest in NGL. We look forward to catching up with everyone in a couple of months on the third-quarter call. We'll talk again in February. Thank you.

謝謝大家對 NGL 的關注。我們期待在幾個月後的第三季電話會議上與大家見面。我們二月再談。謝謝。

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束，此時您可以掛斷電話了。感謝您的參與。