NGL Energy Partners LP (NYSE:NGL) Q2 2024 Earnings Conference Call November 9, 2023 5:00 PM ET

Company Participants

Brad Cooper - CFO

Michael Krimbill - President, CEO and Director

Douglas White - EVP, NGL Water Solutions

Conference Call Participants

Jason Mendell - RBC Capital Markets

Operator

Greetings and welcome to the NGL Energy Partners 2Q 2024 earnings call. At this time, all participants are in a listen-only mode and a question and answer session will follow the formal presentation. [Operator Instructions] Note this conference is being recorded.

I will now turn the conference over to your host, Brad Cooper, CFO of NGL Energy Partners. Brad, you may begin.

Brad Cooper

Thank you. Good afternoon and thank you to everyone for joining us on the call today. Our comments today will focus on the strong second quarter results, the outlook for the balance of this year and the steps we're taking to ensure we can address our debt maturities in the near future. After the market closed today, we issued an earnings release, published our investor presentation and filed our 10-Q. Comments today will include plans, forecasts and estimates that are forward-looking statements under the U.S. 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 SEC filings and earnings materials. With that, let's jump into our second quarter's results. Adjusted EBITDA for the second quarter was $176.2 million compared to $142.2 million for the second quarter of fiscal 2023. The quarter was driven largely by water solutions continued strong performance. Water generated adjusted EBITDA of $140.4 million and processed $2.44 million barrels per day for the quarter.

Through the first two quarters of the year, water solutions has generated $263 million of adjusted EBITDA, and we are on pace for over 1 billion barrels of water disposal for the year. With this strong start to the fiscal year, we are raising the full-year guidance for water solutions from $485 million to $500 million plus. We have seen quite a bit of commodity price volatility this year and to mitigate against swings in oil prices, we have entered into crude oil costless collars, through the end of the fiscal year to hedge our skim oil.

Moving to liquids logistics, butane and propane are seasonal with the majority of their adjusted EBITDA coming in the back half of the fiscal year. Our liquids logistics business is performing well with a strong start to the butane blending season. We're entering the heating season where propane will contribute to the segment's adjusted EBITDA in the third and fourth quarters and our refined products businesses are performing as we expected they would.