NGL Energy Partners LP (NYSE:NGL) Q3 2024 Results Conference Call February 8, 2024 5:00 PM ET
Company Participants
Brad Cooper - CFO
Mike Krimbill - President, CEO and Director
Douglas White - EVP, NGL Water Solutions
Conference Call Participants
Paul Chambers - Barclays
Patrick Fitzgerald - Baird
Gregg Brody - Bank of America
Paul Chambers - Barclays
Ward Blum - UBS
Ned Baramov - Wells Fargo
Ben Neidermeyer - NBW Capital
Operator
Greetings and welcome to the NGL Energy Partners 3Q 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] Please note this conference is being recorded.
I will now turn the conference over to your host, Brad Cooper, CFO. You may begin.
Brad Cooper
Good afternoon and thank you to everyone for joining us on the call today. Our comments today will includes plans, forecast 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 presentation materials and our other public disclosure materials.
Before we enter the third quarter financial results, I want to take some time to discuss who accomplished this quarter. I first want to thank all the NGL employs for their dedication and extra efforts over the last few months. What we have accomplished over the last few months is astonishing and we should be proud of what we have achieved. We have been able to execute on our long-term plan faster than we anticipated. Operationally, we recently held an open season on the Grand Mesa Pipeline.
On January 5, we closed the open season on the Grand Mesa Pipeline and had a new 5-year MVC with the same counterparty, whose prior contract expired on December 31. Outside of entering into a new 5-year MVC agreement, this counterparty will also be the shipper on the pipeline, freeing up $18 million to $20 million of working capital. This is a permanent release of working capital.
As we continue to negotiate new contracts and a free contract on the pipeline, we should continue to see further reductions in working capital. These reductions in working capital require us to hedge fewer barrels thus reducing earnings volatility and turns crude logistics into a more ratable long-term fee based type of business with more MVCs.