NGL Energy Partners LP announced Tuesday that the Board of Directors of its general partner has declared a quarterly distribution of $0.10 per unit, or $0.40 per unit on an annualized basis, for the quarter ended September 30, 2020.
“Our Board has made the strategic decision to adjust our annualized common unit distribution to $0.40 per unit,” stated Mike Krimbill, NGL’s CEO.
He said there were numerous considerations fractored into the decision.
“Our business segments performed in-line with our expectations during the fiscal second quarter and we expect over 5.0x common unit coverage for the period. We are working with our bank group to extend our credit facility maturity. This distribution adjustment should benefit those discussions.”
Krimbill said despite the challenges in the energy industry, NGL’s business has continued to do well. The company recently completed its Poker Lake pipeline and tie-in and produced water volumes average nearly 1.6 million barrels a day.
“We continue to see incremental activity around our Northern Delaware Basin water platform and expect volumes to trend favorably through the remainder of the fiscal year. We are entering the winter gasoline butane-blending and propane heating season in a strong position and expect our Liquids segment to perform well again this year,” he added.
In addition to the common unit distribution, the Board of Directors declared a cash distribution in the required amount of $15.6 million, which amount represents the Class D Distribution Amount to be paid to the holders of the Class D Preferred Units. The Class D Preferred distribution will also be made on November 13, 2020.
NGL plans to issue its fiscal second quarter ended September 30, 2020 earnings press release post-market close on Monday November 9, 2020.