NGL Energy Partners reports 4Q loss of $223 million and $1 billion increase in debt

Tulsa-based NGL Energy Partners LP  reported its fourth quarter and full year fiscal 2020 results revealing fourth quarter losses of $223 million, including a non-cash goodwill impairment charge of $250 million and a $1 billion increase in company debt.

The $250 impairment was in the company’s Water Solutions segment. For the full fiscal year, NGL reported a loss of $180.5 million from continuing operations.

Adjusted earnings for the fourth quarter were $161.8 million while fiscal year adjusted EBITDA from continuing operations was $589.5 million.

NGL explained its $250 million impairment charge was “due to a triggering event caused by the current macroeconomic conditions, the collapse of oil prices driven by both the decrease in demand caused by the COVID-19 pandemic and excess supply, as well as changing market conditions.”

The company said decreases in future cash flows mainly affected the Partnership’s assets in the Eagle Ford Basin and the Pinedale  Anticline.

Company debt rose from $2.16 billion at March 31, 2019 to $3.15 billion at the end of March this year. NGL said the $989 million increase “due primarily to the Mesquite and Hillstone acquisitions and the funding of certain capital expenditures.” The increase would have been more except for the use of proceeds from the sale of TransMontaigne Product Services, LLC and the Gas Blending and Mid-Con businesses.

In late April, NGL amended its credit agreement and reduced capacity of the Working Capital Facility to $350 million and increased the Expansion Capital Facility to $1.565 billion. The change was brought about by reduced working capital borrowing needs going forward as a result of the sale of the TPSL, Mid-Con and Gas Blending refined productions businesses.

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