Tulsa’s NGL ENergy Partners LP reported on Monday it loss nearly $34 million in the first quarter of its fiscal 2021, far below the $9 million in income it made a year earlier.
The company said its adjusted EBITDA was $91 million, down from the $103.7 million reported in the first quarter of fiscal 2020.
Management attributed the huge loss to the impact of the COVID-19 pandemic and what it called “significant commodity price volatility which resulted in lower demand for crude oil, liquids and refined products.”
“Our first quarter results do not fully reflect the actions the partnership has taken to maximize earnings through this unique environment,” stated Mike Krimbill , NGL’s CEO. “We benefited significantly from our crude oil storage assets during the period; however, these benefits are not immediately evident as we have recognized hedge losses on inventory this quarter on product that will be sold with profits recognized in the second quarter.”
But Krimbill was optimistic about the remainder of the year, explaining that May and June were likely the low point in the company’s water volumes and producers are bringing production back online with crude prices more than $40 a barrel.
He said the company reduced operating expenses by nearly $2 million a month starting in June and increased its market share in the Delaware Basin of West Texas and the DJ Basin in Colorado.
“We continue to focus on the future to create value for our unitholders,” Krimbill concluded.
Capital expenditures incurred totaled $29.9 million during the first quarter and are expected to continue to decrease throughout Fiscal 2021, with full year expectations of $100 million for both growth and maintenance capital expenditures combined. Total liquidity was approximately $198.2 million as of June 30, 2020 and the partnership is in compliance with all of its debt covenants.
NGL’s crude oil logistics segment suffered from the Chapter 11 bankruptcy of a major shipper on the Grand Mesa Pipeline. The firm has committed to ship crude oil on the partnership’s pipeline through the fall of 2026 and has asked the court to reject the transportation contracts, something NGL is fighting.
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