Tulsa’s NGL Energy Partners LP turned things around in its second quarter of 2021 as the company reported $6 million of income compared to a loss of nearly $16 million in the previous quarter.
NGL reported adjusted EBITDA of $138 million in the second quarter compared to $123.5 million a year earlier.
“Our second quarter results reflect the expected increase in Adjusted EBITDA related to the sale of crude oil stored for contango, as well as the sale of skim oil barrels we held during our first fiscal quarter,” said Mike Krimbill, NGO’s CEO.
He said operating compares averaged 27 cents a barrel compared to 32 cents in the first quarter of the fiscal year.
“This decrease in expenses is significant as it represents approximately $50 – $60 million in annual cost savings based on average volumes for the quarter,” he added.
During the quarter, NGL was able to extend and expand some of its water disposal contracts in the Delaware Basin of West Texas and southeast New Mexico. Krimbill said the company’s Crude Logistics segment continued to perform despite what he called the “noise” around the Extraction Oil and Gas bankruptcy process.
It was last month a Bankruptcy court judge granted summary judgment in support of Extraction against NGL-owned Grand Mesa Pipeline which had an agreement with Extraction to carry crude 550 miles in the line from Colorado to the Cushing regional pipeline hub in Oklahoma.
Krimbill said NGL is not only reducing capital expenditures but still evaluating assets sales and even joint venture opportunities.
While NGL overcame a first quarter 2021 loss, the company’s total outstanding debt increased from $3.15 billion at the end of March 2020 to $3.29 billion at the end of September. The company said some of the increased debt of $139 million was due to funding capital expenditures before March 31 and $83 million of the remaining $100 million deferred purchase price of Mesquite Disposals Unlimited LLC.
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