NGL Energy Partners went from net loss to net income in a year

NGL Energy Partners LP Announces Collaboration to Increase Recycled and Reused Produced Water Volumes | Business Wire


Quite a turnaround for NGL Energy Partners LP as the Tulsa company reported this week it went from a net loss in the first quarter of the 2022 fiscal year to $23.1 million in net income for the first quarter of its 2023 fiscal year.

The firm said it had a net loss of $134.5 million in the first quarter of Fiscal 2022. It also had adjusted EBITDA for the first quarter of Fiscal 2023 of $123.9 million, up from the $91.1 million in the first quarter of Fiscal 2022.

The company reported record produced water volumes of nearly 2.15 million barrels a day, a more than 29% increase from a year earlier and about 12% more than the previous quarter.

“Our Water Solutions segment outperformed during this past quarter, achieving record numbers for both produced water volumes processed and Adjusted EBITDA(1), while managing costs in a challenging supply chain and inflationary macro environment. Due to the positive results of the first fiscal quarter, we are increasing our guidance for the Water Solutions segment to more than $410 million of Adjusted EBITDA(2) for Fiscal 2023. Full year guidance for Adjusted EBITDA(2) is in excess of $600 million,” stated Mike Krimbill, NGL’s CEO.

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“The Ambassador Pipeline is now fully operational and in service and we expect the additional supply from the pipeline will benefit many of Michigan’s propane customers in one of the largest retail propane markets in the U.S. Fiscal 2023 is starting out well and we look forward to the next three quarters,” Krimbill concluded.

Operating income for the Water Solutions segment increased $46.0 million for the quarter ended June 30, 2022, compared to the quarter ended June 30, 2021.

The increase in produced water was due to higher production volumes primarily in the Delaware Basin driven by the recovery in crude oil prices from the prior year. The partnership also sold approximately 137,000 barrels per day of produced and recycled water for use in our customers’ completion activities.

Revenues from recovered crude oil, including the impact from realized skim oil hedges, totaled $32.9 million for the quarter ended June 30, 2022, an increase of $16.9 million from the prior year period. This increase was due to increased skim oil barrels sold as a result of higher produced water volumes processed, higher skim oil volumes captured per barrel of produced water processed and higher realized crude oil prices received from the sale of skim oil barrels.

Crude Oil Logistics

Operating income for the quarter ended June 30, 2022 increased $30.6 million compared to the quarter ended June 30, 2021 primarily due to an increase in average commodity prices period over period and a decrease in net derivative losses. Product margins also continue to benefit due to high crude oil prices, which have a favorable impact on contracted rates with certain producers, as well as increased differentials on certain other sales contracts. During the three months ended June 30, 2022, physical volumes on the Grand Mesa Pipeline averaged approximately 79,000 barrels per day, compared to approximately 77,000 barrels per day for the three months ended June 30, 2021.


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