NGL Energy Partners reported a turnaround its revenue for the fourth quarter and full year fiscal 2025 results.
Income from continuing operations for full year Fiscal 2025 totaled $65.0 million, compared to a loss from continuing operations of $157.7 million for full year Fiscal 2024. NGL’s fourth quarter income was $16.2 million, improved from a loss of $234.3 million for the fourth quarter of Fiscal 2024.
Adjusted EBITDA from continuing operations for full year Fiscal 2025 was $622.9 million, compared to $593.4 million for full year Fiscal 2024. The company’s Adjusted EBITDA from continuing operations for the fourth quarter of Fiscal 2025 was $176.8 million, compared to $147.9 million for the fourth quarter of Fiscal 2024.
NGL also recorded increased produced water volumes in the fourth quarter, a gain of more than 14% compared to a year ago. During the quarter, the company also closed the sale of its natural gas liquids terminal in Green Bay, Wisconsin and certain railcars in its Crude Oil Logistics segment. During the year, the company recorded the sale of its 17 natural gas liquids terminals which made up the majority of the company’s wholesale propane business. It also sold its refined products Rack Marketing business, its ownership in Limestone Ranch in the firm’s Water Solutions segment and additional railcards in its Crude Ol Logistics segment. The sales raised approximately $270 million.
“The Partnership ended Fiscal 2025, with Adjusted EBITD $622.9 million, versus our previous guidance of $620 million. Water Solutions achieved record annual water disposal volumes processed and Adjusted EBITDA(1), and the Partnership executed on non-core asset sales at attractive multiples. These asset sales will reduce the volatility and seasonality of our Adjusted EBITDA and working capital requirements. Fiscal 2026 holds more opportunities to continue addressing our capital structure and strengthening our balance sheet,” stated Mike Krimbill, NGL’s CEO.
“We are guiding Fiscal 2026 full year consolidated Adjusted EBITDA to a range of $615 -$625 million which is an increase over Fiscal 2025 actuals adjusted for EBITDA associated with asset sales. Also, we are guiding to $45 million in maintenance and $60 million of growth capital expenditures for Fiscal 2026,” Krimbill concluded.
Quarterly Results of Operations
The following table summarizes operating income (loss) and Adjusted EBITDA from continuing operations(1) by reportable segment for the periods indicated:
|
|
|
Quarter Ended |
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|
|
|
March 31, 2025 |
|
March 31, 2024 |
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|
|
Operating |
|
Adjusted |
|
Operating |
|
Adjusted |
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|
|
|
(in thousands) |
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|
Water Solutions |
|
$ |
88,891 |
|
|
$ |
154,870 |
|
|
$ |
28,537 |
|
|
$ |
123,440 |
|
|
Crude Oil Logistics |
|
|
7,148 |
|
|
|
13,121 |
|
|
|
3,279 |
|
|
|
15,339 |
|
|
Liquids Logistics |
|
|
(4,991 |
) |
|
|
17,690 |
|
|
|
(49,920 |
) |
|
|
22,213 |
|
|
Corporate and Other |
|
|
(9,926 |
) |
|
|
(8,851 |
) |
|
|
(62,707 |
) |
|
|
(13,054 |
) |
|
Total |
|
$ |
81,122 |
|
|
$ |
176,830 |
|
|
$ |
(80,811 |
) |
|
$ |
147,938 |
|
Water Solutions
Operating income for the Water Solutions segment increased by $60.4 million for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. The increase was due primarily to higher disposal revenues due to an increase in produced water volumes processed from contracted customers and higher fees charged for interruptible spot volumes. There was also higher water pipeline revenue due to the LEX II pipeline commencing operations during the prior quarter. The Partnership processed approximately 2.73 million barrels of water per day during the quarter ended March 31, 2025, a 14.2% increase when compared to approximately 2.39 million barrels of water per day processed during the quarter ended March 31, 2024.
Revenues from recovered skim oil, including the impact from realized skim oil hedges, totaled $36.7 million for the quarter ended March 31, 2025, an increase of $8.3 million from the prior year period. The increase was due primarily to an increase in skim oil barrels sold due to more skim oil recovered from receiving more water in higher oil cut basins, partially offset by lower realized crude oil prices received from the sale of skim oil barrels.
Operating expenses in the Water Solutions segment increased $7.6 million for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024 due primarily to higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, higher repairs and maintenance expense due to the timing of repairs and tank cleaning and higher business insurance expense for remediation costs incurred. Operating expense per produced barrel processed was $0.23 for the quarter ended March 31, 2025, compared to $0.23 in the comparative quarter last year.
Also contributing to the increase in operating income were lower losses on the disposal or impairment of assets of $8.0 million for the quarter ended March 31, 2025, compared to $31.8 million in the prior year period.
Crude Oil Logistics
Operating income for the Crude Oil Logistics segment increased by $3.9 million for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. For the quarter ended March 31, 2025, we incurred lower expenses of $3.9 million due to lower volumes flowing on the Grand Mesa Pipeline, lower depreciation due to certain assets becoming fully depreciated in the prior year, and we recorded a gain from the disposal of certain assets for the quarter ended March 31, 2025, compared to a loss in the prior year period. In addition, we recognized a net loss on derivatives of $0.4 million in the current year period compared to a net loss of $6.8 million in the prior year period. This was offset by lower product margin for crude oil sales due to lower production on the acreage dedicated to us in the DJ Basin and expiration of certain higher margin purchase contracts during the quarter ended March 31, 2024. During the quarter ended March 31, 2025, physical volumes on the Grand Mesa Pipeline averaged approximately 56,000 barrels per day, compared to approximately 67,000 barrels per day for the quarter ended March 31, 2024.
Liquids Logistics
Operating income for the Liquids Logistics segment increased by $44.9 million for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. Operating income for the fourth quarter of Fiscal 2025 includes impairment losses of $23.2 million, compared to impairment losses of $69.3 million in the same period of the prior year. Excluding these amounts, operating income decreased by $1.1 million for the fourth quarter of Fiscal 2025. Margins for product sales (excluding the impact of derivatives) decreased by approximately $7.1 million, as butane margins declined due to a weak gasoline blending season and asphalt margins declined due to lower supply. Propane margins were essentially flat quarter over quarter. Expenses decreased during the fourth quarter of Fiscal 2025 due to lower commission expense and incentive compensation due to lower operating results.
Capitalization and Liquidity
Total liquidity (cash plus available capacity on our asset-based revolving credit facility (“ABL Facility”)) was approximately $385.7 million as of March 31, 2025. On March 31, 2025, the borrowings under the ABL Facility were $109.0 million, compared to no borrowings under the ABL Facility at March 31, 2024. The ABL Facility was paid off with funds from asset sales on May 1, 2025.
As of March 31, 2025, the Partnership is in compliance with all of its debt covenants and has no significant current debt maturities before February 2029.
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