NGL Energy Partners LP (NYSE:NGL) announced robust financial results for the second quarter of 2024, with adjusted EBITDA reaching $176.2 million, a significant increase from the $142.2 million reported in the same period of fiscal 2023. The company also raised its full-year guidance for its water solutions segment from $485 million to over $500 million, driven by the segment’s strong performance.

Key takeaways from the earnings call:

• NGL Energy Partners’ water solutions segment generated $140.4 million in adjusted EBITDA in Q2 2024, processing 2.44 million barrels per day. The segment is on track to dispose of over 1 billion barrels of water this fiscal year.
• The company has entered into crude oil costless collars to hedge against oil price volatility through the end of the fiscal year.
• The company’s liquids logistics business is performing well, with a strong start to the butane blending season. Propane will contribute to the segment’s adjusted EBITDA in the third and fourth quarters.
• The company is increasing asset sales under $25 million to $100 million for the fiscal year. These sales could impact full-year results depending on their timing.
• NGL Energy Partners is increasing its growth capital expenditures to $100 million, up from the previous guidance of $65 million, due to growth opportunities in the Delaware for its Water Solutions segment.
• The company is executing on its strategy to reduce absolute debt and leverage, ending the quarter with leverage of 4.14 times, down from 6.11 times at the end of Q2 fiscal 2023. Over the last 12 months, the company has reduced absolute debt by approximately $680 million.
• The company anticipates paying off the 25 unsecured notes by March 31, 2024. The company’s liquidity remains strong, with $308 million of liquidity as of September 30, 2024.
• Crude logistics adjusted EBITDA was $30.7 million in Q2 2024, slightly below the company’s internal expectations but optimistic about future growth.

The company’s CFO, Brad Cooper, emphasized the company’s focus on strong Q2 results, the outlook for the rest of the year, and the steps being taken to address debt maturities in the near future. The company has maintained its full-year consolidated adjusted EBITDA guidance of $645 million plus. NGL Energy Partners’ strategy to reduce debt continues, with the company expecting to be well-positioned to address its debt maturities as market windows become available early in the next calendar year.