NGL Energy Partners LP Reports Strong Fiscal 2026 Results Driven by Water Solutions Segment Growth

NGL Energy Partners LP (NGL) demonstrates a strong financial performance driven by its Water Solutions segment, concluding fiscal year 2026 with impressive results. The company reports an adjusted EBITDA from continuing operations at approximately $660 million for the year, closely reaching the upper boundary of their guidance. In the fourth quarter alone, the adjusted EBITDA is around $176 million, with income from ongoing operations reported at about $70 million after accounting for a goodwill impairment charge. This highlights the effectiveness of NGL's strategy and operations during the fiscal year.

Strategic Execution Drives Stability

The positive results stem from the execution of a tailored multi-year strategy that includes the divestiture of non-core businesses, such as wholesale propane and rack marketing. CFO Brad Cooper emphasizes that these strategic decisions have reduced quarterly EBITDA volatility, leading to improved working capital stability. The Water Solutions segment emerges as a significant growth driver, contributing approximately $153 million to adjusted EBITDA in Q4 and $603 million for the entire fiscal year, marking unprecedented achievements for the company.

Operational Metrics Indicate Growth

In terms of operational metrics, NGL reports a notable increase in produced water volumes, averaging about 3 million barrels per day, a 10% rise year-over-year. Furthermore, the disposal volumes throughout the fiscal year average approximately 2.9 million barrels per day, reflecting an 11% increase. The company's initiatives to optimize operations result in improved operating expenses, which decrease to $0.22 per barrel.

Positive Outlook for Fiscal 2027

Looking ahead, NGL management expresses optimism for fiscal 2027, supported by a significant expansion of the LEX2 system, which will enhance daily capacity by 165,000 barrels, enabling the transportation of approximately 560,000 barrels per day under long-term contracts.

Conclusion

Overall, NGL Energy Partners is poised for growth through strategic decision-making and operational efficiencies, particularly within its Water Solutions segment, as it secures a positive outlook for the upcoming fiscal year.