NGL Energy Partners LP Q3 FY2026 earnings call

• Record water disposal volumes: Eclipsed 3.5 million barrels per day of disposal volumes in early January 2026, with a daily record of approximately 3.3 million barrels of water in the quarter.
• Financial strategy execution: Redeemed 15% of original Class D outstanding; repurchased 1.6 million common units during the quarter, with ~8.7 million units repurchased since program inception.
• Pipeline expansion: Western Express pipeline expanded by 27 miles of 24-inch pipeline, expanding reach and flexibility.
• AI project: Second year of development of AI machine-based learning project, utilizing data from SCADA system, etc., to increase revenues and decrease expenses.
• MOU with Natura Resources: Pursuing combination of nuclear power applied to thermal desalination technology in Reeves County, Texas, working toward final draft of TPDES discharge permit.

Water Solutions segment: In 2026Q3, adjusted EBITDA was $154.5 million, up from $132.7 million in the prior year third quarter (16.5% increase). Physical disposal volume was 3.07 million barrels per day, up from 2.6 million barrels per day in the prior year third quarter (17.1% increase). Total volumes paid to dispose of, including deficiency volumes, were 3.13 million barrels per day in Q3 2026, versus 2.91 million barrels per day in the prior year third quarter. Crude Oil Logistics adjusted EBITDA was $15.4 million in 2026Q3, versus $17.3 million in the prior year's third quarter. Physical volumes on the Grand Mesa pipeline averaged approximately 85,000 barrels per day, up from 61,000 barrels per day in the prior year quarter. Liquids Logistics adjusted EBITDA was $15.2 million in 2026Q3, versus $18.6 million in the prior year's third quarter. The segment underwent strategic repositioning in 2025, selling wholesale propane business, terminals, exiting refined products and biodiesel marketing, and now focused on Centennial butane blending.

• Full-year EBITDA guided to a range of $650 to $660 million for fiscal 2026.
• Projected to exceed $700 million of EBITDA in fiscal 2027.
• Focus on eliminating Class D preferred units and targeting water growth projects and Class D preferreds over the next fiscal year.

• Extreme cold weather in mid-January 2026 led to some days with volumes under 3 million barrels per day, but not expected to materially impact full-year guide for fiscal 2026.
• Uncertainties in AI machine learning project implementation and its full impact on revenues and expenses.
• Potential challenges in executing the MOU with Natura Resources and achieving the desired water treatment project.

Q: Good afternoon, guys. Derrick Whitfield with Texas Capital. On the macro environment and firmness of growth projects given crude price volatility, and appetite of producers for future water disposal needs.

A: H. Michael Krimbill mentioned projects outlined in last call are online; Doug White noted projects have volume commitments for long term, customers continuing drilling forward, and large wedge of produced water in Delaware Basin.

Q: Specific to Natura's release, characterization of water treatment opportunity and materiality of current CapEx obligation.

A: Doug White said they've been exploring alternatives to injection, MOU with Natura for nuclear power and thermal desalination, no immediate CapEx demand to NGL on nuclear side, plan to start with scaled treatment.

Q: On AI and machine learning, amount of value recovered to date and potential.

A: Doug White said OpEx numbers improving, AI having impact on expenses and revenues, but specific dollar amount or percentage not disclosed yet as project continues to develop.

Q: Conversations with Devon following deal announcement.

A: H. Michael Krimbill stated they haven't had conversations with Devon yet as they've been busy with call preparation and business operations.