NGL

• Strategic Priorities: The firm continues to execute its multi-year strategy of deleveraging its balance sheet by investing in high-return produced water growth projects. Management has positioned the partnership to address the outstanding Class D preferreds later in fiscal 2027, with long-term strategic goals including building an additional large-diameter water pipeline, pursuing M&A opportunities, and eventually reinstating common unit distributions. Over 85% of trailing 12-month adjusted EBITDA comes from the water solutions segment, and over 90% of produced water volumes come from investment-grade counterparties, improving the overall customer credit profile.

• Operational Milestones: The firm achieved record produced water volumes and record water solutions adjusted EBITDA in 1Q27, with 19.6% year-over-year volume growth that reflects 500,000 barrels per day of producer commitments signed in fiscal 2026 starting to flow through financial results. Permitted injection capacity increased by 200,000 barrels per day during the quarter, bringing total permitted capacity to 5.62 million barrels per day. The firm executed the LEX II extension project, expanding the existing LEX long-haul produced water pipeline system to 81 miles with a total capacity of 560,000 barrels per day. The extension is underwritten by a new long-term volume commitment contract and is expected to enter service by the end of calendar 2026. Total produced water volume commitments now stand at approximately 1.77 million barrels per day, equal to roughly 53% of current total volumes. The firm assigned over 200,000 barrels per day in new commenced volume during 1Q27 despite macroeconomic volatility.

• Capital Structure Update: Leverage decreased during 1Q27 even though growth capital spending is heavily weighted to the first half of fiscal 2027, and management expects the deleveraging trend to continue through the remainder of the fiscal year. Full fiscal 2027 growth capital expenditure will exceed $200 million, with most spending occurring in the first two quarters of the year. A large portion of EBITDA from these 2027 investments will not be recognized until fiscal 2028. Long-term debt is expected to remain relatively flat until the back half of fiscal 2027, while leverage will decline quarter-over-quarter throughout the year.

• Class D Preferred Share Plan: Available high-return investment opportunities generate returns in excess of the cost of the Class D preferreds, so full immediate redemption of the preferreds is not the highest and best use of cash at this time. Management plans to redeem approximately 50% of the remaining Class D preferreds during fiscal 2027, leaving the remainder outstanding. The put option for Class D holders becomes exercisable no earlier than January 1, 2028; if the remaining preferreds are put to the firm, they can be easily financed, and if not, the firm can allocate cash to additional attractive investments or further deleveraging. Management does not believe full elimination of Class D preferreds is required before reinstating common unit distributions.

• Management raised fiscal 2027 adjusted EBITDA guidance by $10 million, increasing the prior guidance range of $715 million to $725 million to a new range of $725 million to $735 million.
• If strong performance continues through the remainder of fiscal 2027, management anticipates it may implement further increases to EBITDA guidance.
• Fiscal 2028 is expected to mirror fiscal 2027's performance and growth trajectory, as growth projects started in the first half of fiscal 2027 will contribute earnings in the next fiscal year.
• Reinstating common unit distributions could potentially occur as early as calendar 2027 after the firm redeems 50% of the outstanding Class D preferreds this fiscal year, contingent on leverage levels and near-term capital needs for large growth opportunities.

1. Water Solutions: Adjusted EBITDA was $179.9 million in 1Q27, compared to $142.9 million in 1Q26, representing a 26% year-over-year increase. This segment contributed 91% of the partnership's total consolidated adjusted EBITDA in the quarter. Average daily physical water disposal volumes were 3.32 million barrels per day, up 19.6% year-over-year, and average total paid disposal volumes (including deficiency volumes) were 3.43 million barrels per day, up 12% year-over-year. Per-barrel operating expenses decreased 1 cent to 21 cents per barrel year-over-year. 2. Crude Oil Logistics: Adjusted EBITDA was $8.6 million in 1Q27, down from $9.6 million in 1Q26. Average daily volumes on the Grand Mesa pipeline were 74,000 barrels per day, up from 55,000 barrels per day in 1Q26. 3. Liquids Logistics: Adjusted EBITDA was $10.3 million in 1Q27, up from $2.9 million in 1Q26. The year-over-year increase was driven by additional contracted activity at the firm's remaining butane terminals, adjusted for prior-year asset sales. The butane blending business will be the primary EBITDA contributor for this segment going forward, with most segment EBITDA generated in the back half of the fiscal year. 4. Consolidated: Total adjusted EBITDA from continuing operations was $186.2 million in 1Q27, up nearly 30% from $143.9 million in 1Q26.

• Forward-looking statements are subject to standard risks and uncertainties, including macroeconomic volatility that could impact producer activity levels and demand for water solutions services. Actual results may differ materially from projected results due to these factors, per standard U.S. securities law disclosures.

Q: What is the growth opportunity outlook for water solutions in the Delaware Basin, and are there constraints on near-term development? / A: The firm added 200,000 barrels per day of contracted new capacity in 1Q27, and plans to add another 300,000 barrels per day of contracted capacity in the remainder of 2027 for a total of 500,000 barrels per day for the full year. Development is not meaningfully constrained by external factors, and new deals currently in process are expected to close before fiscal 2028, with capital spending and EBITDA recognition occurring in that next fiscal year.

Q: What opportunities is NGL seeing in beneficial reuse of produced water and mineral extraction from produced water? / A: The firm is actively engaged in discussions and evaluating opportunities for both mineral extraction (lithium and iodine, which are further along in development industry-wide) and beneficial reuse of produced water, particularly for data center projects in West Texas that struggle to source groundwater. Management expects to make public announcements for these opportunities as contracts and plans firm up.

Q: When could NGL potentially reinstate its common unit distribution? / A: After redeeming half of the outstanding Class D preferreds this fiscal year, distribution reinstatement will come back onto the table. The final timing will depend on leverage levels and whether management prioritizes near-term spending on high-return large growth opportunities over immediate distributions, but reinstatement could potentially happen in 2027.

Q: What is the outlook for M&A given NGL's strong organic growth pipeline? / A: Consolidation in the water solutions space makes strategic sense, but there are few available targets, and the firm is not currently in active discussions for any acquisitions. Management has avoided M&A that would require issuing heavily discounted equity, but as the firm's equity price increases, M&A will become more feasible and attractive for the partnership.