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Gold/Mining/Energy : NGL to da moon (well, maybe to $10?)!!

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From: Elroy2/8/2024 11:53:31 AM
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NGL reports after the close today.

NGL's fiscal year ends in March, so they're reporting Q3 (December).

In the previous report they did not update fiscal 2024 EBITDA guidance of more than $645m because they said they were working on some asset sales, and the sales would sell some EBITDA.

They refinanced their long term debt about 10 days ago, and they announced that they are paying 50% of the arrearage (through Dec 2023) at the end of Feb 2024.

They haven't announced any asset sales since the last call. There is some stuff in the debt filings that allows them to sell up to $200m of assets, and use the funds toward the preferred arrearage and perhaps pay off some of the D preferred series.

In the S&P 500 Global Credit note on the new NGL debt the analyst wrote that he expects fiscal 2025 EBITDA to be $700-$720m. It's unclear where that estimate came from.

Since the last call NGL has had what's called an Open Season for their Grand Mesa pipeline. That's when they sell future capacity in fixed committed contracts. Maybe they'll tell us how it went in today's call.

In January they announced that they are building another water pipeline. No idea the cost or how long it takes from announcement to operations, but that indicates water demand is doing perhaps OK.

Lets see, I think the interesting items from the call that I'd like to hear are 1- what's their EBITDA forecast for fiscal 2025? and 2- Use of cash going forward - What is the plan for paying the remainder of the preferred arrearage, paying off or refinancing the preferred stock, and then when the preferred stock is "handled" what's the plan for useage of free cash above debt Interest, preferred dividends, and Cap Ex? Are common unit distributions perhaps on the horizon?

My hunch is they spend fiscal year 2025 delvering and paying off preferred stock, and then in fiscal 2026 (begins June quarter 2026) distributions resume. But....who knows? They could resume with a nominal distribution in June quarter 2025 to make unit holders feel happy.....
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