NGL to da moon (well, maybe to $10?)!! Message Board

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

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From: Elroy	6/6/2024 6:29:22 PM
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NGL - I'm not sure what caused the EBITDA miss in the March 2024 quarter. The good news is it wasn't water. The plan to repurchase units (if they actually do it) is interesting. They said it's the best use of capital. The preferreds pay about 14%, so if buying units is the best use of their capital it means the units must in the near future be expected to pay more than 14%. If they buy units at $5.00, that's better than buying 14% preferreds if the units are paying 75 cents or more per year. Perhaps that's a future near term plan? I don't like the miss, but there was also something in the conference call that said the $210m Cap Ex for fiscal year 2025 something like 60% of it is for the Lex 2 build out, which completes in November 2024. If they don't have similar growth projects after November, that frees up perhaps $100m in Cap Ex from future years which can go toward a distribution, which means $1.00 per unit is within reach, and also would explain why they'd rather buy untis around their current price of $5.00 than buy back 14% preferreds. I think the price dips tomorrow, but I think this is worth sitting around for another year and seeing how it plays out.

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