| From: Elroy | 2/14/2024 8:22:00 AM | | | | | | NGL preferred stock looks quite interesting for income investors.
The tickers are NGL-B and NGL-C.
Why interesting.
Both were originally fixed rate preferreds paying about 9%. The B's began floating last year, and now pay about 12.8%. The C's float from April 15th this year, and from then on will also pay about 12.8%.
All preferred stock is in arrears, and acruing obligations. The B's had earned $8.88 through Dec 31st last year, the C's about $8.06.
The B's and C's are perpetual.
There are also D's which are private held. The D's expire in summer 2027.
NGL has indicated that going forward their uses of free cash flows will be to retire the D's and increases Growth Cap ex. There may be some nominal common unit distribution, but also, there may not!
Since NGL plans to spend money to retire the D's (about $550m outstanding) it seems they may leave the B's and C's outstanding for, well, quite a long time. A quick rought financial look at NGL is as follows:
EBITDA = $650m, I think this is going up to around $700m next fiscal year (fiscal year ends March), but they haven't given guidance yet.
Debt interest + Preferred dividend payments = $350m
Cap Ex = $150m+
So they have $150m left over each year with nowhere to go, less if they spend on growth Cap Ex.
They have $550m preferred class D outstanding, and they plan to buy that back before 2027 (or perhaps they refinance it with other preferreds sooner?).
NGL has already announced plans to pay half the arrearage this month, and plan to pay the remainder soon after some planned asset sales which are expected to occur before March 31st, 2024.
finance.yahoo.com
Well, it seems to me a good idea to just sit in the B's and C's and collect 12.8% until NGL retires them. Both are now trading at about $32, and will pay $8.50-$9.25 in the next few months. So ignoring taxes, you've got a chance to buy 12.8% preferred stock for $32 - $9 = about $23. Seems like a not too bad idea. |
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| From: Elroy | 2/29/2024 9:42:50 AM | | | | | | This company is similar to NGL's water division. NGL's water division is about 2.5x larger in EBITDA than these guys, but worth watching to get an opinion on how the space is going.
Aris Water Solutions, Inc. Reports Fourth Quarter and Full Year 2023 Results and Provides 2024 Outlook
finance.yahoo.com |
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| From: Elroy | 3/1/2024 4:49:10 PM | | | | | | Some comments from Aris call
Strategically, we have remained disciplined in our approach to capital allocation, growing organically under long-term contractual agreements, while selectively evaluating and closing new agreements in an improving pricing environment. There is greater demand for water infrastructure in the Northern Delaware Basin than there are existing assets, and we have the opportunity to participate in further growth at attractive rates of return. |
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| From: Elroy | 3/18/2024 3:05:00 PM | | | | | | I received a K-1 for NGL-C (the series C preferred stock) that I held in my Roth account.
It throws off zero MLP -style interesting income. All the boxes are zero. The only thing on the K-1 is the amount of USD I bought last year in NGL-C.
It didn't pay a distribution in 2023, so perhaps that has something to do with it. But I suspect each year the preferreds will be treated for taxes like regular company preferred stock and not MLP preferred stock.
But ya never know!
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Before the end of March NGL is supposed to sell some assets and soon after pay the second hald of the arrearage. Perhaps that news comes out in March, lets see. |
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| From: Elroy | 3/19/2024 9:14:27 AM | | | | | | Lets see - the next bit of news expected from NGL is they planned to do some asset sales in Q1 2024, and soon thereafter pay the second half of the arrearage on their various tranches of preferred stock (which are all currently in arrears).
If the sale goes through, I'd expect an announcement by early April latest (perhaps in March if they put out a press release the day of the sale). That could help the preferred stock a bit if they announce the second arrearage payment along with the sale.
I would think it makes sense for them (if the sale is going through) to make the second arrearage payment before April 15th, and then on April 15% make the regular preferred stock payments, meaning their all their obligations are current for the first time in about three years.
The next bit of news after that is fiscal 2025 (March) guidance. That will come on about June 1st with the Q1 2024 earnings release. The main use of cash going forward (once the second half of the arrearage is paid) is retirement of about $550m series D preferred stock. It is due in summer 2027, so they've got three years to save that up or refinance or do whatever the plan to do about that.
My hunch is NGL can get to $9 by this time next year. But the fsical 2025 guidance (how high will EBITDA go?) is the key determinant of the share price. |
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| From: Elroy | 3/27/2024 6:54:13 AM | | | | | | 3 Refining & Marketing MLP Stocks for Your Basket
zacks.com
While uncertainties persist regarding oil consumption and fuel market volatility, select stocks like Sunoco LP (SUN Quick Quote SUN- Free Report) , Global Partners LP (GLP Quick Quote GLP- Free Report) and NGL Energy Partners LP (NGL Quick Quote NGL- Free Report) show promise for above-average performance and stock appreciation. These firms possess characteristics that can mitigate the impact of inflation, and their defensive posture and reliance on fee-based business models render them well-equipped for an uncertain market environment, particularly amid rising consumer prices. |
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| From: Elroy | 4/4/2024 6:58:37 PM | | | | | | This is interesting, and perhaps disappointing, not sure.
They paid half the arrearage in Feb, with indication that they would do up to $200m in asset sales before March 31st, and pay the second half soon after. This press release says they're paying 55.4% of the outstanding arrearage.
Maybe the asset sales didn't go through? Not sure why they're not paying the full amount....
TULSA, Okla., April 04, 2024--( BUSINESS WIRE)--NGL Energy Partners LP (NYSE: NGL) announced today that the Board of Directors of its general partner approved a distribution of 55.4% of the outstanding arrearages for the quarter ending March 31, 2024 to be paid to the holders of the Partnership’s 12.544% Class B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units ("Class B Preferred Units") and the 9.625% Class C Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units ("Class C Preferred Units") in accordance with the terms outlined in NGL’s partnership agreement. Each of the Class B Preferred Units quarterly distribution of $3.0224 per unit and the Class C Preferred Units quarterly distribution of $2.6790 per unit will be made on April 18, 2024 to holders of record at the close of trading on April 12, 2024.
Additionally, the Board of Directors declared a cash distribution in the amount of $77,140,426, which represents the 55.4% of the outstanding arrearages on the Class D preferred units as of March 31, 2024. The arrearage payment on the Class D Preferred units will be made on April 18, 2024.
The total amount of the distributions will be $120,000,000 which will be financed with cash on the Balance Sheet and a draw on the ABL. |
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| From: Elroy | 4/5/2024 2:03:26 PM | | | | | | NGL Energy Partners LP (NYSE:NGL) ("NGL," or the "Partnership") announced today that it has completed the sale of its North and South Ranches. These two New Mexico ranches have combined acreage of approximately 122,250 acres, in the core of the Delaware.
New Mexico Ranches Highlights:
- Approximately $70.0 million in proceeds, including working capital
- Including asset sales in FY24, we have exceeded the $150 million asset sale guidance
"NGL remains focused on our commitment to deliver reliable produced water management for our customers while remaining focused on the environment and the sustainability of our operations," commented Doug White, EVP of NGL Water Solutions. "Today’s announcement highlights our focus on portfolio optimization, especially as we look for additional opportunities to enhance the portfolio with opportunities like the recently announced LEX II Project."
NGL owns and operates the largest integrated network of large diameter wastewater pipelines, disposal wells and produced water handling systems in the Delaware Basin. NGL’s Water Solutions segment operates in several of the most prolific crude oil and natural gas producing basins, including the Delaware, Eagle Ford and DJ Basins. |
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| From: Elroy | 4/9/2024 9:29:49 PM | | | | | | Mo money.....
NGL Energy Partners LP Announces the Payment of All Outstanding Distribution Arrearages for Class B, Class C and Class D Preferred Units as of Payment Date April 25, 2024
finance.yahoo.com
Each of the Class B Preferred Units will receive $2.475 to fully pay all outstanding distribution arrearages and interest as of April 25, 2024, which includes the distribution earned in the quarter ending March 31, 2024. The distribution will be paid on April 25, 2024, to the holders of record at the close of trading on April 19, 2024.
Each of the Class C Preferred Units will receive $2.186 to fully pay all outstanding distribution arrearages and interest as of April 25, 2024, which includes the distribution earned in the quarter ending March 31, 2024. The distribution will be paid on April 25, 2024, to the holders of record at the close of trading on April 19, 2024. |
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