| To: Elroy who wrote (74) | 4/19/2024 9:28:32 AM | | From: FIFO_kid2 | | | | It would be much easier if you look at the FRMO's 3rd quarter transcript but basically what it said is the renumeration for those who store produced water from oil and gas operations has gone from 40 cents a bbl to $2.50 with no costs to do so that is a 500% increase as it is injected into the land and that water in a dry region is an asset. Perhaps that is the main reason why the company has become a money machine with its very high free cash flow.
I wish this company would just ditch the MLP structure. |
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| To: FIFO_kid2 who wrote (76) | 4/19/2024 10:34:39 AM | | From: Elroy | | | | I did look at the transcript. I posted what I thought was the relevant commentary in the next post, although it was a bit hard to follow.
renumeration for those who store produced water from oil and gas operations has gone from 40 cents a bbl to $2.50
I don't think that is correct.
NGL's profit per transported barrel is around 23-26 cents, depending on the quarter. |
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| To: Elroy who wrote (77) | 4/19/2024 10:47:04 AM | | From: FIFO_kid2 | | | | I am sorry I didn't read your second comment. Personally I think Murray Stahl is an interesting person to follow especially for those invested in commodities/bitcoin.
If that is the case with regard to margins then their water operations is likely related to processing and not storage. According to that post it seems the storage end currently seems to be the very high ROIC endeavor though. Irregardless the high inflation in that niche of oil production appears to have greatly benefited the company seeing the speed of their balance sheet improvements. |
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| To: FIFO_kid2 who wrote (78) | 4/19/2024 11:51:30 AM | | From: Elroy | | | | No worries, thanks for bring the conference call to my attention.
Yes, that CEO was a very interesting read. I enjoyed the conference call discussion and crypto discussion.
NGL's water business is doing well, and growing, but I can't claim any deep level of understanding. I know they do transport, but what happens to the water at the end of the transportation pipeline I do not know......whether NGL processes it or some other entity processes it is unknown to me. |
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| To: Elroy who wrote (79) | 4/19/2024 1:24:03 PM | | From: FIFO_kid2 | | | | You would think they would perform some reverse osmosis process before disposing of the fluids as it appears for disposal they reinject it into non crude bearing land at $2.50 /bbl. Something I did not know beforehand.
With regard to Stahl I learned his view to the best approach of operating a crypto miner (which I feel would be a huge challenge given the halving events every 4 years and the challenge for obtaining nearly free energy and the proper timing of renewing obsolete equipment.
In addition his view that land is the best commodity to hold long term and in hindsight he is totally right as NVR (a 1300+ bagger) is really a land bank that happened to allocate capital much better than its competitors by shrinking its float from 17 million to 3 million.
Anyway I enjoy your commentary given your views are the closest to mine of any other poster. |
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| From: Elroy | 5/8/2024 10:00:58 AM | | | | | | ARIS reported Q1 last night and the stock is up 8% today. ARIS is the only publicly traded comp company for NGL’s business that I know of. They’re smaller, but similar.
Anyways, maybe it means NGL’s Q1 results will be strong. NGL will report at the end of the month. |
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| From: Elroy | 5/17/2024 7:18:01 AM | | | | | | NGL Energy Partners Announces Earnings Call
NGL Energy Partners LP (NYSE: NGL) announced today that it plans to issue its fiscal year ended March 31, 2024 earnings press release post-market close on Thursday, June 6, 2024. Members of NGL’s management team intend to host an earnings call following this release on Thursday, June 6, 2024 at 4:00 pm CDT to discuss its financial results. |
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| From: FIFO_kid2 | 5/31/2024 11:37:02 PM | | | | | | | Slightly offtopic to the Ameritrade holder who transitioned to Schwab I noticed the brokerage doesn't consider NGL as a nonequity option under section 1256 like Ameritrade. |
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| From: Elroy | 6/6/2024 4:55:10 PM | | | | | | NGL reported their March Q and fiscal year 2024 (ends March) results.
EBITDA missed badly. They affirmed at least $645m EBITDA for FY24 on Feb 8th, and today delivered $601m. Ouch. Water EBITDA was $508m, which is slightly above guidance. Their water business is going great, something in the other two less profitable business lines is not.
The forward guidance is Ok - EBITDA to grow to $665m (up 10% from the disappointing fiscal 2024), but Cap Ex to be ~$210m. Water EBITDA to grow to $55m (up 10%). They missed last year's EBITDA guidance, so who knows whether we can count on this year's EBITDA forecast.
They announced a $50m unit repurchase.
Cap Ex is eating up a lot of free cash flow, but I guess that's OK as long as it delivers EBITDA growth over time.
I'm not sure if this report and guidance moves the units in either direction. The March Q miss is disappointing, but the key business (Water) did a bit better than expected, it's going to be 85% of EBITDA in the current year, so, who really cares about the other two businesses? Then again they are both massive, and can eat up EBITDA (as just happened) if they stumble.
Hmmm, lets see. For the upcoming year.
$665m EBITDA
minus
$232m interest on $2.9 billion 8.25% long term debt.
$123m preferred stock dividends
$10m interest on the line of credit (maybe there's $100m on the revolver now? Not sure)
--------
-$365 cash obligations
= $300m cash flow
minus
$210m Cap Ex
= $90m unused cash
minus
$50m unit repurchase (maybe)
= $40m cash with no place to go.
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Ok, I guess it's a "build out the system for future growth" year, and buy some cheap units. |
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