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Gold/Mining/Energy
NGL to da moon (well, maybe to $10?)!!
An SI Board Since February 2023
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Emcee:  Elroy Type:  Moderated
Hello MLP investors, this board is for discussion of NGL a partnership that traded in 2022 like it was going to go bust, but.....didn't.

Lets see - quick snapshot. NGLs fiscal year ends in March. In March of 2022 they had....

$3.35b long term debt
$550m Class D 9% preferred stock (which is in arrears)
$348m Class C and B partners preferred stock (also in arrears)
$116m bank loan on line of credit

The annual interest expense on that mess was $271m.

Sales were $7.95b (wow!). The have three business lines described as

Water Solutions $ 545m
Crude Oil Logistics $2.5b
Liquids Logistics $4.9b

Adjusted EBITDA for fiscal 2022 was $543m.

So...the good news is that $543m of F2022 EBITDA can service the F2022 $271m of interest expense. OK.

Hmmm, so why were they trading like they were going to go bankrupt?

The F2022 $543m EBITDA was an improvement from F2021 $448m EBITDA. EBITDA grew. That's also good.

So we are now in the final months of NGL's fiscal 2023 (March). The recent news is.....

NGL has paid down 2023 debt such that total long term debt should be about $2.92b in March 2023.

NGL's business is doing well, so fiscal 2023 EBITDA is expected to be $630m (compared to $543m last fiscal year).

Interest expense for F2023 will probably be about $280m, declining to ~$260m next year (due to the reduction in long term debt).

The main driver of NGL's EBITDA growth is growth in their "Water Solutions" segment. I think this is some water pipeline that exists and is paid for, and as NGL fills it up with sales volumes, the margin on every extra barrel of water transported is. well, very high. More water transport sales = more EBITDA.

To illustrate. In the nine months through Dec 2022 NGL did $511m Water Solutions sales with a COGS of $14. Yowza! I don't claim to know how that is possible, but that's what the financial statement say. I think investors are hoping NGL can grow their water sales, because it's almost the same as growing cash flows.

-----------

So....this brings to mind the question - what's $630m of EBITDA versus $2.9 billion in long term debt worth? It depends on the growth of EBITDA I think, well EBITDA will grow from 2021 (Mar) $448m to 2022 (Mar) $543m and now perhaps to 2023 (Mar $630m). It's definitely growing.

The market cap of NGL today (with $9 billion in sales and probably $630m in EBITDA) is $365m.

This market cap seems low to me.

Ok, off we go SI, anybody have any comments on NGL?
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ReplyMessage PreviewFromRecsPosted
83NGL Energy Partners Announces Earnings Call NGL Energy Partners LP (NYSE: NGL) Elroy-May 17
82ARIS reported Q1 last night and the stock is up 8% today. ARIS is the only publElroy-May 8
81this is where NGL's water transport opterations are located.... ChevronElroy-May 1
80You would think they would perform some reverse osmosis process before disposinFIFO_kid21April 19
79No worries, thanks for bring the conference call to my attention. Yes, that CEOElroy-April 19
78I am sorry I didn't read your second comment. Personally I think Murray StahFIFO_kid2-April 19
77I did look at the transcript. I posted what I thought was the relevant commentaElroy-April 19
76It would be much easier if you look at the FRMO's 3rd quarter transcript butFIFO_kid2-April 19
75This is the bit from the call he was talking about. I can't make heads or tElroy-April 19
74<i> the current massive inflation rate involved zero costs to the ownerElroy-April 19
73In FRMO's 2024 3rd quarter conference call had some very interesting commentFIFO_kid2-April 19
72The preferred dividends hit my account. The second part of the second arrearageElroy-April 18
71Lets see, the first press release said they're paying 54% of the arrearage, Elroy1April 9
70Mo money..... NGL Energy Partners LP Announces the Payment of All OutstandiElroy-April 9
69NGL Energy Partners LP (NYSE:NGL) ("NGL," or the "Partnership&quoElroy-April 5
68This is interesting, and perhaps disappointing, not sure. They paid half the arElroy-April 4
673 Refining & Marketing MLP Stocks for Your Basket zacks.com While uncertaiElroy-March 27
66Lets see - the next bit of news expected from NGL is they planned to do some assElroy-March 19
65I received a K-1 for NGL-C (the series C preferred stock) that I held in my RothElroy-March 18
64Some comments from Aris call Strategically, we have remained disciplined in ouElroy-March 1
63This company is similar to NGL's water division. NGL's water division iElroy-February 29
62Director James Collingworth just bought 100,000 units of NGL at $5.82. Not too Elroy-February 14
61NGL preferred stock looks quite interesting for income investors. The tickers aElroy-February 14
60Key bits from the conference call we recently held an open season on the Grand Elroy-February 9
59NGL reported pretty much in line with their pre-announced guidance. They confirElroy-February 8
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