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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
95Lets see, some simple thoughts on NGL. The partnership was near $6 before reporElroy-August 12
94NGL Energy Partners LP Announces First Quarter Fiscal 2025 Financial Results fiElroy-August 8
93This is the only publicly traded peer company for NGL's water business. It&Elroy-August 6
92Hopefully this means they are producing more cash than expected, and at a minimuElroy-August 6
91NGL Energy Partners LP Announces Quarterly Cash Distribution for the Class B, ClElroy-June 22
90Here's some tidbits from the NGL conference call insidermonkey.com JPM Q: Elroy-June 12
89Well, my take on NGL after the report is ...... The report was pretty disappoinElroy-June 8
88Some key tidbits from the earnings call transcript..... Tarek Hamid And then IElroy-June 7
87NGL - I'm not sure what caused the EBITDA miss in the March 2024 quarter. TElroy-June 6
86Listened to the NGL call. Interesting - they say now that the balance sheet is Elroy-June 6
85NGL reported their March Q and fiscal year 2024 (ends March) results. EBITDA miElroy-June 6
84Slightly offtopic to the Ameritrade holder who transitioned to Schwab I noticed FIFO_kid2-June 1
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
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