NGL Energy Partners LP (NYSE:NGL) Q2 2019 Earnings Conference Call Transcript

Nov 08, 2018 • 11:00 am ET


NGL Energy Partners LP (NYSE:NGL) Q2 2019 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Q2 2019 NGL Energy Partners LP Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to introduce one of your hosts for today's conference, Mr. Trey Karlovich, Chief Financial Officer. You may begin.

Robert karlovich

Thank you, and welcome everybody. This conference call includes forward-looking statements and information. Words such as anticipate, project, expect, plan, goal, forecast, intend, could, believe, may and similar expressions and statements are intended to identify forward-looking statements.

While NGL Energy Partners believes that its expectations are based on reasonable assumptions, there can be no assurance that such expectations will prove to be correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations included in the forward-looking statements.

These factors include: prices and market demand for natural gas, natural gas liquids, refined products and crude oil; level of production of crude oil, natural gas liquids and natural gas; the effective market conditions on demand for oil, natural gas and natural gas liquids; and the ability to successfully identify and consummate growth opportunities and strategic acquisitions at costs that are accretive to financial results and to successfully integrate and operate assets and businesses that are built or acquired.

Other factors that could impact these forward-looking statements are described in the risk factors in the partnership's annual report on Form 10-K, quarterly reports on Form 10-Q and other public filings and press releases.

NGL Energy Partners undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.

This conference call also includes certain non-GAAP measures, namely EBITDA, adjusted EBITDA and distributable cash flow, which management believes are useful in evaluating our financial results. Please see the partnership's earnings releases, investor presentations and annual and quarterly reports on Form 10-K and Form 10-Q on our website at under the Investor Relations tab for more information on our use of non-GAAP measures as well as reconciliations of differences between any non-GAAP measures discussed on this conference call to the most directly comparable GAAP financial measures.

At this time, I will now turn the call over to our CEO, Mr. Mike Krimbill. Mike?

Michael Krimbill

Thanks, Trey. And welcome everyone. We are reporting record adjusted quarterly EBITDA for the second time this fiscal year. Crude Oil Logistics generated nearly $50 million of EBITDA this quarter, volumes on Grand Mesa continue to increase. Water Solutions volumes for the quarter exceeded the prior year by 350,000 barrels per day. We expect to dispose of approximately 1.3 million barrels a day by the end of the fiscal year.

We experienced a disappointing skim oil result due to lower than expected volumes and prices. We are currently working to correct that. The liquid logistics has turned around from last year with both increased volumes and margins as well as all railcars being utilized, which is I think the first time in 3