NGL Energy Partners LP (NYSE:NGL) Q1 2021 Earnings Conference Call - Final Transcript

Aug 10, 2020 • 05:00 pm ET

Previous

NGL Energy Partners LP (NYSE:NGL) Q1 2021 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Q & A
Operator
Operator

[Operator Instructions] And we have a question from Pearce Hammond from Simmons Energy. Please go ahead.

Analyst
Pearce Hammond

Yes. Good afternoon and thanks for taking my questions. Congrats on some of the recent success with some of the acreage dedications in the Delaware Basin. I was just curious, what are leading-edge disposal fees right now within the Delaware Basin?

Executive
H. Michael Krimbill

Doug, I'll call on you for that one, but I think they're different in Texas versus New Mexico. Doug, what are your thoughts?

Executive
Doug White

The range in Texas is anywhere from $0.45 to $0.55 generally. And in some areas, such as our Hillstone, Loving County assets, they're somewhere from that range but maybe a little bit higher due to its unique area, lack of electricity, station power, such as that. So we do have higher rates in that area. New Mexico, with the Devonian wells, they're much more expensive to develop, lack of reliable offtake and takeaway. We see those prices range anywhere from the lows of $0.55 to $0.80. You would imagine prices may have decreased during this downturn, but we have not seen that. We've seen some very temporary rate reductions to help the producers. But those rates, subsequent to the increase in commodity price have gone back up to pre-COVID levels.

Analyst
Pearce Hammond

Okay. Thank you for that. And then Mike and Trey, just wanted to expound a little bit upon your prepared remark comments on asset divestitures and potentially joint ventures to help reduce leverage. What are your thoughts there? What's the sense of timing? What's the market like for that right now?

Executive
H. Michael Krimbill

What do you think, Trey? Go ahead.

Executive
Robert W. Karlovich

Yes. So thanks, Pearce. So, as we've done historically, we're always looking at opportunities. It is a more challenged market, however, we are seeing it improve. We've got some significant opportunity ahead of us as well with -- in particular, with our Water business but really across all of our lines of business. So those are the things that we continually evaluate and expect to do so in these circumstances as well. Now generally speaking, the multiples that we would look at for those types of transactions, they have to be deleveraging in order to make an impact. So that's what we would be targeting. So I would say nothing is on sale. Mike, I don't know if you have anything to add.

Executive
H. Michael Krimbill

I agree, yes.

Analyst
Pearce Hammond

Okay. Great. And then if I could squeeze one more in. Just what's the latest update on Poker Lake?

Executive
H. Michael Krimbill

Doug?

Executive
Doug White

As Mike stated previously, our 30-inch pipeline is in the ground and taking water. We -- our timing of that development is unchanged from previous discussions. That's all we can say about it currently publicly.

Analyst
Pearce Hammond

Okay. Thank you for taking my questions.

Executive
Robert W. Karlovich

Thank you.

Operator
Operator

[Operator Instructions] And we have a question from James Spicer from TD Securities. Please go ahead.

Analyst
James Spicer

Hi guys. Good afternoon. The reduction in guidance -- so did the addition of the range to the guidance $560 million to $600 million, am I assume