NGL Energy Raises FY2027 EBITDA Guidance on Record Water Volumes

NGL Energy Partners LP (NYSE: NGL) raised its fiscal 2027 Adjusted EBITDA guidance after second-quarter earnings benefited from higher Water Solutions volumes, including record produced-water disposal activity. The partnership now expects full-year Adjusted EBITDA of $735 million to $745 million, a range that assumes annual growth of about 12%.

Adjusted EBITDA from continuing operations rose 15% to $192.4 million for the three months ended September 30, 2026, from $167.3 million a year earlier. The improvement was led by Water Solutions, which contributed $178.3 million, or 87% of segment Adjusted EBITDA before Corporate and Other costs.

On a GAAP basis, NGL recorded a $42.6 million loss from continuing operations, compared with income of $29.8 million in the prior-year quarter. The latest result included a $58.1 million impairment charge. The presentation’s segment reconciliation showed a $56.6 million operating loss in Crude Oil Logistics, while consolidated operating income was $23.9 million.

Water volumes reach record level

Water Solutions remained the main earnings driver as produced-water volumes reached approximately 3.45 million barrels per day, up 22.9% year over year and a company record. Paid and physically disposed volumes averaged 3.49 million barrels per day, an increase of 10.9% from the same quarter last year.

The segment’s Adjusted EBITDA increased to $178.3 million from $151.9 million. NGL said its scale contributed to lower unit costs, with operating expense per barrel down 9.1% in the period presented.

During the quarter, the partnership added about 255,000 barrels per day of permitted injection capacity, bringing the fiscal year-to-date increase to approximately 450,000 barrels per day. NGL also completed the LEX II Extension, adding 81 miles to the LEX Pipeline System. The extension can move roughly 560,000 barrels per day from Eddy and Lea counties in New Mexico to Andrews County, Texas.

NGL operates 91 water-handling facilities and 202 injection wells across four basins, with total permitted capacity of about 6.7 million barrels per day. Its Delaware Basin system includes approximately 840 miles of large-diameter pipeline and about 5.4 million barrels per day of permitted disposal capacity.

The water business is supported by approximately 766,000 dedicated acres and more than 1.75 million barrels per day of produced-water volume commitments. More than 90% of volumes are covered by acreage dedications or volume commitments, and the weighted average remaining term of committed contracts exceeds nine years. The partnership said about 96% of fiscal 2026 disposal volumes came from investment-grade and super-major counterparties.

Logistics businesses post mixed results

Liquids Logistics generated Adjusted EBITDA of $14.2 million, up from $10.5 million a year earlier. The business supplies natural gas liquids through assets that include five owned terminals, access to nine common-carrier pipelines, 3,600 leased railcars and marine butane export capacity in Chesapeake, Virginia.

Crude Oil Logistics reported Adjusted EBITDA of $11.9 million, down from $16.6 million in the prior-year quarter. Its assets include the 550-mile Grand Mesa Pipeline, which has capacity of 150,000 barrels per day, as well as crude storage and terminal facilities. The segment’s quarterly results included the impairment charge reflected in the partnership’s GAAP performance.

Corporate and Other expenses reduced Adjusted EBITDA by $12.0 million, leaving continuing-operations Adjusted EBITDA at $192.4 million.

Financing actions lower borrowing costs

NGL repriced its Term Loan B, reducing the applicable margins by 50 basis points. The partnership expects the change to save approximately $5 million in annual interest expense. It also exercised $50 million of the accordion feature under its asset-based lending facility, increasing total commitments to $475 million.

Management’s fiscal 2027 outlook remains subject to the assumptions and uncertainties associated with forward-looking statements. The presentation identified disposal-capacity constraints and regulatory risk in New Mexico as considerations for the water business. NGL said it has secured 1 million barrels per day of pore space in Andrews County, Texas, and is pursuing a permit that could provide an alternative outlet through water treatment and beneficial reuse. The partnership cautioned that actual results could differ materially if its assumptions prove incorrect or other operational, financial or regulatory risks emerge.