NGL Energy Partners LP

from this segment occurs in the back half of the fiscal year. With that, I would now like to turn the call over to our CEO, Mike Krimble.

Thanks, Brad. Good afternoon. I have just some brief comments. With respect to the first quarter results, as Brad said, we have exceeded our expectations. Water Solutions experienced a strong quarter, continues to reduce its cost per barrel. We expect strength in the back half of the year from our crude oil logistics segment as volumes on Grand Mesa ramp up. The remaining liquid logistics business generates enough adjusted EBITDA to cover our corporate costs. If our results continue to exceed expectations, we will consider raising guidance at the time of our second quarter earnings call in early November. Now, as you can see from our first quarter actions, we are exercising an opportunistic strategy with regards to the use of our free cash flow. Cash is being used to purchase, repay debt and equity that provides the highest return and greatest benefit to the partnership while considering liquidity and leverage. These opportunities may change as the markets continue to move. So first, during the quarter, we purchased 19 million of our outstanding 2032 notes at a discount as our bond prices temporarily declined due to the tariff announcement in early April. We paid off 72 million of debt that was outstanding on our ABL at March 31st. We then repurchased 70,000 units, or approximately 12% of our outstanding Class D preferred units. The successful refinancing in February last year and the full payment of the preferred A rearages allows us to purchase any of our preferred classes, B, C and D in the open market or call them at our discretion. We have a couple of years to redeem the Class D preferred, so we are beginning that process now and anticipate additional purchases this fiscal year. And finally, under the board authorized common unit repurchase plan, we have purchased a total of approximately 4.7 million common units at an average price of $4.30 per unit. This represents approximately .5% of the outstanding common units. So in conclusion, as we move forward, the balance sheet remains a priority, but we are very focused on growing our adjusted EBITDA as it reduces leverage and provides additional cash for the balance sheet improvement. And so with that, Operator, let's open up the line for Q&A.

Certainly. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is from Tariq Hamid with JP Morgan.

Hi, this is Nevin on for Tariq. I know you just mentioned that you would be remaining opportunistic with capital allocation, but just going forward, do you expect further common unit repurchases, or would you consider this quarter more as a one-off, and you'll be remaining more concentrated on the Class Ds?

This is Brad. I think we'll continue to be opportunistic if the unit prices kind of hang out in the same level they've been this last quarter. I think you'll see us nibble at that. If the bonds trade down based on some macro event, we'll nibble at those, and we'll continue to attack the Class Ds. So, I don't think we're going to set a path right now in terms of what we're just going to go after solely. It'll be a little bit of each at these levels.

Got it. Thank you.

Your next question is from Derek Whitfield with Texas Capital.

Good afternoon, guys, and congrats on the opportunistic purchases. Thanks, Derek. With respect to the produced water volumes for the quarter, they were a little bit lighter than what we were expecting. Just wanted to see if you could add some colors to perhaps some of the moving parts for the quarter itself.

Doug, you want to take Q1's water volume question? Sure.

They were quite a bit close to where we were expecting. There were some... There were, in June, there were recycling jobs that ramped up, which we're now seeing, you know, those volumes on the takeaway side this quarter. But we felt pretty good about the volumes in Q1. We came in about 79,000 barrels a day over budget for the quarter, over our internal budget. So we felt those were pretty solid. We see that continuing for the balance of the year based on our customer forecast at this time.

Very

good.

Please, go ahead. Derek, let me add to that. So, Derek, when we look at volumes, we see the physical volumes, we move. Then we see the, we call it financial volumes, under MVCs, get paid for that physically didn't move. And then what we do not record in the quarter are additional MVC volumes we will get paid for next quarter. So you're not seeing all the volumes that

the system is actually, I'll say, is seeding. And you won't see it until next quarter when we, when we sell up on an MVC. I hope that makes sense. And then maybe

just higher level, wanted to get your thoughts on the heiress acquisition by Western. I mean, from our perspective, while we look at it and question the timing from a value recognition perspective, it definitely supports the Delaware Water thesis that we have for your business and the revaluing of that poor space over time.

You know, I'll start, Doug, you may have some thoughts too, but I think we congratulate heiress for getting a premium price for their business. That's a price we would never have paid. And, you know, our model is a little different too, because we do not focus on recycling. There are some other companies out there that do a great job who's really focused on that business.

And, Doug, you got any other thoughts?

Yes, I think it's great for the industry, great sign. Consolidation has been positive in the Delaware, for even on the producer side. Once the consolidation happens, you know, there's start, you build and continue to build a more of a foundation of an asset base, be it whether the producer side or the midstream side. So we welcome seeing consolidation, which also includes the, you know, fewer parties at the ballgame. You know, the remaining groups that are out there, I think a couple more of them are looking to be consolidated. So, you know, over time, this will come down to a few parties in the midstream water business, and it will then eliminate the spending of capex on duplicate assets, duplicating such the existing other competitor assets, which I think is good for the industry. You know, larger diameter pipes, more centralized operation of a larger contiguous area of assets. I think that's just good for the industry. And when it's good for the producers, producers become more efficient, drill more wells and create more water.

That's perfect. Thanks for your time and color, guys. Thanks, Derek.

We have reached the end of the question and answer session, and I will now turn the call over to Brad Cooper for closing remarks.

Thanks, everyone, for your interest in NGL. We look forward to catching up with everyone in early November during our second quarter call for fiscal 26.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.