NGL Energy Partners LP

Greetings. Welcome to NGL Energy Partners 3Q26 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Brad Cooper, CFO at NGL Partners. You may begin.

Good afternoon, and thank you to everyone for joining us on the call today. Our comments today will include plans, forecasts, and estimates that are forward-looking statements under the U.S. securities law. These comments are subject to assumptions, risks, and uncertainties that could cause actual results to differ from the forward-looking statements. Please take note of the cautionary language and risk factors provided in our presentation materials and our other public disclosure materials. We delivered another strong quarter highlighted by record water disposal volumes and water solutions and continued execution on our financial strategy. For the quarter, adjusted EBITDA from continuing operations was $172.5 million, up from $158 million a year ago, a 9.2% increase. On the financial strategy front, we executed on two of our priorities, reducing higher cost preferred equity and repurchasing common units. During the quarter, we redeemed an additional 18,506 Class D preferred units, bringing total redemptions to 88,506, about 15% of the original Class D outstanding. On the common units, we repurchased 1.6 million units during the quarter and have now repurchased approximately 8.7 million units since program inception, which is almost 7% of the outstanding units at an average price of $5.70 per unit. We have almost fully exhausted the board approved common unit repurchase plan. At current unit price levels, we are primarily focused on eliminating the Class D preferred units. With the water growth projects we have line of sight into and the Class D preferreds, we will be targeting these two over the next fiscal year. Dougl provides prepared remarks shortly, but in early January, we eclipsed 3.5 million barrels per day of disposal volumes, which is a record for the partnership. We have experienced a few days in mid-January when volumes were under 3 million barrels a day due to the extreme cold weather most of the Midwest and Southeast experienced. We do not expect this to have a material impact on our full year guide for fiscal 2026 due to the nature of how we contract. Recall that over 1.5 million barrels per day of our water disposal volume is under MVC or CBC, which allows us to get paid on volumes even if they are not disposed of. The new contracted volumes that Mike mentioned on the previous earnings call are coming online, and we anticipate a strong close to fiscal 2026. We are still guiding our full year EBITDA to a range of $650 to $660 million. These new contracted volumes that have recently come online set us up for a strong start to fiscal 2027, where we are still projecting to exceed $700 million of EBITDA for the first time in the history of the partnership. In the third quarter of fiscal 2026, water solution segment generated a necessity of 154.5 million versus 132.7 million in the prior year third quarter, an increase of 16.5%. We again set a physical disposal volume record processing roughly 3.07 million barrels per day of physical produced water versus 2.6 million barrels per day in the prior year third quarter, an increase of 17.1%. Total volumes we were paid to dispose that includes deficiency volumes were 3.13 million barrels per day in the third quarter versus 2.91 million barrels per day in the prior year third quarter. So total volumes we were paid to dispose were up approximately 7% third quarter of fiscal 2026 over third quarter of fiscal 2025. Operating expenses for the quarter were 18 cents per barrel due to non-recurring expense reductions. Crude oil logistics adjusted EBITDA was 15.4 million in the third quarter of fiscal 2026 versus 17.3 million in the prior year's third quarter. Physical volumes on the Grand Mesa pipeline averaged approximately 85,000 barrels per day, up significantly from 61,000 barrels per day in the prior year quarter. Margins for barrels on Grand Mesa were lower in the third quarter of fiscal 2026 when compared to the prior year's third quarter due to lower oil prices as well as a reduction in volumes from committed producers with higher contracted tariffs. Liquid's logistics adjusted EBITDA was $15.2 million in the third quarter of fiscal 2026 versus $18.6 million in the prior year's third quarter. Strategically, we executed a significant repositioning in April 2025 with this segment. We sold our wholesale propane business in 17 NGL terminals, exited the refined products business, and wound down our biodiesel marketing business. Today's liquid platform is more focused and anchored by our centennial butane blending business. The streamlined footprint is performing as expected for the full year. Now I will turn the call over to Doug White. Doug?

Thank you, Brad. As Brad mentioned earlier, we entered into several volume commitment contracts in the Delaware Basin that included a large amount of asset development. Our development team executed these projects ahead of schedule and under budget. We are happy to report the water volumes associated with these projects is flowing and has been at or above our expectations. The capital investment included the Western Express pipeline expansion of 27 miles of 24-inch pipeline, further expanding our reach into our customer footprint and providing flexibility to transport water to areas of underutilized capacity and away from areas burdened by seismicity and poor pressure constraints. I want to thank the operations team for their successful execution of these projects. In the quarter, we achieved an all-time daily record of approximately 3.3 million barrels of water, and on January 16th, we received over 3.5 million barrels of water in a single day. This reflects the capacity increase from the capital investment I just mentioned. Our ability to execute large growth projects at attractive multiples over the last several years, combined with our operational capabilities, is allowing us to deliver consistent economic results. We continue to engage our producer customers with opportunities, and we are working to secure additional disposal contracts in fiscal year 2027. We continue to improve the business, and as an example, we are in our second year of development of our AI machine-based learning project, which will begin to contribute to operational efficiencies in this calendar year. We are utilizing the millions of data points collected through our SCADA system, automated electric power consumption meters, and system flow models, which are fed into our proprietary AI model. and it is identifying opportunities to increase revenues and decrease expense. We're excited to continue to grow this project over time and increase the AI impact on our business. As an update to our large-scale produced water treatment strategy in the Delaware Basin, we recently entered into an MOU with Natura Resources, a leading advanced modular nuclear reactor developer. We are pursuing a combination of nuclear power applied to thermal desalination technology in Reeves County, Texas, where our outfall for the TPDES discharge permit is located. We are progressing toward a final draft of that permit this month and expect to receive an issued permit early this year. These steps lead us closer to realizing our medium to long-term goals of large-scale disposition of produced water. I'll now turn the call over to our CEO, Mike Krimble.