NGL Energy Partners (NGL, Financial) has successfully finalized several significant asset sales, which include the sale of 17 natural gas liquids terminals and the Green Bay terminal. Additionally, the company divested its Rack Marketing refined products division, its ownership in Limestone Ranch, and its remaining crude rail car fleet, among other assets.
These strategic divestitures aim to allow NGL to concentrate more effectively on its core operations. By reallocating resources, the company intends to strengthen its financial foundation. The revenue generated from these sales will be directed towards completely paying off the outstanding balance on its asset-based lending (ABL) facility. Remaining funds will further aid in reducing leverage and addressing various elements of the company's capital structure.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for NGL Energy Partners LP (NGL, Financial) is $15.00 with a high estimate of $15.00 and a low estimate of $15.00. The average target implies an upside of 403.36% from the current price of $2.98. More detailed estimate data can be found on the NGL Energy Partners LP (NGL) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, NGL Energy Partners LP's (NGL, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for NGL Energy Partners LP (NGL, Financial) in one year is $2.26, suggesting a downside of 24.16% from the current price of $2.98. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the NGL Energy Partners LP (NGL) Summary page.
NGL Key Business Developments
Release Date: February 10, 2025
- Consolidated Adjusted EBITDA: $147.7 million in Q3, down from $151.7 million in the prior year.
- Water Solutions Adjusted EBITDA: $132.7 million in Q3, up from $121.3 million in the prior year.
- Physical Water Disposal Volumes: 2.62 million barrels per day in Q3, up from 2.38 million barrels per day in the prior year.
- Crude Oil Logistics Adjusted EBITDA: $17.4 million in Q3, up from $17 million in the prior year.
- Liquid Logistics Adjusted EBITDA: $8.2 million in Q3, down from $26.3 million in the prior year.
- Biodiesel Negative Adjusted EBITDA: $12.1 million in Q3.
- Operating Expense per Produced Barrel: $0.21 in Q3, down from $0.25 in the prior year.
- Projected Full Year EBITDA: $620 million.
- Proceeds from Asset Sales: Approximately $95 million from terminal sales and $20 million from railcar sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NGL Energy Partners LP (NGL, Financial) secured new long-term contracts with Prairie operating and another producer, potentially increasing crude oil volumes on the Grand Mesa pipeline to 100,000 barrels per day.
- The company signed agreements to sell 18 natural gas liquids terminals, expected to generate approximately $95 million in proceeds, which will be used to reduce debt.
- The Lex 2 project commenced operations in October and is performing as expected, contributing positively to the company's operations.
- NGL Energy Partners LP (NGL) successfully reduced working capital needs by $60 to $70 million annually through the sale of non-core assets and winding down the biodiesel marketing business.
- Water solutions adjusted EBITDA increased to $132.7 million in the third quarter, up from $121.3 million in the prior year, with disposal volumes rising by 12% year-over-year.
Negative Points
- The winding down of the biodiesel business negatively impacted the quarter's adjusted EBITDA by $12.1 million.
- Consolidated adjusted EBITDA for the quarter decreased to $147.7 million from $151.7 million in the prior year, reflecting challenges in certain business segments.
- Crude oil logistics volumes on the Grand Mesa pipeline decreased to 61,000 barrels per day from 70,000 barrels per day in the previous year.
- Liquid logistics adjusted EBITDA fell significantly to $8.2 million from $26.3 million in the prior third quarter, primarily due to the biodiesel business wind-down.
- The company is experiencing performance volatility and seasonality in its liquids logistics businesses, complicating earnings predictability.
