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Introduction & Market Context
NGL Energy Partners LP (NYSE:NGL) released its Q2 fiscal year 2026 investor presentation, highlighting the company’s operational performance and strategic direction. The presentation, dated November 2025, comes as the company reported mixed financial results on November 4, with an earnings per share (EPS) of $0.02 that missed analyst expectations of $0.04, while revenue of $674.68 million exceeded forecasts of $594.19 million.
Following the earnings announcement, NGL’s stock experienced modest gains, rising 0.15% during regular trading and an additional 2.07% in aftermarket trading to close at $6.91, suggesting cautious optimism from investors despite the EPS miss.
Executive Summary
NGL Energy Partners reported consolidated Adjusted EBITDA of $167.38 million for Q2 FY2026, representing a 12% year-over-year increase. The company’s performance continues to be driven predominantly by its Water Solutions segment, which contributed $151.90 million or approximately 85% of total EBITDA. The Crude Oil Logistics and Liquids Logistics segments contributed 9% and 6%, respectively.
The company has raised its full-year Adjusted EBITDA guidance to $650-$660 million, indicating confidence in continued operational strength, particularly in its Water Solutions business, which has seen significant growth in produced water volumes and dedicated acreage in the Delaware Basin.
As shown in the following segment breakdown chart:
Water Solutions Performance Highlights
The Water Solutions segment remains NGL’s primary growth driver, showing impressive operational improvements across multiple metrics. Produced water processed increased significantly from 225,695 barrels per day (BPD) in Q2 FY2024 to 345,980 BPD in Q2 FY2026, while operating expenses per barrel decreased from $0.28 to $0.18 over the same period, demonstrating enhanced operational efficiency.
The segment’s EBITDA grew from $140.39 million in Q2 FY2024 to $151.90 million in Q2 FY2026, while total revenue increased from $197.24 million to $209.74 million. The company also expanded its dedicated acreage from 670,000 to 765,000 acres during this period.
These performance metrics are illustrated in the following chart:
NGL’s Water Solutions business in the Delaware Basin represents a significant competitive advantage, with the company operating the largest integrated network of large diameter produced water pipelines (over 800 miles) and disposal facilities with approximately 5,100 MBbl/d of permitted disposal capacity. The business is underpinned by long-term, fixed-fee contracts with material minimum volume commitments (MVCs) and major acreage dedications.
The following slide highlights the key features of NGL’s Delaware Water Business:
A crucial aspect of NGL’s Water Solutions business is its high-quality customer base. Approximately 80% of total disposal volumes come from investment grade counterparties, with over 90% of volume committed via acreage dedications and MVCs with an average remaining tenor of approximately 9 years. The weighted average MVC contract life is approximately 10 years, covering about 1,030 mbbl/d of minimum volume commitments across more than 15 long-term contracted customers.
The customer breakdown is illustrated in this chart:
Other Segments Performance
While the Water Solutions segment has shown robust growth, NGL’s other business segments have experienced declines in performance. The Crude Oil Logistics segment’s EBITDA decreased from $30.71 million in Q2 FY2024 to $16.55 million in Q2 FY2026, despite the Grand Mesa pipeline seeing a 30% increase in volumes quarter-over-quarter, as mentioned in the earnings call.
The Crude Oil Logistics operations involve purchasing crude oil from producers and marketers and transporting it to various destinations including refineries, storage terminals, and trading hubs. The segment’s key asset is the Grand Mesa Pipeline, a 550-mile 20" crude oil pipeline running from the DJ Basin to Cushing, Oklahoma, with a capacity of 150,000 BPD.
Similarly, the Liquids Logistics segment saw its EBITDA decrease from $17.09 million in Q2 FY2024 to $10.52 million in Q2 FY2026. This segment focuses on purchasing butane, propane, and other products from refiners and selling them to commercial, retail, and industrial customers throughout the US and Canada.
Strategic Initiatives & Outlook
NGL Energy Partners has undertaken several strategic initiatives to strengthen its financial position and enhance operational efficiency. Key recent milestones include:
1. Final arrearage payment to preferred unit holders in April 2024
2. Authorization of a $50 million common unit repurchase program in June 2024
3. Amendments to the Term Loan B agreement to reduce the SOFR margin from 4.5% to 3.75% in August 2024, and further to 3.50% in September 2025
4. Completion of the LEX II water pipeline project with initial capacity of 200,000 barrels per day in October 2024
5. Non-core asset sales totaling approximately $270 million in May 2025
During the earnings call, executives emphasized the company’s proactive approach to growth. "We are not waiting until calendar 2026, 2027, or later to grow. Our growth is here today," stated an executive named Mike, highlighting the company’s current expansion efforts rather than future promises.
Doug White, EVP of Water Solutions, underscored the strategic advantage of the company’s assets, stating, "We have secured the pore space and it is excellent pore space, unburdened by seismicity, existing injection, legacy vertical production."
Financial Position & Debt Management
NGL’s financial strategy has focused on strengthening its balance sheet and reducing debt. The company’s efforts to improve its financial position are reflected in the amendments to its Term Loan B agreement to reduce interest costs and the sale of non-core assets for approximately $270 million.
As of October 17, 2025, NGL had repurchased 88,506 of the 600,000 outstanding Class D preferred units, representing approximately 15% of outstanding units, further demonstrating its commitment to optimizing its capital structure.
The company’s Q2 FY2026 financial results by segment are detailed in the following table:
Despite the positive revenue surprise and growth in the Water Solutions segment, the EPS miss of $0.02 versus the expected $0.04 suggests that NGL continues to face challenges in translating top-line growth into bottom-line results. However, the raised full-year Adjusted EBITDA guidance to $650-$660 million indicates management’s confidence in the company’s operational trajectory.
Looking ahead, NGL anticipates approximately 10% growth in fiscal years 2026 and 2027, driven primarily by its Water Solutions segment and strategic initiatives in the Delaware Basin, positioning the company to capitalize on the continued strong demand for water management services in this key oil-producing region.
Full presentation:
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