NGL Energy Partners LP (NGL) Stock Analysis and Metrics

NGL Energy Partners

NYSE: NGL

$15.56 ▼ -0.52 (-3.20%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap2.04 Bn

P/E-4.59

P/S0.65

Div. Yield0.00

ROIC (Qtr)0.03

Total Debt (Qtr)3.23 Bn

Revenue Growth (1y) (Qtr)-2.22

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About

NGL Energy Partners LP is a diversified midstream energy partnership that transports treats recycles and disposes of produced and flowback water generated from crude oil and natural gas production The company also transports stores markets and provides logistics services for crude oil and liquid hydrocarbons It operates primarily in the United States and Canada serving upstream midstream and downstream customers in the energy sector

NGL Energy Partners LP generates revenue through fee-based services and product sales across its three operating segments The Water Solutions segment earns revenue from water transportation treatment recycling disposal and the sale of recovered skim oil and non-potable water The Crude Oil Logistics segment generates income from purchasing transporting storing and terminaling crude oil The Liquids Logistics segment derives revenue from supplying natural gas liquids to commercial retail and industrial customers through storage terminaling transportation and marine export services

The company operates through the following segments: Water Solutions Crude Oil Logistics and Liquids Logistics

• The Water Solutions segment transports treats recycles and disposes of produced and flowback water from oil and gas production It sells produced water for reuse and brackish non-potable water to producer customers As part of water processing it aggregates and sells recovered crude oil known as skim oil The segment also disposes of solids such as tank bottoms drilling fluids and drilling muds and provides ancillary services like truck and frac tank washouts Activities are supported by long-term fixed fee contracts and acreage dedications with minimum volume commitments from leading oil and gas companies.

• The Crude Oil Logistics segment purchases crude oil from producers and marketers and transports it to refineries or for resale at pipeline injection stations storage terminals barge loading facilities rail facilities and other trade hubs It provides storage terminaling and transportation services through owned assets Operations are supported by long-term fixed rate contracts with acreage dedications and minimum volume commitments on storage tanks and owned and leased pipelines.

• The Liquids Logistics segment conducts supply operations for natural gas liquids to commercial retail and industrial customers across the United States and Canada These operations are conducted through five owned terminals third-party storage and terminal facilities nine common carrier pipelines and a fleet of leased railcars The segment provides marine export services for butane from its Chesapeake Virginia facility and owns a propane pipeline in Michigan It uses back-to-back physical contracts pre-sale agreements and financially settled derivatives to manage price exposure.

NGL Energy Partners LP holds a strong position in the midstream energy industry particularly as one of the largest independent produced water transportation and disposal companies in the United States The company benefits from strategic asset locations in prolific basins such as the Delaware DJ and Eagle Ford Basins Competitive advantages include long-term contracts with acreage dedications minimum volume commitments and integrated infrastructure networks that are difficult for competitors to replicate The company faces competition from independent water handling firms and in-house operations of oil and gas producers but differentiates through service reliability scale and contractual stability

The company serves large publicly traded oil and gas companies with diversified acreage positions across multiple producing regions In the Water Solutions segment 73% of revenue came from the ten largest customers during the year ended March 31 2025 In the Crude Oil Logistics segment 79% of revenue was generated from the ten largest customers In the Liquids Logistics segment 36% of revenue came from the ten largest customers Key customers include major energy producers refiners and marketers though specific names are not disclosed in the filing

Investment Thesis

▲ Bull case

NGL’s strategic transformation into a pure-play water company is unlocking durable, fee-based cash flows that the market is underestimating, with the Water Solutions segment delivering 11% year-over-year growth in adjusted EBITDA for fiscal 2026 driven by expanding contractual volume commitments rising from 45% to 53% and over 90% of volumes tied to long-term agreements, providing predictable revenue streams insulated from commodity price swings; the Delaware Basin’s acreage dedications and infrastructure footprint, including millions of barrels of pore space in Andrews County, create a moat around operations that competitors cannot easily replicate, positioning NGL to capture outsized returns from internal growth projects like the LEX II expansion which adds 165,000 barrels per day of capacity underpinned by long-term commitments and is expandable to 650,000 barrels per day, signaling robust demand for water handling services that management confirmed is driven by sustained development acceleration rather than temporary commodity spikes; this structural shift toward contracted, essential water infrastructure ensures earnings stability and supports the guided 10% adjusted EBITDA growth to $715–$725 million in fiscal 2027, with growth capital of $200 million focused exclusively on water solutions projects already under contract, eliminating execution risk and enabling accretive expansion without reliance on volatile market conditions.
The partnership’s aggressive capital structure simplification is creating significant equity value that the market is overlooking, with the redemption of approximately 285,000 Class D preferred units representing 47% of the original issuance and directly reducing the highest-cost capital in the stack, while the $950 million refinancing transaction extended maturities and provided flexibility to opportunistically reprice term loan B debt, lowering interest expense as operational performance improves; this deleveraging trajectory, combined with the $50 million common unit buyback program that purchased 8.7 million units at $5.72 — a price validated by recent unit strength — demonstrates management’s commitment to allocating capital to the highest-return opportunities, and as leverage declines, NGL will gain access to capital markets to further redeem preferred units, creating a virtuous cycle where reduced financial drag amplifies free cash flow available for common unitholders, a dynamic not yet reflected in current valuations given the persistent discount to peers despite improving credit metrics and zero near-term debt maturities.
NGL’s adjacent growth opportunities in beneficial reuse, desalination, and energy campus development — including progress on the TCEQ draft permit for large-scale desalination and the Natura partnership — represent a hidden catalyst that management did not emphasize but could transform the Water Solutions segment from a disposal provider into a full-cycle water solutions leader, with the energy campus project exploring nuclear power and data center integration signaling long-term diversification beyond traditional oil and gas water handling; these initiatives, supported by advancing regulatory approvals and ongoing project development, tap into emerging demand for sustainable water management in the Permian Basin, where water scarcity and environmental pressures are increasing, positioning NGL to monetize its extensive infrastructure footprint through higher-margin recycling and reuse services that are not captured in current EBITDA guidance, which explicitly excludes benefits from new contracts or ventures, leaving substantial upside optionality in next-generation water solutions that could meaningfully augment fiscal 2027 and beyond results if commercialized.

NGL’s strategic transformation into a pure-play water company is unlocking durable, fee-based cash flows that the market is underestimating, with the Water Solutions segment delivering 11% year-over-year growth in adjusted EBITDA for fiscal 2026 driven by expanding contractual volume commitments rising from 45% to 53% and over 90% of volumes tied to long-term agreements, providing predictable revenue streams insulated from commodity price swings; the Delaware Basin’s acreage dedications and infrastructure footprint, including millions of barrels of pore space in Andrews County, create a moat around operations that competitors cannot easily replicate, positioning NGL to capture outsized returns from internal growth projects like the LEX II expansion which adds 165,000 barrels per day of capacity underpinned by long-term commitments and is expandable to 650,000 barrels per day, signaling robust demand for water handling services that management confirmed is driven by sustained development acceleration rather than temporary commodity spikes; this structural shift toward contracted, essential water infrastructure ensures earnings stability and supports the guided 10% adjusted EBITDA growth to $715–$725 million in fiscal 2027, with growth capital of $200 million focused exclusively on water solutions projects already under contract, eliminating execution risk and enabling accretive expansion without reliance on volatile market conditions.
The partnership’s aggressive capital structure simplification is creating significant equity value that the market is overlooking, with the redemption of approximately 285,000 Class D preferred units representing 47% of the original issuance and directly reducing the highest-cost capital in the stack, while the $950 million refinancing transaction extended maturities and provided flexibility to opportunistically reprice term loan B debt, lowering interest expense as operational performance improves; this deleveraging trajectory, combined with the $50 million common unit buyback program that purchased 8.7 million units at $5.72 — a price validated by recent unit strength — demonstrates management’s commitment to allocating capital to the highest-return opportunities, and as leverage declines, NGL will gain access to capital markets to further redeem preferred units, creating a virtuous cycle where reduced financial drag amplifies free cash flow available for common unitholders, a dynamic not yet reflected in current valuations given the persistent discount to peers despite improving credit metrics and zero near-term debt maturities.
NGL’s adjacent growth opportunities in beneficial reuse, desalination, and energy campus development — including progress on the TCEQ draft permit for large-scale desalination and the Natura partnership — represent a hidden catalyst that management did not emphasize but could transform the Water Solutions segment from a disposal provider into a full-cycle water solutions leader, with the energy campus project exploring nuclear power and data center integration signaling long-term diversification beyond traditional oil and gas water handling; these initiatives, supported by advancing regulatory approvals and ongoing project development, tap into emerging demand for sustainable water management in the Permian Basin, where water scarcity and environmental pressures are increasing, positioning NGL to monetize its extensive infrastructure footprint through higher-margin recycling and reuse services that are not captured in current EBITDA guidance, which explicitly excludes benefits from new contracts or ventures, leaving substantial upside optionality in next-generation water solutions that could meaningfully augment fiscal 2027 and beyond results if commercialized.

▼ Bear case

NGL’s reported Water Solutions growth is being inflated by temporary factors that the market is failing to scrutinize, particularly the 10% year-over-year increase in produced water volumes processed in Q4 FY26, which management attributed to strong customer activity but was significantly influenced by the U.S./Iran conflict-driven crude oil supply disruption that temporarily boosted production in the Delaware Basin — a non-recurring event that created a misleading tailwind for volume growth; moreover, the segment’s operating income declined by $29.0 million in Q4 FY26 versus the prior year due to $26.3 million in higher net unrealized losses on skim oil hedges, revealing that the EBITDA growth is being masked by volatile derivative impacts excluded from adjusted metrics, and with oil prices having retraced from their March 2026 peak, the underlying organic volume growth may be substantially weaker than reported, raising concerns that the guided 10% adjusted EBITDA increase for FY27 is overly optimistic if production normalizes and contractual commitments do not translate to proportional revenue gains amid potential pricing pressure from new market entrants.
The partnership’s capital structure improvements are being overstated as a bullish catalyst, given that the redemption of Class D preferred units, while reducing high-cost capital, has been funded largely by asset sales and free cash flow that may not be sustainable, with the $950 million refinancing extending maturities but not reducing overall debt leverage meaningfully — total long-term debt actually increased from $2.96 billion to $3.22 billion year-over-year — and the continued reliance on opportunistic term loan B repricing exposes NGL to refinancing risk if market conditions deteriorate, while the $200 million growth capex for FY27, though focused on water solutions, represents a significant increase from the $46 million maintenance capex and may not generate returns quickly enough to justify the outlay, especially if the LEX II expansion’s full capacity of 650,000 barrels per day remains underutilized despite management’s claims of strong demand, leaving the partnership vulnerable to overcapacity in a basin where water handling infrastructure is expanding rapidly across multiple competitors.
NGL’s Crude Oil Logistics segment remains a material and underappreciated drag on consolidated results, with the Q4 FY26 operating loss of $247.4 million driven by a $247.8 million goodwill impairment charge that signals deep-seated issues in the DJ Basin operations, and while management pointed to increased activity from private equity-backed producers, the segment’s full-year adjusted EBITDA of $58.9 million is dwarfed by the Water Solutions segment’s $602.7 million, highlighting the limited scalability and profitability of the legacy logistics business; furthermore, the Liquids Logistics segment’s performance is being distorted by volatile derivative impacts, with $17.0 million in unrealized losses on butane derivatives in Q4 FY26 offsetting what would otherwise be stronger results, and the continued exposure to commodity price swings in these non-core segments undermines the partnership’s goal of reduced volatility, suggesting that the transformation into a pure-play water company is incomplete and that residual risks from hydrocarbons logistics could resurface if market conditions shift, eroding the stability that investors are paying a premium for in the Water Solutions story.

NGL’s reported Water Solutions growth is being inflated by temporary factors that the market is failing to scrutinize, particularly the 10% year-over-year increase in produced water volumes processed in Q4 FY26, which management attributed to strong customer activity but was significantly influenced by the U.S./Iran conflict-driven crude oil supply disruption that temporarily boosted production in the Delaware Basin — a non-recurring event that created a misleading tailwind for volume growth; moreover, the segment’s operating income declined by $29.0 million in Q4 FY26 versus the prior year due to $26.3 million in higher net unrealized losses on skim oil hedges, revealing that the EBITDA growth is being masked by volatile derivative impacts excluded from adjusted metrics, and with oil prices having retraced from their March 2026 peak, the underlying organic volume growth may be substantially weaker than reported, raising concerns that the guided 10% adjusted EBITDA increase for FY27 is overly optimistic if production normalizes and contractual commitments do not translate to proportional revenue gains amid potential pricing pressure from new market entrants.
The partnership’s capital structure improvements are being overstated as a bullish catalyst, given that the redemption of Class D preferred units, while reducing high-cost capital, has been funded largely by asset sales and free cash flow that may not be sustainable, with the $950 million refinancing extending maturities but not reducing overall debt leverage meaningfully — total long-term debt actually increased from $2.96 billion to $3.22 billion year-over-year — and the continued reliance on opportunistic term loan B repricing exposes NGL to refinancing risk if market conditions deteriorate, while the $200 million growth capex for FY27, though focused on water solutions, represents a significant increase from the $46 million maintenance capex and may not generate returns quickly enough to justify the outlay, especially if the LEX II expansion’s full capacity of 650,000 barrels per day remains underutilized despite management’s claims of strong demand, leaving the partnership vulnerable to overcapacity in a basin where water handling infrastructure is expanding rapidly across multiple competitors.
NGL’s Crude Oil Logistics segment remains a material and underappreciated drag on consolidated results, with the Q4 FY26 operating loss of $247.4 million driven by a $247.8 million goodwill impairment charge that signals deep-seated issues in the DJ Basin operations, and while management pointed to increased activity from private equity-backed producers, the segment’s full-year adjusted EBITDA of $58.9 million is dwarfed by the Water Solutions segment’s $602.7 million, highlighting the limited scalability and profitability of the legacy logistics business; furthermore, the Liquids Logistics segment’s performance is being distorted by volatile derivative impacts, with $17.0 million in unrealized losses on butane derivatives in Q4 FY26 offsetting what would otherwise be stronger results, and the continued exposure to commodity price swings in these non-core segments undermines the partnership’s goal of reduced volatility, suggesting that the transformation into a pure-play water company is incomplete and that residual risks from hydrocarbons logistics could resurface if market conditions shift, eroding the stability that investors are paying a premium for in the Water Solutions story.

Segments Breakdown of Revenue (2026)

Peer Comparison

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S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	DHT	DHT Holdings, Inc.	2,970.16 Bn	8,959.91	5,253.98	0.11 Bn
2	FLNG	Flex LNG Ltd.	1,659.01 Bn	18,718.63	4,884.38	1.82 Bn
3	ENB	Enbridge Inc	124.02 Bn	26.47	3.08	78.78 Bn
4	EP-PC	Kinder Morgan, Inc.	112.83 Bn	33.01	6.44	32.06 Bn
5	EPD	Enterprise Products Partners L.P.	83.80 Bn	14.05	1.63	33.91 Bn
6	TRP	Tc Energy Corp	73.34 Bn	29,565.54	14.35	33.55 Bn
7	ET	Energy Transfer LP	70.48 Bn	17.14	1.00	69.36 Bn
8	TRGP	Targa Resources Corp.	60.56 Bn	28.40	3.66	19.03 Bn

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Investment Thesis

Product and Service Breakdown of Revenue (2026)

Segments Breakdown of Revenue (2026)

Peer Comparison

Research Tools

Developers

About

Investment Thesis

Product and Service Breakdown of Revenue (2026)

Segments Breakdown of Revenue (2026)

Peer Comparison

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