NGL Energy Partners LP (NYSE: NGL-PC)

NGL Energy Partners LP (NGL) is a diversified midstream energy partnership operating in the energy industry. With a ticker symbol of NGL, the company's main business activities include transporting, treating, recycling, and disposing of produced and flowback water generated from crude oil and natural gas production, as well as transporting, storing, marketing, and providing logistics services for crude oil and liquid hydrocarbons.

NGL's primary products and services include water processing, crude oil transportation, and storage. The company's customer base is primarily composed of large, publicly traded oil and gas companies with diversified acreage positions across multiple leading oil and gas plays. NGL's Water Solutions segment is the largest independent produced water transportation and disposal company in the United States, with a system that handled approximately 884.6 million barrels of produced water across its areas of operation during the year ended March 31, 2024. The company operates in several of the most prolific crude oil and natural gas producing areas in the United States, including the Delaware Basin, the DJ Basin, and the Eagle Ford Basin.

NGL's 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, refineries, and other trade hubs. The segment is supported by certain long-term, fixed rate contracts that include minimum volume commitments on its owned and leased pipelines and storage tanks. NGL's Liquids Logistics segment conducts supply operations for natural gas liquids, refined petroleum products, and biodiesel to a broad range of commercial, retail, and industrial customers across the United States and Canada. The company's Liquids Logistics segment operates through its 23 owned terminals, third-party storage and terminal facilities, nine common carrier pipelines, and a fleet of leased railcars.

NGL's competitive strengths include its water processing facilities, which are strategically located near areas of high crude oil and natural gas production, its network of crude oil transportation and storage assets, and its network of natural gas liquids transportation, terminal, and storage assets. The company's diversified operations also allow it to generate more predictable and stable cash flows on a year-to-year basis. NGL's management team has extensive experience in the midstream industry and has developed strong business relationships with key industry participants throughout the United States. The company's management team has a track record of acquiring, integrating, operating, and growing successful businesses, and has experience in identifying, evaluating, and completing acquisitions and other ventures that provide opportunities to complement, grow, and expand its existing operations.

NGL's Water Solutions segment faces competition from independent produced water transportation and disposal companies and the water transportation and disposal operations owned by oil and gas production companies themselves. The company's Crude Oil Logistics segment faces competition from other crude oil transportation and storage companies, while its Liquids Logistics segment faces competition from other natural gas liquids, refined petroleum products, and biodiesel suppliers. NGL's pricing policy varies depending on the segment and the type of service provided. The company charges customers a fee per barrel of produced water received in its Water Solutions segment, and generates revenue from the sale of crude oil recovered in processing the produced water. In its Crude Oil Logistics segment, NGL charges customers a fee per barrel of crude oil transported, and generates revenue from the sale of crude oil stored in its terminals.

NGL's customers include approximately 1,200 customers in 48 states, Mexico, and Canada, including national, regional, and independent retail, industrial, wholesale, petrochemical, refiner, and natural gas liquids production customers. The company's largest customers account for approximately 23% of its revenues. NGL has 607 employees in 27 states and Canada, with 226 providing work primarily for its Water Solutions segment, 58 providing work primarily for its Crude Oil Logistics segment, 151 providing work primarily for its Liquids Logistics segment, and 172 providing administrative services to the various business segments.

In terms of environmental regulation, NGL's operations are subject to federal, state, and local laws and regulations relating to the protection of the environment. The company's activities are informed by existing regulatory requirements, including those related to air and water quality, permitting, well location, methods of drilling, well operations, and conservation of resources. NGL's operations are also subject to various reporting requirements that are designed to facilitate transparency and prevent market manipulation. The company is subject to anti-market manipulation provisions in the Natural Gas Act and the Natural Gas Policy Act of 1978, as amended by the Energy Policy Act of 2005, which authorizes the Federal Energy Regulatory Commission to impose fines of up to $1 million per day per violation of the Natural Gas Act, the Natural Gas Policy Act of 1978, or their implementing regulations.