NGL Energy's Q1 2026: Unraveling Contradictions on Water Volumes, Capital Flexibility, and Debt Strategies

Water Volume Expectations, Capital Spending Flexibility, Water Volumes and Seasonality, Asset Sale Proceeds and Debt Reduction, and Water Volumes and System Capacity are the key contradictions discussed in NGL Energy Partners LP Common Units' latest 2026Q1 earnings call.



Improved Water Solutions Performance:
- NGL Energy Partners' Water Solutions adjusted EBITDA increased to $142.9 million in Q1 '26, up 13.8% from the previous year's first quarter.
- This growth was primarily driven by higher disposal revenues due to increased produced water volumes processed from contracted customers and higher water pipeline revenue from the LEX II pipeline.

Crude Oil Logistics Segment Volume Recovery:
- Volumes on the Grand Mesa pipeline averaged 55,000 barrels per day in Q1 '26, down from 63,000 barrels per day in Q1 '25.
- However, July volumes were 25% higher than June volumes, indicating a rebound, attributed to anticipated increase in volumes on the Grand Mesa system.

Liquids Logistics Segment Asset Sales:
- The Liquids Logistics segment's adjusted EBITDA was $2.9 million in Q1 '26, down from $5.7 million in the prior year, primarily due to asset sales.
- The primary EBITDA contributor moving forward is expected to be the butane blending business, with most of the segment's EBITDA occurring in the second half of the fiscal year.