Delek Logistics Partners' Q2 2025 Earnings Call: Navigating Contradictions in Producer Dependence and M&A Strategy

Dependence on third-party producer activity, producers' plans and guidance amid commodity price volatility, M&A strategy and focus are the key contradictions discussed in Delek Logistics Partners' latest 2025Q2 earnings call.



Strong Financial Performance and Guidance:
- Delek Logistics Partners reported approximately $120 million in quarterly adjusted EBITDA, on track to deliver its full-year EBITDA guidance of $480 million to $520 million.
- The strong performance was driven by successful expansion projects and strategic acquisitions, particularly the commissioning of the new Libby plant.

Libby Plant Expansion and Natural Gas Offerings:
- The commissioning of the Libby 2 gas plant was completed, with plans to fill the plant to capacity in the second half of 2025.
- This expansion enhances Delek's natural gas processing capabilities, particularly in sour gas handling, which positions the company for future growth in the Delaware Basin.

Crude and Water Gathering Operations:
- Both VPG and DTG crude gathering operations started the second half of the year strong, with significant volume increases.
- The growth in crude and water gathering is attributed to strategic acquisitions and the company's expanding footprint in the Permian Basin, specifically in the Midland and Delaware basins.

Distribution Growth:
- The Board of Directors approved the 50th consecutive increase in quarterly distributions to $1.11 per unit.
- This achievement reflects the company's prudent management of leverage and its commitment to rewarding unitholders through consistent distributions.