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Oil and gas production brings water to the surface that producers need to reuse or dispose of. NGL Energy Partners LP collects this water through pipelines and trucks, treats and recycles some, and injects the rest into disposal wells. Its Water Solutions business operates mainly in the Delaware Basin in New Mexico and Texas. Disposal fees provide most of this business’s revenue, supplemented by sales of oil recovered from the water. Long-term contracts often commit customers’ production from specified acreage to NGL’s system, and many require minimum water volumes.
NGL is directing its strategy and capital toward water services, but it still buys, transports and resells crude oil and supplies natural gas liquids such as propane and butane to retail, commercial and industrial customers. These product sales account for most company revenue. It earns margins between selling prices and supply and delivery costs, alongside transportation and storage fees. It has sold its refined-products business and most of its wholesale propane business, rather than exited energy logistics altogether.
The water and crude-oil businesses depend on producers maintaining output in the areas NGL serves, and their largest customers account for most of their revenue. Water disposal also requires permitted underground space with remaining capacity. Texas and New Mexico regulators can restrict or shut injection wells over earthquake or pressure concerns, limiting how much customer water NGL can accept.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Western Midstream Partners, LP and NGL Energy Partners LP compete to collect, recycle and dispose of water from Delaware Basin oil producers, and both operate energy-handling assets in the DJ Basin. Western Midstream’s Delaware water volumes offer a comparison for the producer activity feeding NGL’s water business.
Kinetik Holdings Inc. and NGL Energy Partners LP compete for Permian Basin producers’ spending on collecting and disposing of produced water and handling crude oil. Kinetik’s water-disposal and crude-oil gathering activity offers a comparison for demand in those parts of NGL’s business, rather than its much broader gas-processing operations.
Summit Midstream Corporation and NGL Energy Partners LP both collect crude oil and produced water for producers, and oil-price-driven drilling decisions affect their DJ and Permian operations. Watch Summit’s producer drilling and completion activity in its Rockies and Permian segments: fixed service fees do not remove the volume risk that also matters to NGL’s water business.
Energy Transfer LP and NGL Energy Partners LP compete to transport, store and sell crude oil and natural gas liquids for producers and downstream buyers. Energy Transfer’s activity in those products is the relevant comparison for NGL’s crude-oil and liquids businesses, not its wider natural-gas operations.
Enterprise Products Partners and NGL Energy Partners LP compete to move crude oil and to transport, store and distribute natural gas liquids from producers to buyers. Enterprise’s Crude Oil Pipelines & Services and NGL Pipelines & Services results offer a comparison for the supply and downstream demand reaching NGL’s logistics businesses.
Targa Resources and NGL Energy Partners LP compete to buy and sell crude oil and natural gas liquids and to collect, store and handle crude oil at terminals for producers and marketers. Targa’s crude-oil gathering and liquids sales are the activities to compare with NGL’s logistics businesses, rather than its natural-gas sales to utilities.
Enterprise Products Partners L.P. earningsEPD
Enterprise Products Partners' crude-oil and natural-gas-liquids pipeline businesses will show how much product is moving through logistics markets where it competes with NGL.
Look at activity and results in Enterprise Products Partners' Crude Oil Pipelines & Services and NGL Pipelines & Services businesses. Stronger performance would indicate that producer supply and downstream buyer demand are supporting these logistics markets, a helpful backdrop for NGL's competing crude-oil and natural-gas-liquids businesses. Weaker performance would point to softer flows or demand and a tougher market for NGL, but would not tell you how NGL itself performed.
Western Midstream Partners, LP earningsWES
Western Midstream Partners' Delaware Basin water volumes will show whether producer activity is supporting demand in the water-services market where it competes with NGL.
Focus on Western Midstream Partners' Delaware Basin water volumes and compare them with NGL's figures for the same area and period, where comparable data are available. Steady or rising volumes at both companies would indicate that local producer activity is supporting water-services demand. If Western Midstream's volumes rise while NGL's comparable volumes weaken, work may be shifting between competitors; one company's growth alone does not prove the whole market is improving.
NGL ENERGY PARTNERS LP earningsThis company
NGL's report will show whether more produced water moving through its systems is still translating into Water Solutions revenue and earnings.
Read Water Solutions' average daily processed volume alongside its average fee per barrel and Adjusted EBITDA. Higher volume with a steady fee and rising Adjusted EBITDA would show that growth is improving the segment's earnings; higher volume with a lower fee or no improvement in Adjusted EBITDA would show that processing more water alone is not strengthening profitability.
