Nevin Mathew

Nevin Mathew, representing Tarek Hamid from JPMorgan Chase & Co., asked if NGL Energy Partners had engaged in discussions with Devon Energy following their recent deal announcement and if there were any anticipated impacts on activity or volume.

Answer

Executive VP Doug White stated that NGL Energy Partners had not yet had the opportunity to converse with Devon Energy due to the immediate focus on the earnings call and ongoing business operations.

Nevin Mathew asked if NGL Energy Partners had discussions with Devon Energy following their recent deal announcement and if there were any anticipated changes to activity levels or water volumes.

Answer

Executive VP Doug White stated that NGL Energy Partners had not yet had the opportunity to discuss with Devon Energy due to being occupied with the earnings call and running the business.

Nevin Mathew, on behalf of Tariq Hamed, inquired about NGL Energy Partners' future capital allocation strategy, asking if the company will prioritize common unit repurchases or concentrate on its Class D preferred units.

Answer

EVP & CFO Brad Cooper responded that the company will continue to be opportunistic with its capital allocation. He explained that NGL will evaluate repurchasing common units, bonds, or Class D preferred units based on market conditions and which asset provides the most attractive return, rather than focusing on a single path.

Nevin Mathew, on behalf of Tariq Hamed, inquired about NGL Energy Partners' forward-looking capital allocation strategy, asking if the company plans to continue common unit repurchases or concentrate more on retiring Class D preferred units.

Answer

EVP & CFO Brad Cooper responded that NGL will maintain an opportunistic approach to capital allocation. He explained that if unit prices remain at current levels, the company will likely "nibble" at common units, while also targeting bonds if they trade down and continuing to address the Class D preferreds. Cooper emphasized that the strategy will not be focused on a single path but will adapt to market conditions.

On behalf of Tariq Hamed, Nevin Mathew inquired about NGL Energy Partners' forward-looking capital allocation strategy, asking if the recent common unit repurchases were a one-time event or if the focus would shift primarily to Class D preferred units.

Answer

EVP & CFO Brad Cooper explained that the company will continue to be opportunistic with its capital allocation. He stated that NGL will consider repurchasing common units if prices remain at current levels, buy back bonds if they trade down, and continue to address the Class D preferred units, pursuing a mix of all three strategies based on market conditions.

Nevin Mathew of JPMorgan Chase & Co. asked about capital spending flexibility, questioning how much lower CapEx could go if projects are delayed and if there is upside potential if oil prices firm up.

Answer

CEO H. Michael Krimbill responded that with growth capital already guided at a low $60 million and maintenance capital also at minimal levels, there is not significant room to reduce capital expenditures further from the guided $105 million total.

Nevin Mathew of JPMorgan Chase & Co. questioned the relative profitability of volumes from the new LEX II project and sought details on the associated contracts.

Answer

Executive Brad Cooper stated that the LEX II project is performing as expected but declined to provide specific details on profitability or contract structures. He also clarified that no new contracts have been signed as a direct result of the pipeline's completion at this time.