Executive Summary

Q2 2025 was operationally in line, with Shenandoah delivering first oil to GEL’s new SYNC lateral and expanded CHOPS late in July; Adjusted EBITDA was $122.9M, Total Segment Margin $135.9M, revenue $377.3M, and net loss per common unit of -$0.12, with 1.59x distribution coverage on the $0.165/unit payout .
Guidance was effectively narrowed to the low end: management now “reasonably expect[s] full-year 2025 Adjusted EBITDA to be at or near the low end” of the prior $545–$575M range, reflecting delayed remediations at certain high-margin wells and later first oil at Shenandoah/Salamanca; 2026 outlook unchanged and positive .
Near-term catalysts: (1) rapid ramp at Shenandoah (initial 90–100 kb/d peak from four wells), (2) Salamanca first oil by end of Q3 with quick ramp to 40–50 kb/d, (3) start of free cash flow generation in Q3 and planned revolver paydown to zero by year-end, supporting leverage improvement and potential distribution increases .
Estimates context: EPS came in below a thin consensus (-$0.12 actual vs -$0.04 consensus; 1 estimate). S&P Global EBITDA consensus was $118.1M*; company-reported Adjusted EBITDA was $122.9M, while S&P EBITDA actual printed $142.8M*, implying a “beat” on S&P’s EBITDA definition despite definitional differences .

What Went Well and What Went Wrong

What Went Well
- Successful commissioning/start-up of Shenandoah; first oil flowed to SYNC/CHOPS; management reiterated rapid ramp to 90–100 kb/d from four wells with broader debottlenecking potential thereafter. “The Shenandoah … delivered first oil … just last week … likely to achieve initial anticipated peak production of 90–100 kbd” .
- Sequential uplift in Offshore Pipeline Transportation as some previously shut-in wells returned and MVCs commenced on SYNC/CHOPS; Q2 Offshore Segment Margin increased 2% YoY to $87.6M .
- Brown-water marine utilization remained strong (inland 98.1%), with constructive fundamentals and limited Jones Act supply additions supporting day rates over time .
What Went Wrong
- Producer mechanical issues and commissioning delays pushed timing of volumes; company now expects FY25 Adjusted EBITDA at or near the low end of the $545–$575M range, though delays are deemed temporary with no reservoir impact .
- Blue-water marine market softened due to vessel redeployments to Gulf/East Coasts and slower clean product flows to the East Coast, limiting near-term day-rate momentum .
- Cash from operations fell YoY (Q2: $47.0M vs $104.7M), reflecting high working-capital quarter and note redemption/interest timing; management expects FCF to accelerate and revolver to zero by year-end .

Financial Results

Sequential performance (oldest → newest):

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$725.6	$398.3	$377.3
Net loss per common unit ($)	$(0.58)	$(4.06) total; $(0.60) cont. ops	$(0.12)
Total Segment Margin ($M)	$172.5	$121.4	$135.9
Adjusted EBITDA ($M)	$160.6	$131.7	$122.9
Cash from Operations ($M)	$74.0	$24.8	$47.0
Available Cash before Reserves ($M)	$43.3	$20.3	$32.2

YoY comparison:

Metric	Q2 2024	Q2 2025
Revenue ($M)	$430.2	$377.3
Net loss per common unit ($)	$(0.25)	$(0.12)
Total Segment Margin ($M)	$137.9	$135.9
Adjusted EBITDA ($M)	$148.9	$122.9
Cash from Operations ($M)	$104.7	$47.0
Available Cash before Reserves ($M)	$37.6	$32.2

Segment margin breakdown:

Segment ($M)	Q2 2024	Q1 2025	Q2 2025
Offshore Pipeline Transportation	$86.1	$76.5	$87.6
Marine Transportation	$31.5	$30.0	$29.8
Onshore Transportation & Services	$20.2	$14.8	$18.5
Total Segment Margin	$137.9	$121.4	$135.9

KPIs and operating metrics:

KPI	Q2 2024	Q1 2025	Q2 2025
CHOPS oil (bpd, 100% basis)	296,325	312,976	324,533
Poseidon oil (bpd)	280,248	244,323	248,785
Odyssey oil (bpd)	64,213	63,738	71,309
Offshore gas (MMBtu/d)	357,687	401,764	403,703
Inland barge utilization	100.0%	93.6%	98.1%
Offshore barge utilization	94.9%	96.2%	97.3%
Texas onshore pipelines (bpd)	65,229	61,924	98,626
Rail unload (bpd)	19,811	20,492	24,979
NaHS (DST)	29,656	25,873	23,256
NaOH (DST)	10,593	8,545	8,678

Note: Q4 2024 included the soda ash business that was sold on Feb 28, 2025; comparability to 2025 quarters is affected .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2025	$545–$575M (Q1’25)	“At or near the low end” of $545–$575M	Maintained range; bias to low end
Free Cash Flow/Leverage	2H 2025	Turn cash-flow positive 2H25; leverage to trend down (prior commentary)	Begin FCF in Q3; expect revolver at $0 by YE; leverage to improve sequentially	Improved specificity
Offshore project timing	2H 2025	First oil mid-2025 (both)	Shenandoah first oil achieved (late July); Salamanca first oil by end Q3	Achieved/confirmed timeline
Distribution policy	Forward	No change previously disclosed	Potential to consider increases as early as Q4 2025 if ramp proceeds and revolver at $0	New positive optionality
Capital allocation	Forward	Reduce cost of capital; simplify balance sheet	“All-of-the-above”: debt reduction, possible preferred redemptions, potential distribution increases	Reiterated with near-term actions

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24, Q1’25)	Current Period (Q2’25)	Trend
Offshore growth (Shenandoah/Salamanca)	Both on track for mid-2025 start; Shenandoah moored; Salamanca install pending	Shenandoah first oil to SYNC/CHOPS; ramp to 90–100 kb/d; Salamanca first oil by end Q3; quick ramp to 40–50 kb/d	Improving/ramping
Producer mechanical issues	Significant outages impacting volumes; remediation underway	Some wells restored; remaining fixes “by and large” by end Q3; no reservoir impact	Improving
Marine markets/day rates	Constructive fundamentals; fewer dry docks in 2025	Inland strong; blue-water softer as vessels relocate (CA emissions) to Gulf/East Coasts; utilization high	Mixed near term; constructive LT
Capital allocation/leverage	Plan to lower leverage, simplify capital structure	FCF start Q3; revolver to zero YE; potential pref redemptions and distribution increases	Improving flexibility
Macro resilience (deepwater)	Deepwater decisions not driven by short-term oil price	Deepwater activity unchanged despite price moves; long-cycle planning persists	Consistent

Management Commentary

“The Shenandoah production facility … delivered first oil to our new SYNC pipeline lateral and downstream through our expanded CHOPS pipeline just last week … likely to achieve initial anticipated peak production of 90–100 kbd” .
“Salamanca remains on track to achieve first oil by the end of the third quarter … ramp very quickly … to 40–50 kbd” .
“We now reasonably expect full-year 2025 Adjusted EBITDA to be at or near the low end of our prior guidance range of $545–$575 million … delays are temporary … not expected to have any lasting impact on … 2026 and beyond” .
“We anticipate exiting the year with no outstanding borrowings under [the revolver] … leverage ratio [should] improve … and we intend to take an all-of-the-above approach to capital allocation” .

Q&A Highlights

Salamanca timing confidence: management “feel[s] very good” about first oil by end of Q3 absent disruptive weather .
Capital returns timing: focus on taking revolver to zero by YE; with 3–4 months of operating history on Shenandoah/Salamanca, GEL “may have … flexibility to do something in 2025” on distributions .
Commercial/inorganic pipeline: focus on executing/ramping current offshore expansions; no new capex-heavy projects identified; intent to “harvest cash” .
Marine dynamics: inland “sloppiness” behind; blue-water softer due to West Coast equipment redeployments; high utilization supports eventual day-rate increases .
Guidance confidence: early Shenandoah well results meeting/exceeding predrill expectations; management confident at least to the low end of the FY25 range .

Estimates Context

Q2 2025 EPS: actual -$0.12 vs consensus -$0.04* (1 estimate) — a miss on a thin sample .
Q2 2025 EBITDA: S&P Global consensus $118.1M*; company-reported Adjusted EBITDA $122.9M; S&P Global “actual” EBITDA $142.8M*, implying a beat on S&P’s EBITDA basis despite definition differences .
Q2 2025 Revenue: actual $377.3M; no visible revenue estimate in S&P Global for Q2 (N/A)* .

Values marked with * were retrieved from S&P Global.

Key Takeaways for Investors

Execution inflection underway: Shenandoah first oil achieved, Salamanca imminent; sequential offshore volumes should trend higher into 2H25/2026, underpinning Segment Margin/EBITDA growth .
FY25 guide anchored to low end ($545–$575M) due to timing, but 2026 trajectory intact; watch well remediation completion by end Q3 and Salamanca first oil to de-risk the ramp .
Balance sheet catalysts: FCF starting Q3, intent to reduce revolver to zero by YE; leverage should improve, enabling optionality for preferred redemptions and potential distribution increases as early as Q4 2025 .
Marine transportation mixed near term (blue-water softness) but structurally supported long term by limited Jones Act supply; high utilization provides eventual pricing leverage .
KPIs to monitor: CHOPS/Poseidon/Odyssey throughput, inland/blue-water utilization, Texas system volumes, and rail unloads as offshore barrels ramp through GEL’s systems .
Narrative driver: confirmation of Salamanca first oil on time and visible step-up in offshore segment margin should be stock catalysts; any earlier-than-expected capital return could add upside .

Appendix: Additional Data Points (Distribution and Coverage)

Quarterly common unit distribution: $0.165 per unit; Q2 coverage 1.59x; preferred distribution $0.9473/unit (~$14.9M) .
Bank leverage ratio (per credit facility): 5.52x LTM; adjusted consolidated EBITDA $555.4M LTM; adjusted debt $3.07B .

Footnote: Q4 2024 includes the soda ash business that was sold on Feb 28, 2025; comparability with 2025 quarters is affected .

GENESIS ENERGY LP (GEL)·Q2 2025 Earnings Summary