NGL Energy Partners LP (NYSE: NGL) announced today that the Board of Directors of its general partner has declared a quarterly distribution of $0.10 per unit, or $0.40 per unit on an annualized basis, for the quarter ended September 30, 2020. This cash distribution is payable on November 13, 2020 to common unitholders of record at the close of business on November 6, 2020.
"Our Board has made the strategic decision to adjust our annualized common unit distribution to $0.40 per unit," stated Mike Krimbill, NGL’s CEO. "Numerous considerations factored into this decision. Our business segments performed in-line with our expectations during the fiscal second quarter and we expect over 5.0x common unit coverage for the period. We are working with our bank group to extend our credit facility maturity. This distribution adjustment should benefit those discussions. We were also yielding over 20% on our common units and we believe the best use of our cash at this time is to reduce indebtedness, improve leverage and reduce bank commitments in the short-term."
Continued Krimbill, "Our business has continued to perform well despite the challenges faced by the energy industry and the Partnership. Since the end of the quarter, we have successfully completed our Poker Lake pipeline and tie-in and have seen produced water volumes average approximately 1.6 million barrels per day. We continue to see incremental activity around our Northern Delaware Basin water platform and expect volumes to trend favorably through the remainder of the fiscal year. We are entering the winter gasoline butane-blending and propane heating season in a strong position and expect our Liquids segment to perform well again this year. With respect to debt reduction, we continue to identify opportunities to monetize assets at favorable multiples and, since March 2020, we have repurchased and retired approximately $125 million of unsecured notes at a discount, resulting in a net $50 million debt reduction."
In addition to the common unit distribution, the Board of Directors declared a cash distribution in the required amount of $15.6 million, which amount represents the Class D Distribution Amount to be paid to the holders of the Class D Preferred Units. The Class D Preferred distribution will also be made on November 13, 2020.
NGL plans to issue its fiscal second quarter ended September 30, 2020 earnings press release post-market close on Monday November 9, 2020. Members of NGL’s management team intend to host an earnings call following this release on Monday, November 9, 2020 at 4:00 pm CT to discuss its financial results. Analysts, investors, and other interested parties may access the conference call by dialing (800) 291-4083 and providing access code 8880357. An archived audio replay of the call will be available for 7 days beginning at 1:00 pm CT on November 10, 2020, which can be accessed by dialing (855) 859-2056 and providing access code 8880357.
Forward Looking Statements
This press release includes "forward-looking statements." All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. While NGL believes such forward-looking statements are reasonable, NGL cannot assure they will prove to be correct. The forward-looking statements involve risks and uncertainties that affect operations, financial performance, and other factors as discussed in filings with the Securities and Exchange Commission. Other factors that could impact any forward-looking statements are those risks described in NGL’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other public filings. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading "Risk Factors." NGL undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.
About NGL Energy Partners LP
NGL Energy Partners LP, a Delaware limited partnership is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process. For further information, visit the Partnership’s website at www.nglenergypartners.com.
This release is a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat 100% of NGL Energy Partner LP’s distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Therefore, distributions to foreign investors are subject to federal income tax withholding at the highest applicable effective tax rate.
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NGL Energy Partners LP Trey Karlovich, 918.481.1119
Executive Vice President and Chief Financial Officer Trey.Karlovich@nglep.com
Linda Bridges, 918.481.1119
Senior Vice President – Finance and Treasurer Linda.Bridges@nglep.com