NYSE:NGL
NGL Energy Partners LP
A leading midstream energy partner providing essential gathering and processing infrastructure for North American natural gas liquids production.
Key Metrics
Investment Thesis
Bull Case
NGL Energy Partners is an attractive opportunity for value investors seeking exposure to essential midstream infrastructure that generates substantial operating cash flow of $297.5M regardless of commodity cycles. The company's asset base in the prolific Permian Basin offers long-term growth potential as production expands, and its diversified revenue streams from gathering and processing provide a stable foundation for eventual margin recovery. With current cash holdings of $5.6M and a strong ability to generate free cash flow, the stock may be undervalued following recent sector-wide volatility.
Bear Case
The sharp decline in revenue over the last two years and the massive $2.96B long-term debt load create significant financial distress risks if oil and gas prices do not recover quickly. High interest expense of $280.1M severely erodes operating profit, turning strong cash generation into lower net income, while a net change in cash of -$33.3M indicates liquidity tightening. Investors should also consider the $599.3M goodwill on the balance sheet which poses impairment risks if asset valuations continue to fall.
About NGL Energy Partners LP
NGL Energy Partners LP is an independent energy company focused on gathering, processing, and marketing natural gas liquids (NGLs) across North America. The company operates a robust midstream infrastructure network serving producers in the Permian Basin, Eagle Ford, Bakken, and other key shale regions. Its primary revenue streams come from processing fees, NGL sales, and transportation services provided to third-party oil and gas producers.
Analysis
Management Discussion
Recent financial performance shows a dramatic contraction in revenue from $8.69B in 2023 to $3.47B in 2025, likely reflecting cyclical commodity price declines or divestitures totaling $72.2M. Despite the revenue drop and net loss of $143.1M in 2024, the company has returned to profitability with a net profit of $43.2M in the latest period and generated strong operating cash flow of $297.5M. However, the company incurred significant non-cash adjustments of $569M and interest expenses of $280.1M, indicating tight margins under pressure.
Industry Overview
The North American midstream energy industry serves as the critical backbone for domestic oil and gas production, connecting wells to processing plants and markets. This sector is highly cyclical and capital-intensive, driven by the need for continuous infrastructure investment to handle growing production volumes from shale formations like the Permian Basin. Companies in this space face constant pressure from volatile commodity prices and stringent environmental regulations while navigating complex geopolitical energy dynamics.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $8.69B | $6.96B | $3.47B |
| Cost of Revenue | $7.65B | $5.97B | $2.51B |
| Gross Profit | $1.04B | $989.8M | $962.1M |
| Operating Expenses | $755.7M | $812.2M | $632.8M |
| Operating Income | $289.2M | $177.6M | $329.4M |
| G&A | $71.8M | $121.9M | $55.6M |
| Stock-Based Comp | $2.7M | $1.1M | $0 |
| D&A | $290.9M | $282.7M | $267.2M |
| Depreciation | $196.1M | $198.5M | $198.9M |
| Amortization | $82.9M | $74.0M | $60.5M |
| Other OpEx | $683.9M | $690.3M | $577.2M |
| Non-Operating Income | $-236.4M | $0 | $-269.3M |
| Interest Expense | $275.4M | $269.9M | $280.1M |
| Pre-Tax Income | $52.8M | $177.6M | $60.1M |
| Income Tax | $271.0K | $2.4M | $-4.9M |
| Continuing Ops | $52.5M | $175.2M | $65.0M |
| Discontinued Ops | $0 | $0 | $-21.8M |
| Net Income | $52.5M | $-143.1M | $43.2M |
| Minority Interest | $1.1M | $631.0K | $0 |
| Net to Common | $51.4M | $-143.8M | $43.2M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $1.29B | $1.18B | $962.1M |
| Cash & Equivalents | $5.4M | $38.9M | $5.6M |
| Marketable Securities | — | — | $7.9M |
| Accounts Receivable | $1.03B | — | — |
| Inventory | $142.6M | $130.9M | $69.9M |
| Prepaid Expenses | $98.1M | $126.9M | $63.7M |
| Other Current Assets | $12.4M | $882.2M | $814.9M |
| Long-Term Assets | $4.16B | $3.84B | $3.65B |
| PP&E (Net) | $2.22B | $2.10B | $2.07B |
| Intangibles | $1.06B | $940.0M | $851.3M |
| Goodwill | $712.4M | $634.3M | $599.3M |
| Operating Leases | $90.2M | $97.2M | $109.9M |
| Other LT Assets | $58.0M | $52.7M | $20.0M |
| Total Assets | $5.46B | $5.02B | $4.61B |
| Current Liabilities | $1.11B | $977.3M | $739.2M |
| Accounts Payable | $927.6M | — | — |
| Current Debt | $0 | $7.0M | $8.8M |
| Current Leases | $34.2M | $31.1M | $27.9M |
| Deferred Revenue | $14.5M | $16.9M | $9.2M |
| Other Current Liab | $244.0K | $708.6M | $558.1M |
| Long-Term Debt | $2.86B | $2.84B | $2.96B |
| LT Operating Leases | $58.5M | $70.6M | $85.2M |
| AOCI | $-450.0K | $-499.0K | $9.0K |
| Total L&E | $5.46B | $5.02B | $4.61B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $52.5M | $-143.1M | $43.2M |
| Non-Cash Adjustments | $716.6M | $940.0M | $569.0M |
| Working Capital Changes | $-323.9M | $-420.8M | $-314.7M |
| Cash from Operations | $445.2M | $376.2M | $297.5M |
| Cash from Investing | $64.2M | $-83.8M | $-122.8M |
| Share Buybacks | — | — | $2.1M |
| Cash from Financing | $-507.8M | $-258.9M | $-207.9M |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $1.6M | $33.5M | $-33.3M |
| Beginning Cash | $3.8M | $5.4M | $38.9M |
| Ending Cash | $5.4M | $38.9M | $5.6M |
Frequently Asked Questions
How does NGL Energy Partners LP make money?
Gathering operations that collect raw hydrocarbons from wellheads, Processing facilities that separate and purify natural gas liquids into marketable products like ethane and propane, and Marketing divisions that sell these refined commodities to downstream industries and refiners.
What are the main risks for NGL?
Significant exposure to volatile commodity prices which can drastically impact gross margins if energy demand fluctuates, heavy capital expenditure requirements for infrastructure maintenance and expansion pose liquidity risks, regulatory changes in environmental policy could increase compliance costs, and high interest rates elevate debt servicing obligations given the substantial long-term debt load of $2.96B.
What is NGL's competitive advantage?
Extensive proprietary infrastructure with high utilization rates in the Permian Basin provides a stable revenue base, specialized technical expertise in NGL processing creates high barriers to entry for new competitors, and long-term take-or-pay contracts with major producers ensure predictable cash flow streams.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.