From the Sep 2023 conference call....
Adjusted EBITDA for the second quarter was $176.2 million compared to $142.2 million for the second quarter of fiscal '23. This EBITDA number is more than $700m annualized. It's fantastic.
With this strong start to the fiscal year, we are raising the full year guidance for Water Solutions from $485 million to $500 million plus.
Moving to liquids logistics, butane and propane are seasonal with the majority of their adjusted EBITDA coming in the back half of the fiscal year. ...that means the next two quarters....
We are reaffirming our full year consolidated adjusted EBITDA guidance of $645 million plus. Not increasing EBITDA guidance is disappointing. Water is expected to be $15m ahead of guidance, so the other stuff may be expected to be $15m below guidance...
We are increasing asset sales another $25 million to $100 million for the fiscal year. Depending on the timing of these asset sales, there could be EBITDA associated with these sales that would reduce our full year results. Ok, cash is good.
We are also hedging against a warm winter that could impact the results of our liquids logistics unit. Not sure what this means. What are they "hedging"?
We are increasing our growth capital expenditures to $100 million versus previous guidance of $65 million due to the growth opportunities in the Delaware for our water solutions segment. I suppose this may be good, as it makes future water growth more likely...
We should see a small impact to our adjusted EBITDA in the fourth quarter and a full year impact starting in fiscal 2025 from these projects. We are planning to fund this additional growth capital with the incremental asset sales I just mentioned. Ok, so they're selling some stuff, and using the proceeds to invest in water. That sounds great, actually. Water is the future for these guys.
we anticipate paying off the '25 unsecured notes by March 31, 2024. That's $208m debt reduction planned ...
we had 2 items that positively impacted our quarterly results. First, we sold certain saltwater disposal assets and intangible assets in the Pinedale Anticline Basin. A portion of the transaction was allocated between the termination of the water disposal contract and the sale of the assets based on the relative fair value. Approximately $7.8 million of the total consideration was allocated to the termination of the water disposal contract, which was a favorable impact to adjusted EBITDA for the quarter.
Second, recall from the previous quarter, we stored skim oil volumes in the Eagle Ford Basin that didn't meet pipeline specs. This issue was resolved in the second quarter and the oil was sold in the quarter and positively impacted adjusted EBITDA by approximately $4 million. Ok, this sounds like the $140m water EBIITDA benefited from about $12m of stuff that is more like one time items and not recurring. That's no good....
With respect to our EBITDA guidance, water year-to-date EBITDA, $263 million. We only need to generate $237 million in the second half to achieve the $500 million, so we raised water guidance to $500 million plus. This is being conservative, not an indication that we expect a decline. Water volumes have started out lower or slower in October, so third quarter water EBITDA should be between first and second quarter actuals and an anticipated increase in the fourth quarter.Ok, that doesn't add up at all. Last Q water EBITDA was $123 m and this Q it was $140m. So if next Q is in the middle, and then up in March, the water EBITDA guidance is at MINIMUM $124m Dec + $125m Mar '24. That's $249m for Dec + Mar, and they've already done $263m in June and Sep, so the MINIMUM total is $512m for fiscal '24.
Whatever, but their full year water guidance of $500m+ is well below where it should end up if their next two quarter's guidance is remotely accurate.
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I think the water story is very good with these guys.
And I think they begin paying distributions again by Q2 2025, and when that happens NGL will be closer to $10 than where it is now. |
