Thank you for joining us. My name is Joel, and I will be your conference operator today. I would like to welcome everyone to the Delek Logistics Partners First Quarter 2025 Earnings Call. To minimize background noise, all lines have been muted. After the speakers' remarks, there will be a question-and-answer session. I will now turn the conference over to Robert Wright, Senior EVP and CFO. You may begin.

Good morning, and welcome to the Delek Logistics Partners first quarter earnings conference call. Participants joining me on today's call will include Avigal Soreq, President, and Reuven Spiegel, EVP. As a reminder, this conference call will contain forward-looking statements as defined under the federal securities laws, including statements regarding guidance and future business outlook. Any forward-looking information shared during today's call involves risks and uncertainties that may cause actual results to differ materially from today's comments. Factors that could cause actual results to differ are included in our SEC filings. The company assumes no obligation to update any forward-looking statements. I will now turn the call over to Avigal for opening remarks.

Thank you, Robert. Delek Logistics Partners had another record quarter. We reported approximately $117 million in quarterly adjusted EBITDA, facing Delek Logistics on track to deliver on its full-year EBITDA guidance of $480 million to $520 million. After transformation at 2024, Delek Logistics continues to make substantial progress in improving its position as a premier full-service crude, natural gas, and water provider in the most prolific area of the Permian Basin. As we have communicated in the past, we are in a process of increasing our economic separation from Delek. This week we announced an intercompany transaction that further increased this economic separation, bringing third-party contribution to our cash flow from 70% to around 80% on a pro forma basis. This intercompany transaction, along with our acquisition of H2O and Gravity, significantly enhances our competitive position in the Midland Basin. In the Delaware Basin, we are in the commissioning phase of the new Libby plant expansion, and we expect to fill the plant to capacity in the second half of 2025. We are also making progress on acid gas injection and sour gas handling capabilities in the Libby Complex. We expect to start sparring our AGI gas well shortly. The AGI well and sour gas treating capabilities enhance our competitive position in the Delaware Basin and will provide a good runway for growth for Delek Logistics in the future. Despite the near-term volatility in crude prices, we like our competitive position in the Delaware Basin, which we believe will continue to grow. As the Delaware Basin grows, we will continue to grow the partnership through prudent management of leverage and coverage. I'm also pleased to announce that the Board of Directors has approved a 49 consecutive increase in the quarterly distribution to $1.11 per unit. To conclude, we are very excited about the prospects of Delek Logistics. We expect to continue our value creation path moving forward and will continue to grow our distribution in the future. I will now hand it over to Reuven, who will provide more details on our operations.

Thank you, Avigal. As Avigal mentioned, we are excited about the future for Delek Logistics and continue to work diligently to strengthen our advantaged Permian position. Let me start with the Delaware Basin. We are pleased to announce that we have started the commissioning of our Libby II gas plant, a timeframe that is less than seven months following the commencement of construction. We are very proud of our team for this outstanding accomplishment. As a reminder, at Libby II, we are adding 100 million to 120 million cubic feet per day of incremental capacity, which we expect to realize through the course of the year. Our planned CapEx for Libby II does include investments that will allow us to utilize future expansion of the Libby Complex. As Avigal mentioned, we're also adding sour gas treating and gathering capabilities. We are in the process of activating the first of two AGI wells, which will allow us to sequester acid gas. We believe we have differentiated ourselves in the market because of our unique offering of expanded gas processing in addition to our sour gas handling capabilities. Additionally, since we are one of the few companies which can handle crude, gas, and water in the Delaware, our natural gas gathering and processing expansions are opening opportunities for us on crude and water gathering. Furthermore, our two recent water acquisitions are exceeding our expectations. We are currently in the process of integrating the two water gathering systems from H2O and Gravity, and this integration has helped us enhance our combined crude and water offering in the Howard, Martin, and Glasscock counties in the Midland Basin. Finally, we continue to look for opportunities to make our operations more efficient with the target to improve margins across our operations. With that, I will pass it on to Robert.

Thank you, Reuven. Both Avigal and Reuven have mentioned we are continuing the growth and deconsolidation story of Delek Logistics while maintaining focus on a healthy management of liquidity and leverage. As previously announced, Delek Logistics has authorization to buy back common units of up to $150 million through 2026. During the first quarter, we repurchased a total of $10 million worth of units under this authorization. Post the closing of our acquisition of Gravity and the significant progress we have made on the Libby II construction, we currently have approximately $450 million of available liquidity. As Avigal mentioned, we closed the acquisition of Gravity on January 2. This acquisition was made through a combination of cash and units, which Gravity's sponsors have subsequently liquidated in the market as of April. These additional units in the market helped to improve Delek Logistics' overall trading liquidity. Moving on to our first-quarter results. The first-quarter adjusted EBITDA was $117 million compared to $102 million in the same period of 2024. Distributable cash flow as adjusted was $75 million, and the DCF coverage ratio was approximately 1.27x, which we expect to continue to rise throughout the remainder of this year. For the Gathering and Processing segment, adjusted EBITDA for the quarter was $81 million compared to $50 million in the first quarter of 2024. The increase was primarily due to the acquisitions of H2O and Gravity Midstream. Wholesale marketing and terminalling adjusted EBITDA was $18 million compared to $25 million in the prior year. The decrease was primarily due to the seasonal weather impacts driving lower wholesale margins. Storage and Transportation adjusted EBITDA in the quarter was $14 million compared with $18 million in the first quarter of 2024. The decrease was primarily due to the amend and extend renegotiation we completed last summer. Lastly, the investments in the pipeline joint venture segment contributed $10 million this quarter compared with $8 million in the first quarter of 2024. The increase was primarily due to the contribution from the Wink to Webster dropdown in August of last year. Moving on to capital expenditures, the capital program for the first quarter was approximately $72 million, of which $52 million was due to the significant progress made in the construction of the Libby II gas processing plant. This amount includes $15 million for future potential expansion opportunities at the Libby site. The Libby II gas plant remains on track from a timing and cost perspective. The remainder of the capital spend for the period was growth projects, namely advancing new connections in the Midland and Delaware gathering systems. As to our outlook for the balance of the year, we continue to remain on track for the EBITDA guidance we laid out for the full year of $480 million to $520 million. With that, we can open the call for questions.

Thank you. Your first question comes from Doug Irwin of Citi. Your line is open.

Hey, team. Thanks for the question. I was hoping to start by just getting a little more detail on the intercompany agreements that you announced. Did this actually involve assets changing hands or was it more driven by recontracting? And then just looking forward, are there more opportunities to optimize the footprint internally or are most of the remaining deconsolidation steps probably more external at this point?

Hey, Doug. It's Avigal. Good morning. Thank you for joining us today, and thank you for your support. I'll let Robert, our partnership CFO, pick up on that. Please, Robert.

Yes. Thanks, Avigal. What we announced today was another important milestone in our journey to be an independent company. The related party transaction enabled us to clean up some of our contracts between Delek and Delek Logistics. The effort helped to advance our deconsolidation efforts as we were able to move some of the refining-related activities from Delek Logistics back to Delek. Importantly to Delek Logistics, we also moved some midstream-related activities from Delek to Delek Logistics. It's important to note that as a result of this transaction, there was no net material impact to our EBITDA of either entity. One of the other important benefits of this transaction was that it helped increase Delek Logistics' third-party EBITDA to approximately 80% on a pro forma basis, which should help further drive the mutual goal of economic separation with Delek.

Okay. Understood. That's helpful. And then maybe a follow-up more on the macro side. You're obviously more dependent on third-party producer activity today than you've been in the past. Just wondering if you could talk about what you're hearing from customers on your acreage given the current macro environment. And then just any detail you're willing to share around your overall contract mix, particularly for the water assets you've acquired over the last year would be helpful.

Yes, absolutely, I will take that question. So if you're looking holistically at our activity, we look at the Midland – I will start with the Midland Basin, right. Midland Basin, we have a very strong customer base produce over there, we see stable volume and we are happy with what we see. And as you know, we just finished two very timely acquisitions that allow us to have a combined offer. Why is that important? Because we see, as we speak, water volume going up, not down, and that gives us the compelling offering that we are giving, which is very beneficial for us in that basin. In the Delaware, it's probably the lowest, especially in our area, the lowest breakeven for Shell in the entire nation. You have seen I think we provide a slide that shows that most of our acreage in this area is still not drilled. That's a very good positive as well. And we had gas that we didn't really manage to drill because of size, and we are moving into the plant, we're just finishing on the order of 20 million to 30 million cubic feet a day. The combined offering in this area of three streams gives us a definitive competitive advantage and a lot of other opportunities. So we're in a good spot, we're happy about the offering we have and we look forward to the future. But allow Reuven, who is very close and making a lot of great progress in this business, to chime in.

Yes. Thank you, Avigal. Just maybe some color on a couple of points. As far as our contracts, we have limited direct commodity exposure with strong counterparties. In the Midland Basin, we expect that even with some volatility, the produced water volumes will continue to increase. As far as our CapEx, it was heavy at 24% in the first half and 25% in the second half. We don't have material investment for the second half, so that should give us a lower run rate as far as CapEx and expenses. The gas plant ramp-up was actually – the whole idea of the Libby II was twofold: one, to fulfill demand that already existed that we weren't able to satisfy and the second one is dedicated acreage growth, which Avigal just addressed. In addition to all that, we bring one more component to the formula, which is the sour and water handling capabilities. So all that together makes us feel very comfortable about where we are.

Doug, I want to emphasize the sour capability we have. The long time on that in New Mexico is very long and we are very fortunate about that, and that gives us a very good competitive advantage that most of the plants in the area just don't have and probably will not have.

Understood. That's all really helpful detail. Appreciate the time.

Thank you, Doug.

With no further questions, that concludes our Q&A session. I will now turn the conference back over to Avigal Soreq for closing remarks.

Absolutely. So I would like to thank management here around the table, our Board of Directors, our investors that appreciate the story and invest in our unit, and most importantly, to our great employees that make our partnership so good. Thank you.

I would like to thank management here around the table, our Board of Directors, our investors who appreciate the story and invest in our unit, and most importantly, our great employees who make our partnership so successful. Thank you.