in our SEC filings. The company assumes no obligation to update any forward-looking statements. I will now turn the call over to Avigol for opening remarks. Avigol?

Thank you, Robert. Today, DKL reported $144 million in adjusted EBITDA in the second quarter, reaffirming fully EBITDA guidance of $520 to $560 million. dollars. DKL's strong results are a reminder of our advanced position as a premier full-service provider of crude gas and water in the Permanent Basin. As of July 1st, Mark moved from his CFO position at DELEC to lead role at DELEC Logistics, and we recently brought on Chris Kendrick as our new SVP of commercial. I'm highly confident that Mark, Chris, and the rest of the DELEC Logistics team will deliver the next chapter of growth for DKL. All three of our segments are doing well, and I will provide more detail on each one of these segments. Starting with gas, we are nearing the completion of our integrated sour gas processing, treating, and in-handling solution of PliBi Gas Complex. The comprehensive system will serve our customers by further supporting long-term oil and gas production growth in the dollar basin. Moving to crude, both DPG and DDG continue to see strong performance with DDG crude gathering delivering a record quarter. We look forward to further optimize and growing the system. Our water business continues to perform well and we are continuing to explore growth opportunities in this space. Our combined gas, crude, and water offering in the Permanent Basin has improved our competitive position and established a platform for future growth. We will continue to pursue growth opportunities in a disciplined manner while maintaining a focus on leverage and coverage. We will also intend to remain a good steward of our stakeholders' capital. Our Board of Directors has approved our 54 consecutive quarterly distribution increase, raising the distribution to $1.13.5 per unit. This is an extraordinary milestone and it reflects the exceptional work of our team and the financial discipline that has brought us to this point. With the foundation we have built and the opportunities ahead, we are confident in our ability to continue delivering sustainable growth and long-term value for our unit holders. I will now turn it over to Mark, who will provide additional detail on our operations.

Thank you, Avagol. I'm excited about the opportunity to join Delic Logistics and to work with the exceptional team that we have at DKL. I see tremendous growth potential for Delic Logistics as we are uniquely positioned to meet our customers' increasing needs for midstream services across crude, gas, and water in the Permian Basin. We continue to see heightened activity by producers in securing undeveloped acreage and future drilling locations in the northern Delaware in Lee and Eddy counties. Higher crude prices as a result of the ongoing conflict of the Middle East combined with strengthening Waha prices, as additional takeaway capacity comes online by early next year, should drive increased demand for our three-stream service platform, strategically centered in Lee County. As Avagol mentioned, our competitive position as a three-stream provider sets us up well for future growth. Our strong and growing third-party business continues to increase our economic separation from our sponsor, DK. In 2026, on a pro forma basis, we continue to expect approximately 80% of our run rate EBITDA will come from third parties. Turning to our business, we operated well in the second quarter, delivering safe and reliable performance for our customers. We continue to see an increasing need for incremental sour gas gathering and processing capabilities in New Mexico to support our customers' growth plans. During the second quarter, we made great progress advancing our industry-leading sour gas solution in the Delaware basin. With the increased capacity at our liby processing complex and the completion of our first AGI well, we are focusing our efforts on building out our sour gas gathering infrastructure, including compressor stations. We are aligned with our customers and our sour solution will unlock future growth for producers in the region and demand for our services. We achieved higher volumes in the second quarter in our gas business versus the first quarter and are expecting to see a step change in our utilization as our sour gas solution comes online later this year. We continue to evaluate options for future investments that will support further expansions of the Libby Complex based on anticipated customer needs for additional sour gas processing in the region. Moving to crude. Our Delaware crude gathering business achieved record volumes in the second quarter. Our crude gathering business in both the Delaware and the Midland are well positioned and our combined crude and water offering continues to yield great results. In our water business, we are seeing strong operating performance driven by the successful integration of the H2O and Gravity acquisitions in late 2024 and early last year, respectively. Produced water handling and disposal continues to be a critical and increasing need of our customers. Our skill and capabilities across the Delaware and Midland basins present us with unique opportunities to drive future growth in our water business. And I look forward to updating the market as we advance these solutions. With that, I will pass it on to Robert.

Thank you, Mark. As Avigol and Mark highlighted, we are pleased to report another exceptionally strong quarter for the partnership, with adjusted EBITDA reaching a quarterly record of approximately $144 million. Importantly, we are delivering this growth while staying focused and disciplined on our long-term leverage and coverage targets. We ended the quarter with a leverage ratio of 4.23% times, up modestly from the first quarter. This uptick reflects capital investments we are making that are expected to generate up to $75 million of run rate EBITDA, a highly attractive return on our $180 to $190 million growth capital program for the year. We exited the quarter with a strong balance sheet. During the quarter, we proactively refinanced our high-yield capital structure to lower our cost of debt, issuing a new $800 million senior note due 2034, fully retiring our 2028 notes and partially redeeming our 2029 notes. Together, these transactions reduce annual interest costs and extend our maturity profile. Liquidity remains robust at approximately $1.1 billion. Turning to our results, adjusted EBITDA for the quarter was approximately $144 million compared to $127 million in the same period last year. Distributable cash flow as adjusted came in at approximately 81 million dollars and our DCF coverage ratio held steady at approximately 1.33 times. We are also proud to announce our 54th consecutive distribution increase which brings the quarterly distribution to a dollar and 13 and a half cents per unit. As to our segment results starting with gathering and processing adjusted EBITDA for the second quarter was 104 million dollars up from 78 million dollars in the second quarter of 2025. The improvement was driven primarily by higher utilization at the Libby Gas Complex along with stronger realized margins in our Permian Basin crude business. In wholesale marketing and terminaling, adjusted EBITDA was approximately 13 million dollars versus 23 million dollars a year ago, with the decline largely attributable to the effects of the 2024 amended extended agreement with DELIC. Storage and transportation delivered adjusted EBITDA of $16 million compared with $17 million in the prior period. The modest decrease primarily reflects the January 2026 related party transactions. And finally, our investments in pipeline joint venture segment contributed $21 million this quarter, up from $17 million in the second quarter of 2025, led by continued strong results from the Wink to Webster joint venture. Moving now to capital expenditures, total capital spending for the second quarter was approximately $61 million, of which $51 million was for growth capital. That spend was primarily directed toward the drilling of our first AGI well and continued build-out of newer sour gas-gathering infrastructure. The Balance funded other growth initiatives including work to advance reliable power solutions for the libby gas complex looking ahead to the remainder of 2026 as avagol noted our confidence in the earnings trajectory of the partnership remain intact and we are reaffirming our full year 2026 adjusted evita guidance range of 520 to 560 million dollars with that we will now open the call for questions good morning and welcome to the delicate we will now begin the question and answer session if you would like to ask a question please press star one to raise your hand to withdraw your question press star one again we ask that you pick up your

handset when asking a question to allow for optimum sound quality if you are muted locally please remember to unmute your device please stand by while we compile the q a roster your first question from the line of doug erwin from city group doug your line is open please go ahead hey team thanks for the question um just want to start with gathering segment yeah yeah Thanks.

You called out some stronger margins on gathering and processing on the quarter. Just wondering if you could help unpack what drove that strength a little bit more here. I'm just curious how much of that is tied to the commodity environment and just generally how durable you see that margin strength being from here.

Yeah, so we are very confident about the results we see on the second quarter. Obviously, we are starting the year very well. We are very confident about the guidance we are seeing. As I said on my prepared remarks, both DPG and DDG performed very well. I think the DDG had a record number around it. We're very happy about the process that we are seeing on the gas plant that increased quarter over quarter over quarter. As we said on the prepared remark, we're very close to completing the gas-treating solution. On the solar side, it will take us to, as Mark said, to a step change, and we'll let Mark to complete.

Yeah, yeah, thanks, Avagol. Yeah, Doug, look, I'll just touch on the business performance. Like, across the board, we're performing well in the second quarter and continue to do so. We have great infrastructure, which, as you know, is strategically positioned in the right location, and we continue to see a lot of activity amongst our customers in the northern Delaware with close proximity to our assets. As Avagol mentioned, our Delaware crude business had a record volume in Q2 at over 157,000 barrels per day, up from around 129 in Q1. And our produced water volumes in both the Midland and Delaware increased as well to over 687,000 barrels a day, up from 557 in Q1. And as Abigail mentioned, our gas volumes continue to ramp. We were over 80 million cubic feet a day in Q2, up from around 64 in Q1. And we continue to see that trend continue in Q3. You know, both Libby 1 and Libby 2 plants are running well. The volumes are increasing. And as we said in our prepared remarks, we're nearing the completion of our full sour gas solution buildout. And we do expect to see a step change in our gas volumes through the rest of the year.

Yeah, that's helpful. And maybe tying into that a little bit as it relates to guidance for the rest of the year, if I were to just look at your second quarter results and extend that through the year, you're already kind of pointing towards the high end of your guidance range based on those numbers. and then you kind of pointed to an expected ramp with Libby. So just kind of curious how you're thinking about potential upside here is kind of the midpoint of guidance, potentially pretty conservative here, and just kind of how you're thinking about what could potentially drive either end of the range.

Yeah, and you are very – you are correct. The math that you are doing is absolutely right, and I will give you some more context around that. We are very happy about the results we have. we are very happy about the business we have each one of them the strategy that we put together working extremely well and we are very happy about the management team that we have over there we're going to follow in the same sequence that we had in the last year that the q4 on q4 call we are submitting the guidance and if we see a way to upgrade the guidance we're going to do We did it last year in Q3. So stay tight and more needs to come.

Fair enough. Thanks, Chetan.

Your next question from the line of Gabe Maureen with Mizuho. Gabe, your line is open. Please go ahead.

Hey, good morning, everyone. Hey, thank you, Eric. There we go. Quick question, I guess, in terms of the interplay on commodity prices. I just wonder if I could maybe put a finer point on things. Waha has clearly traded better. Crude oil prices have come up, although pulled back a bit here. So I'm just wondering your latest expectations around customer conversations and what you're seeing heading into 2027, whether you're seeing some rigs potentially being added back to some of your acreage relative to your expectations. So I'm just curious. And then also whether, again, I think you mentioned last quarter Waha shudders didn't really impact you, but whether that's having any impact on volumes with pricing being better here?

Yeah, absolutely. So you touch a very good point. Obviously, we are in close touch with our customer on a daily, weekly basis, and they are very excited about their business, which makes us very excited about our business. I've seen your note earlier about the rigs in the area and the wealth that we have in our acreage, and that's very good to see how detailed it becomes the discussion. So we are very optimistic about where we are. We have a prime location. We have a very good producer in our acreage. You've seen the statistics about the Permian Basin as a general going from the beginning of the event to now by around 20 rigs. we see an increase in the increased forecast in our acreage as well. So we are very optimistic about where we are and who do we do business with. So stay tuned and more to come. Mohit, you want to talk about the Waha?

Yeah, I think Abigail, you covered it very well. And Gabe, you and I have discussed this previously as well. So there are two positive effects happening at the same time. First is there is some strength in the commodity prices. And based on that, we have seen incremental production. And because of that, you know, we've seen forecasts for not only second half of 2026, but 2027 rice. And second is this development around Waha. Waha prices have strengthened. This is a minor positive for us just from a result standpoint, but it's a much bigger positive from a volume standpoint. And we should see that reflected. Beyond that, we've talked about in the past that we are working on $185 million of growth capex, which will yield $75 million in EBITDA, 15 and 26, and 16, 20, 27. So our setup on a go-forward basis is very, very strong. So we are very excited about the things that we are seeing.

Thanks, Mohit. And then maybe I could just follow up. Remind me on your contracting behind your water assets. To what degree things are volumetric versus take or pay? and is there any change or shift in kind of your contracting strategy going forward?

Yeah, Gabe, I can answer that. So we don't really share our contracting strategy, but we're very excited about our produced water gathering business, as Mark alluded in his prepared remarks and also as an answer to the previous question. We have scale in the business. We are seeing three-stream service, gas, water, and crude, really reaping results. And even in the Midland, where we just have two streams, crude and water, we are seeing incremental positive results. So we are very excited about the water business that we have. We are building upon it, and we'll share more details around this when we are ready. Great. Thanks, everyone.

Thank you.

Your final question from the line of Ivan Skoto with UBS. Ivan, your line is open. Please go ahead.

Hey, team. Hi, Ivan. Thanks for taking the question. Thank you. Thank you. And congrats on the strong quarter. It's good to hear about the integrated completion on the Libby gas complex, but just wondering how you're thinking about capitalizing on sour gas treating and AGI demand over the long term, including any possible expansions to Libby. What would need to happen or what would you need to see in the market to make you comfortable kind of commissioning that?

Yeah, obviously, the king here is the rock. And we're seeing the rock going a bit sour. And the second part of that is our ability is our drilling of AGI well and building a sour complex. So the combination of that make us very uniquely positioned, that we have three things coming together, our location, the rock, the gas, the sour gas that we see coming out of the ground, and our infrastructure all coming together very nicely, that gives us competitive advantage, and we are very excited about that. And I will let Mark, that is very close to it, share some of his thoughts.

Yeah, thanks, Avago. Look, as we've mentioned in the past, we are seeing increasingly more sour gas production you know, from our customers moving from sweet to sour. And as you rightfully said, you know, we're seeing that trend continue. And we've added a lot of capacity and preparation to handle that. As you know, adding Libby 2, completing the AGI well, as Avigol mentioned, and we're now near completion of our sour gas gathering and adding compression. And it's going to provide us with with the much needed sort of unique sour gas solution in the northern Delaware, which will support our customers' future production growth plans. And not only will we see a step change in our gas volumes because of this capability, but like it positions us extremely well for future growth in the region.

Got it. That makes sense. And then just turning to leverage and coverage targets. Anything to note on how you're working toward achieving these long-term targets? I know you hit 1.3x coverage this quarter, but curious if there were any initiatives that you want to highlight that helped you achieve that or just any general comments on how you're working toward achieving these targets would be great.

Yeah, so obviously we are very disciplined around our capital deployment. As you can see, we are very disciplined around what we did with M&A, right? We did both water and Bolton acquisition around five to six times where they traded now around probably nine to ten. So we are not going to do something which is not a creative to leverage ratio coverage ratio free cash flow and not supported by our strategy so the the combined answer is the combination of extremely disciplined on one side but on the other side extremely aggressive of getting the company towards the right direction and the very disciplined around capital allocation and i will let robert to chime in yeah thanks avical uh yeah i have a great question we we continue to remain comfortable in our long-term leverage target of 3.5 times We're seeing significant growth opportunities, and similar to what we've said in the past, because of that, we will manage our leverage ratio around that four times as we grow.

As we said on the prepared remarks, our leverage ratio right now does sit around that 4.23 times, and that's largely due to a lot of the growth spend that Mo had talked about. We expect return up to $75 million in EBITDA on spend of around $180 to $190 million, so very low multiple there. And considering this, we expect to manage our leverage ratio down as we start to realize this EBITDA and our results. It's probably also just important to note that despite all this recent growth spending, we've maintained a strong balance sheet. We have over a billion dollars of availability, which will facilitate our continued growth trajectory into the future. Awesome. Super helpful.

Thank you. Thanks, Ivan.

Your next question from the line of Gabe Dowd with Truist. Gabe, your line is open. Please go ahead.

Thanks, Operator. Hey, everyone. I just wanted to maybe follow up a little bit on the comments around what you're seeing on the ground as you progress through 2026. Obviously, it's some pretty big outperformance in the quarter. And just kind of looking at third-party data suggests that you've already tied in on the gas side a decent amount of wells, especially relative to what you did last year. So could you maybe just comment on that, and how should we think about well-connects on the gas side as you progress through the year? And I guess similarly, how should we expect Libby II to ramp in the back half?

Yeah, absolutely. I will start and let Mark chime in. So obviously the connections that we are seeing on the ground are going very well, both on the compressor side and on the plant itself. we have a very good a close relationship with our producers and we are committed to give the best service we can on time on budget and making sure it's all ties together with the right offering between sweet and sour we have seen increase as we mentioned earlier between q1 to q2 and between q2 to q3 and we'll see more progression around that once we are completing our sour gas offering But why are you timing, Mark?

Sure, Abigail. Yeah, look, I think Abigail said it well, Gabe. Like, we're seeing this shift from sweet to sour. And so we've seen our gas kind of ramp up as we've built out our capabilities. We're optimizing our system around compression and look forward to, like I said, a step change in our volumes as we move through some of that completion here in the third quarter as we move into the fourth quarter. so I think we're on a great trajectory to really increase the utilization of our plants as we move through the year.

Got it. Okay. That's a great call. Thanks, guys. And then it's a quick follow-up. What are you seeing on the inorganic opportunity front?

Is that something that would still be attractive to you, or do you think you have enough organic opportunity to keep you busy over the next you know a couple years yeah so obviously we have all the time our eyes open around you know inorganic opportunities as i said in the past in order for something to get to the finish line it needs to be accretive to leverage ratio coverage ratio and the free cash flow so that we are extremely disciplined around that when we saw those opportunities coming our way we were not we didn't hesitate we act on that very quickly and aggressively as needed but the the in inorganic it's not a it's not a that's not the objective the objective is to grow the company in a measured disciplined smart way on the other side we can be very happy if you're putting on the intrinsic value that we see on our asset we bought something around five to six times probably now it's around 10 times and we have seen lately the gas deal that was in the market was mid low to mid teens which if you're doing the intrinsic value of each one of our assets as it stands now and with including the development that we are now doing you will get to a very high unit price so there is a tremendous amount of value that we created versus where the market is now and our commitment to the market is still to create additional value. We grew that company 15% year over year in the last few years and we increased distribution 54 quarters in a row. All of that, probably the best combination between growth and yield to our investors. So we are very proud of what we do and we'll keep doing it.

That's great, Collar.

Thank you.

There are no further questions at this time. I will now turn the call back to Avigal Sorek, President and Chairman, for closing remarks.

Thank you. So I would like to thank my colleagues around the table for the hard work and dedication. I would like to thank our board for their trust and support. I would like to thank you, the investor, for seeing that nice, huge transformation in D.K.L. And most importantly, I would like to thank the entire employees of making this company as good as we possibly can every day.

This concludes today's call. Thank you for attending. You may now disconnect.