Greetings. Welcome to the NGL Energy Partners Second Quarter 25 Earnings Call Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Brad Cooper, CFO. You may begin.

Good afternoon, and thank you to everyone for joining us on the call today. Our comments today will include plans, forecasts, and estimates that are forward-looking statements under the U.S. Securities law. These comments are subject to assumptions, risks, and uncertainties that could cause actual results to differ from the forward-looking statements. Please take note of the cautionary language and risk factors provided in our presentation materials and our other public disclosure materials. Consolidated Adjusted EBITDA came at $147.3 million for the second quarter. The consolidated Adjusted EBITDA was primarily driven by our Water Solutions and Crude Logistics segments. The butane blending season began after the quarter ended and wholesale propane is dependent on winter weather and heating demand as you are well aware and should contribute to the third and fourth quarter results. In early August, under the terms of the Term Loan B agreement, we repriced and amended the SOFR margin from 450 basis points to 375 basis points, which reduces our interest expense by approximately $5.25 million per year. On September 19th, the Board of Directors of our General Partnership declared a quarterly distribution for the preferred Class B, C&D's that was paid on October 15th. The LEX II expansion project, with initial capacity of 200,000 barrels per day that is expandable to 500,000 barrels per day, was placed in service in October on time. As we've mentioned on previous calls, this project is fully underwritten by a minimum volume commitment with an investment-grade producer. We are excited to have completed this project as it consumed much of our free cash flow over the last six months. I want to thank the folks in the field for the great work executing this project in a timely fashion. After the close of the quarter, we have entered into agreements to purchase 92% of the outstanding warrants from the Class D unitholders. These warrants were granted to the Class D preferred holders at the time of their investments back in 2019. The warrants have expiration dates in the summer and fall of 2029 with strike prices from 1356 to 1745. The 92% represents 23,375,000 warrants or roughly 18% of our common units outstanding today. Said differently, we have eliminated a potential 18% dilution event to the common unitholders over the next five years with the purchase of these warrants. Eliminating these warrants has been a component of our long-term strategy. Let's get into the quarterly results for the business units: Water Solutions adjusted EBITDA was $182.9 million in the second quarter. Physical water disposal volumes were 2.68 million barrels per day in the second quarter versus 2.47 million barrels per day in the first quarter of this fiscal year, approximately a 9% increase quarter-over-quarter. Total volumes we were paid to dispose, that includes deficiency volumes, were 2.77 million barrels per day in the second quarter versus 2.59 million barrels per day in the first quarter of the year. So total volumes we were paid to dispose of were up approximately 7%. The team continues to find ways to optimize both sides of the margin calculation. Expenses in the Water Solutions segment came in at $0.22 per barrel for the quarter compared to $0.24 per barrel for the first quarter of this year. The decrease in Q2 is due to lower repairs and maintenance expense as well as lower chemical expenses as we are using chemicals more efficiently. Crude Oil Logistics adjusted EBITDA was $17.3 million in the second quarter of fiscal 2025 versus $18.6 million in the first quarter of this year. Crude oil sales averaged approximately 63,000 barrels per day for the quarter, in line with the first quarter of this fiscal year. We continue to remain optimistic on the basin and hope to have some contracting updates by the end of the calendar year. Liquids Logistics adjusted EBITDA was $9.4 million in the second quarter versus $17.1 million in the prior second quarter. Our butane blending business is performing above expectations. It's too early in the year to project how the wholesale propane business will play out. To date, it's been a warm start to the demand season for propane. The other two businesses within liquids have underperformed versus expectations. With these second quarter results in the books, we are where we expected to be at this time of the year. We are in line with our internal expectations and consolidated budget on a year-to-date basis. With that, I would now like to turn the call over to our CEO Mike Krimbill.

Thanks, Brad. Good afternoon everyone. As Brad just mentioned, our first half EBITDA results are in line with our expectations. The second half may have a few challenges such as warm weather and lower crude oil prices. We are slightly reducing our EBITDA guidance for the full fiscal year to a range of $640 million to $650 million. This is a 2% to 4% reduction which does not in any way impact our strategy going forward. Strategically, we are pursuing asset sales in the liquids logistics segment as well as a couple of smaller asset sales in the $15 million to $40 million range. In crude oil logistics, we are close to signing up additional producers on Grand Mesa that if successful will provide a meaningful crude oil volume increase by the start of the next fiscal year. The water solutions segment continues to be our growth engine currently and in the foreseeable future. We have grown our out of basin capacity, offering optionality to our customers and thereby providing a long-term solution for the development of the Delaware Basin. We continue to believe in the growth of the Delaware Basin as producers have approached us with multiple new projects over the next 18 months, we are evaluating and expect to provide solutions for them. Finally, reducing leverage while buying back equity is a priority. We began our common unit buyback program with limited purchases this quarter and have nearly eliminated all future dilution with the warrant purchase agreements that Brad mentioned earlier. The purchase of these warrants marks another milestone in our strategy of creating long-term value for our common unit holders. We are not focused on quarterly results but are managing the partnership to create long-term value by improving asset quality, increasing long-term contracted revenues, growing our water system, repurchasing equity, and strengthening the balance sheet. So with that, let's go to Q&A.

At this time we will be conducting a question-and-answer session. Our first question comes from Tarek Hamid with JPMorgan.

Hi, this is Nebanon on for Tarek. Thank you for the time. We were just wondering how your conversations are going with customers regarding the outlook for calendar 2025?

Doug online. Doug, are you there?

I am, yes. I can answer that.

You want to take that one from a water perspective?

Yes. The Delaware Basin continues to provide us opportunities to increase volumes. We're working hard to maximize all the capacity on the LEX II pipeline. We're also working to create new strategies for demand in areas where our system may not have as much capacity. Additionally, we cannot forget that we're in the DJ Basin and the Eagle Ford, both providing new opportunities. In the DJ, we're adding new contracted volumes and we're underway amending and extending some of our existing long-term commitments. In the Eagle Ford, with the new entrants and producers, we've been very successful and focused this year on increasing the volumes there as well. So across all three basins in which we operate the water business, we are actively contracting new volumes for 2025 and beyond.

I appreciate the color. Thank you.

We now hear from Ned Baramov with Wells Fargo.

Hi, thanks for taking the question. Can you maybe just provide the latest on your expectations for water EBITDA and total CapEx for fiscal 2025?

Yes, the water guide, the 550 to 560 I believe is still intact. Total capital same, it's unchanged from where it was earlier in the year. 210 total for capital.

Thanks for that. And then on your agreement to purchase warrants, can you maybe provide a little bit more on what triggered this transaction now and what your plans are for the remaining 2 million or so of warrants?

Yes, I think over the last couple of years we've been thinking through what the strategy is and the long-term strategy for the company, and the warrants were always part of the thought process being able to eliminate those. I think the opportunity really presented itself. We made an announcement here a few weeks ago at 8-K. EIG sold down their Class D position, and when they sold down that Class D position, those warrants became available. So we worked out an arrangement with them and one of the other Class D holders to take out those warrants.

So I think Ned, this is Mike. I would add to that, you run a Black Scholes model to determine what options and warrants are worth. These had five years remaining, so we felt like they wouldn't get significantly cheaper; they could only get more expensive. So better to buy them today than wait a year or two years.

Understood. And then plans for the remaining 2 million or so?

Yes, we've been in contact with the holder of those and offered to repurchase those at the same price. We're waiting to hear back.

Thank you.

Thank you. With no questions left in the Q&A, we have reached the end of our question-and-answer session. And I will now turn the call back over to your host for any closing remarks.

Thanks, everyone for your interest in NGL. We look forward to catching up with everyone in a couple of months on the third quarter call. We'll talk again in February. Thank you.

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.