NGL Energy Partners LP
For the period ended Dec 31, 2025. Filed Feb 3, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 3, 2026
NGL$14.95+1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001504461-25-000021
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-03.
0001504461-26-000003
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 188 previous paragraphs and 191 current paragraphs.
100 unchanged; 63 reworded; 28 added; 21 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 23 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
•Crude Oil Logistics– an increase of $1.6 million due primarily to increased volumes and derivative gains, partially offset by lower commodity prices and lower pipeline revenue due to the expiration of transportation contracts;
Current report
•Liquids Logistics– a decrease of $7.6 million due primarily to lower product margins for propane, due to the Wholesale Propane Disposition and butane, due to a weak blending market, partially offset by lower expenses due to the Wholesale Propane Disposition and derivative gains; and
Current report
In addition to the items discussed above, other income was higher primarily due to gains on marketable securities, partially offset by lower equity in earnings of unconsolidated entities as we sold our equity method investments during fiscal year 2026 as well as higher interest expense (as discussed below).
Current report
•a net loss of $5.7 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets; and
Current report
•a net gain of less than $0.1 million primarily related to the sale of certain assets.
Current report
•a net loss of $7.4 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
Current report
•a loss of $3.4 million from the settlement of a dispute related to a force majeure event, which resulted in the plugging and abandoning of a disposal well in a prior period; and
Current report
•a gain of $0.2 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.
Current report
Revaluation of Liabilities. During the three months ended December 31, 2024, there was a decrease in expense related to the write-off of a portion of our contingent consideration liability related to royalty agreements acquired as part of certain business combinations, as we no longer expect to make royalty payments for a certain saltwater disposal well that was plugged and abandoned.
Current report
Operating and General and Administrative Expenses. Operating and general and administrative expenses during the three months ended December 31, 2025 were consistent with the three months ended December 31, 2024.
Current report
Depreciation and Amortization Expense. The decrease was primarily due to the sale of railcars during the year ended March 31, 2025 and the nine months ended December 31, 2025.
Current report
Loss on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2025, we recorded a loss of $0.2 million primarily due to disposal or retirement of certain assets.
Current report
Butane product margins, excluding the impact of derivatives, decreased during the three months ended December 31, 2025, compared to the three months ended December 31, 2024 due to a weak gasoline blending season in certain markets and higher-priced inventory was sold into a declining market.
Current report
General and Administrative Expenses. The increase was primarily due to lower allocations of overhead expenses to the other business segments in the current year due to recent disposition transactions and increased legal expenses.
Current report
Depreciation and Amortization Expense. Depreciation and amortization expense during three months ended December 31, 2025 was consistent with the prior year period.
Current report
Loss on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2024, we recorded a net loss of less than $0.1 million due to the write-off of information technology equipment.
Current report
Loss on Disposal or Impairment of Assets, Net. During the nine months ended December 31, 2025, we recorded:
Current report
•a net loss of $16.6 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
Current report
During the nine months ended December 31, 2024, we recorded:
Current report
•a net loss of $11.0 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
Current report
•a loss of $3.4 million from the settlement of a dispute related to a force majeure event, which resulted in the plugging and abandoning of a disposal well in a prior period; and
Current report
•a gain of $2.0 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.
Current report
Revaluation of Liabilities. During the nine months ended December 31, 2024, there was a decrease in expense related to the write-off of a portion of our contingent consideration liability related to royalty agreements acquired as part of certain business combinations, as we no longer expect to make royalty payments for a certain saltwater disposal well that was plugged and abandoned.
Current report
Depreciation and Amortization Expense. The decrease was primarily due to the sale of railcars during the year ended March 31, 2025 and the nine months ended December 31, 2025.
Current report
Butane product margins, excluding the impact of derivatives, decreased during the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024 due to a weak gasoline blending season in certain markets.
Current report
Operating and General and Administrative Expenses. The decrease during the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024 was due to the Wholesale Propane Disposition.
Current report
Depreciation and Amortization Expense. The decrease during the nine months ended December 31, 2025 compared to the nine months ended December 31, 2024 was due to the Wholesale Propane Disposition.
Current report
(Gain) Loss on Disposal or Impairment of Assets, Net. During the nine months ended December 31, 2024, we recorded a net loss of less than $0.1 million due to the write-off of information technology equipment.
Removed paragraphs (21)
Previous report
•Crude Oil Logistics– a decrease of $6.6 million due primarily to lower transportation revenue and lower gains on derivatives, partially offset by higher price and quality differentials realized;
Previous report
•Liquids Logistics– an increase of $3.7 million due primarily to lower expenses related to the Wholesale Propane Disposition and increased product margins due to lower derivative losses; and
Previous report
Subsequent Events
Previous report
See Note 17 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a discussion of transactions that occurred subsequent to September 30, 2025.
Previous report
•a net loss of $7.8 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
Previous report
•a gain of $1.4 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period; and
Previous report
•a net loss of $3.5 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets; and
Previous report
•a gain of $1.5 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.
Previous report
Depreciation and Amortization Expense. The decrease was primarily due to the sale of railcars during the year ended March 31, 2025 and the six months ended September 30, 2025.
Previous report
Loss (Gain) on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2025, we recorded a loss of $0.5 million from the sale of linefill and other assets and a gain of $0.5 million from the sale of railcars. During the three months ended September 30, 2024, we recorded a net gain of $0.4 million primarily due to a gain on the sale of certain assets.
Previous report
Butane product margins, excluding the impact of derivatives, increased during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 due to improved rail utilization and supply optimization.
Previous report
Loss on Disposal or Impairment of Assets, Net. During the three months ended September 30, 2025, we recorded a net loss of $0.8 million due to the Wholesale Propane Disposition.
Previous report
Loss (Gain) on Disposal or Impairment of Assets, Net. During the six months ended September 30, 2025, we recorded:
Previous report
•a net loss of $10.8 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets;
Previous report
During the six months ended September 30, 2024, we recorded:
Previous report
•a net loss of $3.6 million primarily related to writing down the net book value of certain saltwater disposal wells and capital projects due to abandonment and the retirement of certain other assets; and
Previous report
Operating and General and Administrative Expenses. The decrease was primarily due to lower incentive compensation expense accrued during the six months ended September 30, 2025, and lower ad valorem taxes due to lower assessed values on our Grand Mesa Pipeline assets in the State of Colorado, which were partially offset by higher utilities expense on the Grand Mesa Pipeline from higher volumes flowing through the system during the six months ended September 30, 2025, compared to the six months ended September 30, 2024.
Previous report
Depreciation and Amortization Expense. The decrease was primarily due to the sale of railcars during the year ended March 31, 2025 and the six months ended September 30, 2025.
Previous report
Butane product margins, excluding the impact of derivatives, increased during the six months ended September 30, 2025, compared to the six months ended September 30, 2024 due to improved rail utilization and supply optimization.
Previous report
Operating and General and Administrative Expenses. The decrease during the six months ended September 30, 2025 compared to the six months ended September 30, 2024 was due to the Wholesale Propane Disposition.
Previous report
Depreciation and Amortization Expense. The decrease during the six months ended September 30, 2025 compared to the six months ended September 30, 2024 was due to the Wholesale Propane Disposition.
Reworded paragraphs (63)
Previous wording
The following is a discussion of NGL Energy Partners LP’s (“we,” “us,” “our,” or the “Partnership”) financial condition and results of operations as of and for the three months and six months ended September 30, 2025. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”), as well as Part II, Item 7–“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (“Annual Report”) filed with the Securities and Exchange Commission on May 29, 2025.
Current wording
The following is a discussion of NGL Energy Partners LP’s (“we,” “us,” “our,” or the “Partnership”) financial condition and results of operations as of and for the three months and nine months ended December 31, 2025. The discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”), as well as Part II, Item 7–“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (“Annual Report”) filed with the Securities and Exchange Commission on May 29, 2025.
Previous wording
During the six months ended September 30, 2025, we sold the remaining 203 railcars of our Crude Oil Logistics segment (see Note 15 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Current wording
During the nine months ended December 31, 2025, we sold the remaining 203 railcars of our Crude Oil Logistics segment (see Note 15 to our unaudited condensed consolidated financial statements included in this Quarterly Report for a further discussion).
Previous wording
Operating income increased $12.8 million for the three months ended September 30, 2025, compared with the same period in 2024, primarily as a result of the following:
Current wording
Operating income increased $25.0 million for the three months ended December 31, 2025, compared with the same period in 2024, primarily as a result of the following:
Previous wording
•Water Solutions– an increase of $20.1 million due primarily to higher water disposal revenues from an increase in produced water volumes processed, partially offset by increased expenses mainly due to losses on disposal or impairment of assets and higher depreciation and amortization expense;
Current wording
•Water Solutions– an increase of $32.8 million due primarily to higher water disposal revenues from an increase in produced water volumes processed and lower expenses mainly due to lower derivative losses, lower losses on disposal or impairment of assets and lower depreciation and amortization expense;
Previous wording
•Corporate and Other– a decrease of $3.9 million due to increased legal expenses and business insurance.
Current wording
•Corporate and Other– a decrease of $1.8 million due to increased legal expenses.
Previous wording
Operating income increased $28.1 million for the six months ended September 30, 2025, compared with the same period in 2024, primarily as a result of the following:
Current wording
Operating income increased $53.1 million for the nine months ended December 31, 2025, compared with the same period in 2024, primarily as a result of the following:
Previous wording
•Water Solutions– an increase of $19.5 million due primarily to higher water disposal revenues from an increase in produced water volumes processed, partially offset by increased expenses mainly due to losses on disposal or impairment of assets and higher depreciation and amortization expense;
Current wording
•Water Solutions– an increase of $52.9 million due primarily to higher water disposal revenues from an increase in produced water volumes processed and lower derivative losses, partially offset by increased expenses mainly due to losses on disposal or impairment of assets and higher depreciation and amortization expense;
Previous wording
•Crude Oil Logistics– a decrease of $20.0 million due primarily to lower transportation revenue and increased expenses due to a net loss on the sale of assets;
Current wording
•Crude Oil Logistics– a decrease of $18.4 million due primarily to lower pipeline revenue, as discussed above, and increased expenses due to a loss on the sale of assets, partially offset by increased revenues and volumes from higher production on acreage dedicated to us;
Previous wording
•Liquids Logistics– an increase of $31.9 million due primarily to lower expenses related to the Wholesale Propane Disposition, including a gain on the sale, and increased margins from the sale of products; and
Current wording
•Liquids Logistics– an increase of $24.3 million due primarily to lower expenses related to the Wholesale Propane Disposition, including a gain on the sale, partially offset by lower product margins, as discussed above; and
Previous wording
•Corporate and Other– a decrease of $3.8 million due primarily to increased legal expenses and business insurance.
Current wording
•Corporate and Other– a decrease of $5.7 million due primarily to increased legal expenses.
Previous wording
In addition to the items discussed above, interest expense was lower (as discussed below) which was partially offset by a lower income tax benefit (see Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report), losses on marketable securities and a loss from a legal dispute.
Current wording
In addition to the items discussed above, interest expense was lower (as discussed below) and there were gains on marketable securities which were partially offset by a lower income tax benefit (see Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report), lower equity in earnings of unconsolidated entities as we sold our equity method investments during fiscal year 2026 and a loss from a legal dispute.
Previous wording
(4) Total produced water barrels processed during the three months ended September 30, 2025 and 2024 were 257,913,208 and 246,700,755, respectively. These amounts do not include 23,670,072 barrels and 7,693,542 barrels for the three months ended September 30, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 8,160,115 committed barrels not delivered during the three months ended September 30, 2025.
Current wording
(4) Total produced water barrels processed during the three months ended December 31, 2025 and 2024 were 282,525,872 and 241,343,277, respectively. These amounts do not include 2,943,504 barrels and 16,410,749 barrels for the three months ended December 31, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 2,198,757 and 9,938,582 committed barrels not delivered during the three months ended December 31, 2025 and 2024, respectively.
Previous wording
(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.61/barrel and $0.59/barrel during the three months ended September 30, 2025 and 2024, respectively.
Current wording
(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.60/barrel and $0.60/barrel during the three months ended December 31, 2025 and 2024, respectively.
Previous wording
Water Disposal Service Fee Revenues. The increase was due primarily to an increase in produced water volumes processed from contracted customers. There was also an increase in payments made by certain producers for committed volumes not delivered.
Current wording
Water Disposal Service Fee Revenues. The increase was due primarily to an increase in produced water volumes processed from contracted customers.
Previous wording
Recycled Water Revenues. Revenue from recycled water includes the sale of produced water and recycled water for use in our customers’ completion activities. The increase was due primarily to higher pricing for recycled water and higher recycled water volumes related to timing of water to be used in completions.
Current wording
Recycled Water Revenues. Revenue from recycled water includes the sale of produced water and recycled water for use in our customers’ completion activities. The increase was due primarily to higher recycled water volumes related to timing of water to be used in completions, partially offset by lower pricing for recycled water.
Previous wording
Other Revenues. Other revenues primarily include reimbursements from construction projects, booster operating fees and generator rentals, water pipeline revenues, solids disposal revenues and brackish non-potable water revenues. The increase was due primarily to higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our expanded Lea County Express Pipeline system (“LEX II”) commencing operations during the three months ended December 31, 2024. This increase was partially offset by lower reimbursements from construction projects, booster operating fees and generator rentals.
Current wording
Other Revenues. Other revenues primarily include reimbursements from construction projects, booster operating fees and generator rentals, water pipeline revenues, solids disposal revenues and brackish non-potable water revenues. The increase was due primarily to higher reimbursements from construction projects and booster operating fees as well as higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our expanded Lea County Express Pipeline system (“LEX II”) commencing operations during the three months ended December 31, 2024.
Previous wording
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations.
Current wording
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations and lower recycling costs.
Previous wording
Operating and General and Administrative Expenses. The increase was due primarily to higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, higher repairs and maintenance expense due to timing of repairs, higher utilities expense due to increased produced water volumes processed and higher severance taxes due to an increase in revenue from recovered crude oil, partially offset by lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently, lower bad debt expense and lower legal expense.
Current wording
Operating and General and Administrative Expenses. The decrease was due primarily to lower incentive compensation expense and lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently, partially offset by higher utilities expense due to increased produced water volumes processed and higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells.
Previous wording
Depreciation and Amortization Expense. The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2025 and six months ended September 30, 2025.
Current wording
Depreciation and Amortization Expense. The decrease was due primarily to certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2025 and nine months ended December 31, 2025, partially offset by depreciation of newly developed facilities and infrastructure.
Previous wording
Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were primarily due to lower commodity prices partially offset by higher production on acreage dedicated to us in the DJ Basin during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Current wording
Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The increases in sales and cost of sales, excluding the impact of derivatives, were primarily due to higher production on acreage dedicated to us in the DJ Basin during the three months ended December 31, 2025, compared to the three months ended December 31, 2024, partially offset by lower commodity prices.
Previous wording
During the three months ended September 30, 2025, the crude oil product margin and margin per barrel increased primarily due to higher price and quality differentials realized during the three months ended September 30, 2025, compared to the three months ended September 30, 2024. Additionally, there was a more significant decrease in market prices during the three months ended September 30, 2024, thus also contributing to a smaller margin per barrel for that period. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Current wording
During the three months ended December 31, 2025, crude oil product margin increased compared to the three months ended December 31, 2024 due to higher crude oil barrels sold during the current quarter. Product margin per barrel decreased primarily due to lower price and quality differentials realized. There was also a decrease in commodity prices during the three months ended December 31, 2025, thus also contributing to a smaller margin per barrel for the quarter. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Previous wording
During the three months ended September 30, 2025, physical volumes on the Grand Mesa Pipeline averaged approximately 72,000 barrels per day, compared to approximately 63,000 barrels per day during the three months ended September 30, 2024. Higher contracted volumes were shipped on the Grand Mesa Pipeline due to higher production on acreage dedicated to us in the DJ Basin.
Current wording
During the three months ended December 31, 2025, physical volumes on the Grand Mesa Pipeline averaged approximately 85,000 barrels per day, compared to approximately 61,000 barrels per day during the three months ended December 31, 2024. Higher contracted volumes were shipped on the Grand Mesa Pipeline due to higher production on acreage dedicated to us in the DJ Basin.
Previous wording
Butane Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, during the three months ended September 30, 2025, compared to the three months ended September 30, 2024 were primarily due to lower butane prices during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Current wording
Butane Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, during the three months ended December 31, 2025, compared to the three months ended December 31, 2024 were primarily due to lower butane prices and volumes during the three months ended December 31, 2025, compared to the three months ended December 31, 2024.
Previous wording
Propane product margins, excluding the impact of derivatives, increased during the three months ended September 30, 2025 primarily due to selling lower-priced inventory into a market of rising prices.
Current wording
Propane product margins, excluding the impact of derivatives, decreased during the three months ended December 31, 2025 primarily due to the Wholesale Propane Disposition.
Previous wording
Other products sales product margins, excluding the impact of derivatives, decreased during the three months ended September 30, 2025 primarily due to lower asphalt margins due to an increase in product costs.
Current wording
Other products sales product margins, excluding the impact of derivatives, decreased during the three months ended December 31, 2025 primarily due to lower commodity prices and lower asphalt volumes and margins due to tighter supply.
Previous wording
Service Sales and Cost of Sales. The sales include storage, terminaling and transportation services income. Sales during the three months ended September 30, 2025 decreased due to the Wholesale Propane Disposition and the expiration of a throughput contract during the prior fiscal year. Cost of sales increased due to increased hauling activities.
Current wording
Service Sales and Cost of Sales. The sales include storage, terminaling and transportation services income. Sales and cost of sales during the three months ended December 31, 2025 were consistent with the three months ended December 31, 2024.
Previous wording
•a net gain of $0.6 million primarily related to the sale of certain assets.
Current wording
Loss (Gain) on Disposal or Impairment of Assets, Net. During the three months ended December 31, 2025, we recorded a net loss of $0.2 million due to the Wholesale Propane Disposition. During the three months ended December 31, 2024, we recorded a net gain of $0.6 million due to the sale of land.
Previous wording
The debt interest expense decreased $6.4 million during the three months ended September 30, 2025 primarily due to lower interest rates on the Term Loan B and a lower weighted average daily balance on the ABL Facility for the three months ended September 30, 2025 compared to our outstanding debt instruments in the prior year period.
Current wording
The debt interest expense decreased $6.8 million during the three months ended December 31, 2025 primarily due to a lower weighted average daily balance on the ABL Facility and lower interest rates on the Term Loan B for the three months ended December 31, 2025 compared to our outstanding debt instruments in the prior year period.
Previous wording
Segment Operating Results for the Six Months Ended September 30, 2025 and 2024
Current wording
Segment Operating Results for the Nine Months Ended December 31, 2025 and 2024
Previous wording
(4) Total produced water barrels processed during the six months ended September 30, 2025 and 2024 were 510,130,061 and 471,049,065, respectively. These amounts do not include 40,037,812 barrels and 19,393,348 barrels for the six months ended September 30, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 17,606,145 committed barrels not delivered during the six months ended September 30, 2025.
Current wording
(4) Total produced water barrels processed during the nine months ended December 31, 2025 and 2024 were 792,655,933 and 712,392,342, respectively. These amounts do not include 42,981,316 barrels and 35,804,097 barrels for the nine months ended December 31, 2025 and 2024, respectively, related to payments made by certain producers for committed volumes not delivered, as discussed further below. In addition, water pipeline revenue, which is included in Other Revenues, includes payments from a producer for 19,804,902 and 9,938,582 committed barrels not delivered during the nine months ended December 31, 2025 and 2024, respectively.
Previous wording
(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.62/barrel and $0.59/barrel during the six months ended September 30, 2025 and 2024, respectively.
Current wording
(5) Excluding payments made by certain producers for committed volumes not delivered, service fees for produced water processed ($/barrel) would have been $0.61/barrel and $0.60/barrel during the nine months ended December 31, 2025 and 2024, respectively.
Previous wording
Water Disposal Service Fee Revenues. The increase was due primarily to an increase in produced water volumes processed from contracted customers. There was also an increase in payments made by certain producers for committed volumes not delivered.
Current wording
Water Disposal Service Fee Revenues. The increase was due primarily to an increase in produced water volumes processed from contracted customers.
Previous wording
Recovered Crude Oil Revenues. The increase was due primarily to an increase in skim oil barrels sold due to more skim oil recovered from receiving more produced water, partially offset by lower realized crude oil prices received from the sale of skim oil barrels.
Current wording
Recovered Crude Oil Revenues. The decrease was due primarily to lower realized crude oil prices received from the sale of skim oil barrels, partially offset by an increase in skim oil barrels sold due to more skim oil recovered from receiving more produced water.
Previous wording
Recycled Water Revenues. The decrease was due primarily to lower pricing for recycled water, partially offset by higher recycled water volumes related to timing of water to be used in completions.
Current wording
Recycled Water Revenues. The increase was due primarily to higher recycled water volumes related to timing of water to be used in completions, partially offset by lower pricing for recycled water.
Previous wording
Other Revenues. The increase was due primarily to higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our LEX II commencing operations during the three months ended December 31, 2024. This increase was partially offset by lower reimbursements from construction projects, booster operating fees and generator rentals.
Current wording
Other Revenues. The increase was due primarily to higher water pipeline revenue, including payments from a producer for committed volumes not delivered, due to our LEX II commencing operations during the three months ended December 31, 2024, as well as higher reimbursements from construction projects and booster operating fees.
Previous wording
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations.
Current wording
Cost of Sales-Excluding Impact of Derivatives. The decrease was due primarily to lower costs incurred that will be reimbursed by producers for generator and fuel costs at various booster stations and lower recycling costs.
Previous wording
Operating and General and Administrative Expenses. The increase was due primarily to higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, higher utilities expense due to increased produced water volumes processed and higher repairs and maintenance expense due to timing of repairs, partially offset by lower bad debt expense and lower legal expense.
Current wording
Operating and General and Administrative Expenses. The increase was due primarily to higher utilities expense due to increased produced water volumes processed and higher royalty expense due to volumes related to the LEX II pipeline commencing operations and increased volumes at certain other saltwater disposal wells, partially offset by lower incentive compensation expense and lower chemical expense due to purchasing fewer chemicals and using chemicals more efficiently.
Previous wording
Depreciation and Amortization Expense. The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2025 and six months ended September 30, 2025.
Current wording
Depreciation and Amortization Expense. The increase was due primarily to depreciation of newly developed facilities and infrastructure, partially offset by certain long-term assets being fully amortized, impaired or sold during the fiscal year ended March 31, 2025 and nine months ended December 31, 2025.
Previous wording
Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The decreases in sales and cost of sales, excluding the impact of derivatives, were primarily due to lower commodity prices partially offset by higher production on acreage dedicated to us in the DJ Basin during the six months ended September 30, 2025, compared to the six months ended September 30, 2024.
Current wording
Crude Oil Sales and Cost of Sales-Excluding Impact of Derivatives. The increases in sales and cost of sales, excluding the impact of derivatives, were primarily due to higher production on acreage dedicated to us in the DJ Basin during the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, partially offset by lower commodity prices.
Previous wording
During the six months ended September 30, 2025, the crude oil product margin and margin per barrel increased compared to the six months ended September 30, 2024 due to lower transportation costs. In addition, there was a more significant decrease in market prices during the six months ended September 30, 2024, thus also contributing to a smaller margin per barrel for that period. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
Current wording
During the nine months ended December 31, 2025, crude oil product margin increased compared to the nine months ended December 31, 2024 due to higher crude oil barrels sold during the current quarter. Product margin per barrel also increased due to a more significant decrease in commodity prices during the nine months ended December 31, 2024 compared to the nine months ended December 31, 2025, thus contributing to a higher margin per barrel for the current period. Crude oil product margin calculations do not include gains and losses from derivatives that may offset the movement in the physical margin.
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Previous report — wording carried elsewhere
In addition to the items discussed above, interest expense was lower (as discussed below).
Previous report — wording carried elsewhere
General and Administrative Expenses. The expenses during the three months ended September 30, 2025 increased by $3.9 million due to lower legal expenses in the prior year period due to a reimbursement of legal expenses related to a dispute associated with commercial activities and lower business insurance expense in the prior year period due to the receipt of credits.
Previous report — wording carried elsewhere
Depreciation and Amortization Expense. The increase during the three months ended September 30, 2025 was due to depreciation of the airplane put into service in October 2024.
Previous report — wording carried elsewhere
•a gain of $1.8 million from insurance recoveries for certain saltwater disposal facilities and boosters damaged in a prior period.