NGL Energy Partners LP (NGL)

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"NGL Energy reduced to Sell at UBS on potential impact of Extraction deals"

"Oct. 16, 2020 9:26 AM ET|About: NGL Energy Partners LP (NGL)|By: Carl Surran,

* NGL Energy Partners (NYSE:NGL) -2.8% pre-market after UBS downgrades shares to Sell from Neutral with a $3.50 price target, saying yesterday's ruling regarding Extraction Oil & Gas' (NASDAQ:XOG) existing agreements with NGL's Grand Mesa Pipeline increases uncertainty around the financial impact.

* The U.S. Bankruptcy Court judge granted summary judgment in Extraction's favor against NGL-owned Grand Mesa Pipeline, which had an agreement with Extraction to carry crude 550 miles in the pipeline that starts near Lucerne, Colo., to the Cushing, Okla., regional pipeline hub and refinery complex.

* UBS analyst Shneur Z. Gershuni says his estimated FY 2021 adjusted EBITDA of $543M, below NGL's guidance of $560M-$600M and $554M Wall Street consensus, was based on a renegotiation of existing agreements, which is now more likely following the ruling.

* A renewal of NGL's existing credit facility that matures in October 2021 likely would be helped by a further distribution cut, Gershuni also says.

Seeking Alpha authors are mostly bearish on NGL, but its average Wall Street analyst rating is Neutral."

https://seekingalpha.com/news/3622886-ngl-energy-cut-to-sell-ubs-on-potential-impact-of-extraction-deals