NGL Energy Partners LP

Our corporate headquarters are in Tulsa, Oklahoma and are leased. We also lease a corporate office in Denver, Colorado.

For additional information regarding our properties and the reportable segments in which they are used, see Part I, Item 1–“Business.”

• NGL Energy Services, LLC Delaware⁵
• NGL Liquids, LLC Delaware⁵
• NGL Marine, LLC Texas⁵
• NGL Recycling Services, LLC Delaware⁵
• NGL Shared Services Holdings, Inc. Delaware⁵
• NGL Shared Services, LLC Delaware⁵
• NGL Supply Terminal Company, LLC Delaware⁵
• NGL Water Pipelines, LLC Texas⁵
• NGL Water Solutions DJ, LLC Colorado⁵
• NGL Water Solutions Eagle Ford, LLC Delaware⁵
• NGL Water Solutions Holdco, LLC Delaware⁵
• NGL Water Solutions Orla-SWD, LLC Delaware⁵
• NGL Water Solutions Permian, LLC Texas⁵
• NGL Water Solutions Product Services, LLC Delaware⁵
• NGL Water Solutions, LLC Colorado⁵

• Our business depends on the availability of crude oil and natural gas liquids in the United States and Canada, which is dependent on the ability and willingness of other parties to explore for and produce crude oil and natural gas. Spending on crude oil and natural gas exploration and production may be adversely affected by industry and financial market conditions that are beyond our control.
• Declining crude oil prices and crude production volumes could adversely impact our Water Solutions and Crude Oil Logistics segments.
• Our Water Solutions business depends upon available pore space in subsurface geologic formations by which we can dispose of produced water through underground injection wells. Our inability to acquire new pore space or our loss of existing pore space may negatively impact our ability to service new and existing customers.
• Our profitability could be negatively impacted by price and inventory risk related to our business.
• We are affected by competition from other midstream, transportation and terminaling and storage companies, some of which are larger, more firmly established and may have greater resources than we do.
• Our business would be adversely affected if service at our principal storage facilities, common carrier pipelines or railroads we use is interrupted.
• We lease certain facilities and equipment and therefore are subject to the possibility of increased costs to retain necessary land and equipment use.
• Our operations depend on various forms of storage and transportation for receipt and delivery of crude oil and natural gas liquids.
• The fees charged to customers under our agreements with them for the transportation and sale of crude oil, condensate, natural gas liquids and the disposal of produced water may not escalate sufficiently to cover increases in costs and the agreements may be suspended in some circumstances, which would affect our profitability.
• Risk management procedures, including the use of financial derivative contracts, cannot eliminate all commodity price risk, basis risk, or risk of adverse market conditions which can adversely affect our financial position and results of operations. In addition, any non-compliance with our market risk policy could result in significant financial losses.
• Competition from alternative energy sources, energy efficiency and new technology may reduce the demand for propane and adversely affect our operating results.
• The Inflation Reduction Act of 2022 (“IRA”) could impact demand for hydrocarbon fuel products and impose new costs on certain customers.
• Seasonal weather conditions and natural or man-made disasters could severely disrupt normal operations and have an adverse effect on our business, financial position and results of operations.
• Weather conditions, including warm winters or dry or warm weather in the harvest season, may reduce the demand for propane, which could have a material adverse effect on our results of operations, cash flows, financial condition or liquidity.
• Growing our business by constructing new transportation systems and facilities subjects us to construction risks and risks that supplies for such systems and facilities will not be available upon completion thereof.
• We may face opposition to the operation of our pipelines and facilities from various groups.
• We depend on the leadership and involvement of key personnel for the success of our businesses, and we compete with other businesses to attract and retain qualified personnel.
• Our sales of crude oil, condensate, natural gas liquids and related transportation and hedging activities, and our processing of produced water, expose us to potential regulatory risks.
• Our, our customers’ and our suppliers’ operations are subject to a series of risks arising out of the threat of climate change that could result in increased operating costs, adversely impacting our results of operations and ability to make cash distributions to unitholders, limit the areas in which oil and natural gas production may occur, and reduce demand for the products and services we provide.
• State and federal legislation and regulatory initiatives relating to our hydraulic fracturing customers could harm our business.
• Restrictions on drilling and related activities intended to protect certain species of wildlife or their habitat may adversely affect our customers’ ability to conduct drilling and related activities in some of the areas where we operate.
• Federal and state legislation and regulatory initiatives relating to saltwater disposal wells could result in increased costs and additional operating restrictions or delays and could harm our business.
• Some of our operations are subject to the jurisdiction of the FERC and other operations may become subject in the future.
• We are subject to governmental regulation and other legal obligations related to privacy, data protection, and data security. Our actual or perceived failure to comply with such obligations could harm our business.
• Some of our operations cross the United States/Canada border and are subject to cross-border regulation.
• Our Partnership Agreement limits the fiduciary duties of our GP to our unitholders and restricts the remedies available to our unitholders for actions taken by our GP that might otherwise be breaches of fiduciary duty.
• Our GP and its affiliates have conflicts of interest with us and limited fiduciary duties to our unitholders, and they may favor their own interests to the detriment of us and our unitholders.
• Even if our unitholders are dissatisfied, they have limited voting rights and are not entitled to elect our GP or its directors.
• Our Partnership Agreement restricts the voting rights of unitholders owning 20% or more of our common units.
• Our GP interest or the control of our GP may be transferred to a third party without the consent of our unitholders.
• The IDRs of our GP may be transferred to a third party.
• Our GP has a limited call right that may require our unitholders to sell their common units at an undesirable time or price.
• Our Partnership Agreement requires that we distribute all of our available cash, which could limit our ability to grow and make acquisitions.
• We may issue additional units without the approval of our unitholders, which would dilute the interests of existing unitholders.
• Our GP, without the approval of our unitholders, may elect to cause us to issue common units while also maintaining its GP interest in connection with a resetting of the target distribution levels related to its IDRs. This could result in lower distributions to our unitholders.
• Our unitholders’ liability may not be limited if a court finds that unitholder action constitutes control of our business.
• Our unitholders may have liability to repay distributions that were wrongfully distributed to them.
• The Preferred Units give the holders thereof liquidation and distribution preferences over our common unitholders.
• The issuance of common units upon exercise of certain warrants would cause dilution to existing common unitholders and may place downward pressure on the trading price of our common units.
• Our tax treatment depends on our status as a partnership for federal income tax purposes. We could lose our status as a partnership for a number of reasons, including not having enough “qualifying income.” If the Internal Revenue Service (“IRS”) were to treat us as a corporation for federal income tax purposes, our cash available for distribution to our unitholders would be substantially reduced.
• Our unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.
• If we were subjected to a material amount of additional entity-level taxation by individual states, it would reduce our cash available for distribution to our unitholders.
• The tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.
• Changes in tax laws could adversely affect our performance.
• If the IRS contests the federal income tax positions we take, the market for our common units may be adversely impacted and the cost of any IRS contest will reduce our cash available for distribution to our unitholders.
• If the IRS makes audit adjustments to our income tax returns for tax years beginning after 2017, it may collect any resulting taxes (including any applicable penalties and interest) directly from us, in which case our cash available for distribution to our unitholders could be substantially reduced.
• Our unitholders will be required to pay taxes on their share of our income even if they do not receive any cash distributions from us.
• Certain actions that we may take, such as issuing additional units, may increase the federal income tax liability of unitholders.
• Tax gain or loss on the disposition of our common units could be more or less than expected.
• Tax exempt entities and non-United States persons face unique tax issues from owning our common units that may result in adverse tax consequences to them.
• We treat each purchaser of common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the market value of the common units.
• We have subsidiaries that are treated as corporations for federal income tax purposes and subject to corporate level income taxes.
• We prorate our items of income, gain, loss and deduction for federal income tax purposes between transferors and transferees of our units each month based on the ownership of our units on the first business day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.
• A unitholder whose common units are loaned to a “short seller” to effect a short sale of units may be considered as having disposed of those common units. If so, such unitholder would no longer be treated for federal income tax purposes as a partner with respect to those common units during the period of the loan and may recognize a gain or loss from the disposition.
• We have adopted certain valuation methodologies and monthly conventions for federal income tax purposes that may result in a shift of income, gain, loss and deduction between our GP and our unitholders. The IRS may challenge this treatment, which could adversely affect the value of our common units.
• There are limits on the deductibility of our losses that may adversely affect our unitholders.
• Purchasers of our common units may become subject to state and local taxes and return filing requirements in jurisdictions where we operate or own or acquire properties.
• Treatment of distributions on our Preferred Units as guaranteed payments for the use of capital creates a different tax treatment for the holders of Preferred Units than the holders of our common units and such distributions will likely not be eligible for the 20% deduction for qualified publicly traded partnership income.
• The default by significant customers and counterparties or loss of one or more significant customers could materially or adversely affect our business, financial condition, results of operations and cash flows.
• The counterparties to our commodity derivative and physical purchase and sale contracts may not be able to perform their obligations to us, which could materially affect our cash flows and results of operations.
• If we fail to maintain an effective system of internal control, including internal control over financial reporting, we may be unable to report our financial results accurately or prevent fraud, which would likely have a negative impact on the market price of our common units.
• The impact of a global public health crisis may have material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition, results of operations and liquidity and those of our customers, suppliers and other counterparties.
• The risk of terrorism and political unrest in various energy producing regions may adversely affect the economy and the price and availability of products.
• Product liability claims and litigation could adversely affect our business and results of operations.
• A failure in our operational systems or cybersecurity attacks on any of our facilities, or those of third parties, may adversely affect our financial results.
• Artificial intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data.