What happened
Shares of midstream master limited partnership NGL Energy Partners (NGL +2.19%) rose a dramatic 22% out of the gate on Thursday. They then pulled back a bit before bursting higher again, reaching an incredible 34% gain by roughly 10:30 a.m. EST. Company news has been coming out at a rapid clip over the last few days.
So what
On Tuesday, NGL announced that it had come to an agreement with a customer that had declared bankruptcy: fossil fuel producer Extraction Oil & Gas. Although the new agreement required NGL to make concessions to the customer, which will result in one-time charges, it cleared up a notable uncertainty. At the same time, the partnership also reinstated its fiscal 2021 guidance and provided an outlook for fiscal 2022 that included a forecast of 15% adjusted EBITDA growth.
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On Wednesday, the partnership announced the next dividend payout for its preferred shares -- not huge news, but not bad news, either. And then Thursday, NGL announced that it was issuing $2.05 billion worth of bonds in a private placement transaction. This move will push out some of its debt maturities and, perhaps equally important, it should provide ample liquidity for the partnership to continue investing in the future of its business. In other words, in just a few days time, NGL Energy Partners' outlook has become a lot easier to handicap.
Now what
Although NGL's units rallied strongly Thursday morning, they remain down by around 70% from where they traded 12 months ago. So management still has a lot to prove here. But over the last few days, they have given investors a lot of important information about where this energy industry player is heading. And, at least for now, that seems to be in a more promising direction than it has been for a little while.
