What: Units of NGL Energy Partners (NGL -0.50%) slumped more than 18% by 3:30 p.m. ET on Wednesday. Fueling the sell-off were sluggish year-over-year earnings and watered-down full-year guidance.

So what: NGL Energy Partners' fiscal third-quarter results were much weaker than the year-ago period. The company reported adjusted EBITDA of $113.5 million, which was 21.6% less than what it earned last year. A $16.5 million inventory valuation adjustment was one of the items weighing down its results last quarter.

Because of those anemic results, as well as overall weaker market conditions, NGL Energy Partners has reduced its full-year fiscal 2016 guidance. It now forecasts EBITDA at $450 million instead of $500 million. The primary drivers are lower oil prices, which are impacting the value of the recovered hydrocarbons in its water solutions business.

NGL Energy Partners did, however, reiterate its capital expenditure guidance over the next 18 months at $350 million. However, only $250 million of that is currently committed. A big concern heading into 2016 was the company's ability to fund this capital budget given the tightening of the energy credit markets. That problem was solved by selling the general partner for TransMontaigne Partners (TLP) for $350 million. In doing so, TransMontaigne Partners will be deconsolidated from NGL Energy Partners' financials going forward. Furthermore, as part of the deal, NGL Energy Partners can generate additional liquidity by selling a portion of the units of TransMontaigne Partners that it currently owns directly to the buyer of the general partner. That should provide it with more than enough liquidity to fund its capex budget and trim its debt a little bit.  

Now what: The downturn in the energy market is having a noticeable impact on NGL Energy Partners. Not only has its access to capital been constrained because of tightening credit, but its cash flow is shrinking because of its direct exposure to commodity prices. This exposure will continue to put pressure on the company's units until the price of oil starts to rebound.