Good afternoon, ladies and gentlemen, and welcome to the NGL Energy Partners LP 4Q and Year-End 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It’s now my pleasure to turn the floor over to your host Linda J. Bridges, CFO. The floor is yours.

Hi, and welcome to NGLs fourth quarter and year-end fiscal 2022 earnings call. To start, I'd like to call your attention to our Safe Harbor language, which can be found towards the end of the partnership's earnings release, which was filed after market closed this afternoon. Today's remarks may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In accordance with the act, I would also like to direct your attention to the Management's Discussion and Analysis section and the risk factors discussed in the partnership's annual report on Form 10-K for the year ended March 31, 2022 and in other SEC filings made by the partnership, which are available on our website and on the SEC's website. These, together with the Safe Harbor statement in the earnings release set forth important factors that could cause actual results to differ materially from those contained in any such forward-looking statements. Looking back at fiscal 2022, our financial performance has started to produce results that reflect the quality of our asset base and validation of our strategy. Our Water Solutions segment saw tremendous growth in fiscal ‘22 with adjusted EBITDA of $342 million, growing 42% or more than $100 million year-over-year as underlying volumes grew over 30% on a volume basis, and as our skim oil sales benefited from higher realized crude oil prices. Fourth quarter volumes grew nearly 5% over the preceding fiscal quarter, and as expected, we exited the year at approximately 2 million barrels of processed volumes per day. Additionally, the Partnership reported total recycled volumes of approximately 34 million barrels for fiscal 2022. We expect processed water volumes for fiscal 2023 to average 2.2 million barrels per day, a level that we have already seen in May. Margin for fiscal 2022 totaled…

Thank you, Linda. Well, this is a very exciting time for NGL, we are turning the corner and have strong momentum going into fiscal year 2023. Our Water Solutions business is continuing to grow significantly. Our prior year's capital investment is fueling that momentum, allowing us to provide capacity to our upstream customers without delays. Before we get into the specifics, I briefly review our current focus; one, prudent management of the balance sheet, reducing absolute debt and leverage, 2023’s are the primary target; two, reduce leverage below $475 million in order to reinstate the preferred dividends and increase our financial flexibility. We will achieve this through a combination of reduced debt and increased EBITDA; three, generate significant free cash flow from operations to provide the cash to repay the debt; four, enhance that free cash flow by reducing working capital requirements, decreasing CapEx and monetizing underutilized assets. While at the same time, continue to pursue growth opportunities, leveraging volume capacity in our water solutions network with the minimal new investments. We do not turn down any water offered at a reasonable price. Due to the breadth and redundancy of our water pipeline system, our customers know they can depend on NGL, while we commit to take their. Now let's discuss fiscal ‘23, our EBITDA guidance is in excess of $600 million. We do not have an upper range as it could vary significantly depending upon the continuing strong commodity price environment. We are increasing our water solutions EBITDA forecast from $385 million to at least $400 million. The fourth quarter of the recently completed fiscal 2002 was the first $90 million EBITDA quarter for water solutions. We have clarity into the first quarter of fiscal ‘23 where it appears we will realize our first $100 million EBITDA quarter. In…

Thank you. Ladies and gentlemen, the floor is now open for questions. [Operator Instructions] And the first question is coming from Tarek Hamid with JP Morgan. Your line is live.

Good afternoon.

Hello.

So on the water business, obviously, really, really strong performance and good to see the guidance of sort of above $400 million of EBITDA there. You sort of touched on a little bit in your opening remarks, but that sort of $600 million of total EBITDA less the $400 million of water EBITDA on the low end would sort of imply $200 million of EBITDA out of crude oil, logistics and liquid logistics and that clearly would be sort of down from about a little over $240 million in [2000] (ph) and fiscal 2022. So you can help maybe just bridge us a little bit about how you're thinking about that? Is that sort of conservatism. Am I sort of being a little bit too precise with those numbers? Just any other color would be helpful.

I think you're missing the offset of corporate expenses to that and that should bridge you.

Okay.

I think when we say corporate overhead, we have that number, it was 30 -- I think it was about $39 million. So that would be your $40 million difference.

Okay. So really just think about it as flattish in the crude and liquids logistics.

Yes.

And then, second, on the CMA hedge. I think you talked about $12 million to $13 million if I read the doc correctly of expected EBITDA impact in the next quarter. Obviously, the cash flow impact of the overall hedging program was pretty tough this quarter at about $90 million. Could you sort of give us any color on what you expect the cash flow impact to look like of the commodity hedging program in this upcoming quarter?

Yeah. So I think you’ve remixed a couple of items, the $12 million to $13 million is the net loss on commodity derivatives that we expect to hit in the first quarter yeah. That could offset some of the gains. So that's not relating necessarily to the CMA differential role. Without knowing what the price curve is going to do, it's difficult to predict what the cash flow impact is. Typically if you are hedging into a backwarddated market and prices are realizing on those hedges at higher prices, that would be a cash flow outflow and vice versa on an inflow.

Any just sort of sense of how it should -- what it will look like in this upcoming quarter relative to this last quarter?

Not without knowing what commodity prices are going to do for the next month.

Okay. Fair enough. That’s it from me.

Okay. The next question is coming from Jason Mandel with RBC. Your line is live.

Hi guys. Thanks for taking the question. So, obviously, the outlook for the water business is really strong, but it seems like the next couple of quarters could be a little challenging from an outright total cash flow perspective, including settlements and everything, which I think is -- I guess, as I understand, it is part of the $100 million increase on the revolver. Is -- are there any other thoughts towards other levers to pull to give yourselves a little bit more headroom from a liquidity perspective? Asset sales or other capital structure moves.

Yeah. Yes, I think we referenced in the earnings comments that we are working on a few different initiatives from both liquidity and debt pay down perspective, we specifically stated that we're not prepared to talk about those initiatives at this time, but we would hope to provide updates in the coming months.

Okay, thank you. And then the $100 million expansion on the facility, it sounds like that is a -- just to give a little bit more breathing room over the next couple of quarters when working capital is more challenging? And then I guess that facility drops back down early in ‘23, is there any hope or plan or expectation to extend that date or there is no need?

Based on what we are seeing today, I would say that, so let me back up the agreement and that will reduce that commitment back down to $500 million by March 31 of this next year. It really depends on what commodity prices do between now and then. The initial reason for requesting the additional $100 million was related to just higher working capital needs, due to increases in commodity prices. If we continue to see these higher levels we would most likely talk with the bank group going into next year.

Okay, very good. I'll hop back in the queue. Thanks for help.

Up next we have Robert Kane with Kane LLC, Robert, your line is live.

Thank you. Good afternoon. I'm curious, I know the goal on the leverage ratio is 4.75, where are we right now?

Right now, I believe we're right around 6.2.

Okay.

We just posted an investor presentation that walks through where we expect to be, where we ended the year, and where we expect to be at the end of next year.

Okay. All right, very good. Do we have an earnings per share number on this quarter?

I don't have that pulled up, it's going to be in our 10-K, though. We would have posted that right after market close today.

Okay. I did look at that and I didn't see it. All right. I thought you would have that number there available.

Yes. We have.

Yeah. It's not perfect.

Now just check the 10-K –

Okay.

That's not a number we really pay any attention to, but we pay attention to the free cash flow and the EBITDA.

All right, very good. All right, I'll take a look at that and that you've answered my question.

[Operator Instructions] Up next we have Robert Stetson, Private Investor. Robert your line is live. Robert Stetson, your line is live.

Hi, thank you. I'm Investor primarily in the preferred shares and typically when the preferred shares are in suspension and the dividends being suspended the preferred shareholders have a right to name one or more in Directors to the Board, is that the case here?

No.

No. We -- the largest preferred share investor is EIG and they have the right to appoint one board member, but it came with their investment, not because of this suspension of dividends.

And do they have any intention of following through on that?

Yes, they had a Board member since the day of the investment. Yes.

Okay. So was the dividend suspended at the time they made the investment?

Subsequent to the investment.

Okay.

So they invested, they brought on a Board member and you can check our Board members, that member is, Mr. Randy Wade of WIG and he is currently on the Board and we expect he will be until there repay.

Okay. All right, thank you.

Okay. The next question is coming from John Horton with BMR. Your line is live.

Thank you. Good afternoon, Michael and Linda. I appreciate the opportunity. Last quarter you gave a lot more color on the status of the Ambassador Pipeline. Do you have a couple of points that you would highlight now as far as the progress there? And with the excitement that was noted by some of the retailers in the region, do you see a favorable contract situation for this next year that will help increase the growth?

Sure. Jeff Pinter here who runs liquids. So we can give an update on both the pipeline connections, Marysville, et cetera. And then what we're seeing with the response from retailers.

Good afternoon. Yes, the reception in Michigan has been very warm, we had the Wheeler terminal, which, if you'll recall, was built about halfway up the pipeline in the center of the state, a little west of Saginaw. We had -- we completed that and brought it in service February 1 of this year and customers were very excited to come to a brand new facility with very efficient pump and truck loading system. And so we moved, I think, over 1 million gallons in first month in service and the reception has been great. The pipeline connection itself, we have the -- both of the line ready to go. We're finishing up some of the last pieces of the connection with DCP into their Marysville cavern. As Mike mentioned earlier in the comments, we expect that to be complete this summer and ready for winter service.

Yeah, I might add. The importance of -- the importance of the Marysville connection is that that's a hub that produce a lot of propane and that allows us to move propane up the line to Wheeler and then up to Kalkaska. This winter we did not have that ability, we were having to bring rail in and then we were limited by the production at Kalkaska in addition to that. So this is a big, big change. Michigan has very few supply points, they are bringing product in from Toledo, Chicago, where else Detroit –

Sarnia.

Sarnia and the vast majority by rail and truck. So, this from an environmental point of view, this is also a great asset, because it's going to eliminate a lot of truck miles.

And that was kind of a follow-up question to that. Do you the estimates on what it’s saving from an ecological standpoint?

We look at emissions really from the transports, I don't know that we've got a number. Not that we're ready to share today. We are looking at it from -- for the ESC benefits, the pipeline provides that. Yes, it is a significant amount of efficiency gain. If you think about the hall from Chicago or Toledo to Northern Michigan and then returning empty, you talked about 200 miles to 400 miles round trip and half with trucks empty. And so that much more efficiently brings product up there and I'd say much more reliably. Roads can have potholes and rucks and icy conditions, the pipeline runs smoothly and efficiently underground during the bad weather.

Well, I was just thinking with the great relationship you have with the Governor of Michigan that they ought to appreciate all those efforts. I guess the next question, it's a very dynamic, economic and materials environment that we're in right now. We look with many of our economist and the questions of, will we have a recession? And will it be late this year or early next year? It puts a lot of question marks behind the business. So it's good to hear that you've got an action plan in place that can help pay off a significant amount of debt by the end of March in ’23. But in the, I guess, the forecast you're considering, are you seeing anything in particular that you're not able to offset? Let's say, if you see all go back down to $65 a barrel, how does that change the dynamics of the management getting plan?

Well, on all three businesses we're seeing, because of all these LNG demand, especially going to Europe that we anticipate kind of at a lower crude price. The Liquids business will still do very well. So then a lower crude price will affect our crude logistics which is primarily Grand Mesa. I guess the flip side of not seeing a large increase in volume there because the rig count hasn't -- it's fluctuated between 9 and 12 rigs. Having a lower crude price probably doesn't affect the amount of crude being produced in that basin anyway. So then it comes down to the water side, how much of that $65 will water -- will the rig count drop? If I knew that I could answer your question.

Okay. And I'm not trying to push you on the spot. It's just typically management strategic plans take into account a certain range or variables and not trying to poke holes that I just trying to understand it. Many of the people, I think, Wells Fargo showed a very flat future for NGL that would question -- will put in minds of investors the viability of investing as far as it coming back to paying a dividend. So that's the challenge for the common shareholder, maybe the preferreds are looking at and say, hey, great, we're going to be back into money next year late, but for a lot of the common shareholders there is still some questions left there and I think you mentioned maybe three or four quarters ago possibility that we don't see the price go back up until absolute common dividend is put back in place. Do you have any points or you can just add an opinion there professionally?

No, we are really focused on the press first, because you can't do a common increase until you reinstate the press. So we're -- our goal is to get that reinstated in ’23. Obviously, the 475 is the key to that. And then after that we will see what we do with the common units.

Okay. I’m just trying to gain a perspective on how the common shares will be valued between now and two to three years from now. If it doesn't -- typically, you're not looking at the earnings per share, so it's not going to follow a PE multiple there. So it may be completely flat, then we have a lot of time to accumulate in that case. Thank you very much.

Okay, thank you for your call.

Okay. Next we have Khalid Jameel, Private Investor. Your line is live.

Yeah. Thank you, Michael. For dancing. I appreciate that.

It’s a pretty sight.

Yes. So couple of question I had and John Horton covered, but question about the opportunities in Europe. I have not heard anything from management on that. Is there any significant opportunities you are seeing coming quarters?

Not from Europe. No, we don't export. I’d say, we don't have any natural gas. So we don't export any LNGs, but because of the natural gas exports, more gas would be presumably be produced which would produce more liquids. That's where we would come in moving propane and butane around North America. We do have the butane export facility in Chesapeake, Virginia, but yeah crude -- crude we -- from the crude side, we transport to refineries, we do not export ourselves.

All right. Now I don't have any further questions. Thank you.

Thanks.

Okay. Next we have James Yoon with Nomura. Your line is live.

Hi, thanks for taking my question. I was just wondering in your guidance, what you guys are assuming to crude oil price? What are you guys assuming for crude oil prices and can you provide any sensitivities for EBITDA and free cash flow on what happens if crude oil changes by like $5 or $10 bucks?

Sure. The easy one is the skim oil, we've been running 120,000 barrels to 130,000 barrels a month. So if it is 12 you say you're 1.5 million barrels, so then $5 -- $10, that's $15 million. So a $10 drop would cost $15 million. Other than that I think, it's back to what's the impact on the rig count, which would then impact our water volumes.

Got it. And then what are you guys assuming for crude oil prices in your adjusted EBITDA guidance?

We haven't disclosed that specifically, James.

Yeah. James, what we do is, we grab the water projections from our customers. So it's not a function of crude prices for us, we don't know what their drilling plans are, different crude prices, but we do have their projections of water volumes for the year.

Got it. Okay. And then I think CapEx for ‘23 is a little bit higher, just because that new acreage dedication, just curious if there are any changes to your 2024 guidance you guys had provided late last year?

No, we don't have any really changes, hopefully, it changes increasing, but we wanted to increase from a profitability point of view as we get more water. We wanted to decrease from a debt reduction point of view. So Linda would like to see a drop and I’d probably would like to see it go up a little.

No change at this point though, James.

Got it. Okay. Thanks, that's helpful. And then just curious on the economics for the new acreage dedication you guys announced for the water business, just curious like what the economics there look like for those volumes and what we should -- what we should expect for margin per barrel as those volumes start ramping up?

We -- under our agreement we can't disclose anything like that. I think, in general, we could talk about where we see margin scaling. Is Doug White on the line.

I’m here Mike.

Maybe you could talk a little bit about what we're seeing.

We're seeing margins increase. Obviously, the oil price is very helpful to that. I know on previous -- I think our previous call in February we were asked about the revenue per barrel, I’m seeing that decrease a little bit. If you -- I think if we look now, we're seeing that turnaround and increase. So I think, Linda, I think it was $0.46 a barrel margin in our release. I think that'll be a good number to use if you are putting that into your model, but we are seeing, obviously, revenue per barrel increasing along with the activity, also the limitation of capacity from our competitors. It put us in a strong position to increase that fees.

Got it. And I guess is the amount of skim oil you guys are able to grab from this dedication. Is that better than your -- is that kind of like better than your current mix or is that like in line with your current mix? I guess how should we think about that going forward?

In line. I think we were 15 basis points on the last call and that has ticked up a little bit in this this current quarter. And the completions activity drives that, of course. So I think if you take that new dedication and just use our averages, you're going to be very close to the write-up to it.

Got it. Okay. Thank you. That's all the questions I had.

Okay. And next we have Oliver Moon with Moon Private Cap. Your line is live.

Hey guys, how are you? I'm calling you from Europe actually. I'm herein in Barcelona, Spain. So I'm very familiar with what's going on over here with the Europe and the LNG market. You briefly touched on the butane export facility at Chesapeake. I was really interested in knowing about that, if you guys did have any plans on doing any wholesale to companies out here in Europe? As I'm sure next winter, the need for butane and propane is going to be quite higher. It's right, American gas prices are going through the roof. But if you can convert it to LNG, you're not going be able to get it over here to Europe and you guys producing propane and butane, being a liquid already and its liquid state should be able to get it over here. So excited to see here if you guys are doing anything, anything and all to try to get that butane export facility going that would be question number one. And then the next two are just really quick ones. Doug -- Doug White, just wondering do you hold shares in NGL Energy Partners, because I've seen on the insider trading I've seen Mike buying up about 100,000 shares each quarter and John Ciolek actually bought up some last quarter, but I haven't seen any -- I don't see Doug White on the list at all. So just wondering if you had any shares in the company? And third question, are there any sort of buyout, any worries that we should have about near term buyouts -- buyout opportunities of NGL Energy Partners? So butane export facility, Doug White, do you hold shares in NGL Energy Partners, and are there any sort of major asset sales or buyout conversations that we should know about?

All right. I like when you summarize. So I got them all. Doug, you want to go first. I am very invested in NGL and in this company.

Very glad to hear that, because I've been looking online trying to find where your shares and I can’t them. So, that's super stock then. I think –

Unfortunate that I don't have to report.

Well, it's good to hear that you'd have them, that's all one -- settles the sole a little bit to everybody. Yes, thanks for that.

Butane. So, yeah, great question on Chesapeake. It is -- as you know, it's so closer shot to West Africa, Mediterranean, and Europe from the east cost of the US than it is from the Gulf Coast. So we like that. The facility is, I would say, nearly fully subscribed for butane exports through the fall, but we do have some capacity still for the winter. So –

[indiscernible]

What’s that?

There is traffic in and out of that export facility.

Correct, yes.

To where?

To various locations. A lot of that lately has been going to West Africa. And -- but we have sent shipments to South America and the Mediterranean as well. And so I would say if there are interested parties to reach out to us, I’d be happy to talk about that.

Is the Partnership making money off of selling butane and would you guys be interested in more partners? Because I can hook you up to Turkey if you want Turkey. I mean, I'm sorry to speak like that, but I got a lot of money invested in your company. I want to help this make money, how do we make this happen? How do we get that butane export facility working more?

We have a –

How do we sell more propane is what I'm getting at. Because from what I understand is, NGL Energy Partners has NGL Energy Wholesale, and we sell 20 -- we have 27 wells, I believe, that produce butane and propane. So we shouldn't wait for winter time to sell to Michigan, we should be selling year around, like, to everywhere.

Sure. We have an international trading company that has anchored our facility. So we're not actually the company that's selling, we provide the facility and the butane to the trading company. So I don't know what to tell you, giving us the Turkey connection --

It just sounds like NGL Energy Partners as a wholesale, we wholesale butane and propane. Correct?

Yes.

But we just only do -- we only do that in the United States, we don't do that -- we're not selling to Europe.

That's correct.

US and Canada.

Our partner maybe. Just speaking about our partner who is selling to these other countries. Yes.

Okay. Well, I’ll send you guys a -- phone call later if you guys want to get that information. And then just as a passive. I mean, just as a fully invested person in NGL Energy Partners, we're totally out of the woods in bankruptcy. Right. I mean there, nothing happened, there is no scares to come in terms of bankruptcy. Right? We're covering --

Yes.

I mean, I'm not -- I'm just speaking like a business man out here and I'm not a banker from New York. I'm just straight up European investor in NGL Energy Partners. We’re solid, we're good, we just need more time?

That is correct. If there was a problem the outside auditors would have a qualified opinion which they do not.

Exactly, that's what we're trying to -- so we're just trying to push water volumes into go up, propane sales in to go up and which needs patience in time, if I'm not mistaken, correct?

That’s correct.

Hey, it's very good to put a voice -- your voices to the call. Thank you for taking my call. Very appreciated. Have a wonderful day.

Thank you.

Okay. Up next we have Edward Campana with Countryside Ventures. Your line is live.

Good afternoon. I have a question about the water solutions business as it relates to the recycled water component of it. My understanding is, many of your customers might want to not only drill for more oil or complete wells to produce more, but also want to be as environmentally friendly as possible. What are you seeing now in terms of the demand for more recycled water? What kind of premiums can you get for that water? And as it means to enhance margins, my sense is that, only about 20% of produced water that most large operators like yourself receive is actually recycled and this kind of goes in tandem with more restrictions on permitting SWDs.

Hey, Doug.

That's very good topic to bring up, in Q3 we did 53,000 barrels a day, last year Q4, 146,000 barrels a day. And in Q1 we’re already outpacing that, we hope to get to 20% of all of water. That's over 400,000 barrels a day. So we're very excited about that business. From a customer demand perspective, that business continues to accelerate, everyone is getting comfortable utilizing produced water, even versus a year ago in the completions process. So I think there is a large runway there. You talked about margins, there's two sides of that coin. And I think you expressed it in the end, the less capital we have to spend for growth on disposal or even maintenance on disposal on wells is beneficial to us. We already see some of that benefit with our ability to sell water off of our system, certainly in areas of our system that may be heavily subscribed. So it's a great benefit there. There is also an OpEx savings that goes along with that. On the revenue side, we continue to see the value increase as demand has increased. We look -- there is water out there, a year ago people were getting water away off their systems. We have never done that, but we saw $0.10 a barrel. We've done deals, I guess, in May we were selling for $0.40 a barrel. So we're seeing the increase in the value of our water really increase from the revenue side quickly and also volumetrically. So it is a future. Keep in mind, we see that as, obviously, an ESG benefit. It's also a good fit with our customers, because they get to promote their ESG and also because they care and taking the demand off the offer first, but it's also been generally accepted in the industry most importantly, and it is cheaper than fresh or brakeage water. So it's a win-win for all parties. We see that as part of our business as a piece of our business. NGLs core business is oncoming revenue barrels which we used to say for disposal, but really we're taking those barrels off the customers' hands, so they can produce oil. What we do with that water subsequent to that is changing, but our core business and the numbers that we quote like Mike did in his opening, that's based on oncoming full fee revenue barrels for what has traditionally been described as disposal. The recycle and reused barrels, those do come out at a less -- of lesser fee. So they're not quite as impactful incrementally to our bottom line, but they are nice to have.

Are you required to provide any reporting back to your customers regarding the delineating between what's being recycled and what's being injected DSWs.

As the water midstream operator, we do not have that. In New Mexico, the OCD which is the regulatory body of our oil and gas, they have requirements for operators to report those volumes, fresh versus -- brakeage versus reused.

Great. Thank you very much.

Okay. And next we have Craig Thomas with CWT Capital. Your line is live.

Hi everyone, thank you for taking my call. Could you will help me in water solutions business for water takeaway about what percentage of the business right now is conducted in the spot market?

Very, very little. On a percentage basis, we would assume that would be trucked water and that's the spot business. Trucked water is maybe 1% to 1.5% of our total volumes.

So, very small. And then, is there a goal to get water that flows through pipelines to be more exposed to the spot business given that revenue is climbing?

Yes, I think Mike mentioned that earlier. We have this calendar year added interruptible agreements to our portfolio that we have not had in the past. Those continue to roll in and they are -- they will grow while we are in this high commodity environment everyone asked about our system and how utilized has our system been from a capacity basis, where we overbuilt maybe over the last few years, I think, based on what we see with these new interruptible agreements, these agreements are anywhere from $0.80 to $1 in a quarter for fee, that's us capturing water that is committed to our competitors, but their systems are not built with the capacity or the throughput and we're able to capture those barrels ourselves at those very high return fees.

Right. So then those interruptible contracts are not the trucking contracts because you have pipes that go across Texas, New Mexico and multi-direction. So I guess is there more exposure than maybe I used the wrong word, maybe it should be interruptable, how much of our business is now interruptable?

Yeah. So growing this year, we had very few interruptible pipeline agreements prior to this calendar year. Now, if we're doing in the Delaware, and this is -- I'm speaking Delaware, because that's where most of our business is. We probably have about 100,000 a day of interruptible barrels at the average of, I would say, $1 on -- we're doing 2 million a day there now. So you do that. It’s going to continue this.

Yeah. I imagine it would, given earthquakes and the issues with permitting disposal well. So that's a great strategic asset you all have. So I guess it’s a congratulations on having a great system. And then one little clean-up from the last quarter call, you all indicated on that call that the water solutions did or was doing $30 million in January and February and then was on rate to kind of get to that $32 million level in March, so I calculate that at $92 million. In the call that was at the beginning of February when oil was substantially lower and obviously you were able to sell skim oil at higher prices for at least a month and a half higher than it was when you had that call. So I'm just curious was there something one time in the water solutions business in the last six weeks of the quarter or were there expenses that may be – sorry, your prepaid expenses declined pretty dramatically. Was there something that was kind of pulled forward from this now fiscal year that suppressed the EBITDA number a bit?

Can I speak to the April actual -- sorry the March actual Mike or Linda.

Sure. Yeah.

So the March actual was $34 million EBITDA. And to answer your question, were there any one-time events or other accounting measures? It's been year-end, GAAP accounting gets pretty focused on making sure that we've captured all of our accruals and there were some of those we would have even outpaced at $34 million in March, but there were some one-timers that in the quarter, really, really at the GAAP accounting nothing strategic or operational just to wrap up fiscal year.

Got it. So are those things normal every year or they just kind of where under may be accrued in the first nine months and then you've caught up all in the fourth quarter?

It would be the latter. Those are not typical or normal to the magnitude that we had. They were just clean-ups and catch-ups from priors, but we would not expect the same magnitude in this new fiscal year.

Got it. Well, that's good. That sounds like you're doing quite well, so the exit rate of $34 million was better than the $32 million and it would seem that if that's the exit rate, $34 million, you should do better than $400 million probably dramatically so, given where crude is now. So it seems like in your numbers, you are assuming a very low number for the price of oil in skim oil your realization. Is it like $90 you are assume? It seems that could be that low?

No, we're just trying to be make sure we beat our numbers this year.

Okay, I get it. I understand. And I know you have some things in your business that keep you propane’s a wildcard always, you never know what you're going to get. So I understand that one is a hard one to predict. And we as investors certainly appreciate you hitting your numbers. So I appreciate the conservatism. And one final question on, I'll let you go. Did you all say you're going to pay off the $500 million notes due at the end of 2023 by the end of this fiscal year. Did I hear that right?

I think there were $475 million outstanding at $331 million. We would expect free cash flow generated this year as well as cash flow generated from some of the initiatives that we alluded to earlier to get us to a point where we can either pay off or substantially pay off the 2023 notes by the end of this fiscal year.

That's fantastic news. So then there is nothing in the pipeline to win ‘26 in terms of maturities as of ‘25.

There is a small charge in ’25.

Wow. Okay, that's impressive. And then final question, and I'll open up the queue for the people. Have you paid -- how much debt has been paid off through kind of the end of May? Have you gone back into the market to repurchase the notes?

It's not a number that we'll disclose. It will come out in our first quarter 10-Q.

Okay. Wonderful. Thank you very much.

Thank you.

Now like to turn the floor back to management for closing remarks.

All right. Well, thank you guys for your participation in today's call. We look forward to talking to you guys in August when we discuss our first quarter 2023 numbers. Thanks guys.

Thank you.

Thank you. Ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.