Michael Krimbill – CEO Atanas Atanasov – CFO and Treasurer David Kehoe – EVP and COO, High Sierra Energy

T.J. Schultz – RBC Capital Markets Michael Blum – Wells Fargo Matt Niblack – HITE Hedge Asset Management Akash Sinha – Wunderlich Securities

Good day, ladies and gentlemen and welcome to the First Quarter 2015 NGL Energy Partners LP Earnings Conference Call. My name is Denise and I will be the operator for today. At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instruction). As a reminder this conference is being recorded for replay purposes. I would now like to turn the conference over to, Mr. Mike Krimbill, CEO of NGL Energy Partners. Please go ahead.

Thank you and welcome. This conference call will include forward-looking statements and information. While NGL Energy Partners LP believes that its expectations are based on reasonable assumptions, there can be no assurance that such expectations will prove to be correct. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations included in the forward-looking statements. These factors include the prices and market demand for natural gas liquids, and crude oil, level of production of crude oil and natural gas, the effect of weather conditions on demand for oil, natural gas, natural gas liquids and the ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to financial results and to successfully integrate acquired assets and businesses. Other factors that could impact any forward-looking statements are described in risk factors in the partnership’s annual report on Form 10-K, quarterly reports on Form 10-Q and other public filings and press releases. NGL Energy Partners undertakes no obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. Please also see the partnership’s website at www.nglenergypartners.com under Investor Relations for reconciliation of the differences between any non-GAAP measures discussed on this conference call and the most directly comparable GAAP financial measures. I think that’s the [inaudible] Why don’t we jump into some of the numbers and then we will go you a flavor of what’s going on within each of the divisions. So Atanas, go ahead.

Thank you Mike. Adjusted EBITDA for the quarter is $43.1 million which excludes onetime acquisition cost of approximately $3.8 million. This compares to an EBITDA of $27.4 million in the same period the last fiscal year which represents an increase of 57%. NGL reported net loss of $39.9 million for the quarter ended June 30, 2014 compared to a net loss of $17.5 million for the same period last fiscal year. The primary driver of the difference in net income was attributable to approximately $16 million of additional depreciation, amortization expenses and $9 million of additional interest expense related to the acquisition we completed. We started the fiscal year with EBITDA guidance in the range of $425 million to $430 million and now we are reaffirming our guidance for fiscal 2015 to be in the range of $425 million to $430 million. At the beginning of the fiscal year we indicated our expectations to incur approximately $30 million of maintenance CapEx. During the first fiscal quarter of 2015 we spent $6.5 million on maintenance CapEx and we still expect to be around $30 million for the fiscal year. Our expectation for EBITDA after the second fiscal quarter ended September 30, 2014 is in the range of $70 million to $75 million. And with this I’ll turn it back to Mike.

Thanks Atanas. Today I would like to give a little flavor on the individual divisions, our segments. So starting with retail and [we brought] some of the reports on other retailers. In terms of volumes this quarter versus the same quarter of a year ago, our volumes are actually up 1%. I think I’ve seen some reports talk about receivables, our receivables went from $24 million last year to $33 million this year. So they increase about a third. Our actual EBITDA results were about 10% better than the last year. So along with the volume increase, a slight increase we had our margin increase of about 5%. And our bad debt expenses are actually lower for the quarter this year than last year. So our retail guys did just a fantastic job. Within liquids, we have the situation this quarter we had two years ago and you may remember and somewhat of an annoying explanation but we have to aggregate all of our inventory at a given location which in this is Conway. So Conway we have both our free sale gallons and this is where ratable barrels are coming in daily. Because of the last year being so cold and I think customers perhaps not having all the propane they needed we had a fantastic pre-sale season. In terms of pre-sold propane gallons we are twice as many this year or nearly 200 million gallons versus the same quarter of last year. But in a declining market with the propane prices falling because of the quick ramp-up in propane inventories we are having the average, the pre-sold gallon cost which was at a higher level in April, May, June then the ratable gallons that we sell to balance each day. So we actually had lost money on the ratable gallons from and accounting perspective, that we had report for this quarter. So basically our inventory values are dropping. So when we deliver the pre-sell gallons we will recoup all of the margin that we reported lost in this quarter. So that part of our business actually had a negative, I think we are approximately $5 million behind our forecast and that will show up in the third and fourth quarter as we deliver those presold gallons. So that’s definitely a timing piece. Water is just a great story, continues to be, I guess a shining start within NGL. I think our water volumes were up over 100%. About 70% of that was due to acquisitions and other 30% was organic. Our EBIDTA from that side of business more than doubled. And it continues to be a good driver of growth. Margins are little tricky there because it depends where you are adding your volumes. What we charge in the Permian and Eagle Ford is less than what charged up in the Anticline or the DJ because in the Eagle Ford we are not recycling and spending the additional money to recycle water or to discharge it back in to the environment. So we are extremely happy with our water side. On the crude, this is where we continue to have some difficulty. We had some margin compression, in particularly with the legacy NGL business, prior to the Gavilon acquisition. We are being hurt by the backwardation of the market and that’s hurting at a couple of places. We had higher inventories due to refinery turnarounds. So in this quarter we experienced more of a loss due to backwardation on those inventories. And then there are Cushing storage that we picked in the Gavilon transaction and approximately – and David may have better numbers but 3 plus million barrels we have not been able to lease out because of the backwardated market. So those are things that can turnaround if market goes flat to contango, but if not the Cushing storage will continue to hurt but we will reduce inventories as refiners complete their turnaround. In addition we lost one large transportation customer and we are involved in litigation with that customer. But that’s costing us about $500,000 EBIDTA per month. So that’s just a customer we have to replace with other business which we will do throughout the rest of the year. So with that, why don’t we open up to questions.

(Operator Instructions). Our first question comes from with [Suseneer Kosoni] with UBS. Please proceed.

Hi. Good afternoon, guys.

Hi, there.

First question, just specifically EBIDTA guidance for the year was maintained. Trying to understand this is going to be typically the seasonal weak quarter and you are expecting stronger outcome as the year unfolds. And I was wondering if you have incorporated any GT cash flows from GLP as part of your guidance now versus previous?

The first part of the question was – the guidance at $425 million is reaffirming what we previously provided. So it doesn’t include it. Some of this is timing which is the liquids. We had some also timing happening in our ethanol and renewables business. So that will come back. And then the crude oil, as we said, continue to lose some of that, as the market continues to be backwardated. And we’ll just have to make up for that in other areas. So with the tolerance I guess GP cash flows are not included.

Okay. So would it roll it on a lag basis just as TLP reports and gets reported a quarter later, assuming TLP doesn’t close in the immediate future?

No, we will try to answer that question. That should not be because that will be an equity investment in each quarter we are basically picking up our 20% equity pick up from the EBIDTA. So that should not be it.

That should not be a lag, okay. And then just when you are talking about the liquid side in your prepared remarks, it’s basically a non-cash inventory adjustments, I mean is that the way to sort of crystallize without being…

Yeah. The answer is yes, you are right there. Our inventory value is dropping.

But no cash impact at the end of the day?

Correct, that’s correct.

Okay. Then I was wondering if you can talk about logistics a little bit. You mentioned the issue, the inventory issue with the client, turnarounds, Cushing is kind of a challenging market at this point right now. But historically there is also been opportunities to make money with respect to the widening in the spreads and so forth. Is it fair to say that you are still able to take advantage of some those opportunities, LS and WTI narrow throughout the quarter versus where it was previously or is the spread that, that tied, you don’t have much of an opportunity to take advantage of that in this type of market?

David, do you have an answer?

And so we’ve not seen the basin – we have some small basins differentials for example, the Permian to the Cushing market differentials. We are taking advantage of those where we can. The bigger picture is that those differentials aren’t in place today so we are seeing still compression of margins. To the extend they exist we take advantage of their – it’s more limited today than they have been in the past.

Okay. And when you think about the Cushing storage do you see an opportunity for storage opportunities to merge by Houston basically getting filled up and refiners willing to effectively take cheaper storage in Cushing and then use the pipeline network to connect and so forth. I mean do you kind of see that as more and more action happens on the Houston side and rates start to go up and so forth, is that kind of how we should think about the next couple of years as to how Cushing storage prices unfold?

We do see that, that’s a good explanation of our view point. So we see that as an opportunity. The other thing that we see within the Cushing on a go forward basis are a desire for refiners to control quality so they are ultimately looking to back up to the storage hubs and take control of quality there. So we see some activity there from the refiners. And then thirdly, we see a lot of connectivity from some of the other basins for example new pipes whether [Pony] Express others coming in to Cushing and we are making the necessary adjustments to be able to pick up some of those volumes. So those three things would be the macro going forward.

Great. Guys, thank you very much. That’s all from me.

Thank you.

Our next question comes from T.J. Schultz with RBC Capital. Please proceed. T.J. Schultz – RBC Capital Markets: Hey, guys. Good afternoon. I just want to go back to the guidance that you have given. I know last quarter you gave kind of quarter-by-quarter guidance for EBIDTA and first quarter was a bit below where you guided and in terms of second quarter is basically almost in line, that’s very good, you had previously guided, which means quite of bit uptick in the back half of the fiscal year. So just kind of curious what’s changed, what you are seeing that you expect later this fiscal year? I understand some of this is liquids that the presold volumes but something like about $5 million impact. So just looking any other color on that back into the year.

Yes you’re correct. Dave you want any thoughts on crude oil.

Well from the crude oil perspective we have volumes that are coming online in third and fourth quarter, both around some high capacities that have been delayed, that are coming online and producer aggregation there. We committed to those pipelines that are delayed. So the biggest piece of the crude oil segment is just a volumetric increase in the third and fourth quarter, as some of the new systems come online and we’re able to move more volumes. T.J. Schultz – RBC Capital Markets: Okay. And maybe Mike, to distribution crude guidance. You think you reiterated that 15% growth this calendar year. That uptake in the June quarter was a bit more than expected, so just trying to get my arms around that 15% guidance and it’s seems a bit conservative to continue to stick with it. If I look at year-over-year ‘14 versus ‘13 distributions is flat the next couple of quarters from where they are now. So just some color on that 15% year-over-year guidance and so that appears conservative.

Yeah, that’s a good point. What we have the 15% and then when we closed the purchase of TranMountain Inc., we jump that one quarter from, would about $0.08 up to $0.15. So for the year actually will be more than 15% that it will be – it would have 15% plus the $0.07 which is probably another 3%. So they will actually end up around 18% or this calendar year. T.J. Schultz – RBC Capital Markets: Okay the MLP combination proposal TRP NGL, can you just tell us where you are in that process and then if you could give some guidance on some of these based on the combination there, operational cost synergies that you can discuss.

Sure, we submitted our offer letter, I think in July 10. And so we are currently in the process with the special committee that was formed at TLP. So that process is ongoing and that’s all really all we can say at this point. T.J. Schultz – RBC Capital Markets: Okay, fair enough. Thanks.

Our next question comes from Michael Blum with Wells Fargo. Please proceed. Michael Blum – Wells Fargo: Hi good afternoon guys. So I guess sorry to harp on the guidance. Just to clarify, does your guidance assume in the crude segment that conditions remains same for the balance of the year or they improve? And I guess that’s both on the spreads but also in terms of your ability to re-contract the story, attrition.

I’ll start off on that and then Dave you can jump in. But no we’re assuming there will be improvement but our improvements going to be pipelines that we’ve already taken on space on that are going to start up in the second half of the year, increased transportation volumes, increased volumes that we will be earning a margin on. It does not assume that we go contango; it assumes that we continue in this backwardated market. So we’ll look at continuing to lose certain amount each month on our inventories as well as continuing to not be able to lease out the stores that we [be imperative] with the Gavilon transaction we have leased from [inaudible]. Michael Blum – Wells Fargo: Okay.

So if the markets – yes if the market turns around then in terms of contango then we’ll obviously be doing better. Michael Blum – Wells Fargo: Okay, and then if you can, can you say what the contribution, the EBITDA contribution was from Gavilon in the quarter.

We haven’t said that nor do we have the pieces with us. We’ll have to pass on that one. Michael Blum – Wells Fargo: Okay. And just sort of clarifying on TransMontaigne on the piece that you already owned, did you receive any distribution for this current quarter. Is that reflected in your numbers in anyway?

No, because these numbers obviously go through June 30. And we closed the transaction July 1st. Michael Blum – Wells Fargo: Okay.

So nothing would be in these numbers. And then going forward as Atanas said we’ll get our percentage of the EBITDA in our EBITDA. So we’ve increased earnings from that and then when we get distributions that would just be a decrease in our investment wouldn’t show up in the P&L. Michael Blum – Wells Fargo: Okay, but that will be reflected in DCF.

Yes. Michael Blum – Wells Fargo: Okay. And the contribution that you’re expecting to get from TransMontaigne in the EBITDA that is reflected in your guidance or it’s not reflected in your guidance?

It is not. Michael Blum – Wells Fargo: It is not, okay. Thank you very much. I will pass ahead.

(Operator Instructions). Our next question comes from Matt Niblack of HITE. Please proceed. Matt Niblack – HITE Hedge Asset Management: In the storage business are there any contract renewals coming up that could represent another step down?

David?

No. Matt Niblack – HITE Hedge Asset Management: When is the next renewal?

The next renewal is… Matt Niblack – HITE Hedge Asset Management: Next material renewal?

Two years. Matt Niblack – HITE Hedge Asset Management: Two years, great. And then in terms of that the water business, it seems like there is increasing pressure in certain areas around the seismic activities likely caused by the injection wells. Is that a concern for you or is it even potentially a benefit as regulations get some of the smaller guys out of the business.

I would say it’s both. We do not see any connection between disposal and seismic activity where we are. And so your concern is, are there groups, even there is no scientific evidence that would cause issues for us, that’s always a concern. But fracking has had to same concerns as well and probably even more so. But it certainly if regulation, if that caused regulation to move more towards clean water, that’s very good for us. Matt Niblack – HITE Hedge Asset Management: So you haven’t seen really either the seismic activity or ground water pollution any of these concerns sort of scientifically based or not, you haven’t seen major efforts that concern you in any of your areas of operation.

Now we’ve not – there is nothing – migration of this water to drinking water. We haven’t seen that anywhere. The seismic activity that it’s probably the same thing, you hear about it seems to be centered more in Oklahoma and to some extent in Colorado. Matt Niblack – HITE Hedge Asset Management: Right, okay.

And so we’re not in Oklahoma and we do have – and we have operations in Colorado. But at this point there is nothing that concerns us. Matt Niblack – HITE Hedge Asset Management: And then switching over to TransMontaigne and I can’t really comment on the process specifically. But you had some more time to think about the asset. Is your perception of the synergy that is available there growing as you have more time with the assets or is it similar to when you brought it? Any guidance there will be helpful?

I think we’re just as pleased if not more so with that operation then when we – back in June or early July. Everything we see is very positive. Matt Niblack – HITE Hedge Asset Management: Great. Thank you very much.

Our next question comes from Akash Sinha with Wunderlich Securities. Please proceed. Akash Sinha – Wunderlich Securities: [inaudible] good afternoon. Just had a couple of questions. One is on the crude differentials. I know you said because of the backwardated market you had some impression there. But I’m just trying to think do you see anything positive in this quarter, with what you saw last quarter because of differentials and anything in that regard.

David?

I’m sorry; I want to make sure I understood the question correctly. Are you asking, do we see differentials changing in this current quarter such as…? Akash Sinha – Wunderlich Securities: Right. And is it going to be positive for you guys this quarter versus what you experienced last quarter.

We see the differentials in the same place as last quarter, not any significant move. Akash Sinha – Wunderlich Securities: And can you make a comment on the water margin front, you are saying volumes would be up – but how should we think about the trend in the margin going forward from here?

I mean our average margin will decline because our mix continues to be predominantly in the Permian and the Eagle Ford and we’re adding more the DJ, and we are adding more in Texas. So you can see in average margin decline but the EBITDA will continue climbing. Akash Sinha – Wunderlich Securities: All right. Sure. Sure. And regarding the propane I mean how are like both the propane or the [inaudible] margins trending, I mean do you expect similar volumes versus last year when it was cold winter last year. So kind of like volume growth, what kind of volume growth you have baked in 2015 guidance?

We don’t bake in any growth, when we go back to a normal winter. So it could be less – and our forecast would be less than, significantly less than what we experienced last year. So if we have a normal winter warmer than, or colder than normal to some extent not as cold as last year, then we should exceed our forecast. Akash Sinha – Wunderlich Securities: And any comment do you have on the margin trend the propane business?

The reason we don’t lose customers, net loss of customers is because we don’t try to push those margins. As we said we buy a regional business we just leave them more happy and we budget the margin that were there historically. So if we are up like we are 5% over last year that’s great but we’re not, you are not going to see our margins marching up, year-after-year, because that’s how you start losing customers. Akash Sinha – Wunderlich Securities: Right, and just last one, when I am looking at the EBITDA contribution what you have on the slide, the last slide that you guys had, which says crude logistics like 45% or so, water 23%. In that regard is there anything that has changed essentially that we should be wary of or everything remains as it is?

Well I think that’s still a pretty accurate picture of where we are going and where we are. Akash Sinha – Wunderlich Securities: Okay. Perfect. Thank you. That’s all I have.

We have no further questions. I will now turn the call back to over Mr. Mike Krimbill for closing remarks. Please proceed.

Okay. That’s it. Thank you very much.

This concludes today’s conference. You may now disconnect. Have a great day.