- The situation for NGL Energy is looking quite scary even for myself as a bullish author with a get rich or go broke scenario forming, depending upon whether they survive.
- The first big reason that they should survive is that oil and gas drilling is increasing, which should lead to increased production and thus recovering demand for their midstream services.
- The second big reason is that their liquidity sees no debt maturities until late 2023 at the earliest and thus this buys them ample time to turn around their ship.
- On a side note, their class D preferred units that can be forcibly redeemed later this decade are unlikely to prove problematic since half can be repaid with common equity.
- Although my bullish rating is remaining in place, I would be remiss for not stressing that any potential investment is particularly risky and thus only suitable for investors with a sufficiently high risk tolerance.
For further details see:
NGL Energy: Get Rich Or Go Broke, The 2 Big Reasons They Will Survive