Delek Logistics Partners Q2 Earnings Call Highlights

Record quarterly performance: Delek Logistics Partners reported second-quarter adjusted EBITDA of approximately $144 million, up from $127 million a year earlier, and reaffirmed its 2026 guidance of $520 million to $560 million. Volumes and growth investments accelerated: Delaware crude volumes rose to more than 157,000 barrels per day, gas volumes exceeded 80 million cubic feet per day, and produced-water volumes surpassed 687,000 barrels per day. The company is advancing a sour-gas processing and acid-gas injection project expected to drive a significant increase in gas volumes later this year. Distribution increased again: The partnership raised its quarterly distribution to $1.135 per unit, marking the 54th consecutive increase, while maintaining approximately 1.33x distribution coverage. Leverage rose modestly to 4.23x as the company funded growth projects, but refinancing improved its debt maturity profile and lowered annual interest costs. Delek Logistics Partners NYSE: DKL reported second-quarter adjusted EBITDA of approximately $144 million, a quarterly record and up from $127 million in the same period of 2025, as higher utilization at its Libby Gas Complex and stronger Permian crude margins supported results. The partnership reaffirmed its full-year 2026 adjusted EBITDA guidance of $520 million to $560 million. President and Chairman Avigal Soreq said the results reflected the company’s position as a provider of crude, gas and water services in the Permian Basin, while management said it expects roughly 80% of run-rate EBITDA in 2026, on a pro forma basis, to come from third-party customers. “All three of our segments are doing well,” Soreq said, citing progress in gas operations, record performance in Delaware crude gathering and continued strength in the water business. Gas volumes rise as sour-gas project advances Management said it is nearing completion of an integrated sour-gas processing, treating and acid-gas injection solution at the Libby Gas Complex in the Delaware Basin. The project includes expanded processing capacity, the company’s first AGI well, sour-gas gathering infrastructure and compressor stations. Executive Vice President Mark Hobbs said the project is intended to address increasing sour-gas production in the region as some customer production shifts from sweet gas to sour gas. He said the completed system is expected to support producers’ future development plans and drive a “step change” in gas volumes later this year. Gas volumes exceeded 80 million cubic feet per day during the second quarter, compared with approximately 64 million cubic feet per day in the first quarter, according to Hobbs. Both Libby One and Libby Two were operating well, he said, and the company expects utilization to increase as the sour-gas solution comes online. Management also said it continues to evaluate future investments that could expand the Libby Complex in response to anticipated customer demand for additional sour-gas processing capacity. Crude and water operations post higher volumes Delek Logistics’ Delaware crude-gathering operation delivered record volumes during the quarter. Hobbs said Delaware crude volumes exceeded 157,000 barrels per day, up from roughly 129,000 barrels per day in the first quarter. Produced-water volumes across the Midland and Delaware basins increased to more than 687,000 barrels per day from 557,000 barrels per day in the prior quarter. The company attributed water-business performance in part to the integration of the H2O and Gravity acquisitions completed in late 2024 and early 2025, respectively. Management said its combined crude, gas and water offering has improved its competit.