Genesis Energy, L.P. Reports Second Quarter 2026 Results

HOUSTON--(BUSINESS WIRE)--Genesis Energy, L.P. (NYSE: GEL) today announced its second quarter results.

We generated the following financial results for the second quarter of 2026:

• Net Income Attributable to Genesis Energy, L.P. of $42.9 million for the second quarter of 2026 compared to Net Loss Attributable to Genesis Energy, L.P. of $0.4 million for the same period in 2025.

• Cash Flows from Operating Activities of $180.7 million for the second quarter of 2026 compared to $47.0 million for the same period in 2025.

• We declared cash distributions on our preferred units of $0.9473 for each preferred unit, which equates to a cash distribution of approximately $10.5 million and is reflected as a reduction to Available Cash before Reserves to common unitholders.

• Available Cash before Reserves to common unitholders of $78.3 million for the second quarter of 2026, which provided 3.2X coverage for the quarterly distribution of $0.20 per common unit attributable to the second quarter.

• Total Segment Margin of $169.5 million for the second quarter of 2026.

• Adjusted EBITDA of $171.5 million for the second quarter of 2026.

• Adjusted Consolidated EBITDA of $610.1 million for the trailing twelve months ended June 30, 2026 and a bank leverage ratio of 5.00X, both calculated in accordance with our senior secured credit agreement and discussed further in this release.

Grant Sims, CEO of Genesis Energy, said, “Our second quarter results for 2026 came in broadly in line with, if not slightly ahead of, our internal expectations. Six months in, the defining theme of the Genesis story in 2026 is the substantial and deliberate progress we have made to strengthen and simplify our balance sheet and steadily lower the cost of capital to run our business.

In early June, we sold certain non-core, and underutilized, offshore natural gas assets to an undisclosed third party for $95 million, further simplifying our offshore footprint, eliminating future operating expenses and pre-funding a portion of the asset retirement obligations on certain related natural gas assets we retained. In late June, we established a $99.5 million, non-recourse, accounts receivable securitization facility which is priced at SOFR plus 1.375%, or approximately 200 basis points less than the rate we would currently be charged for borrowings under our senior secured credit facility. We used the net proceeds from these two transactions to repurchase an additional $83 million of our 11.24% Series A corporate preferred securities in a negotiated transaction at 102% of par. We also opportunistically purchased 250,000 common units in the open market at a weighted average price of $14.57 per unit. The remainder of the total cash raised was used to pay down the outstanding balance on our existing senior secured credit facility to zero by the end of the quarter, with the balance currently being held as cash on the balance sheet in an interest-bearing account.

When combined with the approximate $135 million of Series A preferred securities that we were able to repurchase and other financing activities in the first quarter, we estimate we have been successful in reducing the annual cost of the capital needed to run our business by approximately $25 million per year. As we stated in our call last quarter, we believe we have an additional $50-$60 million of annual cash savings we can achieve over the next several years by further right-sizing and optimizing our balance sheet, and that is something we will continue to prioritize and focus on.

Since becoming free cash flow positive in the second half of last year, we have made meaningful progress in redeeming our relatively high-priced corporate preferred securities, as well as reducing the partnership’s Adjusted Debt in absolute terms. Consistent with the 'all-of-the-above' approach that we have discussed relating to capital allocation, in addition to the open market purchases of common units mentioned above, we recently announced an increase to the quarterly distribution for each common unit to $0.20. This new distribution represents an increase of 11% as compared to the first quarter of 2026, a 21% increase as compared to the second quarter of last year, and a 33% increase over the corresponding quarter in 2024.

On the operating side, our Offshore Pipeline Transportation segment continues to support the activity levels of our producer customers, including their production nuances, planned turnarounds, well interventions, and the timing of new wells. Our Marine Transportation segment has now finally completed its heavy marine dry-docking cycle, and we saw strong utilization and day rates across our asset classes as we exited the quarter. Our Onshore Transportation and Services segment was able to capitalize on several non-recurring opportunities which arose during the quarter primarily as a result of global macroeconomic conditions. Looking forward, there are a few specific items we are monitoring in the back half of the year, including the performance of existing offshore production versus revised producer forecasts, the timing of new offshore wells, and the timing and ultimate success of mechanical intervention/remediation of certain high-impact offshore wells. In any event, we will remain disciplined and focused on what we can control, continuing to prioritize the balance sheet right-sizing and optimization that will further lower our cost of capital and meaningfully contribute to driving long-term value for everyone in the capital structure.

With that, I will briefly discuss our individual business segments in slightly more detail.

During the second quarter, total produced volumes transported in our Offshore Pipeline Transportation segment were slightly below our expectations. This has continued so far in the third quarter as certain operators have experienced operational challenges and unplanned downtime at several of the key fields connected to our offshore infrastructure. Despite providing our producer customers with over 99% uptime availability on our pipeline systems during the quarter, and despite having downside protection in some cases in the form of minimum volume commitments, we are not immune to fluctuations in production volumes that are beyond our control.

In terms of providing financial guidance to investors, we rely heavily on information supplied to us by the operators which we independently review and evaluate. None of these events or challenges which translate into missing producer provided expectations are uncommon or overly impactful in and of themselves. However, to the extent we have multiple instances that occur at high-margin fields during the same reporting period, the financial impact to us can be notable. We are confident our producer customers are fully aligned with us on maximizing near-term production as well as the ultimate recovery of reserves from their offshore fields. None of the issues that have manifested themselves this year have any longer-term negative implications. In the operators’ view, and we would concur, these impacts are transitory and, in essence, simply result in timing differences, or a longer horizon, for the production of the ultimately recoverable reserves from these world-class hydrocarbon reservoirs.

Notwithstanding quarter-to-quarter variances, we remain encouraged about the level of activity in and around our infrastructure in the central Gulf of America. This is true not only at what we would refer to as legacy fields, but we are especially excited about the newer fields, which are in the very early stages of their anticipated ramp.

The first well in the Monument field, which will be tied back to the Shenandoah floating production unit (“FPU”), was successfully drilled and is anticipated to be completed and turned to production by the end of this year. The drillship that drilled that well is currently performing some remediation work on one of the four producing wells in the Shenandoah field. Once this well intervention is completed, we understand such well should be returned to production and the rig will move approximately 17 miles back to Monument to drill a second well, which is expected to be completed and turned to production in the first quarter of 2027. After the first two wells from Monument are producing, we would anticipate two additional wells to be drilled, completed and turned to production in the Shenandoah field during 2027. In addition, it is anticipated that the first of two locations in the Shenandoah South field will be drilled and tied back to the Shenandoah FPU in 2028. There is potential for a third well to ultimately be drilled in the Monument field to test a currently unpenetrated fault block on the southwest of such structure. The operator is currently performing facilities work to expand the Shenandoah FPU to a total capacity of 140,000 barrels of oil per day to accommodate the additional production handling requirements from these new wells. The operator is also spending significant dollars and proceeding with a sub-sea pumping system for the Shenandoah field, scheduled for installation in mid to late 2028, to maximize the ultimate recoveries of the original oil in place.

At Salamanca, with the addition of the fourth well that commenced production last quarter, we have seen steady and sustained total production in the range of 40-42 kbd. We expect a fifth well to come on-line towards the end of the year or early in 2027. This new well is expected to increase production levels closer to the Salamanca production facility’s initially designed capacity of +/- 60 kbd. We remain highly encouraged by Harbour Energy’s (formerly LLOG’s) public comments stating they are adding a second rig later this year to their Gulf of America program to accelerate their activity and support their plans to double their production out of the Gulf over the next couple of years. We believe this drilling and development activity, while spread across their footprint, will likely be highly concentrated in and around the Salamanca, Buckskin and Spruance fields, all of which will flow through our existing infrastructure.

These new offshore developments and the exciting activity planned around them, along with the steady base of volumes from our legacy fields, reinforce our conviction that our offshore volumes are positioned to grow meaningfully over the coming years. This anticipated volume growth, in turn, should allow us to deliver steadily improving financial results from our Offshore Pipeline Transportation segment for many years ahead, without having to spend any capital. Meanwhile, we will continue to focus on what we can control and provide our producer customers with reliable pipeline transportation from offshore to major refinery centers located onshore in South Louisiana as well as the upper Texas coast.

Our Marine Transportation segment performed in line with our expectations, and the results reflect having both of our largest offshore mated barges in the yard at different times during the quarter, the combined financial impact of which was equivalent to one of these large units being out of service for effectively the entire quarter. The second unit left the shipyard last week and is now back at work, and all four of our scheduled blue water dry dockings for the year are finally behind us. While this last large unit’s time in the yard will weigh some on our third quarter results, with its exit, we will return to full capacity, and we would expect the segment to show better quarterly results for the remainder of the year. The demand for our inland and blue water barges remains relatively constructive. We continue to field multiple in-bound inquiries regarding the American Phoenix and believe we are well positioned to successfully re-contract the vessel above her current day rates when the current contract expires in mid-2027.

Our Onshore Transportation and Services segment performed above our expectations, which will help to offset some of the potential underperformance from our Offshore Pipeline Transportation segment, at least relative to what was originally expected by our producer customers at the beginning of the year. We continued to see steady volumes through both our Texas and Raceland terminals as well as their associated pipeline systems, largely supported by offshore production volumes moving onshore. During the quarter, we also took advantage of certain market dislocations caused by the conflict in Iran that allowed us to capture incremental, but likely non-recurring, margin opportunities. Our legacy sulfur services business performed ahead of our expectations as we saw strong demand from our pulp and paper customers, and our largest host refinery had steady operating performance during the quarter, which allowed us to optimize our production and delivery of NaHS across our network.

Based on our producer customers’ current outlooks, which we have risked, as well as the anticipated performance in our other segments, we would now expect full-year 2026 Adjusted EBITDA to come in towards the lower end of the range we discussed on our year-end call. That said, we see potential upside to that level to the extent we experience a calmer hurricane season than we have conservatively budgeted. Additionally, some of the well remediation work ongoing at certain offshore fields could potentially surprise us to the upside from both a timing and volume perspective. We should have clearer visibility regarding the above when we report third quarter results in early November.

While performance across our business segments may vary in any given quarter, the long-term story for Genesis remains firmly intact. There is increasing visibility to a multi-year ramp in volumes from our Offshore Pipeline Transportation segment, rising free cash flow, a reduction in debt in absolute terms, and the ultimate extinguishment of all the remaining Series A preferred securities. This should give us the financial flexibility to continue right-sizing and optimizing our balance sheet and deliver long-term value for all our stakeholders in the quarters and years ahead. We believe we can do this all while preserving the flexibility to pursue attractive organic and inorganic opportunities if and when they might emerge.

In closing, the management team and board of directors remain steadfast in our commitment to building long-term value for everyone in the capital structure, and we believe the decisions we are making reflect this commitment and our confidence in Genesis moving forward. I would once again like to thank our entire workforce for their continued dedication to safe, reliable, and responsible operations. I’m proud to have the opportunity to work alongside each and every one of you.”

Financial Results

Segment Margin

Segment Margin

Variances between the second quarter of 2026 (the “2026 Quarter”) and the second quarter of 2025 (the “2025 Quarter”) in our reportable segments are explained below.

Segment Margin results for the 2026 Quarter and 2025 Quarter were as follows:

Offshore pipeline transportation Segment Margin for the 2026 Quarter increased $28.0 million, or 32%, from the 2025 Quarter primarily due to: (i) production volumes associated with the deepwater Shenandoah FPU, which ties into our 100% owned SYNC Pipeline for further transportation downstream to our 64% owned CHOPS Pipeline, that began producing in July 2025 (Segment Margin in the 2025 Quarter benefited from one month of contractual minimum volume commitments that commenced in June 2025); and (ii) production volumes from the Salamanca FPU, which ties into our existing 100% owned SEKCO Pipeline for further transportation downstream on our 64% owned Poseidon Pipeline, that began producing in September 2025.

Marine transportation Segment Margin for the 2026 Quarter decreased $4.2 million, or 14%, from the 2025 Quarter primarily due to an increase in planned dry-docking days in our inland and offshore barge businesses during the 2026 Quarter and a slight decrease in average day rates in our inland barge business. In our offshore barge business, revenues for the 2026 Quarter were impacted by several required and planned regulatory dry-dockings, which included our two largest vessels, one of which was completed during the 2026 Quarter, while the other was recently completed in the third quarter of 2026. During the third quarter of 2025, we experienced a decline in our inland barge day rates due to a decrease in Midwest refinery demand for black oil equipment as a result of changing crude slates. Inland barge day rates have recovered at a slower pace than anticipated, and rates in the 2026 Quarter did not reach the levels we saw in the 2025 Quarter. These decreases in Segment Margin were partially offset by a higher contractual rate on our M/T American Phoenix during the 2026 Quarter compared to the 2025 Quarter.

Onshore transportation and services Segment Margin for the 2026 Quarter increased $9.8 million, or 53%, from the 2025 Quarter primarily due to an increase in volumes transported on our onshore crude oil pipeline systems and increased activity and volumes in our crude oil marketing business. We experienced an increase in volumes on our Texas pipeline system, which is a key destination point for various grades of crude oil produced in the Gulf of America including those transported on our 64% owned CHOPS Pipeline, and benefited from an increase in refined product volumes at our Baton Rouge terminal. In our sulfur services business, we experienced an increase in Segment Margin in the 2026 Quarter primarily due to an increase in the index-based NaHS sales prices and strong demand from our pulp and paper customers.

Other Components of Net Income (Loss)

We reported Net Income Attributable to Genesis Energy, L.P. of $42.9 million in the 2026 Quarter compared to Net Loss Attributable to Genesis Energy, L.P. of $0.4 million in the 2025 Quarter.

Net Income Attributable to Genesis Energy, L.P. in the 2026 Quarter was impacted by: (i) an increase in operating income from our reportable segments, primarily from our offshore pipeline transportation segment as discussed above; (ii) a gain on sale of assets of $17.4 million associated with the divestiture of certain non-core natural gas pipeline and platform assets within our offshore pipeline transportation segment; and (iii) an increase in our equity in earnings of equity investees of $6.0 million primarily as a result of an increase in volumes and associated revenue from Poseidon. Additionally, the 2025 Quarter included a loss of $8.9 million primarily due to the premium associated with the redemption of our 8.000% senior unsecured notes due January 15, 2027 in April 2025. These increases were partially offset by: (i) an increase in depreciation and amortization of $7.2 million during the 2026 Quarter; (ii) an increase in interest expense, net of $6.2 million; and (iii) an increase in general and administrative expenses of $4.7 million.

Earnings Conference Call

We will broadcast our Earnings Conference Call on Thursday, August 6, 2026, at 9:00 a.m. Central time (10:00 a.m. Eastern time). This call can be accessed at www.genesisenergy.com. Choose the Investor Relations button. For those unable to attend the live broadcast, a replay will be available beginning approximately one hour after the event and remain available on our website for 30 days. There is no charge to access the event.

Genesis Energy, L.P. is a diversified midstream energy master limited partnership headquartered in Houston, Texas. Genesis’ operations include offshore pipeline transportation, marine transportation and onshore transportation and services. Genesis’ operations are primarily located in the Gulf of America and in the Gulf Coast region of the United States.

Genesis Energy, L.P.
Dwayne Morley
Vice President - Investor Relations
(713) 860-2536