DCP Midstream Partners: Yielding 5.6% And Perfectly Positioned For The Shale Gas Renaissance
Michael Fitzsimmons • 25 Comments
Michael Fitzsimmons • 25 Comments
Thu, Jul. 21, 2:59 PM
- DCP Midstream Partners (DPM -2.4%) is downgraded to Neutral from Buy with a $36 price target at Ladenburg Thalmann, which says the stock appears fairly valued until future potential catalysts come to fruition.
- The firm thinks DPM likely will continue to benefit from its ~$200M capex and significant cost cutting initiatives, and is well positioned to benefit from an increase in ethane demand, a "strategic asset position [that] will allow DCP’s NGL pipelines to benefit from volume/margin uplift of roughly $75M-100M with gathering and processing contracts following suit."
- Ladenburg says the potential benefits already seem to be recognized by investors, and recommends investors to “wait for a more favorable entry point."
Thu, Jul. 14, 5:57 PM
- Energy companies including Anadarko Petroleum (NYSE:APC), Noble Energy (NYSE:NBL), Whiting Petroleum (NYSE:WLL), DCP Midstream (NYSE:DPM) and Synergy Resources (NYSEMKT:SYRG) have donated millions of dollars to derail a push by Colorado environmentalists to place measures on November's election ballot that would stifle oil and gas drilling in the state, Reuters reports.
- Environmental groups are gathering signatures for two statewide initiatives that would transfer regulatory control of oil and gas development to local governments and create tougher setback requirements to keep oil and gas activities away from occupied structures.
- Opponents of the proposed ballot initiatives say they would seriously damage oil and gas exploration in Colorado, the seventh largest oil and gas producing state in the U.S.; a state agency tasked with encouraging energy development says 90% of surface acreage in Colorado would be unavailable for oil and gas development under the new setback laws.
Wed, Jul. 6, 11:58 AM
- Investors may find it difficult to capitalize on propane's big rally, as the rally has come so quick and so fast that it may be too late to hop on board, WSJ reports.
- Jefferies analyst Christopher Sighinolfi had been bullish on many propane pipeline and processing companies when others were skeptical, but recently downgraded Oneok (OKE -1.2%), DCP Midstream Partners (DPM +0.8%), EnLink Midstream Partners (ENLK +0.1%) and Targa Resources (TRGP -0.1%) largely because they became too expensive.
- “We were also concerned with how confident and convicted clients seemed about the prospect for prices to just continue climbing and simultaneously dismissive they are” about declining volumes, Sighinolfi said.
- Others think propane could still rise quickly in the near term from exports and domestic heating and agriculture demand; Greg Sharenow of Pacific Investment Management says "propane is a significantly better value with inventories falling below last year’s level and exports already at a pretty substantial level.”
Wed, Jun. 8, 3:49 PM
- DCP Midstream Partners (DPM -2.5%) is downgraded to Hold from Buy with a $35 price target at Jefferies on valuation, as units have appreciated 53% YTD, including a 140% surge from February lows.
- DPM's Q1 distributable cash flow exceeded estimates at $165M, driven by lower than expected maintenance capex, higher than expected unconsolidated affiliate distributions and MVC receipts worth $2M.
- The firm also does not expect DPM to be able to cover its distribution to the end of the year.
Tue, May 31, 6:55 PM
- Energy Transfer Partners (NYSE:ETP) offers "safe yield and growth prospects" for 2018 and beyond, Barclays says as it reiterates its Outperform rating and raises its price target to $48.
- ETP will benefit from $10B of organic projects under execution, which Barclays sees adding close to $1B of distributable cash flow by 2019; "while we forecast debt to EBITDA to remain ~4.5x in 2016, we see this falling to low 4x in 2017-plus, which we think will help valuation," the firm writes.
- The start-up of the Lone Star Express project in 2016 will bring 180K-280K bbl/day of new NGL pipeline capacity, and new projects "position ETP well in capturing volume upside from ethane recovery expected when new crackers come on line in 2017-2019," the firm says.
- Barclays also notes that ETP continues to trade at a discount to key NGL players such as ONEOK Partners (NYSE:OKS), DCP Midstream Partners (NYSE:DPM) and Targa Resources (NYSE:TRGP); the firm thinks ETP's current yield of 11.82% reflects a 320 bps discount to the group.
Wed, May 4, 4:32 PM
Tue, May 3, 5:35 PM
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Tue, Apr. 26, 5:44 PM
Mon, Apr. 4, 5:46 PM
- DCP Midstream (NYSE:DPM) says it is cutting ~300 jobs across operations, 10% of its workforce, and cuts capital spending to $250M as part of a cost-cutting push.
- DPM says it is executing a strategy of resetting its break-even cost to ensure sustainability as a reliable, safe, low-cost midstream services provider in any environment.
- The joint venture between Phillips 66 (NYSE:PSX) and Spectra Energy (NYSE:SE) employs 2,900 people in 17 states.
- Now read High-dividend stock yields 11% with over 20% cash flow and EBITDA growth, estimates rising
Tue, Mar. 8, 5:17 PM
- A U.S. bankruptcy judge says Sabine Oil & Gas (OTCPK:SOGCQ) can reject contracts with midstream companies it made before oil and gas prices plunged.
- But the judge says her ruling is not binding, potentially setting the stage for another legal battle over the pipeline operators' argument that the agreements cannot be broken because they are inextricably tied to the land on which Sabine operates.
- The ruling covers agreements with two companies, including an affiliate of Cheniere Energy (NYSEMKT:LNG), that gather natural gas for Sabine in specific geographic locations; Sabine has said that rejecting the contracts could save as much as $115M for the bankruptcy estate.
- Restructuring and energy experts have warned that a loss for Sabine's pipeline operators could inspire other bankrupt oil and gas producers to seek similar relief, spreading the distress that has plagued them to the midstream companies that process and transport oil and natural gas.
- Similar requests are pending in the chapter 11 cases of companies including Quicksilver Resources (OTCPK:KWKAQ) and Magnum Hunter Resources (OTCPK:MHRCQ); a Delaware judge is expected to rule on KWK's request by the end of the month.
- Pipeline stocks include: KMI, ENB, EEP, SE, SEP, WMB, ETE, ETP, OKS, PAA, PBA, MMP, CQP, BWP, BPL, WES, SXL, NS, NSH, TCP, NGL, DPM, GEL, HEP, APL, SEMG, TLLP, MMLP, TLP, SGU, BKEP
Wed, Mar. 2, 2:28 PM
- While energy supply and demand dynamics may be about to start improving, the benefits are not yet evident in the profit picture for midstream MLPs, Wunderlich's Jeff Birnbaum writes, as declining onshore crude production will continue to challenge midstream operators.
- E&P guidance and more recent EIA data indicates more significant declines may come in 2016 than expected several months ago, according to Birnbaum.
- Among individual MLPs, the analyst expects Plains All American (PAA +2.3%) to use its scale, downstream operations and lack of 2016 financing needs as weapons to take share from smaller competitors, and sees a rebound in Gulf of Mexico production as a positive for Genesis Energy (GEL +5.8%).
- With additional liquified petroleum gas export capacity online in 2016 and the prospect for a more normalized 2016-17 winter, the propane market should tighten relative to a sloppy 2015, which Birnbaum believes will benefit Enterprise Products Partners (EPD +3.5%), Targa Resources (TRGP +1.1%), DCP Midstream Partners (DPM +6.8%) and NGL Energy Partners (NGL -0.1%).
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Wed, Feb. 24, 4:26 PM
Wed, Feb. 24, 4:25 PM
Tue, Feb. 23, 5:35 PM
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Thu, Jan. 28, 5:14 PM
- DCP Midstream Partners (NYSE:DPM) declares $0.78/share quarterly dividend, in line with previous.
- Forward yield 16.68%
- Payable Feb. 12; for shareholders of record Feb. 8; ex-div Feb. 4.
Thu, Jan. 28, 4:58 PM
- Energy MLPs will survive the current difficult period - unlike many E&P companies, which may not - Stifel analysts say, while urging investors to take a more defensive approach to partnerships with strong balance sheet and coverage ratios, along with conservative management teams.
- Stifel keeps Buy ratings on Buckeye Partners (NYSE:BPL), Energy Transfer Partners (NYSE:ETP), Enterprise Product Partners (NYSE:EPD) and Magellan Midstream Partners (NYSE:MMP), and upgrades Kinder Morgan (NYSE:KMI) - which is no longer an MLP but is still treated like one by many analysts.
- The firm downgrades DCP Midstream Partners (NYSE:DPM), Sunoco Logistics Partners (NYSE:SXL) and Tallgrass Energy Partners (NYSE:TEP) to Hold, and cuts Azure Midstream Partners (NYSE:AZUR) to Sell from Hold.
- Earlier: Kinder Morgan upgraded at Credit Suisse, which sees 40% upside
DCP Midstream Partners LP is engaged in the business of gathering, compressing, treating, processing, transporting, storing and selling natural gas; producing, fractionating, transporting, storing and selling natural gas liquids (NGLs) and condensate; and transporting, storing and selling... More
Sector: Basic Materials
Industry: Oil & Gas Pipelines
Country: United States
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