Dislocation = Opportunity In Enbridge Preferred Shares
Keubiko • 36 Comments
Keubiko • 36 Comments
Wed, Oct. 19, 3:22 PM
- Enbridge (ENB +1.5%) says it is cutting 530 employees, representing ~5% of its total workforce, the latest in a wave of retrenchment in the hard-hit Canadian oil and gas sector.
- ENB downplays assertions that the cuts are related to its recent $37B merger with Spectra Energy (SE +1.7%), saying the layoffs are part of a review earlier this year aimed at allowing the company to “achieve our strategy of growth and diversification.”
- Of the cuts, 370 of which are from ENB's Canadian division and the other 160 are U.S. positions.
Mon, Oct. 17, 5:18 PM
- Construction equipment for the Dakota Access oil pipeline sustained ~$2M in damage in an intentionally set fire over the weekend in Iowa.
- The Jasper County Sheriff's office said the fire occurred late Saturday near the town of Reasnor, Iowa, near the site of an equipment fire in August along the 1,100-mile pipeline route, which is planned to carry oil from North Dakota to the U.S. Gulf coast.
- Opposition to the $3.7B pipeline has been increasing, and construction of one section in North Dakota has been halted in response to protests by the Standing Rock Sioux tribe and environmental activists and is under federal review.
- Relevant tickers: ETP, SXL, PSX, MPC, ENB, EEP
Thu, Oct. 13, 12:44 PM
- Bernie Sanders is one of five U.S. senators calling on Pres. Obama to order a comprehensive environmental review of the Dakota Access pipeline project that has stoked increasingly fierce opposition from Native Americans and environmental activists; experts say such a review could take several months.
- "The project’s current permits should be suspended and all construction stopped until a complete environmental and cultural review has been completed for the entire project," says the letter from Sens. Sanders, Feinstein, Markey, Leahy and Cardin.
- The $3.7B project is being built by the Dakota Access subsidiary of Energy Transfer Partners (ETP -0.2%), which has vowed to complete construction; other relevant tickers are SXL, PSX, MPC, ENB, EEP.
Wed, Oct. 12, 2:48 PM
- Five oil pipelines that carry millions of barrels of crude to the U.S. from Canada have restarted after being shut down by environmental protesters yesterday, although at least one of the lines was operating at reduced rates.
- Company reps for TransCanada (NYSE:TRP) and Spectra Energy (SE, SEP) say their respective Keystone and Express pipelines both restarted yesterday afternoon, and Kinder Morgan (NYSE:KMI) says the spur of the pipeline impacted by the protesters is not operating but it has since restarted the rest of the pipeline.
- Enbridge (ENB, EEP) has not disclosed the situation at its Mainline pipeline, but Genscape says the pipeline has resumed normal flows.
Wed, Oct. 12, 12:28 PM
- Yesterday's sabotage of five cross-border pipelines that together can send 2.8M bbl/day of crude to the U.S. from Canada illustrated the vulnerability of North America's oil and gas pipeline system to low-tech attacks.
- The cost of posting armed guards at valve stations, usually found every 20 miles along underground pipelines, would be prohibitive, says Stewart Dewar, a project manager at Senstar, a company that authored a 2012 white paper on pipeline security; instead, the stations usually are protected by nothing more than an ordinary chain link fence and padlocks.
- Environmental groups say their actions against pipelines owned by Enbridge (NYSE:ENB), TransCanada (NYSE:TRP), Spectra Energy (NYSE:SE) and Kinder Morgan (NYSE:KMI) were an attempt to draw attention to climate change and support opponents of Energy Transfer Partners' (NYSE:ETP) proposed Dakota Access Pipeline.
- The acts caused no leaks yesterday, but pipeline operators and safety experts say shutting off valves was extremely dangerous and that activists underestimated the risks.
Tue, Oct. 11, 5:24 PM
- Environmentalists say they shut down five pipelines carrying crude from Canadian oil sands into the U.S., the latest move by activists to disrupt movement of oil across North America.
- Spectra Energy (NYSE:SE), one of four companies affected, says trespassers tampered with a valve on its Express Pipeline in Montana, forcing it to shut down the line as a precaution.
- The other pipelines claimed to have been shut in are Enbridge's (NYSE:ENB) Lines 4 and 67, TransCanada's (NYSE:TRP) Keystone pipeline, and Kinder Morgan's (NYSE:KMI) Trans Mountain pipeline; ENB says it shut pipelines at a valve site in Minnesota after trespassers cut chains and attempted to turn off vales.
- The Climate Direct Action group says it shut down the pipelines to stand in solidarity with the Native American tribe that has been protesting the construction of the Dakota Access pipeline.
Tue, Oct. 11, 2:19 PM
- Energy Transfer Partners (ETP -1.5%) says it expects to receive federal approval soon to complete the Dakota Access oil pipeline following Sunday's federal appeals court ruling that reaffirmed a lower court decision in September denying an injunction sought by the Standing Rock Sioux tribe.
- The lead company building the controversial project says it is confident that the only remaining approval it needs - a permit to allow the pipeline to cross the Missouri River - will be granted soon by the Army Corp of Engineers.
- ETP says the latest ruling frees it to continue building the pipeline in an area extending 20 miles on either side of the Missouri River.
- Other relevant tickers: SXL, PSX, MPC, ENB, EEP
Mon, Oct. 10, 5:28 PM
- The U.S. Army Corps of Engineers says is not yet authorizing construction of the Dakota Access pipeline on federal land in southern North Dakota, and is reiterating its earlier request for pipeline owner Energy Transfer Partners (NYSE:ETP) to voluntarily stop work on private land in the area.
- The Corps' statement follows yesterday's federal appeals court ruling that allowed construction to resume on the pipeline within 20 miles of Lake Oahe, which set off large protests today at two construction sites in North Dakota.
- The U.S. Justice Department, Interior Department and the Corps also say they are still reviewing the need to reforms in the way tribal views are considered for such projects.
- Other relevant tickers: SXL, PSX, MPC, ENB, EEP
Mon, Oct. 10, 10:39 AM
- The D.C. Circuit Court of Appeals Sunday night rejected a Native American tribe's attempt to block construction of the Dakota Access pipeline, denying an injunction because it said the tribe did not meet the legal standards for such a maneuver.
- Although work may resume within a 20-mile radius of Lake Oahe, the Department of Justice and other U.S. agencies continue to halt construction on federal and adjacent to Lake Oahe and has requested a voluntary halt on private lands.
- The Standing Rock Sioux tribe sought the injunction under the National Historic Preservation Act, arguing that places of cultural and religious significance to the tribe would be harmed by construction.
- Relevant tickers: ETP, SXL, PSX, MPC, ENB, EEP
Mon, Oct. 3, 6:56 PM
- Canada will set a minimum price for carbon pollution beginning in 2018, Prime Minister Trudeau told the country's parliament today, marking a landmark turn by the Liberal government away from the energy-friendly policies of the former Conservative government.
- The government will set a minimum federal price of C$10/metric ton in 2018, rising by C$10 each year to C$50/ton in 2022; Canada’s 10 provinces must meet or exceed the minimum by using either a carbon tax or a cap-and-trade system.
- The announcement sparked sharp rebukes from premiers of the resource-rich Alberta and Saskatchewan provinces; Alberta's Notley - which already has announced its own carbon tax - said she would not accept the plan unless the federal government approves more oil and gas pipelines, and Saskatchewan's Wall said the move would drain jobs away from the energy sector.
- The news comes a week after Trudeau prompted anger from environmentalists by approving a natural gas plant and export terminal on the Pacific coast; he still must decide on the fate of major projects planned by Kinder Morgan (NYSE:KMI) and Enbridge (NYSE:ENB).
- ETFs: EWC, CNDA, EWCS, FCAN, QCAN, HEWC
Fri, Sep. 30, 11:34 AM
- Canadian Prime Minister Trudeau’s government has given itself until Nov. 25 to decide on Enbridge’s (ENB +1.5%) Northern Gateway oil pipeline.
- A cabinet order dated Sept. 23 enacted Natural Resources Minister Carr’s recommendation to set the Nov. 25 deadline for a decision on how to proceed with Northern Gateway.
- Trudeau also must decide on ENB’s Line 3 replacement pipeline project on or before the same date, and Kinder Morgan’s Trans Mountain pipeline expansion by Dec. 19.
- The ~C$7.9B Northern Gateway project, which was approved by the previous government, had its permits invalidated by a court ruling earlier this year; the government recently decided not to appeal the ruling and now must decide whether to re-do the consultation and then reissue the permits.
Thu, Sep. 29, 6:41 PM
- Enbridge (NYSE:ENB) agrees to sell the 994-mile South East Saskatchewan pipeline network to privately-held Tundra Energy Marketing for C$1.075B ($818M).
- ENB's Mainline system is the main conduit for Canadian crude shipped south to U.S. markets, and the SE Saskatchewan system transports 175K bbl/day of crude to the Mainline at Cromer, Manitoba, a major hub for barrels in Canada's South Prairie region.
- ENB says the sale achieves half of its goal of divesting ~$2N of non-core assets over the next year in conjunction with the Spectra Energy merger, and helps its income fund finance its growth program.
Wed, Sep. 28, 3:19 PM
- The energy sector (XLE +4%) bursts to the top of the leaderboard after OPEC announces a planned production cut to 32.5M bbl/day at the informal OPEC meeting in Algiers.
- Among individual energy stocks: XOM +3.8%, CVX +2.7%, RDS.A +2.8%, BP +3.4%, TOT +2.4%, PBR +4.5%, COP +6.4%, MRO +8%, MPC +1.4%, PSX +1.9%, VLO -0.1%, EOG +6.2%, PXD +6.4%, OXY +4.5%, DVN +7.9%, CLR +8.3%, APA +6.2%, NOV +8.1%, SLB +3.3%, BHI +3.6%, HAL +4.3%, KMI +3.4%, ENB +2.6%, EPD +1.9%, ETP +2.9%.
Tue, Sep. 27, 12:58 PM
- Investors likely are underestimating the earnings potential of the Enbridge (ENB -0.1%) and Spectra Energy (SE -0.1%) combination, CIBC analyst Robert Catellier says.
- Catellier says prospective financial information in the prospectus shows 2018 cash flow projections are 18% higher than currently expected, so “it appears to us that there is a healthy discount between estimates and company projections.”
- The proxy statement for the merger also shows that SE pushed for an all-stock transaction and showed “considerable confidence” in the dividend growth of the company following the merger, Catellier says. while Enbridge initially offered a combination of stock and cash.
- CIBC rates ENB as a Sector Outperformer with a $71 12-18-month price target.
Tue, Sep. 20, 2:37 PM
- Enbridge (ENB -0.4%) says it will not appeal a Federal Court of Appeal decision that reversed the Canadian government's approval for building the Northern Gateway pipeline project.
- The court in June overturned ENB’s permits for the pipeline, which were approved by former Prime Minister Harper’s government, saying the administration did not “fulfill its duty to consult” with First Nations communities.
- ENB now says it will work with government and aboriginal groups, and that meaningful consultation rather than litigation is the best path forward.
Tue, Sep. 20, 12:59 PM
- Canada's government is expected this week to launch a new round of consultations with First Nations of northern British Columbia on Enbridge's (ENB -0.5%) Northern Gateway pipeline.
- The government facing a court-imposed Thursday deadline to determine whether it will appeal June's ruling by the Federal Court of Appeal that quashed the former Conservative government’s 2014 approval of the proposed pipeline, finding that the former government’s consultations with affected First Nations were “brief, hurried and inadequate.”
- One of the complicating factors is the government’s 2015 campaign promise to bring in a moratorium on oil tanker traffic on the northern B.C. coast, which - if the moratorium becomes permanent - would prevent the project from proceeding.