Dec. 2, 2015, 3:44 PM
- Energy MLPs sink along with crude oil prices, with some midstream energy bellwethers including Energy Transfer Equity (ETE -4.9%) down by more than the Alerian MLP index's 3% drop.
- MLPs have been closely correlated with the fall in oil prices this year, which is not the norm for the sector, Jerry Swank tells Barron’s; like the last six months, he says today's slide has little to do with company fundamentals.
- MLPs that transport oil to refiners, such as Shell Midstream Partners (SHLX -2.9%) or Phillips 66 Partners (PSXP -4%), are usually more stable than other midstream companies, but today they're also taking a beating.
- Also: PAGP -6.8%, ETP -5.8%, PAA -4.5%, WMB -3.2%, SEP -2.6%, EPD -2.2%, MWE -1.6%, MMP -0.2%.
- ETFs: AMLP, AMJ, KYN, MLPL, YMLP, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, MLPN, SRF, FEI, JMF, CBA, MLPG, MLPX, GMZ, EMO, MLPS, MLPY, TTP, CTR, YMLI, AMU, CEN, MLPJ, ZMLP, GER, AMZA, SMM, MIE, DSE, ENFR, FPL, ATMP, JMLP, MLPC, MLPW, IMLP
Dec. 1, 2015, 2:47 PM
- MarkWest Energy (MWE -4.8%) unitholders vote to approve a merger deal with MPLX (MPLX -13.6%), overcoming opposition from two MWE founders; the deal is now expected to be completed by Dec. 4.
- The agreement will make MWE, the second largest natural gas processor in the U.S., a subsidiary of Marathon Petroleum (MPC +0.9%) pipeline operator MPLX, and create one of the biggest MLPs.
- The overall value of the cash and stock deal originally was pegged at ~$15B in July but had fallen to ~$10B by mid-November amid plunging energy stock prices, when MPC increased the cash portion of the deal to $6.20/unit for MWE shareholders.
Nov. 18, 2015, 11:57 AM
- MarkWest Energy Partners (MWE +2.4%) says the ISS proxy advisory firm recommends MWE unitholders vote in favor of the combination of MWE with MPLX (MPLX -3.3%).
- The ISS recommendation cites "the premium to the unaffected price at announcement, the subsequent cash increases in the merger consideration, and the strategic advantages of the combination - including both the access to relatively more certain capital sources at a lower cost of capital and the ability to de-risk certain growth opportunities" with Marathon Petroleum (MPC +1.1%) as its parent.
- Separately, Kayne Anderson Capital Advisors discloses a 5.7% active stake in MWE.
Nov. 17, 2015, 8:24 AM
- Marathon Petroleum (NYSE:MPC) again raises the cash portion of its cash and stock offer for MarkWest Energy Partners (NYSE:MWE), hoping to clinch its proposed takeover.
- MPC, which has agreed to buy MWE through its MPLX pipeline unit, says it will now offer $6.20/unit, up from $5.21 offered last week.
- The latest offer, which MPC and MPLX say represents the best and final offer, nearly doubles the cash portion of the offer from the $3.37/unit offered in July when the deal was reached.
- MWE +2.7% premarket.
Nov. 12, 2015, 11:59 AM
- Former MarkWest Energy (MWE -5.1%) Chairman and CEO John Fox reaffirms his opposition to the company's proposed merger with MPLX (MPLX -1.2%), urging fellow unitholders to withhold their proxies or vote no.
- Fox says Marathon Petroleum's (MPC -2.2%) $1.84/unit cash increase "does not materially change the fundamentals of the deal. The revised $52.93/unit implied deal terms based on MPLX's closing price on Nov. 10 is still 33% below the initial implied deal terms outlined in July."
- Earlier: Former MarkWest CEO aims to stop merger with MPLX (Nov. 4)
Aug. 7, 2015, 11:36 AM
- MarkWest Energy (MWE -3.1%) falls sharply for a third straight session as shares are downgraded to Neutral from Outperform with a $72 price target, lowered from $81, at Credit Suisse, which cites MWE's revised guidance for EBITDA and distributable cash flow to $925M-$975M and $700M-$750M, implying a $50M reduction to the high end of the company's prior guidance.
- MWE said its guidance revision is because of a "continued period" of low commodity prices, so the firm cuts its 2017-18 EBITDA estimates by 6%.
Aug. 6, 2015, 12:59 PM
- MarkWest Energy Partners (MWE -3.5%), which in July agreed to be acquired by MPLX (NYSE:MPLX), tumbles for a second straight day after posting weak Q2 results and lowering the high end of guidance for 2015 EBITDA and distributable cash flow.
- Shares have dropped 14% in two sessions with units trading ~$53.50, well off the $69 level after the merger was announced.
- Wunderlich lowers its MWE price target to $60 from $71, saying Q2 results reinforce its view that near-term conditions in the Marcellus and Utica remain significantly challenged, and macro conditions have overwhelmed otherwise sound management of the balance sheet and operations to maximize results.
- The evaporation of the trading premium to MPLX’s offer perhaps indicates a fading market belief in a competing bid emerging, the firm adds.
Jul. 23, 2015, 2:49 PM
- MPLX (MPLX +4.2%), which announced last week it plans to buy MarkWest Energy Partners (MWE +1.8%), enjoys a healthy bounce following a report that the companies effectively explained the benefits of the merger at a meeting with sell-side analysts last night.
- Wunderlich's Jeff Birnbaum says MPLX management believes its ability to maintain its targeted 25% distribution compound annual growth rate through 2017 while adding a potential $6B-$9B in joint commercial investment opportunities is compelling.
- A major key to the success of the deal is that it is supported by Marathon Petroleum (MPC -1%), which Birnbaum says can backstop projects, incubate projects on its balance sheet and provide supportive economics and financing on dropdowns, and/or simply help balance markets.
- Nevertheless, it is unclear if MWE shareholders will approve the merger when they vote later this year; Birnbaum believes it will depend how the units trade from now on.
Jul. 14, 2015, 2:42 PM
- MPLX (MPLX +2.8%) bounces back a bit after yesterday's 14.5% drop on news it was buying MarkWest Energy Partners (MWE +2%), as analyst commentary is mostly positive and the shares begin to look cheaper.
- Citi Research analyst Faisel Khan rates all the companies, including MPLX parent Marathon Petroleum (MPC +0.3%), with Buy ratings, as "the damage has been done" and MPLX units are cheap on its distribution target for next year; for MWE, Citi sees the possibility of another bid but that it would be difficult given the no-shop provision and $625M break-up fee.
- However, MPLX gets a negative review from Howard Weil, which downgrades shares to Sector Perform with a $65 price target, cut from $87, believing investors will re-rate their yield expectations on what is a much larger entity with less visibility into outer year growth and a slower growth trajectory beyond 2017 (Briefing.com).
Jul. 13, 2015, 3:39 PM
- The big winner in MPLX's (MPLX -14.9%) takeover bid for MarkWest Energy (MWE +12.8%) is MPLX’s parent, Marathon Petroleum (MPC +7.7%), which contributed $973M of its own cash to seal the deal, according to Liam Denning of WSJ's Heard On The Street.
- While its shareholding in MPLX will drop to 21% on a pro forma basis, Denning says, MPC also will retain its GP units in the combined entity, which entitle it to a much larger share of cash distributions by MPLX - a common feature of MLPs that encourage rapid expansion, though one that has waned in recent years.
- MPC has a lot of assets to drop down to its MLP, and the acquisition will allow it to do so faster going forward since it will be a much bigger company, says InfraCap MLP ETF portfolio manager Jay Hatfield.
Jul. 13, 2015, 12:31 PM
- MarkWest Energy (MWE +11.7%) is up only ~12% after the company agreed to be acquired by MPLX (MPLX -16.8%) for a 32% premium, and MarketWatch's Philip Van Doorn believes the reason lies with the income objective of many MWE unitholders who do not like giving up their dividend yield; MPLX unitholders also hardly seem thrilled, sending shares down 17%.
- MWE’s most recent quarterly distribution was $0.91/share, equating an annual yield of 6.09%; a one-time cash payment of nearly a year’s worth of dividend income helps, but the explanation of the deal’s strengths by MPLX CEO Gary Henniger - who expects a "25% compound annual distribution growth rate for the combined entity through 2017, with a peer-leading growth profile thereafter" - clearly is not enough to convince MWE unitholders of the deal's merits, Van Doorn writes.
Jul. 13, 2015, 9:19 AM
May 13, 2015, 3:49 PM
- Energy MLPs are trading with mixed results, which is not in line with an analyst's expectation that several names in the space may be outperformers today after Williams Cos. (WMB +6.2%) agreed to buy Williams Partners (WPZ +22.7%).
- In an earlier note to investors, Credit Suisse named Plains GP Holdings (PAGP +1%), Targa Resources (TRGP +1.1%), NuStar GP Holdings (NSH -0.1%) and Western Gas Equity (WGP -0.7%) as MLPs that could climb on the news.
- Meanwhile, Wells Fargo says the deal is positive, since it reduces the WMB's cost of capital, will immediately increase its profits, and enhances its dividend growth outlook.
- Among major energy MLPs: EPD -1.5%, ETP +0.9%, PAA +0.2%, EEP -0.2%, MWE +2.2%, MMP -0.3%.
Nov. 28, 2014, 7:48 AM
- The oil market will need to balance via slower U.S. shale growth and OPEC cuts at some later date (their next meeting is on June 5), says Goldman's Brian Singer, maintaining his team's WTI oil price outlook of $70-$75 per barrel for next year.
- Among the energy sub-sectors, refiners and pipelines continue as favorites, and five of Goldman's eleven energy and utilities stocks on the Americas Conviction Buy list are from midstream/refining: KMI, MWE, PAGP, TRGP, TSO (all are lower premarket on oil's tumble).
- Not buyers of oil services and E&P names, Goldman nevertheless does have favorites in these areas: CRR, BAS, RIG.
Aug. 28, 2014, 2:42 PM
- MarkWest Energy's (MWE +3.2%) target price is raised to $88 from $83 at Wunderlich, which is confident in MWE's ability to achieve double-digit distributions growth after 2015 (Briefing.com).
- Wunderlich says wells in the Marcellus and Utica continue to show improvement and have raised the operating outlook for E&P companies in the region; MWE, with its dominating position in the plays and a chain of organic expansion projects in the pipeline, would be a direct beneficiary to the rising production.
- The firm also notes that MWE is adding another 400M cf/day of processing and 60M bbl/day of fractionation capacity at its Keystone complex.
Jun. 27, 2014, 11:20 AM
- SunCoke Energy (SXC +3.8%) is added to Goldman Sachs' Conviction Buy List, citing potential catalysts that include buybacks and introduction of a dividend, tuck-in acquisitions and a potential sale of the coal business; shares are Buy rated with a $27 price target.
- Goldman also adds MarkWest Energy (MWE +0.2%) on its updated list, but it's not enjoying the same bump as SXC; shares are Buy rated with a $78 target.
MarkWest Energy Partners LP is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the gathering and transportation of crude oil.
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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