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Oct. 22, 2015, 3:30 PM
- MLPs are under pressure following Kinder Morgan's (KMI -5.7%) disappointing Q3 report in which it cut guidance for 2016 distribution growth (I, II)
- KMI is no longer classified as an MLP but its relevance to the group remains strong, and MLPs have needed to rely on access to the capital markets; 24/7's Jon Ogg explains that KMI's vagueness about its plans to access new capital has dragged down the entire MLP sector today: MMP -3.5%, EPD -3.2%, ETP -3.1%, ETE -2.2%, WMB -1.8%, PAA -1.4%.
- "There is just no getting away from the fact that a major energy company with a market capitalization of $69B just said that its access to public equity now comes at such a cost that it will go elsewhere, [which] should cause at least a few ripples of concern across the industry," Bloomberg's Liam Denning writes.
- Brace for more waiting games from MLPs this quarter, Wunderlich's Jeff Birnbaum says, expecting many companies to delay providing their 2016 forecasts until later in the year when they have better indications from upstream companies about their plans, which could lead to renewed selling after a 20% gain in the Alerian MLP Index since it bottomed Sept. 29.
- ETFs: AMLP, AMJ, KYN, MLPL, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, MLPN, SRF, FEI, JMF, CBA, MLPX, GMZ, EMO, MLPS, TTP, CTR, AMU, CEN, GER, AMZA, SMM, MIE, DSE, ENFR, FPL, ATMP, JMLP
Oct. 7, 2015, 9:32 AM
- Plains All American Pipeline (NYSE:PAA) declares $0.70/share quarterly dividend, 0.7% increase from prior dividend of $0.695.
- Forward yield 8.51%
- Payable Nov. 13; for shareholders of record Oct. 30; ex-div Oct. 28.
Sep. 14, 2015, 10:43 AM
- Plains All American Pipeline (PAA +0.2%), responsible for an oil spill that blackened California beaches, kept shoddy records on emergency training and how it would protect pristine coastline in the event of a break, federal regulators said Friday.
- Among its findings, the Pipeline and Hazardous Materials Safety Administration said PAA failed to properly document pressure tests on tanks and failed to keep adequate records on how it would prevent spills in sensitive environmental areas, or respond if one did occur.
- The cause of the California pipeline break is still under investigation, and prosecutors are considering possible charges.
Sep. 11, 2015, 12:44 PM
- While Goldman Sachs sees crude oil prices staying roughly flat at $45/bbl a year from now and warning of a potential collapse to $20, the firm also downgrades a wide swath of MLP and pipeline companies as it forecasts heightened risk to capital spending leading to lower distribution growth.
- The firm downgrades Plains All American (NYSE:PAA), ONEOK Partners (NYSE:OKS), Memorial Production Partners (NASDAQ:MEMP), Enable Midstream Partners (NYSE:ENBL) and Dominion Midstream (NYSE:DM) to Sell from Neutral; it cuts Emerge Energy (NYSE:EMES), Rose Rock Midstream (NYSE:RRMS), Concho Resources (NYSE:CXO) and RSP Permian (NYSE:RSPP) to Neutral from Buy.
- However, Goldman sees some opportunities despite the challenging outlook, preferring "stocks with assets leveraged to demand-pull (vs. supply-push)" such as Kinder Morgan (NYSE:KMI); the firm also upgrades Spectra Energy (NYSE:SE), Whiting Petroleum (NYSE:WLL) and Encaca (NYSE:ECA) to Buy from Neutral, and BP, TransCanada (NYSE:TRP) and Gran Tierra Energy (NYSEMKT:GTE) to Neutral from Sell.
Sep. 3, 2015, 12:38 PM
- Holly Energy Partners (HEP +0.3%) agrees to acquire Enbridge’s (ENB +2.8%) 50% stake in the Frontier Pipeline for an undisclosed amount.
- The Frontier pipeline is a 296-mile crude oil route that runs from Casper, Wyo., to Frontier Station, Utah, and has a capacity of 72K bbl/day; the line brings Canadian and Rocky Mountain crude oils south to refineries in the Salt Lake City area.
- Plains All American (PAA +1.5%) owns the remaining 50% interest and will continue to operate the Frontier line.
Aug. 25, 2015, 6:45 PM
- Rose Rock Midstream (NYSE:RRMS) is downgraded to Hold from Buy with a $35 price target, cut from $57, by the MLP analyst team at U.S. Capital Advisors, which also reduces its price target for Semgroup (NYSE:SEMG) to $60 from $84.
- The firm says dropdowns are a major part of the RRMS story, as it struggles to see how SEMG can make accretive dropdowns into RRMS without taking meaningful asset writedowns; it also expects the White Cliffs pipeline to face margin and/or volume pressure once the new DJ Basin pipelines come online in 2016.
- The firm also cuts price targets on 11 other stocks: KMI, MMP, CPPL, SMLP, PAA, PAGP, SE, WPZ, NGLS, TRGP, NFG.
- Top picks include EPD, CQP, TEP and RMP.
Aug. 7, 2015, 7:15 PM
- The Obama administration is investigating Plains All American Pipeline (NYSE:PAA) in connection with the May oil spill that dumped at least 2,400 barrels of oil along the coastline near Santa Barbara, Calif.
- PAA disclosed the ongoing probes and the possibility of civil and criminal charges tied to the incident in its new 10-Q filing.
- PAA's initial spill estimate was 2,400 barrels, but this week the company said it may have to raise the earlier estimate by as much as 1,000 barrels, based on data from emptying and purging the line; any potential Clean Water Act violations carry possible penalties of $1,100-$4,300 per barrel of spilled oil.
- State probes also are underway, as the California Attorney General’s office and the district attorney’s office for the county of Santa Barbara investigate whether state or local laws were violated.
Aug. 7, 2015, 2:58 PM
- Plains All American Pipeline (PAA +1.2%) finally turns a bit higher but Plains GP Holdings (PAGP -6.6%) continues to stumble, after enduring the fallout from a disappointing earnings report and distribution warning this week that has driven PAA down 12.3% and PAGP 29.5% lower.
- Citi analyst Faisel Khan thinks U.S. oil production in the lower 48 states will continue to grow in the long-term driven by strength in the Permian Basin, and predicts PAA will be able to achieve its targeted 1.1x coverage in 2017, which will allow PAA to grow distributions at a 3% rate through 2019 and PAGP to grow dividends by 10% during 2016-19.
- Khan sees the recent plunge as a buying opportunity, and upgrades PAGP to Buy from Neutral.
Aug. 6, 2015, 3:58 PM
- Plains All American Pipeline (PAA -2.8%) suffers at least five analyst downgrades following yesterday's cut in 2015 distribution growth guidance to 6% from the 7% figure achieved in 2014, and that it is evaluating leaving the distribution flat in 2016 as a “transition year” before returning to distribution growth.
- "With PAA trading at a 7.7% yield, management may decide it is more effective to fund its substantial capex backlog with more internally generated cash vs. maintaining a below-average growth rate for PAA,” Wunderlich's Jeff Birnbaum writes in downgrading shares to Hold from Buy with a $37 price target, reduced from $56.
- With transportation and facilities projects ramping up, PAA's S&L margins could contract, the analyst adds.
- In downgrading PAA as well as Plains GP Holdings (PAGP -0.7%) to Neutral, Baird notes that much sooner than firm expected, the impact of infrastructure overbuild due to over-financed, overspending midstream players looks to reduce 2016 marketing margins as differentials collapse.
- PAA also was downgraded at Goldman, Deutsche Bank and UBS.
Aug. 5, 2015, 4:57 PM
- The recent oil spill from a ruptured Plains All American (NYSE:PAA) pipeline that fouled beaches for miles near Santa Barbara, Calif., may have been larger in volume than earlier projected.
- PAA had estimated the May 19 spill at up to 101K gallons, but today it said alternate calculations found the spill might have totaled 143K gallons; the company said it is continuing its analysis and the figures are preliminary.
- PAA also said it does not expect to see the pipeline back in service this year, and expects the spill clean-up to cost ~$257M; it booked a $65M Q2 charge related to the incident.
- Earlier: Plains All American punished after distribution warning
Aug. 5, 2015, 3:21 PM
- Plains All American Pipeline (PAA -11.1%) and Plains GP Holdings (PAGP -20.4%) are both sharply lower even as the companies met analyst expectations for Q2 earnings (I, II).
- But PAA lowered its estimate for FY 2015 adjusted EBITDA by $50M to $2.278B, not including contributions from its Line 901, which ruptured and spilled oil along the California coastline in May; PAA booked a $65M Q2 charge related to the incident.
- PAA also issued a cautious outlook, saying high crude oil and refined product inventory levels will influence oilfield activity and crude oil production levels over the next 6-12 months.
- Even worse, management hinted on this morning's earnings conference call that distribution growth could be in jeopardy in 2016 as competition increases among pipelines while oil prices fall.
- In response, PAA is downgraded to Neutral from Buy at UBS.
Aug. 4, 2015, 4:51 PM
- Plains All American Pipeline (NYSE:PAA): Q2 EPS of $0.27 misses by $0.02.
- Revenue of $6.7B (-40.2% Y/Y) misses by $820M.
Jul. 23, 2015, 6:20 PM
- July is shaping up to be one of the worst months for MLPs in years amid cratering energy prices, but with average yields hitting 7%, J.P. Morgan analysts say the selloff is getting overdone.
- The JPM team highlights four high-quality names as oversold: Plains All American Pipeline (NYSE:PAA), Plains GP Holdings (NYSE:PAGP), Energy Transfer Partners (NYSE:ETP) and Sunoco (NYSE:SUN).
- The analysts also like Valero Energy Partners (NYSE:VLP), Phillips 66 Partners (NYSE:PSXP), NuStar Energy (NYSE:NS) and Macquarie Infrastructure (NYSE:MIC).
Jul. 20, 2015, 11:58 AM
- A flurry of recent acquisitions in the energy MLP sector suggests it is becoming undervalued, according to a Barron's weekend report.
- Rob Thummel of Tortoise Capital Advisors still sees energy as a growing sector over the long term; some of his favorite MLPs include Spectra Energy Partners (NYSE:SEP) and Plains All American Pipeline (NYSE:PAA).
- Marcus McGregor, who runs the MLP equity strategy for Conning, suggests sticking with the largest, most liquid midstream MLP players which should be a step or two removed from the price of crude; he prefers Enterprise Products Partners (NYSE:EPD) and Magellan Midstream Partners (NYSE:MMP).
- But many analysts say only long-term investors should be buying now, since the next few years could be rocky; “Too many MLP investors are taking the ostrich route,” says one who believes the energy sector will get worse before it gets better. “They see such great yields and think they don’t have to worry.”
Jul. 14, 2015, 8:37 AM
- Phillips 66 (NYSE:PSX) says it does not anticipate any impact on operations at its 336K bbl/day Wood River, Ill., refinery following the shutdown of the Capwood pipeline.
- Plains All American Pipeline (NYSE:PAA) said on Friday it experienced a crude oil leak at its Pocahontas pumping station, which is part of the Capwood line, but did not specify if the spill had an impact on the overall flow of the line.
- The Wood River refinery sources crude from the 277K bbl/day Capwood line, which runs from Patoka, Ill., to Wood River.
Jul. 13, 2015, 9:45 AM
- A pipeline owned by Plains All American Pipeline (PAA +0.8%) spilled ~4,200 gallons of crude oil in southwest Illinois near St. Louis on Friday, with some reaching a nearby creek.
- PAA says it has initiated its emergency response plan to contain the release and work crews are on site.
- It is the second leak for PAA in less than two months, following the May 19 leak near Santa Barbara, Calif., that created a nine-mile oil slick along the coastline.
Plains All American Pipeline LP is engaged in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids.
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