Fri, Nov. 13, 9:32 PM
- U.S. pipeline regulators order Plains All American Pipeline (PAA, PAGP) to shut down and clean out a California crude oil pipeline system to prevent corrosion after a separate but nearby pipeline ruptured and fouled Santa Barbara beaches last May.
- The U.S. Pipeline and Hazardous Materials Safety Administration says Plains must purge oil from Line 903, a 130-mile pipeline that runs from Gaviota, Calif., inland to Kern County, as well as three shut offshore oil pipelines operated by Freeport McMoRan (NYSE:FCX) that normally feed Line 903.
- The agency says surveys have shown that Line 903 has "similar corrosion characteristics" as Line 901, which ruptured and spilled more than 100K gallons of crude onto beaches and into the ocean last May.
- Line 901 has been shut and empty since the spill, with the damaged section removed shortly thereafter; Line 903 also is shut but PHMSA says it has been "full of crude oil" since May except for a small section.
Sat, Nov. 7, 8:25 AM
- With Keystone XL nixed by Pres. Obama, the Canadian energy industry - and its opponents - are turning their attention to the three pipelines proposed to carry oil sands volumes from Alberta to Canada’s Pacific and Atlantic coasts and avoid crossing into the U.S.
- Alberta believes Kinder Morgan’s (NYSE:KMI) Trans Mountain expansion to the Pacific and TransCanada’s (NYSE:TRP) Energy East line to the Atlantic have the best chances for success, while Enbridge’s (NYSE:ENB) Northern Gateway is seen as less likely because of strident local opposition.
- ENB also has been waiting since 2012 for a U.S. decision on a permit to nearly double the capacity of its Alberta Clipper cross-border pipeline, but the company notes the existing line is already fully operating and was permitted in 2009.
- Analysts say the Keystone denial will embolden opponents, making all pipelines more difficult to build, and is a blow not just to Canadian companies but to U.S. pipeline firms such as Plains All American (PAA, PAGP) and Energy Transfer (ETE, ETP, SXL) that already are delaying projects (I, II) in response to lower oil prices and tougher environmental reviews.
- Meanwhile, a major beneficiary could be Venezuela, who produces heavy crude similar to Canada’s oil sands and whose economy relies largely on shipping it to the same U.S. Gulf coast refineries that Keystone was meant to supply.
Thu, Nov. 5, 11:59 AM
- Plains All American Pipeline (PAA -2.3%) is downgraded to Neutral from Buy with a $38 price target, cut from $46, at Credit Suisse after PAA lowered its EBITDA guidance by ~13% and reiterated its outlook for “a tough 2016 in terms of volumes and margins.”
- On top of the downgrade, the firm also trims its price target for Plains GP Holdings (PAGP -3.1%) to $20 from $26.
- PAA also is downgraded to Hold from Buy at Stifel, as management undergoes a review to right size its 2016 growth budget, determine the best sources of capital and cut operating costs; as domestic crude oil production declines and competition increases, the firm expects PAA to experience lower transportation volume growth and margins.
Wed, Nov. 4, 7:43 PM
- Plains All American Pipeline (NYSE:PAA) said today that it plans to cut its 2016 capital budget by as much as 30% from this year's $2.2B and may sell some assets.
- PAA also lowered its full-year 2015 EBITDA guidance to $2.17B-$2.23B from an original estimate of $2.23B-$2.325B, but said it would off on offering 2016 guidance until it had a better sense of how oil producers would be spending their capital.
- "Based on our outlook for challenging industry conditions and competitive dynamics over the next 12-15 months, it’s clear 2016 will be a challenging year for PAA,” Chairman/CEO Greg Armstrong said in today's earnings conference call.
- PAA fell 11.4% in today's trade, while shares of parent company Plains GP Holdings (NYSE:PAGP) fell 19.1%.
- Earlier: Plains All American -7% as Q3 revenues cut in half, EBITDA falls 8%
Wed, Nov. 4, 10:45 AM
- Plains All American Pipeline (PAA -6.9%) opens sharply lower after Q3 earnings topped estimates while revenues fell nearly 50% Y/Y, as the oil price slump and production cutbacks ate into its profit.
- PAA says Q3 adjusted EBITDA - its preferred gauge of performance - fell to $497M, down 8% Y/Y but $17M above the midpoint of its guidance range, while Q3 net income slipped to $249M from $323M a year ago.
- The biggest hit came in the supply and logistics segment, where adjusted profit fell 33% Y/Y, mostly due to lower profit margins and less oil moving through the pipes PAA owns closest to the wellhead.
- PAA also says it will issue a quarterly distribution of $0.70/unit "next week," up 6.1% from the $0.66 paid in the year-ago quarter, while Plains GP Holdings (PAGP -15.9%) will pay a quarterly distribution of $0.231/share, up 21.1% Y/Y.
Tue, Nov. 3, 4:58 PM
Mon, Nov. 2, 5:35 PM
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Wed, Oct. 7, 9:37 AM
Tue, Aug. 25, 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.
Fri, Aug. 7, 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.
Thu, Aug. 6, 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.
Wed, Aug. 5, 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.
Tue, Aug. 4, 4:52 PM
Thu, Jul. 23, 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).
Tue, Jul. 7, 4:18 PM
Tue, May 26, 9:35 PM
- Plains All American Pipeline (NYSE:PAA) has revised downward the amount of oil believed spilled from the ruptured pipeline off the coast of Santa Barbara, Calif., now estimating that the maximum amount spilled is 101K gallons, or 4,200 gallons lower than previous estimates.
- PAA is still attempting to dig down to the pipe and look at the ruptured area, a crucial step toward determining the cause of the break, but it has been a slow process because workers cannot use heavy equipment on the soil above the broken pipe; PAA says it has “identified four locations on Line 901 that we plan to investigate as part of our customary procedures.”
- However, at least one analyst - Wunderlich's Jeff Birnbaum - believes the spill is not a "thesis changer" for PAA or Plains GP Holdings (NYSE:PAGP) despite the potential for one-time fines and clean-up expenses.
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