Tue, Jul. 12, 12:54 PM
- Plains All American Pipeline (PAA +11.7%) and Plains GP Holdings (PAGP +11.4%) power higher following last night's agreement to simplify their ownership and governance structure.
- In the deal valued at ~$7.2B, PAA will issue 245.5M shares to an affiliate of PAGP in exchange for permanently eliminating PAGP's incentive distribution rights and other economic rights, and will give PAA unitholders the right to vote for a unified board of directors; at the expected closing of the deal in Q4, PAA also will assume $593M in debt from the affiliate.
- PAA will cut its dividend by 21% to $0.55/unit beginning in Q3, and PAGP will cut the dividend on its Class A units by 11% to $0.2065/share.
- PAGP will remain a publicly traded entity that is treated like a C-corp with a Form 1099 tax reporting structure; the companies say they received a tax opinion stating that the deal would not be taxable for PAA or to shareholders.
- Piper Jaffray analyst Brian Gamble says the deal appears to improve coverage metrics at PAA, and says PAA's distribution cut came in at the low end of his expectations of 20%-50%.
Thu, May 26, 2:42 PM
- Little was said at today's investor day on the subject, but Barron's Amey Stone suspects investors are nervous that Plains All American Pipeline (PAA -1.7%) may consolidate its MLP with the general partner, Plains GP Holdings (PAGP -2.9%).
- One worry about a potential consolidation is that it will threaten the high distributions of the MLP, Wunderlich's Jeff Birnbaum says, and long-term holders also would worry about tax consequences in a restructuring.
- Birnbaum believes a deal would improve Plains’ financial outlook, "but choices will likely need to be made between PAA’s distribution and leverage," so he awaits a more attractive entry point alongside additional signs of upcoming volume growth.
- Now read Plains All American Pipeline, Plains GP kept Neutral at Credit Suisse
Wed, Feb. 10, 11:57 AM
- Plains GP Holdings (PAGP +9.4%) is downgraded to Neutral from Outperform with an $8 price target, cut from $14, at Credit Suisse, after shares already dropped ~25% this week after disappointing Q4 results at PAGP and at Plains All American Pipeline (PAA -0.2%).
- The firm believes management’s 2016 guidance is ~4% too high since it assumes $47.50/bbl crude, noting that storage continues to build, which means crude prices and volumes would deteriorate further.
- Credit Suisse expects flat distributions until 2019 when it expects coverage to return to management's targeted 1.05x-1.10x, but notes that further deterioration could pressure PAA to re-examine the distribution to take added steps to strengthen the balance sheet.
- Credit Suisse maintains its Neutral rating for PAA while slashing the price target to $19 from $33.
Tue, Feb. 9, 12:48 PM
Mon, Feb. 8, 6:18 PM
- Plains All American Pipeline (NYSE:PAA) -1.5% AH, following a 13.2% plunge in today's regular session, as it fell short of expectations for both Q4 earnings and revenues.
- PAA reports Q4 adjusted EBITDA of $563M, down 5% Y/Y, while FY 2015 adjusted EBITDA was $2.17B; in November, the company had forecast a range with a midpoint of $595M in Q4 EBITDA and $2.2B in full-year EBITDA.
- PAA says Q4 results were pushed $15M lower by broken commitments from producers, another $15M was shifted from Q4 2015 to Q1 2016 after unseasonably warm weather delayed inventory draws from natural gas liquids storage, and severe weather in west Texas and the Mid-continent cut volumes and cost the company another $5M.
- Distributable cash flow fell to $383M in Q4 from $415M in the year-ago quarter.
- Plains GP Holdings (NYSE:PAGP) reports a quarterly distribution of $0.231/unit, unchanged Q/Q.
Mon, Feb. 8, 3:22 PM
- MLP sentiment is deteriorating, driven most recently by the unexpected and unexplained departure of Energy Transfer Equity's (ETE -39.1%) CFO, and the situation will remain bearish for the group until crude oil and high yield bottom, says Baird analyst Ethan Bellamy.
- In addition to ETE and Energy Transfer Partners (ETP -22.3%), Baird downgrades EnLink Midstream (ENLC -21.9%), ONEOK Partners (OKS -6%), Plains All American (PAA -11%) and Plains GP Holdings (PAGP -14%) to Underperform, and cuts Antero Midstream (AM +1.3%), ONEOK (OKE -9.4%) and Tallgrass Energy GP (TEGP -13.1%) to Neutral from Outperform.
- ETFs: AMLP, AMJ, KYN, MLPL, YMLP, TYG, SRV, KYE, CEM, MLPI, NML, FEN, NTG, MLPA, KMF, EMLP, FMO, FEI, JMF, MLPN, SRF, CBA, MLPG, MLPX, GMZ, EMO, MLPS, MLPY, TTP, CTR, AMZA, GER, ZMLP, CEN, YMLI, AMU, MLPJ, SMM, MIE, DSE, FPL, ENFR, ATMP, JMLP, MLPC, MLPW
Fri, Jan. 29, 5:39 PM
Wed, Jan. 13, 11:45 AM
- Plains GP Holdings (PAGP -7.5%) is downgraded to Hold from Buy at Stifel after Plains All American Pipeline (PAA -6.5%) announced a private placement of perpetual convertible preferred units expected to generate proceeds of ~$1.5B.
- Stifel views the move as positive for PAA unitholders but negative for PAGP, as the firm had expected PAGP's cash flow growth to be driven by common unit issuance at PAA, so it cuts its rating given the reduced need for common equity at PAA.
- PAA and PAGP were both downgraded to Neutral from Overweight at J.P. Morgan.
Tue, Jan. 12, 10:23 AM
- Energy MLPs open mostly higher as Plains All American Pipeline (PAA +8.5%) says it is keeping its distribution stable and selling $1.5B in convertible preferred units (mostly to P-E firms) to cover its financing needs through at least this year and some of next; PAA and partner Plains GP (PAGP +2.6%) open with strong gains.
- D.A. Davidson analyst Poe Fratt thinks MLPs will begin to recover this year despite a rough start, pointing to the sector’s 9% dividend yield - well above the 20-year average - as a sign downside risk seems limited; his top two selections in the group are Enterprise Products Partners (EPD -2.6%), which raised its distribution last week, and Magellan Midstream Partners (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, ZMLP, GER, AMZA, SMM, MIE, DSE, ENFR, FPL, ATMP, JMLP, MLPC, MLPW, IMLP
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
Nov. 5, 2015, 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.
Nov. 4, 2015, 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.
Nov. 3, 2015, 4:58 PM
- Plains GP Holdings (NYSE:PAGP): Q3 EPS of $0.14 misses by $0.02.
- Revenue of $5.55B (-50.1% Y/Y) misses by $2.26B.
- Shares +2.13%.
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, 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.
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%.
Plains GP Holdings LP operates as a holding company. Its subsidiaries 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. The company was... More
Sector: Basic Materials
Industry: Oil & Gas Equipment & Services
Country: United States