Tue, Nov. 22, 5:38 PM
Mon, Nov. 21, 3:18 PM
- Both Sunoco Logistics Partners (SXL -7.8%) and Energy Transfer Partners (ETP -7.9%) trade sharply lower on news of the plan for the much smaller SXL to purchase ETP that will result in a net implicit reduction in distribution yield for ETP unitholders.
- ETP investors will receive 1.5 units of SXL for each unit of ETP they own but their payouts will be reduced since SXL has a much lower dividend yield; CreditSights says the merger amounts to a “stealth distribution cut” that reduces the ETP cash payout by 29%.
- Bernstein Research notes CEO Kelcy Warren chose a path that protects Energy Transfer Equity (ETE +2.8%), the entity in the group of companies in which he holds more than 10% of shares outstanding.
- But analysts generally are pleased that the deal - if it is approved by unitholders - will simplify ETE's complex structure, which also includes Sunoco LP (SUN -3.6%) and PennTex Midstream Partners (PTXP +0.8%); Baird analyst Ethan Bellamy calls the deal "a major step in untangling... the most complex web of publicly traded partnerships."
- Seaport Global's Sunil Sibal calculates that the deal will lead to a distribution reduction of ~$1.22 per ETP unit, or $650M, but could turn out well in the long run, lowering the cost of capital through the Energy Transfer complex and positioning it for acquisitions as the industry continues to consolidate.
Mon, Nov. 14, 1:48 PM
- Trump's victory has brightened optimism across the energy MLP space, and Credit Suisse's John Edwards updates his forecast across the Energy Transfer family to reflect Q3 results and other material events.
- The firm adds Equity Transfer Equity (ETE -0.9%) to its MLP Top Pick List and reiterates its Outperform rating and $20 price target, as it now expects project approval bottlenecks to break through and sees ETE's ~11% yield as an attractive entry point for long-term investors.
- Energy Transfer Partners (ETP +1.4%), also rated Outperform with a $50 price target, is "easily the biggest beneficiary of the election results," as construction on the final section of the Dakota Access pipeline beneath the Missouri River is finally expected to proceed.
- Sunoco Logistics Partners (SXL +0.3%), rated Neutral, has reported a quarter’s delay in the Mariner East 2 project, which is now scheduled to be placed in service in Q3 2017.
- Sunoco LP (SUN -2.5%) is reiterated Neutral, with Credit Suisse saying the margin outlook seems better than implied by guidance and management could revise its projections going ahead.
Wed, Nov. 9, 4:53 PM
Tue, Nov. 8, 5:35 PM
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Wed, Oct. 26, 5:47 PM
Thu, Oct. 13, 9:11 AM
- As the new threat of Amazon tiptoes into the $575B convenience store industry, GasBuddy puts it into perspective.
- CEO Walt Doyle tells Seeking Alpha that 80% of U.S convenience store sell gasoline. Those 124,374 stores have a clear advantage over a brick-and-mortar play by Amazon.
- "Gas station convenience stores have evolved to providing more amenities and products like groceries and food, to fit the growing needs of the consumer," he notes.
- Major c-store operators in the U.S. include Kroger (NYSE:KR), Casey's General Stores (NASDAQ:CASY), CST Brands (NYSE:CST), Alimentation Couche-Tard (OTCPK:ANCUF), Murphy USA (NYSE:MUSA), Marathon Petroleum (NYSE:MPC), 7-Eleven, Kum & Go, QuikTrip and Sunoco (NYSE:SUN).
- Previously: Amazon threat lingers over C-stores, drug stores and grocery chains (Oct. 11)
Tue, Oct. 4, 1:13 PM
- Sunoco LP (SUN -1.5%) is lower after announcing an agreement to sell common units with an aggregate offering price of up to $400M.
- SUN says it plans to use the proceeds for general partnership purposes, which may include repaying or refinancing all or part of its outstanding debt and funding capital expenditures, acquisitions or working capital.
Thu, Sep. 8, 2:33 PM
- Philadelphia Energy Solutions, operator of the largest oil refinery on the east coast, says its finances are “significantly stressed” and is looking to cut workers, reduce benefits and delay capital projects, according to a Bloomberg report.
- The company, owned by Carlyle Group (CG +0.8%) and Energy Transfer Partners' (ETP -0.1%) Sunoco (SUN +0.2%) unit, reportedly says ~$250M in costs for government-backed ethanol blending credits this year, low fuel prices and high east coast inventories are forcing it to cut spending in all areas.
- East coast refining margins have been pressured by seasonally high inventory levels of gasoline, and the front-month gasoline crack spread on the Nymex is the lowest for this time of the year since 2013.
Fri, Aug. 12, 6:48 PM
- Energy Transfer Equity (NYSE:ETE) is “gearing back up” with an M&A strategy and is fielding plenty of deal interest, while avoiding anything that has "a sense of being hostile" after walking away from the planned multibillion-dollar takeover of Williams Cos., Chairman Kelcy Warren says.
- Analysts say Warren still has work to do convincing investors that ETE and its shareholders will prosper together, after the March issue of preferred convertible shares to himself and other insiders that effectively insulated them from any future dividend cuts the company might make.
- Warren says his reputation has not been damaged, and that he is "not concerned that people will not do business with us because they think we're not going to deal with them straight up. Not concerned at all."
- Warren says the company has no plans to unwind the transaction, but will step up support for its subsidiaries: ETE has waived $720M of special payments from Energy Transfer Partners (NYSE:ETP) over the next seven quarters, and could do more, and Warren says he will look at waiving similar payments from Sunoco (NYSE:SUN) - “We’ve got more coming [to] show that we’re going to support the family and get it into 2018."
Fri, Aug. 5, 11:59 AM
- Sunoco (SUN +1.8%) is downgraded to Neutral from Outperform with a $30 price target, slashed from $43, at Baird, which says it is waiting for improvement in leverage and volumes.
- Baird says it has defended SUN on the premise that margins would improve, which was affirmed in the company's Q2 earnings report, but a 13% disconnect from its volume forecast ultimately drove a 23% miss vs. the firm's DCF/unit target, netting to uninspiring 0.95x coverage.
- The firm thinks much tighter leverage threatens meaningful distribution growth, and precipitates either equity issuance or a distribution haircut.
Wed, Aug. 3, 11:19 PM
Tue, Aug. 2, 5:35 PM
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Tue, Jul. 26, 5:17 PM
Sat, Jul. 2, 8:25 AM
- More turmoil could be ahead for Williams Cos. (NYSE:WMB) even after Energy Transfer Equity (NYSE:ETE) abandoned their merger deal, as the resignation of six board members who failed to oust CEO Alan Armstrong revealed a deep split in the company that may take months to heal.
- Two of the departing board members, Keith Meister and Eric Mandelblatt - who collectively control 8.4% of WMB - blasted Armstrong and the remaining board in their resignation letters (I, II) and indicated they would not sell their shares, which could set the stage for a proxy fight to remove the rest of the board.
- Gimme Credit's Phil Adams thinks the departures imply that WMB will pursue a “go it alone” strategy from here, possibly including a renewed effort to acquire the rest of Williams Partners (NYSE:WPZ); he thinks WMB may have a strong case if it sues ETE for damages or appeals the court’s ruling that favored ETE’s right to walk away from the merger.
- Bloomberg's Liam Denning thinks WMB should refocus on cutting costs and paying off debt, adding that a dividend cut looks likely and that Kinder Morgan's experience last December suggests it is "better to rip off the Band-Aid quickly" rather than slowly.
- Adams also has questions about ETE’s future and its business model, which includes several MLP subsidiaries including Energy Transfer Partners (NYSE:ETP), Sunoco LP (NYSE:SUN), and Sunoco Logistics Partners (NYSE:SXL).
Thu, Jun. 23, 4:51 PM
- Emerge Energy Services (NYSE:EMES) +9.9% AH after agreeing to sell its fuels distribution business to Sunoco (NYSE:SUN) for $178.5M.
- EMES says the sale will drive substantial debt reduction and simplification of its operating platform, allowing it to become a pure-play business with all of its assets and operations focused on its frac sand segment.