Williams Partners L.P.NYSE
Addressing The Williams Chesapeake Exposure
Mon, Dec. 5, 12:44 PM
- Williams Cos. (WMB +2.1%) is reinstated with an Overweight rating and $35 price target, while Williams Partners (WPZ -1.4%) wins only an Equal Weight rating with a $37 target, at Barclays,
- WMB emerged from the broken merger with Energy Transfer by addressing most of the funding needs with the dividend cut at WMB and the DRIP program at WPZ, and Barclays believes these were placeholders with more announcements to come that could be catalysts for the Williams complex.
- The firm thinks management wants to eliminate the need for any external funding in 2017, which would position WMB/WPZ to simplify the structure over the next 12 months and reinvent itself as a standard C-corp that internally funds capex with debt capacity and cash flow while using the remaining cash flow to pay out a dividend and/or buy back stock.
Tue, Nov. 1, 3:55 PM
- Williams Cos. (WMB -2%) recent drop is not fundamentally driven, and shares should be bought on the current weakness, according to Evercore ISI analyst Timm Schneider.
- Expectations for Q3 results may have been elevated, as WMB “had been a bit of consensus long and heavy hedge fund holding," but turnover began after news from Williams Partners (WPZ -1.2%) of the Atlantic Sunrise delay, Schneider says.
- Also, Citi analyst Faisel Khan says he continues to rate both WMB and WPZ at Neutral as the complex’s relatively inexpensive valuation appears balanced by high leverage, significant funding needs, and weak coverage.
Mon, Oct. 31, 1:49 PM
- Williams Cos. (WMB -1.8%) and Williams Partners (WPZ -0.6%) are lower despite reporting Q3 profits (I, II), helped by higher olefin margins at the Geismar plant in Louisiana and lower costs.
- WPZ also revises its 2017 growth capital guidance, due primarily to previously disclosed timing changes for the Atlantic Sunrise pipeline, with partial service now expected to begin in H2 2017 and full service in mid-2018.
- WPZ sees total 2017 growth capex of $2.1B-$2.8B, including expected total 2017 growth capital for Transco of $1.4B-$1.9B.
- WMB says Q3 adjusted EBITDA rose 8% Y/Y to $1.19B, propelled mostly by the MLP, which reported $1.19B in adjusted EBITDA.
- WMB's Q3 dividend coverage was 2.94x, up from 0.91 in the year-ago quarter; WPZ's distribution coverage was 1.08x, up from 1.04x a year earlier.
Mon, Oct. 31, 6:55 AM
Fri, Oct. 28, 11:37 AM
- Williams Partners (WPZ +0.3%) pushes out the targeted full in-service date for its Atlantic Sunrise expansion project to mid-2018, although it expects to begin part of its service during H2 2017.
- WPZ says the revision is a result of the FERC's recently updated schedule of environmental review and anticipated relayed delays in obtaining certain permits required to begin construction.
- WPZ says the Atlantic Sunrise expansion will help alleviate infrastructure bottlenecks in Pennsylvania, connecting Marcellus gas supplies with markets in the mid-Atlantic and southeastern U.S.; WPZ says its net investment in the project is expected to reach $1.9B.
Tue, Oct. 25, 5:42 PM
Wed, Oct. 19, 4:56 PM
- Joint venture partners Williams Partners (NYSE:WPZ) and Crestwood Equity Partners (NYSE:CEQP) announce an agreement with Chesapeake Energy (NYSE:CHK) to restructure natural gas gathering and processing services in Wyoming’s Powder River Basin.
- The companies say the restructured services will replace the current cost-of-service arrangement and improve economics to support a ramp-up in near-term development and production activity and incentivize long-term development across an expanded area of dedication in the region.
- The restructured terms of service are expected to include minimum annual revenue guarantees that support the transition to a new fixed-fee structure over the next 5-7 years.
Thu, Oct. 13, 5:25 PM
- Cabot Oil & Gas (NYSE:COG), Williams Cos. (NYSE:WMB) and Williams Partners (NYSE:WPZ) tumbled into the close following a Bloomberg report that the proposed Atlantic Sunrise natural gas pipeline will be delayed after regulators requested more comments from Pennsylvania landowners over the environmental impact of the project.
- COG, WMB and WPZ closed lower by 4.6%, 2.3% and 1.9%, respectively - with nearly all losses coming in the final half-hour of trading - after a FERC filing included a letter asking landowners to submit comments about two new alternative routes by Nov. 14.
- COG CEO Dan Dinges had said last month that he expected FERC to issue final environmental approval for Atlantic Sunrise in middle or latter part of October.
Sat, Sep. 10, 8:25 AM
- Energy MLPs enjoyed a lift this week (at least until yesterday) following news of the Enbridge-Spectra merger, particularly those lacking sponsorship by producers that may be targets for consolidation.
- Credit Suisse sees logical players to be involved in combinations to secure access to opportunities and capital including ETE/ETP, EPD, MMP, PAA/PAGP, OKE/OKS, WPZ, PSX/PSXP, MPC/MPLX, TRGP, NS/NSH, GEL and TEP/TEGP.
- FBR Capital says MLP valuations have improved ~45% from lows reached early this year, and expects macro trends to lift the sector; the firm thinks CAPL could enjoy double-digit growth for nearly seven years, and says MMLP is another notable outperformer whose valuation reflects more than enough discount for a distribution cut (which the firm is forecasting) - it also likes ENLK, EEP, TLP, SRLP, USAC, WLKP and USDP,
- RBC notes favorable sentiment in the MLP realm, highlighting attractive valuations particularly at ETP, BWP and AMID, and sees dropdown stories - out of favor YTD - such as VLP and SHLX offering visible growth that can support the stocks over the next 12 months.
- ETFs: AMLP, AMJ, KYN, TYG, KYE, SRV, CEM, MLPI, NML, FEN, NTG, KMF, MLPA, EMLP, FMO, AMZA, FEI, JMF, SRF, CBA, MLPN, GMZ, MLPX, GER, EMO, TTP, CTR, MLPS, CEN, SMM, DSE, FPL, AMU, MIE, JMLP, ENFR, ATMP, IMLP
Thu, Sep. 8, 4:55 PM
- Williams Cos. (NYSE:WMB) -5.3% AH after Enterprise Products Partners (NYSE:EPD) makes its official that it is no longer interested in pursuing a merger with the company; EPD +1.6%, WPZ -2.4%.
- EPD says it had submitted non-binding proposals to WMB for a merger but withdrew its indication of interest in WMB because of "recent news leaks, movements in the price of the partnership's common units as well as questions from investors."
- Speculation about a potential EPD-WMB combination began about a month ago, after a planned merger of WMB and Energy Transfer Equity collapsed in June.
Thu, Sep. 8, 2:54 PM
- Williams Cos. (WMB +2.5%) unveils measures to simplify its structure and reduce commodity exposure by consolidating to three operating areas - Atlantic-Gulf, West and Northeast Gathering & Processing - from five.
- WMB also says it plans to reinvest ~$1.7B into Williams Partners (WPZ -0.8%) through 2017, funded by reduced quarterly cash dividends; WPZ also says it will begin a distribution reinvestment program.
- WMB expects financial reporting under the new structure to take effect in early January.
Tue, Sep. 6, 9:56 AM
- Williams Partners (WPZ +1.6%) says it is exploring a possible sale or a long-term fee-based tolling services agreement related to its Geismar, La., olefins plant and complex; WPZ operates and has an 88.5% ownership interest in the Geismar plant.
- Last year, WPZ placed in service an expansion of the facility that increased its ethylene production capacity by 600M lbs.year for a total production of 1.95B lbs/year of ethylene and 114M lbs./year of propylene.
- If the process results in a sale, WPZ says it would use part of the proceeds to reduce debt to help maintain investment-grade credit metrics with the balance used to reduce planned equity issuances.
Wed, Aug. 10, 5:28 PM
- Chesapeake Energy (NYSE:CHK) agrees to sell its interests in the Barnett shale in north Texas - the birthplace of the shale revolution - to Saddle Barnett Resources.
- CHK says leaving the gas fields will cut shipping and processing costs by $715M by the end of 2017, eliminate ~$1.9B in long-term pipeline agreements, increase operating income through 2019 by $200M-$300M annually, and increase the PV-10 of its proved reserves by ~$550M.
- As part of the deal, CHK will pay $334M to Williams Partners (NYSE:WPZ) to end their current gathering agreement, projected MVC shortfall payments and fees pertaining to the Barnett Shale assets, with Saddle Resources also expected to pay an unspecified additional sum.
- CHK also renegotiates its existing cost-of-service gas gathering agreement with WPZ covering the Mid-Continent operating area to a fixed-fee arrangement, which CHK says should reduce its Mid-Continent gas gathering costs by 36%.
- The Barnett deal includes ~215K net developed and undeveloped acres and ~2,800 operated wells.
- CHK +5.2% AH, WPZ -0.2%.
Tue, Aug. 9, 10:58 AM
- Buying Williams Cos. (WMB +0.2%), not Williams Partners (WPZ +0.1%), is the best way to play the likely eventual consolidation of the companies, according to BMO Capital analyst Danilo Juvane, who cites a clearer path to 2018 dividend growth for WMB.
- Juvane expects WPZ to issue ~$3B of equity over the next 18 months, including ~$1.7B WMB reinvestment in which the general partner will forgo cash distributions on its limited partner units in exchange for equity; with the resultant growth in GP cash flow, the analyst thinks that by 2018 WMB can rebase the dividend by 150% to $2/share annualized and subsequently support 5% long-term growth, all while sporting coverage of 1.2x-1.3x.
- Meanwhile, Juvane says the outlook for WPZ distribution growth is less visible, given the expected equity issuances, particularly as the drag from incentive distribution rights continues to exacerbate the MLP’s cost of capital.
Mon, Aug. 8, 5:14 PM
- Williams Cos. (NYSE:WMB) and Williams Partners (NYSE:WPZ) agree to sell their Canadian businesses to Inter Pipeline (OTCPK:IPPLF) for C$1.35B (US$1.03B).
- As part of the deal, WMB waives US$150M of incentive distribution rights in the quarter to facilitate WPZ's consent to the sale in recognition of the value of inter-company contracts; following the waiver, WPZ will receive US$817M net consideration and WMB will receive US$209M.
- The companies say they plan to use the proceeds to reduce borrowings on credit facilities.
Mon, Aug. 8, 12:19 PM
- Williams Partners (WPZ +1.4%) and its co-developers in the $925M Constitution natural gas pipeline are favored to prevail in at least one of two legal challenges to New York’s opposition to the project, Bloomberg reports.
- The developers argue that the project should go forward and that requiring other state permits as a condition precedent to construction is an overreach.
- The FERC last month approved the 124-mile pipeline from the Marcellus shale region in Pennsylvania to markets in New England and New York, and granted the developers a two-year extension to December 2018.
- Other partners in the Constitution pipeline include Cabot Oil & Gas (COG +3.3%), Piedmont Natural Gas (PNY +0.1%) and WGL Holdings (WGL -0.8%).