Fri, Oct. 2, 12:34 PM
- The bloom is off the rose for energy MLPs, as the Alerian MLP index hit its lowest level in more than five years this week and is down 30% YTD, far underperforming other yield-oriented indexes such as the MSCI REIT Index, which is down only 6%.
- Negative sentiment around commodities has overwhelmed the old narrative that MLPs fund generous payouts from pipelines backed by fee-based contracts, unsullied by the vagaries of energy prices; even if price risk is mitigated, revenue still takes a hit when less oil or gas flows through a pipeline whether due to increased competition or less drilling.
- Meanwhile, with debt markets increasingly difficult for energy firms, more borrowing comes at a steep price; Enbridge Energy Partners (NYSE:EEP) yesterday closed on $1.6B of new bonds at what S&P called “some of the highest absolute costs in recent years for investment-grade funds."
- MLPs have not bottomed yet, says Cumberland Advisors, noting that banks soon will take a fresh look at the value of energy assets for the purpose of renewing credit lines, which could prompt a washout in the overall energy industry.
- MKM Partners‘ chief market technician Jonathan Krinsky is starting to find some "downside extremes," and says he's buying EPD, ENB, SE, MMP and CQP, but he's selling OKS, DPM, SMLP, GMLP and GLOG.
- Earlier: MLP investors, worried over Williams deal, head for the exits (Sept. 28)
- 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, MLPW
Tue, Sep. 8, 5:41 PM
- Phillips 66 (NYSE:PSX) and Spectra Energy (NYSE:SE) announce plans to prop up their troubled DCP Midstream (NYSE:DPM) natural gas liquids joint venture with $1.5B in cash and a share of two pipelines.
- PSX says it plans to send $1.5B to go toward paying down a portion of DCP’s debt, while SE sends its share in both the Sand Hills and Southern Hills NGL pipelines into the partnership; the companies say the moves are intended to shore up DCP’s balance sheet and ease its access to credit.
- PSX and SE say they will remain 50/50 JV owners of DCP after the deals.
Wed, Aug. 5, 4:06 PM
Tue, Aug. 4, 5:35 PM
- ABX, ACAS, ACXM, AEGR, AGU, ALB, AMTG, ANDE, AREX, ARNA, ATO, ATSG, AVG, AWK, AXLL, BEE, BGC, BREW, BRKR, BWXT, CBS, CCRN, CF, CJES, CLNE, CLR, CNAT, CODI, CORT, COUP, CPE, CSII, CSLT, CTL, CUTR, CXW, DCO, DNB, DPM, DXCM, ECHO, ECOL, ENS, EQC, ETE, ETP, FANG, FLT, FMC, FNGN, FOXA, FRT, FTD, FUEL, GBDC, GDDY, GMCR, GPOR, HABT, HDP, HI, HIVE, HLF, HR, IAG, ICPT, IL, IRWD, ITRI, JACK, JAZZ, JONE, KND, KW, LGCY, LHCG, LNT, MCHX, MED, MELI, MG, MITT, MNTX, MRIN, MRO, MUSA, NHI, NKTR, NLY, NOG, NP, OME, OPK, OSUR, PACB, PDLI, PFMT, PGTI, PHH, PMT, PNNT, POWR, PRI, PRU, PRXL, PSIX, RAIL, REG, RGLD, RIG, RLD, RP, RST, RYN, SBY, SD, SGI, SGMO, SGY, SHOR, SLF, SQNM, SSNI, STR, SUN, SWM, SXL, TCAP, TLLP, TRNX, TRQ, TS, TSLA, TSO, TTEC, TTMI, TTPH, TUMI, UHAL, UIL, VVC, WGL, WPX, WSR, WTI, WTW, XNPT, XPO, ZU
Wed, Jul. 29, 7:27 PM
- Energy MLPs have been "whipsawed not just by fundamentally driven factors but also perhaps by more technically oriented trading," Wunderlich's Jeff Birnbaum writes, but despite a challenging backdrop, he still expects Q2 throughput trends generally will meet estimates and does not expect major guidance revisions for H2.
- Birnbaum's top picks are are Enterprise Products Partners (NYSE:EPD), Magellan Midstream Partners (NYSE:MMP) and Western Gas Partners (NYSE:WES); on EPD, he expects “solid” distribution coverage and says recent transactions will “create a slimmer, more integrated and growth-oriented asset base and better position the balance sheet for additional M&A.”
- He cuts price targets for American Midstream Partners (NYSE:AMID) and DCP Midstream Partners (NYSE:DPM) but keeps Buy ratings on both, and rates Targa Resource Partners (NYSE:NGLS) and Targa Resources (NYSE:TRGP) at Hold and thinks Q2 results may disappoint, but says the units are not expensive and may become an acquisition target in the future.
Tue, Jul. 28, 4:52 PM
Mon, Jul. 13, 6:57 PM
- U.S. midstream MLPs rallied today following the news that MarkWest Energy (NYSE:MWE) was acquired by MPLX (NYSE:MPLX), as the deal is seen as a validation of the long-term demand potential for U.S. natural gas liquids infrastructure despite current depressed prices.
- Among today's gainers in the group: GEL +3.7%, DPM +3.3%, OKS +2.6%, NGLS +2.5%.
- SunTrust's Tristan Richardson believes the deal is particularly bullish for Enterprise Products Partners (NYSE:EPD), since speaks to the long term potential for the NGL market and the buildout of NGL infrastructure to new sources of market demand, where EPD is a leader with significant organic growth opportunities.
- MPLX fell 14.5% today, as investors worry that adding a nat gas company to MPLX, which had been growing rapidly, could hurt growth and add more volatility to earnings; however, many analysts believe the deal is a safe bet for MPLX because the company is diversifying its sources of income to help it survive the ups and downs of the commodity cycles.
Thu, Jun. 25, 2:52 PM
- DCP Midstream Partners (DPM -2.4%) is downgraded to Sell from Neutral with a $31 price target, cut from $41, at UBS on the back of the firm's natural gas liquids pricing revision, which prompted a similar downgrade of Chesapeake Energy.
- UBS expects weakness in propane/butane to continue in the near term before staging a recovery in Q4, and thus will continue to pressure DPM's credit profile.
- The firm lowers its 2015, 2016 and 2017 EBITDA estimates to a respective $629M, $621M and $692M from $641M, $665M and $744M to reflect the impact of changes to its forecasts and acknowledge that further slowdowns in drilling activity could pressure volumes.
Mon, May 18, 7:45 PM
- Goldman Sachs had a lot to say about all corners of the energy sector today in addition to the cut in its long-term oil price forecast, its Sell recommendations for oil majors BP, Statoil (NYSE:STO) and Chevron (NYSE:CVX), and its gloomy outlook for offshore drillers Transocean (NYSE:RIG), Diamond Offshore (NYSE:DO) and Atwood Oceanics (NYSE:ATW).
- Goldman awards a Buy rating for Exxon Mobil (NYSE:XOM), "the only U.S. or European major that can generate sufficient free cash flow to cover its dividend near $60/bbl in 2016-17"; while the firm says other oil majors will be struggling to keep the dividend flat, XOM will be in a position to increase the dividend for the next several years.
- With its expectation for long-term weakness in oil and gas prices, Goldman sees risk exposure in many names that are reliant on commodity prices, suggesting selling LINE, DPM, NGLS, while predicting PAGP and NS would benefit from a removal of the U.S. crude oil export ban.
- The firm thinks many midstream MLP names now offer attractive valuations, recommending ENB, EPD, ETE, PAA, SXL, WNRL.
- Goldman sees an upturn for frac sand provider Emerge Energy (NYSE:EMES), upgrading shares to Buy from Neutral.
- Other Buys: CLR, NFX, CQP, HEP.
- Other Sells: TRP, TCP, GPOR, MUR, GTE
Wed, May 6, 4:45 PM
Tue, May 5, 5:35 PM
- ACAS, ALB, ALDW, AMTG, ANAC, AREX, ATML, ATO, ATVI, AUQ, AWK, BEAT, BGC, BNFT, BREW, BRKR, BWC, CCRN, CECO, CF, CHEF, CHGG, CJES, CKP, CLR, CLVS, CODI, CPA, CPE, CSLT, CSOD, CUZ, CXW, CZR, DMD, DPM, ECR, EFC, EGN, ENSG, EPAM, EPM, EQC, ESS, ETE, ETP, EXTR, EXXI, FLTX, FNGN, FNV, FOXA, FRSH, GBDC, GMCR, GUID, HIVE, HR, HUBS, IL, IO, IVR, JKHY, JONE, KIM, KND, KW, LCI, LGCY, LHCG, MASI, MCHX, MELI, MET, MITT, MRIN, MRO, MTDR, NEWP, NLY, NP, NSIT, NSTG, NUS, OAS, ORA, OSUR, PAYC, PDLI, PEGA, PFMT, PGTI, PHH, PMT, PNNT, PRAA, PRI, PRU, PSEC, PTLA, QLTY, QTM, REG, RIG, RIGP, RST, RYN, SBY, SD, SGM, SLH, SN, SQNM, SUN, SWM, SXL, SZYM, TCAP, THRX, TRIP, TROX, TSLA, TTPH, TUMI, TWO, VECO, VNDA, VRNS, VVC, WBMD, WFM, WGL, WTI, XNPT
Tue, Apr. 28, 8:20 AM
Tue, Feb. 24, 5:05 PM
Tue, Feb. 24, 9:15 AM
- Enterprise Products Partners (NYSE:EPD), Anadarko (NYSE:APC), DCP Midstream (NYSE:DPM) and MarkWest (NYSE:MWE) announce the formation of a joint venture under which EPD will assign 45% ownership interest in its wholly owned Panola natural gas liquids pipeline.
- EPD will retain a 55% interest and continue to serve as operator of the Panola pipeline; the remaining 45% will be split evenly among the other partners.
- The Texas-based Panola pipeline transports natural gas liquids to Mont Belvieu; following a successful open season, EPD recently announced plans to install 60 miles of new pipeline as part of an expansion project designed to increase capacity by 50K bbl/day.
Mon, Feb. 23, 5:35 PM
- ACAS, AMRS, ARC, AWAY, AWK, BBRG, BGFV, BNFT, BOOM, CBI, CENX, CLGX, CLR, CPRT, DPM, DWA, DY, DYN, EIX, EPR, EXEL, FLTX, FMI, FSLR, GB, GNMK, HEI, HEP, HLS, HPQ, HURN, HWAY, INFI, JAZZ, KONA, KRA, LC, MATX, MMSI, NDSN, NFX, NKTR, NLY, NSTG, NUVA, NYMT, ORA, PZZA, QEP, RJET, RLYP, RRC, RUBI, SAM, SGY, SLCA, SM, TNDM, TRNX, TXTR, VRSK, VVUS, WBMD, XCO, Y, ZAGG
Tue, Feb. 10, 12:39 PM
- Williams Partners (WPZ, WMB) says it has restarted its Geismar, La., chemical plant which was nearly destroyed in a deadly 2013 explosion, and is now producing ethylene for sale.
- The plant has been rebuilt and expanded, and Williams plans to ramp up production up to 1.95B lbs./year of ethylene.
- Separately, Williams and DCP Midstream Partners (NYSE:DPM) say they have begun operations from their newly extended Discovery natural gas gathering pipeline system capable of gathering more than 400M cf/day of natural gas.
DPM vs. ETF Alternatives
DCP Midstream Partners LP along with its subsidiaries is engaged gathering, compressing, treating, processing, transporting, storing and selling natural gas; NGLs and condensate; and transporting, storing and selling propane in wholesale markets.
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