Wed, Feb. 25, 10:44 AM
- Several oil companies including BP are complaining to the FTC that Enterprise Products Partners (EPD +1%) is trying to dominate the exporting of U.S. oil, after it found a way around a decades-old legal ban, WSJ reports.
- EPD’s $5.9B purchase last fall of rival pipeline and logistics firm Oiltanking Partners gave it control of the single largest oil-storage operator on the Gulf coast at a time when space is at a premium, and oil companies that use the Oiltanking terminals on the Houston Ship Channel complain that EPD has started charging a per-barrel loading fee that raises the costs of their exports vs. EPD’s own shipments.
- EPD’s role as an exporter has put it in direct conflict with logistics clients, some of them say; “It prices us out of competition relative to them,” says an executive at a company that has been questioned by the FTC.
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.
Tue, Feb. 3, 2:49 PM
- Veteran energy analyst Christopher Eades recommends a half-dozen safe oil majors, oilfield services firms and transport MLPs as the best bets to ride out the current storm - Halliburton (HAL +4%), Pioneer Natural Resources (PXD +2.2%), Hess (HES +3.2%), Occidental Petroleum (OXY +2.1%), Enterprise Products Partners (EPD +1.4%) and Plains All American Pipeline (PAA +2.4%) - all companies with strong balance sheets, strong growth prospects, and healthy yield levels with no dividend cuts on the table.
- Eades says he is "more enthusiastic about MLPs than I've been in some time," as the group has essentially given up two years’ worth of gains yet cash flow fundamentals have been largely unchanged - "to me, that sounds like a good opportunity, particularly in a world still so starved for yield."
Thu, Jan. 29, 3:27 PM
- Enterprise Products Partners (EPD +3.1%) is higher after reporting higher volumes while lower energy prices weighed on Q4 results.
- Total volume for natural gas liquids, crude oil, refined products and petrochemicals in Q4 rose 3.7% Y/Y to 5.4M bbl/day.
- Q4 gross operating margin was up by ~5%; operating margin at EPD's natural gas liquids pipeline and services business slipped to $705M from $737M in the year-ago period, mostly due to lower returns on processing NGLs and lower ethane production.
- The average market price for NGLs at Mont Belvieu, Tex., was $0.74/gal in Q4 vs. $1.08/gal for Q4 2013.
- EPD says it will have ~$358M in distributable cash left over after investors are paid; it already had said it would pay distributions of $0.37/unit, up 6% Y/Y.
- In EPD's earnings conference call today, executives said they were prepared for a price downturn and already had turned to cutting costs.
Thu, Jan. 29, 6:06 AM| 3 Comments
Wed, Jan. 28, 5:30 PM
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Wed, Jan. 28, 10:35 AM
- Enterprise Products Partners (EPD -1.1%) says it is investigating the cause of an explosion that erupted from a pipeline break earlier this week in West Virginia.
- The Appalachia-to-Texas Express ethane line is new and started moving fuel only last year; it originates in Pennsylvania and brings ethane from the Marcellus and Utica shale formations to the storage site in Mont Belvieu, Tex.
- The fire occurred in a remote area and did not cause injuries or structural damage, and EPD said the affected portion of the line was quickly isolated and shut off.
Tue, Jan. 27, 11:47 AM
- U.S. exports of condensate have been given an important boost by Enterprise Products Partners (NYSE:EPD) agreements for contracts with at least two major trading companies to sell the light crude, according to a Reuters report.
- EPD has contracts with Mitsubishi's Petro-Diamond Singapore oil trading arm and independent oil trader Vitol for 1.2M bbl/month of U.S. condensate in 2015, trade sources say, which should give it a head start before other companies win approval to export condensate produced from shale operations.
- Royal Dutch Shell (RDS.A, RDS.B) also has approvals to export U.S. light crudes, while ConocoPhillips (NYSE:COP) is seeking a license and BHP Billiton (NYSE:BHP) also has sold at least two cargoes.
Fri, Jan. 16, 6:55 PM
- Miller Howard Investments veteran portfolio manager Roger Young has been buying energy stocks for 40 years, and he expects more bad news ahead for the sector but also sees certain MLPs providing long-term value to investors.
- MLPs haven’t escaped the energy wreckage due to worries that lower oil prices will lead drillers to cut back on production, but Young sees MLPs as a way to invest without having to rely on “if you build it, they will come” business models popular elsewhere throughout the energy E&P and services groups.
- With a backlog of projects just being completed or starting construction, all with contracts, “you would have growth of distributions for the next three years" even if no new projects were started, according to Young.
- Among his favorite MLP investments: EPD, ETE, MMP.
- ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY, AMU, YMLI, ZMLP, AMZA, ENFR
Thu, Jan. 15, 3:39 PM
- Eagle Ford pipeline operator EFS Midstream, owned by Pioneer Natural Resources (PXD +0.1%) and Reliance Industries, has attracted bids from Enterprise Products Partners (EPD +1.4%), Energy Transfer Equity (ETE -1.2%) and Williams Cos. (WMB +0.4%), Bloomberg reports.
- EFS has 460 miles of pipelines and 10 gathering plants, and is forecast to generate more than $100M in cash flow this year; the unit would be expected to sell for more than $3B, according to the report.
Thu, Jan. 15, 11:42 AM
- A new report from J.P. Morgan’s energy team reminds investors that despite the Q4 meltdown from declining crude oil prices, MLPs still clawed out a 5% total return in 2014, far better than the -8% total return for the overall energy sector.
- Still, the firm is sticking with top blue chip MLPs and defensive natural gas names, tabbing six Outperform-rated stocks that can stand some volatility as part of a growth and income portfolio: EPD, KMI, PAA, BWP, DM, EQM.
- Others are more pessimistic on the group: S&P Capital IQ's Stewart Glickman says there isn't a single E&P MLP that has healthy fundamentals, though some companies such as PAA and RGP are now cheap enough to be potentially good deals.
- Renaissance Capital's Nick Einhorn thinks a better alternative is to invest in funds that own groups of the MLPs.
- ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY, AMU, YMLI, ZMLP, AMZA, ENFR, ATMP, MLPC, MLPW, IMLP, OSMS, YGRO, MLPO
Dec. 31, 2014, 2:48 AM
- The U.S. Bureau of Industry and Security said it will allow companies to sell oil condensate that has been processed through a basic distillation tower, giving them a green light for export without violating a four decade old ban.
- The agency also published a list of answers to common questions about crude exports, providing guidelines for the first time on an area that has been blanketed in confusion, although many are saying there is still a lot of room for interpretation.
- Previously: U.S. gives silent okay to condensate exports (Dec. 30 2014)
- Related tickers: PXD, EPD, BHP, PSX, KMI, ETP, RGP, CVX
Dec. 30, 2014, 8:13 AM
- The U.S. Commerce Department is telling some oil companies that they should consider exporting condensate without formal permission, Reuters reports.
- Officials familiar with the law said the agency's discussions did not represent a change in policy since self-classification is allowed under U.S. export controls.
- Despite the policy, Pioneer Natural Resources (NYSE:PXD) and Enterprise Products Partners (NYSE:EPD) obtained explicit permission from the agency to export in June, while last month BHP Billiton (NYSE:BHP) became the first company to announce that it would export condensate without authorization from the government.
- Related tickers: PSX, KMI, ETP, RGP, CVX
Dec. 17, 2014, 11:55 AM
- The fundamentals underlying oil and gas pipeline MLPs have fallen much less than energy stocks in recent days, acording to Forbes' John Dobosz, who suggests seeking out MLPs with a long history of rising distributions, payouts well covered by cash flow, a strong balance sheet and an investment-grade credit rating.
- Two MLPs that fit these criteria, Dobosz writes, are Enterprise Products Partners (EPD +3.2%) and Magellan Midstream Partners (MMP +3.9%); he also likes Sunoco Logistics Partners (SXL +5.2%), which is expected to increase revenue 15% to $22B in 2015, with EBITDA rising 20% and distributions growing 18% this year.
- Spectra Energy Partners (SEP +2.3%), Western Gas Partners (WES +2.7%) and Energy Transfer Partners (ETP +2.4%) are appealing because of consistently rising distributions and revenues, Dobosz adds.
Dec. 12, 2014, 5:21 PM
- Enterprise Products Partners (NYSE:EPD) says it will not move forward with development of its crude oil pipeline from North Dakota to the Cushing, Okla., storage hub, apparently hindered by competition from other shippers and lower crude oil prices.
- EPD does not say whether the price decline from $100/bbl in June, when the project was announced, to below $60 this week prompted it to scrap the project, but COO Jim Teague had told analysts in October, when prices had slipped to $80, that such prices "aren't going to help that project."
- EPD also had competition from other Bakken pipeline projects; crude traders say fewer tariffs, better destinations and more options from other projects could be more of a factor in EPD's decision than lower oil prices.
Dec. 2, 2014, 7:21 PM
- A fresh report this week from BofA Merrill Lynch’s MLP team highlights which MLPs may be mostly insulated from the carnage in oil prices, as long as the situation does not deteriorate further: Enterprise Products (NYSE:EPD), Magellan Midstream (NYSE:MMP), Buckeye Pipeline ([BPL), Energy Transfer (NYSE:ETP), Plains All American (NYSE:PAA), and - even though it is now a corporation rather than a parent of three MLP entities - Kinder Morgan (NYSE:KMI).
- The firm considers these MLPs as relatively lower-risk because of their diverse asset bases, investment grade balance sheets, low direct commodity sensitivity, seasoned management teams and solid organic growth outlook.
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