Mon, Mar. 23, 3:58 PM
- Enterprise Products Partners (EPD +2.8%) is upgraded to Buy from Hold with a $36 price target at Jefferies, which notes that EPD units are down 13.5% YTD and now carry a yield about one standard deviation above their three-year average.
- The firm believes that, although commodity price declines and interest rate expectations have created headwinds and analyst EBITDA estimates still need to come down, current levels present an attractive entry point for EPD given the company's experienced management team, diverse asset base and OILT-related optionality, a BBB+ rated balance sheet, and distributable cash flow coverage vs. peers.
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.
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.
Nov. 12, 2014, 8:54 AM
- Oiltanking Partners (NYSE:OILT) +6.1% premarket on news of a merger agreement with Enterprise Products Partners (NYSE:EPD).
- OILT unitholders would receive 1.3 EPD common units for each OILT common unit, representing a 5.6% premium based on closing prices from Sept. 30, the day before the merger was originally proposed.
- If the merger is completed, consideration paid by EPD, including the Oct. 1 acquisition of general partner and limited partner interests in OILT, would total ~$6B.
- EPD says the combination of its system of midstream assets and OILT's access to waterborne markets and crude oil and petroleum products storage assets would extend and broaden its midstream energy services business.
Oct. 15, 2014, 3:18 PM
- MLPs have been crushed this week, and today Citi warns that the rapid drop in oil prices has created a "negative feedback loop on spending” and that a 15% drop in oil-directed drilling activity would result in a 50% drop in oil production growth.
- It Brent oil prices stabilize at $85-$90, Citi thinks the MLPs exposed mostly to oil and natural gas liquids would rebound modestly as a new equilibrium is developed between producers and midstream companies on spending; if crude continues to slide, Citi says MLPs exposed to natural gas would outperform.
- Miller Howard, a money manager specializing in income-producing stocks, is blaming newbie investors who don't fully understand MLPs and are "in it for the yield."
- Most MLP contracts are very long term, meaning that a temporary change in the oil price has no effect on those sources of revenue, Howard says, adding that "there is far from enough infrastructure to serve the domestic energy industry, even if it slows a bit."
- Some big MLPs have turned higher even as most stocks plunge: KMI +1.8%, KMP +1.5%, EPD +4.8%, PAA +3.7%, ETP +4%, ETE +8.6%, RGP +7.2%, CQP +6.6%, TEP +5.2%, PSXP +4.1%, MMP +7.1%, PAGP +4.9%, EEP +2.1%.
- ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPX, MLPS, AMU, ENFR, ATMP, MLPW, AMZA, IMLP, OSMS
Oct. 14, 2014, 12:33 PM
- MLPs have been brutalized lately, with the benchmark Alerian MLP Index (AMJ +0.5%) plunging 13% in the past week and down another 3% earlier today, but at least some in the group have been trying to bounce back in the past hour or so.
- J.P. Morgan strategists are sticking with their bullish central thesis on MLPs, saying prolific production from unconventional energy plays will keep demand high for new energy infrastructure; the firm believes most core acreage in leading shale plays continues to be economic at current commodity prices, which should drive strong long-term growth prospects for MLPs.
- JPM favors MLPs owning high-quality, diversified assets with strong management teams and proven track records, naming Kinder Morgan (KMI -1.5%), Enterprise Products Partners (EPD +2.5%) and Plains All American Pipeline (PAA -1%).
- ETP +3.7% and OKS +2.5%, LINE +1.4%, but EROC -5.3%, CQP -4.5%, BBEP -2.5%, MMP -2.5%, TEP -2.1%, PSXP -2%, WPZ -1.1%, ACMP -0.5%.
- ETFs: AMLP, AMJ, MLPL, MLPI, MLPA, MLPN, EMLP, MLPX, MLPS, AMU, ENFR, ATMP, MLPW, IMLP, AMZA, OSMS
Oct. 9, 2014, 3:25 PM
- Crushed by relentless anxiety about oversupply and weakening global demand, Nymex crude oil futures closed down $1.54 at $85.76/bbl, their lowest close since Dec. 2012, while Brent crude fell below $90/bbl for the first time in more than two years.
- Including today's losses, WTI crude is down 6.2% since the start of the month and Brent has surrendered ~5%.
- In the face of surging output, a move in WTI below its 10-year average at $82 is not out of the realm of possibility, Brown Brothers Harriman says, adding that "a break of $73/barrel could send WTI toward $64, which corresponds with the 2010 low."
- Among big oil names so far today: APC -6.3%, LINE -4.6%, EPD -3.8%, DVN -3.8%, MRO -3.6%, HES -3.8%, KMI -3.7%, TOT -3.5%, STO -3.3%, RDS.A -3.1%, OXY -3%, KMP -3%, XOM -2.6%, COP -2.6%, MUR -2.6%, CVX -2.5%, BP -2.4%.
- ETFs: USO, XLE, OIL, UCO, ERX, VDE, OIH, SCO, ERY, XOP, DIG, BNO, DTO, DBO, DUG, IYE, XES, IEO, CRUD, IEZ, PXE, USL, UWTI, PXJ, FENY, DNO, DWTI, RYE, FXN, SZO, OLO, DDG, OLEM, TWTI
Oct. 1, 2014, 9:19 AM
- Enterprise Products Partners (NYSE:EPD) agrees to acquire general partner and limited partner interests in Oiltanking Partners (NYSE:OILT) for $2.21B in cash and ~54.8M EPD common units for total consideration of ~$4.41B; EPD will own ~66% of OILT common units.
- Oiltanking Holding Americas is selling its 64.7% limited partner interest in OILT, represented by ~15.9M common units and ~38.9M subordinated units in the partnership, as well as its 2% general partner interest and related incentive distribution rights, to EPD.
- In a second step, EPD makes a takeover proposal for OILT through a unit exchange totaling another ~$1.4B.
- OILT owns marine terminals on the Houston Ship Channel and the Port of Beaumont with a total of 12 ship and barge docks and ~24M barrels of crude oil and petroleum products storage capacity on the Texas Gulf coast.
- EPD +1.5%, OILT +8.6% premarket.
Jul. 31, 2014, 3:21 PM
- Enterprise Products Partners (EPD -2.4%) CEO Mike Creel defended his company's apparent lack of a big backlog during today's earnings conference call, saying that unlike other companies - which he did not name - that “seem to add projects to their backlog as soon as they start thinking about them, we only disclose backlog numbers for projects that actually have contracts to support them."
- EPD said it is planning ~$6B in expansions through 2016 and is considering additional projects it is not ready to disclose, but the projects fall short of rivals such as Kinder Morgan (KMI, KMP), which disclosed a $17B backlog earlier this month.
- Beyond EPD’s current projects, “there is little on the horizon," Tudor Pickering analysts say, adding that "without increased long-term growth prospects, we think investors start to rotate into higher-yield names with deeper backlogs.”
- Separately, EPD says it is looking at expanding the ethane export facility it is building on the Houston Ship Channel after winning another transport contract.
- Earlier: Q2 earnings
Jun. 25, 2014, 10:18 AM
- Refiners take a beating in early trading, as a lift of the ban on U.S. oil exports is expected to narrow the WTI-Brent spread, which could cause refiners' profits drop if they are forced to pay higher prices to compete with international buyers for U.S. crude.
- “We don’t think the current system needs to be changed,” Valero Energy tells Bloomberg.
- Yesterday's rulings gave Pioneer Natural Resources (PXD +2.6%) and Enterprise Products Partners (EPD +1.4%) permission to ship ultralight oil to foreign buyers - a narrow ruling, but one that is likely to spark similar requests from other companies, and increase lobbying for a full lifting of the 40-year-old ban on exporting crude oil.
- Refining stocks are broadly lower: VLO -7.4%, PBF -5.8%, MPC -5.7%, WNR -5.5%, DK -5.4%, HFC -4.6%, ALDW -4.6%, TSO -3.8%, NTI -3.5%, PSX -2.9%, ALJ -2.7%, CVI -2.3%.
Jun. 24, 2014, 6:20 PM
- Pioneer Natural Resources (PXD) +4.2% AH and Enterprise Products Partners (EPD) +1% after WSJ reports the U.S. government has taken steps to allow the two companies to export condensate that could be turned into jet fuel or diesel.
- Under current rules, companies can export refined fuel, such as gasoline and diesel, but not oil itself; the government's new approach reportedly redefines some ultra-light oil as fuel after it has been minimally processed, making it eligible for sale abroad.
- The first shipments - which could begin as soon as August - likely will be small but ultimately could include much of the 3M bbl/day of oil energy companies are pumping from shale, industry experts say, depending on how regulators define what qualifies for export.
Mar. 18, 2014, 12:26 PM
- CB&I (CBI +4.5%) shoots higher after receiving a $6B engineering and construction contract on the planned Cameron LNG export facility in Louisiana, a $625M deal from Bechtel for work on Chevron’s (CVX) Wheatstone liquefied natural gas project in Western Australia, and a $100M pipe fabrication contract from Enterprise Products Partners (EPD) for a propane project in Texas.
- Cowen analysts view CBI as their top pick among E&C companies to benefit from the buildout in global petrochemicals and liquefied natural gas, initiating coverage on CBI with an Outperform rating and $98 price target due to its earnings growth and operating stability, exposure to diversified end markets, best in class margins and strong technical operating groups.
Nov. 4, 2013, 4:32 PM| 4 Comments
Sep. 19, 2013, 2:39 PM
- Plains All American Pipeline (PAA +3.5%) and Enterprise Products Partners (EPD +1.9%) say they will expand their Eagle Ford crude oil pipeline, increasing capacity to 470K bbl/day of light and medium grades to accommodate additional volumes expected from PAA’s Cactus pipeline under construction.
- The pipeline expansion is expected to cost ~$120M; both the joint venture pipeline and the Cactus pipeline are expected to be in service in 2015.
Sep. 18, 2013, 2:57 PM
- Enterprise Products Partners (EPD +2.5%) completes a new fractionation unit at its plant in Mont Belvieu, Tex., boosting overall capacity there to 570K bbl/day.
- The expanded capacity will allow the facility to process more of the natural gas liquids produced at shale plays in Texas, Colorado and elsewhere, EPD says.
- It is the seventh natural gas liquids fractionation unit at the site; the eighth is in development and expected to be completed before the end of the year, boosting capacity at the plant to 655K bbl/day.
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