Tue, Aug. 25, 6:45 PM
- Rose Rock Midstream (NYSE:RRMS) is downgraded to Hold from Buy with a $35 price target, cut from $57, by the MLP analyst team at U.S. Capital Advisors, which also reduces its price target for Semgroup (NYSE:SEMG) to $60 from $84.
- The firm says dropdowns are a major part of the RRMS story, as it struggles to see how SEMG can make accretive dropdowns into RRMS without taking meaningful asset writedowns; it also expects the White Cliffs pipeline to face margin and/or volume pressure once the new DJ Basin pipelines come online in 2016.
- The firm also cuts price targets on 11 other stocks: KMI, MMP, CPPL, SMLP, PAA, PAGP, SE, WPZ, NGLS, TRGP, NFG.
- Top picks include EPD, CQP, TEP and RMP.
Fri, Aug. 7, 7:15 PM
- The Obama administration is investigating Plains All American Pipeline (NYSE:PAA) in connection with the May oil spill that dumped at least 2,400 barrels of oil along the coastline near Santa Barbara, Calif.
- PAA disclosed the ongoing probes and the possibility of civil and criminal charges tied to the incident in its new 10-Q filing.
- PAA's initial spill estimate was 2,400 barrels, but this week the company said it may have to raise the earlier estimate by as much as 1,000 barrels, based on data from emptying and purging the line; any potential Clean Water Act violations carry possible penalties of $1,100-$4,300 per barrel of spilled oil.
- State probes also are underway, as the California Attorney General’s office and the district attorney’s office for the county of Santa Barbara investigate whether state or local laws were violated.
Fri, Aug. 7, 2:58 PM
- Plains All American Pipeline (PAA +1.2%) finally turns a bit higher but Plains GP Holdings (PAGP -6.6%) continues to stumble, after enduring the fallout from a disappointing earnings report and distribution warning this week that has driven PAA down 12.3% and PAGP 29.5% lower.
- Citi analyst Faisel Khan thinks U.S. oil production in the lower 48 states will continue to grow in the long-term driven by strength in the Permian Basin, and predicts PAA will be able to achieve its targeted 1.1x coverage in 2017, which will allow PAA to grow distributions at a 3% rate through 2019 and PAGP to grow dividends by 10% during 2016-19.
- Khan sees the recent plunge as a buying opportunity, and upgrades PAGP to Buy from Neutral.
Thu, Aug. 6, 3:58 PM
- Plains All American Pipeline (PAA -2.8%) suffers at least five analyst downgrades following yesterday's cut in 2015 distribution growth guidance to 6% from the 7% figure achieved in 2014, and that it is evaluating leaving the distribution flat in 2016 as a “transition year” before returning to distribution growth.
- "With PAA trading at a 7.7% yield, management may decide it is more effective to fund its substantial capex backlog with more internally generated cash vs. maintaining a below-average growth rate for PAA,” Wunderlich's Jeff Birnbaum writes in downgrading shares to Hold from Buy with a $37 price target, reduced from $56.
- With transportation and facilities projects ramping up, PAA's S&L margins could contract, the analyst adds.
- In downgrading PAA as well as Plains GP Holdings (PAGP -0.7%) to Neutral, Baird notes that much sooner than firm expected, the impact of infrastructure overbuild due to over-financed, overspending midstream players looks to reduce 2016 marketing margins as differentials collapse.
- PAA also was downgraded at Goldman, Deutsche Bank and UBS.
Wed, Aug. 5, 4:57 PM
- The recent oil spill from a ruptured Plains All American (NYSE:PAA) pipeline that fouled beaches for miles near Santa Barbara, Calif., may have been larger in volume than earlier projected.
- PAA had estimated the May 19 spill at up to 101K gallons, but today it said alternate calculations found the spill might have totaled 143K gallons; the company said it is continuing its analysis and the figures are preliminary.
- PAA also said it does not expect to see the pipeline back in service this year, and expects the spill clean-up to cost ~$257M; it booked a $65M Q2 charge related to the incident.
- Earlier: Plains All American punished after distribution warning
Wed, Aug. 5, 3:21 PM
- Plains All American Pipeline (PAA -11.1%) and Plains GP Holdings (PAGP -20.4%) are both sharply lower even as the companies met analyst expectations for Q2 earnings (I, II).
- But PAA lowered its estimate for FY 2015 adjusted EBITDA by $50M to $2.278B, not including contributions from its Line 901, which ruptured and spilled oil along the California coastline in May; PAA booked a $65M Q2 charge related to the incident.
- PAA also issued a cautious outlook, saying high crude oil and refined product inventory levels will influence oilfield activity and crude oil production levels over the next 6-12 months.
- Even worse, management hinted on this morning's earnings conference call that distribution growth could be in jeopardy in 2016 as competition increases among pipelines while oil prices fall.
- In response, PAA is downgraded to Neutral from Buy at UBS.
Tue, Aug. 4, 4:51 PM
Thu, Jul. 23, 6:20 PM
- July is shaping up to be one of the worst months for MLPs in years amid cratering energy prices, but with average yields hitting 7%, J.P. Morgan analysts say the selloff is getting overdone.
- The JPM team highlights four high-quality names as oversold: Plains All American Pipeline (NYSE:PAA), Plains GP Holdings (NYSE:PAGP), Energy Transfer Partners (NYSE:ETP) and Sunoco (NYSE:SUN).
- The analysts also like Valero Energy Partners (NYSE:VLP), Phillips 66 Partners (NYSE:PSXP), NuStar Energy (NYSE:NS) and Macquarie Infrastructure (NYSE:MIC).
Mon, Jul. 20, 11:58 AM
- A flurry of recent acquisitions in the energy MLP sector suggests it is becoming undervalued, according to a Barron's weekend report.
- Rob Thummel of Tortoise Capital Advisors still sees energy as a growing sector over the long term; some of his favorite MLPs include Spectra Energy Partners (NYSE:SEP) and Plains All American Pipeline (NYSE:PAA).
- Marcus McGregor, who runs the MLP equity strategy for Conning, suggests sticking with the largest, most liquid midstream MLP players which should be a step or two removed from the price of crude; he prefers Enterprise Products Partners (NYSE:EPD) and Magellan Midstream Partners (NYSE:MMP).
- But many analysts say only long-term investors should be buying now, since the next few years could be rocky; “Too many MLP investors are taking the ostrich route,” says one who believes the energy sector will get worse before it gets better. “They see such great yields and think they don’t have to worry.”
Tue, Jul. 14, 8:37 AM
- Phillips 66 (NYSE:PSX) says it does not anticipate any impact on operations at its 336K bbl/day Wood River, Ill., refinery following the shutdown of the Capwood pipeline.
- Plains All American Pipeline (NYSE:PAA) said on Friday it experienced a crude oil leak at its Pocahontas pumping station, which is part of the Capwood line, but did not specify if the spill had an impact on the overall flow of the line.
- The Wood River refinery sources crude from the 277K bbl/day Capwood line, which runs from Patoka, Ill., to Wood River.
Mon, Jul. 13, 9:45 AM
- A pipeline owned by Plains All American Pipeline (PAA +0.8%) spilled ~4,200 gallons of crude oil in southwest Illinois near St. Louis on Friday, with some reaching a nearby creek.
- PAA says it has initiated its emergency response plan to contain the release and work crews are on site.
- It is the second leak for PAA in less than two months, following the May 19 leak near Santa Barbara, Calif., that created a nine-mile oil slick along the coastline.
Fri, Jul. 10, 4:47 PM
- The California beach fouled by oil will reopen July 17 to swimmers and campers two months after a pipeline owned by Plains All American Pipeline (NYSE:PAA) ruptured and spewed thousands of gallons of crude along the coast.
- Crews still need to finish scraping oil off cobblestones before the public can use the beach next week, and certain areas will remain off limits as cleanup continues, but officials say the work would not affect beachgoers.
- An underground pipeline ruptured May 19, releasing up to 101K gallons of oil, ~20% of which flowed into the Pacific Ocean.
Tue, Jul. 7, 4:21 PM
Fri, Jun. 26, 9:53 AM
- Plains All American Pipeline (PAA -1.1%) is facing increased scrutiny from U.S. regulators and lawmakers over the recent oil spill off the coast near Santa Barbara, Calif., which released up to 101K gallons and washed up goo on beaches as far as 100 miles away.
- PAA is being criticized for how long it took to relay information on the break to federal authorities.
- A PAA employee at the scene initially suggested to firefighters that the spill “was too big to be from their pipeline," according to the documents obtained by Associated Press.
- A congressional committee has opened a probe into the spill, wanting to know what PAA did in the hours leading up to the break and how it reported the problem.
- Meanwhile, PAA says the cost of cleaning up the spill has climbed to $92M.
Tue, Jun. 23, 10:15 PM
- Exxon Mobil (NYSE:XOM) says it has been forced to suspend production at three offshore platforms off the Santa Barbara, Calif., coast following the shutdown of a pipeline that spilled 100K gallons of oil on the area's beaches last month.
- XOM blames the recent refusal by Santa Barbara County authorities to approve an emergency application to transport its offshore crude by truck from its Las Flores Canyon processing facility while the crippled line owned by Plains All American Pipeline (NYSE:PAA) remains shut down.
- Current output from XOM's shuttered platforms was estimated at 30K bbl/day out of California's daily crude diet of ~1.7M bbl/day.
Wed, Jun. 17, 8:47 AM
- Magellan Midstream Partners (NYSE:MMP) is considering opening an oil trading operation for the first time, CEO Michael Mears tells Reuters, a move that could help it take advantage of wide price gaps that have become a fixture of the shale oil revolution.
- Mears says that while MMP is considering trading oil, the company is first looking at supporting a service that would buy barrels at the wellhead from producers, provide logistics to get it to a long haul pipeline or to a delivery hub in Cushing, Okla., and then sell it in bulk; traders would manage the price risk.
- MMP always has declined to run its own trading operation because it would compete with its own oil drilling customers, who often also trade, but as a result, it has been handing off potential profits to traders making a large margin off market inefficiencies.
- Two of Magellan's main rivals, Enterprise Product Partners (NYSE:EPD) and Plains All American (NYSE:PAA), have been trading oil for years, adding over $1B/year to their books.
PAA vs. ETF Alternatives
Plains All American Pipeline LP is engaged in the transportation, storage, terminalling and marketing of crude oil and refined products, as well as in the processing, transportation, fractionation, storage and marketing of natural gas liquids.
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