Tue, May 26, 9:35 PM
- Plains All American Pipeline (NYSE:PAA) has revised downward the amount of oil believed spilled from the ruptured pipeline off the coast of Santa Barbara, Calif., now estimating that the maximum amount spilled is 101K gallons, or 4,200 gallons lower than previous estimates.
- PAA is still attempting to dig down to the pipe and look at the ruptured area, a crucial step toward determining the cause of the break, but it has been a slow process because workers cannot use heavy equipment on the soil above the broken pipe; PAA says it has “identified four locations on Line 901 that we plan to investigate as part of our customary procedures.”
- However, at least one analyst - Wunderlich's Jeff Birnbaum - believes the spill is not a "thesis changer" for PAA or Plains GP Holdings (NYSE:PAGP) despite the potential for one-time fines and clean-up expenses.
Fri, May 22, 3:26 PM
- Plains All American Pipeline (PAA +0.1%) is ordered by U.S. regulators to conduct a battery of tests and analyses before it can restart the pipeline that spilled thousands of gallons of oil across the California coastline near Santa Barbara.
- The order from the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration requires PAA to remove the damaged section of pipe, test it, empty the remainder of the line, and test the entire line for any conditions similar to the cause of the rupture; no fine was issued in the order.
- Bad weather reportedly has slowed cleanup efforts today at the spill site after several days of calm seas had helped crews earlier in the week.
Thu, May 21, 11:23 AM
- Cleanup teams continue to work around the clock to remove patches of crude oil that stained a beach and fouled Pacific waters near the Santa Barbara, Calif., coastline from a pipeline rupture that could become the biggest oil spill to hit the area since 1969.
- Tuesday's spill could be as large as 2,500 barrels (105K gallons), 5x more than the original estimate, in a worst-case scenario outlined by pipeline owner Plains All American Pipeline (PAA -3.2%), which also estimates 500 barrels may have reached the ocean.
- PAA says it is investigating if pump malfunctions along the line, which led to the line’s temporary shutdown, may have played a role in the spill.
- The pipe that burst was built in 1991 and had been tested a few weeks ago, but the results had not yet come in, the company says.
- California Gov. Brown has declared a state of emergency in Santa Barbara County, a move that frees up additional state funding and resources to help in the cleanup.
Wed, May 20, 3:59 PM
- Plains All American Pipeline (PAA -1.4%), owner of the pipeline that broke and spewed oil into the Pacific Ocean yesterday, says it still does not know exactly how much oil was lost, but the pipeline was operating at maximum capacity of 2K bbl/hour, or 84K gallons.
- Initial estimates put the spill at 500 barrels, or ~21K gallons, but the Coast Guard says the figure likely will change after a flyover provides a better sense of its scope.
- Cleanup efforts are said to be proceeding smoothly, aided by light winds and gentle waves; the oil slick now stretch an estimated nine miles.
- California’s attorney general's office is working with the Santa Barbara County district attorney to investigate whether any civil or criminal laws may have been violated.
Tue, May 19, 11:37 PM
- Oil from a ruptured pipeline near Santa Barbara, Calif., leaked into the Pacific Ocean earlier today, spreading into a four-mile-long slick and fouling an area beach.
- The cause and exact amount of the spill are unknown, but it could reach more than 500 barrels (~21K gallons), according to the Governor’s Office of Emergency Services.
- The pipeline, owned by Plains All American Pipeline (NYSE:PAA), has been shut off.
- The slick is said to be heading toward Refugio State Beach, a cove teeming with wildlife ~140 miles northwest of Los Angeles.
- Four oil spills of 100 barrels or more from PAA pipelines have occurred in California since 2010, not including the latest leak.
Tue, May 19, 6:44 PM
- Enterprise Products Partners (NYSE:EPD) and Plains All American Pipeline (NYSE:PAA) earn Buy ratings from Wunderlich's Jeffrey Birnbaum.
- The analyst likes EPD's almost unrivaled array of strategic assets spanning natural gas, natural gas liquids, crude oil and petrochemicals, and a long list of announced capex projects under construction, with additional projects in the works; he sees EPD as well positioned with a low cost of capital, strong balance sheet, excellent cash flow generation, and access to domestic supplies and both North American and offshore end market demand.
- Sentiment on PAA seems to have soured a bit following Q1 results, but Birnbaum thinks throughput and profit in the fee-based transportation and facilites segments could beat estimates if oil remains at ~$60, and company guidance on supply and logistics margins could prove conservative; the analyst sees PAA's inventory of fee-based assets set to come online and deliver improved coverage in 2016.
- Birnbaum adds that he thinks it's too early for PAA to merge into its general partner, Plains GP Holdings (NYSE:PAGP); since investors appear to have priced into PAGP an acquisition at PAA, he views PAGP as fairly valued and downgrades the stock to Hold from Buy with a $31 price target.
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 13, 3:49 PM
- Energy MLPs are trading with mixed results, which is not in line with an analyst's expectation that several names in the space may be outperformers today after Williams Cos. (WMB +6.2%) agreed to buy Williams Partners (WPZ +22.7%).
- In an earlier note to investors, Credit Suisse named Plains GP Holdings (PAGP +1%), Targa Resources (TRGP +1.1%), NuStar GP Holdings (NSH -0.1%) and Western Gas Equity (WGP -0.7%) as MLPs that could climb on the news.
- Meanwhile, Wells Fargo says the deal is positive, since it reduces the WMB's cost of capital, will immediately increase its profits, and enhances its dividend growth outlook.
- Among major energy MLPs: EPD -1.5%, ETP +0.9%, PAA +0.2%, EEP -0.2%, MWE +2.2%, MMP -0.3%.
Wed, May 6, 12:44 PM
- Plains All American Pipeline (PAA -2.9%) is lower after Q1 earnings beat expectations but fell 26% Y/Y on a nearly 50% drop in revenue.
- PAA said it will pay a quarterly distribution of $0.685/unit while Plains GP Holdings (NYSE:PAGP) will pay $0.222/share, representing respective 8.7% and 30.2% increases over comparative distributions paid in the year-ago quarter.
- Q1 total costs and expenses were cut in half to $5.57B from $11.19B.
- PAA said it has an optimistic intermediate- to long-term outlook for the North American crude oil industry but is cautious in the near term “as high crude oil inventory levels present a challenge for the industry."
- PAA also revised its 2015 capex guidance to $2.15B, 16% higher than the previous forecast.
- In today's earnings conference call, PAA says the energy downturn could get "worse before it gets better," citing the reduction in rig count, slowing production growth and high levels for crude oil.
Tue, Apr. 7, 2:37 PM
- Plains All American Pipeline (PAA +0.1%) says it will pay its unitholders $0.685/unit in May, an 8.7% increase from the distribution a year ago and 1.5% higher than the distribution paid this February.
- Meanwhile, PAA’s general partner, Plains GP Holdings (PAGP +0.1%), says it will boost its payout to $0.222 per Class A share, a 30.2% increase over May 2014 and a 9.4% gain vs. its February 2015 payment.
- The announcement comes even after Plains had cautioned that lower crude prices would impact the rate at which it grew payments to investors.
Mon, Mar. 23, 2:31 PM
- Plains All American Pipeline (PAA +0.9%) says it is teaming up with Delek Logistics Partners (DKL -1%) in a 50/50 joint venture to invest $100M toward building an 80-mile pipeline connecting a PAA terminal in Longview, Tex., with refineries in Shreveport, La.
- The Caddo Pipeline will move 80K bbl/day of crude oil to the Louisiana refineries and Delek’s plant in El Dorado, Ark.; PAA will build and operate the pipeline, which is expected to be completed in mid-2016.
- Delek says the pipeline, along with a just-announced second pipeline venture with Rangeland Energy, will be its first major U.S. development projects; Delek says it will have a 33% stake in the $125M 107-mile pipeline that will carry 55K bbl/day from the Texas-New Mexico border to a hub of other pipelines in Midland, Tex.
- Delek US Holdings (DK +0.1%), the general partner for DKL, will be the long-term anchor shipper for both projects.
Wed, Mar. 18, 10:12 AM
- Anadarko Petroleum (APC +0.2%) says it will exercise its option to purchase a 20% equity interest in the 550-mile Saddlehorn pipeline planned by Magellan Midstream Partners (MMP -0.8%) and Plains All-American Pipeline (PAA -0.6%).
- The pipeline is aimed to transport crude out of the DJ Basin and potentially the broader Rocky Mountain region, and into storage facilities in Cushing, Okla.; MMP and PAA will each own 40% interests in the pipeline, with MMP as the construction manager and pipeline operator.
- Saddlehorn will have a maximum capacity of 400K bbl/day, but initial capacity is targeted at ~200K bbl/day.
- The project is estimated to cost $800M-$850M and should go online in mid-2016.
Sat, Mar. 7, 8:25 AM
- With U.S. oil steadying at ~$50/bbl in recent weeks, investors are beginning to believe crude prices have found a bottom, and public money is starting to flow back to North American oil producers.
- Investors have pumped $7.75B YTD into 16 separate stock market equity fund-raises - the biggest surge in at least seven years, and more equity than oil producers issued in all of 2009.
- "There was a two to three month window when capital markets were closed because everyone was nervous," but now things are turning around, says Tudor Pickering's Michael Rowe.
- In just the past two weeks, PAA, ECA, NBL, OAS, NFX, GDP, CXO, LPI, AR and TEP have stepped up with equity fund-raises.
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, FENY, PXJ, RYE, FXN, DDG
Thu, Mar. 5, 7:23 PM
- U.S. inventories are at their highest levels in at least 80 years, and the U.S. is running out of places to store it, prompting some analysts to predict already depressed prices could spiral even lower.
- When storage is full, there is pressure on those holding oil in storage to "dump that inventory,” says the CEO of energy consulting firm Perry Management, who believes the space shortage could cause prices to drop to as low as $30/bbl.
- U.S. oil production rose for the fourth consecutive week to a rate of 9.3M bbl/day, even as drilling rigs are being idled at a rapid clip; U.S. inventories also rose, for the eighth straight week, jumping 2.4% to 444M barrels, the U.S. Energy Information Administration reports.
- Producers are pumping nearly 1.5M bbl/day more crude than the world needs, due to a combination of slowing demand and rising production in the U.S., meaning oil put in storage today could be there for years; should the glut worsen, more producers could be forced to shut their wells, effectively storing the oil in the ground.
- Storage operators at Cushing, Okla., including Plains All American (NYSE:PAA) and Phillips 66 (NYSE:PSX), said recently they expect the tanks there to hit capacity - currently they are about two-thirds full.
- ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
Mon, Mar. 2, 7:35 PM
- The crude oil aboard the train that derailed and exploded two weeks ago in West Virginia contained so much combustible gas that it would have been barred from rail transport under safety regulations set to go into effect next month, WSJ reports.
- The oil’s vapor pressure was 13.9 psi, which exceeds the limit of 13.7 psi that North Dakota is set to impose in April on oil moving by truck or rail from the Bakken Shale.
- Plains All American Pipeline (NYSE:PAA), which shipped the oil, says it follows regulations governing the shipping and testing of crude; CSX, the railroad that carried the oil, says it had stepped up its inspections of the track along the route.
- The new information about the West Virginia accident likely will increase regulators’ focus on the makeup of oil being shipped by train; oil from sahle formations is known to contain far more combustible gas than traditional crude oil, which has a vapor pressure of ~6 psi.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Fri, Feb. 27, 8:47 AM
- Magellan Midstream Partners (NYSE:MMP) and Plains All American Pipeline (NYSE:PAA) say they have formed a 50/50 company to construct, own and operate the Saddlehorn pipeline, which is estimated to cost $800M-$850M
- Saddlehorn is a ~550-mile pipeline that will transport various grades of crude oil from the DJ Basin, and potentially the broader Rocky Mountain area resource plays, to storage facilities in Cushing, Okla. owned by MMP and PAA.
- MMP will serve as construction manager and pipeline operator.
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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