Yesterday, 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.
Wed, Feb. 25, 4:35 PM
- Plains All American Pipeline (NYSE:PAA) -3.4% AH after announcing a public offering of 21M common units, with an underwriters option to purchase up 3.15M additional units.
- PAA says it plans to use the proceeds to repay outstanding borrowings under its commercial paper program and for general partnership purposes, including acquisitions, joint venture investments and other expansion capital expenditures.
Thu, Feb. 5, 3:39 PM
- Plains All American (PAA +1.3%) is the latest company to obtain U.S. government approval to export oil condensate, saying it has not exported any processed condensate, but "we believe we are well positioned to export the product when market conditions warrant."
- PAA COO Harry Pefanis said during today's earnings conference call that the company received confirmation late last year from the Commerce Department that condensate processed in its 80K bbl/day stabilizer in west Texas provides sufficient processing.
- PAA is higher in today's trade despite lowering its financial forecasts for 2015 and cutting its distribution growth outlook to 7%, as analysts applaud the company's decision to preserve capital; Wells Fargo, for example, views the move as "prudent," with slower growth providing "the flexibility to maintain strong financial metrics and opportunistically capitalize on distressed M&A opportunities in the current oil price environment."
- Earlier: Plains All American cuts 2015 growth forecast
Thu, Feb. 5, 10:44 AM
- Plains All American Pipeline (PAA -0.4%) announces plans to build two new crude oil pipelines and associated gathering systems in west Texas and New Mexico, adding more reach to other expansions to move Permian Basin production to markets.
- The projects will increase infrastructure to move output from the Delaware Basin part of the Permian; one will be a batched system, meaning it will be able to transport condensate separate from other types of crude.
- The move comes even as the company said it was lowering its growth projections due to lower commodity prices.
Wed, Feb. 4, 6:58 PM
- Plains All American Pipeline (NYSE:PAA) reports a 26% increase in Q4 earnings as lower costs offset weaker revenue, and declares a distribution of $0.675/unit for the period.
- PAA says it will cut its expansion capital spending by 9% Y/Y to $1.85B from $2.03B in 2014, and lowers the midpoint of its adjusted earnings target for 2015 by 6.5% to $2.35B and cut its distribution growth target for this year.
- Says it is lowering its 2015 distribution growth target for PAA to 7%, which would equate to a distribution increase for Plains GP (NYSE:PAGP) of ~21%.
- Earnings at PAA's pipeline business rose 26% Y/Y to $267M, due to high volumes of crude, higher tariff rates and the acquisition of a 50% interest in the BridgeTex line completed in 2014.
- The facilities segment’s earnings fell 11%, mostly from the impact of re-contracting capacity originally at higher rates at its natural gas storage operations.
- Supply and logistics profit fell 17%, reflecting less favorable natural- as liquids and crude oil markets.
Wed, Feb. 4, 5:00 PM| Comment!
Tue, Feb. 3, 5:35 PM
- ACXM, ADEP, AFFX, AFOP, ALL, APU, ATML, AWH, BDN, BGC, BKD, BMR, CATM, CBG, CDNS, CEB, CINF, CLW, CMRE, CNW, DATA, ENS, EPM, ESS, EXAR, FBHS, FEIC, FMC, FORM, FOXA, G, GEOS, GIL, GLUU, GMCR, GPRE, HI, HUBG, ININ, IRBT, LCI, LNC, MAA, MAC, MTGE, MTRX, MUSA, NE, NXPI, ORLY, OSUR, PAA, PAGP, PMT, PNNT, PRE, PRU, PSEC, QUIK, RE, RRTS, RXN, SPB, SU, SYA, THG, TTMI, TWO, TYL, UA, UGI, UHAL, WFT, WGL, WSTL, YUM
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."
Fri, Jan. 30, 9:44 AM
- Plains All American Pipeline's (PAA -0.2%) Canadian subsidiary says it is beginning to look for workers at its new crude-by-rail unit train terminal in Kerrobert, Saskatchewan, due to start up mid-2015.
- Initial capacity at the terminal will be one unit train, or 70K bbl/day, with capacity to expand to two trains daily.
- PAA also ships crude from other manifest terminals in Western Canada, and will have capacity to transport around 100K bbl/day once Kerrobert is operating.
Thu, Jan. 15, 6:36 PM
- Plains All American Pipeline (NYSE:PAA) subsidiary Midstream Canada is ordered by the National Energy Board to submit to an independent third-party audit of all its nationally regulated pipelines in Alberta, Saskatchewan, Manitoba and Ontario.
- The company has had two spills in Alberta in recent years: The Rainbow pipeline near Peace River leaked ~37K barrels of oil in 2011 and the Rangeland pipeline spilled ~3.8K barrels near Sundre in 2012.
- Once the audit of 5K km of Plains pipelines is complete, the NEB will review the results and levy fines or halt operations if necessary.
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
Thu, Jan. 8, 9:14 AM| 5 Comments
Dec. 10, 2014, 7:15 PM
- Some energy limited partnerships - pipeline operators or wholesale distributors, with less risky business models than oil E&P companies - have escaped much of the carnage in energy stocks and may make attractive investments, MarketWatch's Philip Van Doorn writes.
- These 12 energy LPs, most of which fell today amid the energy sector rout, actually have posted gains since Nov. 1: TCP, EEQ, EEP, DM, BPL, SHLX, SGU, BIP, SRLP, APU, SEP, SPH.
- Credit Suisse analyst John Edwards recently said many energy LPs look oversold; his top picks in the sector include EEP as well as NGLS, GEL, OKS, CNNX, PAA, BWP and AM.
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.
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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