Tue, Feb. 3, 5:35 PM
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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
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.
Nov. 28, 2014, 10:20 AM| Nov. 28, 2014, 10:20 AM | 17 Comments
Nov. 24, 2014, 4:56 PM
- Plains All American Pipeline (NYSE:PAA) says it plans to provide additional pumps to increase the takeaway capacity of the Cactus Pipeline in response to higher regional production forecasts and shipper demand.
- Installation of booster stations along the Texas pipeline will result in an increase in throughput from ~250K bbl/day to ~330K bbl/day.
- The Cactus Pipeline is expected to be in service in April 2015; the expansion will be completed in Q4 2015.
Nov. 6, 2014, 7:43 AM
- Plains All American Pipeline (NYSE:PAA) agrees to acquire Occidental Petroleum's (NYSE:OXY) 50% stake in BridgeTex Pipeline for $1.075B.
- PAA says the acquisition of the new 300K bbl/day crude oil pipeline running from the Permian Basin to the Houston Gulf coast area will strengthen its access to the Gulf coast.
- Magellan Midstream Partners (NYSE:MMP), which owns the remaining 50% interest in BridgeTex, is buying the southern leg of the pipeline system running from Houston to Texas City for $75M.
- OXY says the deals are part of its attempt to streamline its business.
Nov. 5, 2014, 6:49 PM
- Plains All American Pipeline (NYSE:PAA) reported a 40% jump in Q3 earnings, as producers sent more crude through its transportation and storage facilities.
- Profit at PAA’s transportation business rose 16% Y/Y due to higher crude oil production in the areas it serves and the company’s own recently completed growth projects; supply and logistics saw a 14% gain driven by a favorable crude market and growth in crude oil lease gathering volumes.
- PAA maintains its FY 2014 EBITDA forecast of $2.175B and sets its 2015 preliminary adjusted EBITDA guidance at $2.35B-$2.5B, which it says "reflects a cautious and prudent approach that acknowledges uncertainties associated with the recent decreases in oil prices and related differentials as well as the potential drilling reductions by producers in various crude oil resource plays."
- Says it will pay a distribution of $0.66/unit for the period, up 10% Y/Y.
- PAA also announces plans to construct a new 226-mile pipeline from the Plains Basin pipeline system at Duncan, Okla., to Longview, Tex., supported by long-term commitments.
Nov. 5, 2014, 5:31 PM
Oct. 31, 2014, 6:50 PM
- The recent wild behavior in the energy MLP sector - tumbling nearly 3x more than the S&P 500 during the first 10 trading days of October before rallying this week, with an assist from Shell Midstream Partners (NYSE:SHLX), which went public in a $1.1B offering and gained 46% - should not weaken the investment case for those who are choosy and hold for the long term, analysts say.
- Investors worry that some E&P companies won’t be able to make money in a low oil price environment, and MLPs in the same business face tough times, but those upstream MLPs make up only ~5% of the total value of the sector, perhaps suggesting that the across-the-board decline was too extreme.
- MLPs may remain expensive relative to their own history, but their average distribution of 5.5% in annual income - which should grow at ~7%/year in the next few years to 12%-plus - is plenty attractive relative to everything else.
- To steer clear of the risk that lower energy prices will crimp profits, analysts advise concentrating on midstream operators; among the most stable are ETP, ETE, EQM, MMP, PAA, PAGP and SXL.
- ETFs: AMLP, AMJ, MLPL, YMLP, MLPI, MLPA, MLPN, EMLP, MLPG, MLPX, MLPS, MLPY
Oct. 30, 2014, 1:11 PM
- Marathon Petroleum (MPC +4.8%) says it is studying options for the future of the 1.2M bbl/day Capline crude pipeline, the biggest in the mainland U.S., including reversing the pipeline.
- Shipping volumes on the pipeline, which runs south to north from the Gulf coast to Illinois, have fallen sharply in recent years as midwestern refiners tap into the growing supply of Canadian and North Dakota crude to replace costly imports via Capline.
- The 632-mile 40-inch pipeline includes more than 10M barrels of storage capacity and 16 mainline pumping stations; MPC operates the line; Plains All American Pipeline (PAA +1.1%) and BP (BP +0.1%) are co-owners.
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
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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