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.
Wed, Aug. 5, 2:45 PM
- Energy Transfer Equity (ETE -2.9%) has progressed to the second round of bidding for Williams Cos. (WMB -1.7%), a key milestone in its efforts to clinch a friendly takeover, Reuters reports.
- WMB decided to put itself on the auction block after it rejected an acquisition proposal from ETE in June worth ~$53B at the time including the assumption of debt, aimed at disrupting WMB's plans to acquire its pipeline subsidiary Williams Partners (WPZ -3.6%).
- WMB reportedly has attracted other bidders, although it is not yet clear which other companies made it through to the second round; Kinder Morgan (KMI -3.5%) and Spectra Energy (SE +0.4%) reportedly have expressed interest in WMB, but KMI could face significant antitrust hurdles because of its size.
Wed, Jul. 29, 6:47 PM
- Williams Cos. (NYSE:WMB) +2.6% AH despite reporting Q2 earnings that missed analyst estimates and included reduced full-year guidance, citing a decline in commodity prices.
- But WMB also affirms its 2015 dividend guidance and dividend growth estimate through 2020, forecasting $0.64/share in Q3 2015 ($2.56 annualized) and $2.85 in 2016, with 10%-15% annual dividend growth through 2020.
- WMB lowers its FY 2015 EBITDA guidance by 6% to $4.23B, citing lower commodity prices and the extended ramp-up of its Geismar plant.
- WMB also says it would not hold a shareholder vote on its proposed $13.8B consolidation with Williams Partners (NYSE:WPZ) until after the company finishes evaluating a potential sale.
- WPZ reports distributable cash flow of $701M compared with $504M in DCF attributable to partnership operations in the year-ago quarter, which leaves WPZ just short of covering the $723M in cash it paid out to investors.
Wed, Jul. 29, 4:59 PM
Wed, Jul. 22, 11:59 AM
- Cheap natural gas trapped in the northeast U.S. will be heading south by the end of the year, narrowing the premium for gas in the southeast to as little as $0.30/mmBtu from more than $1 vs. the northeast, analysts say.
- Pipeline expansions by Williams Cos. (WMB, WPZ), Kinder Morgan (NYSE:KMI) and Spectra Energy (SE, SEP) will carry shale gas from the Marcellus reservoir to southern states as early as Q4, closing the divide between the winners and losers of the U.S. shale revolution.
- Projects capable of carrying as much as 2.1B cf/day, or ~17% of southeast demand, are scheduled to begin service by the end of the year, and some of the shale gas will flow to Florida, where power plant demand for the fuel hit a record for April, up 13% Y/Y.
- ETFs: UNG, UGAZ, DGAZ, BOIL, GAZ, KOLD, UNL, DBE, DCNG, RJN, JJE, ONG, UBN
Fri, Jul. 17, 8:51 AM
- Energy Transfer Equity (ETE, ETP) discloses it has signed a confidentiality agreement to participate in an auction for Williams Cos. (WMB, WPZ), which turned down ETE's $48B takeover offer last month.
- ETE had been pushing back against a requirement that it promise not to go hostile as a condition for getting access to WMB's books, and the confidentiality agreement has no such “standstill” clause preventing it from pursuing a deal outside the auction.
Thu, Jul. 9, 11:38 AM
- The ~$130M expansion is expected to deliver an additional 115K dekatherms/day of natural gas into National Grid’s distribution system, and would include the installation of additional horsepower at three of Transco’s compressor facilities.
- WMB already has brought online two of New York’s major pipelines - the Rockaway Delivery Lateral and the Northeast Connector pipelines - earlier this year, as demand for natural gas continues to grow.
Wed, Jul. 8, 7:53 AM
- Energy Transfer Equity (ETE, ETP) says it plans to proceed with its proposal to buy Williams Cos. (WMB, WPZ) despite being rejected, indicating it may go hostile with the offer.
- In a statement issued late yesterday, ETE was critical of how Williams has responded to its proposal and reiterated its offer - an offer Williams already has deemed too low.
- ETE says it will take any steps necessary to make its proposal a reality, including trying to derail WMB's plan to streamline its own corporate structure by buying WPZ.
Thu, Jul. 2, 4:49 PM
- Kelcy Warren is said to be pushing back against the ground rules for participating in an auction for Williams Cos. (WMB, WPZ), which is asking potential buyers to promise not to go hostile as a condition for getting access to its books, according to a Bloomberg report.
- Williams reportedly wants potential suitors to sign a standstill clause in a confidentiality agreement that would block them from buying shares, nominating directors and lobbying investors, but Energy Transfer (ETE, ETP) CEO Warren wants to keep those options open as he presses ahead with his $64/share that was rejected last month.
- Lawyers for Energy Transfer and Williams have been haggling over the issue this week, and Warren is preparing to sit out the sale process if an agreement is not reached by next week, the report says.
Mon, Jun. 22, 3:30 PM
- Williams Cos. (WMB +23.8%) must either show its ability to stand on its own merit or accept a better takeout offer, analysts say after the company rejected a $48B buyout bid from Energy Transfer Equity (ETE -3.8%).
- Analysts suggest that given the limited number of potential buyers, ETE stands a good chance of eventual success, perhaps after raising its offer; Raymond James analyst Darren Horowitz, for one, expects a higher offer to come in, since pipelines remain a coveted, high-value infrastructure that is attractive to own even though oil and gas prices have plunged.
- Jefferies' Christopher Sighinolfi says disclosing the bid was a "defensive move" by WMB, and says he is waiting to learn of WMB's timetable for completing its strategic review.
- Argus says WMB management has demonstrated its ability to create shareholder value through both acquisitions and divestitures; the firm believes that the rejection of ETE's all-stock offer is prudent, and that ETE will need to raise its offer if it wishes to pursue the deal (Briefing.com).
- While WMB surges, Williams Partners (WPZ -6.9%) is sharply lower, since ETE's offer was contingent on the termination of WMB's pending absorption of WPZ.
- Analysts say other companies that run big pipelines may be merger candidates, including Oneok (OKE, OKS) and regional specialists such as Targa Resources (TRGP, NGLS).
Mon, Jun. 22, 9:18 AM
Sun, Jun. 21, 10:25 PM
- Williams Cos. (NYSE:WMB) says it rejected an unsolicited buyout offer worth $48B but has hired banks to explore alternatives, including a merger, a sale of the company or simply continuing on its current path.
- The company says the $64/share bid, a 33% premium to Friday's closing price, "significantly undervalues Williams and would not deliver value commensurate with what Williams expects to achieve on a standalone basis."
- WMB does not identify the bidder, but Bloomberg reports the approach was from Energy Transfer Equity (ETE, ETP).
- WMB says the offer it rejected was contingent on it abandoning its plan to buy up the units it does not already own in its Williams Partners (NYSE:WPZ) subsidiary.
- WMB has said the consolidation would allow it to increase dividends, lower borrowing costs and steer more cash into expansion projects.
Thu, Jun. 11, 3:24 PM
- A natural gas pipeline owned by Williams Cos. (WMB, WPZ) ruptured late yesterday in northeast Pennsylvania, forcing more than 100 area residents to evacuate their homes but causing no injuries or impact to service.
- The breach was in a section of the Transco Leidy pipeline, which moves gas from the Marceullus Shale in north central Pennsylvania to the main Transco pipeline in New Jersey.
- The incident has the potential to complicate Williams' plans to build a gas pipeline through the area as part of the Atlantic Sunrise pipeline project, which is currently being reviewed by the FERC.
Wed, May 27, 12:52 PM
- This year's recently concluded conference of the leading MLP association enjoyed higher overall attendance, but some analysts say the sentiment was not as positive as prior years.
- Deutsche Bank's Kristina Kazarian says some notable absences - including Williams (WMB, WPZ), Kinder Morgan (NYSE:KMI), Energy Transfer Partners (NYSE:ETP) and MLPX - affected the overall tone of the meeting.
- Wunderlich's Jeffrey Birnbaum says he came away from the conference with the sense that companies are broadly feeling that macro conditions are stabilizing but doubts remain on the sustainability of the recovery in crude prices.
- Deutsche Bank's favorite MLPs (and former MLPs) following the conference are KMI, Energy Transfer Equity (NYSE:ETE), MarkWest Energy (NYSE:MWE) and Phillips 66 Partners (NYSE:PSXP).
- Birnbaum’s top picks are Western Gas Partners (NYSE:WES) and EnLink Midstream (NYSE:ENLC).
Wed, May 13, 7:45 PM
- Williams Cos. (NYSE:WMB) move to acquire Williams Partners (NYSE:WPZ), the MLP that holds its natural gas infrastructure assets, echoes last year's Kinder Morgan consolidation - and could bring similar headaches for some of its investors.
- The success of the KMI deal in raising valuations likely is a major reason WMB followed suit, says a portfolio manager: "That deal validated the thesis that a larger more liquid company would trade better than the limited partners plus a general partner."
- The deal will provide powerful tax benefits for the company: By buying its partnership’s assets, WMB says it can reset the clock on depreciation of assets, translating into $2B in tax savings over 15 years.
- But for individual investors who have held the partnership units over the long term, the tax consequences and a lower yield on the resulting investment may be bitter pills to swallow, explains MarketWatch's Philip Van Doorn.
- Analysts - and most investors, based on today's respective 6.2% and 22.7% respective gains for WMB and WPZ - applaud the move: “If you need to be more competitive, you need to be focused on lowering cost of capital,” says Raymond James energy analyst Darren Horowitz.
- WMB "will be able to compete a lot better on future projects because their cost of capital will be lower. This extends their growth outlook," says portfolio manager Jay Rhame.
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%.
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