Introduction
I'll admit, I really wanted to write an unreservedly bullish article about this company. My pipeline article "flak-jacket" is a bit frayed, and for some strange reason, they are out of stock at Walmart (WMT). For the legions of pipeline and MLP acolytes on this platform, un-nock your arrows, put down that brick, and douse the torches...I'm saying it loud and clear, this is THE company to buy in this space! While I do have a few concerns that we will cover, I am impressed with enough with this company to declare them, the "Lannisters of the Pipe-patch." They got money, and don't mind spreading it around!
The pipeline space gets a lot of ink in these and other pages, primarily because of the relatively high, and free cash covered distributions they pay. It's not a sector I've written on extensively because, and I am a little ashamed to say this... it's boring! There, I've put it out in the universe. Running a "delivery" service, which is essentially what the downstream business that Enbridge (NYSE:ENB) dominates, is pretty dull by comparison with my upstream predilections.
I am an upstream oilfield techie geek, and just absolutely marvel at the advances in technology made in the last decade in the upstream sector. Technology that fewer and fewer companies have any use for as you chart the decline of the offshore drillers and major service providers, since the mid-teens of this century. We used to have an expression that suited a well that was successfully brought online, but would never pay out. "Technical success, commercial failure." A story too often told these days in the broader upstream industry.
By comparison, the pipeline companies are relatively unscathed. Sure, they are down, but none I know of are nearing bankruptcy by way of example. On the contrary, they keep "dully" delivering profits
