Why these MLPs Fell More than 5% Last Week
CVR Refining (CVRR), the MLP involved mainly in crude oil refining, was the worst performer last week. It fell 16.9%. The plunge in CVRR’s stock price was mainly due to its weak 2Q17 earnings. For more details, read CVR Refining Fell 15% after 2Q17 Results, Refining Margin Hit.
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Seadrill Partners (SDLP) was the second-biggest loser with a WoW (week-over-week) decline of 12.4%. SDLP, which was formed by Seadrill Limited (SDRL) to own, acquire, and operate offshore drilling rigs, has lost 27.6% since the beginning of this year.
Hi-Crush Partners (HCLP), Fairmount Santrol Holdings (FMSA), and U.S. Silica Holdings (SLCA) have been weak in recent trading session due to ratings downgrades and fear of sand overcapacity in the Permian Basin due to incumbents’ massive expansion opportunities. Last week, FMSA announced its expansion plans to construct a new frac-sand mine in the Permian Basin, which would add 3 million tons of capacity following its completion in 2Q18. Hi-Crush Partners (HCLP), which is structured as an MLP, plunged 10.2% last. It has lost a massive 57.8% since the beginning of this year. For an in-depth analysis on Frac Sand Producers, read Frac Sand Producers: What Investors Can Expect.
Summit Midstream Partners
Summit Midstream Partners (SMLP), which mainly provides natural gas, crude oil, and water gathering services, fell 6.7% last week after it announced a reduction in 2017 guidance due to weak drilling activity in some of the regions where the partnership operates. SMLP lowered its 2017 EBITDA guidance to $295.0 million to $315.0 million, which at the midpoint represents a 4.1% decline compared to the previous guidance. SMLP has lost 11.5% since the beginning of this year.
NuStar Energy (NS), the MLP involved mainly in crude oil, refined products, and NGLs (natural gas liquids) transportation and terminalling, fell 6.1% last week. NS’s decline last week could be due to its weak 2Q17 earnings. We’ll look more into this topic in the next part of this series.