Why these MLPs Rose More than 5% Last Week
Viper Energy Partners
Viper Energy Partners (VNOM), the MLP formed by Diamondback Energy (FANG) to mainly own and acquire crude oil and natural gas properties in the United States, was the top gainer last week. It rose 10.0%. The stock turned positive, driven by the recent rally with YTD (year-to-date) gains of 7.3%.
VNOM owns oil and gas properties in the prolific Permian Basin and is likely to benefit from strong drilling activity in the region. The surge in VNOM’s share price could be due to a $454,462 share purchase by CEO Travis D. Stice ahead of the 2Q17 earnings release, which might affirm the partnership’s growth prospects.
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Teekay LNG Partners
Teekay LNG Partners (TGP) was the second-best MLP gainer with WoW (week-over-week) gains of 9.2%. The partnership has risen 30.8% since the beginning of 2017. TGP, which is one of the world’s largest LNG (liquefied natural gas) carriers, has gained 34.2% from its YTD low of $14.2 last month. The partnership is currently trading slightly below its 52-week high of $19.9. Its 52-week low is $9.5. The volatility in TGP’s stock price could be due to uncertainties in the Global LNG demand.
Teekay Offshore Partners (TOO), which is also part of the Teekay franchise and involved in Marine Transportation of petroleum products, gained 7.4% last week. However, TOO has lost 48.6% in 2017, which could be due to weak recent earnings resulting from a contract dispute with Petroleo Brasileiro SA (PBR). Petrobras, the Brazilian oil producer, has been hit by prolonged weak energy prices.
American Midstream Partners
American Midstream Partners (AMID), the midstream MLP mainly involved in natural gas gathering, compression, and processing rose 7.4% last week. AMID’s shares rallied after its announced divestment of its propane business to SHV Energy for $170 million. According to the related press release, “In the second quarter of 2017, AMID began executing on a capital optimization strategy to simplify its businesses and redeploy capital from non-core assets toward complementary opportunities in the Partnership’s Gulf of Mexico, Permian Basin and East Texas assets.”
Sunoco LP (LP), the subsidiary of Energy Transfer Equity (ETE) involved mainly in wholesale marketing and distribution of refined products, gained 6.1% last week, driving its YTD returns to 20.4%. The partnership announced a flat distribution of $0.8255 last week. Based on the current distribution, it’s trading at an attractive yield of 10.2%. SUN’s ability to maintain its distribution amid uncertainties in the US downstream sector most likely drove the stock last week.