uploads///Total Returns

Western Gas and Antero Midstream Underperformed AMLP


Sep. 10 2015, Updated 3:23 p.m. ET

Series overview

In this series, we’ll conduct an analysis of four midstream MLP peers that mainly provide crude oil and natural gas gathering, transportation, and storage services. The four peers are midstream MLP subsidiaries of four US upstream c-corps. Western Gas Partners (WES), EQT Midstream Partners (EQM), Rice Midstream Partners (RMP), and Antero Midstream Partners (AM) provide midstream services to their upstream parents and other third-party customers.

Article continues below advertisement

While the upstream c-corp parents are exposed to fluctuations in energy commodity prices, their midstream subsidiaries mostly operate as toll-road or fee-based businesses with less commodity price exposure. In this series, we’ll analyze the performance value drivers for each of these four MLPs. First, we’ll analyze the performance for their total returns YTD (year-to-date).

Total return performance

Western Gas Partners and Antero Midstream Partners underperformed the Alerian MLP ETF (AMLP). It’s comprised of 23 midstream energy MLPs. They underperformed by 4.14 percentage points and 2.24 percentage points, respectively, in term of the YTD returns. Western Gas Partners and Antero Midstream have returned -16.46% and -14.57%, respectively, while AMLP has returned -12.33% YTD.

Although Antero Midstream has minimal commodity price exposure, its underperformance to AMLP may be due to market mispricing or indirect commodity price exposure. Western Gas Partners has a higher commodity price exposure through its natural gas and NGL (natural gas liquid) midstream businesses like natural gas processing.

Article continues below advertisement

At the same time, Rice Midstream Partners and EQT Midstream Partners outperformed AMLP by 14.63 percentage points and 4.66 percentage points, respectively. Rice Midstream Partners and EQT Midstream have returned 2.30% and -7.66% YTD. Together, Western Gas Partners, Antero Midstream, and EQT Midstream account for 1.43% of the Global X MLP & Energy Infrastructure ETF (MLPX).

Indirect commodity price exposure

The earnings of these four MLPs mainly depend on the volumes of gas or oil gathered, compressed, transported, or stored. As crude oil and natural gas prices fall, upstream producers might cut their production. This could result in lower throughput volumes and lower earnings for these MLPs.


More From Market Realist

  • BioNano Genomics Saphyr system
    Company & Industry Overviews
    BioNano Genomics (BNGO) Stock Looks Like a Buy, Solid Opportunity
  • Delta aircraft
    Company & Industry Overviews
    Delta Air Lines Updates Mandatory Vaccine Policy, Explained
  • AMC advertisement in walkway
    Company & Industry Overviews
    Why It's Time for Most Investors to Sell AMC Entertainment Stock
  • 100 Thieves founder Matthew Haag
    Company & Industry Overviews
    Why Growing Esports Company 100 Thieves Isn't Publicly Traded
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.