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Why Teekay Offshore Partners Fell the Most among MLPs in May 2017

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Top MLP losers of May 2017

Teekay Offshore Partners (TOO), the MLP involved in the marine transportation of petroleum products, was the worst-performing MLP during May 2017. Teekay Offshore Partners fell 41.1% during the month. Its steep decline could be attributed to its weak 1Q17 earnings driven by a contract dispute with Petrobras (PBR), the Brazilian-based oil producer.

Ingvild Sæther, Teekay Offshore Partners’ president and CEO, noted, “Our results for the quarter continued to be impacted by the non-payment of charter hire on the Arendal Spirit UMS. We were recently notified by the charterer, Petrobras, of its termination of the charter contract on this unit. We are disputing the termination and are reviewing our legal options, while at the same time actively marketing the unit for alternative employment.”

Petrobras, like other oil producers, has been hit by prolonged weak energy prices. For a comparative analysis on PBR and its peers, please read TOT, SU, E, PBR: How Is the Market Treating Them in 2Q17?

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EVEP Energy Partners (EVEP), one of the few surviving upstream MLPs, was the second-worst performer in May. EVEP’s shares slid due to the current volatility in crude oil prices, resulting in the partnership’s weak earnings and the worsening of its liquidity position. EVEP announced the reduction in its borrowing base during its 1Q17 earnings release.

CSI Compressco (CCLP), CVR Partners (UAN), and Cypress Energy Partners (CELP) were among the lowest performers among the MLP stocks during May 2017. 

In the next article, we’ll analyze the performance of MLP-focused funds during the month.

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