EV Energy Partners
Upstream MLPs (master limited partnerships) EV Energy Partners (EVEP) and Legacy Reserves were among the top MLP gainers last week. EVEP was the top gainer, rising 27.8% during the week, while LGCY ended the week 8.3% higher.
EVEP’s and LGCY’s strong gains last week can be mostly attributed to the strong gain in natural gas prices. Natural gas production made up 66.7% and 66.2% of EVEP’s and LGCY’s total production, respectively, in 3Q17.
Despite their recent gains, EVEP and LGCY are still trading 58.7% and 42.0% below the levels at the beginning of this year, respectively. This can be attributed to their weak earnings, low liquidity position, and high leverage.
Enbridge Energy Partners
Enbridge Energy Partners (EEP), the MLP subsidiary of Canadia-based Enbridge (ENB), was the second-highest MLP gainer last week. EEP, which is involved mainly in liquids transportation and terminaling, ended the week 12.4% higher.
EEP’s shares rallied after it announced its 2018 guidance and long-term outlook last week. The partnership is targeting a distributable cash flow of $775 million–$825 million for 2018 while maintaining a distribution coverage of 1.2x.
At the same time, EEP expects to grow its distributable cash flow per unit by ~3% during between 2018 and 2020. This distributable cash flow growth could be transferred to its unitholders through distribution growth. However, EEP is still trading 42.0% below its levels at the beginning of this year.
Antero Midstream Partners
AM’s strong gains came after a massive correction in its stock price, despite its low commodity and volume exposure. AM’s strong last week’s gains might reflect a start of a rally considering its attractive valuation and strong fundamentals.
Other top MLP gainers
NuStar Energy (NS), Shell Midstream Partners (SHLX), Viper Energy Partners (VNOM), Black Stone Minerals (BSM), Plains All American Pipeline (PAA), and Enbridge Energy Management (EEQ) were among the top MLP gainers last week.
Last week, SHLX announced an acquisition of “100% interest in five products terminals and partial interest in two Gulf of Mexico corridor pipelines and in two strategic onshore pipelines” from subsidiaries of Royal Dutch Shell (RDS-A). The transaction is valued at $825 million.
In the next part, we’ll look into last week’s top MLP losers.