NuStar GP Holdings
NuStar GP Holdings (NSH) and its limited partnership, NuStar Energy (NS), were the top two MLP losers in the week ending March 2, 2018. NuStar GP Holdings and NuStar Energy fell 12.4% and 11.9% last week, respectively. NuStar GP Holdings and NuStar Energy have lost 34.9% and 31.0% since the announcement of merger and simplification transactions. Overall, they have lost 29.9% and 30.5% since the beginning of this year.
Recently, NuStar GP Holdings agreed to merge with NuStar Energy in an all-stock deal. NuStar GP Holdings’ economic general partner interest and IDRs would be canceled following the merger. The limited partnership announced a cut of ~45% effective from 1Q18.
CVR Refining (CVRR), a downstream MLP mainly involved in crude oil refining, was among the top MLP losers for the second consecutive week. CVR Refining ended the week 9.4% lower despite a strong 5.5% rally on March 2. The partnership has lost 16.4% in the past two weeks. Overall, the partnership has fallen 24.5% since the beginning of the year.
CVR Refining’s recent weakness could be attributed to strong crude oil prices and weak bottom-line numbers in 4Q17. The partnership reported a net loss of $29 million during 4Q17 despite its strong operating performance—mainly due to a loss on derivatives of $65 million. The partnership’s operating performance might continue to stay strong due to improved refining margins and the strong throughput volume outlook.
Seadrill Partners (SDLP), the MLP formed by Seadrill Limited (SDRL) to own and operate offshore drilling rigs, was the fourth-highest MLP loser last week. The partnership fell 8.8% last week. The partnership has lost 12.3% YTD (year-to-date). Seadrill Partners’ recent decline could be due to its weak 4Q17 earnings. To learn more, read Seadrill Partners’ 4Q17 Results: The Details Are Important.