MarkWest Energy Partners LP
XLE Outperforms USO Last Week
The Energy Select Sector SPDR ETF (XLE) fell 0.66% in the week ended September 11. XLE tracks a diverse group of 45 of the largest American energy stocks in the S&P 500 Index (SPX).
Comparison of exchange-traded funds and exchange-traded notes
ETFs (exchange-traded funds) have stock-like characteristics, while ETNs (exchange-traded notes) possess bond-like traits.
MLPs: How They Operate in the Midstream Energy Industry
Most MLPs operate in the midstream energy industry. They’re mainly involved in gathering, processing, storing, and transporting energy commodities.
Why some MLPs are benefitting from increased propane exports
Significantly higher rates of propane exports have helped to boost propane prices—and the margins of some MLP names.
Why debt is now a less attractive financing source for master limited partnerships
Master limited partnerships rely highly on external capital to fund growth Master limited partnerships or MLPs are specially structured entities that must pay out most of the cash they generate to unitholders. So MLPs rely especially on external funding sources (as opposed to internally generated cash) to execute growth projects and acquisitions. Because of this […]
Part 6: Mid Cap Growth MLP, Mark West Energy Partners—overbought?
MLP’s—have retail investors gone too far? The below graph of Mark West Energy Partners, MWE, reflects exceptional growth against the S&P 400 mid cap index as well as the Morningstar mid cap growth index. This mid cap Master limited Partnership, MLP, has certainly ridden the MLP bull market. Despite the challenges faced by Chesapeake Energy, […]
Why rising frac spreads are benefitting select MLP names
Last week, frac spreads traded up slightly, and over the medium term, frac spreads are up significantly. This is a positive catalyst for natural gas processors.
Before you invest in master limited partnerships, read about this risk (Part 1)
What risk should you know about that could significantly affect MLP valuation? Read on to find out.
US Crude Oil Inventories Increased More Than Expected, WTI Down
In its Weekly Petroleum Status Report released on November 4, 2015, the EIA reported an increase of 2.8 MMbbls in crude oil inventories for the week ended October 30, 2015.
Must-know: Why is Regency’s acquisition of PVR Energy important?
Gas prices may be low now, but long-term gas drilling is here to stay in North America Currently, natural gas prices are relatively depressed, and short-term natural gas drilling activity on the whole doesn’t appear to be rising (see Why natural gas rigs aren’t likely to rise much through year-end). However, Regency’s purchase of PVR […]
Must-know: Frac spreads get boost from oil price spike
Fractionation spreads got a boost last week with rising crude oil prices.
XLE Rose Despite Weakness in Crude Oil Prices Last Week
The Energy Select Sector SPDR ETF (XLE) gained 3.45% in the week ended August 14. This ETF tracks a diverse group of ~45 of the largest American energy stocks.
Wall Street analysts’ ratings of MarkWest Energy Partners
64.7% of the analysts have rated the company as “hold”, while the remaining 35.3% have rated it as “buy”.
Why natural gas gathering and processing are important for MLPs
Natural gas gathering and processing is a significant part of the operations of many midstream master limited partnerships.
Rates inched up, but debt remains cheap for most MLP names providing cash for growth
Corporate debt rates for MLPs increased slightly over the past two weeks, but from a long-term perspective debt funding still remains extremely cheap.
Higher propane prices help frac spreads and natural gas processors
Frac spreads traded up slightly last week and have been relatively range-bound over the past several months.
Overview: An introduction to MarkWest Energy Partners
MarkWest Energy Partners L.P., (MWE) is a master limited partnership (or MLP) that provides natural gas gathering, processing, and transportation services to natural gas producers.
Introducing the UBS ETRACS Alerian MLP Infrastructure ETN AMZIX
The UBS ETRACS 1x Monthly Short Alerian MLP Infrastructure Total Return Index ETN (MLPS) tracks the Alerian MLP Infrastructure Total Return Index (AMZIX).
US Natural Gas Production Flat in July, but Up Year over Year
Based on data from Bentek Energy, the EIA reported that total US natural gas production remained flat in the seven days leading up to September 30, 2015.
Why Is Exterran Partners’ Stock Performance Improving?
After Exterran (EXLP) announced its 4Q14 earnings, its stock jumped from $22.84 to $ 23.42. Since then, its stock performance has mostly been on the rise.
Why higher natural gas liquids prices help natural gas processors
Fractionation spreads increased on the back of higher natural gas liquids prices, a positive for natural gas processor master limited partnerships.
The Marcellus is a key focus area for MarkWest’s 2014 investments
MWE is the largest processor in the prolific Marcellus Shale, with well-integrated midstream assets including processing, fractionating, and storage assets.
Regency’s PVR Midstream acquisition means Marcellus Shale exposure
Regency recently acquired a foothold in the Marcellus by buying PVR Partners LP in March this year in a deal worth $5.6 billion, specifically to boost its footprint in the Appalachian Basin.
Why the pace of natural gas production remains steady
Despite the lower natural gas prices, natural gas production growth has remained steady over the past few years. According to the EIA, in 2013, total U.S. natural gas production increased by 1%.
Cheap ethane affects profits and growth for some upstream MLPs
Ethane prices dropped because while ethane supply grew, mostly from increased natural gas drilling with a significant natural gas liquids component, demand for ethane could not keep pace.
Spread between MLP yields and corp credit widened 9 bps last week
The spread between the BofAML BBB Corporate Credit Index and the Alerian MLP Index widened by 9 bps last week.
Natural Gas Prices Rose and Impacted MLPs
NYMEX near-month Henry Hub natural gas futures contracts rose last week. Natural gas prices closed at $2.21 per MMBtu on November 27.
Falling Natural Gas Prices Continue to Impact Energy MLPs
Natural gas prices closed at $2.14 per MMBtu (British thermal units in millions) on November 20 after closing the previous week at $2.36 per MMBtu.
XOP Was a Better Bet than USO in the Week Ended November 6
The United States Oil ETF (USO) tracks prompt WTI crude oil futures. The fund fell ~4% in the week ended November 6, 2015.
US Crude Oil Production Stays Flat, Imports Fall
The EIA estimates that US crude oil production remained flat at 9.1 MMbpd in the week ended October 30, 2015, compared to the previous week. This is 2% higher than last year’s level of 8.9 MMbpd.
Natural Gas Prices Rose Last Week: Impact on Energy MLPs
Natural gas prices closed at $2.32 per MMBtu (British thermal units in millions) on October 30 after closing the previous week at $2.29 per MMBtu.
Can Enbridge Energy Partners Match Its 3Q15 Earnings Estimates?
Analysts expect that Enbridge Energy Partners’ 3Q15 EBITDA will be more than triple the 2Q15 EBITDA and 18% higher than its 3Q14 EBITDA.
Will ONEOK Partners Match Higher 3Q15 Earnings Estimates?
Analysts expect ONEOK Partners’ (OKS) 3Q15 EBITDA to be 7% lower than its 3Q14 EBITDA and 15% higher than its 2Q15 EBITDA. ONEOK Partners missed its 2Q15 EBITDA estimates by 2%.
US Natural Gas Production Was Up Slightly Last Week
Total US natural gas production rose ~0.14% in the seven days leading up to October 21, 2015, compared to the seven days that ended on October 14.
US Natural Gas Production Fell Slightly Last Week
The U.S. Energy Information Administration reported that total US natural gas production fell ~0.2% in the seven days leading up to October 14, 2015.
Why Have Analysts Increased Williams Partners’ EBITDA Estimate?
Wall Street analysts have increased WPZ’s 3Q15 EBITDA estimates despite the company’s significant misses in recent quarters.
How Will KMI’s Commodity Price Exposure Affect 3Q15 Performance?
Kinder Morgan (KMI) operates like a toll road or a fee-based business with limited commodity price exposure.
Which Segment Will Drive Kinder Morgan’s 3Q15 Performance?
Natural Gas Pipelines is Kinder Morgan’s largest business segment in terms of EBDA. In 2Q15, the segment alone accounted for 54% of the company’s total EBDA.
What Happened to US Natural Gas Production Last Week?
US natural gas production increased slightly by ~0.15% in the seven days leading up to September 23 compared to the seven days ended September 16.
US Natural Gas Production Falls 1.42% Last Week
US natural gas production Based on data from Bentek Energy, an energy market analytics company, the EIA (U.S. Energy Information Administration) reported that total US natural gas production fell ~1.42% in the week ended September 16 compared to the week ended September 9. However, supply levels remain ~3% greater than they were in the corresponding week last year. […]
US Natural Gas Prices Fall 1.52% in Week Ended September 17
US natural gas prices fell 1.52% between Friday, September 11, and Thursday, September 17. Prices closed at $2.652 per MMBtu on September 17. On September 4, prices closed at $2.693 per MMBtu.
Natural Gas Production Falls Slightly as of September 9
US natural gas production fell 0.4% in the week ended September 9 compared to the previous week. However, supply levels remain 4% greater than they were in the corresponding week last year.
EIA Report Supports Natural Gas Prices Last Week
Natural gas prices rose 1.05% from Friday, September 4, to Thursday, September 10. Prices closed at $2.683 per MMBtu on September 10, up from $2.655 per MMBtu on September 4.
USO Gained with WTI, but XOP Down in the Week Ended September 4
Tracking prompt WTI crude oil futures, USO shares trade on the New York Stock Exchange like company stock. The ETF gained 1.3% in the week ended September 4.
Key Trends: US Natural Gas Production Rose in June
The EIA reported that total US natural gas production remained flat in the week ended September 2 compared to the week ended August 26.
XLE Was Up, but USO Was the Winner in the Week Ended August 28
The United States Oil Fund (USO) was the biggest gainer in the week ended August 28. The fund rose by 12.47%.
XOP Was Up, but USO Was the Winner Last Week
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) holds many American energy companies that have exposure to oil prices due to their upstream operations.
Bearish Inventory Pulls Down Natural Gas Prices despite Weather
Natural gas prices fell by 1.42% between Friday, August 21, and Thursday, August 27. Prices closed at $2.638 per MMBtu (British thermal units in millions) on August 27.
What Are the Short-Term and Long-Term Trends for Natural Gas?
The EIA reported that total natural gas supply increased ~1.7% in the week ended August 19 compared to the week ended August 12.
Why Did the Weather Overshadow Bullish Inventories?
Cooler weather reduces power demand for cooling purposes. Natural gas is a major fuel for power generation.
Natural Gas Supply Falls, but What’s the EIA Forecasting?
Total natural gas supply decreased 2% in the week ended August 12 compared to the week ended August 5.
Weather Supported Natural Gas Prices, but Inventories Didn’t
Natural gas prices fell by ~0.4% between Friday, August 7, and Thursday, August 13. Prices closed at $2.787 per MMBtu.
Which Segments Drove Williams Partners’ 2Q15 Performance?
The Atlantic Gulf is Williams Partners’ (WPZ) largest business segment in terms of adjusted EBITDA. In 2Q15, it accounted for 39% of the company’s total EBITDA.
Week Ending August 7: UNG Gains, XLE Loses, but Less than USO
The Energy Select Sector SPDR ETF (XLE) lost 3.39% in the week ended August 7. XLE tracks a diverse group of ~45 of the largest American energy stocks that constitute the S&P 500 Index.
Natural Gas Prices Rose Last Week then Leveled off—Why?
Higher natural gas prices are positive for natural gas producers such as Chesapeake Energy (CHK), Southwestern Energy (SWN), QEP Resources (QEP), and Cabot Oil & Gas (COG).
The MarkWest-MPLX Merger: Trading at a Negative Spread
If investors set up the MarkWest-MPLX merger spread and wait for the deal to close, they’ll make a -6.1% return. This means investors expect a competing bidder or a bump in the consideration.
MarkWest-MPLX Merger: Big News for the Midstream Energy Sector
In a press release published on July 13, 2015, MarkWest Energy Partners (MWE) and MPLX LP (MPLX) announced that the two MLPs have agreed to merge.
Why the Natural Gas-NGL Price Spread Impacts Energy MLPs
Natural gas processing MLPs typically benefit when the price of NGLs is high relative to natural gas.
Natural Gas Inventories Rose Last Week in Line with Expectations
For the week ended June 26, natural gas inventories increased by 69 billion cubic feet to 2,577 bcf.
The Importance of the Distribution Coverage Ratio
The distribution coverage ratio is the most important ratio for MLPs, as it highlights the cash available to the LP unit holders divided by the cash distributed to LP unit holders.
Midstream Movers: Targa Resources and MarkWest Energy
Midstream movers last week included top gainer Targa Resources Partners (NGLS), with a ~7.4% increase, and top loser, MarkWest Energy Partners (MWE).
IDRs: How Do They Impact MLPs?
IDRs entitle the GP to receive a higher percentage of incremental cash distributions after certain target distribution levels have been achieved for the LP unitholders.
MarkWest Energy’s key 2015 forecasts
MWE is forecasting distributions of approximately $3.70 in 2015 and $3.97 for 2016. From then on it expects distribution to grow at an annual growth rate of 10% for 2017 to 2020. The company’s 2014 distribution was $3.54.
MarkWest Energy’s operating income grows in Marcellus and Utica
The Marcellus segment reported operating income of $139.9 million, which is 56.4% higher than the prior year’s operating income of $89.5 million.
MarkWest Energy’s key operational updates
MarkWest Energy Partners’ (MWE) operations are divided into four business units—Marcellus, Utica, Northeast, and Southwest.
Markwest Energy Partners increases its distributable cash flow
Distributable cash flow (or DCF) is the amount of cash left over for an MLP to distribute to its unitholders or shareholders.
Why master limited partnerships rely on external capital
Master limited partnerships are a specially structure entity, and they don’t pay corporate-level taxes. This tax benefit allows MLPs to be valued at a higher multiple.
Relative value: Spread between corporate credit and MLP yields
Through the month of July, the spread between the yield on the Alerian MLP Index and the BofAML BBB Corporate Credit Index widened. Expectations that debt yields will rise could spell an opportune moment to shift assets into yielding stocks such as MLPs and out of corporate credit.