Mont Belvieu ethane prices fell 3% to $0.15 per gallon in the week ending February 5, 2016. Ethane prices had risen 5% to $0.16 per gallon in the previous week.
In the long term, if Treasury yields fall and the spread doesn’t change, energy MLP yields should also fall. This could mean a rise in MLP unit prices.
The Henry Hub–Mont Belvieu fractionation spread fell to $8.10 per barrel in the week ended January 1, 2016. The spread was $10.60 per barrel in the previous week.
Low ethane prices, combined with higher costs for storing and transporting ethane, resulted in ethane rejection. Producers leave ethane in the natural gas stream.
Of the analysts surveyed by Bloomberg, 47% rate Targa Resources Partners (NGLS) a “buy,” and 53% rate it a “hold.” None of the analysts rate it a “sell.” The consensus target price for NGLS is $37.54.
The merger deal between Targa Resources Partners (NGLS) and Targa Resources (TRGP) will greatly simplify the current complex structure. The merger will create one simplified public C corporation.
On November 3, 2015, Targa Resources (TRGP) and Targa Resources Partners (NGLS) announced that Targa Resources plans to acquire Targa Resources Partners in an all-stock deal.
Enbridge Energy Partners’ (EEP) 3Q15 adjusted EBITDA was $392 million, which is 8.2% lower than consensus estimates. EEP missed its consensus EBITDA estimates in eight out of the last ten quarters.
Enbridge Energy Partners’ (EEP) revenues of $1.3 billion in 3Q15 were 0.9% lower than analysts’ consensus estimates. EEP has missed consensus revenue estimates in four out of the last ten quarters.
The Henry Hub-Mont Belvieu fractionation spread rose to $11.5 per barrel for the week ending October 30, 2015. The spread was $10.5 per barrel in the previous week.
ONEOK Partners’ (OKS) forward distribution yield of 9.6% is 125 basis points higher than its peer average. It’s calculated as estimated distribution per share divided by market price per share.
On October 21, 2015, ONEOK Partners (OKS) declared a quarterly cash distribution of $0.79 per unit. OKS’s distributions remained flat for the third consecutive quarter.
The acquired West Texas LPG (liquid petroleum gas) pipeline system in the Permian Basin should continue to contribute to OKS’s Natural Gas Liquids segment’s transportation volumes in 3Q15.
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%.
The consensus revenue estimate for ONEOK Partners (OKS) for the third quarter of 2015 is $2.6 billion. OKS missed revenue estimates by 23% in the second quarter of 2015.
In this series, we’ll take a look at ONEOK Partners’ revenue and EBITDA estimates for 3Q15 before its anticipated earnings release on November 3, 2015.
Kinder Morgan is expected to meet its 2015 dividend guidance of $2 per share. This would represent a 15% year-over-year growth over 2014 by the end of 2015.
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.
The Henry Hub–Mont Belvieu fractionation spread rose to $9.12 per barrel for the week ended September 18, 2015. The spread was $8.86 per barrel in the previous week.
Of the analysts surveyed by Bloomberg, 22% rate Midcoast Energy Partners (MEP) a “buy,” and 56% rate it a “hold.” About 22% rate it a “sell.” Its consensus target price is $13.40.
The Alerian MLP ETF (AMLP) traded at a yield of 8.3% at the end of the week ending August 21. The yield rose during the week from 8.00% at the end of the previous week.
For the next two years, ONEOK Partners expects distribution growth to be 3%. The firm’s higher yield seems to be justified by its lower-than-average forward distribution growth.
ONEOK Partners’ long-term leverage ratio target is below 4x, which is what MLP companies generally target. So its current ratio is higher than its target.
Targa Resources Partners is a midstream energy MLP formed in 2006. The company is expanding its operations into gathering crude oil and transporting petroleum products.
After Targa Resources Partners (NGLS) announced its 1Q15 earnings on May 5, its stock performance increased marginally, from $45.09 on previous close to $45.32.
Targa Resources Partners’ revenues for 1Q15 declined by 27% to $1.67 billion compared to $2.29 billion for the same quarter of 2014. Targa says it’s a result of lower commodity prices.
MLPs normally pay out all the available cash to the unit holders in the form of quarterly cash distribution. They hold only the maintenance capital expenditure.
Since significant pipeline capacity will be added in the coming years, it will directly affect midstream MLPs with a good cash position, strong parent companies, and a clear growth outlook.
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.
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.
MLPs’ tax structure is the major difference that separates them from C Corps. MLPs’ earnings aren’t taxed at the partnership level. The taxes are passed to the unitholders.
Distribution growth In the previous part of this series, we learned that Enbridge Energy Partners (EEP) returns were above those of many of its industry peers last year. Did its unitholders benefit from distributions? In this part, we’ll look more closely at EEP’s distribution and coverage. In the past ten quarters since 4Q12, Enbridge Energy Partners’ […]
In the past 12 quarters, since 1Q12, DCP Midstream’s distribution per unit increased 18% to $0.78 per unit in 4Q14. Since 4Q13, distribution increased 6%.
There’s a variety of issues that have affected DCP Midstream’s operations and performance. How much have they affected DCP Midstream’s market performance?
The Wholesale Propane Logistics segment serves propane and other liquefied petroleum gas markets through its pipelines and terminal assets in seven states.
The crude oil acquisition and marketing business is important for Sunoco Logistics. The company’s assets in the business include 335 transport trucks and 135 truck unloading facilities.
As expected, the midstream MLP sector presents our first positive showing in our analysis of the energy industry. TCP increased ~43% in the five months under review.
From January 2007 to September 2014, crude oil production in the Permian more than doubled—from 0.84 million barrels per day (or bpd) to 1.72 million bpd.
The deal with Atlas Pipeline Partners (APL) strengthens Targa Resources Partners’ (NGLS) position In the Permian Basin. The move also broadens the company’s reach in the Eagle Ford and Bakken Shale formations.
After spinning off its non-midstream assets, ATLS’ assets will include its general partner and incentive distribution rights in APL, as well as 5.8 million APL units.
The combined company will create a midstream enterprise with more than 22,500 miles of crude oil and natural gas pipelines across the U.S. The $7.7 billion deal is expected to close in the first quarter of 2015.
On October 1, 2014, Enterprise Products Partners (EPD) announced its acquisition of Oiltanking Partners L.P. (OILT), a midstream energy master limited partnership
DCP Midstream (DPM) accounts for 50% of Phillips 66’s (PSX) Midstream segment. DPM’s margins depend largely on natural gas liquid (or NGL) prices. During 2013, there was an increased focus on the liquids-rich shale plays.
PSX’s transportation business manages over 18,000 miles of crude oil, natural gas, NGL, and petroleum products pipeline systems. It also owns 39 finished product terminals and 37 storage locations.
Price differentials between ethane and natural gas have resulted in ethane rejection at most of ONEOK Partners’ natural gas processing plants. Ethane rejection is also being seen in customers’ gas processing plants that are linked to OKS’ natural gas liquids assets.
U.S. crude oil export has been banned since the 1970s. However, U.S. companies can export refined fuel like gasoline and diesel. Loosening the ban will allow EPD to export its refined products more in future.
ETP’s interest in Sunoco Logistics (SXL) gives ETE acccess to SXL’s geographically diverse portfolio of complementary pipeline, terminalling, and acquisition and marketing assets.
