Targa Resources Partners LP
Why Frac Spreads Affect Some MLP Stocks
Companies in the natural gas processing space—many of which are MLPS—keep an eye on the fractionation or “frac” spread. Here’s why.
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.
Ethane Prices Fall 3%: Impact on MLPs
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.
MLP Yields and 10-Year Treasuries Diverged Further
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.
Ethane Prices Rose, Benefiting MLPs
Mont Belvieu ethane prices rose 9% to $0.15 per gallon in the week ended January 1, 2016, from $0.14 per gallon in the previous week.
How a Fall in Fractionation Spread Impacted MLPs
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.
How Much Exposure Does Williams Companies Have to Commodity Prices?
The earnings of midstream companies do not have much direct commodity price exposure.
Why Continued Drop in Ethane Prices Could Benefit Some MLPs
Mont Belvieu ethane prices fell marginally to $0.17 per gallon in the week ending December 4, 2015.
How Did a Fall in Ethane Prices Impact Energy MLPs?
Low ethane prices, combined with higher costs for storing and transporting ethane, resulted in ethane rejection. Producers leave ethane in the natural gas stream.
Fractionation Spread Rose after Falling for 3 Weeks in a Row
The Henry Hub-Mont Belvieu fractionation spread rose to $11.2 per barrel in the week ending November 27. It was $10.3 per barrel in the previous week.
Broker Recommendations for Targa Resources Partners and TRGP
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.
NGLS-TRGP Deal Will Simplify the Company Structure
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.
NGLS-TRGP Deal Is Expected to Improve Dividend Growth, Coverage
The additional cash flow coverage for NGLS is expected to support Targa’s dividend growth outlook and reduce the need for external financing.
Targa Resources Partners–TRGP Deal: What’s in It for Investors?
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’ 3Q15 Earnings Grew but Missed Estimates
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 Marginally Missed 3Q15 Revenue Estimates
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.
Fractionation Spread Rose Last Week, Impacting Energy MLPs
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: Top Midstream MLP Loser on October 29
ONEOK Partners (OKS) was the top loser among midstream MLPs at the end of trading on Thursday, October 29. It fell 3%.
Will 3Q15 Results Change ONEOK Partners’ Valuation?
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.
Why Have OKS’s Distributions Been Flat for Last Three Quarters?
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.
Natural Gas Liquids Segment May Drive OKS’s 3Q15 EBITDA Growth
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.
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%.
Will ONEOK Partners Miss 3Q15 Consensus Revenue Estimates Again?
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.
ONEOK Partners: 2015 Returns Exceed MLP Average
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 Lowered Its 2016 Dividend Guidance
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.
Which Segments Drove Kinder Morgan’s 3Q15 Performance?
Kinder Morgan’s 3Q15 performance may have suffered due to poor performance from its CO2, Natural Gas Pipelines, and Kinder Morgan Canada segments.
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.
Spectra Energy Partners Rallies Due to a Rise in 3Q15 Distribution
Spectra Energy Partners declared a distribution per unit of $0.62 in a press release published on October 19. This is a 1.3% rise compared to 2Q15.
How a Fall in Fractionation Spread Affected MLPs Last Week
The Henry Hub-Mont Belvieu fractionation spread fell to $10.1 per barrel for the week ended October 16, 2015.
Genesis Energy: Top Midstream MLP Gainer on October 15
Genesis Energy (GEL) was the top gainer among midstream MLPs at the end of trading on Thursday, October 15. It rose 8% yesterday.
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.
Natural Gas Prices Dipped Last Week: Impact on MLPs
NYMEX (New York Mercantile Exchange) near-month Henry Hub natural gas futures contracts fell last week compared to the previous week.
Week Ended September 18: Rise in Fractionation Spread Affects MLPs
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.
More than Half of Analysts Surveyed Rate Midcoast Energy a ‘Hold’
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.
High Yield Bond Funds See Inflows after 2 Weeks of Outflows
Investor flows in high yield bond funds turned positive last week after two successive weeks of outflows.
Frontier Communications Was the Highest Issuer of Junk Bonds
Junk bond issuers came back to the primary market in the week ended September 11, 2015, after two weeks of no issuance.
Midcoast Energy Partners: Top Midstream MLP Gainer on September 3
Midcoast Energy Partners (MEP) was the top gainer among midstream MLPs at the end of trading on Thursday, September 3. It rose 3.18% yesterday.
AMLP Rises Last Week, but Less than OIH and XOP
AMLP holds midstream MLPs whose earnings are typically linked to their transported volumes of energy products.
The Alerian MLP ETF Outperformed the Broad Market Last Week
In the week ended August 21, the Alerian MLP ETF (AMLP) fell 3.6% compared to its close on August 14, the previous week.
ONEOK Partners in 2Q15: Volumes Benefit Operating Performance
ONEOK Partners forms 4.5% of the Global X MLP ETF (MLPA). The firm has missed EBITDA estimates for all of the last ten quarters.
10-Year Treasury and MLP Yields Diverged Last Week
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.
How Last Week’s Rise in the Fractionation Spread Affects MLPs
The Henry Hub–Mont Belvieu fractionation spread rose to $7.54 per barrel for the week ending August 21, 2015.
Niska Gas Storage: Worst Midstream MLP Performer on August 12
Niska Gas Storage Partners (NKA) was the worst performer among midstream MLPs at the end of trading on Wednesday, August 12. It fell 1.47%.
The Natural Gas–NGL Price Spread’s Impact on Energy MLPs Last Week
The Henry Hub–Mont Belvieu fractionation spread dropped to $8.40 per barrel for the week ended July 24, 2015.
Kinder Morgan’s Outlook for the Rest of 2015
According to Wall Street analysts’ consensus outlook, Kinder Morgan’s (KMI) dividend is expected to grow by ~15.3% year-over-year by the end of 2015.
Which Segments Drove Kinder Morgan’s 2Q15 Performance?
Kinder Morgan’s total EBDA decreased to $1.721 billion in 2Q15 from $1.762 billion in 2Q14—the result of poor performance in various segments.
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.
Must-Know: The 7 Regions for Oil and Gas Production in the US
The EIA (Energy Information Administration) monitors seven key tight oil and gas regions in the US.
OIH Underperforms XOP in the Week Ending June 26
The VanEck Vectors Oil Services ETF (OIH) fell 0.25% in the week ending June 26. It tracks an index of the top 25 US listed OFS companies.
ONEOK Partners Trades at a Higher Yield Compared to Industry
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’ Leverage Ratio Is Higher Than Its Target Range
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.
Crude Oil Production Up, Imports Down in June 19 Week: What Next?
The EIA estimates crude oil production increased 15,000 bpd to 9.60 MMbpd in the June 19 week. That’s 14% higher than year-ago levels of 8.45 MMbpd.
Oil Services ETF OIH Disappoints in June 19 Week
The VanEck Vectors Oil Services ETF (OIH) fell 3.6% in the week ending June 19. The ETF tracks an index of the top 25 US listed OFS companies.
June 23’s MLP Gainers: Crestwood Midstream and Targa Resources
Crestwood Midstream Partners (CMLP) was the biggest gainer among midstream MLPs at the end of trading on Tuesday, June 23.
Targa’s Leverage and Liquidity Position
Targa had ~$800 million of liquidity and a credit facility commitment of $1.6 billion at the end of 1Q15.
Targa’s Downstream Activities: Logistics and Marketing Division
Targa has ownership interests in three fractionation facilities. It has a net fractionating capacity of 448 Mbblpd (thousand barrels per day).
Targa Resources: A Midstream Energy MLP
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.
Targa Resources Closes Atlas Pipeline Acquisition in 1Q15
On February 27, Targa Resources Partners (NGLS) announced that it closed the acquisition of Atlas Pipeline Partners and Atlas Energy.
Targa Resources’ Stock Performance and 1Q Earnings
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 Announces 1Q15 Earnings
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.
How Do Master Limited Partnerships Grow?
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.
How the Changing Natural Gas Scenario Affects MLPs
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.
How Different Contracts Affect Master Limited Partnerships
There are various types of contracts in energy MLPs that each have their own advantages and disadvantages.
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.
How Master Limited Partnerships Are Structured
A MLP’s ownership structure consists of a decision-making general partner (or GP) and a limited partner (or LP).
Energy Transfer Partners’ Key Segments to Watch in 1Q15
The Liquids Transportation and Storage segment was Energy Transfer Partners’ best performing segment in the last quarter.
Energy Transfer Partners’ Fee-Based Model Drives Performance
Considering the rock solid performance of ETP during the slump in energy prices, it is clear that ETP has more fee-based contracts.
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).
Valuing MLPs: Price-to-Distributable Cash Flow Ratio
MLPs’ valuations are different from other stocks. To value MLPs, the widely used PE ratio isn’t as useful as the PDCF ratio.
Insight for Investors: Understanding MLP Contracts
MLPs involved in natural gas processing usually have a mix of contracts. Non-fee based contracts are beneficial when commodity prices move upward.
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.
Analyzing the Differences: MLPs versus C Corporations
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.
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.
Enbridge Energy Partners: 2014 Distribution and Coverage
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’ […]
How Does DCP Midstream’s Valuation Compare to Its Peers?
DCP Midstream’s valuation when compared to its peers shows DCP Midstream’s projected EV-EBITDA multiple of 10.4 is at par with its peers’ average.
DCP Midstream’s Distribution and Coverage
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%.
DCP Midstream’s Market Performance Below Par in 2014
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?
DCP Midstream’s Wholesale Propane Logistics Segment
The Wholesale Propane Logistics segment serves propane and other liquefied petroleum gas markets through its pipelines and terminal assets in seven states.
An Overview of Sunoco’s Terminals Facilities
Sunoco’s terminals facilities business operates crude oil, refined products, and natural gas liquids (or NGL) terminals.
Crude Oil Acquisition and Marketing Is SXL’s Largest Segment
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.
Omega Advisors raises position in Atlas Energy amid Targa deal
Omega Advisors further added to its position in Atlas Energy LP (ATLS) this month. The fund said it holds 7,029,698 shares via an amended 13G filing.
What are Spectra Energy’s long-term plans?
Between 2013 and 2020, Spectra Energy plans to invest in growth projects worth $35 billion.
Why investors should know the best and worst MLP performers
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.
NGL revenue and its significance for Apache Corporation
Apache Corporation’s revenues from NGL went up by a sharp 26% in 2013 over 2011. Year-to-date, the trend continues.
Why investors should understand EPD’s segment performance
Onshore Natural Gas Pipelines & Services’ operating profit declined to $195.4 million in 3Q14—compared to $213.4 million recorded last year.
Why the Permian Basin is important for ONEOK Partners
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.
Why smaller oil and gas firms are foraying into high yield debt
High yield debt markets saw $6 billion worth of new supply issued across 12 transactions in the week ending October 24.
Why Targa Resources sees a benefit to acquiring Atlas
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.
Part 2 of Targa Resources’ acquisition deal with Atlas
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.
An overview of the Targa Resources and Atlas Pipeline deal
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.
Enterprise Products Partners acquires Oiltanking Partners
On October 1, 2014, Enterprise Products Partners (EPD) announced its acquisition of Oiltanking Partners L.P. (OILT), a midstream energy master limited partnership
What drives the Midstream, Chemicals, and Marketing segments?
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.
Must-know: Phillips 66’s midstream business
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.
Why ONEOK Partners expects ethane rejection to continue
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.
Why exports will impact Enterprise Products Partners’ future
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.
Why investors can expect synergies from the combined assets
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.
Why the Energy Transfer and Targa merger talk ended for now
Leading up to the rumor of the possible acquisition, the share prices of NGLS and TRGP jumped up by 17.7% and 20.4% on June 19, respectively.
Must know: An overview of the propane industry
Suburban Propane Partners (SPH) sells propane primarily to six customer markets: residential, commercial, industrial (including engine fuel), agricultural, other retail users, and wholesale.
Why natural gas will spearhead growth for CONSOL Energy
CNX has a joint venture with Noble Energy (NBL) in the Marcellus Shale, which drilled 117 gross wells in 2013.