Targa Resources Corp

Spectra Energy Corp. (SE), headquartered in Houston, Texas, owns and operates a large and diversified portfolio of natural gas–related assets in North America.

Most MLPs operate in the midstream energy industry. They’re mainly involved in gathering, processing, storing, and transporting energy commodities.

Significantly higher rates of propane exports have helped to boost propane prices—and the margins of some MLP names.

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.

The Henry Hub-Mont Belvieu fractionation spread fell to $10.1 per barrel for the week ended October 16, 2015.

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 […]

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.

High yield debt markets saw $6 billion worth of new supply issued across 12 transactions in the week ending October 24.

In 2013, the company processed an average of 780.1 million cubic feet per day of natural gas and produced an average of 91.9 thousand barrels per day of NGLs.

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.

What risk should you know about that could significantly affect MLP valuation? Read on to find out.

Let’s take a look at midstream stocks trading at attractive yields. The stocks have a market capitalization of over $5 billion and yields over 7.0%.

A falling inventory indicates that WTI crude oil is moving out of the inland U.S. towards end refining markets with help from new infrastructure coming online.

Fractionation spreads got a boost last week with rising crude oil prices.

The median target price for EEP as provided by surveyed analysts is $24, which implies a 37% price return in one year from EEP’s current price of $17.48.

Cheniere Energy (LNG) was among the top midstream gainers last week. The stock rose 2.8% during the week.

Ethane has historically received significantly more advantageous pricing than dry natural gas.

Of the analysts surveyed by Reuters, ~66.7% rated Kinder Morgan (KMI) as a “buy” and ~33.3% rated it as a “hold.” None of the analysts rated it as a “sell.”

ONEOK (OKE) stock has continued to build upon its gains in 2018.

Natural gas gathering and processing is a significant part of the operations of many midstream master limited partnerships.

Corporate debt rates for MLPs increased slightly over the past two weeks, but from a long-term perspective debt funding still remains extremely cheap.

In this series, we’ll look at some of the key indicators that impact MLP performance in the long term.

Frac spreads traded up slightly last week and have been relatively range-bound over the past several months.

Companies in the natural gas processing space—many of which are MLPS—keep an eye on the fractionation or “frac” spread. Here’s why.

ONEOK (OKE) stock is up nearly 4% so far in 2018.

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.

Propane is typically extracted from natural gas or separated during crude oil refining. Residential and commercial customers use propane primarily for heating and cooking purposes.

AMLP holds midstream MLPs whose earnings are typically linked to their transported volumes of energy products.

Fractionation spreads increased on the back of higher natural gas liquids prices, a positive for natural gas processor master limited partnerships.

With a 2.3% fall on Friday, March 23, Kinder Morgan (KMI) was down 8.5% for the week.

ONEOK reported its third-quarter results on October 30 after the markets closed. The company’s EPS of $0.75 beat the consensus estimates.

In this series, we’ll look at the historical outliers in midstream energy, which have generated massive wealth amid turbulent times.

While ethane supply grew, the demand for ethane could not keep pace. This caused the ethane prices to drop.

CNX has a joint venture with Noble Energy (NBL) in the Marcellus Shale, which drilled 117 gross wells in 2013.

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 Yorkville High Income Infrastructure MLP ETF (YMLI) tracks the Solactive High Income Infrastructure MLP.

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.

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.

This series will discuss how ethane is important across the energy chain–from upstream and midstream to downstream energy companies.

The definition of “liquefied petroleum gas” or “LPG” can vary depending on context, but it’s commonly used to refer to the hydrocarbons propane and butane.

Targa Resources (NGLS), a major MLP player in the midstream market, has been active in increasing infrastructure and facilitating exports.

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.

Propane exports have increased significantly through 2013, and have spiked recently. Increased propane exports are a positive for domestic propane prices.

Natural gas liquids prices have remained rangebound, which is a neutral for producers of NGLs.

The price on a representative mix of natural gas liquids declined slightly last week, resulting in a negative indicator for wet gas producers.

The Yorkville High Income Infrastructure MLP ETF (YMLI) launched in February 2013. Major constituents of YMLI include Sunoco Logistics Partners LP (SXL) and Western Gas Equity Partners LP (WGP).

Enterprise Products Partners (EPD) is one of the largest master limited partnerships operating in the midstream energy space.

Natural gas liquids took a leg lower, and are down significantly from the beginning of the year.

Natural gas liquids prices edged higher last week, in a positive for wet gas producers such as Linn Energy.

The spread between the BofAML BBB Corporate Credit Index and the Alerian MLP Index widened by 9 bps last week.

Natural gas liquids prices traded roughly flattish on the week in a neutral indicator for upstream energy companies.

As investors, it can be difficult to escape from the lure of high yields. The idea of high and regular income looks attractive.

Kinder Morgan (KMI) spent $2.3 billion on growth projects in 2018. The company expects to spend $3.1 billion on capital projects in 2019.

On October 3, Barclays cut its rating for CVR Refining (CVRR) from “equal weight” to “underweight.” Barclays cut its target price.

So far, midstream companies Targa Resources (TRGP) and ONEOK (OKE) have outperformed the broader energy sector in 2018.

In this article, we’ll look at the 2018 capital spending plans of the four selected peers.

Targa Resources is down nearly 7% year-to-date.

Midstream companies such as Kinder Morgan (KMI), Targa Resource (TRGP), and ONEOK (OKE) are taxed as C-corps, so the revised policy doesn’t apply to them.

About 78.9% of analysts rate MPLX LP as a “buy,” and the remaining 21.1% rate it as a “hold.”

Bank of America Merrill Lynch and Citi Investment Research were the biggest sellers in MLPX LP (MPLX) during the fourth quarter.

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.

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.

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.

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.

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 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.

Analysts expect that Enbridge Energy Partners’ 3Q15 EBITDA will be more than triple the 2Q15 EBITDA and 18% higher than its 3Q14 EBITDA.

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%.

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.

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.

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.

Kinder Morgan’s 3Q15 performance may have suffered due to poor performance from its CO2, Natural Gas Pipelines, and Kinder Morgan Canada segments.

Kinder Morgan (KMI) operates like a toll road or a fee-based business with limited commodity price exposure.

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.

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 Henry Hub–Mont Belvieu fractionation spread rose to $7.54 per barrel for the week ending August 21, 2015.

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.

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.

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.

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.

The Henry Hub–Mont Belvieu fractionation spread dropped to $8.40 per barrel for the week ended July 24, 2015.

Natural gas processing MLPs typically benefit when the price of NGLs is high relative to natural gas.

The EIA (Energy Information Administration) monitors seven key tight oil and gas regions in the US.

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.

There are various types of contracts in energy MLPs that each have their own advantages and disadvantages.

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 last week included top gainer Targa Resources Partners (NGLS), with a ~7.4% increase, and top loser, MarkWest Energy Partners (MWE).

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.

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.

MLPs’ valuations are different from other stocks. To value MLPs, the widely used PE ratio isn’t as useful as the PDCF ratio.

Sunoco’s terminals facilities business operates crude oil, refined products, and natural gas liquids (or NGL) terminals.

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.

FMC obtained global rights for a new herbicide from research companies based in Japan. The herbicide is reportedly effective in controlling broadleaf weeds.

Micron plans to invest ~$4 billion to expand the company’s Singapore fabrication plant. This expansion will add a significant amount of clean room space

Targa Resources Partners LP (NGLS) is a master limited partnership operating in the midstream energy space. Targa Resources Corp. (TRGP) is the general partner of NGLS.

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.

The acquisition marked NGLS’s foray into the crude oil pipeline business and strongly complements Targa’s logistics and terminalling assets for refined products.