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The spreadsheet below uses month ending data. The 'monthly price change' column is for unit price changes, while the 'year to date' stats is for total return. This explains the jumps in year to date gains in the distribution heavy months of February, May, August and November without similar gains in those month's unit prices. CEF numbers are for MLP and MLP-hybrid Closed-End Funds. The 'Ten Year Yield' numbers are for the US Treasury. Tracking the spread of the average MLP's yield to the Treasury has been a useful tool for timing of MLP purchases - buy MLPs when the spread is high. The CEF spread is used in academia to measure investor sentiment. Buy MLPs when the price is at the largest discount to NAV.
Williams to Acquire Additional 20% in Discovery PRNewswire 6-20 Williams Partners L.P. announced that it has agreed to acquire an additional 20 percent interest in Discovery Producer Services LLC from Williams for $78 million. Williams Partners already owns a 40 percent interest in Discovery. Discovery provides gathering, transportation, fractionation, and processing services to producers operating in the shallow and deep waters of the Gulf of Mexico. The equity earnings attributable to a 20 percent interest in Discovery were $5.4 million for the 12-month period ending March 31, 2007. Distributable cash flow attributable to a 20 percent interest in Discovery was $10.3 million for the same period. GE Energy Financial Services Acquires Regency GP Units from HM Capital Businesswire 6-19 GE Energy Financial Services, a unit of GE, announced today that it has acquired interests in Regency Energy Partners LP from HM Capital Partners LLC for $603 million. GE Energy Financial Services acquired 91 percent of Regency's general partner and 16.7 million subordinated units from HM Capital, the Dallas-based private equity firm that helped take Regency public in February 2006. In addition, GE Energy Financial Services acquired 1.1 million subordinated units from members of Regency's management. After this transaction, Regency's management owns the balance of the general partner and continues to own 1.2 million subordinated units. In all, GE Energy Financial Services now owns about 37 percent of the outstanding limited partner units. Affiliates of HM Capital elected to retain more than 8 million of the common limited partner units, making them the second largest investor in Regency. "As the owner of our general partner, GE will bolster Regency's growth strategy by opening the door to opportunities to expand our footprint in new geographic areas and to explore new lines of business," said James W. Hunt, Chairman, President and CEO of Regency. "Our future is bright, and we look forward to working with GE in continuing to build one of the premier midstream MLPs." Regency owns approximately 4,000 miles of gas gathering pipelines. GE Energy Financial Services has investments in 20,000 miles of gas pipelines in North America, including the largest system in the central US - Southern Star Central. Hiland Names Griffin As Its CEO PRNewswire 6-11 Hiland Partners, LP and Hiland Holdings GP, LP announced effective today that Joseph L. Griffin has joined the two companies as chief executive officer, president and director of its general partners, Hiland Partners GP, LLC and Hiland Partners GP Holdings, LLC. Griffin has more than 20 years of experience in the midstream natural gas industry. Griffin comes to Hiland from Lumen Midstream Partnership, a subsidiary of the Southern Ute Indian Tribe, in Tulsa, OK, where since 2004 he has served as executive vice president over multiple facets of the business. In 1989, Griffin co-founded Lumen Midstream and served as its president, chief operating officer, chief financial officer and director until Lumen was sold in 2004 to the Southern Ute Indian Tribe. Griffin holds a bachelor of science degree in business administration from Oklahoma State University and is also a certified public accountant. ETE/ETP Announce Retirement of Co-CEO Ray Davis BusinessWire 6-11 Enterprise Transfer announced that Ray C. Davis, Co-Chief Executive Officer and Co-Chairman of Energy Transfer Partners, L.P. (ETP) and Co-Chairman of Energy Transfer Equity, L.P. (ETE), will retire from these positions following a transition period to transfer his duties to other members of the management team. Mr. Davis will continue to serve as a director of ETP and ETE. Kelcy L. Warren, currently the Co-Chief Executive Officer and Co-Chairman of ETP and Co-Chairman of ETE, will become the sole Chief Executive Officer and sole Chairman of ETP and sole Chairman of ETE upon the effective date of Mr. Davis' retirement. APL to Acquire Anadarko's OK & Texas Gas Gathering Systems for $1.85 Billion MarketWire 6-03 Atlas Pipeline Partners L.P. announced today that the Partnership has signed definitive agreements to acquire control of Anadarko Petroleum's interests in the Chaney Dell and Midkiff/Benedum natural gas gathering and processing systems for $1.85 billion, subject to customary closing conditions and other adjustments. The Chaney Dell natural gas gathering and processing system, currently 100% owned by Anadarko, is located in northwest Oklahoma and southern Kansas, near the center of the Anadarko Basin. Throughput on the Chaney Dell system averaged 226 Mmcf/d in 2006, and is centered within an active drilling area. The Midkiff/Benedum natural gas gathering and processing system, which is approximately 73% owned by Anadarko, is located in the Spraberry Trend of the Permian Basin, near Midland, Texas and contains 2,500 miles of gathering pipeline and two cryogenic facilities. In 2006, the Midkiff/Benedum system had approximately 139 Mmcf/d of average throughput. The acquisition is immediately accretive. Available distributable cash flow to the Partnership is projected to be approximately $2.14 to $2.22 per unit for the second half of 2007, representing a 6-10% increase compared with prior guidance, and $4.56 to $4.80 per unit in 2008. APL expects to distribute between $1.78 and $1.85 per limited partner unit in the second half of 2007, and expects to distribute between $3.80 to $4.00 per limited partner unit in 2008, after an increase in its distribution coverage ratio to 1.2x. At the mid-point of this range, this payout would represent over a 13% increase over the Partnership's current distribution rate of $0.86 per quarter, or $3.44 on an annualized basis. "This purchase is transformative for APL," said Edward Cohen, Chairman and CEO of APL. "APL's aggregate processing capacity will more than double - from 350 Mmcf/d to over 750 Mmcf/d, and current total cash flow should nearly triple following this transaction. In addition, these new assets offer considerable opportunity for further rapid and substantial organic growth." The acquisition is financing fully committed through: [1] a private placement to institutional investors of $1.125 billion, consisting of approximately 25.6 million limited partner units of APL at $44.00 per unit; [2] up to a $900 million term loan, which matures in 2014; and [3] a $250 million revolving credit facility, from which it expects to draw approximately $60 million for the closing. On 6-04 analysts at Friedman Billings reiterate their "outperform" rating on APL and their target price was raised from $51 to $54. On 6-07 AG Edwards Upgraded APL from Hold to Buy. On 6-07 Morgan Keegan Initiated coverage of CPNO at Outperform, Initiated EPD at Outperform, Initiated ETP at Outperform, Initiated KMP at Outperform - and for GPs: EPE was Initiated at Market Perform while ETE was Initiated at Outperform. On 6-18 Wachovia Upgraded EEP [and EEQ] from Market Perform to Outperform. Analyst Yves Siegel suggested that the companies will begin to turnaround in the second quarter of 2008 upon completion of the $610 million east Texas expansion plan and the first stage of its $1.3 billion southern access pipeline expansion. On 6-19 Wachovia on Tuesday upgraded RGNC to outperform after the GE purchase of RGNC's GP. "With this acquisition, Regency's growth prospects are significantly enhanced," Wachovia said in a note to clients. "We suspect GE may begin selling...assets into the partnernship over time to drive distribution growth and monetize their own investments." Similar strategies of adding assets into master limited partnerships have been carried out by DPM and WPZ. GE Capital owns several MLP qualifying assets, most noteably the Southern Star pipeline, a large natural gas transmission system, Wachovia noted. On 6-20 Credit Suisse Upgraded APL from Neutral to Outperform. The target price has been raised from $60 to $61. In a research note, the analysts mention that the Anadarko acquisition has lent upside to the estimated value for the company ahead of the consensus. Atlas Pipeline Partner is considering building an extension of NOARK to Oklahoma, which will compete with the Gulf Crossing, Fayetteville lateral as well as the MidContinent Express pipeline projects, the analysts say. On 6-21 analyst John D Edwards of Morgan Keegan initiates coverage of BWP with an "outperform" rating. In a research note, the analyst mentions that the company has capital expansion projects worth $3.3 billion, which are likely to come online over the forthcoming couple of years. Boardwalk Pipeline Partners has significant financial support from its parent company Loews Corporation, the analyst says. Boardwalk Pipeline Partners generates stable cash flows, since firm contracts account for 79% of its revenues, Morgan Keegan adds. On 6-20 UCLP announced today that it has entered into an agreement to sell $70 million of common units representing limited partner interests in Universal Compression Partners to certain qualified institutional buyers in a private placement at a price of $34.75 per unit. The closing of the private placement is conditioned upon the closing of Universal Compression Partners' previously announced acquisition of a fleet of compressor units and customer contracts from Universal Compression Holdings [UCO] for approximately $233 million. On 6-20 PAA announced today that it has received equity commitments from a group of entities affiliated with thirteen institutional and private investors led by GPS Partners LLC. The commitments provide for the sale by PAA of 6.3 million common units, which will generate aggregate net proceeds of approximately $382.5 million. The price for the common units was $59.56 per unit, which represents a 5.8% discount to the closing price on June 19, 2007. A portion of the proceeds will be used to fund the closing of the Bumstead LPG storage facility acquisition as well as our ongoing expansion capital projects and the balance will be used to reduce short-term borrowings. On 6-20 DPM announced it has entered into a private placement agreement with a group of institutional investors for $130 million, representing 3,005,780 common limited partner units in the Partnership at a price of $43.25 per unit. DPM will use the net proceeds from this private placement to pay down a portion of the debt balances associated with the Partnership's acquisition from Anadarko Petroleum Corporation of natural gas gathering and compression assets located in southern Oklahoma that closed May 9, 2007 and for other general Partnership purposes. On 6-21 ETP announced a distribution of $0.80625/unit payable 7-16 to unitholders of 7-02. On 6-26 APL declared a distribution of $0.87/unit payable 8-14 to holders of 7-06. On 5-03 Lehman Brothers Downgraded MMP from Overweight to Equal-weight. On 5-08 Wachovia Upgraded EROC from Market Perform to Outperform. On 5-22 RBC Capital Initiated EROC at Sector Perform. On 5-23 Deutsche Securities Upgraded BGP from Hold to Buy, Downgraded MMP from Buy to Hold, and Downgraded NS and NSH from Buy to Hold. On 5-31 Stifel Nicolaus Initiated coverage of TLP at Buy and KeyBanc Capital Markets Initiated coverage of KSP at Hold. The CAGR estimates were influenced by those attained from Yahoo, but are primarily based on those from AG Edwards. The DCF estimates for ATN, BBEP, EVEP and LINE are from AG Edwards. Those for CEP and LGCY are based on their current distributions, where I used dcf/.9 = distribution [which is approx the sector average] to arrive at a DCF. And the EVEP 2008 EPS estimate was also absent at Yahoo - so I used the current trend to estimate that. This whole sector is brand new, with ONLY LINE having paid a distribution in 2006. And the abscence of a track record causes the CAGR estimates to be varied and undependable. The unit price gains in this sector have been too high to ignore. The P/E ratios still look very attractive relative to standard MLPs. And many of the CAGR estimates [estimate that are so high that I am not using them for my metrics] for most E&P's are significantly higher than most regular MLPs. At the moment, I still have a problem believing the CAGRs would be higher for sustainable periods. E&P's can purchase assets at lower enterprise values to EBITDA ratios and thus make more accretive acquisitions compared to midstream MLPs, where the purchase of these acquistions by traditional MLPs now come with higher price tags and lower accretion. I would suspect that over time, the EBITDA multiples for E&P assets will grow too. Because of the hyper-accretiveness of new acquisitions, those E&P MLPs with the newest and the highest percentage of acquisitions will be the ones that will probably have the highest unit price appreciation. Thus the Forecaster Model - which uses valuation and CAGR differences to mathamatically find MLPs that are undervalued - would logically be less predictive in this sub-sector. On 6-05 AG Edwards upgraded EVEP to Buy. On 5-23 Deutsche Securities Downgraded BBEP from Buy to Hold. On 6-15 Oppenheimer Initated coverage of LGCY at Buy. On 6-20 AG Edwards Initiated coverage of LGCY at Buy. PXD to IPO Two E&Ps Gas Processors Report 5-02 & OilVoice.com 4-23 Pioneer Natural Resources [PXD] announced its intent to file with the SEC by year-end to form two new MLPs. Pioneer will build a $250-million MLP this year around its long-life oil, gas and liquids production in West Texas' Spraberry Trend. In the Spraberry, the company plans to drill 300 to 350 wells this year and 400 in 2008. [From BusinessWeek As a result of the increased drilling, Spraberry production is now expected to grow by 18% to 23% in 2007 and by 20% to 25% in 2008.] The second MLP will incorporate coalbed-methane production from the Raton Basin in southern Colorado. Approximately $250 million of these partnership units are expected to be offered to the public during 2008. In the Raton, it expects to drill 250 to 300 wells this year.Pioneer expects to file during the third quarter of 2007 and that the offering will be made during the fourth quarter of 2007. At the close of the initial public offerings, Pioneer will be the general partner of each of the MLPs and hold a majority ownership in the units of each of the MLPs. Pioneer will continue to operate and own a partial working interest in the assets that will form the MLPs. Dominion Sale Could Fuel Future MLPs Fortune 6-06 Dominion Resources announced two sales, totaling $6.5 billion, that would include most of its U.S. onshore oil and gas exploration and production operations. Loews Corp bought Dominion's operations in Michigan, Alabama, and the Permian Basin of Texas for $4.03 billion, and XTO Energy will acquire Dominion's operations in the Rocky Mountains, Gulf Coast, New Mexico’s Juan Basin, and South Louisiana for $2.5 billion. Loews already has an 80% stake in Boardwalk Pipeline Partners and a 54% stake in Diamond Offshore Drilling. UBS analyst William Featherston called the acquisition an attractive one, adding that Loews bought high quality properties at a reasonable price. XTO is rumored to have a $500 million MLP spin-off in the works. [from MarketWatch 6-08: Philip C. Adams, analyst with Gimme Credit, said XTO still expects to do another $700 million of acquisitions in 2007, so it's possible other MLPs could follow. ] On 6-19 KYN declared a dividend of $0.49 per share [an increase of 2.1% from the prior quarter's dividend] payable on July 12, 2007 to common stockholders of record on July 5, 2007, with an ex-dividend date of July 2, 2007. On 6-19 KYE declared a dividend of $0.47/share [an increase of 3.3% from the prior quarter's dividend] payable on July 12, 2007 to shareholders of record on July 5, 2007, with an ex-dividend date of July 2, 2007. On 6-01 Kayne Anderson MLP Investment [KYN] announced its net asset value at May 31st was $34.13, based on 42.9 million shares outstanding. Its top five investments were in Energy Transfer Partners, Plains All American, Magellan, Copano Energy, and Enterprise Products Partners. On 6-01 Kayne Anderson Energy Total Return Fund [KYE] announced its net asset value at May 31st was $30.31 based on 32.1 million shares outstanding. Long-term investments were comprised of MLPs and MLP Affiliates (42%), Canadian Income Trusts (21%), Marine Energy Transportation (20%), Coal Companies (5%) and U.S. Royalty Trusts and Other Energy Companies (12%). Its top five investments were in KMI, PAA, EPD, EEP and XTEX. On 6-21 ETE announced a distribution of $0.3725/unit payable 7-19 to unitholders of 7-02. On 6-26 AHD declared a distribution of $0.26/unit payable 8-17 to holders of 7-06. On 6-25 Buckeye GP Holdings announced that The Carlyle/Riverstone Global Energy and Power Fund II, certain members of management and other limited partners completed the sale of their ownership interest in the general partner of BGH and an approximate 62% limited partner interest in BGH to an entity formed by affiliates of ArcLight Capital Partners, Kelso & Company and Lehman Brothers Holdings. Forrest E. Wylie [recently Vice Chairman of Pacific Energy Partners] was elected as Chairman of the Board, President and CEO of the general partners of BGH and BPL and as a director of each entity. ArcLight Capital Partners, LLC is a leading energy investment firm, with more than $4.6 billion under management. ArcLight invests throughout the energy industry value chain in hard assets that produce high current income and capital appreciation. Kelso & Company, a leading private equity firm, has been involved in leveraged acquisitions both as a principal and as a financial advisor since 1971. Kelso makes equity investments on behalf of investment partnerships, which it manages. Remarks from John Tyceland of Citigroup on the transaction: "The market seems to be discounting future acquisitions into the valuation of BGH [which is expensive on a price/DCF basis] as a result of ArcLight and Kelso acquiring a controlling interest in the entity. ArcLight Capital owns assets that generate MLP-qualifying income that could be dropped-down to the underlying MLP, BPL. Given BPL's acquisition history, in addition to ArcLight acquiring a controlling interest in the general partner, a large acquisition that is highly accretive to BGH seems quite likely. While known sources of growth do not seem to support the current price level, potential drop-downs from ArcLight could drive enough accretion to support our revised target price. Recent transactions have demonstrated how strongly accretive acquisitions can be to the general partner (GP) even if the deal is only marginally accretive to the MLP." On 6-06 Morgan Keegan Initiated EPE at Market Perform and Initiated coverage of ETE at Outperform. On 5-23 Deutsche Securities Upgraded BGH from Hold to Buy. On 5-23 NSH was was downgraded to hold from buy at Deutsche Bank after a 47% year-to-date share price rise. The broker says the stock now offers little upside. On 5-02 AG Edwards Downgraded NSH from Buy to Hold. On 4-16 EPE announced a distribution of $0.365/unit payable 5-11 to unitholders of 4-30. On 3-29 ETE announced a distribution of $0.356/unit payable 4-16 to unitholders of 4-09. On 4-23 XTXI announced a distribution of $0.220/unit [was .220] payable 5-15 to unitholders of 5-02. On 4-25 HPGP announced a distribution of $0.2075/unit [was .2075] payable 5-18 to unitholders of 5-04. On 4-25 NSH announced a distribution of $0.320/unit [was .320] payable 5-16 to unitholders of 5-07. On 4-26 MGG announced a distribution of $0.2615/unit [was .2460] payable 5-15 to unitholders of 5-08. On 4-26 AHD announced a distribution of $0.250/unit [was .250] payable 5-18 to unitholders of 5-08. On 4-26 BGH announced a distribution of $0.240/unit [was .225] payable 5-31 to unitholders of 5-07. NOTE #1: This page is ment to be a supplement for those already getting monthly sector updates from another source. Data entry errors sporadically happen. Metrics like Debt/Market Cap and the GP/LP split ratios should not be ignored. NOTE #2: The operator of this site owns units in BWP, EPD, ETP, MWE and PAA, and units in GP ETE, and candidates for future acquisition include GEL, HLND, RGNC and WPZ - and this could distort the coverage of those MLPs. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||