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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.
NS to Sell Units BusinessWire 11-12 NuStar Energy L.P. (NYSE: NS - News) today announced that it plans to sell 2,600,000 common units pursuant to an effective shelf registration statement on Form S-3ASR previously filed with the Securities and Exchange Commission. The underwriters have been granted a 30-day option to purchase up to 390,000 additional common units. USS May Cut Distribution - Later Announces Distribution is Safe MLP Blog 11-09 / Market Wire 11-26 US Shipping (USS) was down $16/share to a yield of 11% as the company announced earnings and indicated the possibilty that the distribution was at risk. USS said: "we continue to examine our capital structure and other alternatives with the goal of increasing liquidity, including taking actions which could result in a reduction in the amount of the quarterly distribution paid on our subordinated units. Our inability to adequately address any liquidity issues that may arise in the future could impact our ability to pay the minimum quarterly distribution in full. It should be noted that the full minimum quarterly distribution on the common units of $0.45 will be paid prior to the payment of any distribution on the subordinated units." On 11-26 USS announced that it expects to pay the $0.45 fourth quarter distribution on its common units in full. In addition, in order to enhance liquidity for the Partnership's working capital requirements and payment of future minimum quarterly distributions on its common units, the holder of the Partnership's subordinated units has agreed that, if necessary, it will through 2008 either reinvest or ask the General Partner to suspend any distributions payable on the subordinated units. USS will have sufficient liquidity to continue to pay the minimum $0.45 quarterly distribution on its common units during 2008. Targa Resources Confirms Bidding for MarkWest Reuters 11-15 Natural gas provider Targa Resources Partners LP (NGLS) confirmed that it had made an indicative proposal to acquire peers MarkWest Hydrocarbon Inc (MWP) and MarkWest Energy Partners LP (MWE). However, the parties never entered into a substantive negotiation as the MarkWest management did not provide additional current information requested by Targa, the company said in a statement. MarkWest Hydrocarbon considered Targa's proposal as likely to lead to a superior proposal, MarkWest Energy Partners indicated it was not for sale and refused to discuss the potential merits of a business combination, the company added. Devon Changes MLP IPO Plans Various 11-06 Devon announced that it has "decided not to proceed at this time with its plans to form a publicly-traded master limited partnership. The MLP was to own a minority interest in Devon's U.S. onshore marketing and midstream business. Devon cited changing financial market conditions for MLPs as the principal reason for the decision. And from the conference call [via seking Alpha] "The market today is just less receptive than it was when we announced our plans, so we are putting that project on hold. With Devon's marketing and midstream business generating more than $450 million in operating profits, we believe it is prudent to be very cautious with any decision affecting this important and strategic part of our business. Although we have no firm timeline for revising the project, we will reconsider it in the future should market conditions change." OSP IPOs Various 11-09 Overseas Shipholding Group (OSG) and OSG America L.P. (OSP) jointly announced today the pricing of the initial public offering of 7,500,000 common units representing limited partner interests in OSG America L.P. at $19.00 per unit. The common units being offered to the public represent a 24.5% limited partner interest in the partnership. OSG America LLC, a wholly owned subsidiary of OSG, is the sole general partner of the partnership and has a 2% general partner interest and other subsidiaries of OSG hold a 73.5% limited partnership interest. OSG America L.P. will own and operate a fleet of 18 U.S. flag product carriers and barges that principally transport refined petroleum products. EPB IPOs Various 11-16 El Paso Pipeline offered 25 million common units representing limited partner interests on Firday [11-16]. The initial public offering priced at $20 per unit. The common units offered to the public represent 33.2% of El Paso Pipeline's outstanding equity. El Paso Corp. will indirectly own the company's remaining equity interests. The company's initial assets consist of Wyoming Interstate and 10% interests in Colorado Interstate Gas Company and Southern Natural Gas Company pipelines, which operate in the Rocky Mountain and Southeastern regions of the United States. Combined, these businesses consist of about 12,300 miles of pipeline and associated storage facilities, with total underground working natural gas storage capacity of 89 billion cubic feet. BPL Announces Secondary Offering Various 11-29 Buckeye Partners LP plans to have a secondary offering of 2 million units. BPL has not yet priced the offering. It plans to use net proceeds to repay debt under its revolving credit facility and to finance its acquisition of all interests in Lodi Gas Storage LLC. That deal was announced in July. Lodi Gas owns and operates a northern California natural-gas storage facility and an expansion facility known as Kirby Hills. KMP Announces Secondary Offering Various 11-30 Kinder Morgan Energy Partners announced it has priced the public offering of 6.2 million common units representing limited partner interests raising approximately $300 million in net proceeds. Fire Closes EEP Pipeline Various On 11-28 EEP reported a fire on an Enbridge Energy Partners' crude oil pipeline approximately three miles southeast of Enbridge's Clearbrook, Minnesota terminal. All Enbridge pipelines in the vicinity - Lines 1, 2, 3 and 4 -- were immediately shut down and isolated and Enbridge emergency crews were dispatched to the site. In total, the pipelines carry a maximum of 1.5 million barrels of oil a day from Canada to the U.S. [The U.S. consumes 20.58 million barrels of oil a day.] Enbridge's 34-inch pipeline carries crude oil from Saskatchewan to the Chicago area. The pipe had leaked a few weeks ago and was being repaired. On 11-29 Enbridge re-opened two lines out of four after a fire was extinguished. Enbridge noted that at least one or two lines will be shut down until the damage can be inspected. Citi Update on EEP: EEP's crude pipeline segment generates roughly half of EEP's cash flow and the pipeline closures immediately impacted 1.5 mil. BBLs/Day of crude oil throughput; 500,000 BBLs/Day of this throughput is reported to be back on-line, speculation is that an additional 550,000 BBLs/Day will be back on-line in the next day or two, while the remaining 450,000 BBLs/Day is expected to be back on-line in about a week. We do not expect EEP's distribution to be impacted by this event given that it is one-time in nature and our expectation of a quick recovery back to normal operations. Fire at Plant Cuts WPZ's Cash Flow - But Distribution is Safe PRNewswire 11-30 Williams Partners L.P. announced management's preliminary estimate for the total financial effect it expects as a result of the Nov. 28 fire at its Ignacio natural gas processing plant. Management expects a total reduction in expected cash flows of $10 million to $20 million, primarily in the fourth quarter of 2007. This range includes the expected mitigating effect of its property-damage and business-interruption insurance. Management does not expect this reduction in cash flow to impact its regular quarterly cash distributions to unitholders. On 11-02 RBC Capital Marktes Upgraded EEP from Underperform to Sector Perform. On 11-05 Wachovia Upgraded APL from Market Perform to Outperform. On 11-12 Wachovia Upgraded CPNO from Market Perform to Outperform. On 10-02 Lehman Brothers Initiated coverage of SGLP at Equal-weight. On 10-18 JP Morgan Initiated coverage of EROC and MWE at Overweight, and Initiated coverage of KGS, KMP, PAA, RGNC and TPP at Neutral. On 10-23 Deutsche Securities Upgraded PAA from Hold to Buy. On 10-29 RBC Capital Markets Initiated coverage of DEP and SGLP at Sector Perform. 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. QELP IPOs Various 11-09 E&P MLP QELP IPOed 9.1 million units priced at $18 per unit on 11-09 [and then the price per unit promptly fell. As of 11-19 it closed at $15.38]. The common units offered to the public will represent a 42.1 percent limited-partner interest in the partnership, or 48.5 percent if the underwriters exercise their overallotment option in full. Quest Resource (QRCP) will own the rest of the partnership. Quest Energy Partners was recently formed by Quest Resource Corporation to acquire, exploit and develop oil and natural gas properties. Quest Energy Partners' operations are currently focused on the development of coal bed methane in the Cherokee Basin, a 13-county region in southeastern Kansas and northeastern Oklahoma. IPO Update VNR began trading 10-24 at $19 per common unit and as of 11-19 it closed at $14.95. ENP began trading 9-12 at $21.00 and as of $11.19 it closed at $20.08. On 11-14 UBS Upgraded ENP from Neutral to Buy. On 11-15 Lehman Brothers initiated coverage of ENP with an overweight rating and a $26 price target. "We believe ENP is well positioned to generate attractive distribution growth through its sponsor relationship with Encore Acquisition [EAC] as well as through independent acquisition opportunities," Lehman said in a note to clients. On 10-11 RBC Capital Markets Initiated EVEP at Outperform. On 10-22 RBC Capital Markets Initiated ENP at 0utperform. On 10-23 UBS Initiated ENP at Neutral. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||