A lot is going on these days in the energy MLP sector, as companies
try to balance their needs for cash distribution growth to
shareholders/unitholders, keep a sustainable balance sheet, and fund the
capital spending needed to exploit what could well be a
once-in-a-career buildout of new infrastructure to handle North
America's growing energy output.
When it comes to Enbridge Energy Partners, L.P. (EEP), the balancing act is a little trickier. Enbridge's (ENB) recent decision to cut its top incentive distribution rights is a positive for EEP, as was a drop-down to Midcoast Energy Partners, L.P. (MEP),
but the company is still stretched on its distribution coverage and has
a delicate balancing act ahead of it in managing billions of dollars of
growth-oriented capex.
Follow this link for the full article:
Enbridge Energy Partners Working A Tricky Balance
Showing posts with label TransCanada. Show all posts
Showing posts with label TransCanada. Show all posts
Wednesday, June 25, 2014
Friday, March 30, 2012
Investopedia: Enbridge Energy Partners May Gain From Keystone's Pain
Whatever the objections people had to TransCanada's (NYSE:TRP) Keystone XL pipeline, the fact remains that the U.S. needs ways to get more oil from over there (wherever "there" may be) to over here. With its ownership of the U.S. side of one of the largest North American crude oil pipelines and extensive gas gathering operations in Texas, Enbridge Energy Partners (NYSE:EEP) may yet be able to benefit from the situation.
A Valuable Asset Becoming More Valuable
Key to the stories of Enbridge Energy Partners and parent/general partner Enbridge (NYSE:ENB) is the Enbridge Pipeline System. It includes about 1,200 miles of Canadian pipeline and the Lakehead System - 1,900 miles of U.S. pipeline than can move well over 1 million barrels of oil from oil fields in Western Canada down through Chicago and (through connecting pipelines) on to storage facilities in Oklahoma (Cushing) or along the Great Lakes, up to Montreal.
Read more here:
http://stocks.investopedia.
A Valuable Asset Becoming More Valuable
Key to the stories of Enbridge Energy Partners and parent/general partner Enbridge (NYSE:ENB) is the Enbridge Pipeline System. It includes about 1,200 miles of Canadian pipeline and the Lakehead System - 1,900 miles of U.S. pipeline than can move well over 1 million barrels of oil from oil fields in Western Canada down through Chicago and (through connecting pipelines) on to storage facilities in Oklahoma (Cushing) or along the Great Lakes, up to Montreal.
Read more here:
http://stocks.investopedia.
Tuesday, March 29, 2011
Investopedia: Can Pipelines Still Deliver The Goods?
In many respects, pipelines are great businesses for patient investors who like collect to dividends. They allow investors to leverage the growing demand for energy with far less exposure to commodity prices than is the case for integrated energy companies or exploration and production companies. Instead, they act as toll collectors with very little operating risk on a week to week basis.
The nature of the business also gives certain inherent advantage to these companies. It takes a great deal of capital to build networks of pipelines, terminals, storage facilities and the like, but once they are in place there is seldom much competition for their services. What's more, because the tax-advantaged MLP structure is so common in the space, these companies often pay substantial dividends (technically called distributions in most cases). (For more, see Power In Pipelines.)
The Downside
It is not all perfect in the industry, though. Because companies that opt for the MLP structure cannot retain any significant amount of their earnings, these companies must borrow extensively to meet their capital needs. So while these companies have clearly benefited from the low interest rate environment (which has also made the yields on these stocks quite attractive), the risk of higher rates is particularly significant here. That is all the more relevant when considering the fact that many companies are looking to expand their networks to better access areas like the Bakken and Marcellus Shales.
To continue, please click this link:
http://stocks.investopedia.
The nature of the business also gives certain inherent advantage to these companies. It takes a great deal of capital to build networks of pipelines, terminals, storage facilities and the like, but once they are in place there is seldom much competition for their services. What's more, because the tax-advantaged MLP structure is so common in the space, these companies often pay substantial dividends (technically called distributions in most cases). (For more, see Power In Pipelines.)
The Downside
It is not all perfect in the industry, though. Because companies that opt for the MLP structure cannot retain any significant amount of their earnings, these companies must borrow extensively to meet their capital needs. So while these companies have clearly benefited from the low interest rate environment (which has also made the yields on these stocks quite attractive), the risk of higher rates is particularly significant here. That is all the more relevant when considering the fact that many companies are looking to expand their networks to better access areas like the Bakken and Marcellus Shales.
To continue, please click this link:
http://stocks.investopedia.
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