Use access key #2 to skip to page content.
$22.05 -0.12 (-0.54%)
1/9/2009 4:01 PM

Enterprise Products Partners L.P. (EPD)

CAPS Rating:
*****

A North American midstream energy company providing a range of services to producers and consumers of natural gas, natural gas liquids, crude oil, and certain petrochemicals.

View All Commentary (EPD)

Recs

11

Avatar NtscrbEnergy (96.47) Submitted: 11/22/06 10:57 AM : Outperform Start Price: $24.84 EPD Score: 25.51

It’s an all win situation for Enterprise Resources Partners, the number one master limited partnership operating in the US midstream energy sector. The Company operates oil and natural gas pipelines in the US, generating revenues by rendering services to the upstream and downstream segments.

The Company has made a series of acquisition starting with the GulfTerra acquisition in 2004, which has made it the number one. Further, the recent acquisition of Cerrito Gathering Company will give a boost to its top-line. The exploration and production companies are drilling oil in the hard to reach areas of the Gulf of Mexico and the Rocky Mountain Region. These companies will require oil and natural gas to be moved out from these areas to the refineries. Recently, the company’s Cameron Highway Oil Pipeline System started receiving natural gas and natural gas liquids form the Gulf of Mexico fields. Volumes have increased and will further see an augment as the fields reach full production.

Partners, L.P. a kind of a special purpose vehicle created by the company. EPD will retain 35.2% limited partner interest in the company, while, the remaining 62.8% will be offered to the public. Duncan Energy will raise $313.95 million and will pay EPD $421 million for its assets. Further, EPD will also possess the controlling 2% general partner interest in Duncan. The Company has recently announced to transfer its matured assets to Duncan Energy, this move will leave EPD with a handsome amount of liquidity. Going ahead, this cash will help the company to acquire new assets without increasing leverage. In the recent future, EPD will make a big leap and will shine brighter in the dark sky.

Report this Post Replies: 1 | Reply | Permalink

Avatar NtscrbEnergy (96.47) Submitted: 4/23/07 5:18 AM

Recs: 0 | Rec This

Good times ahead for Enterprise Products Partners L.P. The company’s important projects in the Gulf of Mexico and Independence Hub, and Trail project is well on track and will translate into organic and earnings growth for the company. Of these, Independence platform and pipeline off the coast of Louisiana; Natural Gas Liquid storage facility expansion at Mississippi, Mont Belvieu and Houston Ship Channels areas, with additional supplies from Rockies will help in generating substantial upside in cash flow for 2007. In addition, company’s plans to build a new pipeline through the Barnett Shale that will carry 1.1 bcf/d of natural gas to Sherman, Texas will further boost earnings in 2008.

The U.S. natural gas distribution industry is expected to grow by 2.9% in 2007, due to increase in the natural gas consumption. The outlook for residential natural gas consumption remains strong and is expected to increase by 10.8% year-on-year in 2007, due to return of normal temperatures. Similarly, commercial and industrial sector consumption are expected to increase by 6.3% and 1.9%, respectively, in 2007 because of a return to normal weather, lower commercial prices, and growing industrial output. As a result, EPD will benefit from continuous customers demand, due to rise in consumption.

The company reported record revenues of 14 billion and 43% increase in net income to $601 million, and announced its plan to spend another $1.7 billion in 2007 for projects in the Gulf of Mexico and Texas. The company plans to finance this by spinning-off certain mature assets to its newly listed subsidiary i.e. Duncan Energy Partners and thus help EPD to maintain the ownership of the assets. With record revenues, organic and earnings expansion projects, and intact industry growth, EPD is all set to deliver good returns.

Report this Post Reply

Featured Broker Partners

Sponsored Links