MLP Protocol 070513

Key Adjustments:

  • Adjusted distribution estimates for LINE to exclude the possible BRY acquisition in light of the current price moves making it look unfavorable for BRY shareholders.
  • Adjusted all Upstream MLPs to be rated as Extremely Risky (a few were Very Risky) given the broadening fear of the entire Upstream MLP business model and my general concerns that 2Q13 numbers could also come in a little weak like they did for 1Q13.
  • Added a Top 30 Leverage page, showing the Top 30 ranked by Lowest Net Debt / TTM EBITDA compared to Current Yields, 3 Year Forward Yield After Tax and 3 Year Forward Yield After Tax / Valuation Coverage Ratio (Subscriber Version).

Other News:

  • On July 1, QR Energy (QRE) announced today that it has signed a definitive agreement to acquire predominantly oil properties located in the Ark-La-Tex area from an undisclosed private seller for $110 million in cash, subject to customary purchase price adjustments. QR Energy expects to finance the acquisition with cash on hand and borrowings under its bank credit facility. The acquisition is expected to close in early August. (Press Release)
  • On July 1, Legacy Reserves (LGCY) announced it has closed on its previously announced agreement to purchase Permian Basin oil properties from Resaca Exploitation, Inc. Legacy purchased a 95% interest in the properties for approximately $67.9 million and is joined by an industry partner who purchased the remaining 5% interest. (Press Release)
  • On July 1, Magellan Midstream Partners (MMP) announced today that it has closed on its previously announced acquisition of pipeline assets in Texas and New Mexico from Plains All American Pipeline (PAA). The pipeline system includes approximately 250 miles of common carrier pipeline that transports refined petroleum products from El Paso, Texas, delivering products north to Albuquerque, New Mexico and transporting products south to the U.S.-Mexico border for delivery within Mexico via a third-party pipeline. Of the previously announced combined purchase price of $190 million, $57 million was allocated to the Texas-New Mexico pipelines, which Magellan funded with cash on hand. (Press Release)
  • On July 1, LINN Energy (LINE) and LinnCo (LNCO) announced that they have been notified by the staff of the Securities and Exchange Commission (“SEC”) that it has commenced a private, non-public inquiry regarding LINN and LinnCo. The SEC has requested the preservation of documents and communications that are potentially relevant to, among other things, LinnCo’s proposed merger with Berry Petroleum Company, and LINN and LinnCo’s use of non-GAAP financial measures and hedging strategy. The SEC has stated that the fact of the inquiry should not be construed as an indication that the SEC or its staff has a negative view of any entity, individual or security. LINN and LinnCo are cooperating fully with the SEC in this matter. (Press Release)
  • July 1, LINN Energy, LLC (LINE) and LinnCo, LLC (LNCO) announced today distributions and dividends, respectively, for the month of April 2013. LINN Energy, LLC declared a monthly cash distribution of $0.2416 per unit, or $2.90 per unit on an annualized basis, for all of its outstanding units. The distribution will be payable July 15, 2013, to unitholders of record as of the close of business on July 10, 2013. LinnCo, LLC declared a monthly cash dividend of $0.2416 per common share, or $2.90 per share on an annualized basis, for all of its outstanding common shares. The dividend will be payable July 16, 2013, to shareholders of record as of the close of business on July 10, 2013. (Press Release)
  • On July 1, NGL Energy Partners (NGL) announced today the acquisition of the assets of Crescent Terminals, LLC, a Delaware limited liability company, and the partnership interests of Cierra Marine, LP, a Delaware limited partnership, and its affiliated companies. The Cierra Marine, LP acquisition expands NGL’s crude oil logistics business by adding 4 additional tow boats and 7 crude oil barges, doubling NGL’s current fleet of marine equipment. The terminal facility will add 130,000 barrels of storage capacity in the rapidly developing Eagle Ford shale in South Texas, and the ability to throughput up to 20,000 barrels per day to markets along the Gulf Coast. (Press Release)
  • On July 2, NGL Energy Partners (NGL) announced today the acquisition of the assets of High Roller Wells Big Lake SWD No. 1, Ltd, a Texas limited partnership (“Big Lake”). The Big Lake acquisition expands NGL’s water services business by adding a high capacity, strategically located, oil and gas water disposal facility to its portfolio of water treatment and gathering infrastructure. The acquisition brings an experienced development team to NGL’s water services business and 25,000 barrels of disposal capacity in the growing Permian Basin in West Texas, a major US oil producing region. The Partnership is increasing its Fiscal 2014 Adjusted EBITDA guidance from $230-$235 million to $240-$245 million. In addition, previous guidance with respect to distribution increases over the next four quarters is increased from a 10%-12% range to a 13%-15% range. (Press Release)
  • On July 3, USA Compression Partners (USAC) filed a Prospectus for a Distribution Reinvestment Plan. (Filing)
  • On July 3, Brookfield Infrastructure Partners  (BIP) announced that it has signed definitive agreements to sell its 42% interest in its Australasian regulated distribution business for approximately $410 million. (Press Release)

The MLP Protocol Monthly Analytics Report for July is now available, the August 2013 report will be available the weekend of July 26.

MLP Protocol Weekly Snapshot report: (click to open) MLPP 070513 Snapshot vFree

About Philip Trinder

President of MLP Protocol, investor, trader, and proponent of Master Limited Partnerships.
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