MLP Protocol 072613

Key Adjustments:

  • Adjusted CMLP for the Jackalope Gas Gathering acquisition.
  • Added Phillips 66 Partners (PSXP) to the Crude & Refined Products peer group after its wildly successful IPO on July 22.
    1. PSXP priced at $23, up 15% from mid-point price of $20
    2. Upsized from 15 million units to 16.4 million units
    3. At the IPO price PSXP represented the lowest yield at IPO for an LP at 3.7% (coming in substantially below MPLX’s previous low LP IPO yield of 4.77% back on October 25, 2012)
    4. PSXP then proceeded to open at $28.98 and close the week out at $34.34 gaining ~49% from the IPO price and ending the week with an indicative yield of 2.5%
    5. This is the most robust reception I have ever seen for an MLP IPO
  • Added Marlin Midstream Partners, LP (FISH) to the Gathering & Processing peer group after its successful IPO at $20 with an indicated yield of 7% on July 25.
    1. FISH slipped slightly on its first day of trading and ended the week at $19.50

Other News:

  • On July 22, Crestwood Midstream Partners (CMLP) and the owner of its general partner, Inergy (NRGY), announced that Crestwood’s subsidiary, Crestwood Niobrara LLC (“Crestwood Niobrara”), has completed the acquisition of a 50% interest in Jackalope Gas Gathering Services, L.L.C. (“Jackalope”) from RKI Exploration & Production, LLC (“RKI”) for a total cash consideration of $107.5 million. The other 50% interest in Jackalope is owned by Access Midstream Partners, L.P. (“Access”). (Press Release)
  • On July 22, Mitsui & Co., Japan’s biggest iron ore supplier, agreed to buy 30 percent of a U.S. gas pipeline started by Kinder Morgan (KMI). The project run by Kinder Morgan’s Sierrita Gas Pipeline LLC will connect an existing pipeline link at Tucson, Arizona with Sasabe on the Mexican border, a 100-kilometer (62-mile) route that will cost about $200 million to build. Kinder Morgan will also sell a 35 percent stake in the pipeline to Mexico’s state-run oil producer Petroleos Mexicanos. (News Item)
  • On July 22, Genesis Energy (GEL) announced that it has agreed to acquire for approximately $230 million all the assets of the downstream transportation business of Hornbeck Offshore (HOS). The business is primarily comprised of nine barges and nine tug boats which transport crude oil and refined petroleum products, principally serving refineries and storage terminals along the Gulf Coast, Eastern Seaboard, Great Lakes and Caribbean. The transaction is expected to close by the end of the third quarter of 2013. (Press Release)

The MLP Protocol Monthly Analytics Report for August is now available, the September 2013 report will be available the weekend of August 30.

MLP Protocol Weekly Snapshot report: (click to open) MLPP 072613 Snapshot vFree

About Philip Trinder

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