MLP Protocol 080913

Key Adjustments:

  • Adjusted CPLP for an 11.9 million common unit offering at $9.25 on August 5 (4% discount to August 5 close) and made pro forma adjustments for the announced vessel acquisitions. (Press Release)
  • Adjusted OKS for a 10 million common unit offering at $49.61 on August 6 (3.6% discount to August 6 close).
  • Adjusted DPM for an 9 million common unit offering at $50.04 on August 7 (3.7% discount to August 6 close, one day marketed offering, upsized from original deal size of 8.5 million units).
  • Adjusted ETP and ETE for their exchange of 50% of the GP and IDR interest in SXL to ETE for 50.16 million units that ETE owns (additional detail below).
  • Added QEP Midstream Partners, LP (QEPM) to the Gathering & Processing segment after its successful IPO at $21 with an indicated yield of 4.76% on August 8.
  • Added World Point Terminals, LP (WPT) to the Terminal & Storage segment after its successful IPO at $20 with an indicated yield of 6% on August 8.
  • Adjusted CEP for the transactions with Sanchez Oil & Gas (additional detail below).

News Items:

  • On August 2, Rose Rock Midstream (RRMS) announced that it executed a definitive agreement to acquire the assets of Barcas Field Services LLC, which owns and operates a crude oil trucking fleet, for $47 million. Approximately 140 employees of Barcas Field Services will join Rose Rock at the close of the transaction. Closing is expected during the third quarter of 2013 and is subject to customary closing conditions. Acquisition Highlights: 114 trucks, 120 trailers and miscellaneous equipment, operating in Colorado, Louisiana, Oklahoma, Wyoming, North Dakota, Kansas, New Mexico, and Texas; with long-term take-or-pay customer transportation agreements. (Press Release)
  • On August 6, SunCoke Energy Partners (SXCP) announced that it executed a definitive agreement to acquire 100% of the ownership interest in Kanawha River Terminals LLC (KRT) for $86 million. KRT is wholly-owned by Traxys North America LLC, an international financing, marketing, distribution and trading company in metals, minerals and mining industries. This transaction is subject to regulatory approval and customary closing conditions and is expected to close in fourth quarter 2013. SXCP plans to finance this acquisition with a combination of available cash and its existing revolving credit facility. (Press Release)
  • On August 6, the Obama administration said it would lower the target for how much renewable fuel, such as corn-based ethanol, would needed to be blended into gasoline in the United States in 2014, a move that could give oil refiners some relief on compliance costs. The Environmental Protection Agency also gave refiners more time to meet renewable fuel quotas in 2013. (Reuters News Item)
  • On August 6, Spectra Energy Partners (SEP) and Spectra Energy Corp (SE) announced that both company boards have executed an agreement to drop down Spectra Energy’s remaining U.S. transmission, storage, and liquids assets to Spectra Energy Partners.  In consideration, Spectra Energy will receive 172,000,000 in newly issued limited partner units, 3,510,204 in newly issued general partner units, and $2.2 billion in cash.  In addition, Spectra Energy Partners will assume about $2.5 billion of acquired asset debt. The 2014 EBITDA multiple of this transaction is approximately 9.3 times based on the volume weighted average unit price ($36.12) for the ten-day period ending on June 11, the date of the transaction announcement.  The transaction is expected to close by year-end. (Press Release)
  • On August 7, Energy Transfer Partners (ETP) and Energy Transfer Equity (ETE) announced the exchange of 50.16 million ETP common units, currently owned by ETE, for newly issued Class H units by ETP that track 50% of the underlying economics of the general partner (GP) interest and the incentive distribution rights (IDRs) of Sunoco Logistics Partners L.P. (NYSE: SXL).  (Press Release)
  • On August 9, EV Energy Partners (EVEP ) announced that it has signed an agreement to divest 4,345 acres in Ohio’s Utica Shale for approximately $56 million. EVEP will retain its overriding royalty interests in these acres. The transaction is expected to close by the end of the third quarter. I have adjusted their financial data to give them the benefit of the expected cash on their balance sheet. (Press Release)
  • On August 9, Constellation Energy Partners (CEP) announced that the it has entered into a new business relationship with Sanchez Oil & Gas Corporation (“Sanchez Oil & Gas”) and its affiliate, Sanchez Energy Partners I, LP (“SEP I” and together with Sanchez Oil & Gas, “SOG”). CEP has acquired oil, natural gas and natural gas liquids assets in Texas and Louisiana from SEP I for a purchase price of $30.4 million. In conjunction with the acquisition, SEP I received $20.1 million in cash, 1,130,512 Class A units, which represents 70.0% of the total Class A units outstanding after the transaction, and 4,724,407 Class B units, which represents 16.6% of the total Class B units outstanding after the transaction. CEP and SOG believe that the transaction, pursuant to which SEP I now owns a 17.7% limited liability company interest in CEP, is an important first step toward a wide variety of business development opportunities that may be pursued by the parties. (Press Release)

I will be on vacation next week through August 19 so the Weekly Snapshot for August 16 will be delayed until August 20. Have a great week and please try not to break the market while I am away!

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 080913 Snapshot vFree

About Philip Trinder

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