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November 4, 2012

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MLP Week Thoughts: Just the Stats

Busy week in the MLP space.  Earnings and the equity calendar weren’t slowed by the big storm, or by the two day stock market closure.  Busy week for me as well.  So busy that I’ll be very brief with the commentary, sticking to the charts and stats for the most part.  Also, good luck to anyone that is still without power or had their property damaged last week.  Never been happier to have moved from the northeast.
MLPs kept pace with the S&P 500 on a total return basis in this storm-shortened week, returning 0.2% compared with 0.2% for the S&P 500.  Oil dropped another 1.4% and gold was down 2.2% for the week.   NGLs dropped sharply as well. Natural gas futures bounced 4.9% to $3.55 per mcf.

IPOs dominated the top five performers for the second straight week.  Bottom five was weighed down by OXF, which on Monday morning announced a 54.3% cut in its distribution.  RNO was no doubt impacted by that news, as a fellow coal MLP that has had trouble maintaining its distributions.

 OXF dropped back into the cellar for the week, nothing much else changed as far as year to date winners and losers this week.

For the year, MLPs still trail the broader stock market, variable distribution MLPs are still outperforming and GPs are outperforming MLPs.  Although the Alerian MLP Index doesn’t include any of the 2012 IPOs, or many variable distribution MLPs.  The unweighted average of all energy MLPs is 14.4%, inline with the broader market.  This helps support a suspicion I have that yield hungry investors prefer fresh MLP stories to the large cap MLPs and (for some) their incessant follow on equity offerings.

News of the (MLP) World


  • Delek Logistics (DKL) prices IPO of 8.0mm common units at $21.00/unit, raising $168.0 in gross proceeds
    • IPO Yield: 7.14%
    • Up 6.4% on its first day of trading
  • Southcross Energy (SXE) prices IPO of 9.0mm common units at $20.00/unit, raising $180.0mm in gross proceeds
    • IPO Yield: 8.0%
    • Up 11.8% on its first day of trading
  • Golar LNG (GMLP) launched a 4.3mm follow on offering


  • Magellan Midstream (MMP) prices $250mm of 4.20% senior notes due 2042 at 99.338% of par, to yield 4.24% to maturity
  • Northern Tier Energy (NTI) prices $275mm of 7.125% senior notes due 2020 at par

M&A / Growth Projects

  • Rentech Nitrogen (RNF) completes acquisition of Agrifos, LLC
  • Vanguard Natural Resources (VNR) announces acquisition of natural gas and liquids assets in the Piceance Basin in Colorado and Wyoming for $335mm from Bill Barrett Corporation
  • QR Energy (QRE) announces acquisition of oil properties located in Ark-LA-Tex area from an undisclosed private seller for $215mm
  • Enterprise Products (EPD) announced its sixth NGL fractionator (85,000 bbls/d capacity) at Mt Belvieu is operational
  • Ferrellgas Partners (FGP) announces acquisition of Flores Gas, a retail propane provider in El Paso, TX for an undisclosed sum
  • Natural Resource (NRP) announces acquisition of an overriding royalty interest in frac sand reserves in Wisconsin for $15.0mm

Corporate Actions

  • Quarterly Per Unit Distributions
    • DPM:     $0.68, +1.5% quarter over quarter
    • BBEP:     $0.465, +1.1%
    • EXLP:     $0.5075, +1.0%
    • BWP:     $0.5325, flat
    • OXF:      $0.20, -54.3%
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