×
Triangles background
OUR COMPANY AND AFFILIATES
CBRE GLOBAL INVESTORS

CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers providing real estate and infrastructure investment solutions to over 500 clients worldwide.

INVESTMENT MANAGEMENT

CBRE Global Investors

CBRE Clarion Securities

CBRE Caledon Capital Management

Trammell Crow Company

MLPguy
CBRE GROUP

CBRE Global Investors is the investment management division of CBRE Group, Inc. the world’s premier commercial real estate services and investment firm.  The company’s shares trade on the New York Stock Exchange under the symbol “CBRE.”

REAL ESTATE SERVICES

CBRE

CBRE Blueprint
Our Company and Affiliates

This website uses cookies to improve the user experience. By using our website you consent in accordance with our Cookie Policy. Read More

ACCEPT
Triangles background
Back to Insights

January 4, 2013

Viewed 7722 times

Week Thoughts: Best Week for MLPs Since March 2009

MLPs took off like they were shot out of a cannon this week. We’ll see how long it takes for gravity to take effect. Perhaps gravity will take the form of a fresh slew of equity offerings in the coming weeks, or the next DC crisis which we forestalled for at least a month or two this week. But for now, its all good.
Cannon Shot
MLPs were up each of the 4 trading days, and week over week the MLP Index was up a staggering 7.0%, the best week over week change since March 2009 when the index was up 10.3%. There was clearly some money on the sidelines waiting for the fiscal cliff deadline to pass, or just waiting for the first of the year to allocate capital to the MLP space. The pop has pushed MLPs out to an early lead on the S&P 500.

Weekly Review_1-4-13

This week was so epic, I came up with two analogies for this week’s action (the first being the cannon thingy above). I mentioned this on Twitter, but this week reminded me of the 90s movie PCU. The premise of that movie was that in order to save their on-campus housing, a group of campus outcasts had to bring together all the random politically correct groups (hippies, african americans, feminists, etc.) for an all campus party. Its a fun movie if you’ve never seen it. But this week’s market action was akin to an all campus party after the fiscal cliff. Stocks of all types, all the MLPs, everything was up. The last few years of roller coaster price action has trained us to prepare for a hangover after such parties, but MLPs are well positioned after their “down” year to sustain some out-performance this year.
PCU
Winners & Winners
Not one single MLP had a negative week this week. I can’t remember the last time that happened. Very rare. The high beta, low liquidity names led the pack, with AMID popping 18.5% to lead everyone.

Top5Bottom5MLPs_1-4

I Realize You Have a Choice When it Comes to MLP Content…
Because the content on this site is free, I have no real obligation to continue to produce content here, but the rewards for doing so continue to be incredible. I’ve met (or virtually met) many new and interesting people, gained some new clients, gained plenty of publicity/credibility, and attracted speaking engagements all from this blog. I even got my job from a reader. Since I launched the site in 2009, there has been an explosion of MLP articles in mainstream publications, on Seeking Alpha, Motley Fool and other random blogs like mine. Through all that noise, you all have continued to read this site and tell friends about it,which is much appreciated. Having said all that, my posts these next few months will likely be fewer and with less words than usual. At my day job (at Guzman & Company), we’ve got some very exciting plans for MLP equity research that I will share in more detail here by the end of the month. But for the next 30 days or so, I will be exhausting most of my content producing efforts in the execution of those plans. I hope you understand.
News of the (MLP) World
News-of-the-World
Equity

  • New Source Energy (NSLP) files S-1 for initial public offering to raise up to $106.3mm
    • R.W. Baird leading the deal, which I believe is their first lead managed MLP IPO, so congrats to them on that, score one for the smaller banks
    • Upstream MLP, headquartered in Oklahoma City
    • Will own 14.2 MMboe of proved reserves (as of 6/30/12), 6.8 MMboe additional proved reserves held by sponsor
    • Use of proceeds from the IPO and credit facility borrowings to go to sponsor as consideration for contributed assets
    • 3,316 boe/d projected 2013 production (per S-1),
      • 63.8% NGLs, 4.7% oil and 31.5% natural gas
    • Has incentive distribution rights up to 25%
  • Western Gas (WES) files equity distribution agreement to sell up to $125mm in common units at the market

Debt

  • Vanguard Natural Resources (VNR) announces increased borrowing base from $960mm to $1.2bn in connection with the closing of its previously announced $328.8mm acquisition from Bill Barrett Corp
  • Eagle Rock Energy (EROC) announces increased commitments under its senior secured credit facility from $675mm to $820mm

M&A / Growth Projects

  • Enbridge Energy (EEP) announces $0.2bn further expansion of the Lakehead System to add 230,000 bbl/d of capacity (press release)
    • EEP quoted the investment in decimal point billions, apparently detail in millions too trivial to disclose, must be nice…
    • EEP to expand Lakehead System between Neche, ND and Superior, WI
    • Expansion will add additional 230,000 bbl/d capacity at an estimated cost of approximately $0.2bn
    • Expansion involves increased pumping horsepower, with no line pipe construction
    • Expansion will be included in the Mainline Expansion Joint Funding Arrangement under which 60% of the capital will be funded by Enbridge, Inc and 40% by EEP
    • Expected to be in service in 2015
  • Martin Midstream (MMLP) announces acquisition of Talen’s Marine & Fuel for net investment of $47.4mm after selling certain working capital-related assets to Martin Energy Services (press release)
    • Pretty complex transaction for relatively small dollars, but MMLP likes to offload the marketing pieces of their assets to the parent and keep the MLP assets fee-based
    • MMLP acquired all of the outstanding membership interests in Talen’s Maring & Fuel, LLC, effective 12/31/12, from Quintana Energy Partners, L.P.
    • Simultaneous with the acquisition, MMLP sold certain working capital-related assets to Martin Energy Services, LLC (MES), a wholly owned subsidiary of the GP of MMLP
    • MMLP’s net investment is $47.4mm, funded by MMLP’s credit facility
    • Expected 2013 cash flows to be $6 to $7mm
    • Assets include additional marine fueling barges and tug boats and delivery rolling stock
    • MES amended various service agreements with MMLP pursuant to which MMLP provides certain terminalling and marine services to MES
    • MES markets and distributes marine fuel and lubricants along the Gulf Coast utilizing MMLPs shore-based marine terminals
      • Talen’s Marine & Fuel business will join MES’s existing portfolio
  • QR Energy (QRE) announces $145mm acquisition of oil properties in the Florida Gulf Coast area from Quantum Resources Fund (press release)
    • Purchase price of $145mm, funded by cash on hand and credit facility borrowing, paid in cash to seller, Quantum Resources Fund (QRE’s sponsor)
    • Properties consist of 11.3mmboe of proved reserves (87% oil and 13% NGLs) in the Jay field in the Florida Gulf Coast
    • Expected to produce $35mm in 2013 adjusted EBITDA (4.1x EBITDA multiple) with $11mm maintenance capital expenditures and $3mm in additional G&A expenses
      • Very solid accretion, increases liquids exposure, which is generally a good thing
    • Approximately 2,500 boed with annual decline rate of approximately 9%
  • American Midstream (AMID) announces long-term agreement with Silver Oak Energy to provide midstream services and to construct and operate additional midstream facilities to support Silver Oak’s production in the Woodbine Formation in East TX (press release)

Other

  • DCP Midstream Partners (DPM) announces Wouter Van Kempen to replace retiring Mark Borer as CEO (press release)
RELATED CONTENT
No posts matching your criteria
MLPguy Post
Week Thoughts: Market Relief, MLP Grief The market found some relief on the stimulus bill, but midstream and MLPs lagged this week. Canada midstream helped the AMNA outperform the other midstream indexes. Oil prices fell further, and the lack of places to put oil in this climate is concerning.
MLPguy Post
Midstream Week Thoughts: Remote Detonation While the entire country worked remotely this week, the market had its worst week since 2008. This led to another week of staggering losses in midstream and oil prices. MLPs actually outperformed utilities and the DJIA this week and were roughly inline with the S&P 500 decline.
MLPguy Post
MIDSTREAM ELEPHANTS COMING HOME TO ROOST The balance between supply and demand of MLP paper has always been delicate. In the past it was a balance between perpetually growing inflows and equity issuance. There were times when equity offerings temporarily overwhelmed investor appetite for MLPs. But as liquidity has diminished in recent years, the structural risks to this group to a stampede to the exits grew larger.
MLPguy Post
Week Thoughts: Market Suspended, MLPs Canceled What a week. The oil price collapse dragged MLPs and midstream stocks down again this week. The group finished down a staggering 30%, which leaves YTD returns in less than 3 months at negative 40-50%.
MLPguy Post
Week Thoughts: From Russia, No Love for Midstream Midstream captured more downside, selling off again this week but for a different reason. Last week, midstream was down alongside the rest of the stock market. This week the market finished flat, utilities finished sharply higher with a big interest rate drop, but midstream sold off again.
MLPguy Post
Midstream Week Thoughts: Selling Goes Viral Midstream joined in on the biggest and broadest equity selloff in recent memory this week. This was the worst week for the S&P 500 and for MLPs since 2008. Oil dropped to the mid-$40s, interest rates and natural gas prices dropped to fresh lows.
MLPguy Post
Week Thoughts: MLP Erosion Resumes Stocks of all types were negative this short week (even utilities, barely), so despite a rally in commodity prices and a further drop in interest rates, midstream stocks were negative. MLPs were down for a 4th week in the last 5 weeks and were again the worst performing group in midstream.
MLPguy Post
Week Thoughts: Midstream Positive, Beyond Partnerships (BP) On the back of rebounding oil prices and an ever-higher stock market, midstream indexes were positive this week. In a familiar refrain, the broader AMNA index was well ahead of the MLP Index, reflecting better performance among corporations
MLPguy Post
Week Thoughts: Midstream Reprieve MLPs and midstream companies arrested their recent decline this week with a flattish week. The broad equity market had a strong week, helped by gains from some big tech firms on earnings results.
MLPguy Post
Week Thoughts: Somber Midstream, Market Mentality Midstream was negative this week, along with most other global equities and commodities.  Midstream outperformed broader energy stocks, but underperformed the S&P 500 and utilities, which continue to grind higher. 
MLPguy Post
Week Thoughts: Market Seeks Shelter, Not MLPs MLPs and midstream came back to earth this week, dragged down by oil and natural gas prices that were too weak to be ignored by midstream investors after 6 weeks of gains.
MLPguy Post
Week Thoughts: Midstream Phase Won Midstream gains kept rolling for a sixth straight week, again riding a strong broad equity market higher, and defying weakness in upstream energy stocks (XOP -3.6%).
MLPguy Post
Week Thoughts: Falling Tension, Rising Tide Lifts Midstream MLPs extended their winning streak to 5 weeks, but MLPs and midstream stocks were weaker towards the end of the week as oil prices and energy stock prices sank lower.
MLPguy Post
INFRASTRUCTURE DELIVERS MLPs have bounced 10%+ off the early December 2019 multi-year low and are enjoying a seasonal respite from fund outflows. Without the stress of daily extreme volatility and angst, now is an ideal time to re-evaluate midstream exposure and consider (or re-consider) listed infrastructure.
MLPguy Post
Week Thoughts: Clean Slate Midstream traded up for a 4th straight week since bottoming on December 3rd.  MLPs are up 12.7% from the bottom and the AMNA isn’t far behind with a 10% gain.
MLPguy Post
2019 Year-End Midstream Statistics The year ended this week, which you may have heard.  From this point forward, we forever will be closer to 2050 than 1990.  So, it is time to review the final results of 2019.
MLPguy Post
Week Thoughts: No Holiday Drama for Midstream Midstream traded up the first 3 days this week to cap a run of 7 positive days out of 8.  Then on a very low volume session Friday, midstream corporations and MLPs sold off a bit to finish the week slightly positive overall.  Midstream broadly was in-line with the broad stock market overall (S&P 500 +0.6%).
MLPguy Post
Week Thoughts: Pipelines Piping, MLPs A-Leaping Midstream’s bounce off the bottom continued this week. In basically a repeat of last week, the MLP Index gained 4.6% the first three days of the week and was flattish from Wednesday’s close through the end of the week.
MLPguy Post
Week Thoughts: Midstream Relieves Itself Midstream and MLPs ripped this week, continuing the rebound that began in the middle of last week. A benign broad market backdrop allowed midstream stocks and MLPs to rally on their own merits this week.
MLPguy Post
Week Thoughts: Midstream Trypophobia Midstream stocks took cues from the broad market this week, drifting lower early in the week before mounting a comeback later in the week, including a big Friday after the robust jobs report.
MLPguy Post
DECADENCE TO DECAY: A DECADE OF MLPguy As of this week, I have now been publishing thoughts on MLPs at MLPguy.com for more than 10 years. The usual end of the year reflection in the media and among investors will be magnified arbitrarily this year by the end of the decade.
MLPguy Post
Midstream Week Thoughts: Groundhog Day for Thanksgiving Monday was positive for midstream, capping a rare 3-day run of positive performance. But apathy reigned the rest of the week, as Midstream and MLPs traded down the rest of the holiday-shortened week.
MLPguy Post
Week Thoughts: Midstream Flattish, Finishes on Positive Note Midstream was almost positive week over week, but had to settle for two days of positive performance in a row.
MLPguy Post
Week Thoughts: Mariner Makes Midstream Mixed Midstream stocks were mixed across categories, with Canadian midstream outperformance offset by MLP weakness, but overall finished positive for the week, helped by broad market strength and income stock strength.