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Enbridge Energy Partners, L.P. Message Board

  • glsimmons3 glsimmons3 Sep 26, 2011 9:25 AM Flag

    oil spill cost increased by 20% & now

    above 650 insurance coverage.... doing the math and adding stated 20% to previous amount of 585 mil looks like loss could be around 700 mil or about 50 mil over the insurace coverage...
    does not sound good but to put into better light this is about 2.2% of 3rd qtr estimated revenue or .54% of 2011 reveunue... so even though the spill is a terrible event for the enviroment and not good for our reputation as well as other companies involve it's not a huge monetary event for eep.
    forgot to mention that third party companies are not off the hook for a portion of spill expenses and these may be collected in the future... biggest negative to eep will be volatility to the balance sheet w/ damage payouts, insurance coverage reimbursements, and 3rd party payments all coming at different times... gross income may bounce down or up on various 1 time events... just a dark cloud that will pass & may provide a great buy op... gl

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    • "UPDATE 1-Enbridge Energy ups spill cost estimate by 20 pct

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      Mon Sep 26, 2011 6:52am EDT

      (Follows alerts)

      (Reuters) - Oil and gas pipeline operator Enbridge Energy Partners said the cost to clean up a pipeline spill last year in Michigan is expected to increase by 20 percent.

      The partnership, the U.S. affiliate of Canadian pipeline company Enbridge Inc , said in a regulatory filing on Monday that it had earlier expected the cost to be $585 million.

      More than 20,000 barrels of oil leaked into a Michigan river system when Enbridge's Line 6B ruptured on July 26, closing the line for nine weeks.

      The company said the expected increase includes only the gross costs before insurance recoveries and not fines and penalties.

      The partnership said it anticipates the new estimate to exceed Enbridge Inc's $650 million insurance coverage. (Reporting by Aftab Ahmed in Bangalore; Editing by Supriya Kurane)"

      Reading Reuters, it appears as if EEP's net exposure, after insurance recoveries, is (1.2 X $585m) - $650M, or $52M.

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