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Linn Energy, LLC Message Board

  • rlp2451 rlp2451 Dec 13, 2011 12:39 PM Flag

    Citi Likes a Lot of MLPs; Doesn't Mention Linn

    LINE used to be one of Citi's top picks; for whatever reason, it isn't now.

    Based on an increased estimate for the price of oil and a lowered estimate for domestic natural gas, Citi boosted its natural gas liquids price expectation for 2012, saying the most impacted names by these revisions include master limited partnerships in the gathering and processing and crude-levered sectors. Citi raised its adjusted EBITDA estimates by 5.0% in 2012 and 6.0% in 2013 for these sectors.

    Citi said current commodity prices continue to benefit many MLPs, and that after incorporating actual fourth-quarter commodity prices to date, its adjusted EBITDA estimates are increasing by 4.1% on average with Atlas Pipeline Partners L.P. (APL) recording the biggest uptick at roughly 14%.

    In addition to APL, Citi said its top picks remain DCP Midstream Partners L.P. (DPM), Enbridge Energy Partners L.P. (EEP), Enterprise Products Partners L.P. (EPD), Genesis Energy L.P. (GEL), Targa Resources Partners L.P. (NGLS), ONEOK Partners L.P. (OKS), Western Gas Partners L.P. (WES), Magellan Midstream Partners L.P. (MMP), Plains All American Pipeline L.P. (PAA), and Targa Resources Corp. (TRGP). Here’s Citi:

    In the current environment we remain positive on midstream MLPs that are closely tied to the producer or downstream industrial customer. With a lower cost of capital, midstream MLPs have the ability to provide the necessary infrastructure to service these cyclical customers on mutually beneficial terms. We believe that the following sectors will perform well in 2012: gathering & processing, NGL logistics, and crude oil logistics. Conversely, we remain cautious on the following sectors: retail propane distribution, natural gas storage, and long-haul natural gas transportation.

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