I am pretty sure EPD quietly paid up and buried the $$ in a 10Q. That fiasco is behind them. EPD did not make any attempt at making amends in trying to deep six the ETP/Phillips Bakken oil pipe. Think that would will continue to fester.
Correct. Also EPD usually (except in a panic situation) has little correlation to oil prices. It does effectively trade of NG pricing and has msade a real niche it exports which are effected by neither. Understand taking profits. The first couple weeks in December also usually hit by lots of mom and pop sellers who bought a couple years ago and then got a surprise - a K-1. Are selling onw so not to receive in 2015. No idea how many for EPD but MWE some years ago (about 1/20 of market cap then) had over 10,000 individuals sell in December!
Marv - The COXE post is exactly what several other have posted. SA is indeed trying to send a political message to Russia - it was delivered and economically it has pretty well decimated an already hurting economy. Got to remember Russia is #1 energy exporter. Interesting that with oil down the NG people like MWE hurt. NGLs down but only because price of natural gasoline tied to gas price. That will move up and down in tandem. Nothing has effectively changed for MWE. NOTHING. same for most of the other NG MLPs. Several posts by myself and others on IV MLP board.
The big thing you have each year is about 10-20K sellers of fairly small lots of MWE. These are people who did not understand a MLP equals a k-1 and do not want another K-1 after the one for 2013. Happens each year. This year add on redemptions from CEFs and hedge fund sales alnog with general panic and you got down some 15% +/- for midstream and upstream destroyed. midstream that is olilier wil take longer to come back. Sure wish I were not fully invested.
On another subject - oil production is going to drop by some 3M bbl/day becuase smaller producers with medium to high costs are getting killed. columbia for example down by 700K a day as thry say now worth pumping/selling.
You need lots more education. EEP pays no dividend - should have figured that out in your reading - and any distribution increased are done each quarter in Jan, Apr, july, sept. Absolutely positively do not buy EEP until you go to the National association of Publically Traded Partnerships and read MLPs 101 a Primer. Googling MLPs will get you confused. Googling GP wil get you to Georgia Pacific - not anything to do with EEP/Q
govpur - When EPD bought out its GP EPD earnings and price went down for almost a year. The buyout was dilutive to earnings for about 9 months. The buyout also only worked because the Duncan family owned almost 2/3 of the GP and were willing to take almost no premium to make the company as a whole stronger. Does that situation exist here?
I agree that getting rid of the GP (lots of costs) as an economic entity would be good. Do not think right now the company cost stand the millions it would cost. MMP and MWE did it and they too had short term issues. Longer term it is a plus.
idror - Oil prices will effect those areas that have the lowest return. In the USA the Bakken has one of the highest costs (including transport to market) and drillers are likely to slow drilling if oil stays low. That is where lots of CMLP assets are located. If the cash flow is not sufficient they will cut distributions. Also there is panic and selling of ANYTHING energy related whether low oil prices will effect them or not. Several NG pricessors and exporters are down some 20-40%.
ETP already got a pipeline started. Complete in a year or two. EPD plan was probably something designed to tick off ETP as they hate each other.
Lets try Europe had $100 oil and $12NG and naptha was more expensive even then. Europe also had problem that most NG came from Russia and two shutdowns in last serveral years gave pause to changing to NG. Was told that the traditional 6 to 1 ratio was needed. Thus with NG at $3.75 oil would need to be in the $25 area AND stay there for naptha to be competitive. In Europe we are starting to ship LNG over for use and it is delivered at cost of about $8-10 landed.
Mktply - Did you forget EPD was sued by ETP over the Seaway for violating their contract. Absolutely no love there. EPD has significant contacts and good relationships with producers and did have a possibility of getting volumes BEFORE oil prices imploded. Management is not always perfect and EPD certainly was not perfect here, but the open season for this line cost little except in egos.
As to the Fed. . . . retail sales are still weak as the consumer is apparently not spending their extra $10 a week or whatecver the amount. walmart up but am thinking the big beneficary in retail will be grocers. Hard to predict Fed actions but unless they lied they will not increase until inflation move to 2%. Right now we are well below that and dropping into negative CPI numbers because of energy. I do not guarantee anything for certain. All i can do is perdict no increase until energy moves back up taking inflation with it. Would say that could not happen before Q3 of 2015 and maybe later.
As to good news - EPD distirbution is secure as are almost every otgher midstream payout for at least the next 5 quarters. The NGL price hit is mostly over and really confined to natural gasoline. Propane stable due to exports and C3/C4 prices holding just fine and a small % of that mix anyway. If drilling stopped completely today volumes would not decrease until 2016 according to EPD and others.
Will MLP prices be destoyed in the meantime - probably, but long term holders will simply collect their distributions and wait it out. Way too late IMO to bail out now.
CNBC is guilty (as almost always) of telling part of the truth. companies have 3 basic types of contracts. Most of EPDs contracts are fee based with take or pay. The E&P pays a fixed fee for services and pays whether they deliver or not. Not all contracts or volumes are take or pay. Some contracts are Keep Whole where the processor takes out the bad or good stuff to be able to put NG into a pipe. The processor gets to keep the NGLs etc but must buy NG to keep the BTU content going downstream the same (Whole). This type is getting pretty rare. Last is POP where the processor gets a % of the proceeds. If the NGLs etc as worth less the processor gets less. Processors usually hedge positions to try to take commodity prices out of the mix. Price movement for EPD would be minimal as compared to the $1.6B they will make in 2014 if NG/NGL go down even more.
EF, Permian, Utica, Marcellus, Woodford, and about 20 others. The Bakken still lacks G&P infrastucture. Butte Pipeline already there and expanding with loop. Enbridge looking at completing new pipe as well. ETP pipe will go to Patoka IL with 320K capacity and the reversal of trunkline gets the oil to the Gulf. EPDs 2M bbl a day pipe was simply nonsense IMO.
I would have been amazed if the season had been successful. The reason is ETP already announced enough commitments to build a line SE from the Bakken. One line is enough. Would guess EPD simply put this in to antagonize ETP as feeling between the two are not good.
The breakeven for going back to oil for ethane is at about $1.50 ethane. Ethane is now about .24. got to remember we have so much ethane it is mostly left in the NG stream. Europe uses naptha because NG is $12 and ethane even more. NG demand only will go up because of some 20 new power plants that will burn NG. 2 in Arizona alone!
The problem comes only if prices stay down for an extended time (say 18 months). At that point shippers will begin to produce less and smaller producers will default on contracts. Definately some BK a year or tow out. Problem now is uncertainty and panic with investors. People also do not understand the price collapse has only effected oil and not NG.
Suggest you simly try reading the information for yourself. Not hard. Go to EPD website and under investors click on DRIP information tab. You then need to call your broker and find out if they participate. Not all offer the EPD Discount DRIP.
Seriously? Rubybell already said it. My grandkids Twitter, Snap, Skype and text each other. Facebook is simnply for having a page. Little used.
Couple of things - OPEC is not saying oil demand will be down, but the INCREASE in demand less than their prior estimate. Production in the USA will be up significantly in 2015 and begin to drop in 2016 if oil stays down, but NG and NGL prices are still fairly firm so wet gas in particular is a winner. Also the producers have lots of take or pay contracts.
you are looking at margin calls and panic where panic is not deserved.
Actually not correct. You can get almost every K-1 on line. That move arrival date up to about the end of feb or 1st week of March. Certainly plenty of time to enter a few numbers.