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MarkWest Energy Partners, L.P. Message Board

divyinvstr 5 posts  |  Last Activity: Feb 5, 2016 9:21 AM Member since: Jun 30, 2011
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  • Reply to

    Distribution Growth Reduced

    by divyinvstr Feb 3, 2016 7:43 AM
    divyinvstr divyinvstr Feb 5, 2016 9:21 AM Flag

    Not sure that the Marine Division drop down will be positive for non-MPC unit holders. The deal will be 100% financed with MPLX units which, given the sell-off, represents a relatively stiff cost of capital. MPC will benefit from the normal distribution from the new units plus the resultant increase in IDR payments. I don't recall that being told that the Marine unit would be accretive to current unit holders during the conference call.

  • This morning management reduced 2016 distribution growth for 2016 to 12% - 16% citing ongoing weakness in product pricing and slower than previously anticipated volume growth.

  • Reply to

    ETE share price if Merger gets cancelled

    by sjfriedel Jan 29, 2016 10:48 AM
    divyinvstr divyinvstr Jan 29, 2016 12:51 PM Flag

    Only WMB shareholders vote.

  • Reply to

    Distribution cut, and more

    by jimattarian Dec 14, 2015 11:22 AM
    divyinvstr divyinvstr Dec 14, 2015 12:22 PM Flag

    Should say when the index falls 30%, you might want to read it again.

  • Reply to

    Who is selling this one??

    by jimbo1392 Dec 8, 2015 5:55 PM
    divyinvstr divyinvstr Dec 9, 2015 8:08 AM Flag

    I think Kinder Morgan slashing its dividend by 75% this morning has become the example of why the MWE deal was done. As you must know, the MLP model is to fund each project, whether organic or acquisition, with some combination of new debt and new equity. As equity prices fall, however, more units must be sold at these lower prices in order to satisfy project requirements. The cost of capital thus rises to the point that ongoing projects are no longer economically viable. Given the massive ongoing building program at MWE, management evidently believed becoming part of a financially stronger entity, MPC, preferable to the alternatives (the golden handcuffs were also attractive). It appears that KMI produces sufficient cast to satisfy its growth and debt service needs by cutting its dividend. Given the number of ongoing projects at MWE and the likely slower than previously projected utilization growth for its many new projects that might not have been possible for MWE.
    However, to believe that MWE could remain independent while maintaining its distribution and continuing to grow distributions at 5% or higher each year in the current energy environment is, I believe, a fantasy.