Paloma Acquisition (1) Based on 160 - acre spacing
Gulfport has entered into an agreement to acquire Paloma Partners III, LLC (“Paloma”) for ~$300
Paloma holds ~24,000 net acres in the dry gas core of the Utica Shale
Represents a natural bolt - on to Gulfport’s existing position
Large, concentrated acreage position in the dry gas window of the Utica Shale primarily located
in Belmont County and Jefferson County, Ohio
Increases Gulfport's scale within the basin and adds ~150 (1) net locations to the inventory
Acreage overlaps with a number of Gulfport’s planned units
Optimally located in terms of midstream infrastructure and transportation
Numerous options for gathering and compression infrastructure already under development
Multiple existing interstate pipelines located in vicinity of acreage position
go to investorvillage bry board
mobely 5, sherwood 6 and houston 4 coming on line in 2nd quarter 2015 also ie eqm. (cmlp also-damaged company with low cagr-but high yield)
Swiss firm to use Utica gas for Ohio power plant
Swiss firm Advanced Power said last week that it plans to use natural gas from the Utica Shale for its $899 million power plant that will be built in Carroll County, Ohio. The plant is expected to provide electricity for 750,000 houses starting in late 2017
Marcellus / Shale Daily / Utica / NGI The Weekly Gas Market Report / Northeast
Rockies Express Gets FERC Approval For East-to-West Capacity Expansion
March 2, 2015
FERC Approves TGP's Niagara Expansion, NFG's Northern Access Projects
Commission Approves Leidy Southeast Expansion Partial Path Service
Equitrans Files FERC Application For Ohio Valley Connector
Tallgrass Energy Partners LP said Monday that FERC has approved its Zone 3 East-to-West Project that would modify the Rockies Express Pipeline (REX) to send an additional 1.2 Bcf/d of Appalachian natural gas to Midwest markets.
REX is now waiting for the Federal Energy Regulatory Commission (FERC) to issue a final Notice to Proceed, and the project is expected to be in service in the second half of the year. The pipeline's Seneca Lateral, which delivers 600 MMcf/d from MarkWest Energy Partners LP's Seneca gas processing plant in Noble County, OH, to the Rex mainline and westward through Ohio, Indiana and Illinois is already in service (see Shale Daily, June 18, 2014) . Tallgrass, which operates and owns half the pipeline along with Sempra U.S. Gas & Power (25%) and Phillips 66 (25%,) said Monday that the lateral has reached full capacity.
Rex said in its FERC application that adding the Zone 3 capacity would require modification of certain delivery interconnects and the construction of two others along with compressor stations (see Shale Daily, June 24, 2014). The 1.2 Bcf/d is fully contracted for average terms of 20 years.
The additional capacity is being added to move Appalachian gas from the Clarington Hub in Monroe County, OH, to an interconnect with Natural Gas Pipeline Co. of America in Moultrie County, IL...end part 1
Kinder Morgan planning two natural gas liquids pipelines across northern Ohio
By Bob Downing
Beacon Journal staff writer
Published: April 3, 2015 - 09:24 PM | Updated: April 3, 2015 - 09:24 PM
Texas-based Kinder Morgan Energy Partners LP says it intends to add a second 12-inch pipeline to its previously announced plan to ship petroleum-based liquids through northern Ohio.
The additional line would transport natural gasoline.
The lines, dubbed Utica to Ontario Pipeline Access (UTOPIA) West and UTOPIA East, would run side by side along a 240-mile route from Harrison County through southern Stark and Wayne counties to Fulton County in northwest Ohio.
Officials said the pipelines would be built at the same time.
From Fulton County, UTOPIA West would carry natural gasoline through existing pipelines to Illinois, then another 1,900 miles to Fort Saskatchewan, Alberta. That line previously carried Canadian propane to the United States.
UTOPIA East would connect with existing Kinder Morgan pipelines in Michigan. Its liquids, including ethane and propane from Ohio’s Utica Shale region, would be shipped to the NOVA Chemicals Corp. for eventual use as feedstock for producing plastics at its plant in Corunna, Ontario.
That pipeline, a $500 million project, was announced in December 2013.
The two pipelines do not require Federal Energy Regulatory Commission approval because the new sections are entirely within Ohio. Only interstate pipelines require approval from FERC.
Approval will be required from the U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service and several Ohio agencies.
Construction could begin in November 2016, and the pipelines could begin service in January 2018, according to a company fact sheet. The two pipelines would create five full-time jobs plus hundreds of temporary union construction jobs.
According you recent rbn article still coming on line in second quarter 20155 with no actual date but no info if actually operating yet
Cadiz/Harrison County, OH
Cadiz is owned by the MarkWest Utica EMG joint venture. The first gas processing capacity at Cadiz was a 125 MMcf/d plant that started operating in May 2013, in support of Gulfport Energy production in the area. The complex’s capacity was later expanded to 325 MMcf/d and now supports production by American Energy Utica (AEU, a division of American Energy Partners) as well. Two more 200 MMcf/d plants are planned at Cadiz: one to come online in the second quarter of 2015 and the other to follow in the first quarter of 2016. Residue gas flows into either TCO, Dominion East Ohio, or Texas Eastern.
Seneca/Noble County, OH
MarkWest Utica EMG’s Seneca complex started in November 2013, when the first 200 MMcf/d of gas processing capacity was developed to support Antero Resources’ production in that part of the Utica. Another 400 MMcf/d of processing capacity has come online there since, supporting not only Antero but AEU (American Energy Utica), Gulfport Energy, PDC Energy and Rex Energy And yes, as at all other MarkWest processing complexes in the Utica/wet Marcellus, another 200 MMcf/d of capacity is under construction at Seneca; it will begin operation in the second quarter of 2015. Seneca’s residue gas flows into the Texas Eastern system and TCO.
to my recollection SLMP joint interest is primarily in the Ohio condensate stabilization system and any future dry gas gathering in se Ohio
typo correction original jv was in 1999
a lot of money changed hand in 2005 to re-structuring for JV from the original 1999 set up as DEFS
barels there is a big interest by Spectra and Phillips in dcp
a lot of money changed hand in 2005 to re-structuring for JV from the original 1994 set up as DEFS
COP 10Q 3rd qrter 2005
"Duke Energy Field Services, LLC (DEFS)
"In July 2005, ConocoPhillips and Duke Energy Corporation (Duke) completed the restructuring of their respective ownership levels in DEFS, which resulted in DEFS becoming a jointly controlled venture, owned 50 percent by each company. This restructuring increased our ownership in DEFS to 50 percent from 30.3 percent through a series of direct and indirect transfers of certain Canadian Midstream assets from DEFS to Duke, a disproportionate cash distribution from DEFS to Duke from the sale of DEFS’ interest in TEPPCO Partners, L.P., and a combined payment by ConocoPhillips to Duke and DEFS of approximately $840 million. This payment was approximately $230 million higher than previously anticipated because our interest in the Empress plant in Canada was not included in the initial transaction as anticipated due to weather-related damages to the facility. Subsequently the Empress plant was sold to Duke on August 1, 2005, for approximately $230 million."
also as an fyi (not much financial importance) dcp is the name of the two original parent companies
duke and conocphillips that formed the jv,
barles-thanks for detailed response and seeing the increased volumes contribution.
- ~$19 to $ 20mm is not an add back, it is the increase in their fixed fee percentage over 2015 of 5% (from 60% in 2015 to 65% in 2016).
DPM will generate this much more in fixed cash flow in 2016 so it should apply to 2016 DCF
- ~$32 mm is extrapolated percentage of $ hedges, using the authors calculation methodology, that would be attributed to 2016 from the $187 mm the author derived in total
It is fair to deduct the hedges from cash flow that go away in 2015, likewise it is fair to attribute the extrapolated cash attributed to 2016 hedges in 2016 DCF
So I do not see how a professional analyst could disregard these two items in addition to the increased volumes as they are real assets/agreement terms.
On distribution coverage my attempt was to determine in the LP units were covered and they are easily covered with my additions of the ~$19 to $20 mm and the ~$32 mm; along with the additional ~$30 mm in cash flow from increased volumes from 2015 Capital, even fully funding 2015 capital with 100% equity of 8.6 mm new units
Now if you add in the GP interests, along with the additions of the ~$19 to $20 mm and the ~$32mm, and with the additional ~$30mm in cash flow from increased volumes; the fully paid coverage ratio extrapolates to ~.91 to .95 at 8.6 mm new units issued and at ~.92 to .97 with 50% equity-50% debt for financing 2015 capital and ~.95 to 1.0 with 100% pik units to the LLC or debt (which is always possible through there two major sponsors as guarantors); so yes it is close and discomforting if prices remain low, but if you follow investorvillage [mlp board (for those holding mlp's) or bry board] and follow my posts you will see to date this 2014 oil price crises response is closely trending the 1985 oil price crises (both induced by SA defending production) and if 2014 continues to even remotely trend 1985, oil prices may be near/in a slow sustained recovery
barles thanks for sharing the analysis. I studied it along with the graph I found again. My goal was to review the 2015 "base" projections for ebitda and dcf and validate if they were reasonable based on my analysis. The person who analyzed the data put a lot of effort into it and has some legitimate issues, but I noticed two critical flaws in the base unhedged data arriving at $483mm ebitda /$368mm dcf that would lead to an erroneous conclusion that DPM could not cover 2016 distributions.
Most of my calculations were derived from data on slides 7, 9, 10, 12 of Mar. 2015 and 5, 6, 7, 8, 9 of 2014 Earnings presentations. First the calculation in the analysis did not include the increase in fixed fee percentage plus hedges to 73% forming base for 2016. If this increase in fixed fee percentage is factored in, it adds another $19 to $20mm to the dcf for exiting 2015 DCF entering 2016 and in addition an estimated $32mm in hedged dcf still carried into 2016 i.e. of the ?$187mm hedge value given by analyst I estimate $165mm is attributed to 2015 and $32mm to 2016
Secondly, the analysis did not included increased volumes exiting 2015 entering into 2016 for the $300mm capital spend over 2015. If I apply volumes/values from 2014 capital of $500mm capital and apportion it to 2015 capital; I generate an estimated additional ebitda of ~$49mm or ~$36mm in dcf in 2016 from 2015 capital
If I the take the $545-$565mm of 2015 projected dcf, reduce that by expiring hedges of $165mm add back the increase in 2016 fixed fee base of $19 to $20 mm and hedges $32 mm; plus $30mm in new 2016 volume revenue from 2015 capital arrives at extrapolated effective 2016 DCF of ~$460-$480mm
If I take the most conservative approach possible and say the $300mm is funded entirely by new equity-units it will increase total units outstanding by ~8.6 mm at $35 unit from 114mm to 122.6mm and distributions of $387mm (at $3.16 unit)
Divide $387mm by 122.6 gives 2016 coverage ratio of ~1.19/~1.24
thanks barles will take a look at it
charles b. thanks for feedback but I cannot readily get to where the article you referenced concluded with available data. we need to see the data behind non hedged numbers from the tweet as approx 60% of dpm revenue is fixed fee in 2015 (plus ~25% of 40% remaining is hedged so effectively 70% of 2015 cash flow is locked in), approx 65% of dpm revenue is fixed fee in 2016 and approx 70% of dpm revenue is fixed fee in 2017; so hedges play a smaller role in revenue generation as dpm moves forward. Also I tired to relocate the analysis and it was not locatable
charles barkley great name--- can you share the logic of using unhedged guidance
go to investorvillage mlp or bry boards to access article
not specific on if debt guarantees, ownership, structural, etc or all of the above. It could be small or it could be a big
Is it a combination of ngl pipeline pack, rail to alternate locations and exports?
Join Together With Demand—MarkWest’s Utica/Marcellus Fractionation Facilities
Monday, 03/30/2015Published by: Housley Carr
"...In our next episode, we’ll explain how MarkWest’s complexes in the Utica/wet Marcellus are connected to each other (and to take-away NGL pipelines), note the company’s NGL storage capacity, and get to our “big reveal” on the midstream’s company plan for ensuring that its processing/de-ethanizing/fractionation/NGL-pipeline network can function reliably through almost any situation despite the region’s lack of NGL storage capacity...."