Oklahoma City-based Access Midstream Partners L.P. (ACMP) has commenced a secondary public offering of 6,000,000 common units – being sold by a major owner – while providing the underwriters with a 30-day option to purchase up to 900,000 additional common units.
The natural gas pipeline master limited partnership (MLP) will not get the net proceeds from this offering, which will go to the seller – private equity firm Global Infrastructure Partners – that owns a substantial number of Access Midstream units.
Access Midstream, which was spun off from U.S. gas producer Chesapeake Energy Corp. (CHK) in Jun 2012 and is now controlled by Global Infrastructure Partners, is engaged in the gathering and processing of natural gas. The partnership’s operations are concentrated primarily in the major gas shale plays that include the Barnett Shale, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Mid-Continent regions of the U.S.
Having done a stellar job at boosting its presence in leading unconventional plays and creating a best-in-class business model, analysts are predicting strong earnings growth for Access Midstream over the next couple of years. The 2013 Zacks Consensus Estimate is $1.45, representing 21% earnings per unit growth over 2012. Next year’s average forecast is $1.68, corresponding with 16% growth.
However, units of Access Midstream – currently trading at $54.01 – have already climbed some 17% during the past three months. Therefore, any upside from here may be limited.
As a result, Access Midstream currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
However, some better-ranked energy stocks include SM Energy Co. (SM) and Harvest Natural Resources Inc. (HNR). Both these stocks carry a Zacks Rank #1 (Strong Buy).