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Enterprise Products (EPD) Seeks Commitment for ECPL Expansion

Zacks Equity Research
Kinder Morgan (KMI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Why Is Kinder Morgan (KMI) Down 4.3% Since Last Earnings Report?

Kinder Morgan (KMI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Enterprise Products Partners L.P. EPD intends to expand capacity at its Enterprise Crude Pipeline LLC (“ECPL”) West Texas System and has announced a binding open season.

Crude oil from points in New Mexico is transferred by ECPL to the partnership’s terminal in Midland, TX. The expansion of the pipeline system will provide the required augmentation to the takeaway capacity. The pipeline is intended to facilitate transportation of high crude oil production from the Delaware Basin in New Mexico.

The open season seeks customer commitments for capacity expansion on the West Texas System from ECPL’s Lynch, Hobbs and Red Hills stations in Lea County, New Mexico to the Midland terminal. At Midland, shippers will have access to storage and terminal services besides being connected to multiple transportation substitutes like trucking and pipeline infrastructure.

These additional alternatives provide access to diverse downstream markets including the Gulf Coast. The expanded West Texas System is expected to commence operations in the third quarter of 2018.

Enterprise Products is one of the largest integrated midstream energy companies with system that facilitates the reduction of the impact of cyclical commodity swings. The partnership has successfully executed growth projects as well as mergers and acquisitions worth $38 billion and $26 billion, respectively, since its IPO in 1998. Currently, it has growth projects of about $5.3 billion under construction. In 2018, Enterprise Products has completed growth capital projects worth $400 million.

Price Performance

In the past three months, Enterprise Products’ shares have gained 10.5% compared with the industry’s 1.2% rise.


Zacks Rank & Key Picks

Enterprise currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Nine Energy Service, Inc NINE, Equinor ASA EQNR and CVR Refining, LP CVRR. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nine Energy Service is engaged in delivering onshore completion and production services to unconventional oil and gas resource development. The company pulled off a positive earnings surprise of 28.57% in the preceding quarter.

Equinor, based in Norway, is a major international integrated oil and gas company. It witnessed an average positive earnings surprise of 11.53% in the last four quarters.

Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.

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CVR Refining, LP (CVRR) : Free Stock Analysis Report
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