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Valero Energy Partners: Top Midstream MLP Loser on November 19

Kurt Gallon

Midstream and Upstream MLP Gainers and Losers on November 19

(Continued from Prior Part)

Top losers

In the last part, we saw the top five midstream MLP gainers on Thursday, November 19. In this part, we’ll discuss the top five midstream MLP losers on the same day.

Valero Energy Partners

Valero Energy Partners (VLP) was the top loser among midstream MLPs at the end of trading on Thursday, November 19. It fell 7.4% yesterday. It fell after an announcement regarding the pricing of a public offering of 4,250,000 common units. Valero Energy Partners priced the common units at $46.25. The offering is expected to generate ~$196.5 million in gross proceeds. The company stated that “The Partnership expects to use the net proceeds from this offering for general partnership purposes, which may include funding future acquisitions, investments and other capital expenditures, and repayment of its outstanding indebtedness.”

Enlink Midstream Partners

Enlink Midstream Partners (ENLK) is next on our list of the top five midstream MLP losers on November 19. It fell 7.3% yesterday. With this loss, Enlink Midstream’s YTD (year-to-date) returns fell to -46.40%. EnLink Midstream mainly provides natural gas processing, gathering, transportation, and storage services.

Other losers

Dominion Midstream Partners (DM), MPLX LP (MPLX), and Rice Midstream Partners (RMP) were among the top five midstream MLP losers on Thursday, November 19. They fell 5.1%, 4.9%, and 4.5% in the last trading session, respectively. They have returned -19.9%, -48.3%, and -15.5% YTD, respectively. The Alerian MLP ETF (AMLP) and the UBS ETRACS Alerian MLP ETN (AMU) have returned -28.20% and -31.8% YTD.

MPLX fell 9.0% since an announcement by its sponsor, Marathon Petroleum (MPC). Marathon Petroleum will increase the cash consideration for the MPLX-MWE merger. This is the second cash consideration increase by Marathon Petroleum since the merger announcement.

Marathon Petroleum increased the one-time cash payment to $1.3 billion. Now, each MarkWest unitholder would receive a one-time cash payment of ~$6.20 per MarkWest common unit—up from the cash consideration announced on November 10 of ~$5.21 per unit.

According to the press release “Three of MarkWest’s top unitholders, representing more than 15 percent of voting units, have agreed to vote in favor of the transaction.” The shareholder vote by MarkWest common unitholders is on December 1, 2015.

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