|Bid||19.54 x 800|
|Ask||19.60 x 47300|
|Day's Range||19.50 - 20.17|
|52 Week Range||14.62 - 21.50|
|Beta (3Y Monthly)||0.92|
|PE Ratio (TTM)||19.61|
|Earnings Date||Oct 15, 2019 - Oct 21, 2019|
|Forward Dividend & Yield||1.00 (4.95%)|
|1y Target Est||22.16|
The deal values the Canadian subsidiary at approximately $1.73 billion, with Kinder Morgan's 70 percent stake representing about $935 million, and the U.S. portion of the pipeline at nearly $1.55 billion.
(Bloomberg) -- Capital keeps marching out of Canada’s oil industry, with Kinder Morgan Inc.’s sale of its remaining holdings in the country on Wednesday adding to more than $30 billion of foreign-company divestitures in the past three years.Pembina Pipeline Corp., based in Calgary, is snapping up Kinder’s Canadian assets and a cross-border pipeline in a $3.3 billion deal. For Houston-based Kinder, the deal completes an exit from a country that has frustrated more than a few companies -- from ConocoPhillips and Royal Dutch Shell Plc to Marathon Oil Corp.The drumbeat of exits, rare for such a stable oil-producing country, adds an extra layer of gloom for an industry that accounts for about a fifth of Canada’s exports. The energy sector -- centered around Alberta’s oil sands -- has struggled to rebound since the 2014 crash in global oil prices, with capital spending declining for five straight years and job cuts pushing the province’s unemployment rate above 6%. Alberta is forecast to post the slowest growth of any region in Canada this year.The situation isn’t likely to improve any time soon, with key pipelines like TC Energy Corp.’s Keystone XL and Enbridge Inc.’s expansion of its Line 3 conduit bogged down by legal challenges. The lack of pipelines has weighed on Canadian heavy crude prices for years, sending them to a record low late in 2018.“If they thought things were getting better in Canada, they might hold on, but they don’t see things getting better,” Laura Lau, who helps manage more than C$2 billion ($1.5 billion) at Brompton Corp. in Toronto, said in an interview. “The pipeline situation is getting worse; everything is getting worse.”Other recent major divestitures include ConocoPhillips’ $13.2 billion sale of oil-sands and natural gas assets to Cenovus Energy Inc. in 2017, and Shell’s and Marathon’s sales of their stakes in an oil-sands project to Canadian Natural Resources Ltd. for about $10.7 billion that same year. Canadian Natural also bought Oklahoma City-based Devon Energy Corp.’s Canadian heavy oil assets this year for $2.79 billion. Norway’s Equinor ASA pulled out in 2016 after facing pressure at home to invest in lower-emission projects.While a government curtailment program has boosted oil sands prices to more normal levels, the system has prevented companies from investing in new deposits. What’s more, the oil sands are often viewed by investors as a higher-cost jurisdiction that produces a lower quality of heavy crude. Those persistent drags are likely to keep Canadian assets at the top of international companies’ lists for potential disposal, Lau said.Kinder Morgan is in many ways the perfect example of the troubles -- including slow-moving regulatory processes, an active environmental movement, and a variety of inter-provincial squabbles. The company bought the Trans Mountain pipeline, which carries crude and other products from Edmonton to a shipping terminal in Vancouver, for about $5.6 billion in 2005 in a bid to gain exposure to the oil sands -- the world’s third-largest crude reserves.But a plan to roughly triple the capacity of the line got bogged down amid opposition from indigenous groups, environmentalists and British Columbia’s government. Kinder threatened to scrap the expansion, which all but forced Prime Minister Justin Trudeau’s government to step in and buy the entire line for about $3.45 billion last year. The project took an initial step forward on Thursday as contractors were given approval to start some work on the line.Bad Signal“When they sold Trans Mountain, there wasn’t much left, and it was just a matter of time for them to exit Canada completely,” Lau said. “But definitely another foreign company exiting Canada doesn’t send a good signal.”Not all foreign operators have abandoned Canada. Exxon Mobil Corp. still has a sizable presence with its controlling stake in Imperial Oil Ltd., a C$25 billion company. Shell, based in The Hague, still owns a refining complex and natural gas production in Alberta and British Columbia. France’s Total SA owns a portion of the Fort Hills mine, and Japanese and Chinese companies also have oil-sands projects. Conoco still has an oil-sands facility and holdings in the Montney shale play.A potential catalyst for the sector could be the election of a Conservative government in Canada’s federal election in October, said Rafi Tahmazian, senior portfolio manager at Canoe Financial. That may change global investors’ perceptions about the support the industry would receive from the government.“The silver lining in this whole process is that Canada owns Canada again, and we got it pretty cheap,” Tahmazian said in an interview. “Now the question is can we take advantage of that by allowing ourselves a more friendly environment for foreign investment?”(Updates with Trans Mountain in ninth paragraph)\--With assistance from Divya Balji.To contact the reporter on this story: Kevin Orland in Calgary at email@example.comTo contact the editors responsible for this story: David Scanlan at firstname.lastname@example.org, Carlos CaminadaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Kinder Morgan (KMI) announced that it agreed to sell the US portion of Cochin Pipeline and its 70% stake in Kinder Morgan Canada Ltd. to Pembina Pipeline.
A company based in Calgary, Canada, will pay $1.55 billion for the pipeline and $1.73 billion for the subsidiary.
(Bloomberg) -- Pembina Pipeline Corp. increased its bet on the future of Canada’s turbulent oil-sands industry, agreeing to buy Kinder Morgan Inc.’s Canadian unit and the U.S. portion of a key pipeline for about C$4.35 billion ($3.3 billion).The deal makes Pembina a major player in the oil-storage business, giving it 10 million barrels of capacity in the crude complex near Edmonton, Alberta, a key hub for oil-sands producers. With the takeover of Kinder’s Cochin Pipeline system, Pembina also becomes a key provider of the condensate that oil-sands companies need to blend with their thick crude to enable it to flow through pipelines.The acquisition is a major bet on the future of the oil sands at a time when delays to key export pipelines have hampered the industry’s ability to expand and forced the Alberta government to support Western Canadian heavy crude prices with unprecedented production limits, which it extended for another year on Tuesday. The deal also continues a flight of international capital out of the oil sands, following major divestitures from ConocoPhillips and Royal Dutch Shell Plc in recent years.Pembina Chief Executive Officer Mick Dilger said the deal increases its vertical integration, diversifying its offerings to its oil-sands customers and enhancing the company’s resilience in an uncertain environment. The takeover also gives Pembina additional integration opportunities, and those benefits are reflected in the premium it paid for the assets, Chris Cox, an analyst at Raymond James, said in a note.“The acquisition further strengthens the quality of the company’s integrated value chain, improves the quality of the company’s cash flows and adds a new compelling business line with the Edmonton storage business,” Cox said.For Kinder Morgan, the agreement comes more than three months after the Canadian unit said it would continue as a standalone company. It held two bidding rounds, “but ultimately concluded that a transaction on satisfactory terms was not available at the current time,” Steve Kean, CEO of both Kinder Morgan and the Canadian unit, told investors on a May conference call.The transaction values Kinder Morgan Canada Ltd. at about C$2.3 billion, or C$15.02 per share, based on an all-share exchange ratio of 0.3068 of a common share of Pembina per Kinder Canada security, according to a statement. That’s about 37% more than the stock’s closing price on Tuesday. It values the U.S. portion of the Cochin pipeline at about C$2.05 billion for cash consideration.Pembina fell as much as 1.8% to C$48.37 on Wednesday before paring losses. Kinder Morgan Canada jumped as much as 35% to C$14.84.Before the deals were announced early Wednesday, there was speculation that Kinder Morgan Canada could be a potential buyer for the Trans Mountain pipeline that runs from Alberta to Vancouver. The government bought the line from Kinder last year and has promised to sell the conduit back to a private company after it completes a long-delayed expansion project. Multiple indigenous groups in Canada have expressed interest in buying a stake in the line, and analysts have said the line also might be a good fit for pension funds.Pembina’s Dilger said on the conference call that the Trans Mountain line would fit into the company’s strategy of serving western Canadian oil producers but that the company doesn’t want to take on the baggage that comes along with the project, which has faced opposition and legal challenges from environmentalists, indigenous groups and British Columbia’s government.Though Pembina is “uniquely qualified” to operate Trans Mountain, “we don’t want to submerge our entire management team and subject our entire organization and reputation to all the noise that entails,” Dilger said on a conference call to discuss the transaction.Pembina also confirmed that another party has a right of first refusal on one of the assets it acquired. The company wouldn’t disclose the party or the asset, but Dilger said on a call to discuss the deal that if that right of first refusal were to be exercised, it would shrink the size of the assets Pembina is buying “a little bit” but would not be “devastating.”(A previous version of this story corrected the stock decrease in the fifth paragraph.)\--With assistance from Brian Eckhouse.To contact the reporter on this story: Kevin Orland in Calgary at email@example.comTo contact the editors responsible for this story: James Herron at firstname.lastname@example.org, Christine Buurma, Carlos CaminadaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Shares of Kinder Morgan Inc. rallied 2.9% in premarket trading Wednesday, after the energy transportation and storage company announced a deal to sell the U.S. portion of the Cochin Pipeline for $1.55 billion to Pembina Pipeline Corp. . As part of the deal, Pembina has agreed to buy all of the outstanding common stock of Kinder Morgan Canada Ltd. , of which Kinder Morgan owns a 70% stake. Kinder Morgan will receive 0.3068 shares of Pembina for each Kinder Morgan Canada share it owns, which will result in Kinder Morgan receiving 25 million shares of Pembina stock, or just under 5% of the shares outstanding. Based on Tuesday's closing price of the U.S.-listed Pembina stock, that would be worth about $923.8 million. The deals are expected to close late in the fourth quarter or in the first quarter of 2020. Kinder Morgan initially expects to use the proceeds to pay down debt. Kinder Morgan's stock has soared 31% year to date through Tuesday, while the SPDR Energy Select Sector ETF has edged up 0.8% and the S&P 500 has gained 16%.
NYSE: PBA) (Pembina) for $1.546 billion, approximately 13 times 2019 expected EBITDA. Also, Kinder Morgan Canada Limited (KML.TO) announced that it reached an agreement with Pembina under which Pembina has agreed to acquire all the outstanding common equity of KML (which includes KMI’s 70 percent stake), subject to the terms of the arrangement agreement between KML and Pembina.
NYSE: PBA) ( Pembina ) under which Pembina has agreed to acquire all of the outstanding common equity of KML (including the 70 percent majority voting interest held by Kinder Morgan Inc. (NYSE: KMI)), subject to the terms of the arrangement agreement between KML and Pembina. On closing, KML shareholders will receive .3068 shares of Pembina for each KML share. Based on yesterday's closing price for Pembina , the total consideration to be received by KML common shareholders is valued at $15.12 per KML share, which represents a 38 percent premium to yesterday's KML closing price.
Oil and gas pipeline company Kinder Morgan said it will sell the U.S. part of its Cochin pipeline to Pembina Pipeline in a cash-and-stock deal. Kinder will get around $1.6 billion in cash as well as 25 million shares of Pembina, valued at close to $925 million. In addition, Pembina will purchase all outstanding shares of Kinder Morgan Canada Limited.
Kinder Morgan, Inc. (KMI) today announced a series of projects, totaling over $170 million of capital investment, that will increase efficiency, add product liquidity, and enhance blending capabilities at its Pasadena and Galena Park terminals, part of its best-in-class refined products storage hub on the Houston Ship Channel. In response to growing customer demand, KMI’s liquids terminal platform now boasts 10 ship docks, 38 barge spots, 20 inbound pipelines providing connectivity to 10 regional refineries and chemical plants, 15 outbound pipelines, 14 cross-channel lines, and approximately 43 million barrels of storage on the Houston Ship Channel, North America’s leading port for energy exports.
The U.S. has more midstream energy infrastructure than the rest of the planet combined, and the companies that own it can deliver powerful returns for investors.