Now the company starts a new period. A new CEO brings at least the hope of better capital allocation, while an aggressive divestiture program should help fill the funding gap. While I think Chesapeake's economic returns are going to be impacted for some time to come by the aggressiveness of past days, I do believe the shares may offer decent value today if you believe in the future of natural gas usage in the U.S.
SEE: Oil And Gas Industry Primer
Slimming Down To Get Through
Chesapeake started the year with an estimated funding gap of around $4 billion and announced intentions to use JVs, asset sales, and other transactions to generate around $4 billion to $7 billion in capital. Through roughly mid-year, the company is making decent progress though not always on terms that the Street has liked.
Top 5 Small Cap Stocks To Watch Right Now: NGL Energy Partners LP (NGL)
NGL Energy Partners LP is a limited partnership company formed to own and operate a vertically-integrated propane business. The Company operates in three segments: retail propane; wholesale supply and marketing; and midstream. Its retail propane business sells propane to end users consisting of residential, agricultural, commercial and industrial customers. The Company�� wholesale supply and marketing business supplies propane and other natural gas liquids and provides related storage to retailers, wholesalers and refiners. Its midstream business, which consists of its propane terminaling business, takes delivery of propane from pipelines or trucks at its propane terminals and transfers the propane to third-party transport trucks for delivery to retailers, wholesalers or other consumers. The Company�� general partner is NGL Energy Holdings LLC (the General Partner). On October 14, 2010, it executed a series of transactions (the Combination) with NGL Supply, Inc. (NGL Supply). In February 2012, the Company acquired all of the assets comprising the propane and distillate operations of North American Propane. In May 2012, the Company acquired Downeast Energy Corporation. The assets contributed by Downeast are located in Maine and New Hampshire. In November 2012, the Company acquired limited liability company membership interests in Pecos Gathering & Marketing LLC and its affiliated companies (Pecos). In July 2013, NGL Energy Partners LP announced the acquisition of the assets of Crescent Terminals, LLC. Effective July 8, 2013, NGL Energy Partners LP acquired High Roller Wells Big Lake SWD No 1 LP. In August 2013, NGL Energy Partners LP acquired the water disposal and hauling business of Oilfield Water Lines LP. In September 2013, NGL Energy Partners LP acquired the water disposal business of Coastal Plains Disposal #1, LLC owned by WinCo Development, LLC. In November 2013, the Company announced acquisition of all of the equity interests of Gavilon, LLC.
Retail Propane
The Co! mpany�� retail propane business consists of the retail marketing, sale and distribution of propane, including the sale and lease of propane tanks, equipment and supplies, to more than 56,000 residential, agricultural, commercial and industrial customers. It markets retail propane primarily in Georgia, Illinois, Indiana and Kansas through its customer service locations. The Company owns or leases 44 customer service locations and 37 satellite distribution locations, with aggregate above-ground propane storage capacity of approximately four million gallons. It also owns a fleet of bulk delivery trucks and service vehicles.
Wholesale Supply and Marketing
The Company�� wholesale supply and marketing business provides propane procurement, storage, transportation and supply services to customers, through assets owned by it and by third parties. Its wholesale supply and marketing business also obtains the majority of the propane supply for its retail propane business. The Company procures propane from refiners, gas processing plants, producers and other resellers for delivery to leased storage, common carrier pipelines, rail car terminals and direct to certain customers. It has the right to utilize 100% of the ConocoPhillips Blue Line pipeline, which runs from Borger, Texas, to its propane terminals in East St. Louis, Illinois and Jefferson City, Missouri. The Company leases approximately 67 million gallons of propane storage space in various locations to accommodate the supply requirements and contractual needs of its retail and wholesale customers.
Midstream
The Company�� midstream business, which consists of its propane terminaling business, takes delivery of propane from a pipeline or truck at its propane terminals and transfers the propane to third party trucks for delivery to propane retailers, wholesalers or other customers. The Company�� midstream assets consist of its three propane terminals in East St. Louis, Illinois; Jefferson City, Missou! ri, and S! t. Catharines, Ontario. The Company is a service provider at each of its terminals, which have a combined annual throughput in excess of 170 million gallons of propane.
Advisors' Opinion:- [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on NGL Energy Partners (NYSE: NGL ) , whose recent revenue and earnings are plotted below. - [By Seth Jayson]
Calling all cash flows
When you are trying to buy the market's best stocks, it's worth checking up on your companies' free cash flow once a quarter or so, to see whether it bears any relationship to the net income in the headlines. That's what we do with this series. Today, we're checking in on NGL Energy Partners (NYSE: NGL ) , whose recent revenue and earnings are plotted below.
Top Gas Companies To Buy Right Now: Whitecap Resources Inc (SPGYF.PK)
Whitecap Resources Inc., formerly Spitfire Energy Ltd., is engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids in Western Canada. The Company�� activities are concentrated primarily in Northwest Central Alberta and Southwest Saskatchewan. On July 1, 2010, the Company amalgamated with its wholly owned subsidiary Whitecap Resources Inc. During fiscal 2010, the Company produced an average of 355 barrels of oil equivalent per day (boed). On July 12, 2010, the Company entered into an agreement to acquire a private company. The primary assets to be acquired are located in the Pembina region of west central Alberta with production and reserves focused in the Cardium formation. In October 2013, the Company announced that it has completed the acquisition of a Cardium light oil property and a working interest consolidation of its Eagle Lake Viking unit. Advisors' Opinion:- [By Caiman Valores]
The recent surge in oil prices has renewed investor interest in the small-cap oil and gas E&P sector. One company that stands out for all the right reasons is Canadian domiciled small-cap, Whitecap Resources (SPGYF.PK). Since 2009 the company has unlocked considerable value for investors through a range of acquisitions as well as development and exploration projects. This has seen its share price surge in value to be up by almost 53% over the last year alone. However, it is clear that the market has yet to fully recognize the true value of Whitecap and there is still considerable upside potential of over 30% for investors. This along with Whitecap's dividend growth strategy makes it a particularly appealing deep-value investment in the oil and gas E&P sector.
Top Gas Companies To Buy Right Now: Boardwalk Pipeline Partners LP (BWP)
Boardwalk Pipeline Partners, LP is a limited partnership company. The Company owns and operates three interstate natural gas pipeline systems including integrated storage facilities. Its business is conducted by its primary subsidiary, Boardwalk Pipelines, LP (Boardwalk Pipelines) and its subsidiaries, Gulf Crossing Pipeline Company LLC (Gulf Crossing), Gulf South Pipeline Company, LP (Gulf South) and Texas Gas Transmission, LLC (Texas Gas) (together, the operating subsidiaries), which consist of integrated natural gas pipeline and storage systems. During the year ended December 31, 2011, it formed Boardwalk Midstream, LP (Midstream), and its operating subsidiary, Boardwalk Field Services, LLC (Field Services), which is engaged in the natural gas gathering and processing business. In December 2011, Boardwalk HP Storage Company, LLC (HP Storage), a joint venture between Boardwalk Pipelines and Boardwalk Pipelines Holding Corp. (BPHC) acquired Petal Gas Storage, L.L.C. (Petal), Hattiesburg Gas Storage Company (Hattiesburg). In December 2011, it acquired a 20% equity interest in HP Storage.
The Company�� pipeline systems originate in the Gulf Coast region, Oklahoma and Arkansas and extend north and east to the midwestern states of Tennessee, Kentucky, Illinois, Indiana and Ohio. It serves a mix of customers, including producers, local distribution companies (LDCs), marketers, electric power generators, direct industrial users and interstate and intrastate pipelines. The Company provides a portion of its pipeline transportation and storage services, through firm contracts, under which the Company�� customers pay monthly capacity reservation charges. Other charges are based on actual utilization of the capacity under firm contracts and contracts for interruptible services. During 2011, approximately 82% of its revenues were derived from capacity reservation charges under firm contracts; approximately 14% of its revenues were derived from charges-based on actual utilization under firm contr! acts, and approximately 4% of its revenues were derived from interruptible transportation, interruptible storage, parking and lending (PAL) and other services. Its expansion projects include South Texas Eagle Ford Expansionand Marcellus Gathering System and HP Storage.
Pipeline and Storage Systems
The Company�� operating subsidiaries own and operate approximately 14,200 miles of pipelines, directly serving customers in twelve states and indirectly serving customers throughout the northeastern and southeastern United States through numerous interconnections with unaffiliated pipelines. In 2011, its pipeline systems transported approximately 2.7 trillion cubic feet of gas. Average daily throughput on its pipeline systems during 2011 was approximately 7.3 billion cubic feet. Its natural gas storage facilities are comprised of eleven underground storage fields located in four states with aggregate working gas capacity of approximately 167.0 billion cubic feet. the Company operates the assets of HP Storage on behalf of the joint venture.
The principal sources of supply for our pipeline systems are regional supply hubs and market centers located in the Gulf Coast region, including offshore Louisiana, the Perryville, Louisiana area, the Henry Hub in Louisiana and the Carthage, Texas area. Its pipelines in the Carthage, Texas area provide access to natural gas supplies from the Bossier Sands, Barnett Shale, Haynesville Shale and other gas producing regions in eastern Texas and northern Louisiana. The Henry Hub serves as the designated delivery point for natural gas futures contracts traded on the New York Mercantile Exchange. Its pipeline systems also have access to unconventional mid-continent supplies, such as the Woodford Shale in southeastern Oklahoma and the Fayetteville Shale in Arkansas. The Company also accesses the Eagle Ford Shale in southern Texas; wellhead supplies in northern and southern Louisiana and Mississippi; and Canadian natural gas through an unaffil! iated pip! eline interconnect at Whitesville, Kentucky.
Gulf Crossing
The Company�� Gulf Crossing pipeline system originates near Sherman, Texas, and proceeds to the Perryville, Louisiana area. The market areas are in the Midwest, Northeast, Southeast and Florida through interconnections with Gulf South, Texas Gas and unaffiliated pipelines.
Gulf South
The Company�� Gulf South pipeline system is located along the Gulf Coast in the states of Texas, Louisiana, Mississippi, Alabama and Florida. The on-system markets directly served by the Gulf South system are generally located in eastern Texas, Louisiana, southern Mississippi, southern Alabama, and the Florida Panhandle. These markets include LDCs and municipalities located across the system, including New Orleans, Louisiana; Jackson, Mississippi; Mobile, Alabama; and Pensacola, Florida, and other end-users located across the system, including the Baton Rouge to New Orleans industrial corridor and Lake Charles, Louisiana. Gulf South also has indirect access to off-system markets through numerous interconnections with unaffiliated interstate and intrastate pipelines and storage facilities. These pipeline interconnections provide access to markets throughout the northeastern and southeastern United States.
Gulf South has two natural gas storage facilities. The gas storage facility located in Bistineau, Louisiana, has approximately 78 billion cubic feet of working gas storage capacity from which Gulf South offers firm and interruptible storage service, including no-notice service. Gulf South�� Jackson, Mississippi, gas storage facility has approximately five billion cubic feet of working gas storage capacity, which is used for operational purposes and is not offered for sale to the market.
Texas Gas
The Company�� Texas Gas pipeline system originates in Louisiana, East Texas and Arkansas and runs north and east through Louisiana, Arkansas, Mississippi, Tennessee, K! entucky, ! Indiana, and into Ohio, with smaller diameter lines extending into Illinois. Texas Gas directly serves LDCs, municipalities and power generators in its market area, which encompasses eight states in the South and Midwest and includes the Memphis, Tennessee; Louisville, Kentucky; Cincinnati and Dayton, Ohio, and Evansville and Indianapolis, Indiana metropolitan areas. Texas Gas also has indirect market access to the Northeast through interconnections with unaffiliated pipelines. Texas Gas owns nine natural gas storage fields, of which it owns the majority of the working and base gas. Texas Gas uses this gas to meet the operational requirements of its transportation and storage customers and the requirements of its no-notice service customers.
Field Services
In 2011, the Company formed its Field Services subsidiary and transferred to it approximately 100 miles of gathering and transmission pipeline. In 2012, the Company transferred to Field Services an additional 240 miles of pipeline and two compressor stations. Field Services is developing gathering and processing capabilities in south Texas and Pennsylvania.
Advisors' Opinion:- [By Sean Williams]
Do investors have a reason to worry?
Of the three stocks listed above Loews is likely the shakiest in terms of current fundamentals, but its long-term outlook continues to remain intact. Loews has sizable investment stakes in a handful of other companies, one of which is Boardwalk Pipeline Partners (NYSE: BWP ) . Boardwalk's dividend had been one of the many factors fueling Loews' profitability. But in February, Boardwalk and majority holder Loews chose to slash its dividend by around 80% due to a weaker outlook in the natural gas market. This shaved a sizable chunk off Loews' profit forecast. Thankfully, its hotel operations and insurance business have been performing well, delivering more than enough cash flow to keep investors calm. In the near term it's possible Loews could struggle a bit, but over the long run its diversity should chase away most pessimists.Google
Why are short-sellers avoiding Google? - [By Jon C. Ogg]
Boardwalk Pipeline Partners, LP (NYSE: BWP) was a total disaster on Monday, and it has 24/7 Wall St. wondering just how many other Master Limited Partnerships and trust structures in the oil and gas sector could be at risk. The good news is that Wall Street does not seem that�concerned of a spill over into peers and competitors, at least not yet.
- [By Aimee Duffy]
Winners
Buckeye Partners (NYSE: BPL ) �trounced analyst expectations on the top and bottom lines, and recorded a distribution coverage ratio of 1.21 times payouts, allowing the partnership to boost its distribution. DCP Midstream Partners' (NYSE: DCP ) �distributable cash flow popped 40% year over year, and the partnership completed its Eagle Ford dropdown transaction with parent company DCP Midstream, boosting its stake in the lucrative South Texas shale play. Boardwalk Energy Partners' (NYSE: BWP ) �operating revenue and net income increased 5% and 10% year over year. More importantly, distributable cash flow popped 24%, though the partnership elected to hold the distribution flat quarter over quarter. Energy Transfer Partners (NYSE: ETP ) �had no distribution increase either, but things are looking better than they have in a while. Production in the Eagle Ford Shale is driving growth at ETP, and the partnership is reorganizing into an operation that is stronger and more diverse than ever before.
Given the current state of U.S. energy production, most midstream companies are winners these days. Kinder Morgan Energy Partners (NYSE: KMP ) got things started off on the right foot, reporting in mid-April and beating expectations on revenue and EPS. Here are some highlights from around the industry:Very strong results here, now let's take a look at some midstream companies that didn't perform as well.
Top Gas Companies To Buy Right Now: Lonestar Resources Ltd (LNR)
Lonestar Resources Limited is an Australia-based independent oil and gas company involved in exploration, production, and acquisition of oil and gas reserves in the United States. The Company�� operations are focused onshore with primary activity in the Fort Worth Basin (Barnett Shale), Eagle Ford Shale, and the Williston Basin in Montana. The Company is active in sourcing other assets in producing areas. The Company�� Eagle Ford Shale portfolio comprises three separate assets: Beall Ranch, Asherton and Gonzo. The Company�� operations in the Williston Basin are focused on the Roosevelt County, Montana. The Company owns and operates a single lease in the Barnett Shale, a gas producing basin in North Texas. On January 2, 2013, the Company acquired Ecofin Energy Resources plc. In August 2013, the Company announced that it has sold its producing assets outside the state of Texas for its Louisiana assets and for its Oklahoma assets. Advisors' Opinion:- [By Eric Lam]
Linamar Corp. (LNR) soared 14 percent to a record C$40.72 for the biggest gain in the S&P/TSX. The Guelph, Ontario-based auto parts maker reported third-quarter adjusted profit of 80 Canadian cents a share, topping analysts��projections for 66 cents.
Top Gas Companies To Buy Right Now: Atlas Energy LP (ATLS)
Atlas Energy, L.P. (Atlas Energy), incorporated on December 15, 2005, is a limited partnership. The Company's assets consist of the Company's ownership interests in the Atlas Resource Partners, L.P. (ARP), an independent developer and producer of natural gas, crude oil and natural gas liquids (NGL), with operations in basins across the United States; Atlas Pipeline Partners, L.P. (APL) a midstream energy service provider engaged in natural gas gathering, processing and treating services in the Anandarko and Permian Basins of the United States, and Lightfoot Capital Partners, LP (Lightfoot LP) and Lightfoot Capital Partners GP, LLC (Lightfoot GP), the general partner of Lightfoot L.P. (collectively, Lightfoot), entities which incubate new master limited partnerships (MLPs) and invest in existing MLPs. As of December 31, 2012, the Company had an approximate 16% general partner interest and 12% limited partner interest in Lightfoot.
On April 30, 2012, ARP acquired 277 billion cubic feet equivalent of proved reserves, including undeveloped drilling locations, in the core of the Barnett Shale from Carrizo Oil & Gas, Inc. (Carrizo). The assets include 198 gross producing wells. On July 26, 2012, ARP acquired Titan Operating, L.L.C. (Titan), which owned approximately 250 billion cubic feet equivalent of proved reserves and associated assets in the Barnett Shale on approximately 16,000 net acres. Titan's assets are located in close proximity to the assets acquired from Carrizo in the Barnett Shale. On September 24, 2012, ARP acquired Equal Energy, Ltd�� (Equal) remaining 50% interest in approximately 8,500 net undeveloped acres. On December 20, 2012, ARP acquired 210 billion cubic feet equivalent of proved reserves in the Fort Worth basin from DTE Energy Company (DTE). The assets include 261 gross producing wells on over 88,000 net acres. The acreage position includes approximately 75,000 net acres prospective for the Marble Falls play, in which there are over 700 identified vertical drilling l! ocations..
In February 2012, APL acquired a gas gathering system and related assets, at its WestOK region. In June 2012, APL acquired a gas gathering system and related assets in the Barnett Shale in Tarrant County, Texas. In December 2012, APL acquired 100% interests held by Cardinal Midstream, LLC (Cardinal) in three wholly owned subsidiaries. The assets of these companies include gas gathering, processing and treating facilities in Arkansas, Louisiana, Oklahoma and Texas as the Tupelo plant, the East Rockpile treating facility, a fixed fee contract gas treating business, a 60% interest in Centrahoma Processing, LLC (Centrahoma), the Coalgate and Atoka plants, and the prospective Stonewall plant.
Atlas Resource Partners
During the year ended December 31, 2012, ARP�� average daily net production was approximately 77.2 million cubic feet equivalent. As of December 31, 2012, ARP owned production positions, including the Barnett Shale and Marble Falls play in the Fort Worth Basin in northern Texas; the Appalachia basin, including the Marcellus Shale and the Utica Shale; the Mississippi Lime and Hunton plays in northwestern Oklahoma, and the Chattanooga Shale in northeastern Tennessee, the Niobrara Shale in northeastern Colorado, the New Albany Shale in southwestern Indiana, and the Antrim Shale in Michigan. ARP has ownership interests in over 525 wells in the Barnett Shale and Marble Falls play. ARP has ownership interests in over 10,200 wells in the Appalachian basin, including approximately 270 wells in the Marcellus Shale. The Chattanooga Shale in northeastern Tennessee, the Niobrara Shale in northeastern Colorado, the New Albany Shale in southwestern Indiana, and the Antrim Shale in Michigan.
Atlas Pipeline Partners
APL conducts its business in the midstream segment of the natural gas industry through two reportable segments: gathering and processing, and transportation, treating and other. The gathering and processing segment consist! s of the A! rkoma, WestOK, WestTX and Velma operations, which are comprised of natural gas gathering and processing assets servicing drilling activity in the Anadarko, Arkoma and Permian Basins, and natural gas gathering assets located in the Barnett Shale play in Texas and the Appalachian Basin in Tennessee. Gathering and processing revenues are derived from the sale of residue gas and NGLs and the gathering and processing of natural gas.
APL's gathering and processing operations, own, have interests in and operate 12 natural gas processing plants with aggregate capacity of approximately 1,090 million cubic feet per day located in Oklahoma and Texas; a gas treating facility located in Oklahoma, and approximately 10,100 miles of active natural gas gathering systems located in Oklahoma, Kansas, Tennessee and Texas. APL's gathering systems gather natural gas from oil and natural gas wells and central delivery points and deliver this gas to processing plants, as well as third-party pipelines.
APL's gathering and processing operations are located in Golden Trend, Mississippian Limestone and Hugoton field in the Anadarko Basin; the Woodford Shale; the Spraberry Trend, which is an oil play with associated natural gas in the Permian Basin, and the Barnett Shale. APL's gathering systems are connected to approximately 8,600 receipt points, consisting of individual well connections and secondarily, central delivery points, which are linked to multiple wells.
APL's transportation and treating operations consists of 17 gas treating facilities used to provide contract treating services to natural gas producers located in Arkansas, Louisiana, Oklahoma and Texas, and a 20% interest in West Texas LPG Pipeline Limited Partnership (WTLPG), which owns a common-carrier pipeline system, which transports NGLs from New Mexico and Texas to Mont Belvieu, Texas for fractionation. WTLPG is operated by Chevron Pipeline Company, an affiliate of Chevron Corporation (Chevron), which owns the remaining 80% i! nterest. ! The contract gas treating operations are located in various shale plays, including the Avalon, Eagle Ford, Granite Wash, Haynesville, Fayetteville and Woodford.
The Company competes with Access Midstream Partners, LP; Caballo Energy, LLC, Carrera Gas Company; Copano Energy, LLC; Crosstex Energy Services, L.P.; DCP Midstream, LLC; Energy Transfer Partners, LP.; Enogex, LLC; Lumen Midstream Partners, LLC; MarkWest Energy Partners, L.P.; Mustang Fuel Corporation; ONEOK Field Services Company, LLC; Scissor Tail Energy, LLC; SemGas, L.P.; Southern Union Company; Superior Pipeline Company, LLC; Targa Resources Partners LP, and West Texas Gas, Inc.
Advisors' Opinion:- [By Teresa Rivas]
Targa Resources Partners (NGLS) is buying the oil and gas limited partnerships Atlas Pipeline Partners (APL) and Atlas Energy�(ATLS), sending the shares of both stocks up double digits.
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