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Oklahoma City-based Access Midstream Partners L.P. (ACMP - Snapshot Report) has priced an underwritten secondary public offering of 8,000,000 common units – being sold by a major owner – at $46.47 a piece, with a 30-day over-allotment option for an additional 1,200,000 units. The offering, announced Aug 12, will be offered by Access Midstream pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) in last Dec.

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 - Analyst Report) 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 $1.36, representing 13% earnings per unit growth over 2012. Next year’s average forecast is $1.65, corresponding with 22% growth.    

However, units of Access Midstream – currently trading at $46.81 – have already climbed some 35% since the beginning of the year. 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 perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at Delek Logistics Partners L.P. (DKL - Snapshot Report) and Pioneer Southwest Energy Partners L.P. as good buying opportunities. These energy pipeline partnerships – sporting a Zacks Rank #2 (Buy) – have solid secular growth stories with potential to rise from current levels.
 

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