Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

On Nov 28, midstream service supplier and pipeline operator, Pembina Pipeline Corporation (PBA - Snapshot Report), revealed its plan to invest roughly C$1.5 billion capital in 2014. This target spending – the largest for the company to date – marks a 56% hike over this year’s budget.  

Pembina expects to allocate C$670.0 million towards Conventional Pipelines operations in 2014. C$510.0 million is likely to be invested for midstream activities. While C$260.0 million will be entrusted to the Gas Services business, the remaining C$60.0 million will be allocated to the Oil Sands & Heavy Oil operation.  

Of the amount due for Conventional Pipelines activities, C$240.0 million will be assigned to the previously announced second phase of the Peace and Northern natural gas liquids (NGL) Pipeline Systems project. The investment is meant to increase the capacity of the pipeline system by 53,000 barrels per day (bpd) by the middle of 2015. Pembina added that another C$215.0 million from the portion assigned is likely to be invested for the completion of the second phase of Low Vapour Pressure Expansion project, also declared earlier. This spending should boost Peace Pipeline’s crude oil and condensate capacity by 55,000 bpd in the latter part of 2014.

Pembina also plans to divide the capital budget planned for midstream business in 2014. While C$145.0 million will be spent for the improvement of infrastructure and service offerings of the company’s crude oil Midstream operations, the rest C$365.0 million is to be allocated for manufacturing the previously declared RFS (Redwater Fractionator and Storage) II.   

The news was out in the press release of Pembina last Thursday. The stock opened at $32.12 per share the next day, reflecting a nominal change from the Nov 27 closing price of $32.16 per share.   

Calgary-based Pembina presently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, some better-ranked players in the oil production and pipeline sector include Western Gas Partners LP (WES - Snapshot Report), EQT Midstream Partners LP (EQM - Snapshot Report) and Spectra Energy Corp. (SE - Analyst Report). While Western Gas Partners sports a Zacks Rank #1 (Strong Buy), EQT Midstream Partners and Spectra Energy hold a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%