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Williams Partners Sells Stake in Williams Olefins for $2.1B
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Williams Partners L.P. recently announced that it has agreed to divest 100% of its membership interest in Williams Olefins LLC, to NOVA Chemicals for $2.1 billion in cash. Williams Olefins holds 88.46% undivided ownership interest in the Geismar, LA, olefins plant and related complex.
Moreover, on completion of the transaction, Williams Partners subsidiaries will ink long-term supply and transportation agreements with NOVA Chemicals to supply feedstock to the Geismar olefins plant through Williams Partners’ Bayou Ethane pipeline system in the U.S. Gulf Coast. These agreements are expected to secure an important long-term fee-based revenue stream for the partnership.
The proceeds raised from the transaction will likely be utilized to pay off the partnership’s $850 million term loan and to finance a portion of the capital and investment expenditures that are part of the partnership’s widespread growth portfolio. The partnership believes that for federal tax purposes, any taxable gain from the transaction will be cushioned by its net operating loss carry-forwards.
The Williams Olefins transaction is anticipated to be closed in the summer of 2017 and is subject to customary closing conditions and regulatory approvals.
The transaction, along with new supply and transportation agreements, will lower the partnership’s commodity margin exposure and secure its fee-based Gulf Coast transportation business. This is in sync with Williams Partners’ strategy to allocate capital for its core, natural gas-focused business.
Investor confidence on the Williams Partners’ stock is reflected in its price chart. Shares of the company gained 54.6% in the last one year, while the Zacks categorized Exploration & Production MLP industry increased 53% in the same time span.
Currently, ConocoPhillips carries a Zacks Rank #3 (Hold). Some better-ranked from the same space are Diamond Offshore Drilling Inc. (DO - Free Report) , Cenovus Energy Inc. (CVE - Free Report) and Bellatrix Exploration Ltd. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Diamond Offshore Drilling posted a positive earnings surprise of 341.67% in the preceding quarter. It beat estimates in all of the four trailing quarters with an average positive earnings surprise of 353.28%.
Cenovus Energy posted a positive earnings surprise of 583.33% in the preceding quarter. It beat estimates in two of the four trailing quarters with an average positive earnings surprise of 74.89%.
Bellatrix Exploration posted a positive earnings surprise of 240.00% in the preceding quarter. It beat estimates in three of the four trailing quarters with an average positive earnings surprise of 58.54%.
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Williams Partners Sells Stake in Williams Olefins for $2.1B
Williams Partners L.P. recently announced that it has agreed to divest 100% of its membership interest in Williams Olefins LLC, to NOVA Chemicals for $2.1 billion in cash. Williams Olefins holds 88.46% undivided ownership interest in the Geismar, LA, olefins plant and related complex.
Moreover, on completion of the transaction, Williams Partners subsidiaries will ink long-term supply and transportation agreements with NOVA Chemicals to supply feedstock to the Geismar olefins plant through Williams Partners’ Bayou Ethane pipeline system in the U.S. Gulf Coast. These agreements are expected to secure an important long-term fee-based revenue stream for the partnership.
The proceeds raised from the transaction will likely be utilized to pay off the partnership’s $850 million term loan and to finance a portion of the capital and investment expenditures that are part of the partnership’s widespread growth portfolio. The partnership believes that for federal tax purposes, any taxable gain from the transaction will be cushioned by its net operating loss carry-forwards.
The Williams Olefins transaction is anticipated to be closed in the summer of 2017 and is subject to customary closing conditions and regulatory approvals.
The transaction, along with new supply and transportation agreements, will lower the partnership’s commodity margin exposure and secure its fee-based Gulf Coast transportation business. This is in sync with Williams Partners’ strategy to allocate capital for its core, natural gas-focused business.
Investor confidence on the Williams Partners’ stock is reflected in its price chart. Shares of the company gained 54.6% in the last one year, while the Zacks categorized Exploration & Production MLP industry increased 53% in the same time span.
Currently, ConocoPhillips carries a Zacks Rank #3 (Hold). Some better-ranked from the same space are Diamond Offshore Drilling Inc. (DO - Free Report) , Cenovus Energy Inc. (CVE - Free Report) and Bellatrix Exploration Ltd. . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Diamond Offshore Drilling posted a positive earnings surprise of 341.67% in the preceding quarter. It beat estimates in all of the four trailing quarters with an average positive earnings surprise of 353.28%.
Cenovus Energy posted a positive earnings surprise of 583.33% in the preceding quarter. It beat estimates in two of the four trailing quarters with an average positive earnings surprise of 74.89%.
Bellatrix Exploration posted a positive earnings surprise of 240.00% in the preceding quarter. It beat estimates in three of the four trailing quarters with an average positive earnings surprise of 58.54%.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>