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Kinder Morgan Cuts 2017 Capital Spend View for Canada Unit
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Per the latest investor presentation, Kinder Morgan Inc. (KMI - Free Report) proposes to lower spending on Canadian subsidiary in 2017.
In 2017, the company is likely to spend $446.5 million on growth capital for its Canadian subsidiary, down 38% from the earlier projection of $721 million as stated in another presentation in September.
Of the total spending, $365.18 million has been apportioned to pipelines and $81.18 million to terminals, down from $629.70 million and $91.33 million, respectively.
This change has been confirmed by a spokesman of the company, who stated that the change was primarily due to operational delay on the Trans Mountain expansion project. The 590,000 barrel per day pipeline has been deferred since the company did not receive permits for the use of Crown land in Canada, promptly.
As expected, the pipeline might come online by the end of 2019, if the company is able to offset the deferral on construction. However, the spending has been pushed to 2018 and beyond.
Currently, Kinder Morgan is one of the three companies trying to construct a pipeline to meet demand for crude takeaway capacity in western Canada.
About Kinder Morgan
Kinder Morgan, headquartered in Houston, TX, has the largest network of natural gas pipeline in North America that spreads over almost 70,000 miles. Most importantly, the company’s midstream properties are linked to all the prospective plays in the United States which are rich in natural gas. These extensive pipeline networks, for which almost $32 billion has been invested to date, have been providing Kinder Morgan with stable fee-based revenues.
However, we are concerned about Kinder Morgan’s weak balance sheet. As of third-quarter 2017, total debt — both short and long term — is pegged at $37.1 billion. The debt capital is higher than the total equity capital of $36.5 billion which depicts the company’s significant exposure to debt.
Price Performance
Shares of the company have lost 3.7% compared with the industry’s decline of 9.6% in the last three months.
A major exploration and production company, BP, delivered an average positive earnings surprise of 26.80% in the last four quarters.
ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It delivered an average positive earnings surprise of 152.34% in the last four quarters.
Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company delivered an average positive earnings surprise of 175.00% in the last four quarters.
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Kinder Morgan Cuts 2017 Capital Spend View for Canada Unit
Per the latest investor presentation, Kinder Morgan Inc. (KMI - Free Report) proposes to lower spending on Canadian subsidiary in 2017.
In 2017, the company is likely to spend $446.5 million on growth capital for its Canadian subsidiary, down 38% from the earlier projection of $721 million as stated in another presentation in September.
Of the total spending, $365.18 million has been apportioned to pipelines and $81.18 million to terminals, down from $629.70 million and $91.33 million, respectively.
This change has been confirmed by a spokesman of the company, who stated that the change was primarily due to operational delay on the Trans Mountain expansion project. The 590,000 barrel per day pipeline has been deferred since the company did not receive permits for the use of Crown land in Canada, promptly.
As expected, the pipeline might come online by the end of 2019, if the company is able to offset the deferral on construction. However, the spending has been pushed to 2018 and beyond.
Currently, Kinder Morgan is one of the three companies trying to construct a pipeline to meet demand for crude takeaway capacity in western Canada.
About Kinder Morgan
Kinder Morgan, headquartered in Houston, TX, has the largest network of natural gas pipeline in North America that spreads over almost 70,000 miles. Most importantly, the company’s midstream properties are linked to all the prospective plays in the United States which are rich in natural gas. These extensive pipeline networks, for which almost $32 billion has been invested to date, have been providing Kinder Morgan with stable fee-based revenues.
However, we are concerned about Kinder Morgan’s weak balance sheet. As of third-quarter 2017, total debt — both short and long term — is pegged at $37.1 billion. The debt capital is higher than the total equity capital of $36.5 billion which depicts the company’s significant exposure to debt.
Price Performance
Shares of the company have lost 3.7% compared with the industry’s decline of 9.6% in the last three months.
Zacks Rank & Key Picks
Kinder Morgan currently carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include BP plc (BP - Free Report) , ConocoPhillips (COP - Free Report) and Northern Oil and Gas Inc (NOG - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
A major exploration and production company, BP, delivered an average positive earnings surprise of 26.80% in the last four quarters.
ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It delivered an average positive earnings surprise of 152.34% in the last four quarters.
Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company delivered an average positive earnings surprise of 175.00% in the last four quarters.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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