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Plains All American (PAA) to Sell 30% Interest in BridgeTex
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Plains All American Pipeline, L.P. (PAA - Free Report) and Magellan Midstream Partners, L.P. have announced to sell their respective 30% and 20% of stakes in the joint venture, BridgeTex Pipeline Company, LLC to OMERS.
Plains All American Pipeline decided to sell off the equity stake for $862.8 million and to retain 20% of its balance equity stake in the joint venture. The proposed transaction is expected to be closed by fourth-quarter 2018, subject to regulatory approvals.
Future Plans of Plains All American Pipeline
Plains All American Pipeline is expanding its operation in the Permian Basin to capitalize on improving demand. The partnership is progressing with its plan to construct Cactus II pipeline systems coupled with the extension of Sunrise I and II, which will strengthen its activity in the Permian Basin. Also, the firm and Exxon Mobil Corporation (XOM - Free Report) entered into a joint venture for construction of pipelines to transport 1 million barrels of crude oil and condensate per day from multiple locations in the Permian Basin to the Texas Gulf Coast.
The firm expects some debottlenecking projects to be in service by third-quarter 2018. Also, the partnership plans to put its new pipeline capacity from Wink to McCamey online, partially by this year-end. This part service would add 670,000 barrels a day to its Cactus II pipeline.
The partnership is also committed to lowering its debt level and has thus reduced its total leverage position from $11.8 billion at 2016 end to $9.8 billion at the end of second-quarter 2018. It aims at decreasing its debt burden further coupled with strong projects in pipelines, to be funded from the divestiture proceeds, retained cash flows as well as earnings from its new projects.
Capex Plans
After spending $1.1 billion on capital expansion in 2017, the partnership anticipates the 2018 expansion capital to come in at $1.95 billion wherein 47.4% of the capex will be incurred with regard to Permian projects. Also, the partnership has raised its capex guidance by nearly $650 million for 2018 and 2019 time period, of which, 75% of the planned capital expenditure will be spent on Permian projects.
The firm has been divesting assets to fund its business capital requirement. After getting rid of $1.1 billion non-core assets in 2017, the partnership now aims at selling off nearly $700 million assets in 2018 to further strengthen its core operations and also continue with its capital projects.
Price Performance
Units of Plains All American Pipeline have outperformed its industry in a year. The stock has surged 36.7% versus the industry’s decline of 0.1%.
TC PipeLines, LP sports a Zacks Rank #1. It delivered second-quarter 2018 earnings of $1.32 per unit, surpassing the Zacks Consensus Estimate of $1.08 by 22.22%. The stock has seen the Zacks Consensus Estimate for 2018 EPU move 8.7% north over the past 30 days to $3.75.
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It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Plains All American (PAA) to Sell 30% Interest in BridgeTex
Plains All American Pipeline, L.P. (PAA - Free Report) and Magellan Midstream Partners, L.P. have announced to sell their respective 30% and 20% of stakes in the joint venture, BridgeTex Pipeline Company, LLC to OMERS.
Plains All American Pipeline decided to sell off the equity stake for $862.8 million and to retain 20% of its balance equity stake in the joint venture. The proposed transaction is expected to be closed by fourth-quarter 2018, subject to regulatory approvals.
Future Plans of Plains All American Pipeline
Plains All American Pipeline is expanding its operation in the Permian Basin to capitalize on improving demand. The partnership is progressing with its plan to construct Cactus II pipeline systems coupled with the extension of Sunrise I and II, which will strengthen its activity in the Permian Basin. Also, the firm and Exxon Mobil Corporation (XOM - Free Report) entered into a joint venture for construction of pipelines to transport 1 million barrels of crude oil and condensate per day from multiple locations in the Permian Basin to the Texas Gulf Coast.
The firm expects some debottlenecking projects to be in service by third-quarter 2018. Also, the partnership plans to put its new pipeline capacity from Wink to McCamey online, partially by this year-end. This part service would add 670,000 barrels a day to its Cactus II pipeline.
The partnership is also committed to lowering its debt level and has thus reduced its total leverage position from $11.8 billion at 2016 end to $9.8 billion at the end of second-quarter 2018. It aims at decreasing its debt burden further coupled with strong projects in pipelines, to be funded from the divestiture proceeds, retained cash flows as well as earnings from its new projects.
Capex Plans
After spending $1.1 billion on capital expansion in 2017, the partnership anticipates the 2018 expansion capital to come in at $1.95 billion wherein 47.4% of the capex will be incurred with regard to Permian projects. Also, the partnership has raised its capex guidance by nearly $650 million for 2018 and 2019 time period, of which, 75% of the planned capital expenditure will be spent on Permian projects.
The firm has been divesting assets to fund its business capital requirement. After getting rid of $1.1 billion non-core assets in 2017, the partnership now aims at selling off nearly $700 million assets in 2018 to further strengthen its core operations and also continue with its capital projects.
Price Performance
Units of Plains All American Pipeline have outperformed its industry in a year. The stock has surged 36.7% versus the industry’s decline of 0.1%.
Zacks Rank and Stock to Consider
Plains All American Pipeline has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TC PipeLines, LP sports a Zacks Rank #1. It delivered second-quarter 2018 earnings of $1.32 per unit, surpassing the Zacks Consensus Estimate of $1.08 by 22.22%. The stock has seen the Zacks Consensus Estimate for 2018 EPU move 8.7% north over the past 30 days to $3.75.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>