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Pembina (PBA), KKR Merge Canadian Assets via Joint Venture
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Headquartered in Calgary, Canada, Pembina Pipeline Corporation (PBA - Free Report) announced that it signed definitive agreements with the private equity firm, KKR & Co. (KKR - Free Report) , to merge their respective western Canadian natural gas-processing assets into a new joint venture.
The joint venture entity “Newco” will have a 60-40 ownership split between Pembina and KKR's global infrastructure funds. PBA will act as the joint venture's operator and manager. The deal consists of Pembina's field-based natural gas-processing assets, the Veresen Midstream business, which is owned 55% by funds managed by KKR, and the remaining 45% by Pembina, and Energy Transfer Canada (ETC), 49% of which is presently owned by funds managed by KKR. The joint venture will also take over Energy Transfer LP's remaining 51% stake in ETC.
According to Pembina and KKR, the aggregate value of the transaction is about C$11.4 billion ($9 billion). Moreover, the joint venture is supposed to bring together three complementary platforms to create a leading, highly competitive western Canadian gas-processing entity, which will be able to serve customers throughout the Montney and Duvernay trends from north-central Alberta to northeast British Columbia. Per PBA, the combined entity’s natural gas processing capacity will be approximately 5 billion cubic feet per day.
Should the transaction go through, Pembina will hike its dividend by 3.6%, while C$700 million in after-tax cash proceeds will allow it to raise the full-year stock buyback target by C$150 million to C$350 million.
Founded in 1954, Pembina Pipeline Corporation is a Canada-based vertically integrated operator of energy infrastructure assets. The company is active throughout the hydrocarbon value chain, offering a complete range of midstream and marketing solutions. Pembina’s extensive network of conduits covers some of North America’s most prolific basins. PBA’s mix of transportation and midstream assets include conventional pipelines, oil sands pipelines, transmission pipelines, a fractionator and a gas processing plant.
KKR & Co. Inc. operates as an investment firm. The company manages investments, such as private equity, energy, infrastructure, real estate, credit strategies and hedge funds. KKR & Co. Inc., formerly known as KKR & Co. L.P., is based in New York.
The Zacks Consensus Estimate for SM Energy’s 2022 earnings is projected at $6.62 per share, up about 257.8% from the projected year-ago earnings of $1.85.
SM Energy beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 153.9%. SM stock has rallied 146% in a year.
The Zacks Consensus Estimate for Valero’s 2022 earnings is projected at $7.10 per share, up about 152.7% from the projected year-ago earnings of $2.81.
Valero beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 75.7%. VLO is valued at around $35 billion.
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Pembina (PBA), KKR Merge Canadian Assets via Joint Venture
Headquartered in Calgary, Canada, Pembina Pipeline Corporation (PBA - Free Report) announced that it signed definitive agreements with the private equity firm, KKR & Co. (KKR - Free Report) , to merge their respective western Canadian natural gas-processing assets into a new joint venture.
The joint venture entity “Newco” will have a 60-40 ownership split between Pembina and KKR's global infrastructure funds. PBA will act as the joint venture's operator and manager. The deal consists of Pembina's field-based natural gas-processing assets, the Veresen Midstream business, which is owned 55% by funds managed by KKR, and the remaining 45% by Pembina, and Energy Transfer Canada (ETC), 49% of which is presently owned by funds managed by KKR. The joint venture will also take over Energy Transfer LP's remaining 51% stake in ETC.
According to Pembina and KKR, the aggregate value of the transaction is about C$11.4 billion ($9 billion). Moreover, the joint venture is supposed to bring together three complementary platforms to create a leading, highly competitive western Canadian gas-processing entity, which will be able to serve customers throughout the Montney and Duvernay trends from north-central Alberta to northeast British Columbia. Per PBA, the combined entity’s natural gas processing capacity will be approximately 5 billion cubic feet per day.
Should the transaction go through, Pembina will hike its dividend by 3.6%, while C$700 million in after-tax cash proceeds will allow it to raise the full-year stock buyback target by C$150 million to C$350 million.
Founded in 1954, Pembina Pipeline Corporation is a Canada-based vertically integrated operator of energy infrastructure assets. The company is active throughout the hydrocarbon value chain, offering a complete range of midstream and marketing solutions. Pembina’s extensive network of conduits covers some of North America’s most prolific basins. PBA’s mix of transportation and midstream assets include conventional pipelines, oil sands pipelines, transmission pipelines, a fractionator and a gas processing plant.
KKR & Co. Inc. operates as an investment firm. The company manages investments, such as private equity, energy, infrastructure, real estate, credit strategies and hedge funds. KKR & Co. Inc., formerly known as KKR & Co. L.P., is based in New York.
Pembina Pipeline currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include SM Energy (SM - Free Report) and Valero Energy (VLO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for SM Energy’s 2022 earnings is projected at $6.62 per share, up about 257.8% from the projected year-ago earnings of $1.85.
SM Energy beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 153.9%. SM stock has rallied 146% in a year.
The Zacks Consensus Estimate for Valero’s 2022 earnings is projected at $7.10 per share, up about 152.7% from the projected year-ago earnings of $2.81.
Valero beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 75.7%. VLO is valued at around $35 billion.