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Enbridge (ENB) Expands U.S. Footprint With East Ohio Gas Deal
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Enbridge Inc. (ENB - Free Report) ) concluded its acquisition of The East Ohio Gas Company (“EOG”) from Dominion Energy, Inc.(D - Free Report) , solidifying its position in the U.S. utility sector. As part of the transaction, EOG will now operate under the name Enbridge Gas Ohio and will become a part of Enbridge's Gas Distribution and Storage Business Unit.
The deal, valued at $14 billion (C$19.1 billion), is part of a series of agreements inked by Enbridge in 2023 to acquire three natural gas distribution companies from Dominion Energy. This amount comprises $9.4 billion in cash consideration and $4.6 billion in assumed debt. Enbridge initiated the acquisition process in September 2023, entering into three separate definitive agreements with Dominion Energy to acquire EOG, Public Service Co. of North Carolina Inc. (“PSNC”), and Questar Gas Co.
The completion of the acquisition of Questar and PSNC is anticipated to follow regulatory approvals specific to each gas utility, with both transactions expected to close within the year. Enbridge emphasized that these two acquisitions are not cross-conditioned, allowing for a streamlined process.
EOG, a single-state utility, serves over 1.2 million customers across more than 400 communities in Ohio, with a substantial presence in major metropolitan areas. The gas utility boasts an extensive portfolio, including over 22,000 miles of transmission, gathering, and distribution pipelines, underground storage, and interconnections to multiple interstate pipelines and large natural gas producers.
Michele Harradence, Enbridge's executive vice president and president for Gas Distribution and Storage, highlighted the importance of the acquisition, stating that adding a robust Ohio-based gas utility company aligns strategically with Enbridge’s goals. This move is seen as a means to diversify the company's business and improve the stable cash flow profile of its assets.
Harradence emphasized the lasting value of natural gas utilities, characterizing them as essential infrastructure for delivering secure, dependable and cost-effective energy. The acquisition of EOG is anticipated to contribute more than 40% to the total annualized EBITDA from the three gas utilities that Enbridge is set to acquire from Dominion.
Upon the conclusion of the Dominion transactions, Enbridge will extend its gas utility operations to Ohio, North Carolina, Utah, Idaho and Wyoming, marking a substantial presence in the U.S. utility sector. The combined three utilities, including EOG, serve approximately 3 million homes and businesses, encompassing 78,000 miles of natural gas distribution, transmission, gathering and storage pipelines.
Zacks Rank & Key Picks
Currently, Enbridge carries a Zack Rank #3 (Hold).
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $4.89. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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Enbridge (ENB) Expands U.S. Footprint With East Ohio Gas Deal
Enbridge Inc. (ENB - Free Report) ) concluded its acquisition of The East Ohio Gas Company (“EOG”) from Dominion Energy, Inc.(D - Free Report) , solidifying its position in the U.S. utility sector. As part of the transaction, EOG will now operate under the name Enbridge Gas Ohio and will become a part of Enbridge's Gas Distribution and Storage Business Unit.
The deal, valued at $14 billion (C$19.1 billion), is part of a series of agreements inked by Enbridge in 2023 to acquire three natural gas distribution companies from Dominion Energy. This amount comprises $9.4 billion in cash consideration and $4.6 billion in assumed debt. Enbridge initiated the acquisition process in September 2023, entering into three separate definitive agreements with Dominion Energy to acquire EOG, Public Service Co. of North Carolina Inc. (“PSNC”), and Questar Gas Co.
The completion of the acquisition of Questar and PSNC is anticipated to follow regulatory approvals specific to each gas utility, with both transactions expected to close within the year. Enbridge emphasized that these two acquisitions are not cross-conditioned, allowing for a streamlined process.
EOG, a single-state utility, serves over 1.2 million customers across more than 400 communities in Ohio, with a substantial presence in major metropolitan areas. The gas utility boasts an extensive portfolio, including over 22,000 miles of transmission, gathering, and distribution pipelines, underground storage, and interconnections to multiple interstate pipelines and large natural gas producers.
Michele Harradence, Enbridge's executive vice president and president for Gas Distribution and Storage, highlighted the importance of the acquisition, stating that adding a robust Ohio-based gas utility company aligns strategically with Enbridge’s goals. This move is seen as a means to diversify the company's business and improve the stable cash flow profile of its assets.
Harradence emphasized the lasting value of natural gas utilities, characterizing them as essential infrastructure for delivering secure, dependable and cost-effective energy. The acquisition of EOG is anticipated to contribute more than 40% to the total annualized EBITDA from the three gas utilities that Enbridge is set to acquire from Dominion.
Upon the conclusion of the Dominion transactions, Enbridge will extend its gas utility operations to Ohio, North Carolina, Utah, Idaho and Wyoming, marking a substantial presence in the U.S. utility sector. The combined three utilities, including EOG, serve approximately 3 million homes and businesses, encompassing 78,000 miles of natural gas distribution, transmission, gathering and storage pipelines.
Zacks Rank & Key Picks
Currently, Enbridge carries a Zack Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Sunoco LP (SUN - Free Report) and Murphy USA Inc. (MUSA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
The Zacks Consensus Estimate for SUN’s 2024 EPS is pegged at $4.89. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Murphy USA is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of B for Growth and B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.