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Spectra Energy: 2013 Capital Outlay
EQT SGY SE
Spectra Energy Corporation ( SE - Analyst Report) has planned its finances for 2013. The company projected its diluted earnings per share (EPS) at $1.50 for 2013 and the annual dividend to increase by 10 cents to reach $1.22. These are consistent with its earlier forecasts.
The company intends to allocate about $1.4 billion in 2013 for expansion. This is in sync with Spectra Energy’s long-term growth plan of $1.5 billion average annual growth capital expenditure (capex). The company has assumed the expansion capex and maintenance capex to be $1.4 billion and $790 million respectively, in 2013.
The company’s proposed EPS growth in the range of 6% as well as dividend growth of around 8 cents annually will facilitate the company to enhance value for shareholders for the coming years.
Spectra Energy holds a positive outlook in both the near and longer term with major growth prospects expected in all the business units. The company plans to allocate an amount of $25 billion in growth projects through the end of the decade. Further, momentum will be driven by the advancing of master limited partnership (MLP) dropdown strategy through the recent asset additions.
The company has set aside approximately $10 billion for its U.S. Transmission segment; around $7 billion in Western Canada; at least $6 billion at DCP Midstream; over $1 billion at their Union Gas distribution business in Canada; and in excess of $2 billion in crude oil and liquids pipelines, including the Express-Platte acquisition, for prospective growth opportunities along with the ongoing projects.
Recently, Spectra acquired the Express-Platte pipeline from Kinder Morgan Energy Partners LP . The acquisition is expected to close during the first half of 2013 and be value accretive immediately, providing immense upside in the growing crude oil transportation and storage space.
The other companies in the oil and gas sector like – EQT Corporation ( EQT - Analyst Report) and Stone Energy Corporation ( SGY - Analyst Report) – have allocated $1.5 billion and $650 million, respectively, as capex for 2013.
Spectra Energy holds a Zacks Rank #3, which is equivalent to a Hold rating for a period of one to three months.