Energy Transfer Partners’ Next Earnings Release: What to Expect
Key for Investors: Energy Transfer Partners' 1Q15 Earnings Release (Part 4 of 5)
Distribution growth
Energy Transfer Partners’ (ETP) distributions continued to increase since 3Q13. Investors expect this to continue in the coming quarters.
Energy Transfer Partners’ distribution per unit increased from 0.975 in 3Q14 to 0.995 in 4Q14—a quarter-over-quarter increase of 2%. Wall Street analysts’ expect Energy Transfer Partners to distribute 1.0133 per common unit in 1Q15. The growth in distribution is linked to the growth in DCF (distributable cash flow)—attributable to the company’s partners. Its DCF grew by ~29.3% in 4Q14. The trend is expected to continue in the next quarter.
Timelines on ETP-Regency merger
In January 2015, Energy Transfer Partners executed a definitive agreement to merge with Regency Energy Partners (RGP). Regency unitholders’ vote and HSR (Hart-Scott-Rodino) clearing approval are pending on the merger. Energy Transfer Partners might provide timelines for the merger completion in its next earnings call.
The merger is expected be a win-win situation for both Energy Transfer Equity (ETE) and Energy Transfer Partners. Energy Transfer Equity holds the GP (general partner) interest and IDRs (incentive distribution rights) in Energy Transfer Partners. It’s expected to benefit from an immediate increase in overall cash flow and long-term cash flow growth. In contrast, Energy Transfer Partners would become the second largest MLP (master limited partnership) with a combined pipeline network of 62,270 miles and over 60 plants with 8.7 Bcf/d (billion cubic feet per day) of gathering and processing throughput.
Both Energy Transfer Partners and Regency Energy Partners are part of the Alerian MLP ETF (AMLP) and the First Trust North American Energy Infrastructure Fund (EMLP). Together, the two stocks account for ~11.6% of AMLP.
Organic projects
Energy Transfer Partners’ management might provide an update on a few of the organic projects that are expected to come online later in 2015 or in 2016–2017.
Rover project – The project will help Energy Transfer Partners deliver gas to markets in Michigan and the Union Gas Dawn Hub in Ontario, Canada.
Bakken project – The project will enhance the firm’s takeaway capacity out of North Dakota to over 450,000 bpd (barrels per day).
New processing plants – The new plants include two new 200 million cubic feet per day of cryogenic gas processing plant projects—the East Texas plant and the REM II plant—plus the 70-mile 24-inch Volunteer Pipeline.
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