Thursday, June 16, 2011

Spectra Energy Partners new public offering announced

Spectra Energy Partners (NYSE: SEP) fell three percent in afterhours trading on June 8 after announcing a public offering of common units.

The firm will offer 6.25 million units, with an underwriter’s option for another 937,500 units. The money raised is being used to fund the Big Sandy acquisition, which was announced in early May.

Spectra's assets are broken down into three natural gas pipeline systems - Ozark Gas Transmission, East Tennessee Natural Gas and Gulfstream Natural Gas - and the Market Hub Partners storage facilities. The Market Hub storage facilities, in which Spectra owns a 50 percent interest, are Moss Bluff in Texas and Egan In Louisiana. Together, both of these salt caverns have roughly 43 BCF capacity being expanded to 52 Bcf, 77 miles of pipelines and 13 interconnects to pipelines.

Spectra's distribution has been marching higher, increasing in every quarter since the end of 2007. Distributions increased 12 percent in 2010, showing strong growth and increasing returns to shareholders.

The partnership expects distributable cash flow to grow 19 percent in 2011, supported by organic growth projects being completed as well as a full year of an increased ownership stake in the Gulfstream Pipeline. At a current rate of $0.46 per quarter, and a unit price of $30.70, units currently yield 5.9 percent.

No comments:

Post a Comment