Friday, July 29, 2011

EV Energy soars as Chesapeake Energy reveals new shale find in Ohio

HOUSTON, Texas - EV Energy Partners (Nasdaq: EVEP) surged premarket on July 29 as Chesapeake (NYSE: CHK) announced a "major new liquids-rich discovery" in the Utica Shale play of eastern Ohio.

EVEP owns some 150,000 net acres and has royalty rights on another 80,000 in the Utica Shale.

EVEP on July 29 reached an interday high of $73.37, up $9.50, before closing at $70.99, up $7.12, in heavy trading of more than 1.5 million units.

Chesapeake Energy's disclosure of the Ohio gas find came as part of its second-quarter financial report, in which it announced that its profit doubled as production increased, while prior-year results included a derivatives loss. Chesapeake shares rose on July 29 as results topped analysts' expectations. However, the units closed up by only $0.92 per share. The stock closed at $34.35. Chesapeake said it values its Utica Shale holdings at a possible $12,000 to $16,000 an acre.

Oppenheimer and Wells Fargo on July 29 raised their rating on EVEP to outperform, with the former setting an $85 price target and Wells boosting its to about $76 from $56. "We acknowledge that we are relatively late to the game," says Oppenheimer, "but believe there is significant upside remaining."

Thursday, July 28, 2011

Kinder Morgan Central Florida pipeline jet fuel leak temporarily repaired

TAMPA, Fla. - Crews on July 24 temporarily repaired a break in a Central Florida pipeline that carries jet fuel between Tampa and Orlando.

The pipeline ruptured on the night of July 22, spewing thousands of gallons of fuel into a nearby creek. The damaged portion of the pipeline runs along railroad tracks in Mango, Fla.

Crews managed to stop the flow of fuel from the rupture around 9 p.m. on July 23, said Holley Wade, a spokeswoman for Hillsborough County Emergency Management.

On the morning of July 24, workers installed a sleeve over the damaged portion of pipe, said Emily Thompson, a spokeswoman for Kinder Morgan, the company that operates the Central Florida pipeline.

The broken pipe dumped about 31,000 gallons of fuel, and about 65 percent of that has been cleaned up, Thompson said.

The fuel spewed into a creek called the Mango Channel, Wade said. The channel eventually connects with a bypass canal that runs into Tampa Bay. Booms are being used to contain the fuel, and workers are monitoring the situation.

The broken section of the pipe will eventually be permanently replaced, but Thompson didn't know when that would happen.

Thompson said the initial investigation showed the pipe was struck by a third party, but no other details were currently available. The pipeline rupture is being investigated by the Florida Department of Transportation. (Sources:, July 24, 2011; CF News, July 24, 2011)

Wednesday, July 27, 2011

Energy Income and Growth Fund prices public offering of 2,800,000 common shares

Energy Income and Growth Fund (NYSE Amex: FEN) announced on July 26 the pricing of a new public offering of common shares.

The fund agreed to sell a total of 2,800,000 common shares at a price to the public of $28.13 per share, exclusive of 420,000 common shares that the underwriters may purchase pursuant to a 45-day option to cover over-allotments.

Net proceeds from the offering of approximately $75.49 million will be used to make additional portfolio investments that are consistent with the fund's investment objective and policies, and for general corporate purposes.

FEN, which went ex-dividend on July 21, closed at $27.15 on July 26, down $1.851, in heavy trading. FEN is currently paying an annual dividend of $1.88, or 6.48 percent.

The offering is scheduled to close on July 29.

Tuesday, July 26, 2011

State Department firms up timetable for Keystone XL Pipeline decision

WASHINGTON, D.C. - The State Department is pointing to November as the time frame for a final decision on the proposed Keystone XL Pipeline.

In a July 22 conference call, department spokesman Daniel Clune said a final environmental impact statement is likely to be issued in August on the $7 billion project.

Clune said that State Department officials would come to Lincoln, Neb., and to the Nebraska Sandhills in September to give residents two more chances to weigh in on the controversial project. Similar meetings are planned for state capitals in the five other states the pipeline would cross on its way from the oil sands of Alberta to refineries along the U.S. Gulf Coast.

While the agency is standing by its commitment to act by the end of the year, "we won't make a decision until we complete a thorough review process," Clune said.

Secretary of State Hillary Clinton or her designee will answer the pivotal question of whether the project is in the national interest.

That determination "will take into account the environmental and safety issues covered in the final environmental impact statement," Clune said, "as well as additional issues related to the national interest, such as energy security and economic considerations."

Monday, July 25, 2011

Kinder Morgan profit up in 2Q, but Kinder Morgan Partners net plummets

Second-quarter profit at Kinder Morgan Inc. (NYSE: KMI) soared on higher revenue and increased earnings from equity investments. For the latest quarter, Kinder Morgan Inc. reported earnings of $132.1 million, or 17 cents per Class A share, compared with $46 million a year earlier. Revenue climbed 2.1 percent to $2.03 billion. Analysts polled by Thomson Reuters expected a profit of 25 cents on revenue of $2.07 billion. Earnings from equity investments were $75.3 million, up 24 percent from the prior year. The company owns the general partner of Kinder Morgan Energy Partners as well as a stake in the pipeline operator.

Second-quarter profit at Kinder Morgan Energy Partners LP (NYSE: KMP) fell 36 percent as expenses jumped. KMP’s profit fell to $230.5 million from $361.2 million. On a per-unit basis, which is affected by the general partner's interest, the latest quarter was a loss of 19 cents per unit, compared with an 88-cent profit a year earlier. Revenue improved 2.9 percent to $2.02 billion. Wall Street projected a 40-cent profit on $2.12 billion in revenue. Expenses increased 14 percent.

Kinder Morgan, Inc. (NYSE: KMI) has announced an increase in its dividend for the second quarter to $0.30 per share ($1.20 annualized) from $.29 per share ($1.16 annualized), payable on Aug. 15 to shareholders of record on Aug. 1. KMI on July 19 reported second quarter cash available to pay dividends of $154 million. Through the first two quarters of the year, the company reported cash available to pay dividends of $405 million. Chairman and CEO Richard D. Kinder said, "KMI had a good second quarter and is on target to exceed its previously disclosed annual budget of $820 million in cash available to pay dividends." Approximately 98 percent of the distributions KMI receives are attributable to KMP. KMI also owns a 20 percent interest in Natural Gas Pipeline Company of America.

Friday, July 22, 2011

BP tells ROW agents to stop saying federal government agencies require tree clearing

"Talking Points to Avoid" appearing in a current BP "Tree Cutting Talking Points" paper specify:


  • Homeland Security - Property Owners have not been receptive to this talking point and BP would not receive support from Homeland Security Department that tree cutting is their requirement.

  • DOT Requirement - The DOT has stated that they are not requiring the tree cutting and have told pipeline companies to stop informing property owners that tree clearing is being done at their request.