Regency Energy Partners reports increases in financial results

Regency Energy Partners LP (NYSE: RGP) on Feb. 15 announced its financial results for the fourth quarter and full year ended Dec.31, 2011.

For full-year 2011, adjusted EBITDA increased 29 percent to $422 million, compared to $327 million in 2010. Adjusted EBITDA increased by 13 percent for the fourth quarter of 2011, compared to the fourth quarter of 2010. The increases were primarily attributable to RGP’s acquisition of a 30 percent interest in the Lone Star Joint Venture in May 2011 and an increase in the adjusted segment margin in the Gathering and Processing segment due to increased volumes in south and west Texas. The full-year increase was also partly due to a full-year contribution from the MEP Joint Venture in 2011, compared to a partial-year contribution in 2010.

For full-year 2011, net income increased to $74 million, compared to a net loss of $11 million in 2010. Net income increased to $14 million for the fourth quarter of 2011, compared to a net loss of $9 million for the fourth quarter of 2010.

"Our acquisition of an interest in the Lone Star Joint Venture added a predominantly fee-based natural gas liquids platform to Regency's portfolio which when combined with increased volumes in south and west Texas, led to solid year-over-year adjusted EBITDA growth," said Mike Bradley, president and chief executive officer of Regency. 

Three reasons to avoid Energy Transfer Partners

Energy Transfer Partners L.P. (NYSE: ETP) is the third-largest energy pipeline master limited partnership (MLP) in the U.S.

The dividend yield is relatively high due to the lack of dividend increases. The equity in early November was yielding close to 8.0 percent, which is high for the MLP pipeline sector.

The three principle reasons to avoid Energy Transfer Partners:

(1) The dividend has failed to grow. ETP insiders control the general partner, Energy Transfer Equity (NYSE: ETE). Energy Transfer Equity controls 26 percent of Energy Transfer Partners L.P. shares.

(2) The cost of equity capital is one of the highest in the MLP space. Although Energy Transfer Equity has stated it will make General Partner concessions, time will tell if this will in fact drop down to Energy Transfer Partners. Per ETE's SEC 10K, Energy Transfer Equity's only income is: "The Parent Company’s … direct and indirect investments in limited partner and general partner interests in ETP and Regency (NYSE: RGP), both of which are publicly traded master limited partnerships engaged in diversified energy-related services."

(3) The corporate restructurings, including deals with AmeriGas Partners and Southern Union, need time to digest and prove they will result in higher Energy Transfer Partners dividends.

Energy Transfer, Regency to pay $1.93 billion for LDH Energy

DALLAS, Texas - Energy Transfer Partners LP (NYSE: ETP), the third-largest U.S. pipeline partnership, on March 22 announced that will join with an affiliate to buy a pipeline and natural-gas liquids processing plants in Texas for $1.93 billion in cash.

Energy Transfer and Regency Energy Partners LP (Nasdaq: RGNC) will buy LDH Energy Asset Holdings LLC, which owns and operates a natural-gas liquids storage, fractionation and transportation business, the companies said in a statement.

LDH owns and operates a natural gas liquids, or NGL, storage, fractionation and transportation business. LDH's storage assets are primarily located in Mont Belvieu, Texas, one of the largest NGL storage, distribution and trading complexes in North America. Its West Texas Pipeline transports NGLs through a 1,066-mile intrastate pipeline system that originates in the Permian Basin in west Texas, passes through the Barnett Shale production area in north Texas and terminates at the Mont Belvieu storage and fractionation complex. LDH also owns and operates fractionation and processing assets located in Louisiana.

Energy Transfer will pay $1.35 billion for 70 percent of a joint venture that will own the assets, and Regency will pay $578 million for the remaining 30 percent stake. Energy Transfer Partners will operate the assets, the companies, both based in Dallas, said in the statement.

The purchase "suits us very well at a time when we really are trying to move into the transfer of liquids," Kelcy Warren, chief executive officer of Energy Transfer, said in an interview. "We haven't been a big player in that market; that’s about to change."

Energy Transfer and Regency are both controlled by Dallas-based Energy Transfer Equity LP. (NYSE: ETE).

The joint venture will be controlled by a two-member board with a representative from each company. The companies said they will initially finance the purchase with their existing revolving credit lines.

Energy Transfer Equity closes deal to acquire Regency GP

DALLAS, Texas - Energy Transfer Equity LP said on May 26 that it has closed its acquisition of the general partner of Regency Energy Partners LP.
The deal means Energy Transfer Equity now owns the general partner of both pipeline firm Energy Transfer Partners LP and natural gas company Regency. Both will operate as separate entities.
In addition, Regency said it has closed on its purchase of nearly all of Energy Transfer Equity's stake in the Midcontinent Express Pipeline, which gives Regency a total of 49.9 percent of the pipeline. The Midcontinent Express Pipeline is about 500 miles long and extends from Oklahoma to Alabama.
Energy Transfer Equity used its preferred units worth about $300 million to buy all of Regency's general partner from an affiliate of GE Energy Financial Services.
The deal was announced May 11.

Energy Transfer Equity acquiring Regency Energy Partners GP

Regency Energy Partners LP (Nasdaq: RGNC) announced on May 11 that Energy Transfer Equity, L.P. (NYSE: ETE) will acquire the general partner interest in Regency Energy Partners LP from an affiliate of GE Energy Financial Services, a unit of GE. In addition, Regency will acquire a 49.9 percent ownership interest in the Midcontinent Express Pipeline from Energy Transfer Equity, L.P.
ETE will acquire a 100 percent interest in Regency's general partner from an affiliate of GE Energy Financial Services for ETE preferred units with a value of approximately $300 million. Affiliates of GE Energy Financial Services will retain their 24.7 million limited partner units and will be Regency's second largest unitholder, holding 21 percent of Regency's common units after giving effect to the transaction.
In addition, GE Energy Financial Services will have the right to name two board members to the Regency board of directors and one board member to the ETE board of directors.
ETE will own the general partner of both Energy Transfer Partners, L.P. (NYSE: ETP) and Regency. Regency and Energy Transfer Partners (ETP) will operate as separate entities, both with publicly traded limited partner units.
"Energy Transfer Equity is an experienced midstream leader with a strong track record of supporting its limited partnership, assisting ETP in obtaining investment grade status and growing its distributable cash flow," said Byron Kelley, chairman, president and chief executive officer of Regency. "Once the transaction closes, we look forward to calling upon ETE's expertise and extensive knowledge while continuing to focus on implementing the strategic growth objectives we have set for Regency."
Regency also announced on May 11 that it has entered into a definitive agreement to purchase a 49.9 percent interest in the Midcontinent Express Pipeline from ETE. Regency will fund the transaction through the issuance of approximately 26.27 million Regency limited partner units to ETE. ETE will hold 22 percent of Regency's common units after giving effect to the transaction.