Filing activity suggests a busy fall for the energy sector

While many companies pushed back plans to launch deals amid extreme market volatility last week, filing activity showed no signs of a slow-down with new IPOs filing initial S-1's with the SEC on Aug. 12, including three energy companies.

So far this year, 17 IPOs have priced in the energy sector, compared to 18 in all of 2010. The U.S. IPO pipeline now includes 16 energy companies (nine percent of total IPOs) expected to generate nearly $4 billion in proceeds. This robust pipeline may make 2011 the most active year in a decade for the energy sector, matching peaks in 2006 and 2007 when 34 and 32 energy IPOs priced, respectively.

Rose Rock Midstream (Nasdaq: RRMS), a limited partnership recently formed by SemGroup to own and acquire midstream energy assets in the western U.S., plans to raise up to $181 million in its offering. The Tulsa, Okla.-based company, which was founded in 2011, booked $239 million in sales for the 12 months ended March 31, 2011. Barclays Capital is the lead underwriter on the deal.

Matador Resources (Nasdaq: MTDR), an independent energy company with a focus on unconventional natural gas exploration and production, plans to raise up to $150 million in its offering.

The recent successful IPO of C&J Energy (Nasdaq: CJES) and the acquisition of Great White Energy show interest in unconventional oil and gas drilling. The Dallas, Texas-based company, which was founded in 2003, booked $41 million in sales for the 12 months ended March 31, 2011. RBC Capital Markets and Citigroup are the lead underwriters on the deal.

Mid-Con Energy Partners (Nasdaq: MCEP), an owner, operator, and developer of primarily oil properties in the central United States, plans to raise up to $140 million in its offering. The Tulsa, Okla.-based company, which was founded in 2011, booked $25 million in sales for the 12 months ended June 30, 2011. RBC Capital Markets is the lead underwriter on the deal.

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.

Kinder Morgan plans to increase distributions in 2011 by 4.5 percent

HOUSTON, Texas - Kinder Morgan Energy Partners LP said on Nov. 29 that it expects cash distributions next year of $4.60 per unit, which would be an annual increase of 4.5 percent over 2010.

The pipeline and energy storage company said it expects to meet its projection of a 4.8 percent annual increase in 2010 distributions of $4.40 per unit.

In addition, Kinder said it anticipates investing about $1.4 billion in expansions and acquisitions next year.

KMP said it's assuming an average West Texas Intermediate crude oil price of about $89 per barrel in 2011.

Enterprise to link Eagle Ford crude to Houston-area refining complex

HOUSTON, Texas - Enterprise Products Partners L.P. on Nov. 11 announced plans to construct a crude oil storage facility and associated pipelines to provide refiners in the Houston area with access to growing production from the Eagle Ford Shale play in South Texas.

A 150-acre tract in an industrial area of southeast Houston has been purchased as the site for the new Enterprise Crude Houston terminal.
Crude oil will be delivered to the Enterprise Crude Houston facility through the partnership’s Rancho Pipeline, located approximately three miles northwest of the new terminal, and two 24-inch pipelines Enterprise plans to construct.

Strategically located close to two large-diameter crude oil distribution pipelines, the Enterprise Crude Houston terminal would provide access to the major refiners in Texas City, as well as other installations in Pasadena/Deer Park, Baytown and along the Houston Ship Channel via the Seaway Pipeline.

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.