Thursday, October 23, 2014

Top 5 Transportation Companies To Buy For 2014

Businesses added 139,000 jobs in February, private payroll processor ADP said Wednesday, adding to concerns that the labor market continued to struggle last month amid extreme winter weather.

Economists expected ADP to report 158,000 additional private-sector jobs, according to a consensus forecast. They predict the Labor Department's more closely watched survey, due Friday, will show 150,000 job gains by businesses and federal, state and local governments.

ADP said that small businesses added 59,000 jobs; mid-size ones, 35,000 and large companies, 44,000.

Professional and business services led job gains, with 33,000. Trade, transportation and utilities added 31,000 and construction firms, 14,000. Manufacturers added 1,000 jobs.

"February was another soft month for the job market," said Mark Zandi, chief economist of Moody's Analytics, which helps ADP compile the report. "Bad winter weather, especially in mid-month, weighed on payrolls. Job growth is expected to improve with warmer temperatures."

Best Stocks To Invest In: KNOT Offshore Partners LP (KNOP)

KNOT Offshore Partners LP, incorporated on February 21, 2013, is a limited partnership formed to own, operate and acquire shuttle tankers under long-term charters. Its initial fleet of shuttle tankers contribute to the Company by Knutsen NYK Offshore Tankers AS (KNOT), which is jointly owned by TS Shipping Invest AS, (TSSI), and Nippon Yusen Kaisha (NYK). NYK is a Japanese public company with a fleet of approximately 800 vessels, including bulk carriers, containerships, tankers and specialized vessels. The Company is a holding entity and is conduct its operations and business through subsidiaries KNOT is an independent owner of crude oil shuttle tankers. Its general partner is KNOT Offshore Partners GP LLC. In August 2013, KNOT Offshore Partners LP's wholly owned subsidiary KNOT Shuttle Tankers AS completed its acquisition of all interests in Knutsen Shuttle Tanker 13 AS that owns and operates the Carmen Knutsen from KNOT Offshore Tankers AS.

The Company's initial fleet consists of four shuttle tankers, which are vessels designed to transport crude oil and condensates from offshore oil field installations to onshore terminals and refineries. The shuttle tankers include , Fortaleza Knutsen, Recife Knutsen, Bodil Knutsen and Windsor Knutsen. Its shuttle tankers are equipped with loading systems and dynamic positioning systems that allow the vessels to load cargo safely and reliably from oil field installations, even in harsh weather conditions.

Advisors' Opinion:
  • [By Robert Rapier] There were a half a dozen initial public offerings (IPOs) by master limited partnerships in the first half of the year, and all but one are now in the green while one has nearly doubled in value.

    The first MLP IPO of 2013 debuted on Jan. 15. USA Compression Partners (NYSE: USAC), which I mentioned in last week’s issue, provides compression services for the oil and gas industry. Units have advanced 36 percent since the IPO, and at the current price yield 7.3 percent.

    The day after the USA Compression Partners IPO, CVR Refining (NYSE: CVRR) made its debut.  CVRR was spun off from CVR Energy (NYSE: CVI), and both companies remain majority-owned by Carl Icahn. CVR Refining’s primary assets are two refineries located in Kansas and Oklahoma with a combined processing capacity of approximately 185,000 barrels per day (bpd). These refineries are strategically located near the major Cushing, Oklahoma shipment and storage hub, with easy access to discounted feedstock from the nearby Permian basin, as well as the Bakken shale and Canadian oil sands.

    But refiners have struggled with diminished margins in 2013 because of a much lower Brent-WTI differential. After the recently concluded second quarter, CVRR declared a distribution of $1.35 per unit, bringing its per-unit distributions for the first half of the year to $2.93. At the same time, CVR Refining lowered its annual distribution target to a range of $4.10 to $4.80 per unit. This was lower than the outlook issued in March, when it foresaw annual distributions of $5.50 to $6.50. CVRR units slid on the news, and are presently trading slightly below the $25 IPO price. The lower end of the revised forecast implies distributions of $1.17 per unit in the second half of the year, for a forward annualized yield of 10 percent based on the recent $23.50 unit price.

    SunCoke Energy Partners (NYSE: SXCP) was the third IPO to debut during a very busy third week of January. SXCP is the first M

Top 5 Transportation Companies To Buy For 2014: TC PipeLines LP (TCP)

TC PipeLines, LP (the Partnership), incorporated on December 16, 1998, acquires, owns and participates in the management of energy infrastructure businesses in North America. The Company�� pipeline systems transport natural gas in the United States. The Partnership is managed by the Company�� General Partner, which is an indirect, wholly-owned subsidiary of TransCanada. The Company has equity ownership interests in four natural gas interstate pipeline systems. The Company�� pipeline systems include Great Lakes, Northern Border, GTN, Bison, North Baja and Tuscarora. The Company owns 46.45% interest in Great Lakes. Great Lakes connect with the TransCanada Mainline at the Canadian border near Emerson, Manitoba, Canada and St. Clair, Michigan, near Detroit. Great Lakes are a bi-directional pipeline that can receive and deliver natural gas at multiple points along its system. In July 2013, TC PipeLines, LP announced the closing of its acquisition of an additional 45% interest in each of Gas Transmission Northwest LLC (GTN) and Bison Pipeline LLC (Bison) from subsidiaries of TransCanada Corporation.

The Company owns 50% interest in Northern Border. Northern Border Extends between the Canadian borders near Port of Morgan, Montana to a terminus near North Hayden, Indiana, south of Chicago. Northern Border is capable of receiving natural gas from Canada, the Williston Basin and Rockies Basin. The Company owns 25% interest in GTN. GTN extends between an interconnection near Kingsgate, British Columbia, Canada at the Canadian Border to a point near Malin, Oregon at the California border. The Company owns 25% interest Bison. Bison extends from a location near Gillette, Wyoming to Northern Border's pipeline system in North Dakota. The Company owns 100% interest in North Baja. North Baja extends between an interconnection with the El Paso Natural Gas Company pipeline near Ehrenberg, Arizona to an interconnection with a natural gas pipeline near Ogilby, California on the Mexican border. The Compa! ny owns 100% interest in Tuscarora. Tuscarora extends between GTN near Malin, Oregon to its terminus near Reno, Nevada and delivers natural gas in northeastern California and northwestern Nevada.

Advisors' Opinion:
  • [By Robert Rapier]

    Next week�� issue will tackle the three remaining questions: one on MLP equivalents in Canada and Australia, one on Enbridge Energy Partners (NYSE: EEP) �and TC Pipelines (NYSE: TCP), and a third query on Access Midstream Partners (NYSE: ACMP), Crestwood Midstream Partners (NYSE: CMLP) and Mid-Con Energy Partners (Nasdaq: MCEP).

  • [By Dividends4Life]

    TC PipeLines LP (TCP) has interests in over 5,550 interstate natural gas pipelines, including a 46.5% stake in Great Lakes Gas Transmission L.P.
    Yield: 6.3% | Years of Dividend Growth: 14

  • [By Rich Duprey]

    For holders of TCF Financials' (NYSE: TCP  ) non-convertible perpetual�7.5% Series A stock, the board of directors announced yesterday investors will receive $0.05 per share on August 30�to holders of record at the close of business on August 15.

  • [By Robert Rapier]

    Last week,�TC PipeLines�(NYSE: TCP) outperformed all other MLPs, rising more than 20%. Another partnership sponsored by a Canadian midstream giant,�Enbridge Energy Partners�(NYSE: EEP), rallied 10%.

Top 5 Transportation Companies To Buy For 2014: QEP Midstream Partners LP (QEPM)

QEP Midstream Partners, LP (QEP), incorporated on April 19, 2013, is a limited partnership formed by QEP Resources, Inc. to owns, operates, acquires and develops midstream energy assets. The Company�� primary assets consist of ownership interests in four gathering systems and two Federal Energy Regulatory Commission (FERC)-regulated pipelines, through which it provides natural gas and crude oil gathering and transportation services. The Company�� assets are located in, or are within close proximity to, the Green River Basin located in Wyoming and Colorado, the Uinta Basin located in eastern Utah, and the portion of the Williston Basin located in North Dakota. As of December 31, 2012, the Company�� gathering systems had 1,475 miles of pipeline and an average gross throughput of 1.8 million british thermal units per hour of natural gas and 18,224 barrels of crude oil.

Green River System

The Company�� Green River System, located in western Wyoming, consists of three complimentary systems owned by Green River Gathering, Rendezvous Gas and Rendezvous Pipeline and gathers natural gas production from the Pinedale, Jonah and Moxa Arch fields. In addition to gathering natural gas, the system also gathers and stabilizes crude oil production from the Pinedale Field, transports the stabilized crude oil to an interstate pipeline interconnect, and gathers and handles produced and flowback water associated with well completion activities in the Pinedale Field. The Green River Gathering assets are comprised of 405 miles of natural gas gathering pipelines, 61 miles of crude oil gathering pipelines, 81 miles of water gathering pipelines and a 60-mile, FERC-regulated crude oil pipeline located in the Green River Basin. The Rendezvous Gas assets consist of three parallel, 103-mile high-pressure natural gas pipelines, with 1,032 million cubic feet per day of throughput capacity and 7,800 basic hydrogen peroxide of gas compression. Rendezvous Pipeline�� sole asset is a 21-mile, FERC-regu! lated natural gas transmission pipeline that provides gas transportation services from QEP�� Blacks Fork processing complex in southwest Wyoming to an interconnect with the Kern River Pipeline.

Vermillion Gathering System

The Vermillion Gathering System consists of gas gathering and compression assets located in southern Wyoming, northwest Colorado and northeast Utah, which, when combined, include 454 miles of low-pressure, gas gathering pipelines and 23,197 basic hydrogen peroxide of gas compression. The Vermillion Gathering System is primarily supported by life-of-reserves and long-term, fee-based gas gathering agreements with minimum volume commitments, which are designed to ensure that it will generate a certain amount of revenue over the life of the gathering agreement by collecting either gathering fees for actual throughput or payments to cover any shortfall. The primary customers on our Vermillion Gathering System include Questar, Samson Resources Corporation (Samson Resources), QEP and Chevron USA, Inc. (Chevron).

Three Rivers Gathering System

Three Rivers Gathering is a joint venture between QEP and Ute Energy Midstream Holdings, LLC (Ute Energy) that was formed to transport natural gas gathered by Uintah Basin Field Services, L.L.C., an indirectly owned subsidiary of QEP (Uintah Basin Field Services), and other third-party volumes to gas processing facilities owned by QEP and third parties. The Three Rivers Gathering System consists of gas gathering assets located in the Uinta Basin in northeast Utah, including approximately 50 miles of gathering pipeline and 4,735 basic hydrogen peroxide of gas compression.

Williston Gathering System

The Williston Gathering System is a crude oil and natural gas gathering system located in the Williston Basin in McLean County, North Dakota. The Williston Gathering System includes 17 miles of gas gathering pipelines, 17 miles of oil gathering pipelines 239 basic hydrogen peroxide o! f gas com! pression, and a crude oil and natural gas handling facility, located primarily on the Fort Berthold Indian Reservation.

The Company competes with Enterprise Products Partners, L.P., Western Gas and The Williams Companies, Inc.

Advisors' Opinion:
  • [By Jon C. Ogg]

    QEP Midstream Partners L.P. (NYSE: QEPM) was started as Buy at Janney Capital, and note that four other firms started coverage earlier this week.

    ServiceNow Inc. (NYSE: NOW) was started as Buy with a $55 price target at Canaccord Genuity.

  • [By Lauren Pollock]

    QEP Resources Inc.(QEP) plans to separate its midstream business, QEP Field Services Co., into a separate entity, including its interest in QEP Midstream Partners LP(QEPM).

  • [By Dimitra DeFotis]

    But things aren’t all bad. A spate of initial public offerings traded at nice prices Friday. Among them was QEP Midstream Partners (QEPM), an energy master limited partnership. (Press release here). More on IPOs from Bloomberg here.

Top 5 Transportation Companies To Buy For 2014: Eagle Rock Energy Partners LP (EROC)

Eagle Rock Energy Partners, L.P. (Eagle Rock) is a limited partnership engaged in the business of gathering, compressing, treating, processing and transporting natural gas; fractionating and transporting natural gas liquids (NGLs); crude oil logistics and marketing; natural gas marketing and trading, known as Midstream Business, and developing and producing interests in oil and natural gas properties, known as Upstream Business. On May 3, 2011, the Company acquired CC Energy II, L.L.C and outstanding membership interests of Crow Creek Energy. On May 20, 2011, it sold the Wildhorse Gathering System in its East Texas and Other Midstream Segment.

Midstream Business

The Company�� Midstream Business is located in four natural gas producing regions: the Texas Panhandle; East Texas/Louisiana; South Texas, and the Gulf of Mexico. As of December 31, 2011, these working interest properties included 591 gross operated productive wells and 1,197 gross non-operated wells with net production to the Company of approximately 87.7 million cubic feet of natural gas per day and proved reserves of approximately 234.0 Bcf of natural gas, 11.5 million barrels of crude oil or other liquid hydrocarbons of crude oil, and 11.3 million barrels of crude oil or other liquid hydrocarbons of natural gas liquids, of which 76% are proved developed. As of December 31, 2011, its Midstream Business consisted of Panhandle Segment and East Texas and Other Midstream Segment.

The Company�� Texas Panhandle Segment covers 10 counties in Texas and two counties in Oklahoma. Through the systems within this segment, the Company offers midstream wellhead-to-market services, including gathering, compressing, treating, processing and selling of natural gas, and fractionating and selling of NGLs. As of December 31, 2011, approximately 213 producers and 2,072 wells and central delivery points were connected to the systems in its Texas Panhandle Segment. The Texas Panhandle Segment averaged gathered volumes fo! r 2011 of approximately 155.1 million cubic feet of natural gas per day. As of December 2011, Chesapeake Energy and BP America Production represented 14% and 11%, respectively, of the total volumes of its Texas Panhandle Segment. The Texas Panhandle Segment consists of approximately 3,963 miles of natural gas gathering pipelines, ranging from two inches to 24 inches in diameter; seven natural gas processing plants with an aggregate capacity of 210 million cubic feet of natural gas per day; a propane fractionation facility with capacity of 1.0 million cubic feet of natural gas per day, and two condensate collection and stabilization facilities.

Eagle Rock�� systems in the East Panhandle (northern Wheeler, Hemphill and Roberts Counties, Texas) gather and process natural gas produced in the Morrow and Granite Wash reservoirs of the Anadarko basin. In the Panhandle Segment, natural gas is contracted at the wellhead primarily under percent-of proceeds (which includes percent-of-liquids) fixed recovery, percent-of-index and fee-based arrangements that range from one to five years in term. During the year endede December 31, 2011, it produced over 2,600 equity barrels per day of condensate in the Texas Panhandle Segment. During 2011, it stabilizes approximately 2,000 barrels per day combined at its Superdrip and Cargray Stabilizers.

The Company�� East Texas and Other Midstream Segment operates within the natural gas producing regions, such as East Texas/Louisiana, South Texas and the Gulf of Mexico. Through its Texas/Louisiana region, it offers producers natural gas gathering, treating, processing and transportation and NGL transportation across 21 counties in East Texas and seven parishes in West Louisiana. Its operations in the South Texas region primarily gather natural gas and recover NGLs and condensate from natural gas produced in the Frio, Vicksburg, Miocene, Canyon Sands and Wilcox formations in South Texas. Its operations in the Gulf of Mexico region are non-operated owne! rship int! erests in pipelines and onshore plants which are all located in southern Louisiana. The Gulf of Mexico region also provides producer services by arranging for the processing of producers��natural gas into third-party processing plants, known as Mezzanine Processing Services.

As of December 31, 2011, approximately 705 wells and central delivery points were connected to its systems in the East Texas and Other Midstream Segment. As of December 31, 2011, the East Texas and Other Midstream Segment provides gathering and/or marketing services to approximately 140 producers. During 2011, the East Texas and Other Midstream Segment averaged gathered volumes of approximately 319.9 million cubic feet of natural gas per day. As of December 31, 2011, Stone Energy Corporation and Anadarko Petroleum Company represented 18% and 9%, respectively, of the total volumes of its East Texas and Other Midstream Segment. Residue gas pipelines include Houston Pipeline Company, Natural Gas Pipeline Company, Tennessee Gas Pipeline, Crosstex Energy L.P. and Southern Natural Pipeline.

Upstream Business

The Company�� Upstream Business located in four regions within the United States, such as Southern Alabama, which includes the associated gathering, processing and treating assets; Mid-Continent, which includes areas in Oklahoma, Arkansas, Texas Panhandle and North Texas; Permian, which includes areas in West Texas, and East/South Texas/Mississippi assets. As of December 31, 2011, these working interest properties included 591 gross operated productive wells and 1,197 gross non-operated wells with net production of approximately 87.7 million cubic feet of natural gas per day and proved reserves of approximately 234.0 Bcf of natural gas, 11.5 million barrels of crude oil or other liquid hydrocarbons of crude oil, and 11.3 million barrels of crude oil or other liquid hydrocarbons of natural gas liquids, of which 76% are proved developed.

The Southern Alabama region includes the! Big Esca! mbia Creek, Flomaton and Fanny Church fields located in Escambia County, Alabama. These fields produce from either the Smackover or Norphlet formations at depths ranging from approximately 15,000 to 16,000 feet. The Big Escambia Creek field encompasses approximately 11,568 gross and 7,334 net Eagle Rock operated acres. It operates 18 productive wells with an average ownership of 60% working interest and 51% net revenue interest in the Big Escambia Creek field. The Fanny Church field is located two miles east of Big Escambia Creek. Its ownership includes approximately 1,284 gross and 999 net operated acres that include three productive operated wells with an average ownership of 86% working interest and 66% net revenue interest. The Flomaton field is adjacent to and partially underlies the Big Escambia Creek field. The field encompasses approximately 1,280 gross and 1,256 net Eagle Rock operated acres and produces from the Norphlet formation at depths from approximately 15,000 to 16,000 feet. It operates three productive wells with an approximate average 91% working interest and 78% net revenue interest. The Smackover and Norphlet reservoirs are sour, gas condensate reservoirs which produce gas and fluids containing a high percentage of hydrogen sulfide and carbon dioxide.

The Mid-Continent region consists of operated and non-operated properties across the Golden Trend Field, Cana Shale play, Verden Field, and other western Oklahoma fields located in the Anadarko Basin in Oklahoma, the Mansfield Field and other various fields in the Arkoma Basin in Arkansas and Oklahoma, various fields in the Texas Panhandle, and the Barnett Shale in north Texas. Productive depths range from approximately 2,500 feet in the Arkoma fields of western Arkansas to greater than 18,000 feet in the Springer formation in certain western Oklahoma fields. Its producing field is the Golden Trend field that extends across Grady, McClain and Garvin counties in Oklahoma. It has 14,621 net acres in the Cana Shale play exte! nding acr! oss Canadian, Blaine and Dewey counties, Oklahoma. The Cana Shale produces from horizontal wells drilled to vertical depths of 11,000 - 13,000 feet and extended with horizontal lateral lengths of approximately 5,000 feet. In the total Mid-Continent region, it operate 316 productive wells and own a working interest in an additional 1,054 non-operated productive wells. The average working interest in these productive operated and non-operated wells is 83% and 9%, respectively. The net production averaged approximately 53.2 million cubic feet of natural gas per day during 2011, of which approximately 77% was produced from wells it operated.

The Permian region contains numerous fields, including Block 27, Estes Block 34, H.S.A., Heiner, Monahans N., Payton, Running W., Ward S, and Ward-Estes N. located mainly in Ward, Pecos, and Crane Counties, Texas. These fields are located in the Central Basin Platform which extends from central Lea County in New Mexico to central Pecos County in Texas and encompasses hundreds of individual fields with multiple productive intervals from the Yates-Seven Rivers-Queen through the Ellenburger formations. The Ward County fields contains two major properties, the Louis Richter and the American National Life Ins. Co. leases, and encompasses approximately 10,285 gross and 10,215 net Eagle Rock acres. It operate multiple fields consisting of stacked multi-pay horizons that produce from depths of 2,300 feet (Yates) to 9,100 feet (Pennsylvanian). The Southern Unit is located in the Running W Waddell field and produces predominantly oil at depths from approximately 5,750 to 5,900 feet. It operates approximately 5,875 net acres in this area.

The East/South Texas/Mississippi region includes the Aker, Birch, Edgewood, Eustace, Fruitvale, Ginger and Wesson fields in East Texas, the Jourdanton field in South Texas, and the Chicora W, High Road, and Stafford Springs fields in Mississippi. The East Texas fields produce primarily from the Smackover Trend at depth! s from 12! ,000 to 12,700 feet and encompass approximately 18,991 gross and 15,872 net Eagle Rock acres. It operates 32 productive wells, which produce gas that contains between approximately 30% to 69% of impurities (hydrogen sulfide, nitrogen, and carbon dioxide). The Edgewood field also contains two productive gas wells in the Cotton Valley at depths of 11,500 to 11,600 feet which produce sweet natural gas. The East Texas production, with the exception of a single well, is delivered to the third party owned Eustace Plant for separation of condensate, removal of impurities, and extraction of natural gas liquids and sulfur for a combination of fees and percentage of proceeds.

In South Texas, it operates wells in the Jourdanton field in Atascosa County, Texas. It operates nine productive wells with 100% working interest and 88% net revenue interest. Its production from the field is primarily from the Edwards carbonates (7,300 to 7,400 feet). On December 31, 2011, the Company had under operation 290 gross (261 net) productive oil wells and 301 gross (251 net) productive natural gas wells. On December 31, 2011, Eagle Rock owned non-operated working interests in an additional 148 gross (18 net) productive oil wells and 1049 gross (72 net) productive natural gas wells.

The Company competes with DCP Midstream, LLC and Enbridge Energy Partners, L.P., Crosstex Energy, L.P., Energy Transfer Partners, LP and Enterprise Products Partners, L.P.

Advisors' Opinion:
  • [By Jason Shubnell]

    Eagle Rock Energy Partners LP (NASDAQ: EROC) was also up, gaining 6.94 percent to $6.33. Analysts at Wells Fargo upgraded the stock from Market Perform to Outperform.

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