EEP Plans for Growth

MARK EASTERBROOK, RBC Capital Markets (07/29/2010)
"Synergistic Transaction: EEP agreed to acquire the Elk City Gathering & Processing System from Atlas Pipeline in southwestern Oklahoma and the Texas Panhandle. . .[which] consists of 800 miles of gathering pipeline, one treating plant, three cryogenic processing plants with a total capacity of 370 mmcf/d, and NGL production capability of 20,000 bpd.

Capitalizing on Expanding Production in the Granite Wash: The partnership expects to use the current excess capacity on the system to pick up growing volumes in the Granite Wash. Under APL management, the assets were underutilized (<50% based on 1Q/10 results). EEP believes it can utilize these assets at or near 100%.

Assets Look Mildly Accretive Using a 9.0x Multiple: Management stated that it expects the deal to be immediately accretive to DCF once the system is integrated with its Anadarko system."

 PRINT THIS PAGE   EMAIL THIS PAGE

Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

Related Quotes: