Note below is from Bank of America Equity Research It pertains to PAA (an MLP) and PAGP (a C-CorP) that are both in our High Yield Income Portfolio.
BofA has raised their price target for PAGP to $13.
Revisiting federal lands exposure risk for PAA
In a report last week, we re-examined PAA’s federal lands exposure as well as recent strong price performance. We note three reasons that justify this performance and warrant further strength: (1) constructive 3Q update with clear return of capital strategy, (2) ~30% increase in WTI price and meaningful move higher on forward curve, and (3) improving Permian data points that support Permian production recovery over the near-to-medium term, including continued derisking of production on federal lands in the Delaware Basin. Although the risk of a moratorium on oil & gas leasing and production on federal lands still remains under President Biden, we argue that the latest DUC/drilling permit inventory on Delaware federal lands lends to sustained production levels for at least >2 years. The top permit holders also include large, well-capitalized producers such as EOG Resources and Exxon Mobil that have long-term production plans in the Permian.
Read more: https://research1.ml.com/Archive/122272 ... 332e3a6d70
Plains All-American Pipeline LP (PAA) Update - Dec 29
Plains All-American Pipeline LP (PAA) Update - Dec 29
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Plains All-American Pipeline LP (PAA) Update - Dec 29
I have posted my updated profile on Plains All American Pipeline LP to the EPG website under the "High Yield" tab.
PAA and PAGP are in our High Yield Income Portfolio. I have followed them for over a decade, so I have a high level of confidence in my forecast model for this midstream company.
PAA and PAGP pay identical quarterly dividends.
> PAA is an MLP, so it is more suitable for a taxable account. Based on the December 29th closing price the annual yield is 8.4%.
> PAGP is a C-Corp,, so it is OK for an IRA. Based on the December 29th closing price the annual yield is 8.2%
PAA is now generating distributable cash flow (DCF) that is more than 3X their current quarterly distribution. There is a good chance that they raise their distributions, which will raise the unit price. They also have a unit buyback program that reduces risk.
December 29 closing prices:
PAA = $8.54
PAGP = $8.73
If we get out of "Pandemic World", PAA's 52-week high of $19.39 is definitely possible. Lots of upside and very limited risk on this one.
PAA and PAGP are in our High Yield Income Portfolio. I have followed them for over a decade, so I have a high level of confidence in my forecast model for this midstream company.
PAA and PAGP pay identical quarterly dividends.
> PAA is an MLP, so it is more suitable for a taxable account. Based on the December 29th closing price the annual yield is 8.4%.
> PAGP is a C-Corp,, so it is OK for an IRA. Based on the December 29th closing price the annual yield is 8.2%
PAA is now generating distributable cash flow (DCF) that is more than 3X their current quarterly distribution. There is a good chance that they raise their distributions, which will raise the unit price. They also have a unit buyback program that reduces risk.
December 29 closing prices:
PAA = $8.54
PAGP = $8.73
If we get out of "Pandemic World", PAA's 52-week high of $19.39 is definitely possible. Lots of upside and very limited risk on this one.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group