An updated Net Income & Cash Flow Forecast has been posted under the MLP Tab. We will be updating the profile in December.
My Fair Value Estimate is $65.60, compared to First Call's Price Target of $63.50.
To say that PAA's cash distributions to unitholders are "Rock Solid" is a gross understatement. This midstream business is easy to forecast and commodity prices have almost no impact on their earnings and cash flows, in fact lower fuel costs should help by reducing their operating expenses a bit.
The only risk is if the U.S. economy tanks and we use a lot less fuel for an extended period.
PAA's goal is to raise their distributions by 10% each year. Based on my forecast model, they should have no problem exceeding that goal for at least the rest of this decade.
Plains All American Pipeline LP (PAA)
Plains All American Pipeline LP (PAA)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Plains All American Pipeline LP (PAA)
HOUSTON, Nov 24 (Reuters) - Plains All American aims to expand its new Cactus Pipeline to move West Texas oil to Corpus Christi, increasing the company's ability to move super-light crude to the Texas Gulf Coast for possible export.
The move further positions Plains to export minimally processed condensate if it chooses to do so. Pressure from oil producers to scrap the decades-old domestic crude export ban has grown as super-light condensate emerging from the U.S. shale oil boom overwhelms refineries with limited capacity to handle it.
Cactus will connect with Plains' joint-venture line at the company's Gardendale hub in La Salle County, and Plains' partner in that line, Enterprise Products Partners, already has government approval to export minimally processed condensate.
My Take: Assuming that PAA knows a bit more about what is going on in Washington that we do, I think this move points clearly to Congress lifting the export ban soon after the GOP takes control. Many "experts" think that will move WTI up to Brent within a few months.
The move further positions Plains to export minimally processed condensate if it chooses to do so. Pressure from oil producers to scrap the decades-old domestic crude export ban has grown as super-light condensate emerging from the U.S. shale oil boom overwhelms refineries with limited capacity to handle it.
Cactus will connect with Plains' joint-venture line at the company's Gardendale hub in La Salle County, and Plains' partner in that line, Enterprise Products Partners, already has government approval to export minimally processed condensate.
My Take: Assuming that PAA knows a bit more about what is going on in Washington that we do, I think this move points clearly to Congress lifting the export ban soon after the GOP takes control. Many "experts" think that will move WTI up to Brent within a few months.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group