MPC and MPLX
MPC and MPLX
Marathon Petroleum Corp. (MPC) was reiterated as Outperform and the price target was raised to $63 from $55 (versus a $52.93 close) at Credit Suisse. The firm noted that a faster drop down schedule accelerates its potential toward a medium-term sum of the parts analysis of $80, handily above its formal price target.
Last edited by dan_s on Wed Jan 04, 2017 10:55 am, edited 1 time in total.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: MPC
Read this: http://marketrealist.com/2017/01/mpcs-s ... ock-value/
This plan strengthens MPLX, one of the mid-stream MLPs in our High Yield Income Portfolio.
MPC plans to drop-down midstream assets that generate around $1.4 billion of annual EBITDA to MPLX in 2017. The assets are expected to be valued in the range of 7x–9x their annual EBITDA. Assets representing around $250 million of EBITDA are slated for dropdown in 1Q17, as well as $350 million by the end of 4Q17 and $800 million between 3Q17 and 1Q18. All the dropdowns are subject to the requisite approvals.
This plan strengthens MPLX, one of the mid-stream MLPs in our High Yield Income Portfolio.
MPC plans to drop-down midstream assets that generate around $1.4 billion of annual EBITDA to MPLX in 2017. The assets are expected to be valued in the range of 7x–9x their annual EBITDA. Assets representing around $250 million of EBITDA are slated for dropdown in 1Q17, as well as $350 million by the end of 4Q17 and $800 million between 3Q17 and 1Q18. All the dropdowns are subject to the requisite approvals.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: MPC and MPLX
John Fox, former ceo of Mark West and huge MPLX shareholder, responds to Marathon's (and Elliot Management's) proposed plans for MPLX. Paul Singer of Elliot Management (the guy who got Argentina to pay its bondholders) said his plan was to "unlock the value of the Marathon's GP interest in MPLX." He didn't say anything about maximizing the value of of the limited partners' interest in MPLX. Fox's materials at www.itjustmakessensegary.com
Re: MPC and MPLX
After the complete all the planned drop downs at 7 to 9 times EBITDA significantly increasing operating cash flow the plan includes buying back the juiced IDR at an estimated 15 to 20 times cash flow. The IDR buyout will be funded with additional equity to MPC. Sounds like a wonderful deal for MPC. What is meant by requisite approvals?
The good news is they are in the right basins and will be moving a lot of gas, and NGL's.
The good news is they are in the right basins and will be moving a lot of gas, and NGL's.