Barclays Maintains an 'Overweight' on Atlas Pipeline Partners (APL); Incremental 200 mmcf/d West Texas Expansion Extends Growth Visibility

Barclays maintains an 'Overweight' on Atlas Pipeline Partners, L.P. (NYSE: APL) price target raised $1 to $41.00.

Barclays analyst says, "Raising 4-year distribution CAGR to 10%: The 200 mmcf/d West Texas expansionfor 2013-2015 improves APL's distribution growth visibility beyond the 320 mmcf/d expansion currently being executed for mid 2012 service. At the current price environment returns are expected to be in the 3-4x range when plants are fully utilized. Given the margins are commodity driven (contracts will be 100% POP with a small fee-component) the return multiple will move with commodity price as well as plant utilization. We expect the project to generate 5-6x multiple on 60-70% load factor and 6-7x if commodity price declines by 10-20% from current levels. The project should generate high single digit return profile under this scenario and could be funded with revolver/debt without having to issue equity, given APL's liquidity and underlevered balance sheet. We are raising our 4-year distribution CAGR to 10% from 9% previously."

For an analyst ratings summary and ratings history on Atlas Pipeline Partners, L.P. click here. For more ratings news on Atlas Pipeline Partners, L.P. click here.

Shares of Atlas Pipeline Partners, L.P. closed at $35.60 yesterday.

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