Shift in Spectra Energy (SE) Assets to MLP Will Provide Rich Returns for Investors - Cramer
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Spectra Energy (NYSE: SE) is on the rise Wednesday following an announcement late Tuesday that it will drop down all of its remaining U.S. Transmission and Storage assets to Spectra Energy Partners (NYSE: SEP) by the end of the year, subject to market conditions. The news prompted an upgraded at Morgan Stanley and Deutsche Bank today.
CEO Gregory Ebel also spoke with Jim Cramer on Tuesday's "Mad Money." Ebel noted that Spectra will move even more assets into the master limited partnership (MLP) by the end o 2013. That will allow for a bigger distribution from its MLP and larger dividend on its common stock starting in 2014.
Ebel also noted that Spectra will pay about $1.2 billion to complete the last 15 million of its much-anticipated Utica shale pipeline into New York City. Though it seems pricy, Ebel noted that it would be the first new pipeline into New York City in 40 years and residents will save over $700 million annually on lower energy costs.
Shipments by railroads are an okay interim solution, Ebel notes, but over a longer-term time frame, it safer and more economical to transport oil and gas by pipeline.
Ebel also sees the Keystone XL pipeline being built, but its not a "90 percent guarantee anymore."
On nat gas liquids like propane and ethane, Ebel thinks those are range bound for now as new facilities are built to process the increased supply.
Cramer is still a supporter of the stock and the MLP.
Shares of Spectra are up 10 percent on the session.
CEO Gregory Ebel also spoke with Jim Cramer on Tuesday's "Mad Money." Ebel noted that Spectra will move even more assets into the master limited partnership (MLP) by the end o 2013. That will allow for a bigger distribution from its MLP and larger dividend on its common stock starting in 2014.
Ebel also noted that Spectra will pay about $1.2 billion to complete the last 15 million of its much-anticipated Utica shale pipeline into New York City. Though it seems pricy, Ebel noted that it would be the first new pipeline into New York City in 40 years and residents will save over $700 million annually on lower energy costs.
Shipments by railroads are an okay interim solution, Ebel notes, but over a longer-term time frame, it safer and more economical to transport oil and gas by pipeline.
Ebel also sees the Keystone XL pipeline being built, but its not a "90 percent guarantee anymore."
On nat gas liquids like propane and ethane, Ebel thinks those are range bound for now as new facilities are built to process the increased supply.
Cramer is still a supporter of the stock and the MLP.
Shares of Spectra are up 10 percent on the session.
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