Natural gas processor and distributor,
MarkWest Energy Partners LP
) provided a positive 2014 outlook in its recently held investor
conference. The partnership intends to increase its fee-based
margin and expects 2014 fee-based net operating margin of over 70%,
significantly higher than the 2013 level of 61%.
MarkWest Energy provided 2014 distributable cash flow (DCF)
projection of $600-$690 million. It expects year-over-year
distribution growth of 7% in 2015 and 10% in 2016. With no
incentive distribution rights, the partnership has the ability to
pass its entire cash benefit to the unit-holders, thus,
facilitating higher distribution growth.
However, the 2014 capital budget was maintained at $2-$3 billion.
In the past two years, MarkWest Energy completed 23 major
infrastructure projects. The partnership currently has 14 major
projects under construction, 7 of which are likely to complete in
MarkWest Energy expects the Marcellus segment to be the largest
contributor of the 2014 projected operating income, constituting
about 52%. The Southwest segment is anticipated to contribute
around 34% to the 2014 operating income, while Northeast and Utica
are expected to contribute 10% and 4% respectively.
MarkWest Energy is also focused on increasing its processing
capacities as a means to drive growth. The partnership intends to
increase its Marcellus and Utica processing capacity to over 4.1
billion cubic feet per day (Bcf/d) by the year-end from the current
level of 3.1 Bcf/d.
Following this positive update, MarkWest Energy units gained about
2.4% on Jun 6 to close at $64.79.
Denver, CO-based MarkWest Energy, a master limited partnership, is
engaged in the gathering, processing and transmission of natural
gas, transportation, fractionation and storage of NGLs as well as
the gathering and transportation of crude oil.
MarkWest Energy currently has a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Meanwhile, one can consider better-ranked players in the same
Boardwalk Pipeline Partners LP
Delek Logistics Partners LP
Magellan Midstream Partners LP
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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MARKWEST EGY PT (MWE): Free Stock Analysis
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