PVR Partners, L.P.
) has started to issue common units and intends to utilize the
net proceeds to repay a part of the borrowings outstanding under
its revolving credit facility. In this occasion, the partnership
made a public offering of 5.5 million units representing limited
HESS CORP (HES): Free Stock Analysis Report
OILTANKING PTNR (OILT): Free Stock Analysis
PVR PARTNERS LP (PVR): Free Stock Analysis
SEMGROUP CORP-A (SEMG): Free Stock Analysis
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Per the conditions of the offering, the underwriters can issue up
to 825,000 additional common units within one month to cover the
over subscription, if necessary.
As of July 12, 2013, PVR Partners had a total of 95,724,743
common units. The partnership follows the practice of issuing new
units and utilizes the proceeds to repay borrowings from its
credit facilities. In Nov 2011 and 2012, PVR Partners issued 6.5
million and 7 million common units, respectively. The partnership
used the net proceeds to pay-back the portions of borrowings
under its credit facilities.
During the six months ended on Jun 30, 2013, PVR Partners paid
cash distribution of $105.5 million to its unitholders. The
proposed issue of common units will increase the total cash
Radnor, PA-based PVR Partners owns and operates a string of
natural gas midstream pipeline systems and processing plants and
is also involved in the management of coal as well as natural gas
The pipeline operators invest substantial amounts to install new
pipelines after getting long-term service contracts from the
petroleum companies. These contracts provide the midstream
companies regular flow of income.
Recently, PVR Partners entered into an agreement with
) to provide trunkline plus gathering and compression services to
the latter. Per the contract, the partnership will invest
$125-$150 million to install a 45-mile natural gas trunkline and
set up allied gathering pipelines and facilities at Hess Corp.'s
lean gas production facility in the Utica Shale.
As PVR Partners is replenishing its borrowings, the partnership
can utilize a portion of its replenished revolving credit
facility for its upcoming infrastructure addition projects. The
installation of a number of new pipelines will allow the
partnership to strengthen its presence in the region, which will
subsequently increase the number of contract-awards while
improving top line, going forward.
We believe that improvement in operating results will help PVR
Partners to meet the fund requirement for paying cash
distribution, while reducing external debts.
PVR Partners currently has a Zacks Rank #3 (Hold). However, other
stocks from the industry that are presently performing well
Oiltanking Partners L.P.
) with a Zacks Rank #1 (Strong Buy), and
) with a Zacks Rank #2 (Buy).