Spectra Energy Corporation
) plans to transfer all of its remaining U.S. Transmission and
Storage assets to its limited partnership interest
Spectra Energy Partners, LP
) by the end of 2013.
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The transaction, subject to market conditions, is expected to be
immediately value accretive for its investors. It will strengthen
the partnership's position and enable it to move ahead with other
Upon completion of the drop down, management intends to boost the
dividend payout to around 12 cents per year from the current
commitment of 8 cents per year.
The investors in the partnership will also benefit from an
increase in the quarterly distribution rate to a penny a quarter
from the current three quarters of a cent.
Spectra Energy Corp. has faced several challenges from low
commodity prices, which impacted its bottom line in the recent
quarters, similar to most of its peer companies. But with the
improving price scenario, Spectra is enjoying a growth momentum.
The company has an upbeat 2013 outlook both on organic as well as
Spectra Energy Corp., through its subsidiaries and equity
affiliates, engages in the ownership and operation of a portfolio
of complementary natural gas-related energy assets. The company
operates in four segments: U.S. Transmission, Distribution,
Western Canada Transmission & Processing, and Field Services.
The company also has 50% ownership in DCP Midstream, one of the
largest natural gas gatherers and processors in the U.S.
Spectra Energy Partners, LP was formed in July 2007 by Spectra
Energy Corp., which serves as the master limited partnership's
(MLP) general partner and manages and operates the entity with an
overall 74% retained ownership (limited partner & general
Spectra Energy Corp. carries a Zacks Rank #3 (Hold). However,
Zacks Ranked #1 (Strong Buy) stocks -
Newpark Resources Inc.
Gulfmark Offshore, Inc.
) - are expected to perform impressively over the short term.