Energy stocks were broadly higher Tuesday, with the NYSE Energy
Sector Index rising nearly 1.5% while shares of energy companies in
the S&P 500 were up about 1.0% as a group. Crude oil for
September delivery was down 25 cents at $102.61 per barrel while
August natural gas was down 6 cents to $3.79 per 1 million BTU.
In company news, Tallgrass Energy Partners LP (
) fell Tuesday after the pipeline company disclosed plans to buy a
significant minority stake in a new pipeline connecting oilfields
in Wyoming and Colorado with the industry hub in Cushing, Okla.,
selling 7 million equity units at $41.07 apiece to help fund the
$600 million purchase.
The offering went out at a 4.2% discount to Monday's closing
price for the TEP units, generating nearly $287.5 million in gross
proceeds. Underwriters received options to buy up to 1.05 million
additional shares, which if fully exercised, would produce an extra
$43.1 million in gross proceeds for the company.
The Tallgrass Pony Express pipeline project is being completed
in stages, including converting a 430-mile natural gas pipeline
starting in Guernsey, Wyo., along with a 260-mile extension to the
Cushing hub. The project also calls for a 66-mile spur into
northeastern Colorado. The mainline is expected to begin service by
late September, with the Colorado Lateral coming on-line before
Under terms of the proposal, TEP would be able to acquire a
33.3% interest in pipeline from its current owner, Tallgrass
Development, for $600 million. According TEP Chief Executive David
Dehaemers, the deal would significantly diversify the company's
operations and regional footprint, and would immediately add to TEP
earnings if completed this year.
TEP shares recently were down 4.8% at $40.80 apiece this
afternoon, earlier sliding to a session low of $40.50 a share. The
stock has a 52-week range of $22.03 to $43.50 a share, climbing
more than 90% in value over the past 12 months.
In other sector news,
(+) HLX, (+7.5%) Q2 net income rises to $57.8 mln, or $0.55 per
share, from $27.2 mln last year and beating analyst estimates by
$0.13 per share. Revenue jumps 31.6% year over year to $305.6 mln,
crushing Street view by around $38.6 mln.
(-) PVG, (-7.5%) Announces plans for a $60 mln offering of
common stock, with the company selling 82.5% of the shares to be
sold - with proceeds funding more development of its Brucejack
project - and Silver Standard Resources selling the remaining
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