Tesoro Logistics L.P.
) has priced a public offering of 8,500,000 common units at
$41.70 a piece, with a 30-day over-allotment option for an
additional 1,275,000 units. The offering is expected to close on
January 14, 2013.
The master limited partnership (MLP) plans to use the net
proceeds from this offering to part finance its previously
declared acquisition of Chevron Pipeline Company's Northwest
Products System and for general partnership purposes. The
proposed $400 million purchase - announced in December last year
- will see Tesoro Logistics buy out the system's 760-mile
Northwest Product Pipeline extending from Salt Lake City, Utah,
to Spokane, Washington, another 5-mile jet fuel pipeline to the
Salt Lake City International Airport and refined products
terminals in Idaho and Washington.
The transaction with Chevron Pipeline Company, an indirect wholly
owned subsidiary of
), is expected to close by March 31, 2013. Should the agreement
fail to go through, Tesoro Logistics - which was publicly floated
on April 26, 2011 by independent refiner
) - may utilize the net proceeds from the offering towards future
acquisitions and capital programs.
Tesoro Logistics is scheduled to report its fourth quarter 2012
results on Monday, February 11 after the closing bell. The Zacks
Consensus Estimate for the to-be-reported quarter is a profit of
56 cents per share on revenues of $49 million.
San Antonio, Texas-based Tesoro Logistics is engaged in the
ownership, operation, development and acquisition of crude oil
and refined products logistics assets. The partnership currently
retains a Zacks Rank #5 (Strong Sell), implying that it is
expected to significantly underperform the broader U.S. equity
market over the next one to three months.
However, there are certain other energy stocks like
Boardwalk Pipeline Partners L.P.
Atlas Energy L.P.
) that offer tremendous value and are worth buying now. Both
these partnerships sport a Zacks #1 Rank (short-term Strong Buy
ATLAS ENERGY LP (ATLS): Free Stock Analysis
BOARDWALK PIPLN (BWP): Free Stock Analysis
CHEVRON CORP (CVX): Free Stock Analysis
TESORO LOGISTIC (TLLP): Free Stock Analysis
TESORO CORP (TSO): Free Stock Analysis Report
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