Oil refiner and marketer,
Western Refining Inc.
) announced that its subsidiary Western Refining Logistics, LP,
has priced its initial public offering of 13.75 million common
units at a price of $22.00 per unit. Settlement of the offering
is expected on Oct 16, 2013.
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Western Refining Logistics intends to begin trading of its common
units listed on the New York Stock Exchange under the symbol
"WNRL" on Oct 10.
The underwriters have a 30-day option to purchase up to
additional 2,062,500 units at the IPO price. On completion, the
offering represents a 30.1% limited partner interest in Western
Refining Logistics. Moreover, if the underwriters exercise their
option in full, the limited partner interest would increase to
34.7%. The remaining stake and distribution rights remain with
The El Paso, Texas-based company formed its subsidiary to own,
operate, develop, and acquire terminals, storage tanks,
pipelines, and other logistics assets.
Incorporated in 2005, Western Refining is an independent refiner
and marketer of refined petroleum products in the south western
and mid-Atlantic regions of the U.S. The company operates in
three segments, refining, wholesale and retail. Among the three,
refining is the major contributor to the company's income.
Western Refining stock trades in a 52-week range of $23.67 to
$39.42. The company's stock has been trading at the middle of the
range for the greater part of last month with shares settling at
$30.14 on Oct 9. Moreover, with volatile industry fundamentals
and limited geographic diversification, we do not see any
significant price upside for the stock in the near-to-medium
Western Refining currently holds 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 look at other stocks in the energy sector that
are expected to outperform in the same time frame. These include
the Zacks Ranked #1 (Strong Buy) stocks of
Stone Energy Corp.
Pembina Pipeline Corp.