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OGE Energy Corp. (OGE)
CenterPoint Energy, OGE Energy Corp. and ArcLight Capital to Combine Assets to Form Leading Midstream Partnership Conference Call
March 15, 2013 11:30 am ET
Todd J. Tidwell – Director-Investor Relations, OGE Energy Corp.
David M. McClanahan – President and Chief Executive Officer-CenterPoint Energy, Inc.
Peter B. Delaney – Chairman, President and Chief Executive Officer, OGE Energy Corp.
Keith Mitchell – President, Enogex LLC
C. Gregory Harper – Senior Vice President, Division Group President-Pipelines and Field Services
Carla Kneipp – Vice President-Audit Services, CenterPoint Energy, Inc.
Sean Trauschke – Vice President and Chief Financial Officer, OGE Energy Corp.
Gary L. Whitlock – Executive Vice President and Chief Financial Officer-CenterPoint Energy, Inc.
Carl L. Kirst – BMO Capital Markets
Stephen J. Maresca – Morgan Stanley & Co. LLC
Reza Hitucki – Decade Capital Management LLC
Charles J. Fishman – Morningstar Research
John D. Edwards – Credit Suisse Securities LLC
Anthony C. Crowdell – Jefferies & Co., Inc.
Brian J. Russo – Ladenburg Thalmann Securities
Ali Agha – SunTrust Robinson Humphrey
Raymond M. Leung – Goldman Sachs & Co.
Steve I. Fleishman – Wolfe Trahan & Co.
Steven Gambuzza – Millennium Partners
Stephen Huang – Carlson Capital LP
Randall Li – Nexus Asset Management
Nikhil Chopra – Trust Company of the West
Greg Haas – Hart Energy Research
Dan Hynes – Salient Partners, L.P.
Previous Statements by OGE
» OGE's CEO Discusses Q4 2012 Results - Earnings Call Transcript
» OGE Energy's CEO Discusses Q3 2012 Results - Earnings Call Transcript
» OGE Energy's CEO Discusses Q2 2012 Results - Earnings Call Transcript
I would now turn the call over to Todd Tidwell, OGE Energy’s Director of Investor Relations. Mr. Tidwell?
Todd J. Tidwell
Thank you, operator, good morning everyone. On behalf of CenterPoint Energy and OGE Energy, let me welcome you to our joint call where we will discuss through creation of a new midstream partnership between our two companies. We will focus today's call on the creation of this new partnership and request that you hold any questions regarding the parent companies until our respective first-quarter 2013 earnings calls; at that time each company will be prepared to detail the partnership's impact on the parent.
David McClanahan, President and CEO of CenterPoint Energy; Pete Delaney, Chairman, President and CEO of OGE Energy; Keith Mitchell, President of Enogex; and Greg Harper, Senior Vice President and Group President of CenterPoint Energy's Midstream business will discuss the detail of this announcement. Also joining us today are Gary Whitlock, Executive Vice President and CFO of CenterPoint Energy; Sean Trauschke, Vice President and CFO of OGE Energy and other members of management who may assist in answering questions following the prepared remarks.
The companies would like to remind you that any projections or forward-looking statements made during this call are subject to the cautionary statements on forward-looking information in each companies filing with the SEC, including their most recent filings on Form 10-K and subsequent filings made on Form 8-K. Actual results may vary materially from those expressed in or indicated by the forward-looking statements made during this call. A replay of this call as well as the joint press release and supplemental materials will be made available on both company's respective websites. The supplemental materials are for information purposes only and we will not be referring to them during the prepared remarks.
I will now turn the call over to David McClanahan. David?
David M. McClanahan
Thank you Todd and good morning ladies and gentlemen. We are pleased to be with you today to discuss the combination of our midstream businesses. Yesterday CenterPoint Energy, OGE Energy, and ArcLight Capital Partners entered into an agreement to form a master limited partnership. CenterPoint will contribute its interstate pipelines and field services businesses, and OGE and ArcLight will contribute their interest in Enogex. The master limited partnership will be managed by a general partner whose governance will be shared equally by CenterPoint and OGE. Subject to certain adjustment at closing, CenterPoint will have a 59% economic interest in the partnership, OGE will have a 28% interest and ArcLight will have a 13% interest. CenterPoint Energy and OGE Energy will hold 40% and 60% interests respectively in the incentive distribution rights of the general partner.
Those of you that follow CenterPoint and OGE know that each company has been considering the formation of their own MLP. With this combination, the companies made the decision to accelerate the formation of a private MLP concurrent with closing. Further, we are committed to taking the necessary steps to execute an initial public offering of the MLP, which subject to market conditions and legal requirements, we hope to complete within six to 12 months after the transaction is closed.
We believe this partnership will have the attributes of a strong MLP; scale, diversity and growth with consistent and predictable cash flows. This partnership should be much stronger and more competitive than either company could have achieved on a standalone basis. The industrial logic of putting these two businesses together is strong. We have complementary skill sets, capabilities and assets.
Together, we will have greater scale, geographic reach, diversification, and service capabilities, and expect to realize operating and commercial synergies. More importantly we believe we can grow faster and capture more opportunities in a midstream industry that has become more competitive over time.
The MLP will provide access to capital on an attractive basis and consistent with other competitors in this space. Further we plan to capitalize this company on a conservative basis with investment grade credit matrix.