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Guidance and Support

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During the week of  12/21/15, the following companies issued press releases aimed at increasing investor confidence:

 

ONEOK and ONEOK Partners:  Operational Guidance issued 12/21

We expect 2016 earnings to be driven by continued natural gas and natural gas liquids volume growth across our integrated pipeline system, with strong year-end performance providing us momentum into 2016. Our substantial backlog of well connects, flared gas inventory in the Williston Basin and uncompleted wells provides considerable visibility into our 2016 volumes," said Terry K. Spencer, president and chief executive officer of ONEOK and ONEOK Partners. "Our commodity price outlook remains cautious for 2016. However, we expect the partnership's 2016 earnings to increase compared with 2015 guidance, primarily from volume and fee-based margin increases, resulting in increased distributable cash flow.

 

"At ONEOK Partners, we remain committed to maintaining our investment-grade credit ratings, sustaining our current distribution and achieving distribution coverage of 1.0 times or better in 2016 at current NYMEX future strip pricing of $40 to $45 per barrel of crude. ONEOK Partners does not expect to access the public equity markets in 2016 and well into 2017," said Spencer. "If needed, ONEOK continues to be well-positioned to provide financial support to ONEOK Partners. We have a long history of prudent financial decision-making, as demonstrated by the $750 million of equity raised at the partnership this past summer, and we will continue to make decisions that are in the best long-term interest of our investors at both ONEOK and the partnership to create value, reduce risk and protect the partnership's investment-grade credit rating.  

 

"The partnership has a solid balance sheet and ample liquidity, including access to our commercial paper program and $2.4 billion credit facility, to support our current capital-growth program and fund the 2016 long-term debt maturities," Spencer said. "We continue to evaluate long-term debt financing alternatives for our 2016 debt maturities, but our strong liquidity position allows us to be opportunistic when refinancing. Additionally, ONEOK has no maturities until 2022 and an unutilized $300 million credit facility. The credit facility can be drawn to facilitate purchasing partnership equity, with the expectation to repay those borrowings with internally generated cash flow.

 

"ONEOK Partners is well-positioned to not only withstand the low commodity price and uncertain capital market environment but also to take advantage of opportunities," added Spencer. "Our strong position in the Williston Basincontinues to serve us well, and we continue to benefit from a large natural gas supply backlog in the basin. Our natural gas pipelines segment is well-positioned to expand its fee-based natural gas export capabilities in the future, particularly to Mexico where we have key relationships through our joint venture Roadrunner Gas Transmission pipeline. Our large and extensive natural gas liquids business maintains a growing position in the emerging Stack and SCOOP plays in Oklahoma, and we remain well-positioned in the Gulf Coast to take advantage of ethane demand growth potential over the next two years."

 

American Midstream Partners:    Issued 12/21/15

 

Affiliates of ArcLight Capital Partners, LLC (“ArcLight”), which controls the general partner of American Midstream Partners, LP (NYSE: AMID) (the “Partnership”) today announced that ArcLight has approved a unit purchase program (the “Purchase Program”) whereby ArcLight may purchase up to $75 million of common units of the Partnership. ArcLight’s unit purchases are expected to commence as early as December 22, 2015. ArcLight may purchase units under the Purchase Program in open market transactions, in privately negotiated transactions, or otherwise. The amount and timing of any ArcLight unit purchases may vary and will be determined based on market conditions, unit price and other factors. The Purchase Program does not require ArcLight to purchase a specific number of units. There can be no assurance that ArcLight will purchase any units under the Purchase Program, and the Purchase Program may be modified or suspended at any time without prior notice. ArcLight’s unit purchases, if any, made under the Purchase Program will not impact the total number of units outstanding. “As the sponsor of the Partnership, we strongly believe the Partnership’s current unit price undervalues the assets of the Partnership. In light of this belief, as well as our confidence in the strength of these assets, the management team, and prospects for the future, ArcLight authorized an additional $75 million investment to be used for ArcLight to acquire common units of the Partnership,” commented Dan Revers, Managing Partner of ArcLight. “We are pleased to broaden our financial commitment to the Partnership through the Purchase Program.

 

 

 

KNOT Offshore Partners:  Operational Update 12/21/15

 

Despite the disruption in the capital markets, the Partnership has not experienced any material changes in its operations since its third quarter 2015 earnings announcement on November 5, 2015. The Partnership’s underlying business continues to perform well in the fourth quarter. The Partnership’s vessels have experienced 100% utilization in the months of October and November 2015. As a result of the acquisition of the shuttle tanker Ingrid Knutsenon October 15, 2015, the Partnership expects to report incrementally higher Adjusted EBITDA in the fourth quarter of 2015. Furthermore, the Partnership has no newbuilding commitments and no loan maturities before the second half of 2018.

 

Therefore, the Partnership's management currently expects to recommend to the board of directors (the “Board”) an unchanged distribution of $0.52 per unit with respect to the fourth quarter of 2015. The Board must approve the fourth quarter of 2015 distribution and this approval will be dependent upon, among other things, the absence of any material adverse developments at the time of the determination. Management expects the Board to meet in January 2016 to determine this cash distribution

 

Rice Energy:  Issued 12/21/15

 

Rice Energy Inc. (NYSE: RICE) ("Rice") today announced that it has agreed to non-binding terms with an energy infrastructure fund to invest up to $500 million in preferred equity in Rice Midstream Holdings LLC ("RMH"), a wholly-owned subsidiary of Rice, and common equity in a new wholly-owned subsidiary of RMH, "GP Holdings", which will be formed to hold the common units, subordinated units and incentive distribution rights in Rice Midstream Partners LP (NYSE: RMP) currently held by RMH.

 

The closing of the transaction is expected to occur in the first quarter of 2016 and is subject to the completion of diligence, definitive documentation and satisfactory customary conditions precedent. At closing, Rice Energy plans to utilize $375 million, of which it intends to use a portion to repay all outstanding borrowings under RMH's revolving credit facility, and the remainder to fund Rice's 2016 development of its core Marcellus Shale and Utica Shale wells

 

 


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