Monday, April 30, 2012

For Investors Only -- Nothing To Do With The Bakken -- ETP Will Buy Sunoco

For pipeline, for liquids.

Link here.
Pipeline operator Energy Transfer Partners LP said it will buy Sunoco Inc  for $5.3 billion in stock and cash to get into the more lucrative crude oil transportation business as natural gas prices stay weak.

Oil and gas production from shale formations in the United States has surged over the past two years, creating a scramble to build infrastructure to get supplies to refining hubs.

Sunoco shareholders will receive $25 in cash and 0.5245 Energy Transfer units, or $50.13, for every share they own.

The offer represents a 22.5 percent premium over Friday's close.
M&A activities provide a nice check on the real value of some of these energy companies. Last week a similar announcement affecting a Bakken operator indicated a 25% premium (+/-, I forget the company, and I forget the exact premium). I just remember the premium.

1 comment:

  1. From the call...

    Lots of excess nat gas pipes. Mostly going to the northeast. Not needed now. So, convert them to NGL, oil, etc.

    Anon 1