Texas Should Weather The Worst -- February 13, 2015

CNBC is reporting:

"Texas should hold up better than it did when oil prices tumbled in the 1990s and 1980s because the state's economy is much more diverse than it was then."

The region also will benefit from the ongoing development of oil and gas reserves elsewhere in the country, as Texas companies supply goods and services needed to support that production.

"There is still a tremendous boom in petrochemical plant construction along the Gulf Coast, stretching from Houston to New Orleans," Vitner noted. "While some projects have been postponed or shelved, most remain on track and should keep construction humming right through the current supply glut."

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Updates On Two MLPs 

24/7 Wall Street is reporting:

The two largest oil and gas midstream (pipeline) companies in the United States each closed a major deal Friday. One was the $3 billion acquisition of pipeline, gathering and processing company Hiland Partners by Kinder Morgan Inc. Hiland was owned by shale developer Harold Hamm and certain Hamm family trusts and operates primarily in the Bakken play in North Dakota and Montana.

The second deal that closed was the acquisition of Oiltanking Partners L.P. (NYSE: OILT) by an affiliate of Enterprise Products Partners L.P. in a two-step transaction valued at around $5.9 billion. The first step in the deal was completed in October, with an Enterprise an payment of approximately $4.41 billion to acquire about 66% of Oiltanking Partners’ outstanding common units, its general partner and the general partner’s incentive distribution rights. In the second step completed Friday, Enterprise exchanged 1.3 Enterprise common units for each common unit of Oiltanking Partners that it did not already own.

Kinder Morgan’s acquisition of Hiland Partners gives the company a significant position in the Williston Basin, serving producers like Hamm’s own Continental Resources, Oasis Petroleum, XTO Energy, Whiting Petroleum and Hess, among others. The acquisition is expected to be slightly accretive to Kinder Morgan’s cash available to pay dividends in 2015 and 2016 and to add approximately six to seven cents to the dividend beginning in 2017.

Enterprise has now acquired a company that it has done business with for 31 years and that owned 12 ship and barge docks on the Houston Ship Channel and the Port of Beaumont, Texas, with about 24 million barrels of storage for both crude oil and refined products. Prior to the completion of the acquisition, Enterprise estimated that it generated about 40% of Oiltanking Partners’ 2013 EBITDA. Oiltanking Partners was already connected to the existing Enterprise Crude Houston (ECHO) facility, with its 800,000 barrels of crude oil capacity. Enterprise plans to bring the total at ECHO to 6 million barrels and another 8 million barrels per day of refining and water capacity.