Wednesday, October 14, 2015: A Great Day For Blogging, Though Blogging Will Be Delayed A Few Hours

Active rigs:

	10/14/2015	10/14/2014	10/14/2013	10/14/2012	10/14/2011
Active Rigs	67	190	183	192	195

RBN Energy: the Energy Transfer / Williams acquisition. First in a series. A keeper. Will be archived at the source.

In a $38 Billion transaction announced September 28, 2015, Energy Transfer Equity (ETE) agreed to gobble up The Williams Companies in a deal expected to close during the first half of 2016. The combination of these two companies creates a U.S. midstream giant that will own infrastructure including gas pipelines carrying as much as 45% of U.S. Lower 48 dry gas production, processing capacity producing16% of domestic natural gas liquids (NGL’s) and crude oil pipelines in the Permian, Eagle Ford and Bakken. Today we take a look at the liquids infrastructure assets in this giant deal and provide a download of RBN’s maps of the infrastructure involved.
The financial intricacies of the ETE acquisition of Williams (let’s call it “The Deal”) are complex to say the least. ETE is today the parent company of the Energy Transfer group and a publically traded Master Limited Partnership.

 ETE sits atop four companies – three of which – Sunoco LP (SUN), Energy Transfer Partners LP (ETP) and Sunoco Logistics Partners LP (SLX) – are also publically traded MLPs with the fourth being Energy Transfer LNG – the vehicle behind the group’s proposed Lake Charles LNG export terminal. The Deal calls for a new company called Energy Transfer Corp (ETC) to take over the reins from ETE at the top of the group – ruling over four MLPs with Williams Partners LP (WPZ) joining SUN, ETP and SLX as well as Lake Charles LNG (that will become an MLP when and if the terminal comes online (expected mid-2020). The big deal is that ETC is a C-Corp entity – meaning that it is treated as a corporation for tax purposes and therefore does not have all the tax advantages associated with MLPs. The advantage of C-Corp status is access to a broader spectrum of institutional investors (MLP’s are messy investments for tax reporting). C-Corp status also reduces some of the baggage associated with MLP structures that have lost significant market value since oil prices crashed in 2014. For example ETE rival Kinder Morgan transformed back to a C-Corp in November 2014 by acquiring its Kinder Morgan Energy Partners MLP in a $76 billion transaction. ETE’s acquisition of Williams leaves a considerably more messy mixture of C-Corp and MLP structures in place than the Kinder deal but one that the company claim has more optionality. That means the four MLPs under ETC retain much of their own identity and WPZ retains its name and public listing.

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Doing Just Fine, Thank You

Being reported by Reuters/Rigzone:

U.S. shale oil and gas producers have seen smaller-than-expected cuts to their credit lines, a sign that banks could be relaxing their lending standards to help companies avoid technical defaults.