Showing posts with label Markwest Energy Partners. Show all posts
Showing posts with label Markwest Energy Partners. Show all posts
Tuesday, June 22, 2010
MARKWEST ENERGY PARTNERS
Recently I posted about my sale of Markwest Energy (MWE) for a profit of over 40%. I found it interesting that Jim Cramer with CNBC is recommending the limited partnership as a dividend play. (See: "Oil’s Out of Favor? Try Natural Gas" Friday June 18th) I sold and took the profit after a disappointing earnings report. It will be interesting to see how things play out. Perhaps Cramer is right, he's a very smart man and I've always been a big fan, just don't always agree with his recommendations. I'm pretty happy with the move I made out of MWE and in to British American Tobacco (BTI) and Unilever (UN). We'll see how it goes.
Monday, August 10, 2009
MARKWEST ENERGY PARTNERS, L.P.
I mentioned in yesterday's post, my plan to invest this week in MWE a master limited partnership. MarkWest Energy Partners, L.P. is a publicly traded Delaware limited partnership, which was formed on January 25, 2002. The Company is engaged in the gathering, compressing, treating, processing and transportation of natural gas the transportation, fractionation, storage, and marketing of NGLs and the gathering and transportation of crude oil.
It conducts its operations in three geographical operating segments: the Southwest, the Northeast, and the Gulf Coast. Its East Texas system consists of natural gas gathering pipelines, centralized compressor stations, a natural gas processing facility and an NGL pipeline. The East Texas system is located in Panola, Harrison and Rusk Counties and services the Carthage Field. Producing formations in Panola County consist of the Cotton Valley, Pettit and Travis Peak formations, which collectively form one of the largest natural gas producing regions in the United States. The Company owns the Foss Lake natural gas gathering system and the Arapaho I and II natural gas processing plants, all located in Roger Mills, Custer and Ellis Counties of Western Oklahoma. The gathering portion consists of a pipeline system that is connected to natural gas wells and associated compression facilities. It also owns the Grimes gathering system, which is located in Roger Mills and Beckham Counties in Western Oklahoma. In addition, it owns a natural gas gathering system in the Woodford Shale play in the Arkoma Basin of Southeast Oklahoma. The Company owns a number of natural gas-gathering systems located in Texas, Louisiana, Mississippi and New Mexico, including the Appleby gathering system in the City and County of Nacogdoches, Texas. It gathers a portion of the gas produced from fields adjacent to its gathering systems. The Company is a processor of natural gas in the Appalachian Basin, with fully integrated processing, fractionation, storage and marketing operations. Its Appalachian assets include the Kenova, Boldman, Cobb and Kermit natural gas processing plants, an NGL pipeline, the Siloam NGL fractionation plant and two caverns for storing propane. The Company owns and operates a crude oil pipeline in Michigan. The Michigan Crude Pipeline is subject to regulation by the Federal Energy Regulatory Commission. It also owns a natural gas gathering system in Michigan. The Company owns and operates the Javelina Processing Facility, a natural gas processing facility in Corpus Christi, Texas, which treats and processes off-gas from six local refineries. The facility processes approximately 120 to 130 MMcf/d of inlet gas out of its 142 MMcf/d capacity.
In each of its operating segments, the Company faces competition for natural gas and crude oil transportation and in obtaining natural gas supplies for its processing and related services operations in obtaining unprocessed NGLs for fractionation and in marketing its products and services. Competition for natural gas supplies is based on the location of gas-gathering facilities and gas-processing plants, operating efficiency and reliability, and the ability to obtain a satisfactory price for products recovered. The Company's business is subject to federal, state and local laws and regulations with respect to environmental, safety and other regulatory matters.
MWE currently pays a dividend of $2.56 per share which represents a yield of 11.97% on their recent share price of $21.38. Recently I discovered the tax advantages in owning MLP units, which makes them even more appealing. The way I understand it, the IRS considers 80 to 90% of payouts from master limited partnerships as return of equity, and unit holders are taxed at their regular tax rate on 10 to 20% of payments received. Because of their special tax treatment, they are more appropriate for taxable investment accounts.
It conducts its operations in three geographical operating segments: the Southwest, the Northeast, and the Gulf Coast. Its East Texas system consists of natural gas gathering pipelines, centralized compressor stations, a natural gas processing facility and an NGL pipeline. The East Texas system is located in Panola, Harrison and Rusk Counties and services the Carthage Field. Producing formations in Panola County consist of the Cotton Valley, Pettit and Travis Peak formations, which collectively form one of the largest natural gas producing regions in the United States. The Company owns the Foss Lake natural gas gathering system and the Arapaho I and II natural gas processing plants, all located in Roger Mills, Custer and Ellis Counties of Western Oklahoma. The gathering portion consists of a pipeline system that is connected to natural gas wells and associated compression facilities. It also owns the Grimes gathering system, which is located in Roger Mills and Beckham Counties in Western Oklahoma. In addition, it owns a natural gas gathering system in the Woodford Shale play in the Arkoma Basin of Southeast Oklahoma. The Company owns a number of natural gas-gathering systems located in Texas, Louisiana, Mississippi and New Mexico, including the Appleby gathering system in the City and County of Nacogdoches, Texas. It gathers a portion of the gas produced from fields adjacent to its gathering systems. The Company is a processor of natural gas in the Appalachian Basin, with fully integrated processing, fractionation, storage and marketing operations. Its Appalachian assets include the Kenova, Boldman, Cobb and Kermit natural gas processing plants, an NGL pipeline, the Siloam NGL fractionation plant and two caverns for storing propane. The Company owns and operates a crude oil pipeline in Michigan. The Michigan Crude Pipeline is subject to regulation by the Federal Energy Regulatory Commission. It also owns a natural gas gathering system in Michigan. The Company owns and operates the Javelina Processing Facility, a natural gas processing facility in Corpus Christi, Texas, which treats and processes off-gas from six local refineries. The facility processes approximately 120 to 130 MMcf/d of inlet gas out of its 142 MMcf/d capacity.
In each of its operating segments, the Company faces competition for natural gas and crude oil transportation and in obtaining natural gas supplies for its processing and related services operations in obtaining unprocessed NGLs for fractionation and in marketing its products and services. Competition for natural gas supplies is based on the location of gas-gathering facilities and gas-processing plants, operating efficiency and reliability, and the ability to obtain a satisfactory price for products recovered. The Company's business is subject to federal, state and local laws and regulations with respect to environmental, safety and other regulatory matters.
MWE currently pays a dividend of $2.56 per share which represents a yield of 11.97% on their recent share price of $21.38. Recently I discovered the tax advantages in owning MLP units, which makes them even more appealing. The way I understand it, the IRS considers 80 to 90% of payouts from master limited partnerships as return of equity, and unit holders are taxed at their regular tax rate on 10 to 20% of payments received. Because of their special tax treatment, they are more appropriate for taxable investment accounts.
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