Energy Biz Recap: Apache & Shell EVACUATE Before Isaac, Kinder Morgan Back To OVERWEIGHT
Apache Corporation (NYSE:APA) and Royal Dutch Shell (NYSE:RDSA) are currently taking their staff out of the Gulf of Mexico before Tropical Storm Isaac’s arrival. However, the impact on energy markets should be less disruptive than for storms in the past, since the boom in shale gas production onshore has left Gulf gas production at only 6 percent of the total produced in the continental United States, which is down from the 17 percent at the time Katrina struck in 2005.
Kinder Morgan Energy Partners L.P. (NYSE:KMP) and Kinder Morgan, Inc. (NYSE:KMI) have been reinstated by Barclays at Overweight, which sees the purchase of El Paso Pipeline Partners, L.P. (NYSE:EP) as a “transformative transaction” for KMI. The deal enlarges KMI’s presence in key gas end markets, improves the degree of cash-flow stability and also raises the dividend growth prospects. At the same time, the deal helps KMP by the addition of a $12 billion drop-down opportunity set.
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