Publicly traded energy pipeline partnership, Williams Partners L.P. (WPZ) announced that it has completed a public offering of $1 billion of its 4.3% senior notes due 2024 at a price of 99.791% of par and $500 million of its 5.4% senior notes due 2044 at a price of 99.676% of par.
Williams Partners plans to use the net proceeds from the offering to repay amounts outstanding under the partnership’s commercial paper program, to fund capital expenditures and for general partnership purposes.
On Feb 19, the partnership reported fourth quarter earnings of 12 cents per limited-partner unit, which lagged the Zacks Consensus Estimate of 40 cents. Earnings also deteriorated 71.4% from the year-ago profit level of 42 cents. The downcast figures were due to loss of production from the closed Geismar olefins plant which will resume operation not before mid 2014. Lower natural gas liquids (NGLs) margins and higher operating costs from the Northeast G&P segment also added to the woes.
Quarterly total revenue also decreased 11.1% year over year to $1,616.0 million but surpassed the Zacks Consensus Estimate of $1,483.0 million. Notably, Williams Partners' distributable cash flow (DCF) attributable to partnership operations in the fourth quarter was $509 million against $405 million in the year-ago quarter. Recently, the partnership increased its quarterly cash distribution by 7.9% year over year to 89.25 cents per unit.
Williams Partners is an energy master limited partnership engaged in gathering, transportation, treating and processing of natural gas as well as fractionation and storage of NGLs. The partnership owns interests in three major interstate natural gas pipelines that together deliver 14% of the natural gas consumed in the U.S. The partnership’s gathering and processing assets include large-scale operations in the U.S. Rocky Mountains as well as onshore and offshore Gulf of Mexico. The general partner of the partnership is owned and managed by Williams Companies Inc. (WMB).
Williams Partners currently carries a short-term Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Willbros Group Inc. (WG) and Patterson-UTI Energy Inc. (PTEN). Both these stocks hold a Zacks Rank #1 (Strong Buy).
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