# Pembina Pipeline PLL



## Gumball (Dec 22, 2011)

Hello all, im new to the forum, have recently looked at a lot of past threads and have found it to be very informative. There is alot of great feedback on here as well as some entertaining comments and posts I am enjoying it!

Anyways, Im wondering what your individual thoughts and opinions are on Pempina Pipeline. I love the fact that it has a consistent and generous dividend and a prudent management team. PPL just laid out there 2012 capital spending plan and things in the future look promising. They are also bringing back their DRIP in the new year.

The only concern I have is their dividend payout ratio (over 100%) is this something that you turn a blind eye to in a company that has such a strong history of paying dividends and also growing their stock? 

Looking forward to your feedback.


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## Homerhomer (Oct 18, 2010)

Gumball said:


> Anyways, Im wondering what your individual thoughts and opinions are on Pempina Pipeline. I love the fact that it has a consistent and generous dividend and a prudent management team. PPL just laid out there 2012 capital spending plan and things in the future look promising. They are also bringing back their DRIP in the new year.
> 
> The only concern I have is their dividend payout ratio (over 100%) is this something that you turn a blind eye to in a company that has such a strong history of paying dividends and also growing their stock?
> 
> Looking forward to your feedback.


The stock has performed great but I personally pay a huge attention to payout ratio, share dilution and some basic valuations, for me payout of over 100%, p/e of 28 and annual share dilution of about 10% (look at the increased number of shares between 2008 and 2010) are enough to take a pass, with that said I realize that there is more to it and like CPG other measures should be applied, however I have done well for myself sticking to my rules therefore at this point of time I wouldn't be interested.


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## Gumball (Dec 22, 2011)

thx HomerHomer, Im intrigued by the energy transportation sector and how stable it seems to be in terms of growth and dividends and Im looking at buying stocks like Pembina, Inter Pipeline, etc as I find them very attractive.

The title of my post should read PPL not PLL sorry guys!


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## londoncalling (Sep 17, 2011)

I personally think all the pipelines are overvalued right now. I would love to add ppl to my stable but as many are seeking "safe" yield the prices for these and similar stocks are too high. As a result I have been forced to seek bargains with smaller or mid cap stocks VNR, VSN and AQN are on my watchlist currently. I do have a small position in AQN at the moment. I also hold IPL. I wish I had purchased more IPL so I could take some profits and buy back in when valuations revert back to a normal range.

I also pay attention to payout ratio, EPS, forward p/e (compared to ave p/e) and share dilution. Share dilution can be tricky for me to monitor, but it is important as it is a way for a company to create capital without some investors being aware that their slice of the pie is shrinking. This is one reason why companies love DRIPs. More importantly the reason for dilution can be a factor in my decision. If it is for executive/employee compensation or for raising capital to pay down debt are two entirely different motives for dilution.

Cheers!


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## webber22 (Mar 6, 2011)

Piplelines being overvalued is an understatement. It seems not everyone was happy with their 2012 capital spending budget. The other day S&P revised Pembina Pipeline's outlook to negative from stable ..... I would wait until these pipelines go on sale later in the year maybe


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## Gumball (Dec 22, 2011)

I agree with you guys that the pipelines seem overvalued, everytime I look the stocks seem to be going up, Pembina went from $20 to almost $30 in no time...


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## Gumball (Dec 22, 2011)

I find it very interesting that many of you find these pipelines to be overvalued. I too hope that with perhaps their prices will retreat but I just don't see it happening, I hope I am wrong!
What do you guys think will cause these stocks to pullback? Higher interest rates, etc, ??


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## webber22 (Mar 6, 2011)

Already a 10% drop from the $31.15 high and still dropping.


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## doctrine (Sep 30, 2011)

Higher interest rates or an expanding economy would torpedo them. However, a long term investor will be fine. Dividends will keep coming.


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## Gdc (Jan 5, 2012)

A press release today saying they're holding dividends at current levels and they're down 5.9% so far today.

wtf


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## Gumball (Dec 22, 2011)

interesting to say the least....


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## zylon (Oct 27, 2010)

*Pembina Pipeline*


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## Homerhomer (Oct 18, 2010)

I guess we now know the reasons for last week slide, funny enough I just put provident on my watch list to analyze, guess don't have to do it anymore ;-)


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## Yudansha (May 14, 2011)

I have a question regarding Pembina buying out PVE. I wonder if I should start my own topic but I'll ask anyways. 

Can someone clarify what exactly will take place to the existing PVE shares I own right now? 

I understand there will be some sort of share exchange:

"Pembina will exchange 0.425 of its own stock for each Provident share, a premium of 24.7 per cent over Friday’s closing price of $9.51." (CBC)


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## KaeJS (Sep 28, 2010)

Yudansha said:


> "Pembina will exchange 0.425 of its own stock for each Provident share, a premium of 24.7 per cent over Friday’s closing price of $9.51." (CBC)


Your shares will turn into Pembina shares.

If you have 100 shares of Provident, you now have 42.5 shares of Pembina.

You may in fact only receive 42 Pembina shares, plus Cash for the 0.5 share.


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## Yudansha (May 14, 2011)

Right on thanks KaeJS!


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## doctrine (Sep 30, 2011)

Shucks. PVE was on my watch/buy list for this year, as it was likely they would be increasing earnings and dividends over the next few years. Will keep watching Pembina, this may boost their earnings 2-3 years down the road once the dust settles and efficiencies get realized.


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## indexxx (Oct 31, 2011)

hmmm- I think pipeline is worthy- I bought Atlas at $10 and it's still rising after 1.5 years; 370% gain in less than 2 years


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## Gdc (Jan 5, 2012)

I just saw the bit about Pembina upping their dividend after the deal closes. Nifty!


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## dubmac (Jan 9, 2011)

I sold TRP in Nov before the KXL decision & having been waiting to buy ENB - or any other pipeline co - to diversify my holdings - But...ENB remains very expensive. I'd consider starting a position at a 10-15 % reduction right now. Most people are buying them for yield, and as long as growth stays neglible & rates low, pipelines will stay expensive.


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## Gumball (Dec 22, 2011)

looks like the price is dropping down to some "attractive" levels, will be keeping an eye on it and may just pull the trigger soon... im expecting steady dividends and growth over the next few years from PPL


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## webber22 (Mar 6, 2011)

I've added some at 26.78 for about a 6% yield. Stock has now dropped 14% from it's 31.15 high, the payout ratio is lowered with it's latest acquisition even with the dividend increase. Once the credit details are ironed out in July, the stock should be good to go


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## webber22 (Mar 6, 2011)

S&P has announced changes in the S&P/TSX Canadian indices, replacing PVE with PPL effective after Thursday's close. The end result sill be many etf's adding millions of dollars of PPL stock in the re-balancing process. Today PPL was up 2.5%, it could go back up to $31 by next week

http://www.newswire.ca/en/story/949...unces-changes-in-the-s-p-tsx-canadian-indices


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## doctrine (Sep 30, 2011)

Not quite - I believe they are just increasing the weight of PPL, by approximately the amount of PVE relatively considering the acquisition was pretty fairly valued. Meaning, there will be little rebalancing for any S&P TSX Composite ETF that held both PPL and PVE, since the PVE shares will be converted into PPE at only a slight increase (10?%)


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## alexei (Jul 2, 2012)

Isn't this stock way overvalued and risky? P/E of almost 30. For the past four years the company has paid out more than it earned, at the same time diluting shareholder's value by ~25%. The revenue has increased nicely this quarter, but it would seem that any future growth is already discounted in the high P/E ratio. Am I missing something here?

Dividends per Share - Common Stock Primary Issue	1.56	1.56	1.56	1.49
Diluted Normalized EPS	0.99	1.07	1.09	0.94
Total Common Shares Outstanding	167.91	166.88	158.59	134.70


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## blin10 (Jun 27, 2011)

man, been holding since 26, thinking on what to do now to sell or not ... love these dilemmas


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## LOST (Aug 30, 2010)

*Ppl*



blin10 said:


> man, been holding since 26, thinking on what to do now to sell or not ... love these dilemmas


Moi Aussi, since inception $10, me likey also. Like the analyst on BNN says " Sometimes you just have to hold your nose and buy " What is high now could be low in a decade. I thought PPL was high
when I was buying at the $13 level and now look at it. Plus the dividends.


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## LOST (Aug 30, 2010)

Another stock , I thought was high when I purchased, was ENB last year. This year I am up quite a bit also. I find it is just hard to diversify when there is less and less stock in which fits your criteria." Never hold more than 10% of portfolio in one stock" is another mantra that is widely believed. Why not if it keeps going up? I think you just have to be vigilant. Nobody knows everything about any stock and what it will do at any point in time.


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## londoncalling (Sep 17, 2011)

LOST said:


> Another stock , I thought was high when I purchased, was ENB last year. This year I am up quite a bit also. I find it is just hard to diversify when there is less and less stock in which fits your criteria." Never hold more than 10% of portfolio in one stock" is another mantra that is widely believed. Why not if it keeps going up? I think you just have to be vigilant. Nobody knows everything about any stock and what it will do at any point in time.


Which is exactly why you should not hold more than 10%. 

Disclosure: I am guilty of this as well


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## doctrine (Sep 30, 2011)

I like to start stocks at about 5% of a portfolio. They can double, and still be at the 10% mark and not trigger selling pressure. Once a stock exceeds 10% though, you should definitely reconsider your position and reevaluate.


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## blin10 (Jun 27, 2011)

so instead of selling I bought more around $31... in my opinion ipl and ppl will be big winners in the years to come unless market sinks hard


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## LOST (Aug 30, 2010)

*Mmmm*

Gotta love this stock :}


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## blin10 (Jun 27, 2011)

I have a feeling they will raise dividend soon


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## blin10 (Jun 27, 2011)

keeps moving up :>


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## Canadian (Sep 19, 2013)

I keep looking at this stock but I can't justify buying something with such a high payout :cower:


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## My Own Advisor (Sep 24, 2012)

http://www.stockhouse.com/news/natu...-pipeline-raises-dividend-on-back-of-strong-p

Got your wish earlier this year for IPL 

Just a matter of time for PPL.

Increased target price...up price goes...
http://tickerreport.com/banking-fin...ased-to-42-00-by-analysts-at-rbc-capital-pba/


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## Gumball (Dec 22, 2011)

Im with Blin on this one,,,, i think IPL and PPL are poised to be big winners in the upcoming years.


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## PatInTheHat (May 7, 2012)

I sold mine the day before the announcement. Oops.


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## warp (Sep 4, 2010)

Gumball said:


> Im with Blin on this one,,,, i think IPL and PPL are poised to be big winners in the upcoming years.


I sure hope you are right!........I and my family own lots of shares of both.

We have owned both for years and they have been great performers.


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## AltaRed (Jun 8, 2009)

The major threat to both companies longer term would be the lack of new export takeaway capacity (one or two of Keystone XL, Northern Gateway, Kinder Morgan, East Coast). If none of these happen, then significant expansion opportunities are limited simply because producers cannot move significantly more volumes of oil than they are today. The midstream/natural gas liquids business is also fraught with potential hazards going forward, i.e. margins are likely as good as they are ever going to be. 

Beware the apparent stability of the past going forward. Examine their expansion plans very carefully. I wouldnot be committing new money to either of these companies at this time, certainly not at the growth rates being perceived by current P/E ratios. You may not want to be overweight in either of these companies.


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## Synergy (Mar 18, 2013)

Arh. I was going to pull the trigger at around $33 but I listened to all the nay sayers. I gotta stop doing that ;o)

Nice little pop.


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## Gumball (Dec 22, 2011)

Pembina hosted an investor day yesterday, some pretty ambitious growth plans, the future is looking bright.

presentation can be found here:

http://www.pembina.com/pembina/webcms.nsf/AllDoc/31A2F1E6BF79076887257788005B78F0?OpenDocument


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## Gumball (Dec 22, 2011)

record revenue, record quarter, and a 3.5% divi increase, thanks I'll take it!


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## blin10 (Jun 27, 2011)

this thing is unstoppable, knock on wood don't want to jinx it... now it's time for ipl to raise divi, I need to pay for fuel this summer :>


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## supperfly17 (Apr 18, 2012)

Stock is nearing its 52 week low. Anyone know why the downside?


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## CPA Candidate (Dec 15, 2013)

supperfly17 said:


> Stock is nearing its 52 week low. Anyone know why the downside?


Have you been in a coma since September 2014?


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## supperfly17 (Apr 18, 2012)

CPA Candidate said:


> Have you been in a coma since September 2014?



Not sure what happened then. I stumbled upon this company recently.


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## daddybigbucks (Jan 30, 2011)

I think he is just saying that the price of oil has dropped and all oil related stocks dropped.

But if that is true, how come TRP and ENB are close to hitting new highs?


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## AltaRed (Jun 8, 2009)

daddybigbucks said:


> I think he is just saying that the price of oil has dropped and all oil related stocks dropped.
> 
> But if that is true, how come TRP and ENB are close to hitting new highs?


TRP and ENB are not in the same 'regional' play issue that the smaller players are in, are into both gas and oil, and have other businesses like utilities, power, etc. PPL is more reliant on the oilsands, and northwest shale oil plays, and midstream/diluent processing margins....all of which are under stress. PPL's P/E multiple was (is) highly dependent on growth/expansion projects... Few of those will happen if the oil companies are no longer willing to sign up. The pain may have just begun.


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## Gumball (Dec 22, 2011)

AltaRed said:


> TRP and ENB are not in the same 'regional' play issue that the smaller players are in, are into both gas and oil, and have other businesses like utilities, power, etc. PPL is more reliant on the oilsands, and northwest shale oil plays, and midstream/diluent processing margins....all of which are under stress. PPL's P/E multiple was (is) highly dependent on growth/expansion projects... Few of those will happen if the oil companies are no longer willing to sign up. The pain may have just begun.


Good analysis AltraRed.
They just announced a pipeline expansion in the Bakken. They seem to be always adding accretive plays, I think this is an excellent long term stock. I don't know enough about the propane/ethane markets but seems to me they are trying to diversify slightly. Look back in 07-08 their divi didn't skip a beat. I don't think your going to see the capital appreciation we witnessed over the last few years, but still a solid long term stock. If you check out their investor presentation, a high % of their contracts are take-or-pay (same with IPL) and I am long both these stocks.
Also, you may want to look for earnings out Feb 26, investor day March 10th...

Pembina Pipeline announces an $85M expansion of its Vantage oil pipeline system connecting the Bakken Shale in North Dakota with the petrochemical market in Alberta, increasing its current capacity by 70% to 68K bbl/day once the project is complete early next year.
The 80-km expansion will include the addition of mainline pump stations as well as the construction of a new eight-inch gathering lateral.
Pembina says the added capacity and volumes from its Saskatchewan ethane extraction plant will boost yearly EBITDA by $75M-$110M/year.


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## AltaRed (Jun 8, 2009)

I just think the so called expansions by most of the infratructure companies have not yet considered that $50 oil is anything other than a temporary aberration. IOW, producers will NOT be signing up to any new contracts, take-or-pay or not, if they are not drilling and production starts to shrink. I believe we really have yet to see the shake out and while I would like to be owner of PPL, I am loathe to pull the trigger until I sense infrastructure companies have become realistic about their opportunities (beyond those already under construction).


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## KaeJS (Sep 28, 2010)

Thinking of taking a position.

Ideally I should have bought today, but I was too busy trading National Bank.


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## KaeJS (Sep 28, 2010)

On Friday the 13th, Bought 500 @ $40.70, sold at $41.00

Bought back in on Friday for 500 @ $40.50.


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## supperfly17 (Apr 18, 2012)

KaeJS said:


> On Friday the 13th, Bought 500 @ $40.70, sold at $41.00
> 
> Bought back in on Friday for 500 @ $40.50.


Decent profit for a days work.


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## OptsyEagle (Nov 29, 2009)

> Decent profit for a days work.


Now extend that out for a year and eventually an entire stock market cycle and you should be able to see how well that strategy will treat you.

Since you didn't mention what your strategy is, I will not give you my opinion on it, but suffice to say, I am not holding out much hope for it, if it keeps getting repeated this way.

Just my opinion of course.


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## Numbersman61 (Jan 26, 2015)

I own IPL and ENF which are trading very well. Considering selling some ENF and investing in PPL. Any comments on PPL?


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## gibor365 (Apr 1, 2011)

Numbersman61 said:


> I own IPL and ENF which are trading very well. Considering selling some ENF and investing in PPL. Any comments on PPL?


What is the reason?


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## gibor365 (Apr 1, 2011)

KaeJS said:


> On Friday the 13th, Bought 500 @ $40.70, sold at $41.00
> 
> Bought back in on Friday for 500 @ $40.50.


KaeJS, just curious to know how ended your TLM swing trades?


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## Numbersman61 (Jan 26, 2015)

gibor said:


> What is the reason?


Due to ENF stock price run-up, it now represents more than 10% of my investment portfolio so I'm considering taking some profits and investing in PPL. Just interested if anyone has any opinion on PPL.


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## PuckiTwo (Oct 26, 2011)

Numbersman61 said:


> ...... Just interested if anyone has any opinion on PPL.


See AltaReds post # 49 upthread.


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## KaeJS (Sep 28, 2010)

gibor said:


> KaeJS, just curious to know how ended your TLM swing trades?


I ended up selling everything at an ACB of about $8.60. The trade ended up costing me about a $2k loss, but these things happen. I booked $920 in profits last week alone, so I don't let the TLM trade bother me. I am, and always will be, fully transparents in my wins and losses.


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## AltaRed (Jun 8, 2009)

PPL took a beating in its midstream in its 4Q results with $61M revenue vs $183M in same period in 2013 despite increased sales volumes, and 4Q14 does not yet reflect the full impact of lower crude prices. Me thinks 1Q15 results in this business could be brutal. Management spent a lot of time describing their capital projects in this sector without commenting at all on what they might do to avoid near term losses in this sector. The market seems to like their results though.


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## Gumball (Dec 22, 2011)

AltaRed said:


> PPL took a beating in its midstream in its 4Q results with $61M revenue vs $183M in same period in 2013 despite increased sales volumes, and 4Q14 does not yet reflect the full impact of lower crude prices. Me thinks 1Q15 results in this business could be brutal. Management spent a lot of time describing their capital projects in this sector without commenting at all on what they might do to avoid near term losses in this sector. The market seems to like their results though.


Alta Red, I think we will learn alot more on March 10th during the Pembina investor day.. Do you think some of the investments theyve been making into ethane and butane will help offset any near term losses in midstream?


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## AltaRed (Jun 8, 2009)

Gumball said:


> Alta Red, I think we will learn alot more on March 10th during the Pembina investor day.. Do you think some of the investments theyve been making into ethane and butane will help offset any near term losses in midstream?


They should take the time to clear this up then but if they don't, it is because they don't want to tell shareholders about (potential) bad stuff. I doubt their new investments will do anything to offset near term losses in the midstream but I imagine it depends on how they construct their processing contracts and how they intend to run their 'increased' midstream business. 

It is clear they were exposed to commodity prices on NGLs and they specifically mentioned the collapse in propane prices. I doubt they can do anything about any commodity (such as ethane and propane) that is not directly part of their diluent business because heavier liquids must be stripped from rich gas streams to make natural gas saleable and if they cannot get sufficient price for the products, they will have to eat the losses. Heavy oil/oil sands oil producers still need diluent so I suspect butane and pentanes+ will have a clearing price high enough that operators like Pembina and AltaGas can at least breakeven.

I personally recall a dilemma I had back in 1986 with the collapse of oil prices. Gas plants in the US mid-continent I was responsible for had turboexpanders to extract as much NGLs as possible from the gas stream, i.e ethane, propane and butane to take advantage of commodity margins between low(er) priced natural gas and high(er) priced NGLs. The collapse in oil price also collapsed NGL prices (priced off oil) and we cut back as much as possible to NOT extract ethane, propane and butane. But we had to extract some to meet natural gas specifications and had to eat losses in NGLs. It was a bad time.


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## CPA Candidate (Dec 15, 2013)

AltaRed said:


> PPL took a beating in its midstream in its 4Q results with $61M revenue vs $183M in same period in 2013 despite increased sales volumes, and 4Q14 does not yet reflect the full impact of lower crude prices. Me thinks 1Q15 results in this business could be brutal. Management spent a lot of time describing their capital projects in this sector without commenting at all on what they might do to avoid near term losses in this sector. The market seems to like their results though.


Canadian investors are in love with pipelines, the results hardly matter.


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## OptsyEagle (Nov 29, 2009)

CPA Candidate said:


> Canadian investors are in love with pipelines, the results hardly matter.


_Tru dat._


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## 0xCC (Jan 5, 2012)

it seems as though the recent (i.e. the last 6-8 weeks, not the last year) oil price slump and general economic jitters is having an impact on PPL's stock price. It is getting into the price range again where it looks attractive to me here in the mid-high $38's. I would really like to see it closer to the low 37's like it was briefly back at the end of last year/early this year.

Anyone have any opinions on whether this might be a good price to add to an existing position?


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## newfoundlander61 (Feb 6, 2011)

Pembina Pipeline Corp has signed a deal to buy Kinder Morgan Canada Ltd. and the U.S. portion of the Cochin pipeline system in an agreement it valued at a total of about $4.35 billion. Source BNN

https://www.bnnbloomberg.ca/pembina-buying-kinder-morgan-canada-u-s-portion-of-cochin-pipeline-1.1304632


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## agent99 (Sep 11, 2013)

newfoundlander61 said:


> Pembina Pipeline Corp has signed a deal to buy Kinder Morgan Canada Ltd. and the U.S. portion of the Cochin pipeline system in an agreement it valued at a total of about $4.35 billion. Source BNN
> 
> https://www.bnnbloomberg.ca/pembina-buying-kinder-morgan-canada-u-s-portion-of-cochin-pipeline-1.1304632


Interesting! In Feb, they announced a go-ahead for the Canada Kuwait Petrochemical polypropylene project. Not much news since. According to this news article, construction was to start this Fall, Pembina's share is another $2.5 Bilion. They must have deep pockets!


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## doctrine (Sep 30, 2011)

They are a $25B+ company now. $2.5B is a big investment, but it is still less than 10% of their enterprise value.


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## agent99 (Sep 11, 2013)

doctrine said:


> They are a $25B+ company now. $2.5B is a big investment, but it is still less than 10% of their enterprise value.


However, CKPP + KM = $5billion or 20%. Maybe spread over a few years.


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## OptsyEagle (Nov 29, 2009)

Pembina is freefalling. Anyone know why?

Maybe the Cenovus news of them cutting their capital spending???? Very weird.


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## AltaRed (Jun 8, 2009)

They are all in freefall this morning, including KEY, GEI and IPL. Maybe their commodity related portions of their business could result in zero margin (revenue). Remember that their feed stock price has not changed much, but the price of the liquid products has dropped massively with the oil price drop.


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## OptsyEagle (Nov 29, 2009)

Definitely not pretty. I assume investors do know that when it comes to pipelines, they are not allowing any new competitors. You would think that their scarcity would mean something. If you owned the only house on the street and everyone wanted one, I would think the price of that house would rise in value, even if your electricity and gas rates were going up.


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## spdr1812 (Apr 8, 2016)

Sounds like the take or pay side of the buisness and concerns over the suppliers going bankrupt therefore no one to pay the contracts ?


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## AltaRed (Jun 8, 2009)

spdr1812 said:


> Sounds like the take or pay side of the buisness and concerns over the suppliers going bankrupt therefore no one to pay the contracts ?


That is part of it as I have already written in a few threads. Some of the shippers on pipelines don't have the best credit ratings and in a low commodity price world, some of those shippers will fail to pay their bills and actually cease operations altogether. But it is also the commodity side of the business where sustained lower prices for the liquid products will compress margins dramatically. Midstream can be feast or famine....been there, done that in my career.


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## doctrine (Sep 30, 2011)

Well, if petrochemical production is going to plummet with a cease in activity, certainly their growth is gone; therefore, the stock needs to be priced appropriately. The difference in valuation between a company growing 5-10% a year and one growing none or maybe even -2% is quite striking. PPL like many others may be pricing in a zero growth environment for a couple of years at least.


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## AltaRed (Jun 8, 2009)

doctrine said:


> Well, if petrochemical production is going to plummet with a cease in activity, certainly their growth is gone; therefore, the stock needs to be priced appropriately. The difference in valuation between a company growing 5-10% a year and one growing none or maybe even -2% is quite striking. PPL like many others may be pricing in a zero growth environment for a couple of years at least.


Why would petrochemical production plummet? There is both market and propane feedstock. The issue/risk may be on the oil pipeline side, not the processing side if this is indeed the area of risk.


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## OptsyEagle (Nov 29, 2009)

AltaRed said:


> Why would petrochemical production plummet? There is both market and propane feedstock. The issue/risk may be on the oil pipeline side, not the processing side if this is indeed the area of risk.


I think the market is just thinking that drilling in Canada is just going to come to a stop, due to the current oil price. It is just fear overcoming common sense.

I was watching the Pembina fall in real time, yesterday. I started posting about it on various sites around 10:30 am when it was down about $2.50, in an upward rebounding market. I kept refreshing the quote, every 20 seconds or so and then refreshing my question about it on the various sites. I watched the price falling, more and more, each time I refreshed, with higher and higher volumes, and no one seeming to know why. Google searches came up with nothing. As she went below $30, I started to believe that perhaps there was something going on, specifically with PPL, but that the sellers I was starting to see now were basically "shooting first and asking questions later". They were selling simply because others were selling. The decline appeared to me, to be feeding on itself.

It turned out that what I was seeing was correct, since there really was no new news. Just speculation and a lot of fear, and because of that the bargain hunters swooped in quickly before the end of the day.


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## agent99 (Sep 11, 2013)

AltaRed said:


> Why would petrochemical production plummet? There is both market and propane feedstock. The issue/risk may be on the oil pipeline side, not the processing side if this is indeed the area of risk.


Why would the market for NGL/petrochemicals NOT be affected by a downturn in global markets?


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## AltaRed (Jun 8, 2009)

agent99 said:


> Why would the market for NGL/petrochemicals NOT be affected by a downturn in global markets?


You know the market for NGL is much broader than the market for petrochemicals and can actually diverge. The petrochemical market, e.g. ethylene/PE/PET/PS and PP, is not necessarily affected until such time as the manufacture of widgets slows due to economic downturns. So not much effect for ethane and propane. The problem today is propane prices are depressed due to lack of access to markets. Hence the reason for the Ripley terminal, and the PPL and IPL PP projects. I doubt ethane and propane prices have moved, or will move in the short term. 

The bigger issue today for the likes of GEI, PPL, KEY and IPL today is the drop in pricing for the heavier gas liquids used to provide diluent for bitumen blending. The collapse in oil prices will directly impact the prices for pentanes plus and I imagine butane as well. Oilsands producers simply can't pay the same prices for diluent and to the extent some oilsands production gets shut in, demand for diluent will go down. CVE has already said they are cutting back on crude by rail.

So one cannot lump petrochemical demand and thus the feedstock for petrochemicals into the same bucket as NGLs used primarily for diluent. They are only loosely correlated. Building the PP plants can be highly profitable for the most part, distinctly separate from the NGL processing business.

Added: Link to Nov 2018 NGL Study https://ceri.ca/assets/files/Study_176_Full_Report.pdf


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## gardner (Feb 13, 2014)

This is the most recent thread on PPL that I could find -- perhaps a moderator would care to adjust the subject to correct the stock symbol?

Anyhow, I was curious what PPL holders think about the prospects of the company with this IPL mess shaking out. My instinct is the BAM will win and PPL will get nothing. I suppose that this would be a nagative for PPL. Do you think potential failure of the deal is adequately priced into PPL at ~$39 or is there a downside if they don't prevail? To me it looks like we're almost back at May pre-deal-announcement levels, but I am unsure what the wider sentiment is likely to be.


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## AltaRed (Jun 8, 2009)

The PPL/IPL presentation talks about the acquisition being accretive due to &A synergies primarily and there are likely some other marketing and product movement opportunities that will be accretive but the 2 companies mostly occupy a different space. I see this attempt being similar to PPL prior acquisitions, i.e. spreading their tentacles.

My take is if PPL is not successful, there will likely be a temporary dip in PPL stock price followed by a recovery to about current levels. I am a bit agnostic about success or not as regards my PPL shares. I am simply not very concerned about near term stock price movements.


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## gardner (Feb 13, 2014)

Thanks. I am considering whether to deploy the cash now or wait a while. I had supposed, when I originally decided I would dump IPL, that I should wait for the dust to settle before buying PPL -- or whatever. That still looks like a reasonable idea, but particularly with yesterday's pull-back I've begun to wonder if there's a limited buying opportunity this week.


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## Beaver101 (Nov 14, 2011)




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## Dilbert (Nov 20, 2016)

Looks like it’s over and PPL is pocketing $350M. Stock is up over 4%.


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## AltaRed (Jun 8, 2009)

Dilbert said:


> Looks like it’s over and PPL is pocketing $350M. Stock is up over 4%.


Clearly the break fee is a boost to the bottom line.


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## Retiredguy (Jul 24, 2013)

Deleted.....no longer relevant.


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## gardner (Feb 13, 2014)

It looks like I missed my chance to but PPL for a while. I assumed a breakup of the deal would be perceived as negative and see the price fall a little, or stay the same, if the negative were priced in. Is the $350M really enough to justify 4% rise, or is it mostly just rebound from the uncertainty around IPL, I wonder?


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## AltaRed (Jun 8, 2009)

No, it is not enough to justify 4%. It is simply market relief PPL is not buying IPL. I spent some time going through the 'accretive' aspects of the joint PPL/IPL shareholder materials issued for voting. I wasn't overly impressed there was meaningful accretion opportunities besides specified G&A savings and some unspecified/nebulous 'gas liquids' synergies at Redwater.


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