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MarkWest Prices Another Secondary Offering (MWE, APC, CVX, CHK, REXX)

Paul Ausick — Wed, 09 May 2012 14:37:28 +0000

For the second time in two months, MarkWest Energy Partners L.P. (NYSE: MWE) has launched a secondary offering of common units to support the company’s expansion plans. In March, MarkWest sold 6.8 million common units at $59.54 each and raised a total of $388 million to fund expansion of its gathering systems in East Texas. Anadarko Petroleum Corp. (NYSE: APC) and Chevron Corp. (NYSE: CVX) are among the companies for which MarkWest will offer mid-stream services.

Today the company priced a secondary offering of 8 million units at $55.28/common unit, a discount of about 3.5% to last night’s closing price of $57.29/common unit. The offering’s underwriters have an over-allotment option for 1.2 million additional shares. Morgan Stanley, BofA Merrill Lynch, Barclays, Citigroup, UBS Investment Bank and Wells Fargo Securities are acting as joint book-running managers for the offering.

On Monday the company announced that it would acquire Keystone Midstream Services LLC for $512 million. Keystone’s operations in the Marcellus shale play are owned by a consortium including Rex Energy Corp. (NASDAQ: REXX). MarkWest also announced last week it had signed a new gas processing deal with Chesapeake Energy Corp. (NYSE: CHK) that would involve expanding MarkWest’s capacity in the Marcellus shale play by about 60%.

While today’s secondary offering price is battering the company’s common unit price, it’s worth remembering that both the dilution and the lower price have no impact on the limited partnership’s ability to pay its quarterly distributions. The company’s long-term contracts are based on fixed prices that virtually guarantee that distributions will be paid. On Monday, MarkWest paid $0.79/common unit in distributions, and even with the increased demand for capital, the company expects distributable cash flow to range from $440-$500 million for the fiscal year. Distributable cash flow in the first quarter totaled $81.1 million, yielding a jump in distributions of nearly 18%.

MarkWest’s common units are taking a beating today though, down -4.3% at $54.82 in a 52-week range of $39.00-$61.60.

Paul Ausick

Filed under: Oil & Gas, Secondary Offering Tagged: APC, CHK, CVX, MWE, REXX

Calls For 50% to 100% Upside in Energy Stocks (AREX, MHR, NOG, OAS, REXX, SFY, VOG, GDP)

Administrator — Fri, 16 Sep 2011 12:44:13 +0000

It is not too often that analysts call for stocks to rise 50%, let alone call for them to rise 100%. That is happening as Canaccord Genuity has initiated coverage of many second tier oil and gas companies with buy ratings. The implied upside is frankly off the charts as far as price targets, but what is amazing is that the upside targets are often not that far off from the pack of analysts and some of the stocks have even seen these prices or come close over the last year.

Approach Resources Inc. (NASDAQ: AREX) was started as Buy with a $38.00 price target based upon catalysts driving the horizontal Wolfcamp potential. The current price is $21.58 and the 52-week range is $9.83 to $34.93 and Thomson Reuters has a consensus price target of $31.69.

Magnum Hunter Resources Corp. (AMEX: MHR) was started as Buy with $9.00 price target as the sum of parts analysis is attractive due to a relative mispricing of assets. At $4.62, the 52-week trading range is $3.72 to $8.66 and Thomson Reuters has a consensus price target of $8.68.

Northern Oil and Gas (AMEX: NOG) was started as Buy with $37.00 target as the firm sees the company having blowout earnings in the second half due to its accelerated Bakken presence. At $22.41, the 52-week range is $11.72 to $33.98 and Thomson Reuters has a consensus price target of $33.40.

Oasis Petroleum Inc. (NYSE: OAS) was started as Buy with a $36.00 based on the company positioning its asset base to accelerate growth in 2012. At $27.37, the 52-week range is $16.74 to $36.15 and Thomson Reuters has a consensus price target of $36.19.

Rex Energy Corporation (NASDAQ: REXX) was started as Buy with a $18 target based upon meaningful catalysts to “drive second-half alpha generation.” At $13.93, the 52-week range is $9.67 to $14.33 and Thomson Reuters has a consensus price target of $16.62.

Swift Energy Company (NYSE: SFY) was started with a Buy rating and a $52.00 price target based upon the thesis that the company’s assets are undervalued and have a significant resource potential. At $32.56, the 52-week range is $25.08 to $48.19 and Thomson Reuters has a consensus price target of $48.77.

Voyager Oil & Gas, Inc. (AMEX: VOG) was started as Buy with a $5.00 price target as the firm called this “a high-beta play for a second-half Bakken bounce back.” At $2.39, the 52-week range is $2.20 to $7.75 and Thomson Reuters has a consensus price target of $5.29.

Goodrich Petroleum Corporation (NYSE: GDP) was started as Buy with a $31.00 target after management meetings have highlighted the company’s asset quality and it sees a disproportionate equity value upside. At $15.49, the 52-week range is $12.28 to $23.80 and Thomson Reuters has a consensus price target of $24.75.

JON C. OGG

Filed under: Analyst Calls, Oil & Gas Tagged: AREX, GDP, MHR, NOG, OAS, REXX, SFY, VOG

Energy Companies Raising More Cash (BRY, BWEN, KYN, MWE, REXX)

247wallst — Thu, 14 Jan 2010 18:02:37 +0000

We have already seen a flood of secondary offerings from many companies in many sectors either sold or filed this week. The strong market is giving many companies a window to raise cash, and we are seeing a specific push from the energy sector in efforts to raise capital. We have seen formal pricing, pending pricing and/or filings this week from companies like Berry Petroleum Co. (NYSE: BRY), Broadwind Energy Inc. (NASDAQ: BWEN), Kayne Anderson MLP Investment Company (NYSE: KYN), MarkWest Energy Partners LP (NYSE: MWE), and Rex Energy Corp. (NASDAQ: REXX).

Other secondaries filed this week

Berry Petroleum Co. (NYSE: BRY) is selling some 7 million common shares in an offering expected to price today. The deal is being brought by Credit Suisse and J.P. Morgan and would be close to $200 million based on current prices. That compares to a market cap of $1.3 billion and funds are being used for an acquisition.

Broadwind Energy Inc. (NASDAQ: BWEN) is first and foremost NOT an oil and gas company. It manufactures and sells high precision gears for wind turbines and for other sectors, but we hope one day that alternative energy companies and their suppliers are thought of as energy companies. The company has been in the process of selling 15 million shares of common stock in an offering through Macquarie and J.P. Morgan. That would be close to $100 million in proceeds today, versus an implied market cap of $633 million.

Kayne Anderson MLP Investment Company (NYSE: KYN) is technically not an oil company, but it is a closed-end fund that invests at least 85% of its total assets in energy-related master limited partnerships and their affiliates. It sold 5.5 million shares at $23.61 per share. This raised approximately $124 million to be used to make additional portfolio investments. The sale came through UBS Securities, Merrill Lynch, Citi, and Morgan Stanley as joint book-running managers. This one is even down 6% today on the event.

MarkWest Energy Partners LP (NYSE: MWE) has filed with the SEC its automatic shelf registration for units to sell Common Units (LP interests) and debt securities. As with many automatic shelf registration statements, no financial terms nor underwriters were named. Its market cap is $1.9 billion.

Rex Energy Corp. (NASDAQ: REXX) is selling some 5.5 million shares in a deal expected to price today after the close through KeyBanc Capital Markets and RBC Capital Markets. Net proceeds of the offering are intended to fund a portion of Rex Energy’s capital expenditure program for 2010 and for other general corporate purposes. This would be close to $70 million today versus an implied market cap of $472 million.

You are invited to join our free daily email distribution list to hear about IPOs and secondary offerings, ongoing day trader and options trader alerts, analyst upgrades and downgrades, stock and market rumors, Buffett and guru investor news, M&A and more.

JON C. OGG

Posted in Mutual Funds, Oil & Gas, Secondary Offering Tagged: BRY, BWEN, KYN, MWE, REXX

Cramer’s Oil & Gas Wildcatting Week (HK, REXX, BZP, RRC, RAME)

247wallst — Fri, 13 Jun 2008 17:23:48 +0000

This week on CNBC’s "MAD MONEY," Jim Cramer had another one of those "one pick per night" features. This week’s special feature wasn’t just oil, it was wildcatting. Yep, drill a hole in the ground and see what happens. In his version of the wildcatting climate, it is now highly profitable because oil prices are incredibly high and the costs are easy to recoup. Here are his picks in the sector chronologically, and the "gain" posted here is on the "day after move" rather than for the week:

Monday… Petrohawk Energy Corp. (NYSE: HK) -4.1%
Tuesday… Rex Energy Corp. (NASDAQ: REXX) +6.2%
Wednesday… BPZ Resources, Inc. (NYSE: BZP) +7.4%
Thursday… Range Resources Corp. (NYSE: RRC) -1.1%
Friday… RAM Energy Resources, Inc. (NASDAQ: RAME) +10% (in after-hours trading on Friday after he touted it)

Enjoy your weekend, and if there used to be an oil well that was drilled dry or if there have been any oil discoveries within about 20 or 30 miles of your property it might be worth calling one of these companies……

Jon C. Ogg
June 13, 2008

Rex Energy Files For Secondary (REXX)

247wallst — Mon, 07 Apr 2008 16:07:50 +0000

Rex Energy Corporation (NASDAQ: REXX) has filed with the SEC for a secondary offering of 8 million shares today. KeyBanc Capital Markets is listed as the sole selling agent.

As far as the use of proceeds, 4 million shares will be sold by existing shareholders and 4 million shares will be sold by the company. After the overallotment, if used, the proposed offering based on a recent close would be $128 million, which compares to a market cap of $575 million.

Rex is an independent oil and gas company operating in the Illinois Basin, the Appalachian Basin, and the Southwestern Region of the United States.

You can join our open email distribution list to hear about buybacks, special financings, secondary offerings, M&A, and more previews for other special situations.

Since coming public, Rex has risen steadily and its post-IPO trading range was $7.55 to $17.95. This came public back in July 2007 with a 9.6 million share offering at $11.00, and KeyBanc was the lead there at the IPO time as well.

Rex Energy closed up over 7% today at $18.68, a new high, although shares are down some 3% at $18.05 in after hours trading.

Jon C. Ogg
April 7, 2008