Enable Midstream Partners stands at a crossroads. It has great assets –– natural gas gathering and processing operations in the Anadarko, Arkoma, and Ark-La-Tex basins; a crude oil gathering system in the Williston Basin; and interstate/intrastate gas pipelines that ship natural gas from its gathering regions to the Texas Panhandle and Illinois. The company also has an excellent position in gathering systems and processing plants in the prolific STACK and SCOOP plays in Oklahoma. But everything is not rosy. Earnings from STACK/SCOOP are being offset by production declines in its other areas of operation. On top of that, CenterPoint Energy, which owns 55.4% of Enable’s limited partnership units, is seeking to divest its shares, which would bring a new majority owner into the picture. In today’s blog we review our latest Spotlight analysis.
Spotlight is a joint venture of RBN Energy and East Daley Capital Advisors. With the support of Oil & Gas Financial Analytics, Spotlight provides “deep dives” into the fundamentals that shape the outlook for midstream energy companies. In each report, we “spotlight” a midstream energy firm, typically one operating within a master limited partnership (MLP) structure, and provide a comprehensive view of the company’s assets and operations. Please note that Spotlight should not be viewed as investment advice. Neither RBN Energy nor East Daley Capital is an investment advisor. Spotlight is included as part of our Drill Down report series to RBN Backstage Pass members. For more about Spotlight, see the paragraph at the end of this blog.
Enable is a moderate-size ($6.2 billion market capitalization) MLP established in May 2013 and publicly traded since April 2014. Its general partner is Enable GP, LLC, which is owned by CenterPoint Energy (50% management interest, 40% economic interest) and OGE Energy (50% management interest, 60% economic interest). The company generated $785 million in earnings in 2015 (including its 50% interest in the Southeastern Supply Header natural gas pipeline), approximately 55% from its Gathering & Processing segment and 45% from Transportation & Storage.
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