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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (45299)11/5/2011 10:44:36 AM
From: Sergio H  Read Replies (1) of 78644
 
<My guess is that they will issue new NS shares to the amount of 200M$ soon and NSH will get a free ride on the cash flow generated with expansions project that get paid from the capital raised. >

It's not that simple as this is not something new. NS has been issuing new shares for years and they announced in their recent conference call that they plan to do so in 2012 to the tune of $350 million, stepping up to fund expansion. Distribution growth from this expansion would be realized in 2013. Expenses for the growth, $300m annually to expand its crude storage and transportation operations will continue to lower distributable cash flow, although NS forecasts a modest increase for 2012.

Also from the conference call, NS plans to go on a buying spree as larger oil and gas companies strip themselves of pipeline and terminal assets. This would lower their growth expenses if they are able to continue buying from chapter 11 bankruptcy as they did earlier this year.
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