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Gold/Mining/Energy : Big Dog's Boom Boom Room

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From: Biomaven	8/7/2013 11:57:34 PM
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Anyone here follow Veresen? They are a Canadian-based utility with substantial pipeline and midstream exposure mostly centered on the Bakken. Here is their earnings release from today: vereseninc.com My thesis here is that this is a pretty stable utility-type play, with a very hefty (8.6%) dividend (barely covered though) and a couple of longer term call options. The first of the call options is the Jordan Cove LNG export facility on the Oregon coast that is currently awaiting regulatory approval. Its advantage is that it's one of the only West Coast facilities, whereas there are dozens of proposals for the Gulf. They are proposing repurposing an existing LNG import facility, so not a greenfield project at all. I believe this will have a decent chance of approval, although ultimately this will be a political decision. (Dow Chemical and others are lobbying against further LNG exports, but I note a very recent approval for a similar facility elsewhere). The second long term development I am predicting is that eventually the oversupply of ethane and propane at Aux Sable will be resolved, and when that happens there will be a fairly significant earnings bump. Meantime, I am happy to collect the very substantial dividend. Am I missing something here? Why isn't this a no-brainer? (I'm also long the somewhat similar ONEOK). Peter

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