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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (179968)	8/8/2013 4:26:48 PM
From: Biomaven	1 Recommendation Recommended By E_K_S Read Replies (1) \| Respond to of 206201

Yes, I've bought Veresen at around current levels. Even though this is a Canadian company, many of their key assets are US based - in particular they hold half of the Alliance pipeline (from Western Canada through the Bakken to near Chicago) and the Aux Sable processing facility In Illinois, which are mostly Bakken related. (Enbridge and Williams are the other holders). The Jordan Cove facility is also US-based, although most of the gas they would export from it would actually be Canadian (which makes it more likely in my view that the DOE will approve the license). They would have to partner if Jordan Cove is approved - this is way too big a project for them to do alone. They do have some purely Canadian assets - some power generation facilities, some Alberta-based gas pipelines and finally a midstream gas-processing plant (Hythe/Steeprock) located in Alberta they bought in 2012 from Encana. The ($1) dividend is indeed somewhat skimpily covered at present, but it's important to realize that about 70% of their earnings are very stable. Aux Sable is what provides the volatility, but the short-term trend there seems favorable (and I'm fairly confident that the 3-5 year picture will improve). The other big unknown is they are currently recontracting (for 2015) the Alliance pipeline (which is nearly half their revenue). I think the good news on that front is the recent uncertainty relating to the TransCanada mainline gas pipeline (some of which might be taken out of service and repurposed to carry oil) should improve the terms they get - they discussed this some on yesterday's conference call. Alliance are also changing the dew point specs on the pipeline to allow for more natural gas liquids, which apparently is very desirable for their prospective customers. Here's some discussion from a few months back on the TransCanada pipeline issue: rbnenergy.com and more recently: transcanada.com And this provides some good background on Aux Sable and Alliance: seekingalpha.com They sound pretty confident that they are not going to reduce distributions any time soon, and longer term I am happy with their prospects. So again, what might I be missing here? This stuff is not my specialty at all, and I'd love to hear any criticisms or corrections. Peter