2/9/16: Energy Transfer on Clearance Sale

By Igor Greenwald • February 9, 2016

Energy Transfer Equity’s (NYSE: ETE) management has been its own worst enemy of late, but the resulting discount on its diversified, gas-focused midstream empire should yield very friendly returns for years to come.

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Noel Dunivant

02/10/16 ‐ 3:03pm ET February 10, 2016 at 3:03pm ET

According to Level 2 Energy, the following companies have exposure to Chesapeake. Any chance its bankruptcy would have meaningful impact on EPD or SEP DCF? The annual commitments ($161M-EPD and $137.2M-SEP seem relatively small to me. (Sorry table doesn’t format well)

Pipeline Midstream company Ticker Ending Year Annual Commitment

Columbia Gas pipeline Columbia Pipeline Partners CPPL 2017-2099 $5.6M
ATEX Enterprise EPD 2029 $161.M
Tiger Energy Transfer ETP 2025 $127.8M
Midcontinent Express Kinder Morgan KMI 2020 $148.4M
Tennesee Kinder Morgan KMI 2033 $28.M
Tennesee Kinder Morgan KMI 2028 $14.5M
Plains Eagle Ford Plains All American PAA 2022 $45.6M
Texas Eastern Spectra SEP 2033 $65.7M
Texas Eastern Spectra SEP 2030 $71.5M
Total $668.1M

Igor Greenwald

02/10/16 ‐ 11:27pm ET February 10, 2016 at 11:27pm ET

Yeah, I don’t think it’s material to anyone other than Williams/ETE, and while I saw one manager guess at a 50% haircut for Williams from its 20% revenue customer, I think that’s probably on the high side given that Chesapeake will have incentive to keep shipping gas from producing wells. But even if we assume that 10% haircut it becomes closer to 5% pro-forma for the merger. That doesn’t mean that ETE and Williams won’t get whacked in market if and when Chesapeake files, though.

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