The collapse in commodity prices has not been good for partnerships looking to go public. In 2014 there were 18 partnership IPOs, but thus far this year there has been just a handful. There were none at all during the third quarter, but in October Noble Midstream Partners (NBLX) filed an initial registration statement to raise up to $100 million in a public offering.

Noble Midstream Partners was recently formed by Noble Energy (NYSE: NBL) to provide crude oil, natural gas, and water-related midstream services for NBL. Noble Midstream Partners has entered into multiple fee-based commercial agreements with Noble Energy, each with an initial term of 15 years, to provide an array of services critical to Noble’s upstream operations in the Denver-Julesburg (DJ) Basin in Colorado.

Noble is one of the largest drillers in the DJ Basin, where in 2014 it produced an average of 101,000 barrels of oil equivalent (BOE) per day of crude oil, condensate, natural gas and natural gas liquids, or NGLs, with crude oil and NGLs accounting for 66% of the output.

Noble Midstream Partners’ initial assets include crude oil gathering pipelines, crude oil treating facilities, natural gas gathering pipelines and a centralized gathering facility in the DJ Basin. In addition, it’s providing water-related services critical to Noble’s drilling, including the storage and distribution of fresh water for use in drilling and completion operations and the collection, cleaning, recycling and disposal of flowback and produced water.

Most of the current facilities are located in two areas of Weld County, Colorado — the Wells Ranch integrated development plan area (IDP), and the East Pony IDP. Core Assets generate substantially all current cash flows, and include:

• Approximately 25 miles of liquids pipelines that carry crude oil and saltwater serving the Wells Ranch IDP

• Approximately 30 miles of natural gas gathering pipelines serving the Wells Ranch IDP

• Storage capacity for up to 96,000 barrels (bbls) of crude oil and 32,000 bbls of saltwater at the Wells Ranch centralized gathering facility

• Approximately 20 miles of fresh water pipelines serving the Wells Ranch IDP

• A fresh water storage system serving the Wells Ranch IDP

• Approximately 15 miles of crude oil gathering pipelines servicing the East Pony IDP

• The Briggsdale and Platteville crude oil treating facilities

• A 3.33% ownership interest in White Cliffs Pipeline LLC, which has a current capacity of approximately 150,000 bpd of crude oil and connects the DJ Basin to Rose Rock Midstream’s (NYSE: RRMS) storage facility in Cushing, Oklahoma

The initial SEC filing does not specify the projected minimum quarterly distribution or the sponsor’s incentive distribution rights (IDRs), but it does include unaudited pro forma financials for the past two calendar years, as well as projections through 2016.

It projects revenue of $135.1 million in 2016, up from $104.4 million in 2014 and $102.5 million in the 12 months through June. The projected revenue increase is attributed primarily to increased throughput on its gathering systems.

In the 12 months through June the partnership’s assets generated EBITDA of $40.6 million, up from $37.8 million in 2014. Noble projects partnership EBITDA of $59.5 million in 2016 and estimates distributable cash flow at $52.4 million.

We will keep readers updated on this pending IPO as details emerge, as well as on other MLP IPOs likely to emerge with the eventual improvement in market conditions.

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)

Portfolio Update

Dark Days for SunEdison        

It’s hard to write about a stock in freefall (though admittedly not as hard as owning it.) Regardless of the progress of the underlying business or its prospects, regardless of apparent value, the focus stays on the plunging share price and the linear extrapolation that it might soon be worthless.

That’s certainly the case with SunEdison (NYSE: SUNE), which topped out above $31 a share in July, hit $9 barely a month later in late August and is now below $5 on a second day of heavy selling following the renewable power developer’s quarterly results.

These were mixed, with project completions running ahead of schedule but a loss wider than estimates as the company continued to retrench in the wake of its capital markets drubbing. SunEdison still expects to produce positive cash flow next year even as it races to get more power plants built ahead of the expiration of a key solar tax credit at the end  of 2016.

Management also still expects to complete the pending acquisition of rooftop panel marketer Vivint Solar (NYSE: VSLR), the unpopular deal that precipitated SunEdison’s downfall.

“We have signed an agreement with Vivint; we intend to abide by it,” CEO Ahmad Chatila said on yesterday’s conference call. As for the stock’s precipitous slide, “we are cautiously optimistic that the current dislocation will normalize,” just as past selloffs have for master limited partnerships and real estate investment trusts, Chatila said in his prepared remarks.

So the company line is that it’s almost business as usual thanks to secured financing for the entirety of next year’s heavy project slate adding up to at least $6 billion, and bright long-term vistas of fast growth backed by rapid advances in technology driving down the cost of renewable power.

The expiration in a year of the 30% federal investment tax credit on solar installations does loom large, though, with Chief Financial Officer Brian Wuebbels acknowledging that “there are many U.S. solar utility projects that clearly the economics make much more sense to build them in 2016 than it would be to build them in 2017,” and CEO Chatila noting later that “solar is a little bit more challenged” than wind power beyond 2016.

In addition to the tax credit expiration, solar sentiment has dimmed in the wake of Hawaii’s decision to scale down a net metering program allowing customers with solar panels to sell surplus power back to the utility at the retail rate. There are fears of similar pushback in other states in response to lobbying by utilities.

But SunEdison has more pressing concerns after clearly squandering much investor confidence, to the point where the stock is now a plaything for daytraders.

Chief among these is how to rationalize the project pipeline beyond the 2016 bulge in light of its sharply higher cost of capital now that the two affiliated yieldcos are trading at yields precluding further fundraising. As a result, the pace of new projects added to the to-do pile has already begun to slow.

If the results were mixed and commentary beyond 2016 somewhat downbeat, the market’s reaction has been unequivocally withering. Shares slumped 22% Tuesday and are down another 15% so far today.

The silver lining in this F5 tornado is that the market’s reaction should be demonstrating conclusively to the many large hedge funds still invested that value can only be preserved under new management, and perhaps new ownership. There’s a ton of long-term value already under construction that’s been discounted completely by the sellers at this point. But it will only be realized if SunEdison continues to be seen as a secure and reliable partner for outside investors in its projects as well as power offtake customers. And that’s not at all what the equity market keeps signaling. SUNE remains an Aggressive Portfolio Buy below a reduced limit of $7.     

 — Igor Greenwald