RECEIVES PERMIT FROM B.C. OIL AND GAS COMMISSION FOR NORTH PINE FACILITY
Impact: Modestly positive, as receipt of this permit brings AltaGas one step closer to making a final investment decision (FID) on the ~$200 mm North Pine Liquids Separation Facility. AltaGas expects to make an FID on the facility in 4Q16 as it looks to develop its northeast B.C. strategy to serve Montney production. The facility is expected to link with existing AltaGas infrastructure, including the proposed ~$450 mm Ridley Island propane export terminal.
29 Sep 16
SIGNS 20 MW BATTERY STORAGE CONTRACT AT POMONA, CA
On the morning of August 16, 2016, AltaGas announced that it had won a 20 MW contract to store power on the same site as its 44.5 MW gas-fired Pomona facility in greater Los Angeles. The contract was signed with Southern California Edison (a subsidiary of Edison International, EIX-N). Under the contract, AltaGas has committed to store up to 80 MWh of dispatchable power on site (4 hours' worth of full power). AltaGas has contracted Greensmith Energy Systems to install the lithium-ion batteries and control systems. The Company expects the project to cost from US$40-$45 mm and be online by YE2016.
16 Aug 16
2Q16 Beats Consensus, Raises Dividend
AltaGas reported positive results for 2Q16, beating consensus estimates, and raised its dividend payable September 15 by 6%. We expect that this will be AltaGas’s last dividend increase of 2016. By YE2016, AltaGas could reach final investment decisions on over $500 mm of new natural gas and NGL processing facilities. We have made only minimal changes to our 2016e EBITDA (-1%) and FFO/share (-6%). AltaGas has long been a solid ‘collector of assets’, finding or building good infrastructure projects, but now appears to becoming a ‘builder of systems’, creating assets that may help provide business for other new AltaGas assets.
22 Jul 16
ANNOUNCES CEO TRANSITION
After 21 years, AltaGas' Founder and Chairman of the Board, David Cornhill, has retired as CEO as of April 15, 2016; David Harris, the 25-year energy infrastructure veteran, has assumed the role of President and CEO. Mr. Cornhill will retain his position on AltaGas' Board of Directors and will continue his involvement in strategy development, capital allocation and stakeholder relations.
18 Apr 16
ANNOUNCES OFFERING OF $350 MM 10-YEAR NOTES
On Monday April 4, 2016, after market close, AltaGas announced its intention to issue $350 mm senior unsecured medium-term notes with a coupon rate of 4.12% that mature on April 7, 2016. The offering will be used to refinance current debt and general corporate purposes.
04 Apr 16
4Q15 Results: Adj. EPS $0.38 (FCC $0.28)
In a beleaguered industry, AltaGas is in the relatively fortunate position of having secure growth in its 2016e EBITDA (+20%), FFO (+20%) and FFO/share (+10%) versus 2015 numbers. The Company expects that ~77% of its 2016 EBITDA will come from either contracted power or regulated utilities, with half the remainder coming from take-or-pay arrangements in gas midstream that have no exposure to commodity prices or producer volumes; this is a very different company than the AltaGas of 2010 that earned half its EBITDA from Alberta merchant power and NGL extraction or “frac spreads”. We maintain our 12MTP of $36.00/share and our Outperform ranking.
26 Feb 16
4Q15 RESULTS: ADJ. EPS $0.38 (FCC $0.28/CONS. $0.47); DOUGLAS CHANNEL LNG SHELVED
AltaGas announced 4Q15 results on February 25, 2016: EBITDA $173 mm (FCC $166 mm) Normalized EPS $0.38 (FCC $0.28) AltaGas noted that worsening world market conditions had caused it to end all further work on the Douglas Channel LNG project. AltaGas's net exposure to the project was ~17%. AltaGas expects it is fully funded for its capital expenditures in 2016 as it had $293 mm in cash at YE2015 and close to $1 billion in available room on its credit facilities.
25 Feb 16
ALTAGAS LTD. (ALA) ANNOUNCED SALE OF NON-CORE GAS ASSETS
On February 2, 2016, after market close, AltaGas announced that its wholly owned subsidiaries, AltaGas Processing Partnership and AltaGas Holdings Inc., have entered an agreement with Tidewater Midstream and Infrastructure Ltd. (TWM) to divest AltaGas Northcentral Processing Limited Partnership, a limited partnership containing gas gathering and processing assets, for $30 mm and 43.7 million Tidewater common shares. The deal is expected to close within 1Q16, dependent on satisfaction of regular conditions.
02 Feb 16
AltaGas Ltd. (ALA) Reaches Agreement To Build 40,000 bbl/d Propane Export Terminal Near Prince Rupert
We expect that the terminal will contribute $60 mm in annual EBITDA beginning in 2019 and that this terminal increases AltaGas’s DCF-NAV (8%, Atax) by 3%. Risks to our estimates include possible delays in permitting, a potential capital cost increase, as well as commercial risk, that is, the terminal does not get enough business to pay its return of capital and return on capital.
21 Jan 16
ALTAGAS (ALA) PROPOSES 40,000 B/D PROPANE EXPORT TERMINAL NEAR PRINCE RUPERT
AltaGas announced on January 20, 2016, that it had an agreement with Ridley Terminals of Prince Rupert to build a propane export terminal on leased land from the Prince Rupert Port Authority. The proposed terminal will ship up to 1.2 million tonnes of propane per year (40,000 barrels per day). AltaGas expects to make a final investment decision in 2016, subject to permitting, and have the terminal in service as early as 2018 for a cost of $400-$500 mm.
20 Jan 16
AltaGas Ltd. (ALA) Issues $200 mm Preferred Shares; 12MTP Now $36/share; Maintain Outperform Ranking
AltaGas closed an issue of $200 mm of 5.25% preferred shares on November 23, 2015. With this update, we have made minor changes to our dividend outlook and changed our 12-month target price from $40.00/share to $36.00/share. Our ranking remains at Outperform.
30 Nov 15
ANNOUNCES CLOSE OF GWF ACQUISITION
AltaGas announced that, through its indirect wholly owned subsidiary AltaGas Power Holdings (U.S.) Inc., it has successfully acquired GWF Energy Holdings LLC for a price of US$642 mm. The acquisition includes GWF's portfolio of three natural gas-fired power generation facilities in northern California with 523 MW of capacity.
30 Nov 15
AltaGas’s 3Q15 adjusted financial results (released October 30, 2015) were below Street consensus but FFO/share met our estimates, and we view the results as neutral. The annual Investor Day on November 2 showcased AltaGas’s two major new growth initiatives: providing services and market access for Montney gas producers (such as the 198 mmcf/d Townsend Gas Plant, currently under construction) and growth in its power business, particularly in the U.S. (where AltaGas recently purchased GWF Power for US$642 mm). We maintain our $40.00/share target price (based on our dividend discount model). As this implies a one-year total return of 22%, we maintain our Outperform ranking.
04 Nov 15
FFO/SHARE $0.75 (FCC $0.75, CONSENSUS $0.83); ADVANCES B.C. LPG EXPORT TERMINAL
Summary: AltaGas's adjusted financial results were below Street consensus but FFO/share met our estimates and we do not see anything in the release that would lead us to change our dividend growth outlook, our 12-month target price of $40.00/share or our Outperform ranking.
29 Oct 15
ANNOUNCES CEO SUCCESSION
After 21 years, AltaGas' Founder and Chairman of the Board, David Cornhill, has announced that he will be retiring as CEO on April 15, 2016; David Harris, the 25-year energy infrastructure veteran, will step into the role of President and CEO. Mr. Cornhill will retain his position on AltaGas' Board of Directors and will continue his involvement in strategy development, capital allocation and stakeholder relations.
28 Oct 15
California Generation Acquisition Increases Power Division EBITDA By 50%
We expect that AltaGas’s US$642 mm acquisition of 3 power plants in California at an effective 9.0x EV/EBITDA multiple will increase its FFO/share by 6% in FY2016 and increase its NAV by 1%. The deal should give AltaGas some additional diversification in the western U.S. power market. We have maintained our 12-month target price of $47.00/share and our Outperform ranking.
01 Oct 15
Frac Spread Forecast Update - NGL Price Environment and New Price Forecast
The cut to our crude oil price estimates has also caused us to revise our NGL price forecasts. However, these revisions do not have a material impact on our corporate cash flow estimates for our Energy Infrastructure coverage list.
Commodities - Energy
31 Aug 15
2Q15 ADJ. EBITDA $107 MM (FCC $128 MM, CONSENSUS $115 MM); ADJ. FFO/SHARE $0.50 (FCC $0.69, CONSENSUS $0.62)
AltaGas's adjusted financial results were behind ours/Street consensus but we expect the earnings shortfall will be overshadowed by the news that AltaGas is proceeding with an LPG export terminal on the B.C. West Coast. Second quarter adjusted EBITDA was $107 mm (FCC $128 mm, consensus $115 mm); adjusted FFO/Share was $0.50 (FCC $0.69, consensus $0.62).
30 Jul 15
ALTAGAS LTD. (ALA) APPOINTS TIM WATSON, FORMER INVESTMENT BANKING EXECUTIVE, AS NEW CFO
On Thursday July 29, after market close, AltaGas announced the impending departure of current Senior Vice President Finance and Chief Financial Officer, Deborah S. Stein, effective March 31, 2016. Ms. Stein has been with AltaGas for eleven years and will assume an interim position as Executive Vice President effective the end of October 2015 to aid in the transition plan for Tim Watson, who will become CFO effective November 1, 2015. Mr. Watson has been with AltaGas since March 2015 in the role of Executive Vice President and previously held the position of Head and Managing Director, Canadian Energy and Power Investment Banking with a major international bank.
29 Jul 15
1Q15 EPS; Moving Away From Commodity-Sensitive Revenues At The Right Time; Upgrade to Outperform
Despite “one of the weakest energy environments we have ever seen” (CEO David Cornhill), AltaGas’s adjusted FFO of $140 mm was ahead of our $133 mm estimate and 1Q14’s adjusted FFO of $132 mm. We believe AltaGas has prepared for years to weather this diffi cult frac spread and power environment by building assets that earn revenues under long-term contracts. Small changes to our dividend discount model (DDM) see us increasing our 12-month target price to $47.00/share and increasing our ranking to Outperform.
01 May 15