Access Midstream Sets Offering Price Tag - Analyst Blog

Oklahoma City-based Access Midstream Partners L.P. ACMP has priced an underwritten secondary public offering of 8,000,000 common units – being sold by a major owner – at $54.85 a piece, with a 30-day over-allotment option for an additional 1,200,000 units. The offering, announced Mar 10, will be offered by Access Midstream pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) in Dec 2012.

The natural gas pipeline master limited partnership MLP will not get the net proceeds from this offering, which will go to the seller – private equity firm Global Infrastructure Partners – that owns a substantial number of Access Midstream units.

Access Midstream, which was spun off from U.S. gas producer Chesapeake Energy Corp. CHK in Jun 2012 and is now controlled by Global Infrastructure Partners, is engaged in the gathering and processing of natural gas. The partnership's operations are concentrated primarily in the major gas shale plays that include the Barnett Shale, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Mid-Continent regions of the U.S.

Having done a stellar job at boosting its presence in leading unconventional plays and creating a best-in-class business model, analysts are predicting strong earnings growth for Access Midstream this year. The 2014 Zacks Consensus Estimate is $1.71, representing 69% earnings per unit growth over 2013.   

Access Midstream currently retains a Zacks Rank #2 (Buy), implying that it is expected outperform the broader U.S. equity market over the next one to three months.

Apart from Access Midstream, investors interested in the ‘Oil/Energy' sector may consider stocks like Helmerich & Payne Inc. HP and Patterson-UTI Energy Inc. PTEN. Both of them carry a Zacks Rank #1 (Strong Buy) and offer even better return than Access Midstream.