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Energy Transfer (ET) Forms JV With Sunoco in Permian Basin
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Energy Transfer (ET - Free Report) and Sunoco (SUN - Free Report) have announced the formation of a joint venture (JV) that combines their crude oil and produced water-gathering assets in the Permian Basin in a strategic move to enhance their operations and financial performances.
Energy Transfer, based in Dallas, will serve as the operator of the newly formed JV. The partnership is expected to be immediately accretive to distributable cash flow for both Energy Transfer and Sunoco, reflecting the strategic and financial benefits of this collaboration.
Under the terms of the agreement, Energy Transfer will contribute its Permian crude oil and produced water-gathering assets and operations, whereas Sunoco will add its Permian crude oil-gathering assets and operations. Energy Transfer’s extensive long-haul crude pipeline network, which facilitates the transportation of crude oil from the Permian Basin to key destinations like Nederland, Houston and Cushing, is excluded from this joint venture.
The JV will operate an extensive network, including more than 5,000 miles of crude oil and water gathering pipelines. Additionally, it will manage a substantial crude oil storage capacity exceeding 11 million barrels. This extensive infrastructure is poised to enhance the efficiency and reach of both companies’ operations in one of the most prolific oil-producing regions in the United States.
Energy Transfer will hold a 67.5% interest in the joint venture, while Sunoco will hold the rest. This distribution of interest reflects the significant contributions and operational responsibilities assumed by Energy Transfer as the operator of the venture.
The collaboration marks a significant step in the evolution of both Energy Transfer and Sunoco, as they leverage their combined assets and expertise to optimize operations, increase efficiencies and drive growth in the highly competitive energy sector. The JV is positioned to play a crucial role in the ongoing development and expansion of the Permian Basin, ensuring that both companies remain at the forefront of the industry.
As the energy landscape continues to evolve, strategic partnerships like this one between Energy Transfer and Sunoco will be vital in navigating the challenges and opportunities that lie ahead. With their combined resources and shared commitment to excellence, the JV is poised for success, benefiting not only the companies involved but also the broader energy market and stakeholders.
Zacks Rank & Stocks to Consider
Currently, Energy Transfer carries a Zacks Rank #3 (Hold).
SM EnergyCompany (SM - Free Report) is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term shareholder value.
The Zacks Consensus Estimate for SM’s 2024 and 2025 earnings per unit is pegged at $7.15 and $8.79, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.
USA Compression Partners, LP (USAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USAC earns its revenues from the overall horsepower use of natural gas transported rather than the price. As such, the partnership is largely insulated from fluctuations in commodity prices.
The Zacks Consensus Estimate for USAC’s 2024 and 2025 EPS is pegged at 77 cents and 98 cents, respectively. USA Compression Partners has a Zacks Style Score of B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
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Energy Transfer (ET) Forms JV With Sunoco in Permian Basin
Energy Transfer (ET - Free Report) and Sunoco (SUN - Free Report) have announced the formation of a joint venture (JV) that combines their crude oil and produced water-gathering assets in the Permian Basin in a strategic move to enhance their operations and financial performances.
Energy Transfer, based in Dallas, will serve as the operator of the newly formed JV. The partnership is expected to be immediately accretive to distributable cash flow for both Energy Transfer and Sunoco, reflecting the strategic and financial benefits of this collaboration.
Under the terms of the agreement, Energy Transfer will contribute its Permian crude oil and produced water-gathering assets and operations, whereas Sunoco will add its Permian crude oil-gathering assets and operations. Energy Transfer’s extensive long-haul crude pipeline network, which facilitates the transportation of crude oil from the Permian Basin to key destinations like Nederland, Houston and Cushing, is excluded from this joint venture.
The JV will operate an extensive network, including more than 5,000 miles of crude oil and water gathering pipelines. Additionally, it will manage a substantial crude oil storage capacity exceeding 11 million barrels. This extensive infrastructure is poised to enhance the efficiency and reach of both companies’ operations in one of the most prolific oil-producing regions in the United States.
Energy Transfer will hold a 67.5% interest in the joint venture, while Sunoco will hold the rest. This distribution of interest reflects the significant contributions and operational responsibilities assumed by Energy Transfer as the operator of the venture.
The collaboration marks a significant step in the evolution of both Energy Transfer and Sunoco, as they leverage their combined assets and expertise to optimize operations, increase efficiencies and drive growth in the highly competitive energy sector. The JV is positioned to play a crucial role in the ongoing development and expansion of the Permian Basin, ensuring that both companies remain at the forefront of the industry.
As the energy landscape continues to evolve, strategic partnerships like this one between Energy Transfer and Sunoco will be vital in navigating the challenges and opportunities that lie ahead. With their combined resources and shared commitment to excellence, the JV is poised for success, benefiting not only the companies involved but also the broader energy market and stakeholders.
Zacks Rank & Stocks to Consider
Currently, Energy Transfer carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. The companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company (SM - Free Report) is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term shareholder value.
The Zacks Consensus Estimate for SM’s 2024 and 2025 earnings per unit is pegged at $7.15 and $8.79, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.
USA Compression Partners, LP (USAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. USAC earns its revenues from the overall horsepower use of natural gas transported rather than the price. As such, the partnership is largely insulated from fluctuations in commodity prices.
The Zacks Consensus Estimate for USAC’s 2024 and 2025 EPS is pegged at 77 cents and 98 cents, respectively. USA Compression Partners has a Zacks Style Score of B for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.