LONDON, UK / ACCESSWIRE / January 5, 2017 / Active Wall St. blog coverage looks at the headline from DCP Midstream Partners, L.P. (NYSE: DPM) ("DPM") and Phillips 66 (NYSE: PSX) and Spectra Energy Corp. (NYSE: SE). On January 04, 2017, DPM and DCP Midstream, LLC ("Midstream"), a 50/50 joint venture between Phillips 66 and Spectra Energy (together both companies referred to as "Owners") announced that they have signed and closed a transaction combining all of the assets and debt of Midstream with DPM. The combined entity will become the largest natural gas liquids (NGL) producer and gas processor in the US. On January 23, 2017, the combined company will be renamed DCP Midstream, L.P. and will trade on New York Stock Exchange under the ticker symbol DCP. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

Today, AWS is promoting its blog coverage on DPM, PSX and SE. Get all of our free blog coverage and more by clicking on the links below:

http://www.activewallst.com/registration-3/?symbol=DPM

http://www.activewallst.com/registration-3/?symbol=PSX

http://www.activewallst.com/registration-3/?symbol=SE

Transaction Summary

As per the transaction details, Midstream will contribute all of its assets plus $424 million of cash to DPM. In return Midstream will get approximately 31.1 million DPM units worth approximately $1.125 billion. DPM will also assume $3.15 billion of Midstream's debt.

DPM stated that the cash proceeds of $424 million will be used to repay its revolver, fund its growth projects or prefund repayment of DPM debt maturing in December 2017. As per the announcement, Phillips 66 and Spectra Energy have retained their 50/50 joint ownership of DCP Midstream, LLC, which owns the incentive distribution rights (IDRs) and 38% of the outstanding DPM's general and limited partner units. The terms of the transaction were unanimously approved by the Board of Directors of DCP Midstream and DCP Midstream Partners.

"This transformational transaction provides a platform of premier assets with strong growth opportunities in the key US producing basins at a multiple that paves the way towards future distribution growth," said Wouter van Kempen, Chairman, President, and CEO of both DCP Midstream and DCP Midstream Partners, "The transaction benefits both our unit-holders and our Owners with a simplified structure and is the logical progression following our successful DCP 2020 strategy execution to date."

Compelling Value Proposition

All companies in the press release cited multiple reasons for the merger, stating that the merged entity create the largest gathering and processing Master Limited Partnership in the US with a pro-forma enterprise value of approximately $11 billion. As per DPM, the transaction is projected to be distributable cash flow (DCF) accretive to DPM's unit-holders at current strip prices.

The transaction increases Phillips 66 and Spectra Energy's ownership in DPM to 38% allowing Owners greater participation in increased earnings from future growth opportunities at the MLP. To support a minimum 1.0 times distribution coverage ratio, Phillips 66 and Spectra Energy have agreed, if required, to provide IDR givebacks up to $100 million annually through 2019 which provides downside protection for DPM's unit-holders.

Along with the merger details, DPM's also announced significant expansion projects in the DJ Basin and on Sand Hills Pipeline:

DJ Basin Expansion - DPM will construct a new 200 MMcf/d cryogenic natural gas processing plant in the DJ Basin, its tenth plant in the basin, projected to be in service by the end of 2018. DPM will also complete the next phase of its Grand Parkway low pressure gathering project and associated compression expansions by the end of 2018.

DPM is in the process of constructing additional field compression and plant bypass infrastructure that will add approximately 40 MMcf/d of incremental capacity during the summer of 2017. The new plants will connect to the Front Range pipeline (one-third owned by DPM) for NGL takeaway to Mont Belvieu, Texas. Total capital investment for the plant and associated gathering is expected to be up to $395 million.

Sand Hills Pipeline Expansion - DPM announced that it will expand NGL takeaway capacity on Sand Hills Pipeline by 30%, or 85,000 barrels per day (BPD) to 365,000 BPD, through the addition of four pump stations and a pipeline loop, in order to meet NGL production growth from owned and third party plants in the Delaware Basin. Total capital investment for the Sand Hills expansion is approximately $70 million, with an expected in-service date in Q4 2017. The newly combined DPM owns two-thirds interest in Sand Hills and Phillips 66 Partners owns the remaining one-third interest and each will fund their proportionate share of the expansion.

Stock Performance

At the closing bell, on Wednesday, January 04, 2017, following the announcement of the deal, DPM' stock closed the trading session at $36.92, dropping 4.33% from its previous closing price of $38.59. A total volume of 1.55 million shares have exchanged hands, which was higher than the 3-month average volume of 320.03 thousand shares. The Company's stock price advanced 7.17% in the last month, 10.34% in the past three months, and 12.60% in the previous six months. Furthermore, in the past twelve months, the stock skyrocketed 70.08%. The stock is trading at a PE ratio of 20.86 and has a dividend yield of 8.45%.

On Wednesday, Phillips 66's stock marginally climbed 0.54%, ending the trading session at $87.26. A total volume of 2.31 million shares were traded at the end of the day, which was higher than the 3-month average volume of 2.16 million shares. In the last six months and previous twelve months, shares of the Company have advanced 16.06% and 11.14%, respectively. Moreover, the stock gained 10.15% in the previous three months. The Company's shares are trading at a PE ratio of 22.86 and have a dividend yield of 2.89%.

At the close of trading session, Spectra Energy's stock price was slightly up 0.75% to end the day at $41.82. A total volume of 3.14 million shares were exchanged during the session. The Company's share price has surged 74.46% in the past twelve months. The stock currently has a market cap of $29.39 billion. The Company's shares have a dividend yield of 3.87%.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street