NGL Energy Partners LP ($NGL) | Stock Skyrockets As Company Announces Sale Of TransMontaigne GP

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NGL Energy Partners LP (NYSE: NGL)

 

 

NGL Energy Partners LP (NGL), a company that runs a vertically integrated energy business on Friday announced an agreement to sell TransMontaigne GP to affiliate ArcLight Capital Partners for $350 million. The transaction is expected to close by the end of January 2016. The transaction allows NGL to repay outstanding debts, reduce leverage, and fund future growth projects with capital.

 

NGL Energy Partners LP CEO’s Comments

Mike Krimbill, CEO of NGL Energy Partners stated, “I believe this is a very positive transaction for both NGL and ArcLight. NGL will remain the long-term exclusive tenant in the TLP Southeast terminal system and we look forward to our ongoing partnership with ArcLight. ArcLight has been great to work with and NGL will enter into certain commercial transactions with, as well as provide various transition services for, ArcLight.”  Business Wire

 

NGL Technical Analysis

NGL Chart

NGL gapped up in price on Friday to $10.69, up from the prior day’s close of $9.12, which is a 17% increase on favorable news. Taking a look at the daily chart, we can see the last time NGL traded above this price level was on January 4th when it traded at $10.76. Taking a closer look at the daily chart we can see that NGL has been on an overall decline dating back to June 19th when it traded at $33.63, ultimately reaching its 52 week low price of $8.04 on December 21st, equivalent to a 76% drop in price. Since then NGL has slowly started to rebound in price. As of late Friday afternoon trading in NGL is up over 63% at $14.86. NGL has a float of 62.23 million shares and is trading over 6 times the normal daily trading volume. Right now I think the move up is a little overextended and I would like to see the stock’s reaction at $15. If it can close above $15 that would be a good sign that this rally can continue. However I expect the stock to fade a bit as traders will be looking to take profits into the weekend.

 

Company Profile

NGL Energy Partners LP, through its subsidiaries, engages in the crude oil logistics, water solutions, liquids, retail propane, and refined products and renewables businesses in the United States. The Crude Oil Logistics segment purchases crude oil from producers and transports it for resale at pipeline injection points, storage terminals, barge loading facilities, rail facilities, refineries, and other trade hubs. The Water Solutions segment is involved in the treatment and disposal of wastewater generated from crude oil and natural gas production operations; sale of recycled water and recovered hydrocarbons; and disposal of solids, such as tank bottoms and drilling fluids. The Liquids segment supplies propane, butane, and natural gas liquids to retailers, wholesalers, refiners, and petrochemical plants in the United States and Canada. This segment also provides natural gas liquids terminaling services through its 21 terminals in the United States; and rail car transportation services through its fleet of leased rail cars. The Retail Propane segment sells propane, distillates, and equipment to end users consisting of residential, agricultural, commercial, and industrial customers, as well as re-sellers. The Refined Products and Renewables segment markets gasoline, diesel, ethanol, and biodiesel products; refined products terminaling services; and own refined products storage facilities. NGL Energy Holdings LLC serves as the general partner of the company. The company was founded in 1940 and is headquartered in Tulsa, Oklahoma.  Yahoo Finance

 

 

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