Pembina Pipeline

Pembina Pipeline is a midstream company serving the Canadian and North American (primarily Bakken) markets with an integrated product portfolio. Its assets include pipelines and gas gathering as well as assets across fractionation, storage, and propane exports.

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The U.S. oil and gas exploration and production industry has faced headwinds related to falling natural gas prices and political uncertainty so far in 2024. Cash from operations across three dozen leading U.S. firms fell in real terms from the first quarter of 2023 to the first quarter of this year due to lower gas prices.

Opportunity Knocks: Buy the Dip on Permian Resources Stock?


The U.S. oil and gas exploration and production industry has faced headwinds related to falling natural gas prices and political uncertainty so far in 2024. Cash from operations across three dozen leading U.S. firms

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Small Cap

Pembina Pipeline Corporation (NYSE: PBA), a Canada-based oil and gas storage and transportation company, has announced a major acquisition through its joint venture Pembina Gas Infrastructure Inc. (&#34;PGI&#34;).

Pembina Pipeline to Acquire Veren&#39;s Midstream Assets in C$400M Deal

Pembina Pipeline Corp. Ordinary Shares (Canada)

Pembina Pipeline Corp

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Kineticor Asset Management LP ("Kineticor") is pleased to announce that Pembina Pipeline Corporation ("Pembina") (TSX:<a class="ticker" href="https://www.benzinga.com/stock/PPL#TSX">PPL</a>) (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBA#NYSE">PBA</a>) has entered into agreements for a 50 percent interest in the Greenlight Electricity Centre Limited Partnership ("Greenlight LP" or "Greenlight"), a special-purpose limited partnership with Kineticor Holdings LP #3, a portfolio company of OPTrust.
Greenlight LP is developing the Greenlight Electricity Centre ("GLEC" or "Project") which is a proposed multi-phased gas-fired combined cycle power generation facility of up to 1,800 MW with carbon capture optionality coupled with significant land holdings that can accommodate a co-located 1,800 MW data centre complex. The Project would be constructed on land already zoned for heavy industrial use and strategically located near transmission lines, utility infrastructure, carbon sequestration, and fiber in Alberta's Industrial Heartland.
The GLEC is managed by Kineticor, which successfully developed, constructed, and currently operates the 900 MW Cascade Power Plant near Edson, Alberta.

TSX:PPL

embina Acquires 50% Stake In Greenlight Electricity Centre With Kineticor; 1,800 MW Facility Includes Carbon Capture, Data Centre Plans; Financial Terms Not Disclosed

2025 Guidance
In December 2024, Pembina announced a 2025 adjusted EBITDA guidance range of $4.2 billion to $4.5 billion, which relative to 2024 reflects the impacts of continued volume growth across the WCSB, new assets acquired or placed into service, and the full year impact of the consolidation of the Alliance and Aux Sable assets, partially offset primarily by the full year impact of the recontracting of the Cochin Pipeline, and normalization of commodity margins in the marketing business.
Despite proposed tariffs on U.S. energy imports, Pembina does not expect any material near-term impacts given the highly contracted, take-or-pay nature of its business.
The 2025 adjusted EBITDA guidance range reflects quarterly seasonality in Pembina's business including:
<ul>
<li>higher contribution from Alliance in the first and fourth quarters due to the ability to transport higher volumes during colder periods;</li>
<li>higher integrity and geotechnical costs on the conventional pipeline assets in the third and fourth quarters; and</li>
<li>stronger first and fourth quarter results in the NGL marketing business.</li>
</ul>
Pembina continues to execute its strategy within a fully funded model and consistent with its financial guardrails. At December 31, 2024, the ratio of proportionately consolidated debt-to-adjusted EBITDA on a trailing twelve-month basis was 3.5 times, at the low end of the Company's targeted range, and reflecting only three quarters of contribution from the Alliance/Aux Sable Acquisition. Within the 2025 adjusted EBITDA guidance range, Pembina expects to generate positive free cash flow, with all 2025 capital investment program scenarios being fully funded by cash flow from operating activities, net of dividends. Further, the Company is forecasting a year-end 2025 proportionately consolidated debt-to-adjusted EBITDA ratio of 3.3 to 3.6 times.

Guidance

Pembina Pipeline Sees FY25 Adj. EBITDA C$4.2B-C$4.5B

Pembina Pipeline Q4 2024 GAAP EPS C$0.92 Beats C$0.82 Estimate, Sales C$2.145B Beats C$2.053B Estimate

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Earnings Scheduled For February 27, 2025

TD Securities analyst Aaron Macneil initiates coverage on Pembina Pipeline (TSX:<a class="ticker" href="https://www.benzinga.com/stock/PPL#TSX">PPL</a>) with a Buy rating and announces Price Target of C$66.

Initiation

TD Securities Initiates Coverage On Pembina Pipeline with Buy Rating, Announces Price Target of C$66

Pembina continues to execute its strategy within a fully funded model and consistent with its financial guardrails. Within the 2025 adjusted EBITDA guidance range, Pembina expects to generate positive free cash flow, with all 2025 capital investment program scenarios being fully funded by cash flow from operating activities, net of dividends.

Pembina Pipeline Expects 2025 Adjusted EBITDA Of C$4.2B - C$4.5B, Expects To Generate Positive Free Cash Flow

Barclays analyst Theresa Chen initiates coverage on Pembina Pipeline (TSX:<a class="ticker" href="https://www.benzinga.com/stock/PPL#TSX">PPL</a>) with a Overweight rating and announces Price Target of C$63.

Barclays Initiates Coverage On Pembina Pipeline with Overweight Rating, Announces Price Target of C$63

Pembina Pipeline Narrows 2024 Adj. EBITDA Guidance Range From C$4.2B-C$4.35B To C$4.225B-C$4.325B

Pembina Pipeline (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBA#NYSE">PBA</a>) reported quarterly earnings of $0.44 per share which missed the analyst consensus estimate of $0.74 by 40.54 percent. The company reported $1.352 billion in sales this quarter. This is a 20.87 percent decrease over sales of $1.708 billion the same period last year.

Earnings Misses

Pembina Pipeline Q3 2024 GAAP EPS $0.44 Misses $0.74 Estimate, Sales $1.352B Down From $1.708B YoY

The U.S. oil and gas exploration and production industry has faced headwinds related to falling natural gas prices and political uncertainty so far in 2024. Cash from operations across three dozen leading U.S. firms fell in real terms from the first quarter of 2023 to the first quarter of this year due to lower gas prices. The November election is also likely to play a significant role in shaping the industry&#39;s future.
At the same time, production cuts by OPEC+ have supported increased crude oil production among some U.S. firms, with companies like Antero Resources Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ar#NYSE">AR</a>) and Pembina Pipeline Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pba#NYSE">PBA</a>) benefiting from the shift. One area that has not experienced a wholesale production increase, though, is the Permian Basin of the southwestern U.S. West Texas&#39; Waha hub experienced negative trading for much of the summer, prompting some producers in the area to curtail production.
Permian Resources Corp. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pr#NYSE">PR</a>) shares have slid by more than 22% in the last six months. Over the last year, the company&#39;s stock has significantly underperformed competitors like Antero and Pembina.
Nonetheless, Permian Resources has a history of cost management, successful M&amp;A activity, and strong earnings performance that may entice investors interested in buying while share prices are low.
<h2>Permian Resources: Keeping Costs Down, Earning Efficiently</h2>
Operating an oil and gas production company is costly, but Permian Resources does a good job of reducing these expenses whenever possible. Its total costs are below the industry average, thanks in part to its low lease operating expenses (LOE; the costs of maintaining a well after the initial expenses of drilling and completion) of $5.18 per barrel of oil equivalent (BOE).
Overall, the company reduced total controllable cash costs by 8% quarter-over-quarter for the most recent quarterly period&nbsp;to $7.45 per BOE. Permian is also finding ways to reduce costs on new drilling projects, which are down 13% relative to last year.
At the same time, total production increased by 6% from the first quarter of the year to the second. By bringing production up and minimizing costs, Permian Resources has contributed meaningfully to free cash flow growth. In the second quarter, the company generated $332 million in adjusted free cash flow, or $0.43 per share. Adjusted free cash flow per share is up an impressive 60% since the first quarter of 2023.
<h2>Permian&#39;s Strong M&amp;A Activity</h2>
In mid-September, Permian completed the acquisition of various leasehold and royalty interests, including midstream infrastructure, from Occidental Petroleum Corp.&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/oxy#NYSE">OXY</a>). This acquisition increased Permian&#39;s resource base by nearly 30,000 acres adjacent to its prior assets in Texas. The new interest is expected to generate roughly 15,000 BOE per day.
This acquisition is just the latest in a longer series of deals that analysts have viewed positively. Permian has successfully targeted key royalty and land interests for expansion, keeping costs down in the process.
<h2>Earnings Growth Potential</h2>
Permian has topped analyst expectations for earnings per share for each of the last three quarters. Analysts are optimistic about the potential for future growth as well: Permian enjoys a projected earnings growth rate of nearly 16%.
Fast-growing earnings have allowed Permian to boost its dividend to $0.15 from $0.06 in September and to initiate a $1-billion share buyback program. Permian executives have assured investors that the dividend is sustainable for more than two years, regardless of the price of oil at that time.
<h2>Permian Stock&#39;s Upside Opportunity</h2>
Given these factors, it&#39;s little surprise that analysts largely believe Permian Resources has the potential to reverse its recent downward trend and reclaim much of its lost share value. The average price target for PR shares is $19.20, representing upside potential of about 39%. Still, the unpredictability of the U.S. political climate going forward and the trajectory of oil prices may mean that investors will have to wait to realize this opportunity. Permian&#39;s stable history and impressive operations make it a good candidate for buy-and-hold investors interested in waiting for more favorable external conditions.
The article &quot;<a href="https://www.marketbeat.com/stock-ideas/opportunity-knocks-buy-the-dip-on-permian-resources-stock/">Opportunity Knocks: Buy the Dip on Permian Resources Stock?</a>&quot; first appeared on MarketBeat.

UBS analyst Manav Gupta initiates coverage on Pembina Pipeline (TSX:<a class="ticker" href="https://www.benzinga.com/stock/PPL#TSX">PPL</a>) with a Neutral rating and announces Price Target of C$58.

UBS Initiates Coverage On Pembina Pipeline with Neutral Rating, Announces Price Target of C$58

Pembina Pipeline Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pba#NYSE">PBA</a>), a Canada-based oil and gas storage and transportation company, has announced a major acquisition through its joint venture Pembina Gas Infrastructure Inc. (&quot;PGI&quot;). This agreement with Veren Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/vrn#NYSE">VRN</a>) involves acquiring its Gold Creek and Karr area oil batteries, coupled with a significant investment in future infrastructure development.
The strategic acquisition represents a key milestone in Pembina&#39;s growth, expanding the company&#39;s infrastructure footprint and strengthening its partnership with VRN, a prominent player in the Montney and Duvernay regions.
<h2>Details of the Agreement Between PBA &amp; VRN</h2>
The acquisition involves four batteries in the Gold Creek and Karr areas, contributing significantly to PGI&#39;s existing infrastructure. These batteries boast a natural gas handling capacity of 320 million cubic feet per day and liquids handling capacity of 53,000 barrels per day. The natural gas processed from these batteries is directed to PGI&#39;s Patterson Creek Gas Plant, with the batteries and the plant integrated into Pembina&#39;s Peace Pipeline system.
Calgary-based VRN will play a major operational role with the newly acquired assets. According to the agreement, this Canadian oil and gas exploration and production company will manage the newly acquired batteries and the existing PGI-owned batteries in the region. Under this arrangement, VRN will handle all operating costs and maintenance capital, establishing itself as the primary operator for these facilities.
PGI will invest up to C$300 million and approximately one-third of this funding has already been committed, which reflects the seriousness of the collaboration. VRN, as part of this agreement, will oversee the construction and operation of the batteries, while PGI focuses on the high-pressure gathering pipelines that support this infrastructure.
<h2>Key Financial Aspects of PBA&#39;s Acquisition</h2>
The net purchase price is C$400 million (C$240 million net to Pembina), a considerable investment that highlights the company&#39;s commitment to expanding its gas processing and handling capacity. This acquisition is expected to generate an initial annual adjusted EBITDA of approximately C$50 million (C$30 million net to Pembina), with further capital deployment anticipated to yield additional contracted EBITDA through enhanced plant utilization and corresponding fees.
<h2>PBA&#39;s Long-Term Take-or-Pay Agreement</h2>
A critical component of this transaction is the 15-year take-or-pay agreement signed between the two companies. This long-term contract provides security for PGI, with VRN committing to processing capacity at the newly acquired batteries. Additionally, the agreement includes a dedicated area, which is situated in the Gold Creek and Karr regions, where VRN is obligated to use PGI&#39;s gathering and processing services for all volumes produced.
This acquisition is not only a financial transaction but a strategic move that strengthens Pembina&#39;s existing relationships and infrastructure capabilities. VRN is a leading producer in Montney and Duvernay, two prolific gas-producing formations in Western Canada, with more than 20 years of premium drilling inventory. This transaction ensures that PGI continues to collaborate with a top-tier counterpart in the energy sector.
The transaction also involves extending the existing legacy agreements between Pembina and VRN. Under the new structure, all the purchased batteries, existing assets and future infrastructure developments will be amalgamated into a single, simplified contract structure. This streamlined approach eliminates redundant administrative processes and provides clearer, long-term commitments between the parties.
Moreover, PGI has taken steps to eliminate future non-revenue-generating capital obligations tied to previous agreements, further optimizing its financial exposure. This move reduces operating expenses and ensures that all capital deployed has a direct impact on revenue generation.
This transaction enables VRN to manage the upstream gathering and battery infrastructure, while PGI will maintain operations at the Patterson Creek Plant. This arrangement supports the ramp-up of drilling activities and the associated increase in volumes outlined in VRN&#39;s development plan, leveraging the existing unused capacity at PGI&#39;s Patterson Creek Gas Plant.
<h2>Integration and Future Plans for PBA Stock</h2>
The transaction is part of Pembina&#39;s broader strategy to enhance its infrastructure and logistics chain. Liquids from the new batteries and Patterson Creek Gas Plant will continue to be transported via the Peace Pipeline system and natural gas liquids will be processed at Pembina&#39;s Redwater Facility, ensuring smooth integration with existing operations.
To finance this acquisition, PGI will use its existing credit facility, which highlights the company&#39;s strong financial position. This deal is expected to close in the fourth quarter of 2024, subject to customary closing conditions and regulatory approvals. This acquisition aligns with Pembina&#39;s long-term goals for growth and solidifies its role as a leading midstream service provider in Western Canada.
VRN&#39;s Gold Creek and Karr area oil batteries&#39; acquisition by PBA is a strategic transaction that extends its reach into critical gas-processing regions. This collaboration with VRN ensures stable and long-term growth trajectory. The transaction brings together expanded operational capacity, enhanced infrastructure alignment and integration into Pembina&#39;s existing value chain, creating an opportunity for both companies to benefit from increased efficiencies and growth in the energy landscape of Western Canada.
<h2>Zacks Rank and Key Picks</h2>
Currently, PBA and VRN each have a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like VAALCO Energy, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/egy#NYSE">EGY</a>) and Core Laboratories Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/clb#NYSE">CLB</a>), each carrying a Zacks Rank #2 (Buy) at present.
Houston, TX-based Vaalco Energy is valued at $568.51 million. The oil and gas exploration and production company currently pays a dividend of 25 cents per share, or 4.56%, on an annual basis. EGY is an independent energy company principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
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Core Laboratories is valued at $829.89 million. The company currently pays a dividend of 4 cents per share, or 0.23%, on an annual basis. Netherlands-based CLB is an oilfield services company, operating in more than 50 countries. The firm deals with providing reservoir management and production enhancement services to oil and gas companies.
<a href="https://www.zacks.com/stock/news/2333876/pembina-pipeline-to-acquire-veren-s-midstream-assets-in-c-400m-deal?cid=CS-BENZ-FT-analyst_blog|company_news_energy_sector-2333876">To read this article on Zacks.com click here.</a>
</div>

Pembina Pipeline to Acquire Veren's Midstream Assets in C$400M Deal

Pembina Pipeline Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBA#NYSE">PBA</a>)&nbsp;shares are trading higher after the company disclosed that its joint venture, Pembina Gas Infrastructure Inc. (PGI), reached <a target="_blank" href="https://www.benzinga.com/pressreleases/24/09/b40769696/pembina-pipeline-corporation-announces-pembina-gas-infrastructures-agreement-to-acquire-midstream-" rel="noreferrer noopener">agreements with Veren Inc. and its affiliates</a>.
PGI is a Western Canadian-focused gas processing entity jointly owned by Pembina and KKR &amp; Co. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KKR#NYSE">KKR</a>).
The deal includes the acquisition of Veren's Gold Creek and Karr area oil batteries, with a net purchase price of CAD$400 million (CAD$240 million net to Pembina), and supporting future infrastructure development.
In particular, PGI will acquire four batteries in the Gold Creek and Karr areas, with a natural gas handling capacity of 320 million cubic feet per day and a liquids handling capacity of 53,000 barrels per day.
As per the deal, Veren will retain operatorship of the acquired assets, including covering operating costs and maintenance capital. Additionally, Veren will take over the operation of the existing PGI-owned batteries in the area.
Also, Veren will enter into a 15-year take-or-pay agreement for capacity at the acquired batteries. This agreement includes an area-of-dedication to PGI for gathering and processing services for all volumes Veren produces from the Gold Creek and Karr areas.
PGI will also provide up to CAD$300 million for Veren's future battery and gathering infrastructure in the area, with about one-third of this amount already committed.
Pembina expects the acquisition to generate an initial annual adjusted EBITDA of around CAD$50 million (CAD$30 million net to Pembina).
The deal is anticipated to close in the fourth quarter of 2024, pending the fulfillment or waiver of standard closing conditions.
Investors can gain exposure to the stock via&nbsp;VanEck Energy Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EINC#NYSE">EINC</a>).
Price Action: PBA shares are up 1.74% at $41.17 at the last check Monday.
Image via Shutterstock
Read Next:
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<li><a href="https://www.benzinga.com//node/40777028" target="_blank" rel="noreferrer noopener">Self-Storage REITs Analyst Is Bullish On Extra Space Storage, But No Longer Bullish On This Stock</a></li>
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Equities

EINC

Pembina Strikes Major Deal To Boost Oil And Gas Infrastructure: Details

PGI, a Western Canadian focused gas processing entity jointly owned by Pembina and KKR, has entered into agreements with Veren Inc. and certain affiliates thereof that include the acquisition of Veren&#39;s Gold Creek and Karr area oil batteries and support for future infrastructure development. The net purchase price related to the acquisition of the batteries is C$400 million&nbsp;(C$240 million, net to Pembina).
<div>PGI will acquire four batteries in the Gold Creek and Karr areas, which include natural gas handling capacity of 320 million cubic feet per day and liquids handling capacity of 53,000 barrels per day.</div>
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<div>Natural gas from the batteries is processed at PGI&#39;s Patterson Creek Gas Plant and both the batteries and the Patterson Creek Gas Plant are connected to Pembina&#39;s Peace Pipeline system.</div>
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Pembina Pipeline Reveals Pembina Gas Infrastructure's Agreement to Acquire Midstream Assets From Veren; Net Purchase Price Related To Acquisition Of Batteries Is C$400M

Citigroup maintains Pembina Pipeline (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PBA#NYSE">PBA</a>) with a Neutral and raises the price target from C$53 to C$56.

Citigroup Maintains Neutral on Pembina Pipeline, Raises Price Target to C$56

RBC Capital analyst Maurice Choy maintains Pembina Pipeline (TSX:<a class="ticker" href="https://www.benzinga.com/stock/PPL#TSX">PPL</a>) with a Outperform and raises the price target from C$58 to C$60.

RBC Capital Maintains Outperform on Pembina Pipeline, Raises Price Target to C$60

CORRECTION: Pembina Sees FY24 EBITDA C$4.20B - C$4.35B Vs C$4.05B - C$4.30B Est.

Pembina Q2 2024 Revenue C$479M; EPS C$0.75

Helmerich &amp; Payne, Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/hp#NYSE">HP</a>) is set to release fiscal third-quarter earnings on Jul 24, after the closing bell. The current Zacks Consensus Estimate for earnings is pegged at 77 cents per share on revenues of $668.8 million.
Let&#39;s delve into the factors that might have influenced HP&#39;s performance in the to-be-reported quarter. Before that, it&#39;s worth taking a look at the company&#39;s performance in the last reported quarter.
<h3>Highlights of Q2 Earnings</h3>
In the last reported quarter, the Tulsa, OK-based oil and gas drilling company&#39;s earnings marginally beat the consensus mark. HP reported adjusted earnings of 86 cents per share, which was one cent higher than the Zacks Consensus Estimate. This was attributed to the strong performance of the International Solutions unit, which reported an operating profit of $3.6 million, surpassing the consensus estimate of a loss of $1.6 million.
Operating revenues of $687.9 million also beat the Zacks Consensus Estimate by 1.2%. HP&#39;s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark in one, delivering an average earnings surprise of 15.53%.
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<h3>Helmerich &amp; Payne, Inc. Price and EPS Surprise</h3>
<img alt="Helmerich &amp; Payne, Inc. Price and EPS Surprise" src="https://staticx-tuner.zacks.com/images/charts/0b/1721381890.png" style="height:263px; width:538px" title="" />
Helmerich &amp; Payne, Inc. price-eps-surprise | Helmerich &amp; Payne, Inc. Quote
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<h3>Trend in Estimate Revision</h3>
The Zacks Consensus Estimate for third-quarter fiscal 2024 earnings has witnessed an upward revision and no downward movement in the past 30 days. The estimated figure indicates a 29.36% year-over-year decline. The Zacks Consensus Estimate for revenues indicates a decrease of 7.61% from the year-ago period.
<h3>Factors to Consider</h3>
On a positive note, Helmerich &amp; Payne&lsquo;s operating costs and expenses are projected to have reached $559.5 million in the fiscal third quarter, down 2.7% from the year-ago period&#39;s level. Specifically, the company&#39;s drilling services and other operating expenses are expected to have reduced from $430.2 million to $386.9 million. This reduction in costs highlights the company&#39;s efforts to improve efficiency and control expenses.
On the other hand, HP&#39;s revenues are likely to have been negatively impacted in the quarter to be reported. Our model predicts fiscal third-quarter revenues to decrease to $666.1 million from the year-ago period&#39;s level of $724 million. This decline is due to the weaker performance across North America Solutions, International Solutions, Offshore Gulf of Mexico and Other segments, reflecting challenges in market conditions and segment-specific issues.
<h3>What Does Our Model Predict?</h3>
The proven Zacks model does not conclusively predict an earnings beat for Helmerich &amp; Payne this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that&#39;s not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is +0.97%.
Zacks Rank:&nbsp; HP currently carries a Zacks Rank #5 (Strong Sell).
<h3>Stocks to Consider</h3>
Here are some firms that you may want to consider, as these have the right combination of elements to post an earnings beat this reporting cycle.
Coterra Energy (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ctra#NYSE">CTRA</a>) has an Earnings ESP of +3.01% and a Zacks Rank #2 at present.
The firm is scheduled to release earnings on Aug 1. CTRA has a trailing four-quarter average earnings surprise of 9.81%. Valued at around $20.1 billion, CTRA&#39;s shares have risen 2.2% in a year.
Pembina Pipeline (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pba#NYSE">PBA</a>) currently has an Earnings ESP of +9.09% and a Zacks Rank #2. The firm is scheduled to release earnings on Aug 8.
PBA has a trailing four-quarter average earnings surprise of 10.91%. Valued at around $21.84 billion, PBA&#39;s shares have risen 21.9% in a year.
Baker Hughes (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bkr#NASDAQ">BKR</a>) has an Earnings ESP of +1.59% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Jul 25.
BKR has a trailing four-quarter average earnings surprise of 11.4%. &nbsp;Valued at around $36.09 billion, BKR&#39;s shares have risen 2% in a year.
<a href="https://www.zacks.com/stock/news/2305056/what-s-in-store-for-helmerich-payne-hp-in-q3-earnings?cid=CS-BENZ-FT-analyst_blog|earnings_preview-2305056">To read this article on Zacks.com click here.</a>

Earnings Beats

CTRA

What's in Store for Helmerich & Payne in Q3 Earnings?

Pembina Pipeline Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/pba#NYSE">PBA</a>), an energy transportation and midstream services provider, has entered into a purchase and sale agreement through its joint venture entity, Pembina Gas Infrastructure Inc. (&quot;PGI&quot;), with Whitecap Resources Inc., a Calgary-based oil and gas exploration and production company.
This strategic collaboration will see PGI acquiring a 50% working interest in Whitecap&#39;s 15-07 Kaybob Complex in Alberta and supporting the infrastructure development of the company&#39;s Lator growth area. The gross proceeds related to this transaction amount to C$420 million, with C$252 million net to Pembina.
<h3>Key Transaction Details</h3>
Acquisition of Kaybob Complex: PGI will acquire a 50% working interest in the Kaybob Complex, which includes a natural gas processing capacity of 165 million cubic feet per day and a condensate stabilization capacity of 15,000 barrels per day.
Despite the acquisition, Whitecap will retain operatorship of the assets. A long-term take-or-pay agreement for PGI&#39;s capacity in the Kaybob Complex has been secured with Whitecap, which will a dedicated area for all volumes produced by the company in the region.
Lator Area Development: PGI has committed to funding the development of Whitecap&#39;s Lator area, including a new battery and gathering lateral, referred to as the Lator Infrastructure. PGI will own this infrastructure and in return Whitecap has agreed to long-term take-or-pay agreements, which will grant the company priority access to the Lator Infrastructure. This development also includes an area of dedication to PGI for all volumes produced by Whitecap from the Lator area.
Additional Agreements and Facilities: Whitecap has also entered into further long-term take-or-pay contracts with PGI at the Musreau gas plant within the Cutbank Complex and the K3 gas plant. These contracts enhance the volume capture potential of PGI&#39;s facilities.
Integrated Services Agreements: In addition to the transaction, PBA has signed a combination of new and extended long-term integrated transportation, fractionation and marketing services agreements with Whitecap. These agreements include a dedication of future growth volumes from Whitecap&#39;s Kaybob and Lator developments, which should provide a significant boost to Pembina&#39;s operational capabilities.
<h3>Strategic Benefits of the Transaction</h3>
Alignment With a Growth-Oriented Company: The transaction further aligns PGI and PBA with Whitecap. The company has an exceptional growth track record in the Montney and Duvernay plays. This alignment is expected to yield significant strategic advantages.
Enhanced Asset Utilization: By increasing volumes at PGI&#39;s Musreau and K3 facilities, the transaction will enhance the utilization of existing white space within these assets. This increased utilization is a critical component of Pembina&#39;s operational strategy.
Increased Volume Capture Potential: The Lator Lateral, which connects PGI&#39;s Musreau facility to the Lator area, will enhance PGI&#39;s ability to capture additional volumes. This strategic connection is expected to drive growth and efficiency within PGI&#39;s operations.
Strong Contractual Protections: The transaction is underpinned by long-term take-or-pay agreements and dedicated areas of production, providing strong contractual protections. These agreements ensure that PGI and PBA can reliably forecast and manage the companies&#39; operations and revenue streams.
Comprehensive Value Chain Benefits: Beyond the immediate infrastructure and development gains, the transaction offers additional benefits across Pembina&#39;s integrated value chain. The new and extended long-term transportation, fractionation and marketing services agreements will support higher utilization of PBA&#39;s Peace Pipeline and at the Redwater Complex, including the construction of RFS IV. The arrangements for Whitecap&#39;s Lator development also support Pembina&#39;s ethane supply commitments, further enhancing the company&#39;s strategic position.
<h3>Financial and Operational Impact</h3>
Transaction Funding: The transaction will initially be funded using PGI&#39;s existing credit facility, which should provide a streamlined and efficient financial pathway for the acquisition and development activities.
Expected Closing Timeline: The closing of the transaction is anticipated to occur in the third quarter of 2024, subject to the satisfaction or waiver of customary closing conditions, including all required regulatory approvals. This timeline allows for a structured and well-managed transition of ownership and operational responsibilities.
<h3>Conclusion</h3>
The strategic partnership between PBA, through its joint venture PGI, and Whitecap Resources Inc. marks a significant milestone in the development of Western Canada&#39;s natural gas infrastructure. The acquisition of a 50% working interest in the Kaybob Complex and the commitment to support the Lator area development position PBA and PGI for sustained growth and enhanced operational efficiency.
The transaction&#39;s comprehensive contractual protections and alignment with Whitecap&#39;s growth trajectory underscore the strategic value of this partnership, promising significant benefits across PBA&#39;s integrated value chain.
<h3>Zacks Rank and Key Picks</h3>
Currently, PBA carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like Sunoco LP (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sun#NYSE">SUN</a>), sporting a Zacks Rank #1 (Strong Buy) and&nbsp;SM Energy Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/sm#NYSE">SM</a>) and Coterra Energy Inc. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ctra#NYSE">CTRA</a>), &nbsp;each carrying a Zacks Rank #2 (Buy), at present.
Sunoco is valued at $5.68 billion. It is a major wholesale motor fuel distributor in the United States, distributing over 10 fuel brands through long-term contracts with more than 10,000 convenience stores, ensuring consistent cash flow.
SUN&#39;s extensive distribution network across 40 states provides a robust and reliable source of income and the Brownsville terminal expansion should add to its revenue diversification.
Denver, CO-based SM Energyis valued at $5.02 billion. The company currently pays a dividend of 72 cents per share, or 1.65%, on an annual basis.
SM, an independent energy company, engages in the acquisition, exploration, development and production of oil, gas and natural gas liquids in the state of Texas.
Coterra Energy is valued at $19.75 billion. The company currently pays a dividend of 84 cents per share, or 3.16%, on an annual basis.
CTRA is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids.
<a href="https://www.zacks.com/stock/news/2296447/pembina-pbr-signs-deal-to-acquire-50-stake-in-whitecap?cid=CS-BENZ-FT-analyst_blog|company_news_energy_sector-2296447">To read this article on Zacks.com click here.</a>

Events

Pembina Signs Deal to Acquire 50% Stake in Whitecap

Press Releases

Pembina Pipeline Corporation Reports Results for the Third Quarter 2024 and Updates Full Year Guidance

Pembina Pipeline Corporation Announces Intention to Redeem its Series 19 Medium Term Notes

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