QUOTE AND NEWS
SeekingAlpha  Sep 20  Comment 
By Roger S. Conrad: Gregory Ebely, CEO of Spectra Energy Corp. (NYSE:SE) and Spectra Energy Partners LP (NYSE: SEP), made the most telling statement about competitive dynamics in the midstream space at the recent Barclays CEO Energy-Power...
Benzinga  Sep 16  Comment 
Spectra Energy Corp (NYSE: SE), Spectra Energy Partners (NYSE: SEP) and Northeast Utilities (NYSE: NU) today announced details of the Access Northeast project, designed to reliably meet growing demand for natural gas in New England while...
Jutia Group  Sep 16  Comment 
[PR Newswire] - HOUSTON, BOSTON and HARTFORD, Conn., Sept. 16, 2014 /PRNewswire/ -- Spectra Energy Corp (SE), Spectra Energy Partners (SEP) and Northeast Utilities (NU) today announced details of the Access Northeast project, designed to reliably...
SeekingAlpha  Sep 3  Comment 
By SA Transcripts: Spectra Energy Partners, LP (NYSE:SEP) Barclays CEO Energy/Power Conference Call September 3, 2014 11:05 AM ET Executives Gregory L. Ebel – Chairman, President and Chief Executive Officer Analyst ...
Market Intelligence Center  Sep 2  Comment 
Friday’s trading in Spectra Energy Corp (SE) gives options traders an opportunity for a 9.09% return. By selling the Dec. '14 $41.00 call and buying the Jan. '16 call at the $35.00 level for a net debit of $5.50, traders will book a profit as...
SeekingAlpha  Aug 13  Comment 
Spectra Energy Partners, LP (SEP Goldman Sachs Power, Utilities, MLP and Pipeline Conference Call August 12, 2014 9:30 AM ET Executives William T. Yardley – President-US Transmission & Storage U.S. Pat Reddy – Chief Financial...
SeekingAlpha  Aug 6  Comment 
Spectra Energy Corporation (NYSE:SE) Q2 2014 Earnings Conference Call August 6, 2014 9:00 AM ET Executives Julie Dill – Chief Communications Officer Pat Reddy – CFO Greg Ebel – Chairman, President and CEO Analysts ...
Market Intelligence Center  Aug 6  Comment 
With bearish technical indicators and a 3 STARS (out of 5) hold ranking from Standard & Poor’s, Spectra Energy Corp (SE) could be an attractive play for investors according to MarketIntelligenceCenter.com's patented option-trade picking...
Wall Street Journal  Aug 6  Comment 
Spectra Energy Corp. said its second-quarter profit fell 26%, reporting weaker-than-expected results as plant turnarounds dented revenue growth and increased costs.
Forbes  Jul 11  Comment 
Spectra Energy Corp (NYSE: SE) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, signifying a stock with above-average ''DividendRank'' statistics including a strong 3.1% yield, as well as being recognized by prominent...




 

Spectra Energy (NYSE:SE) owns and operates a portfolio of complementary natural gas energy assets and infrastructure.[1] Spectra natural gas operations include gathering and processing, transmission and storage, and distribution.[2] It segments are based on geographic region and include: the United States Transmission, Distribution, Western Canada Transmission & Processing, and Field Services.[3] Spectra receives approximately 80% of cash flows from fees, but approximately 20% of the Company's cash flows are directly impacted natural gas prices. As a result, low natural gas prices have significantly impacted earnings and its ability to finance future projects.[4]

Business Growth

As one of the largest North American companies engaging in natural gas gathering and processing, transportation and storage, and distribution, Spectra's growth can be attributed to increased processing of natural gas reserves in North America, including unconventional shale gas.[5] As more North American gas reserves become economically viable to develop, Spectra benefits from higher volumes of transported gas. Spectra reported net income $1.04 billion on $4.95 billion in revenues in 2010, compared net income of $848 million on $4.55 billion in revenues in 2009.[6]

CompanyOverview

Business Financials

In 2009, SE earned a total of $4.6 billion in total revenues. This was a decline from its 2008 total revenues of $5.1 billion in 2008. This in turn had a negative impact on SE's net income. Between 2008 and 2009, SE's net income declined from $1.13 billion in 2008 to $923 million in 2009.[7]

Trends and Forces

Spectra's revenues depend heavily on Natural Gas Prices and Demand

For Infrastructure companies like Spectra, a large portion of their revenues come from transportation, processing, and distribution fees.[8] As a result, Spectra like less exposed to short-term changes in natural gas prices and more exposed to the long-term demand for natural gas, which is driven by demand for natural gas-fired electric generation. Spectra's largest markets by revenue - the northeastern and the southeastern United States, the Pacific Northwest, British Columbia and Ontario - are projected to have higher-than-average annual growth rates in natural gas demand, which would benefit Spectra.[9] The projected rise in natural gas demand in these areas can be partially attributed increased economic activity as well as a push to use more environmentally friendly energy sources than coal. As a result, revenues from operations in these areas have grown, despite a relatively weak natural gas prices.[10]

Unconventional Natural Gas Provides Growth Opportunities in North America

While natural gas supplies traditionally came from the Gulf Coast region, supplies from the Rockies, Mid-Continent, Appalachia, Texas and Louisiana are on the rise. This supply shift is occurring as a result of improved drilling technology and increased exploration for unconventional sources of natural gas in North America.[11] As the demand for natural gas derived energy rises, production from shale or other unconventional sources has the potential of increasing.[12] While new supplies of natural gas partially mitigate resource depletion risks for pipeline operators, Spectra and its competitors have had to quickly change their transportation infrastrucutre to adapt to new sources of natural gas.[13] One of Spectra's key long-term growth strategies is to position its business to take advantage of shale gas sources.[14] As a result, the Company expects to devote a large amount of its capital and investment expenditures to the development of pipelines and processing facilities in these areas.[15]

Competition

Companies engaging in the gathering and processing of natural gas and in marketing and transporting natural gas and NGLs rely heavily on their ability to complete contracts with producers. As unconventional gas discoveries have grown and natural gas becomes a more economically viable energy source, Spectra has the potential of facing heightened competition from traditional infrastructure companies, but also from oil majors and other companies looking to enter the industry.[16]

Independent Infrastructure Companies Include:[17]

Oil Majors Include:[18]

Other Competitors Include:[19]

  • Independent operators of major interstate and intrastate pipelines
  • Private natural gas brokers, marketers and distributors

References

  1. Reuters: Spectra Energy, June 2011
  2. Reuters: Spectra Energy, June 2011
  3. Reuters: Spectra Energy, June 2011
  4. Reuters: Spectra Energy, June 2011
  5. Yahoo! Finance: Spectra Energy Financials, June 2011
  6. Yahoo! Finance: Spectra Energy Financials, June 2011
  7. SE 10-K 2009 Item 6 Pg. 32
  8. Spectra Energy Investor's Page: 10-K 2010
  9. Spectra Energy Investor's Page: 10-K 2010
  10. Spectra Energy Investor's Page: 10-K 2010
  11. Spectra Energy Investor's Page: 10-K 2010
  12. Spectra Energy Investor's Page: 10-K 2010
  13. Spectra Energy Investor's Page: 10-K 2010
  14. Spectra Energy Q&A, 2009 Annual Report
  15. Spectra Energy Q&A, 2009 Annual Report
  16. Spectra Energy Investor's Page: 10-K 2010
  17. Daily Finance: Spectra Energy Competitors
  18. Daily Finance: Spectra Energy Competitors
  19. Spectra Energy Investor's Page: 10-K 2010
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