QUOTE AND NEWS
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...
Motley Fool  Jul 11  Comment 
With more than $3 billion in growth capital planned between now and 2016, Spectra Energy Partners doesn't have to lean on shareholders as much as you would think.
TheStreet.com  Jul 11  Comment 
By Mike Yamamoto of OptionMonsterNEW YORK -- Option traders turned bullish on Spectra Energy late Thursday. More than 8,800 September 46 calls traded for 20 cents to 40 cents with less than an hour left in the session, according to...
The Australian  Jul 8  Comment 
MELBOURNE packaging billionaire Raphael Geminder has stepped up his exposure to the education sector.
Market Intelligence Center  Jul 2  Comment 
Spectra Energy Corp (SE) was selected by MarketIntelligenceCenter.com’s trade-picking algorithms today after trading between $42.34 and $42.72 on Tuesday before closing at $42.45. A diagonal spread using a long position in the Jan. '15 $38.00...
OilVoice  Jul 2  Comment 
Spectra Energy NYSE SE and Spectra Energy Partners NYSE SEP announced plans to expand natural gas pipeline capacity into the New England Market to meet critical demand for reliable electric powe
SeekingAlpha  Jun 20  Comment 
ByIAEResearch: Spectra Energy (SE) is one of the largest diversified natural gas utility companies in North America, owning and operating a large portfolio of pipelines, storage, gathering and processing assets. The company came into existence in...
Benzinga  Jun 20  Comment 
Analysts at Nomura initiated coverage on shares of JD.com (NASDAQ: JD) with a “neutral” rating. The target price for JD.com is set to $27. JD.com's shares closed at $25.83 yesterday. UBS initiated coverage on shares of Spectra Energy (NYSE:...
Market Intelligence Center  Jun 18  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center are highlighting two trades on Spectra Energy Corp (SE) today after it closed at $41.33 on Tuesday. For more conservative...
SeekingAlpha  Jun 11  Comment 
Spectra Energy Partners, LP (SEP) Credit Suisse MLP and Energy Logistics Conference Call June 11, 2014 8:00 AM ET Executives J. Patrick Reddy – Vice President and Chief Financial Officer Analysts John D. Edwards –...




 

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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