Houston, we have liftoff...
The natural gas environment is an exciting place to be these days, as it is characterized by high production and high demand. The higher demand from the U.S. petrochemical industry for natural gas liquids (NGLs) coupled with its high production sent Enterprise's revenues soaring 40%, to $11.3 billion, from a year ago. Helped by the favorable conditions and a large increase in its top line, Enterprise saw its bottom line swell nearly 13 times, to $471.4 million.
Enterprise has seen positive results in the past few quarters thanks to a number of mergers. A couple of years ago, it acquired Teppco Partners for a deal worth $3.3 billion, which helped create one of the largest pipeline companies in the U.S. In September, Enterprise acquired its sister concern, Duncan Energy Partners
Enterprise has $5 billion worth of expansions lined up for the next few years. The company might have received a further impetus when Kinder Morgan acquired El Paso and knocked Enterprise from the top spot. The combined entity will control nearly 80,000 miles of pipelines, whereas Enterprise currently operates 50,000 miles of pipelines. Given the expansion plans, Enterprise is definitely looking to expand its pipeline network and take advantage of the expected increase in the demand for natural gas.
The Eagle Ford shale play
In the south Texas shale play called Eagle Ford, Enterprise is looking to expand its NGL infrastructure. It has entered into a deal with Enbridge
Enterprise expects its Eagle Ford operations to produce between 200,000 and 250,000 bpd currently, which can go as high as 750,000 to 850,000 bpd. Production is so strong currently that an Enterprise spokesman said its pipelines are "chock-a-block full."
Enterprise and Enbridge have joined forces to boost the ability of Texas coast refineries to transport oil from a storage depot in Cushing, Okla. Enbridge has agreed to pay $1.15 billion for ConocoPhillips'
Enterprise's investors have a lot to look forward to as the company capitalizes on the demand for natural gas to become one of the top providers of the commodity in the U.S. Another bit of good news for investors is that Enterprise this quarter raised its quarterly cash distribution rate by 5.2%, to $0.6125.
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Shubh Datta doesn't own any shares in the companies mentioned above. Motley Fool newsletter services have recommended buying shares of Enterprise Products Partners. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.