Atlas Pipeline Partners
With natural gas production still surging across the nation, Atlas Pipeline Partners (NYSE:APL) could be one of the top picks. The firm owns and/or operates approximately 10,100 miles of active natural gas gathering systems in key producing regions like the Woodford shale, Permian Basin and Barnett.
However, Atlas isn’t resting on its laurels.
The company recently agreed to shell out $1 billion to buy private midstream firm TEAK Midstream in order to expand into the Eagle Ford shale field in South Texas. The deal will add “over 540 miles of gathering pipelines, a 200 million cubic-foot-per-day treatment plant as well as a similar-sized plant that is currently under construction,” according to Bloomberg.” The firm has already begun talking about expanding upon TEAK’s system in the region to reach more producers.
Most importantly, the purchase will benefit shareholders, boosting the company’s earnings before interest, taxes and amortization (EBITA) by as much as $500 million in 2014. Plus, it will add value almost immediately since APL is paying cash for the purchase.
Overall, the system will help to strengthen cash flows and APL’s juicy 6.5% yield.