Regency Energy Partners, LP
Regency Energy Partners, LP (RGP) — which offers a full suite of midstream services to producers in several of the most prolific shale formations in the U.S., including the Haynesville, Eagle Ford, Barnett, Fayetteville and Marcellus — could be a great pick to play the hydraulic fracturing boom.
Aside from its current stable of gathering and processing assets, Regency has been busy adding new midstream facilities to its portfolio. Its latest acquisition — a $1.3 billion purchase of Southern Union Gathering’s 5,600-mile gathering system and 500 million cubic feet per day of natural gas processing facilities from Energy Transfer Equity (ETE) and Energy Transfer Partners, LP (ETP) — will significantly expand RGP’s presence in the Permian Basin.
More importantly, that deal has been pretty accretive for unitholders.
Focusing on the natural gas and natural gas liquids (NGLs) side of the energy business, RGP has been able to strongly grow its cash flows. Net operating cash flow increased almost 20% year-over-year to $67 million. That allowed Regency to up its dividend, with the August payout coming in a penny higher at 47 cents — good for a current 6.6% yield.