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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?


To: rllee who wrote (30234)3/5/2008 7:06:37 PM
From: Spekulatius  Read Replies (1) | Respond to of 70386
 
WMZ pipe begins where WPZ pipe ends :-).
WPZ and WMZ have a similar financial structure - both are LP sons of WMB. WPZ is for WMB short haul /processing/storage assets near the wellhole. WMZ is for WMB's long haul/storage assets.

What i expect to happen is that WMB will "drop down" long haul pipeline assets intp WMZ. the expectation is that this is going to be accreditive to WMZ, meaning that the distribution/unit will increase. the advantage for WMB is that it free's up capital, they still control the assets and if certain targets are met their General partner share will increase from 2% currently to 50%. For LP holders the advantage is that there is a low risk growth path build in (the existing WMB assets).

If WMZ follows WPZ trajectory I am going to be fairly happy. IMO, WMZ has languished below IPO price because they IPO'd at the worst possible time (Late January). I do not think there is anything wrong with the assets owned by WMZ or the LT plan.

FWIW, I added to my starter position today.