Enterprise Products Partners

Enterprise Product Partners delivered a mixed set of results in the quarter. It failed to meet the revenue expectations of Wall Street despite improved production of propylene, DIB processing, and octane improvement in its petrochemical industry. Enterprise moved a record 11.2 million barrels of oil equivalent per day which helped it deliver an all-around beat. Natural gas prices on the NYMEX ranged from $9.50 to $3.50. Volatility also existed in natural gas liquids. Propane traded between $1.60 and $0.60 per gallon, and ethane traded between $0.70 and $0.25 per gallon. In addition to their second PDH and four more gas processing plants in the Permian under construction, expansion attracted capital in 2023. They are also expanding their export facilities and building their 12th fractionator in Chambers County. The management is optimistic for crude oil in 2023 but much less for natural gas. They believe that a wide gas-to-crude differential could result in a considerable cost advantage for American petrochemicals globally. We give the company a ‘Hold’ rating with a revised target price.