DUKE MIDSTREAM PARTNERS (DPM)

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joew...@optonline.net

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Nov 26, 2006, 11:40:04 AM11/26/06
to MASTER LIMITED PARTNERSHIPS
THIS IS THE DISCUSSION GROUP FOR DUKE MIDSTREAM PARTNERS

rex hunt

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Dec 2, 2006, 3:37:15 PM12/2/06
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Article in Barrons's about Spectra Energy which is an MLP that Duke
Energy is spinning out to realize the significantly higher valuations
for midstream assets in the tax advantaged structure. Spectra is big
with 2007E EBITDA of $2.8 billion. So where does that leave little old
DPM which trades at a large premium because of the growth from Duke
drop-downs? I think Duke has alreay committed to some future asset
sales to DPM but with Spectra being a much bigger dawg ... I think Duke
will have to let it hunt. Does that leave DPM on the porch and
over-valued? I own DPM but don't know enough its opportunities with
and without Duke. Anyone have any insight?

Also, correct me if I am mistaken but KMP is the biggest MLP currently
by mkt cap with 2007E EBITDA of 2.1bln. Spectra Energy will takeover
as the largest MLP by far and may raise another question ... will the
Democrats go after the MLP structure as a way to make big oil pay more
of their fair share? I know majority opinion is that MLP's are too
small and US energy independence is too much of a priority for MLPs to
come under fire, but Duke is going to get a massive windfall from this
MLP spin out and I am would guess other majors will follow their
footsteps. Nancy Pelosi scares the heck out of me!

Mike

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Dec 4, 2006, 4:09:39 PM12/4/06
to MASTER LIMITED PARTNERSHIPS
I thought EPD was the biggest MLP based on market cap? Didn't it
surpass KMP this year?

I can't comment on the value of DPM and how it will fare with the new
Duke spinoff. I do know that WPZ is anticipated to get a steady stream
of assets from Williams and is being priced by the market (ie.
relatively low yield) accordingly.

Funny, my MLP portfolio was the first thing that crossed my mind when
the Dems got control of Congress. A special report by Lehman Brothers
after the Canadian tax minister's announcement imploded the Canroy
market (could the same thing happen to MLPs?) put me at ease. But I
can't help having this sick feeling in the pit of my stomach that
Pelosi and company will be looking to punish anything and everything
oil and gas related for purely political reasons.

mike

joewxman

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Dec 6, 2006, 8:01:06 AM12/6/06
to MASTER LIMITED PARTNERSHIPS
Don't worry about the same thing happening here. First off the MLP
universe is very small and would not get them much money. And unlike
the Canroys..MLP holders actually pay tax as capital gains when they
sell their unitsas the distriutions of cash flow come off the cost
basis. So effectively they are getting tax at a 15% rate. How much more
could they get by eliminating the corporate structure? It would also
mean getting rid of an entire type of corporate structure and the
result would be one huge mess. This is small potatoes for them as they
have much bigger fish to fry.

On the other hand if they bring back the double taxation of dividends
it could make out group more attractive to income seekers.

The law of unintended consequences!

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