All posts from Zacks
Zacks in Our Research. Your Success.,

Andeavor to Construct a Pipeline in Permian Basin for $225M

Independent oil refiner and marketer Andeavor ANDV – formed following the merger of Tesoro Corporation and El Paso-based Western Refining Inc. – recently announced plans to initiate the construction of Conan Crude Oil Gathering Pipeline in West Texas. The news came a couple of days after the company announced its first earnings release under the new name and delivered better-than-expected earnings.

The open season for this 130 mile crude oil pipeline in Delaware Basin (located on the western part of the lucrative Permian Basin) had been launched in May by Western Refining. Apart from bolstering its network of assets, downstream operator Western Refining’s buyout is likely to help Andeavor enhance its geographic footprint in the prolific Permian Basin, driving double-digit earnings growth in 2018. As it is, over the last two years despite the industry’s downturn, the energy companies including Exxon Mobil Corporation XOM,Noble Energy, Inc. NBL and many othershave been increasing their investment in the prolific Permian Basin owing to its lower costs and widespread infrastructure.

The pipeline will begin in the Lea County and will extend to the Loving County, where it will join with other pipelines. Conan Pipeline is also expected to connect with the Wink Pipeline – owned by Kinder Morgan, Inc. KMI – and supply the oil to the company’s El Paso Refinery. The first phase of the pipeline will have a transportation capacity of 250,000 barrels per day (bpd), expandable up to 500,000 bpd in the future phases. The company is expected to invest around $225 million in the first phase of the completion of the pipeline, out of which it is likely to spend $75 million this year. The commercial service of the Conan Pipeline is most likely to begin by mid-2018.

Zacks' 10-Minute Stock-Picking Secret

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month. Learn the secret >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Exxon Mobil Corporation (XOM): Free Stock Analysis Report
Kinder Morgan, Inc. (KMI): Free Stock Analysis Report
Noble Energy Inc. (NBL): Free Stock Analysis Report
Tesoro Corporation (ANDV): Free Stock Analysis Report
To read this article on click here.
Zacks Investment Research