Enterprise Product Partners (EPD) Sept 2024 Valuation Model and Risk Framework

This EPD valuation model includes an comparable companies valuation, financial forecasts, segment breakdown, and detailed operating model. Assumptions can easily be adjusted by the user.

This company is one of the 3 top energy master limited partnerships in the U.S. with a 7%+ dividend yield.

Business:

Enterprise Products Partners is one of the leading players in the North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, petrochemicals, and refined products. Its fully integrated, midstream energy asset network or value chain links producers of natural gas, NGLs and crude oil from some of the largest supply basins in the US, Canada, and the Gulf of Mexico with domestic consumers and international markets. The company conducts substantially all of its business operations through EPO and its consolidated subsidiaries.

Operations

Enterprise Products operates through four business segments: NGL (natural gas liquids) Pipelines and Services, Crude Oil Pipelines and Services, Petrochemical and Refined Products Services, and Natural Gas Pipelines and Services.

The NGL Pipelines and Services segment generates about 40% of revenue and comprises the activities of natural gas processing plants. The segment is comprised of related NGL marketing activities, NGL pipelines, NGL fractionation facilities, related product storage facilities, and NGL marine terminals.

The Crude Oil Pipelines & Services segment brings in about 40% of revenue. It includes crude oil pipelines and related operations, crude oil storage and marine terminals, and crude oil marketing activities. Perhaps its most important pipeline is the Seaway pipeline that connects the Cushing, Oklahoma crude oil hub with markets in Southeast Texas

The Petrochemical and Refined Products Services segment engages in petrochemical and refined products transportation and services. It fractionates propylene to create the building blocks of carpet fibers, molded plastic parts for appliances, cars, and medical products, and packaging film. It accounts for about 20% of revenue.

NGL Pipelines and Services segment includes more than 20,000 miles of pipeline used to gather and transport natural gas from shale plays Eagle Ford, Haynesville, Permian and others. It leases underground salt dome natural gas storage facilities and conducts to natural gas marketing activities. It accounts for approximately 10% of revenue.

Geographic Reach

Houston, Texas-based Enterprise Products operates in key locations from which it gathers natural gas and crude oil include Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming. It has a presence in shale plays: Eagle Ford, Haynesville, Barnett, Permian, Piceance, San Juan and Greater Green River supply basins. Its NGL pipelines extend throughout the US Midwest, Rocky Mountains, Southeastern regions.

Sales and Marketing

Enterprise sells products and services to producers, regional natural gas processing facilities, and on the open market. NGL marketing transacts with these customers using long-term sales contracts with take-or-pay provisions and exchange agreements. The company's 200 largest customers represent about 95% of its total revenue.

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