NuStar Energy Q4 Loss Widens On Charges; Signs Deal With Occidental Petroleum

(RTTNews) - NuStar Energy L.P. (NS) reported a fourth quarter net loss applicable to limited partners of $368.3 million, or $4.73 per unit, wider than prior year's $21.2 million, or $0.27 per unit.

Without certain adjustments in the fourth quarters of both years, the fourth quarter of 2013 would have generated adjusted net income applicable to limited partners of $16.6 million, or $0.21 per unit, compared to adjusted net income applicable to limited partners of $19.5 million, or $0.25 per unit in the fourth quarter 2012.

The latest-quarter results included $403.6 million, or $4.94 per unit, of adjustments, primarily non-cash charges associated with the write-down of asset values and the value of goodwill assigned to several of the company's terminal facilities.

The prior year results included $41.5 million, or $0.52 per unit, of expense items related primarily to hedge losses recorded following NuStar's decision to sell the San Antonio refinery in December 2012, as well as a handful of cancelled capital projects.

Total revenues for the quarter were $785.39 million, lower than prior year's $982.89 million.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.30 per share and revenues of $942.40 million for the quarter. Analysts' estimates typically exclude special items.

The company plans to spend $370 million to $390 million on internal growth projects during 2014. Most of this spending should be focused on projects in its pipeline segment. 2014 reliability capital spending is expected to be in the range of $35 million to $45 million.

Separately, NuStar Energy L.P. announced that the company has signed a long-term agreement allowing Occidental Petroleum (OXY) to ship natural gas liquids or NGLs on NuStar's currently idled, 200-mile, 12-inch pipeline between Mont Belvieu and Corpus Christi, Texas.

NuStar has begun work to reactivate the line, reverse its flow and convert it from refined products service to NGL service. The pipeline has capacity to move approximately 110,000 barrels per day. Oxy will use a majority of the line's capacity to transport NGLs via an interconnect with an Oxy pipeline to the Oxy Ingleside Energy Center export facility located in Ingleside, Texas, at the site of the former Naval base purchased by Oxy in 2012. NuStar will continue to market any remaining capacity on the pipeline. The pipeline project is scheduled to be completed and in full operation in the second quarter of 2015, although the pipeline may flow at reduced rates this year.

Once the line is in service, it is expected to generate approximately $23 million per year of incremental EBITDA for NuStar.