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Drillers bank on NGL for cash flow; NGL Energy Partners exits propane business

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Drillers bank on NGL for cash flow; NGL Energy Partners exits propane business

Appalachian gas drillers banking on NGL price improvements for cash flow goals

Natural gas liquids prices for Appalachia's top shale drillers continued to rise through the early months of 2018, and companies are making NGL production a key part of their strategy to improve free cash flow. The majority of the biggest Appalachian gas producers saw their realized NGL prices increase by more than 10% up to as much as 26% year over year, according to an S&P Global Market Intelligence analysis of the companies' first-quarter earnings reports. Price uplifts for NGLs are connected to higher oil prices.

NGL Energy Partners to exit retail propane business with $900M sale

NGL Energy Partners LP agreed to sell its remaining retail propane business to a subsidiary of Superior Plus Corp. for $900 million, more than 10 times its fiscal 2018 adjusted EBITDA. NGL Energy Partners plans to use proceeds from the sale to immediately repay $800 million of debt, which includes CapEx incurred through early fiscal 2019. The transaction will also reduce the weather-dependency of the partnership's NGL earnings, according to a May 30 news release. The decision to exit the retail propane business comes as the partnership shifts its focus to its water solutions and crude logistics businesses, which have more growth opportunities in its core basins.

Miffed at Mariner pipelines, Pa. legislator wants more safety oversight

Spurred by environmental violations in the construction of Sunoco Pipeline LP's Mariner East 2 and Mariner East 2X NGL pipelines, a Pennsylvania state senator is spearheading the formation of a new oversight committee to recommend improvements in pipeline regulation and construction. The Pennsylvania bill, S.R. 373, calls for a 23-member panel to represent both houses of the Legislature; cities and towns; fire departments; first responders; and the Marcellus Shale Coalition, the oil and gas industry's major trade group in the state. The panel will recommend pipeline regulations to lawmakers, according to the bill's text. State Sen. John Rafferty made no secret of the fact that his bill was in reaction to inadvertent spills of drilling muds by contractors of Sunoco, an Energy Transfer Partners LP affiliate, and the discovery of sinkholes in Chester County, Pa., along the shared path of the Mariner East 1, 2 and 2X pipelines.

Devon finds common ground with dissident shareholders ahead of annual meeting

Facing five separate shareholder proposals on topics ranging from lobbying expenditures to hydraulic fracturing, shale driller Devon Energy Corp. relied on a new steering committee focused on environmental and social issues to reach agreements to provide additional disclosures sought by dissident shareholders and to avoid proxy votes at the company's June 6 annual meeting. The agreements to end certain lobbying alliances and disclose more environmental information earned praise from the dissident shareholders, a diverse group ranging from the Unitarian Universalist Association to the public employee pension fund of Rhode Island.