By Tom Kleckner
CenterPoint Energy said it is continuing to evaluate an offer for its ownership share in Enable Midstream Partners, and it expects to “clarify” its position in the third quarter.
The Texas company has a 55.4% stake in the gas gathering and processing venture with Oklahoma City-based OGE Energy. CenterPoint is considering an offer to purchase its share, but it could also spin off the business or continue to manage its position.
“If we determine that neither a sale nor a spin would fulfill our criteria, our third path will be to maintain our stake in Enable and continue to support efforts to reduce exposure to commodity price influences,” CenterPoint CEO Scott Prochazka said.
OGE made a second offer for CenterPoint’s stake on Feb. 15 under its right of first offer (ROFO), along with an unnamed partner. CenterPoint, which rejected OGE’s first offer in September, has until June 15 to make a final decision.
Prochazka said CenterPoint is continuing its “dialogue with interested parties” and it will “evaluate OGE’s recent offer made pursuant to the ROFO terms of our partnership agreement.”
“While the process is taking longer than originally anticipated, we expect to clarify which path we are on by the second-quarter earnings call,” he said.
Prochazka’s comments came during a Feb. 28 conference call with financial analysts following the company’s fourth-quarter earnings announcement.
Q4 Earnings Fall Short
CenterPoint fell short of analysts’ expectations, reporting fourth-quarter net income of $101 million ($0.23/share), compared to 2015’s fourth-quarter loss of $509 million (-$1.18/share). Zack’s consensus estimate was 29 cents/share.
The 2015 results included impairment charges totaling $984 million from its midstream investments. The company attributed the turnaround to rate increases and customer growth in its electric and gas utility businesses.
For the year, the company reported net income of $432 million ($1/share), compared to 2015’s loss of $692 million ($1.61/share).
CenterPoint reiterated its 2017 guidance of $1.25 to $1.33/share.
The company’s stock gained $1.99/share in the four days after the earnings announcement, ending the week at $27.90. CenterPoint shares have risen more than 13% since the beginning of the year — doubling the 6.4% increase in the Standard & Poor’s 500 index — and are up 43% in the last 12 months.
Executive Appointments
On March 1, the company announced three executive appointments: Scott Doyle as senior vice president of natural gas distribution; Joe Vortherms, as senior vice president of CenterPoint Energy Services; and Jason Ryan, vice president of regulatory and government affairs. Doyle and Vortherms will report to Prochazka. Ryan will report to General Counsel Dana O’Brien.
