Boston, MA 04/29/2014 (wallstreetpr) – Western Refining Logistics LP (NYSE:WNRL) is considering to set up a pipeline that could stretch about 40 miles in Delaware Basin. The facility is expected to link the oil gathering operations in Mason Stations with a terminal at Wink Station. The new pipeline is expected to commence operations by June 2015 and would be able to deliver about 125,000 barrels of liquids on a daily basis. The construction of a new pipeline requires regulatory approvals.
In developing the pipeline, Western Refining Logistics LP (NYSE:WNRL) seeks to benefit from the robust liquids output in the Delaware Basin and the pipeline expansion is expected to support higher revenue for the company.
Company strength
Western Refining Logistics LP (NYSE:WNRL) has a friendly financial policy towards shareholders making it one of the attractive companies in the refinery and marketing of petroleum products. The company has also been very successful in debt reduction, giving it a clean and strong balance sheet.
The company’s ability to successfully trim debt has been supported by the internal improvements. The company has an effective and reliable cost reduction that leads to significant savings that can be returned to shareholders, reinvestment and put into repayment of debts.
However, as much as the company boasts solid balance sheet, disciplined cost controls and shareholder-oriented financial policy, Western Refining Logistics LP (NYSE:WNRL) is troubled by inability to post surprisingly strong earnings due to lack of geographical diversification and industry volatility.
Investor takeaway
Western Refining Logistics LP (NYSE:WNRL) is rated as “hold” at Zacks. The company reports its Q12014 results on May 6, and it is worth waiting to see what the company reports about its progress over the past three months and the way forward regarding the plans for a new pipeline project. Moreover, the upcoming results should also provide a glimpse into the company’s future performance especially in the current fiscal year.
Shares of the Texas-headquartered company dropped about 0.19 percent during yesterday’s session.
