2009
07.19
07.19
Inter Pipeline Fund, L.P. Raising Frac Spread Assumptions
CIBC are changing our per-gallon propane+ frac spread assumptions for Inter
Pipeline to US$0.53, US$0.65 and US$0.65 for 2009, 2010 and 2011,
respectively from the previous assumptions of US$0.52, US$0.55 and
US$0.65.
As a result of revisions to frac spread assumptions, 2010E cash flow rises
from $1.16/unit to $1.23/unit, while 2009 and 2011 estimates remain
unchanged at $1.14 and $1.33, respectively.
Within our sum-of-parts valuation, we reduce the valuation multiple used to
value the NGL business from 6.8x to 6.5x as frac spread assumptions move
further from the historic average. Our sum-of-the-parts valuation rises from
$9.75 to $10.13, reflecting the higher 2010E NGL contributions.
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