Top 10 Oil Service Companies To Own In Right Now

Top 10 Oil Service Companies To Own In Right Now: SunCoke Energy Partners LP (SXCP)

SunCoke Energy Partners, L.P., incorporated on July 30, 2012, manufactures coke, which is used in the blast furnace production of steel. The Company's sponsor owns the remaining 35% interest in each of Haverhill and Middletown. The Company's sponsor, through its subsidiary, owns a 55.9% partnership interest in the Company owns and controls its general partner which holds a 2% general partner interest in the Company. The Company's cokemaking ovens utilize efficient, modern heat recovery technology designed to combust the coal's volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. The Company operates in cokemaking facilities located in Ohio. In September 2013, SunCoke Energy Partners, L.P completed its acquisition of Lakeshore Coal Handling Corporation. In October 2013, the Company acquired Kanawha River Terminals LLC (KRT).

The Company licenses this advanced heat recovery cokemaking pr ocess from its sponsor. The Company's sponsor designed, developed and built, and owns and operates five cokemaking facilities in the United States, including Haverhill and Middletown with an aggregate coke production capacity of approximately 4.2 million tons per year and designed and operates one cokemaking facility in Vitoria, Brazil with a coke production capacity of approximately 1.7 million tons per year. Approximately 90% or 17.5 million tons, was for blast furnace steelmaking operations and the remaining 10% was for foundry and other non-steelmaking operations. The Company's cokemaking capacity represents stated capacity for the production of blast furnace coke. The Middletown capacity on a run of oven basis is approximately 578,000 tons per year.

The first phase of the Company's Haverhill facility or Haverhill 1, includes s! team generation facilities which use hot flue gas from the cokemaking process to produce steam. The steam is sold to a third-party pu rsuant to a steam supply and purchase agreement. The Company! 's Middletown facility and the second phase of the Company's Haverhill facility, or Haverhill 2, include cogeneration plants that use the hot flue gas created by the cokemaking process to generate electricity. The electricity is either sold into the regional power market or to AK Steel pursuant to energy sales agreements. The Company has Approximately 400 acres in Franklin Furnace (Scioto County), Ohio, on which the Haverhill cokemaking facility is located and 250 acres in Middletown (Butler County), Ohio near AK Steel's Middletown Works facility, on which the Middletown cokemaking facility is located.

Advisors' Opinion:

• [By Ben Levisohn]

  We like [SunCoke Energy] due to its growth optionality and believe this business model is well positioned to benefit from the steel industry’s over-leveraged balance sheet, lack of profitability, and historically low asset valuations. [SunCoke Energy] brings to the table a low cost of capital and proven business model. We estimate that [SunCoke Energy] has business development opportunities across various industries (including coke making, coal handling and ferrous) which could be worth as much as 3-4x in annual EBITDA as the company's current asset base. [SunCoke Energy] has very low commodity price exposure relative to steel mills and coal miners. [SunCoke Energy] also maintains a 55.9% common unit interest and a GP interest in [SunCoke Energy Partners (SXCP)] (the MLP) which allows [SunCoke Energy] to benefit disproportionately from the MLP's growth given their incentive distribution rights.

• [By Robert Rapier] There were a half a dozen initial public offerings (IPOs) by master limited partnerships in the first half of the year, and all but one are now in the green while one has nearly doubled in value.
  The! first MLP IPO of 2013 debuted on Jan. 15. USA Compression Partners (NYSE: USAC), which I mentioned in last week’s issue, provides compression services for the oil and gas industry. Units have advanced 36 percent since the IPO, and at the current price yield 7.3 percent.
  
  The day after the USA Compression Partners IPO, CVR Refining (NYSE: CVRR) made its debut.  CVRR was spun off from CVR Energy (NYSE: CVI), and both companies remain majority-owned by Carl Icahn. CVR Refining’s primary assets are two refineries located in Kansas and Oklahoma with a combined processing capacity of approximately 185,000 barrels per day (bpd). These refineries are strategically located near the major Cushing, Oklahoma shipment and storage hub, with easy access to discount ed feedstock from the nearby Permian basin, as well as the Bakken shale and Canadian oil sands.
  
  But refiners have struggled with diminished margins in 2013 because of a much lower Brent-WTI differential. After the recently concluded second quarter, CVRR declared a distribution of $1.35 per unit, bringing its per-unit distributions for the first half of the year to $2.93. At the same time, CVR Refining lowered its annual distribution target to a range of $4.10 to $4.80 per unit. This was lower than the outlook issued in March, when it foresaw annual distributions of $5.50 to $6.50. CVRR units slid on the news, and are presently trading slightly below the $25 IPO price. The lower end of the revised forecast implies distributions of $1.17 per unit in the second half of the year, for a forward annualized yield of 10 percent based on the recent $23.50 unit price.
  
  SunCoke Energy Partners (NYSE: SXCP) was the third IPO to debut during a very busy third week of January . SXCP is the first M
• [By Aimee Duffy]

  But this too is starting to shift. If you look at the most-recent IPOs on the New York Stock Exchange, you'll find many corners of the energy industry represented:

  Tallgrass Energy Partners -- Na! tural gas! midstream, debuted May 14 KNOT Offshore Partners (NYSE: KNOP  ) -- Shuttle tankers, debuted April 10 SunCoke Energy Partners (NYSE: SXCP  ) -- Coal/coke making, debuted Jan. 18 CVR Refining (NYSE: CVRR  ) -- Mid-continent refining, debuted Jan. 17

  There have also been a few MLP-related funds to hit the market this year, including Global X Junior MLP ETF and Neuberger Berman MLP Income Fund.

source from Top Stocks For 2015:http://www.topstocksblog.com/top-10-oil-service-companies-to-own-in-right-now.html