Enbridge Might Unveil Funding Plan Before Q4 Results

by: FP Trading Desk December 02, 2008 | about stocks: EEP / ENB    

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Enbridge Inc. (ENB) is taking the unusual step of hosting its 2009 guidance conference call ahead of its fourth quarter results, possibly to update investors on its funding plan for the upcoming year. The call is set for Wednesday, December 3 at 2:30 p.m. ET, while its fourth quarter earnings are due in late January or early February.

The potential delay of capital expenditures for the Fort Hills oil sands project, where Enbridge is building a pipeline, along with the equity and debt injections into Houston-based Enbridge Energy Partners (EEP) that recently brought its stake up to 27%, suggests management may update investors on capex and the 2009 funding plan, according to RBC Capital Markets analyst Robert Kwan.

He noted that recent guidance for 2009 capex came in between C$3.5-billion and C$4-billion. But the delay in Fort Hills spending of about C$400-million forecast for 2009 means capex budget changes are likely, the analyst told clients. There are other potential delays as well, however, they could be partially offset by more spending for other projects.

The company previously said it needed C$600-million of “equity” to complete its five-year capex plan. That number is now closer to C$800-million as a result of the EEP injection and this need is likely front-end loaded, Mr. Kwan said.

“With the asset sale market weak and the hybrid market closed, we think that the company will take a hard look at common equity,” he added, suggesting that while there is no urgent need, management may take the conservative route and address funding in the first half of 2009 by issuing common shares.

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