July 28, 2010 / 11:59 AM / 8 years ago

UPDATE 2-Enbridge operating profit up; to buy natgas assets

* Q2 adjusted EPS C$0.63 vs analyst forecast of C$0.58

* Buying Texas, Oklahoma lines for $682 mln

* Shares down 2.3 pct (Adds details; changes dateline from Toronto. In U.S. dollars unless noted)

By Scott Haggett

CALGARY, Alberta, July 28 (Reuters) - Enbridge Inc (ENB.TO), which is currently dealing with a ruptured pipeline and oil spill in Michigan, said on Wednesday its second-quarter operating profit rose 19 percent as new lines entered service.

The company, Canada’s No. 2 pipeline operator, also said Enbridge Energy Partners (EEP.N), which operates most of Enbridge’s U.S. assets, would acquire natural gas gathering and processing facilities in southern Oklahoma and the Texas Panhandle from Atlas Pipeline Partners APL.N for $682 million.

The new lines are adjacent to Enbridge’s existing Anadarko pipeline systems and the assets will immediately add to profits once the deal closes, which is expected in this quarter or the next.

“They provide us with additional processing capacity that can immediately be used to process liquids-rich gas coming from the Granite Wash,” Pat Daniel, Enbridge’s chief executive, said on a conference call. “The Granite Wash is a liquids-rich tight gas play which has had a resurgence recently due to improved horizontal-drilling technology.”

The results and acquisition announcements come after an Enbridge line carrying 190,000 barrels a day ruptured in Michigan, spilling an estimated 19,500 barrels of oil into the Kalamazoo River. [ID:nN28181202]

The company said it is working with officials and regulators to clean up the spill.

“This is a serious incident and we are treating it as the top priority,” Daniel said.


Enbridge, whose lines carry the bulk of Canada’s oil exports to the United States, posted net income of C$138 million, or 37 Canadian cents a share, down 65 percent from C$393 million, or C$1.08 a share, a year earlier on non-cash losses on foreign exchange contracts.

Adjusted profit, which excludes most one-time items, rose to C$232 million, or 63 Canadian cents a share, from C$195 million, or 54 Canadian cents a share.

The adjusted results exceeded the average analyst forecast of 58 Canadian cents, according to Thomson Reuters I/B/E/S.

Revenue rose 22 percent to C$3.51 billion

The company said it was on track to meet the upper half of its 2010 profit target of C$2.50 to C$2.70 per share.

Enbridge has been expanding its network of pipelines into the United States, including the 450,000 bpd Alberta Clipper expansion project. It has also been boosting its regional network in the oil sands, with several new projects committing to ship oil on the company’s lines.

The company’s shares fell C$1.19, or 2.3 percent, to C$50.36 by midday on the Toronto Stock Exchange.

$1=$1.04 Canadian Additional reporting by Euan Rocha; editing by Rob Wilson

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