Kelcy Warren Zeroes in on Energy Transfer; Believes ET to Be Undervalued

As the Chairman and CEO of Energy Transfer, Kelcy Warren has spent the better part of the past several decades working to build his name within the industry. Recently, Warren made headlines when it was revealed that he made by totaling more than 3 million units of ET – according to the latest SEC Form 4 Filings. These acquisitions continue efforts made by Mr. Warren, dating back to 2017 when ET was being traded at $20 per unit.

Let’s take a closer look at Mr. Warren and his position with ET, the future of the company, and what potential investors should contemplate before getting some skin into the game.

Bullish Investments: Recouping ET With Long Plays

Dating back to 2017, Mr. Warren has been a heavy investor in Energy Transfer, having purchased shares at more than $20 per unit. Over the years, due to several environmental and global factors, share prices have declined, yet this has not stopped Mr. Warren from continuing to buy into his position. Warren’s confidence has been buoyed by continued reports of LNG agreements with international and overseas companies, including a supply deal with Shell.

During the height of the pandemic, ET was forced to dramatically reduce its distribution levels and efforts. This saw ET reduced from $0.3050 to $0.1525 in the space of a few months. Since this reduction, ET has enjoyed three consecutive quarters of distribution increase, leading to a total increase of 50.82%.

Tom Long, the Co-CEO of Energy Transfer, stated that future increases would be evaluated on a quarterly basis with the goal of returning distribution to roughly $1.22 annually while properly accounting for ET’s leverage ratio.

Is Energy Transfer Still Undervalued? Kelcy Warren Says Yes.

In early June of 2022, Energy Transfer negotiated a contract with China Gas to supply more than 0.7M tonnes of LNG on a free-on-board basis. The 25-year contract begins in 2026. ET also inked a 20-year contract with Shell to supply the company with more than 2.1m metric tons/year from its Lake Charles export unit in Louisiana. These latest contractual agreements have culminated in six total deals, positioning Energy Transfer to become one of the largest American exporters of energy.

Backing the public’s perception of Energy Transfer’s recent growth has been the insight of Kelcy Warren. Warren continues to double and triple down on his positioning, purchasing shares while adding significant numbers of units. Due to Warrens’ latest unit additions, some investors are suggesting that they could see a unit increase of more than 32.6% by 2023 as distribution levels continue to return to normal.

About Kelcy Warren

Kelcy Warren was born and raised in Gladewater, TX. The youngest of four children, Kelcy looked to his father for motivation. Warren’s father worked as a ditch digger and gauger, eventually becoming a field clerk for Sun Oil despite only having a high school education. Warren would pay his way through college in 1975 when he attended the University of Texas at Arlington, eventually securing his 4-year degree in Civil Engineering.

Kelcy Warren would enter the energy industry in the early 80s when he was brought on by the Lone Star Gas Company to operate as a design engineer. A few years later, Warren would partner up to acquire Endevco, now known as Cornerstone Natural Gas. Four years later, Warren would sell Cornerstone Natural Gas to found Energy Transfer.

Nowadays, Energy Transfer employs an umbrella of partnerships to gather, treat, process, and transport natural gas, refined products, and crude oil. Through his efforts, Warren has cultivated one of the most diverse and largest publicly traded portfolios in energy.

See more on Kelcy Warren here:

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