Enbridge Selling Intensifies on Michigan Oil Spill

Selling in shares of Enbridge Energy Partners after the EPA said the Michigan oil spill could exceed one million gallons of oil.
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NEW YORK (

TheStreet

) --

Enbridge Energy Partners

(EEP)

, the oil affiliate of

Enbridge

(ENB) - Get Report

that owns the Michigan oil pipeline that ruptured, is experiencing its heaviest day of selling on Thursday morning, since news of the Michigan oil spill broke on Monday.

The Environmental Protection Agency estimated last on Wednesday that the Michigan oil spill may have now surpassed one million gallons of oil.

Political criticism has increased as well, with Michigan Gov. Jennifer Granholm taking issue with efforts so far to contain the oil spill.

Enbridge Energy Partner shares slipped were down more than 4% on Thursday morning, and that was a climb back up from a precipitous opening bell drop. The energy company, which as an average daily volume of less than 300,000 shares, was nearing the one million share mark on Thursday morning as the selling action intensified. Thursday morning was the most active trading session for Enbridge Energy Partners since May 6.

EPA Administrator Lisa Jackson said in a statement that the agency and parent company Enbridge are doing everything possible to contain the oil spill, countering claims from the Michigan Governor that the oil spill response effort has been inadequate.

The 30-inch pipeline was built in 1969 and carries about 8 million gallons of oil daily. The leak occurred near Enbridge's Marshall, Mich., pump station, though no cause has yet been found.

"This is our responsibility," Enbridge's president and chief executive Patrick D. Daniel said in an interview with the

AP

Tuesday evening. "This is our mess. We're going to clean it up."

Enbridge energy reported an earnings beat this week, but at least one analyst believed that valuation in its shares was already too high. RBC Capital Markets wrote in an Enbridge Energy Partners earnings wrap that it was lowering its rating to underperform from neutral based solely on valuation relative to the other energy master limited partnerships (MLPs) in coverage. "The market's valuation, we believe, has gotten ahead of the fundamentals.... While these numbers are respectable andan improvement over previous years, the market is fully reflecting thesefundamental factors, in our view," RBC analysts wrote.

Enbridge shares were at $59.50 on Monday, and after a 5% drop on Thursday morning, were trading just under $54. The RBC price target on the shares is $52.

-- Written by Eric Rosenbaum from New York.

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