However, the firm is still looking to grow, with the June 5 announcement of the expansion of the Bostco Oil Terminal in Houston. But the firm is at risk of not profiting in the years ahead, due to the fact that companies in this sector require a lot of capital to invest in various projects. In order to sustain growth, the firm is spending a lot of money acquiring or investing into new pipelines to keep up growth. Furthermore, the company has more current liabilities than it does current assets. In fact, the current assets to current liabilities ratio is 0.74.
Oil firms face increased scrutiny
Also earlier this month, Apache Corporation (NYSE:APA) reported a spill of 2.5 million gallons of contaminated water in Alberta, and Plains All American Pipeline, L.P. (NYSE:PAA) also spilled 950 barrels in Alberta. Despite oil companies defending their expansion efforts by saying they have healthy track records, there have been a spate of spills recently that put into question the safety of oil pipelines. That damages the ability of these companies to grow, and the Enbridge Energy Partners, L.P. (NYSE:EEP) spill is just the latest example.
Phillip Woolgar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Spills Plague Canadian Pipeline Operators originally appeared on Fool.com is written by Phillip Woolgar.
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