Entries by Simon Lack

Natural Gas Demand Remains Firm

SL Advisors Talks Markets
SL Advisors Talks Markets
Natural Gas Demand Remains Firm







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Midstream energy infrastructure lagged the market sharply following last week’s FOMC meeting with its revised dot plot. The odds of a recession have increased. Although infrastructure businesses have very visible cashflows, enough holders operate on a hair trigger that requires little inducement to sell. It’s doubtful you’ll see any revision to guidance as a result […]

In Case it’s Not Clear, Rates Are Going Up

SL Advisors Talks Markets
SL Advisors Talks Markets
In Case it’s Not Clear, Rates Are Going Up







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“I have approximate answers and possible beliefs in different degrees of certainty about different things, but I’m not absolutely sure of anything.” Fed chair Jay Powell did not say this at his press conference on Thursday. It is attributed to American physicist Richard Feynman. But had Powell uttered these words they would not have seemed […]

Why Liberal States Pay Up For Energy

SL Advisors Talks Markets
SL Advisors Talks Markets
Why Liberal States Pay Up For Energy







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The northern hemisphere winter is approaching, which means more opportunities for amusement or shock at New England’s masochistic energy policies. Massachusetts and neighboring states have denied themselves access to abundant US natural gas in the Marcellus shale in Pennsylvania by preventing the construction of new pipelines that would connect them. As with most initiatives embraced […]

The Fed Is Misreading Housing Inflation

SL Advisors Talks Markets
SL Advisors Talks Markets
The Fed Is Misreading Housing Inflation







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The August CPI report that came out last Tuesday was the catalyst for a sharp market reversal. The headline number was a benign 0.1%, helped by falling gasoline prices. But the “core” number (ex food and energy) came in at 0.6%. There were several factors, but chief among them because of its high weighting was […]

Another Pleasant Suprise From Cheniere

SL Advisors Talks Markets
SL Advisors Talks Markets
Another Pleasant Suprise From Cheniere







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On Monday evening Cheniere provided their third revised EBITDA guidance of the year. It’s good that they’re not based in the EU where they would be a target of the planned windfall profits tax. Cheniere has raised guidance by $1.2BN (after 1Q earnings), $1.6BN (after 2Q earnings) and now another $1.2BN pointing to a range […]

The Strong Fundamentals Underpinning Pipelines

SL Advisors Talks Markets
SL Advisors Talks Markets
The Strong Fundamentals Underpinning Pipelines







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Recently a long-time investor Jeff Waters suggested that it might be interesting to dig a little deeper into the valuation metrics that make midstream energy infrastructure such an attractive sector. It resulted in a podcast interview, which you can access here. The roughly 2/3rds drop in growth capex since 2018 underpins an improving cash flow […]

Will Energy Price Caps Work?

SL Advisors Talks Markets
SL Advisors Talks Markets
Will Energy Price Caps Work?







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Few should be surprised that Russia has shut off all natural gas to western Europe, on a timing of their choosing not Germany’s. EU countries and the UK are implementing price controls and residential subsidies in various forms to cushion the blow from electricity prices that have risen as much as 10X over the past […]

How Occidental Invests In Lower Taxes

SL Advisors Talks Markets
SL Advisors Talks Markets
How Occidental Invests In Lower Taxes







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Occidental Petroleum (OXY) has a checkered history. In 2019 CEO Vicki Hollub snatched Anadarko away from Chevron (CVX), who already had a signed deal in place. CVX CEO Mike Wirth showed financial discipline that’s rare in such cases and declined to get into a bidding war. Instead, they walked away with a $1BN break-up fee. […]

From Top Hats To Tightening

SL Advisors Talks Markets
SL Advisors Talks Markets
From Top Hats To Tightening







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The beginning of my career in finance overlapped with the presence of morning suits on the floor of the London Stock Exchange. Mullens & Co, founded in 1786, held the privileged role of “government broker”, meaning they transacted directly with the UK Treasury and were an important intermediary in financing the UK government.  As recently […]

The High-Priced Energy Transition

SL Advisors Talks Markets
SL Advisors Talks Markets
The High-Priced Energy Transition







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“Thankfully, energy has been the bright spot in our client portfolios,” said investor Emily Jaffe. We had just sat down to enjoy a most convivial lunch with Emily and her business partner Jeff Waters of OFC Wealth Management. In the photo below we are toasting the performance of the pipeline sector this year. Superstition has […]

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