The spreading coronavirus and effective end of OPEC+ were a one-two punch that caused the worst collapse in midstream energy infrastructure stocks any of us have ever seen. The IEA forecasts a 2.5 Million Barrels per Day (MMB/D) drop in demand for 1Q20, but clearly oil markets are pricing a bigger drop. Medical experts typically […]
Almost a year ago, we published The Coming Pipeline Cash Gusher. Midstream energy infrastructure companies, especially MLPs, have long relied on Distributable Cash Flow (DCF) as a measure of profits available for distributions. As the funding needs of growth projects increased, the difference between DCF and Free Cash Flow (FCF) became stark. FCF is a […]
A little noticed sentence in President Trump’s State of the Union speech was that the U.S. would join the Trillion Trees Initiative. He didn’t mention climate change – most people like trees anyway, and the link was obvious. But planting trees to combat climate change is so seductively simple that it must be impractical. A […]
Blackrock’s ESG funds hold positions in pipeline corporations, consistent with Larry Fink’s recent letter on climate change (watch ESG Investors Like Pipelines). Their inclusion is entirely appropriate. The International Energy Agency recently announced that global CO2 emissions last year were flat, at 33 gigatonnes (a gigatonne is 1 billion metric tonnes). The U.S. lowered emissions […]
Last week Kelcy Warren, CEO of Energy Transfer (ET), defended the MLP structure. He’s definitely correct that MLPs possess a powerful tax advantage over corporations, in that their profits are only taxed at the investor level. Tax-deferred income free of the double-taxation to which corporate profits are subject is very appealing, and for years it […]
We’re in one of those times when everything is a macro call. Stocks and sectors are, for now, more highly correlated, since Coronavirus developments are dominant. Click here for some cool graphics illustrating its spread. The recent recovery in stocks echoes the information on the link. We won’t attempt to offer any insight on the […]
A Chief Financial Officer needs to know her way around a financial statement. Presenting operating performance in the best possible light is a highly valuable skill. We watched Kinder Morgan’s (KMI) Analyst Day last week via webcast, and my admiration is split between (1) KMI President and former CFO Kim Dang’s deft maneuvering among numbers, […]
We had an opportunity to meet with a Washington-DC based independent research firm, specializing in energy policy and geopolitics last week. The following is from our notes on their discussion. On Iran, one principal, a highly decorated ex CIA officer and Iran expert, thought markets continue to underestimate the risk to oil infrastructure and production […]
