Closed end funds (CEFs) are an obscure sector of the market with a small but fiercely passionate following. Because they have a fixed share count, they can trade at a premium or discount to the value of their holdings, which are usually public equities or debt. This creates appealing opportunities to buy at a discount […]
Our blog topics are often informed by the subjects that come up in conversations with clients. October was a wrenching month, with the Alerian MLP index slumping to -6% versus +2% for the S&P500. MLPs have lagged equities by an astonishing 22% YTD. Over the last couple of weeks we have been busier than usual […]
Three years ago, Energy Transfer Equity (then ETE, now ET following its 2018 simplification) cleverly extricated itself from a ruinous attempted acquisition of Williams Companies (WMB). Having relentlessly pursued his target, ETE CEO Kelcy Warren came to regret the terms he’d offered as rating agencies criticized the overly leveraged contemplated combined entity. Having failed to […]
As recently as five years ago, the terms “MLPs” and “pipelines” were interchangeable. If you wanted to invest in pipelines for their steady growth and attractive tax-deferred yields, you had little choice but to be a K-1 tolerant, MLP investor. MLP-dedicated funds were developed to provide retail exposure to the sector, but the corporate tax […]
Early analysis of the twin attacks on Saudi Arabia’s oil infrastructure has focused on the length and severity of supply disruption. 5.7 Million Barrels per Day (MMB/D) of lost output is the biggest supply drop in history, although its impact will depend on how long it takes to repair the damage. This misses two more […]
Saturday’s surprise attack on Saudi Arabia’s Abaqaiq oil facility in Buqyaq has sent crude oil prices sharply higher. There are estimates of up to 5.7 Million Barrels per Day (MMB/D) of lost output. For perspective, the last two big drops in crude oil, in 2008 and 2014-16, were caused by around 2% excess supply. The […]
Breaking News — Drone attack disables Saudi crude ouput Although we don’t normally highlight the favorable geopolitics of U.S. midstream energy infrastructure, this news does emphasize that much of the world’s crude oil comes from unstable regions. See WSJ story U.S. Insulated From Possible Supply Shock After Saudi Attack Momentum Crash Supports Pipeline Sector The […]
Over 60% of U.S. liquid hydrocarbon production comes via hydraulic fracturing (“fracking”). This includes 7.75 million Barrels per Day (MMB/D) of crude oil (total 12.4 MMB/D), and three MMB/D of Natural Gas Liquids (NGLs, including propane and butane) out of five in total. In addition, shale natural gas production is 68.5 Billion Cubic Feet per […]
The end of August was the five year anniversary of the peak in MLPs. Had it not been for the distraction caused last week by a more compelling story (see Blackstone and Tallgrass Further Discredit the MLP Model), we would have already noted this milestone. The Alerian MLP index, albeit much changed and diminished since […]
To be an SEC-registered asset manager is to submit to extensive rules of behavior, all with the objective of protecting the clients. Where a portfolio manager invests personally alongside her clients, creating a desirable alignment of interests, regulations require that the client’s interests are placed ahead of the manager’s. The asset manager has a fiduciary […]
