Recent weakness in crude oil has spilled over into Master Limited Partnerships (MLPs). Some connection between the two is understandable, because part of the bull case for MLPs lies in growing shale output increasing demand for energy infrastructure. Lower oil prices dampen the enthusiasm for the idea that Exploration and Production (E&P) companies will be […]
The U.S. produces electricity from diverse sources; burning coal and natural gas each provide just under a third of our needs (natural gas is steadily displacing coal, which is good for those MLPs that transport, process and store natural gas). Nuclear is 19%, with the rest being other renewables of which hydro is the biggest. […]
Most MLP investors are attracted by the regular distributions paid out by midstream infrastructure businesses. Some though, are wary of a repeat of the heightened volatility of 2015 even though evidence increasingly supports our analysis from early last year that an improbable confluence of circumstances was responsible (see The 2015 MLP Crash; Why and What’s […]
If you talk to investors about U.S. energy infrastructure, you’re pretty soon going to get to crude oil. A view on one is seemingly predicated on the other. Some investors mutter darkly about assertions in years back that Master Limited Partnerships (MLPs) are a toll-like business model with limited sensitivity to commodities. Although it remains […]
Long time subscribers will recall that back in 2015 this blog sought ever more creative and different ways to communicate the same message, which was that MLP prices had fallen far enough and represented compelling value. Bear markets have an unfortunate tendency to last longer than their opponents would like. Although the sector rebounded strongly […]
My partner Henry Hoffman and I spent Thursday last week at the Capital Link MLP Investing Forum in New York. The mood was cautiously optimistic but certainly wary of another commodity-linked swoon in prices. Meeting one-on-one with company managements is often the best part of such events. We had a very useful discussion with Crestwood’s […]
America’s path to Energy Independence is taking place through myriad advances in hydrocarbon output, driven by the many advantages we possess. In America Is Great! we noted the benefits of America’s energy sector’s large skilled labor force, access to capital, culture of entrepreneurialism, constant drive for productivity improvements, ready availability of water, vast network of […]
The resilience of the Shale Revolution in in the face of the 2015-16 oil price collapse is due in large part to dramatic improvements in productivity. Exploration and Production companies have strived to achieve more while using less of everything. Fewer rigs, for shorter times; less cement by drilling multiple wells on a pad; less […]
There’s a developing paradigm shift under way in the oil market. It is manifesting itself through the quarterly earnings reports of many energy sector companies. At a high level, discoveries of new oil and gas fields recently fell to a 60-year low. Last year there were 174 oil and gas discoveries, compared with 400-500 a […]
A year ago, on February 11th, the Alerian MLP Index (AMZX) put in its low. Following a relentless 58.2% drop from its peak on August 29th, 2014, the selling was finally exhausted. As a retired bond trader friend of mine has said, “Down was a long way”. And indeed it was. The biggest and longest […]
