Examining the Risk Factors in a company’s 10-K is not everybody’s idea of light entertainment, but as you’ll see below it can provide useful insight about how management may treat certain of its stakeholders. Many Master Limited Partnerships share a legal structure that is similar to hedge funds and private equity funds, in that the […]
Tallgrass Energy is the Right Kind of MLP If Linn Energy was the wrong kind of MLP (see last week’s blog), Tallgrass Energy is the right kind. They have an MLP, Tallgrass Energy Partners (TEP) and a publicly traded General Partner, Tallgrass Energy, GP (TEGP). It’ll come as little surprise to regular readers that we […]
Last week Linn Energy (LINE) filed for bankruptcy. Over the past year or so we’ve come across quite a few people whose exposure to Master Limited Partnerships (MLPs) regrettably included LINE. They were attracted by the yield, whose steady rise until 2013 belied the unpredictability of their cashflows. LINE was engaged in Exploration and Production […]
The Energy Transfer-Williams deal has been a rich source of material for this blog, as well as an important driver of MLP performance. Energy Transfer Equity (ETE) was creative in its pursuit of Williams Companies (WMB); as buyer’s remorse quickly set in they were equally creative in pulling all the levers at their disposal to […]
Quarterly Earnings We’re approaching the time of year when report cards proclaiming, “what a joy your child is to have in my class” are dispatched with varying degrees of sincerity. Quarterly MLP earnings are the report cards of the industry, and a time when investors can similarly consider whether they are happy to have included […]
“Yes, but are the pipes full?” This was the pointed and entirely reasonable question of one investor several weeks ago after hearing that the energy infrastructure sector offered compelling value. It cuts directly to the crux of the issue. You can discuss the sanctity of contracts, stability of cashflows, limited commodity exposure and yet the […]
Williams Companies Stands Alone at the Altar The Energy Transfer-Williams deal continues to be a rich source of intrigue and fascinating machinations. Sometimes a target company will try and get out of an agreement to sell itself so as to join with a more eager suitor. But it’s not often that an acquirer has second […]
The U.S. Energy Information Agency (EIA) is a powerful resource for those interested in the topic. They recently noted that in 2016, natural gas-fired power generation would exceed coal for the first time in history. 18.7 gigawatts (GW) of new gas-fired capacity is due to come online between now and 2018 replacing dirtier coal plants […]
Drilling Efficiencies A week or so ago the Energy Information Agency (EIA) released the results of a survey showing the average cost to drill and complete a well in four of the major producing regions in the U.S. As the EIA chart shows, costs were rising going into 2012, but thereafter started to fall and […]
The managements of Energy Transfer Equity (ETE) and Williams Companies (WMB) are engaged in a high stakes poker game. It’s an absorbing spectacle. Last May WMB announced plans to buy in its MLP Williams Partners (WPZ). As with Kinder Morgan, they felt their size as well as the drag from Incentive Distribution Rights (IDR) from […]
