Author Archive for: Simon Lack
Entries by Simon Lack
Energy Transfer's Kelcy Warren Thinks Like a Hedge Fund Manager
Last Monday, June 22nd, Energy Transfer Equity (ETE) went public with their rejected merger proposal to Williams Companies (WMB) in an effort to force WMB to the negotiating table. WMB’s stock rose by most of the 32% premium ETE has offered, and in recent days has held on to most of that gain as the […]
LNG Exports Will Soon Commence
A question I’m often asked is how the business prospects of many MLPs will respond permanently to lower prices for oil and gas, perhaps lower than where they are today. From a high level, markets often appear vulnerable to a correction. This is especially true with the S&P500. You rarely hear anyone simply say the […]
Prognosticating the Effect of Higher Interest Rates
People often ask me how I think equity markets, including Master Limited Partnerships (MLPs), will perform when interest rates are rising. It’s a timely question, since bond yields have been moving higher for the past couple of months. The yield on the ten year U.S. treasury recently touched 2.5% as markets look ahead to a tightening […]
Interesting Perspectives from Plains All American's Investor Day
Plains All American Pipeline (PAA) held their Investor Day on Thursday. The presentations included a fascinating analysis of the global oil market with a view to forecasting prices as well as regional supply/demand, since these are important drivers of PAA’s planned infrastructure development. The chart at the left, reproduced from PAA’s Investor Day deck, plainly […]
The Enormous Misunderstanding About MLP Funds and Taxes
Inspiration for these posts often comes from conversations I’ve had with investors during the prior week. For a great many investors, the decision to invest in an MLP mutual fund or ETF goes something like this: 1) MLPs have generated attractive historical returns over (choose your time period) number of years 2) The yield on […]
U.S. Natural Gas Terms of Trade Continue to Shift
Data recently released by the Energy Information Agency (EIA) highlighted the continuing shift in U.S. terms of trade regarding natural gas. The North East U.S. (NY, OH, PA, NJ, MD, DE and VA) was for the first time in 2014 no longer a net importer of natural gas from Canada, as production in the Marcellus […]
Another MLP Simplification Benefits From Favorable Depreciation Rules
Last week Williams Companies (WMB) simplified their structure by acquiring the assets of their Master Limited Partnership (MLP), Williams Partners (WPZ). As was the case with Kinder Morgan’s (KMI) move last year, the objective was to move to a simpler structure with a lower cost of equity driven by faster dividend growth supported by a […]
MLPs Start Reporting 1Q Earnings
Several Master Limited Partnerships (MLPs) announced their quarterly earnings last week. The overall picture continues to be one of businesses performing well with good distribution coverage and continued plans to grow their infrastructure networks while responding appropriately to shifts in the domestic production landscape. So Enterprise Products Partners (EPD), an MLP with no Incentive Distribution […]
Energy Insights from Enterprise Products Partners
We noticed several interesting slides from an investor presentation by Enterprise Products Partners (EPD) recently. The first concerns future capital investment plans of Master Limited Partnerships (MLPs). As you can see on the first chart, lower oil prices have caused some moderation in forecast capital expenditures (“capex”) and a drop in 2016 versus 2015. However, the […]
