Natural gas prices vary widely — not just seasonally (electricity generation for summer air conditioning and winter heat create a familiar wave pattern to prices) but also regionally. It’s well known that natural gas prices are higher in many parts of the world than in the U.S. Probably less well knownn is the regional differences that […]
You rarely see MLPs buying back their stock, by contrast to companies in most other industries. Buybacks provide a tax efficient way to return excess capital if the stock is undervalued. Because MLPs invest heavily in CapEx and generally distribute most of their free cashflow to LP unitholders there’s rarely any left over for buybacks. […]
Master Limited Partnerships (MLPs) are inexorably linked with those annoying K-1s in the minds of many investors, complicating tax reporting. For some people it’s one of the few things they know about MLPs and the muttered warning of their accountants to avoid K-1s keeps them away from the asset class. Direct holdings of MLPs are […]
Among energy infrastructure companies of note delivering earnings this past week was Spectra Energy (SE) and Spectra Energy Partners (SEP), the Master Limited Partnership (MLP) it controls. The results were good, coming in slightly ahead of estimates. More important was that their backlog of new projects remains robust. Last year SE management produced a soundbite […]
It’s earnings season, and last week Enterprise Products Partners (EPD) reported another solid quarter. An appealing feature of EPD is the absence of a General Partner (GP). So unlike many other MLPs, EPD LP unitholders do not suffer a haircut to Distributable Cash Flow (DCF) from GP Incentive Distribution Rights (IDRs) before the cash makes […]
This morning Energy Transfer Partners (ETP) agreed to merge with Regency Energy Partners (RGP). Terms included an equity swap whereby RGP holders will receive 0.4066 ETP units and $0.32 in cash for each RGP unit they hold. ETP is also assming RGP’s debt. Energy Transfer Equity (ETE), ETP’s General Partner, already owns the GP and […]
Master Limited Partnerships (MLPs) have been falling along with the rest of the Energy sector since oil began its plunge last Summer. Following its peak in August, the Alerian MLP Index is down 15.1%. So far it’s down 1.6% in January, typically a strong month as retail investors implement asset reallocations settled on over the Christmas […]
It’s always interesting digging into the details of what’s happening with oil and gas production. Often there’s useful information provided by the companies themselves. Baker Hughes (BHI) for example publishes a global rig count every month. It covers most oil producing regions, and shows that the global rig count (counting those in use) has barely […]
The General Partners (GPs) of Master Limited Partnerships (MLPs) have in many cases taken quite a drubbing since the Summer when the sell-off in oil picked up steam. Plains GP Holdings (PAGP) for example has fallen 26% over this time. And yet, midstream MLPs have limited direct exposure to commodity prices. Kinder Morgan (KMI) is […]
Master Limited Partnerships (MLPs) are best when they’re boring over the short term. Predictably raising your cashflows and distributions leads to long term excitement at the very reasonable cost of being tedious to watch on a daily basis. In 2014, Linn Energy (LINE) was the antithesis of this. While most MLPs own midstream energy infrastructure […]
