Episode 4: Pipeline Earnings Are Good
In Episode 4 of SL Advisors Talks Energy, Simon reports on 2Q19 pipeline earnings and provides his insights on the weeks’s major stories in energy politics.
Show Notes:
In this week’s podcast, I’m going to talk about pipeline company earnings and why valuations are attractive, followed by some comments on climate change politics
Pipeline Earnings Are Good 1:08
Energy out of favor 1:10
Too much investing in new projects, not enough cash back to investors 1:22
Democratic primary debates show political risk given extreme positions 1:27
But cash flows are growing 1:40
Some big companies reported 2:10
EPD increased EBITDA 18%. $66BN company 2:14
WMB been weak because of natgas but had good earnings and popped 2:22
OKE, CEQP, TC Pipelines all good quarters 2:38
Still expect FCF to reach $7-8BN for AEITR this year, up from $1BN 2:47
Balance sheets are stronger, 4.1X Debt:EBITDA 3:40
Dividend yields >2X bond yields 4:00
…credit analysts, banks fine with risk 4:05
Industry has growing FCF, better credit profile, lots of PE interest 4:40
Energy politics
2 Items caught my eye
- Annual Google Camp 5:10
Attendees of rich and famous, secretive affair 5:20
Barry Diller, Dave Geffen, Katy Perry, Tom Cruise, Leonardo DiCaprio 5:25
Many arriving by private jet – one estimate of 111 separate flights 5:30
Let’s hope there’s no sermonizing on climate change from this crowd 5:40
- Democratic Debate 6:05
Most candidates endorse GND 6:12
We wrote Bovine Green Dream 6:16
Completely impractical 6:25
Climate change solutions include 6:50
Government support for nuclear 7:05
Increased natgas and phasing out of coal 8:30
R&D on cleaner use of fossil fuels, share results 9:23
Greater honesty, that dealing with climate change will be expensive 10:11
Americans won’t spend >$10 per months fighting climate change 10:18
US 15% of emissions 11:15
Andrew Yang: Find high ground 11:32
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