EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES HIGH
America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors.
Pipelines Are Becoming Less Risky
Before the Shale Revolution, midstream energy infrastructure was a boringly stable sector. MLPs, which predominated versus corporations back then, paid out most of the cash they generated and grew distributions through price escalators and improved operating efficiencies. Volatility was low, and attractive yields drew income-seeking investors. This happy marriage started to fall apart in 2015, […]
Pipeline Earnings Should Confirm Growing Cash Flows
Earnings season for pipeline stocks begins on Wednesday 22nd, with Kinder Morgan (KMI) reporting after the market close. We expect the quarterly updates from the sector’s biggest companies will confirm the progress towards improved profitability (see Pipeline Cash Flows Will Still Double This Year). We’ll also hear from management teams how they regard the prospects for […]
Covid By The Numbers
The recent news on Covid-19 has been mostly bad. Infections are increasing sharply in sunbelt states, where Florida now holds the record for two worst days’ new infections – 15,300 and 13,965, both reached last week. Reopening plans are being halted. Even the Republican convention scheduled for late August, which was moved from Charlotte, NC […]
Installed Pipelines Are Worth More
Sunday’s blog (see Pipeline Opponents Help Free Cash Flow) drew some interesting feedback. It seems odd to favor constrained growth opportunities, and it’s contrary to how most management teams will assess their outlook. But for many pipeline investors, including your blogger, the pre-Shale years of steady returns were what made the sector attractive. Anti-fossil fuel […]
Pipeline Opponents Help Free Cash Flow
Several major pipeline developments last week might well represent a key turning point in how the industry operates. Berkshire Hathaway (BRK) acquired Dominion Energy’s natural gas pipeline and storage assets for an enterprise value of $9.7BN, which included BRK using $4BN of its cash pile. Although some estimated the price on the low side, Buffett […]