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.
With Energy Uncertainty, Natural Gas Offers Stability
The spreading coronavirus and effective end of OPEC+ were a one-two punch that caused the worst collapse in midstream energy infrastructure stocks any of us have ever seen. The IEA forecasts a 2.5 Million Barrels per Day (MMB/D) drop in demand for 1Q20, but clearly oil markets are pricing a bigger drop. Medical experts typically […]
Quick Update After OPEC+ Collapse
Yesterday’s blog on the positive free cash flow story was largely written before Saturday’s news that precipitated today’s sharp sell off. It’s doubtful any company would reaffirm prior guidance if asked right now. Investment grade names are better to own than high yield issuers; exposure to natural gas infrastructure is better than crude oil pipelines; […]
Updating the Coming Pipeline Cash Gusher
Almost a year ago, we published The Coming Pipeline Cash Gusher. Midstream energy infrastructure companies, especially MLPs, have long relied on Distributable Cash Flow (DCF) as a measure of profits available for distributions. As the funding needs of growth projects increased, the difference between DCF and Free Cash Flow (FCF) became stark. FCF is a […]
Where America Gets its Power
One of the challenges facing solar energy in providing electricity is that demand often peaks at the beginning and end of the workday. When people are preparing to head to work or school, electricity demand rises. The second peak occurs during early evening during dinner. Solar output peaks around midday, inconveniently between the twin household […]
Equities Rapidly Price A Pandemic
S&P earnings are estimated to be +8% this year, according to Factset’s most recent publication. The sharp sell-off in stocks last week shows that markets are looking ahead to revised guidance. Covid-19 is a true black swan event that is challenging people to assess its impact. For example, my daughter just canceled a Caribbean cruise […]