Blog
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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.
Adapting to New Circumstances
Investors are focusing carefully on the response of Master Limited Partnership (MLP) managements to the impact of a higher cost of equity on their growth plans. Those firms that moderate their growth forecasts in response so as to rely less on issuing equity and maintain their distribution coverage are acting thoughtfully with the best interests […]
Growth Prospects So Good We'll Cut Our Payouts to Investors
Thursday saw another example of tone-deaf decision making by the management of an MLP. Teekay LNG Partners (TGP) is an operator of ships that transport Liquified natural gas, petroleum gas and crude oil. Shipping is a horrible business; unlike pipelines, ships are highly mobile and so you’re never the only transport solution from A to […]
Kinder Shows The MLP Model is Changing
This week Kinder Morgan (KMI) did the right thing, after doing the wrong thing last year. By slashing their dividend they finally acknowledged that the MLP model of returning most free cashflow to investors and issuing new equity to finance growth doesn’t work in the C-corp structure they adopted in 2014. The square peg jammed […]
Equity Underwriting for Dummies; Kinder's Blunder
If a banker approaches the CEO of a Master Limited Partnership (MLP) with an offer to help, the CEO should run (not walk) in the other direction. The latest victim is the management of Columbia Pipeline Group Inc (CPGX). A month ago management had indicated that they’d be tapping the markets for equity via their […]
Targa Resources Needs an Activist
Writing a blog from the vantage point of your own firm is fantastically liberating compared with analyzing markets at a well-known behemoth, where any criticism risks offending a corporate client. Thus it was that in April 2014 I could write ADT and the Ham Sandwich Test, as we invoked Warren Buffett’s advice to only invest in […]