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EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES AND INFLATION HIGH
America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors..
Private Equity, Private Valuations
Last week Cowen held a two day energy conference. Presenting companies included upstream and service providers, so although there were no midstream energy infrastructure companies present it provided useful background for current operating conditions. Baker Hughes (BKR) is one of three large diversified services companies supporting the sector, along with Schlumberger and Halliburton. BKR CFO […]
Enlink’s Growth Plans Need Better Justification
Energy investors would still like to see less spending on growth projects than company executives are pursuing. Whenever a CEO announces new spending, there’s a palpable lack of enthusiasm. Given valuations, many companies could easily justify buying back stock as a higher return use of capital than building new infrastructure. The message is getting through, […]
Williams Companies Promotes the Little Blue Flame
Last Thursday Williams Companies (WMB) held their investor day in New York. WMB owns and operates an extensive natural gas network, and is a top ten U.S. midstream energy infrastructure company. Like most big pipeline companies, it’s omitted from the Alerian MLP indices because it’s not an MLP. CEO Alan Armstrong conceded that the company […]
Why Inflation Isn’t What You Think
The Federal Reserve has long wrestled with stubbornly low inflation. A decade ago few would have expected this to be a problem, but Personal Consumer Expenditure (PCE) inflation, the Fed’s preferred measure, is coming in at 1.8% this year. Federal Open Market Committee (FOMC) members have been considering allowing inflation to overshoot their target of […]
MLPs Weak in November, As Usual
The Alerian MLP Index now has almost a 24 year history. Investors whose experience pre-dates the 2014 high will fondly recall many strong years. Since 1996 the compounded annual return is 11.3% including distributions, even though the AMZX remains 44% off its August 2014 high. MLPs are a shrinking part of the midstream energy infrastructure […]