Over the past two years, oil and gas producers have accounted for the bulk of the energy sector’s bankruptcies, laid low by excessive leverage, the collapse in commodity prices and inferior assets. Exploration and production companies haven’t emerged from the woods yet—but they’re not all goners. In fact, the buying opportunity that investors have awaited appears to be around the corner.
In a scenario where oil prices remain lower for longer, investors should focus on upstream operators with strong balance sheets, low production costs, a history of solid execution and franchise assets that can deliver output growth in a challenging environment. Names that can expand their output and win market share should outperform, while their cash-strapped peers or those with inferior assets will struggle.
The universe of exploration and production companies that meet our criteria is relatively small; don’t misconstrue this call as open season to buy upstream names indiscriminately. Not every oil and gas producer has the potential to outperform, let alone survive.
In this issue, we highlight a handful of our favorite names to scoop up during the coming buying opportunity. To help with timing, we’ve included dream buy prices for these stocks that reflect trough valuations in previous downturns and our outlook for commodity prices.
The US-oil-directed rig count ticked up last week, but investors shouldn't overlook the reduction in international drilling activity.
With the exception of upstream operators, master limited partnerships have held up reasonably well relative to other groups in the energy sector. We survey some of the risks and opportunities.
Shares of US refiners have outperformed since oil prices swooned. Here's why and what's to come.
How US producers responded to plummeting natural-gas prices provides useful insight into how names with an oil-weighted output mix will contend with lower oil prices.
Sensationalist predictions about oil prices have become all the rage over the past two months, but they won't necessarily help investors make money. We explain our outlook for crude-oil prices and why a buying opportunity may be around the corner.
Fluctuations in the US dollar's value relative to major international currencies can influence crude-oil prices. But many more important factors are also at play.
We attended the National Association of Publicly Traded Partnerships' MLP Investor Conference and lived to tell the tale. Here are some of our key takeaways from the most important event of the year for MLP investors
Schlumberger's quarterly earnings call usually includes loads of useful insights for energy investors; the company's most recent conference call was no exception.
We'll be looking for value at the NAPTP's annual MLP investor conference.
Elliott and Roger on Sep. 29, 2015
Balanced portfolios of energy stocks for aggressive and conservative investors.
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.