A little over a year ago, we added three high-quality oil and gas producers to the model Portfolio. Our selection process targeted names with strong balance sheets, low production costs, a history of solid execution and franchise assets that can deliver output growth in a challenging environment. With oil prices a point of pain or profit for all upstream operators, names that can deliver on a volumetric growth story and take market share should outperform.
This strategy has played out to perfection thus far, with our positions in Anadarko Petroleum Corp (NYSE: APC), Concho Resources (NYSE: CXO) and EOG Resources (NYSE: EOG) up an average of 86.9 percent over the intervening months.
In light of this run-up and the risk of rising service costs, the Jan. 25 issue of Energy & Income Advisor suggested that readers consider taking a partial profit off the table, especially with hedge funds’ aggregate long positions in West Texas Intermediate futures reaching record levels and creating a significant liquidation risk.
Our Model Portfolios also contain four legacy upstream names that we held through the down-cycle: Noble Energy (NYSE: NBL), Occidental Petroleum Corp (NYSE: OXY), Eni (Milan: ENI, NYSE: E) and Total (Paris: FP, NYSE: TOT). Here are our latest thoughts on these positions.
US natural-gas exports to Mexico will continue to grow over the next five years, creating opportunities for investors north and south of the border.
These emerging shale plays are driving the recent recovery in Midcontinent drilling activity.
Master limited partnerships issued significant amounts of debt and equity to build pipelines and other infrastructure needed to support the shale oil and gas revolution. The midstream construction boom has started to wind down, ushering in a period of consolidation when management teams focus on strengthening their balance sheets.
Weak demand, a wave of contract expirations and excessive leverage are all reasons to remain bearish on offshore contract drillers. Investors should continue to avoid these value traps.
While reading through transcripts of master limited partnerships' fourth-quarter earnings calls, we compiled a series of quotes from management teams that provide insight into some of the macro trends that will continue to drive returns and opportunities in the space.
We dig into the five master limited partnerships with the highest percentage of short interest.
The energy industry’s growing consumption of fresh water for hydraulic fracturing and approaches to disposing the resulting wastewater have created significant challenges. We highlight some of the solutions.
This week brought rush of third-quarter earnings and three acquisitions involving midstream MLPs. Here’s our take on this flurry of deal announcements.
US oil production appears to be bottoming, but investors seeking to profit in an environment where prices will likely range between $40 and $60 per barrel must pay attention to basin-specific trends as well as companies' balance sheets and acreage quality.
Elliott and Roger on Feb. 28, 2017
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Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.