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Peter Staas is the former managing editor of the Conrad’s Utility Investor and Energy & Income Advisor. He earned a BA from the State University of New York at Binghamton and co-authored a textbook about real estate valuation models used by federal bank examiners. Peter Staas also served as managing editor of Personal Finance, MLP Profits and The Energy Strategist, where he honed his understanding of global energy markets under the tutelage of investing experts Elliott Gue and Roger Conrad.

Articles

A Tale of Two MLP IPOs

The divergent performance between Noble Midstream Partners LP and Hess Midstream Partners LP since their initial public offerings demonstrates what investors value in an environment where energy prices remain lower for longer.

Permian Basin to Take Market Share in a Short-Cycle World

Break-even rates continue to fall across the board in US shale plays, but the efficiency gains that come from exploiting multiple oil-bearing formations with the same infrastructure give the Permian Basin an edge in the battle for market share.

Upstream Strategy

Although our outlook for oil prices and the US energy patch favors an overweight position in core midstream holdings, nimble investors can generate alpha in upstream names by buying when oil prices retreat to the low end of their range and taking some profits off the table when they recover. Timing these moves is easier said than done. We highlight our favorite upstream stocks and dream prices to help instill discipline on the buyside.

Trends Favor Midstream

In this environment, we prefer midstream names that offer the best leverage to volumetric growth stories and have the balance sheet strength to pursue joint ventures with cash-strapped rivals. Not only do these MLPs pay generous yields that can improve your total return during periods of volatility, but the most recent down-cycle also prompted many midstream operators to take the necessary steps to put themselves on a more sustainable path by cutting their distributions and paying down debt. We highlight our favorites and dream prices for period of heightened volatility.

Upstream IPOs: Private Equity Cashes Out

Despite the underperformance of SPDR Oil & Gas Exploration & Production (NYSE: XOP) this year because of concerns about the outlook for energy prices and surging US production, several upstream operators have completed initial public offerings and more remain on the docket. Here are our takes.

US Shale: Pump Up The Volumes

Every earnings season, we pay particularly close attention to commentary from the major oil-field service companies—Schlumberger (NYSE: SLB), Halliburton (NYSE: HAL), Baker Hughes (NYSE: BHI) and Weatherford International (NYSE: WFT)—because their extensive operations give them insights into key trends throughout the energy value chain.

Their conference calls also occur relatively early each earnings season; the read-throughs gleaned from the proceedings can provide insight into emerging opportunities and potential pitfalls.

Although we continue to pore over first-quarter results from the energy patch, comments from management teams in the upstream and oil-field-services industries underscore the potential for further efficiency and productivity gains in US shale plays.

Given the short development times needed to exploit these resources, drilling and completion activity in the US onshore market will continue to track oil price realizations and producers’ ability to hedge future output. These fluctuations will create investment opportunities in cyclical names, but timing will be crucial.

Our outlook for oil prices to remain lower for longer and the best US shale plays to take market share favors an overweight position in midstream master limited partnerships, especially those with the best-positioned assets, capable management teams and healthy balance sheets.

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    Elliott and Roger on Jul. 26, 2018

  • Portfolios & Ratings

    • Model Portfolios

      Balanced portfolios of energy stocks for aggressive and conservative investors.

    • Coverage Universe

      Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.

    • MLP Ratings

      Our assessment of every energy-related master limited partnership.

    • International Coverage Universe

      Roger Conrad’s coverage of more than 70 dividend-paying energy names.

    Experts

    • Elliott H. Gue

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor

    • Roger S. Conrad

      Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor