Energy Gets a Win in Court
Rumors of an Iran nuclear deal dominated energy headlines this week. That’s hardly surprising. Nor is the selling it spurred of oil and energy stocks. But as we’ve pointed out, even if that country’s oil does return to world markets, it would have little real impact on the global supply and demand balance–especially at a time when US shale producers are staying conservative and post-pandemic demand is surging.
That’s why the more important news by far for US energy investors was a ruling by a federal judge in Louisiana, which blocked the Biden Administration’s “pause” on issuing new oil and gas drilling leases on federal lands.
Midstream Mergers Heat Up
Bids and counterbids: Pembina Pipeline’s (TSX: PPL, NYSE: PBA) offer to swap 0.5 of its shares for each share of fellow Canadian midstream company Inter Pipeline Ltd (TSX: IPL, OTC: IPPLF) has provoked a new effort from rival bidder Brookfield Infrastructure Partners (TSX: BIP-U, NYSE: BIP).
Endangered Dividends List
There were no dividend cuts in our coverage universe since the previous EIA issue. That leaves the tally for the year at six, with only 12 names on the Endangered Dividends List. We continue to expect at the majority of this dozen to avoid reducing dividends this year.
Portfolio: A Look at the High Yield Energy List
Clearly we could have picked a better time to launch our High Yield Energy List than late May 2019—on the eve of a pandemic that briefly sent oil prices below zero, forced dramatic cutbacks in shale output and triggered an historic number of sector dividend cuts.
Midstream M&A’s Train Picks Up Steam
Too many small owners lacking critical scale and unprecedented roadblocks to new energy pipeline infrastructure: That’s what was at the core of the unprecedented wave of US oil and gas midstream dividend cuts and bankruptcies of the past few years.
Now those same forces are spawning something considerably more positive for investors
Endangered Dividends List
Our outlook remains bullish for energy prices and sector stocks. That means we expect the number of names on the Endangered Dividends List to decrease further in 2021. And we believe odds favor most of the remaining 12 companies still on the EDL will avoid cuts when they declare their next payouts in July and August.
Portfolio: Highlights from the Data Deluge
Results from the Portfolio and High Yield Energy List companies are now all in. The most important takeaways are all of our recommended companies are executing on conservative business plans and their dividends are safe and well covered with cash flow. They’re also fully adjusted to the current stage of the energy price cycle, and increasingly well position to capitalize on the recovery we see unfolding the next several years.
Colonial Goes Down: What it Means for Pipeline Politics
There may come a day when US transportation is 100 percent electrified and homes are heated with blended hydrogen. But in the here and now, oil and gas pipelines are essential infrastructure. Exhibit A is the havoc wreaked by the successful hack of systems at the Colonial Pipeline this month.
Energy Earnings: Few Surprises But Good Ones
Last year, energy investors faced a perfect storm. Demand for refined products collapsed in the face of measures to contain an historic pandemic, at the same time producers abruptly began to prioritize free cash flow over output.
The result was a business meltdown for all but a handful of best in class companies. And even they were forced to dramatically shift strategy, as plunging share prices and pressured credit ratings all but cut them off from capital markets on reasonable terms.
This year is shaping up as a far different animal. Even sector leaders like Portfolio members Enterprise Products Partners (NYSE: EPD), Pioneer Natural Resources (NYSE: PXD) and Schlumberger Ltd (NYSE: SLB) still haven’t made it back to pre-pandemic levels. But we have seen some very impressive gains across the board off the late October 2020 lows. And that price momentum has accelerated so far in 2021.
Endangered Dividends List
Our outlook remains bullish for energy prices and sector stocks. That means we still expect to see a declining number of names on the Endangered Dividends List going forward, with Q1 results the next opportunity for companies to drop off.
Live Chat with
Elliott and Roger on Jun. 30, 2021
Portfolios & Ratings
Model Portfolios
Balanced portfolios of energy stocks for aggressive and conservative investors.
Producers and Drillers
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
MLPs and Midstream
Our assessment of every energy-related master limited partnership.
International Coverage
Roger Conrad’s coverage of more than 70 dividend-paying energy names.
Experts
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor