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Feature Article

Inside MLPs Part II

Talking Point #1: Over the past 18 months we’ve seen basis differentials rise quite sharply. Those regional pricing differences for crude oil and natural gas are up at least in part to insufficient pipeline infrastructure, including what serves key shale fields like the Permian Basin.

Endangered Dividends List

Unfortunately, we continue to see elevated risk for a number of companies, and particularly for the 13 currently on our Endangered Dividends List. For more on where the risk lies at individual midstream energy companies and MLPs, see the comments column in our now updated MLP Ratings table, including analysis of first quarter results, distribution coverage and debt-to-EBITDA figures and prospects for potential roll-up mergers. It’s posted on the Energy and Income Advisor website under the “Portfolios” tab.

Inside MLPs Part I

It’s been a little over a year since FERC shocked the MLP industry with its decision to disallow a significant tax-related item in cost-of-service rates for interstate pipelines. That ruling, coupled with the big drop in oil prices last fall sent the industry benchmark Alerian MLP Index tumbling to its lowest levels in a decade.

Seeking High Income Energy

The cheapest source of expansion funds is always internally generated cash. So it’s no great surprise that many energy sector management teams are still choosing to “right size” dividend distributions, rather than issue new debt and equity into what remain largely hostile capital markets.

An Update on Oil Prices

In the December 19, 2018 issue of Energy & Income AdvisorOil: It’s Not 2014,” we took a deep-dive look at the global oil market and came to the following conclusion:

“While it’s tough to catch the proverbial falling knife or call an exact bottom in crude, we believe oil is approaching a crucial bottom and will recover into the first half of 2019. Specifically, we could see Brent rallying back over $70/bbl and WTI reaching the mid $60’s by the second quarter of 2019.

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

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      Our assessment of every energy-related master limited partnership.

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    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