Upstream Overview: Thoughts on Q2 Results
Within the upstream space, we continue to focus on names with low costs, solid balance sheets, high-quality acreage in the STACK and Permian Basin, and the flexibility to monetize noncore assets or retain cash flow through captive midstream MLPs.
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 and stock selection—easier said than done with shorter cycle times—will be critical to producing differentiated returns. Adhering to our Dream Prices can help in this regard.
Midstream IPOs: Rockin’ the Bakken
The flow of initial public offerings in the midstream space has slowed significantly since investor demand for master limited partnerships peaked a few years ago. We review the latest MLPs to go public or file initial registration statements with the SEC.
Upstream Takeover Targets
Some of the biggest winners from mergers and acquisitions activity in the US upstream space have been the acquirers. Deal flow will continue to focus on assets and private-equity outfits monetizing their investments. We prefer names with solid balance sheets and exposure to franchise assets with low production costs; these names will continue to take market share, outperform their and grow their inventories of potential drilling locations.
E&P Update
We highlight five high-quality exploration and production stocks for investors to buy on a pullback as well as on speculative play on a 2017 recovery in oil prices.
On the Radar
Shares of many exploration and production companies have rallied too far, too fast. However, investors will profit from exposure to names that can win market share in an environment where crude oil ranges between $40 and $60 per barrel–provided that they bide their time and buy at the right price. We highlight a handful of names to keep on your radar screen.
In the Portfolio
Our strategy of buying our favorite upstream oil and gas companies at dream prices has paid off with impressive returns. We update our investment theses for these names as well as our buy targets and dream prices.
Oil Prices, Production Volumes and MLP Investment Strategy
The most recent issue of Energy & Income Advisor, Dusting off the Crystal Ball, laid out our outlook for the stock market, the US economy and the prices of oil, natural gas and natural gas liquids (NGL) over the coming year. These views shape our strategy for investing in master limited partnerships (MLP) in the near term and for the long haul.
IPO Analysis: Hess Midstream Partners LP (NYSE: HESM)
The proposed initial public offering of Hess Midstream Partners LP will monetize Hess Corp’s processing, transportation and terminal assets in North Dakota’s Bakken Shale, a prolific oil-producing play. Here’s our take on the prospective publicly traded partnership.
Making Sense of the Marcellus Shale’s Midstream Madness
The stakes are high for the masters of midstream, particularly in the Northeast where surging output of natural gas has overwhelmed local demand and existing takeaway capacity, depressing the prices at Pennsylvania’s Leidy Hub relative to the Henry Hub in Louisiana.
Cypress Energy Partners LP: A Marriage of Nontraditional Business Lines
Cypress Energy Partners operates niche businesses–water management and pipeline inspection services–that customarily aren’t included in many master limited partnerships.
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Live Chat with
Elliott and Roger on Aug. 29, 2017
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
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Roger S. Conrad
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Elliott H. Gue
Founder and Chief Analyst: Capitalist Times and Energy & Income Advisor
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Peter Staas
Managing Editor: Capitalist Times and Energy & Income Advisor