Key Takeaways from Q1 Earnings: LNG, Deepwater and the Permian Basin
First-quarter earnings season is in full swing for the energy sector, with the major integrated oil and gas companies and the diversified oil-field service companies reporting results this week. Here’s a quick rundown of some of our key takeaways from the action.
International Review
We break down some of the major themes and opportunities in Canada and Australia’s energy patches, including consolidation in the oil sands, ongoing takeaway constraints in Alberta and restrictions on LNG exports.
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.
The Shipping News: LNG Overview
The market for LNG tankers looks oversupplied for at least the next two years. Nevertheless, the space offers some attractive opportunities for discriminating investors.
Global LNG: Near-Term and Long-Term Outlook
We examine the root causes of the recent drop in Asian and European LNG projects, assess the implications of this recent retrenchment and highlight some key themes for investors.
Ship Shape: Floating Pipelines
The marine-transport segment of the MLP universe offers robust yields for conservative and aggressive investors alike. Here are two of our favorites.
New MLPs on the Seas
The latest batch of master limited partnerships to complete their initial public offerings include two names that specialize in marine assets: Transocean Partners LLC and Hoegh LNG Partners LP.
3 Reasons Why US Natural-Gas Prices Will Remain Low
Unless we stand on the cusp of a new ice age, investors shouldn’t expect a sustainable rally in US natural-gas prices.
More CAPEX, More Problems: A Survey of Big Oil
When casual investors think of the energy stocks, one of the Seven Sisters—BP (NYSE: BP) NYSE: BP), Chevron Corp (NYSE: CVX), Eni (NYSE: E), Exxon Mobil Corp (NYSE: XOM), Royal Dutch Shell (NYSE: RDS B), Statoil (NYSE: STO) and Total (NYSE: TOT)—likely springs to mind.
But these Western energy giants have come in for a great deal of criticism over the past several years, as investors lose patience with the industry’s massive capital investments and limited production growth.
GasLog Partners LP: A Virtuous Cycle
The creation of GasLog Partners LP provides GasLog with a cost-effective means of recycling capital to fund additional growth opportunities. This virtuous cycle involves GasLog selling LNG carriers in its fleet to GasLog Partners at prices that are accretive to the MLP’s distributable cash flow. The parent then redeploys some of the proceeds into ordering or acquiring new vessels that can be dropped down to the MLP once they obtain longer-term contracts.
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Live Chat with
Elliott and Roger on Sep. 27, 2019
Portfolios & Ratings
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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