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.
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 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.
Focus On The Permania
The latest additions to the Energy & Income Advisor Focus List have lagged of late, primarily because of the selloff in West Texas Intermediate crude oil. In light of these recent market moves, we we revisit our outlook and investment strategy.
Deal Flow Accelerates In Cotton Valley And Haynesville Shale
Enterprise Products Partners LP’s acquisition of Azure Midstream Partners LP’s gas-gathering and -processing assets marked the latest in a series of deals involving assets in the resurgent Haynesville Shale and the emerging Cotton Valley play. We explore what it all means and whether it’s worth placing a bet.
Upstream Update
We revisit four legacy upstream holdings and reassess their current appeal and upside potential in a market where energy prices remain lower for longer.
Focus List Update And Noteworthy Portfolio Developments
Since its reinstatement in early December 2016, the Energy & Income Advisor Focus List has generated an average total return of 9.6 percent, outperforming the S&P 500 Energy Index’s average loss of 4.5 percent over an equivalent holding period. We dig into fourth-quarter results from companies on our Focus List and in our Model Portfolios.
Quarterly Check-Up
A number of our Model Portfolio holdings have reported third-quarter results. We look at how they fared and analyze their future growth prospects.
What’s Behind the Recovery in the Midcontinent Rig Count?
These emerging shale plays are driving the recent recovery in Midcontinent drilling activity.
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.
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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