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MLP Scorecard is our weekly distribution of information emerging from the world of master limited partnerships.

This week’s Scorecard report delivers 33 comparative metrics on 72 MLPs in the industry. All of the MLPs in the list have traded publicly for at least four quarters. The EnerCom MLP group includes 11 E&Ps and 61 Midstream and Other operations. Market capitalization ranges from $1 million to $49.9 billion. Dividend yields range from 5.2% to 74.3% in the E&P list, and 2.8% to 62.4% in the ‘Midstream & Other’ list.

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The following data & analysis is from EnerCom’s Energy Industry Data & Trends, December 2015

*Oil and Gas Spending Cuts are Inevitable for 2016 – Will Production Follow? – Oil & Gas 360®

Budget layouts and capital expenditure plans for 2016 are trickling onto the newswires, with EQT Corp. (ticker: EQT), Noble Energy (ticker: NBL) and PDC Energy (ticker: PDCE) all unveiling their plans within the week. To date, the plans are mirror images of 2015: less spending, more production. Spending for 2015 was significantly below 2014 levels. Based on EnerCom’s E&P Weekly Benchmarking Report, the average 2015 capex (on a trailing twelve month basis) decreased by 15% in Q3’15 compared to the prior year’s period. – Read More

*Icahn: How to Stop Turning U.S. Corporations Into Tax Exiles – The New York Times

The Pfizer-Allergan deal is a travesty. Pfizer, which is based in New York, will move overseas by merging with Allergan, based in Ireland, in a maneuver known as a corporate inversion. The point isn’t to find corporate synergy. It is to leave behind our uncompetitive international tax system. Not only is this the largest inversion in history, but it will also open the floodgates for other companies to leave the United States, further eroding our tax base, damaging our economy and costing many thousands of jobs. This is not just me speculating. – Read More

*Oil rout rattles nervous investors as Fed hike looms – Reuters

Volatility swept through world markets on Monday as a renewed slide in oil and weakness in credit markets hit stocks, weighed on bond yields and added to the nervousness already building ahead of an expected U.S. interest rate hike later this week. European stocks wiped out earlier gains to trade in the red by midsession, while U.S. futures turned flat. Brent crude tumbled 3.4 percent to trade as low as $36.62 a barrel, its lowest since December 2008. A fall below $36.20 will take oil prices down to levels not seen since 2004. – Read More

*OECD Commercial Stocks See First Draw in Seven Months – Oil & Gas 360®

The Organization of Economic Cooperation and Development saw commercial stocks of crude oil draw down for the first time in seven months, according to the International Energy Agency’s (IEA) December Oil Market Report. Commercial stocks stood at 2,971 MMBO at the end of October. While the draw comes as welcome news for markets that have remained critically oversupplied during the last year, the IEA believes that inventories will continue to build until late 2016, although at slower rates than seen this year. – Read More

*Oil industry cutbacks may not be enough – USA Today

Chevron announced on Wednesday its decision to slash capital expenditures even further for 2016, cutting spending down to $26.6 billion, or about 24% below 2015 levels. “Our capital budget will enable us to complete and ramp-up projects under construction, fund high return, short-cycle investments, preserve options for viable long-cycle projects, and ensure safe, reliable operations,” Chevron Chairman and CEO John Watson said in a statement. “Given the near-term price outlook, we are exercising discretion in pacing projects that have not reached final investment decision.” That follows an October announcement in which the company said it would cut 10% of its workforce. – Read More

*SEC Reserves Price Deck Down 48% for 2016 – Oil & Gas 360®

With the end of 2015 quickly approaching, and companies preparing for a lower Securities Exchange Commission (SEC) price deck for reserves reporting, proved reserves for oil and gas companies are likely to diminish significantly in the near future. The dramatic decrease in oil prices since November of last year has pulled the SEC’s price deck down to about $50.13, based off the average of the price for WTI on the first day of every month this year, falling within 1% of EnerCom Analytic’s estimate, made in September. That represents a 48% decline from $94.99 in 2014. – Read More

*Canadian Short Rates Have Become Unhinged From Oil Prices – Bloomberg

The collapse in oil prices in the second half of 2014 provoked a surprise rate cut from the Bank of Canada at the start of this year. Six months later, the prolonged downdraft in crude spurred another reduction in the overnight rate to 0.5 percent amid back-to-back quarters of economic contraction. But as oil prices (in Canadian dollars) have been tumbling since early November, the yield on the one-year Government of Canada bill has continued to inch higher to 0.549 percent. – Read More

*Oil Rout Accelerates Selloff in Master-Limited Partnerships – The Wall Street Journal

The oil selloff has hurt energy investments across the board, including one that has attracted billions through its reputation as a haven from big drops in the price of crude. Shares of energy pipeline and storage companies have fallen sharply in the past couple of weeks, accelerating a recent rout for master-limited partnerships, which have seen strong demand for their shares in recent years as investors sought ways to profit from the natural gas and energy infrastructure boom in the U.S. – Read More

*U.S. Looks to Sell 174 Million Barrels from the SPR between 2017-2025 – Oil & Gas 360®

The Strategic Petroleum Reserve (SPR) is a U.S. Government complex of four sites with deep underground storage caverns created in salt domes along the Texas and Louisiana Gulf Coasts. The caverns have a design capacity of 714 million barrels and store emergency supplies of crude oil owned by the U.S. Government. Two recently enacted laws authorize the sale of 174 million barrels of crude oil from the U.S. Strategic Petroleum Reserves to fund infrastructure projects. – Read More

*MLPs: It’s The Balance Sheet, Stupid – Forbes

If you believe oil is going to $25 a barrel, don’t read this piece. The analytical basis for the MLP wipeout has escaped Wall Street to date. At stake is what the optimum balance sheet should look like. All managements ponder this issue, particularly banks that operate with huge leverage in good times and bad times. The capital structure for major MLPs was two-thirds debt and preferred stock. The remainder was market value of the common stock used for debt issuance and increasing capex. – Read More

*Oil Buyers Beware – Bloomberg

It takes guts to be a buyer in the oil market these days. Take Devon Energy. The $14 billion oil and gas explorer said Monday that it’s paying $2.5 billion for Felix Energy’s drilling rights in a shale region of Oklahoma and assets in the Powder River Basin in Wyoming. The properties are attractive enough and will help Devon continue its shift toward producing higher-margin oil and natural gas liquids. But these days, it’s hard to convince investors that even the most sensible oil and gas deals are a good idea. So Devon’s stock slumped 10 percent Monday, and fell another 4 percent early on Tuesday. – Read More

*Devon Energy, EnLink Midstream Team Up for $4 Billion Acquisition from Private Companies – Oil & Gas 360®

Devon Energy (ticker: DVN) has secured the strongest foothold in the Cana-Woodford, pro forma for its $1.9 billion acquisition of Felix Energy LLC on December 7, 2015. Rumors of the impending cash-and-stock exchange were first brought to light by Reuters on December 3, but today’s announcement carried additional acquisitions that were unforeseen in the preliminary report. In addition to Felix Energy, Devon purchased $600 million of acreage in the Powder River Basin from an undisclosed private seller. –Read More

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable.  This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note.  This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results.  EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services.  In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies.  As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note.  The company or companies covered in this note did not review the note prior to publication.