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MLP Scorecard

December 7, 2015

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 10 E&Ps and 62 Midstream and Other operations. Market capitalization ranges from $1 million to $49.9 billion. Dividend yields range from 5.2% to 69.0% in the E&P list, and 2.7% to 49.0% in the ‘Midstream & Other’ list.

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

*Oil Trade is Fertile Ground for Turkey-Russian Tensions – Oil & Gas 360®

As tensions continue to rise following Turkey’s decision to shoot down a Russian fighter jet November 24, the oil trade has become a target in an exchange of blows. Russian President Vladimir Putin accused Turkey of shooting down Russia’s jet in order to protect an ISIS oil trade route earlier this week, a claim Turkish President Recep Tayyip Erdogan has vehemently denied. Just days after The Russian plane was shot down, Russia began pulling Turkish products off store shelves, and recommending Russians refrain from traveling to Turkey, which receives roughly $10 billion per year from Russian tourists. – Read More

*Green investors take note: climate-focused mutual funds dabble in oil – Reuters

Several of the world’s biggest climate-focused mutual funds have stakes in traditional oil and gas companies mixed in with their solar, wind and clean tech holdings, a potential shock to green investors seeking to avoid fossil fuels altogether. Six of the 20 biggest funds that mention “climate change” or “global warming” in their titles or marketing materials have oil and gas stocks, including two funds with investments in companies proposing new pipelines from Canada’s carbon-intensive oil sands reserves, according to Reuters data. – Read More

*The Long Wait: Oil And Gas Private Equity Is In A Holding Pattern – Forbes

Talking to private equity-backed companies in the oil patch lately is definitely a Big Lebowski-esque exercise. You’d think executives christened with hundreds of millions in private equity money would see the world as their oyster. Instead, these wunderkind are being forced to, ya know, abide. A summer bounce in commodity prices prompted a brief surge in deals, but since then, deal activity has slowed again. The fall loan redeterminations that were supposed to unleash assets onto the market, finally, once again passed without much ado. The oh-so-recently high-flying oil and gas industry is stuck in a rut. – Read More

*U.S. Economy Adds 211,000 Jobs in November – Oil & Gas 360®

The Bureau of Labor Statistics (BLS) reported strong November jobs growth today ahead of the Federal Reserve’s December meeting. The U.S. economy added 211,000 jobs in the month of November, according to the BLS, adding to the possibility that that the Fed may decide to raise interest rates later this month on the stronger employment data. Overall unemployment remained unchanged from October, standing at 5% for the second straight month. Unemployment has trended down over the last year, with the number of unemployed at 5.8% in November of last year. – Read More

*Three Oil Stocks to Weather the Storm – Barron’s

Citigroup’s Alastair Syme and team didn’t just upgrade Chevron (CVX) to Buy today, but they also laid out a strategy for outperforming using less volatile oil majors, including Total (TOT) and Statoil (STO).  They explain: In August we upgraded our view of Big Oil to at least benchmark-weight, the first constructive arguments we have made on the group in several years…Our thesis remains built on a belief that managements can repair a multi-year ROE collapse through self-help, leveraging growth and realising better capital allocation. On our estimates, ROE – currently c. 5% – can climb back to 10-11% by 2017/18, enough we think to support 30%+ equity upside for the group. – Read More

*China’s Currency Becomes IMF’s Fifth Reserve Currency – Oil & Gas 360®

The International Monetary Fund (IMF) announced Monday that the international lender will include the Chinese renminbi, or yuan, in its basket of currencies that make up the Special Drawing Right (SDR), it said in a release. The IMF’s decision will be effective as of October 1, 2016, providing lead time for the IMF and users of the SDR basket time to adjust. The SDR is neither a currency, nor a claim on the IMF, but rather a potential claim on the freely usable currencies of IMF members. – Read More

*OPEC Decision Raises Risk Of Oil Company Dividend Cuts – Forbes

OPEC just killed the expectation that it would finally reduce oil production to balance demand and supply, thereby pushing prices back up. With those dashed hopes comes a serious challenge to oil companies: How to manage in this price-unfriendly environment. The OPEC decision both prolongs low price environment and increases risk of even lower prices. – Read More

*Cheap oil is here to stay. So why does our budget pretend it isn’t? – Alaska Dispatch News

Eight months ago, the state Department of Revenue predicted oil prices this fiscal year would be in the vicinity of $66. That same forecast said prices would rise in the years ahead, hit $109 by 2020 and remain in triple digits thereafter. It embodied the fading Alaska prayer that the collapse in oil prices is a short-term blip and not a trend that will last. The belief that higher prices will return is at the root of the dream, now a matter of faith among some Republican leaders, that if Alaska cuts the state operating budget to $4.5 billion, our financial problems will be solved and we will have achieved a “sustainable budget,” with no need for any difficult decisions about taxes or the Permanent Fund dividend.  – Read More

*New Iranian Oil and Gas Contracts Extend 20-25 Years – Oil & Gas 360®

Over the course of last weekend, Iran outlined the contractual terms on its new Iranian Petroleum Contracts (IPCs). Iran hopes to use the new contract terms to attract international investors to its oil and gas industry as it seeks to draw in $280 billion in foreign investment. Iran hopes the substantial amount of foreign investment will help it revitalize its oil and gas sector with the goal of taking its production to 5 MMBOPD. The contracts are meant to replace the old buy-back contracts previously used by Iran, which have not remained competitive due to their low flexibility and the fixed profit margins. – Read More

*Oil slump, determined Draghi halts euro zone bond sell-off – Reuters

A sell-off in euro zone bond yields kicked into reverse on Monday as oil prices tumbled close to 2015 lows and ECB president Mario Draghi said he stood ready to deploy further stimulus to achieve the central bank’s inflation target. German 10-year bond yields — the bloc’s benchmark — fell 5 basis points to 0.64 percent, erasing some of the 25 bps rise seen after Draghi announced a package of stimulus measures on Thursday including a rate cut and an extension of bond-buying that fell short of market expectations. – Read More

*Reform bill would make Federal Reserve accountable –The Detroit News

Marriner Eccles, chairman of the Federal Reserve under President Franklin Roosevelt, once began his testimony to Congress by saying: “I am speaking for the Board of Governors of the Federal Reserve System, an agency of Congress.” Eccles recognized what many seem to have forgotten over the Federal Reserve’s 100-plus years in existence — the Fed was created by Congress and is accountable to the American people. Since first opening its doors in 1913, the Federal Reserve has increasingly operated in a “man behind the curtain” manner as its authority has continued to expand at a pace far outstripping transparency and accountability standards. – Read More

*TRC Completes $130 Million Acquisition of Willbros Professional Services – Oil & Gas 360®

TRC Companies (ticker: TRR), an engineering, environmental consulting and construction management service company, announced yesterday that it has completed its acquisition of the Professional Services business segment of Willbros Group (ticker: WG). The all-cash transaction amounted to $130 million, less a balance of $7.5 million to be paid when certain customer consents are received, according to Willbros. Willbros said the majority of the all-cash consideration will be used to reduce its term loan to less than $100 million. – 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.