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February 1, 2016

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 71 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 61 Midstream and Other operations. Market capitalization ranges from under $1 million to more than $47 billion. Dividend yields range from 5.5% to 17.6% in the E&P list, and 2.6% to 78.3% in the ‘Midstream & Other’ list.

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The following data & analysis is from EnerCom’s Energy Industry Data & Trends, January 2016

*2016 Budget Cuts Underway as Oil & Gas Majors Slash Billions in Capex – Oil & Gas 360®

Lower year-over-year spending in 2016 was a foregone conclusion for many in the exploration and production space, but the amount of expenditure cuts is noteworthy, no matter how you slice it. Plans for 2016 are trickling out ahead of Q4’15 earnings season, and some of the biggest names in the business continue to pull back on operational activity. Hess Corp. (ticker: HES) announced its 2016 budget of $2.4 billion is 40% below its 2015 spending levels and 20% below its initial 2016 plans. – Read More

*The Science (Or Art) Of Forecasting Oil Prices – Forbes

The past few years have greatly encouraged those who consider oil price forecasters to be little more than astrologers (on a good day), but there are some basic lessons that tend to be overlooked amidst all the noise and confusion. It doesn’t help that today’s news cycle requires constant commentary on oil price movements, as well as predictions short- and long-term, nor that free publicity is available, particularly to those willing to make the most extreme predictions. – Read More

*Key to Surviving the Oil Bust: Beware Bankers Bearing Cheap Debt – Bloomberg

During the go-go days of $100 oil, bankers swarmed into Travis Stice’s office in downtown Midland, Texas, trying to sell him on the wonders of easy credit. He didn’t bite, not even when equity analysts groused that Diamondback Energy Inc. would grow a lot faster if he’d just spend more of other people’s money. “We had bankers with wheelbarrows of cash that were coming up the elevator saying, ‘Hey, here’s debt, take it on,’” said Stice, chief executive officer of Diamondback. – Read More

*Core Lab Continues to Outperform the Oilfield Service Sector – Oil & Gas 360®

Core Laboratories (ticker: CLB, released its fourth quarter and full year 2015 results this week, proving that it is a company that can continue to outperform its oilfield service peers, even through a tough commodity downcycle. CLB reported revenue of $182.7 million in the fourth quarter and full year revenue of $798 million. The full year revenue fell 23% on a constant currency basis, year over year, due in large part to the slowdown in new drilling around the globe. – Read More

*Investing for income—without getting burned – Barron’s

Humans are predisposed to reach for the bright and shiny—the most decadent dessert, the snazziest sports car. When investing for income, the impulse—reaching for yield—often ends in disappointment. If an investor looked solely at year-end prevailing yields in 2014, he may have allocated more toward areas such as lower-quality high yield and master limited partnerships (MLPs) at the beginning of 2015. – Read More

*Bam! It’s Earnings Season Again – Q4’15 Estimates – Oil & Gas 360®

EnerCom, Inc. compiled fourth quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 217 E&P and OilService companies in our database. The median OilServices company earnings estimate for the quarter ending December 31, 2015, is ($0.05) per share compared to actual earnings per share of ($0.14) and ($0.03) for Q3’15 and Q2’15, respectively. In Q4’14, the median OilServices company earnings were $0.02. – Read More

*What Is Rolling Down the Yield Curve? – The Wall Street Journal

Sometimes you’ll hear investors talk about rolling down the yield curve. The term refers to a strategy of selling bonds before they mature in an effort to profit from rising prices. In bond markets, prices rise when yields fall, which is what tends to happen as bonds approach maturity. The concept, while confusing, is important to understand, especially for those bond investors worried about rising interest rates. – Read More

*Blackstone ups new investments as Q4 earnings disappoint – Reuters

Blackstone Group LP, the world’s largest alternative asset manager, said on Thursday it is seizing on the market turmoil to make new investments, as it posted disappointing fourth-quarter earnings due partly to falling oil prices. Armed with nearly $80 billion of unspent cash – the most in its industry – Blackstone increased its investments in debt and the real estate sector between November and December in the hope of picking up bargains battered by choppy markets. – Read More

*Stephens: Invest in OilService Development, Not a Recovery – Oil & Gas 360®

Buy low, sell high is perhaps the most commonly (and overly) used phrase when it comes to investing. Now that commodity prices are near the floor (depending on who you ask), investors are cherry picking stocks in hopes of capitalizing on a down market and its inevitable recovery. It may not come in 2016, but oilservice giants like Schlumberger (ticker: SLB,, along with analyst firms like KLR Group, are pegging 2017 as the rebound year. – Read More

*Federal Reserve releases scenarios for 2016 bank stress tests – Reuters

Large financial firms will have to show how they would survive a “severely adverse scenario”, including a global recession where U.S. unemployment shoots up to 10 percent and short-term U.S. Treasuries pay negative yields, in this year’s bank stress tests, the Federal Reserve said on Thursday. In the annual testing of stability, the Fed, the U.S. central bank, presents three scenarios for firms such as Bank of America (BAC.N) and Goldman Sachs (GS.N) to show how they would hypothetically withstand various economic and financial shocks. – Read More

*M&A Isn’t Saving Oil – Bloomberg

The plunge in crude prices couldn’t rattle the two biggest pending oil mergers: Shell won shareholder support Wednesday for its $64 billion takeover of BG, which sent both stocks rising. And Energy Transfer was said to be plowing ahead with plans to acquire Williams Cos. in another multi-billion-dollar deal. In other words, it wouldn’t have been a half-bad day for the oil news cycle. – Read More

*For the Year, U.S. Economic Growth Exceeds Five Year Average – Oil & Gas 360®

The U.S. Bureau of Economic Analysis released the growth numbers for the U.S. economy for fourth quarter, and full-year, 2015. According to the BEA, economic growth was just 0.7% in the fourth quarter of the year, as business investment slowed down. Better employment numbers have helped improve the housing market and auto sales, but the decline in oil prices and a strong dollar had mixed impacts on business and consumers. – 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.