Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
January 18, 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 $45 billion. Dividend yields range from 5.6% to 94.8% in the E&P list, and 2.7% to 290.8% in the ‘Midstream & Other’ list.

Download the full EnerCom MLP Scorecard by clicking on the icon below.
The following data & analysis is from EnerCom’s Energy Industry Data & Trends, January 2016

*E&P CapEx: First Double Dip Since ’86 – Oil & Gas 360®

“That’s what Friends are For” was the Billboard Top 100 song the last time this happened. Exploration and production spending is expected to decline by 15% this year. That’s on top of a 23% decline last year, making 2016 the eighth decline in global spending in the last 31 years, and only the second consecutive two-year reduction in spending seen in the period. According to Barclay’s E&P Spending Outlook, which has been conducted annually over the last three decades, the last time a double-dip was seen was 1986-1987 when E&P spending fell 31% and 6%, respectively. – Read More

*A Week of Warning for MLPs – Bloomberg

If you invest in MLPs, then you’re probably muttering to yourself: “Is it really only Thursday?” It’s been a wild week for the traditionally sleepy sector. On Wednesday, the Alerian MLP Index plunged 6 percent to close at its lowest level since 2009. Brent crude dipping a toe below $30 a barrel didn’t help, but there has also been plenty of action on the deal-making and financing front. – Read More

*After Brutal January Start, MLPs Should Recover – Barron’s

The last half of December was kind to master limited partnerships. Oil stabilized, year-end tax loss harvesting abated and several MLPs announced distribution increases. Investors were able to look past the Kinder Morgan (KMI) dividend slash that freaked them out earlier that month. But the reprieve from selling pressure didn’t last into January. As crude plummeted, MLPs were down 14% year-to-date as of Monday’s close, measured by the Alerian MLP ETF (AMLP). – Read More

*US$4.5 Billion Deal Reached: Suncor to Acquire Canadian Oil Sands – Oil & Gas 360®

After months of posturing and wrestling for shareholder approval, the boards of Suncor (ticker: SU) and Canadian Oil Sands (ticker: COS) have reached a merger agreement. The joint announcement, released on January 18, 2015, includes a sweetened transaction value of CN$6.6 billion (about US$4.5 billion) for COS, inclusive of an estimated CN$2.4 billion (about US$1.6 billion) in debt. The transaction is a straight stock-for-stock exchange and each COS shareholder will receive 0.28 SU shares (CN$8.74/share) in exchange for each COS share. – Read More

*Plains All American raises $1.5 billion from private equity firms, calms investors – Reuters

Plains All American Pipeline LP said on Tuesday it has secured $1.5 billion in new financing from private equity firms, aimed at easing investor fears that the U.S. midstream company would cut shareholder payouts amid slumping crude oil prices. The private equity firms paid a 20 percent premium over the company’s 20-day volume weighted average share price, providing more money than a traditional equity offering and showing the sector has more confidence in Plains All American than other investors. – Read More

*Energy Finance: The Right Tool at the Right Time – Oil & Gas 360®

Energy Finance: with oil prices still searching for a bottom, energy companies have been in search of ways to lighten burdens through good financial decisions. The ubiquity of capital needs and consequent debt associated with the oil and gas sector necessitates that many companies use multiple debt vehicles to meet their capital requirements. Among the most common debt vehicles are corporate bonds. – Read More

*There are still some good things one can say about yieldcos – Financial Times

Wrecking, or looting the washed-up debris of shipwrecks, was a big industry in Cornwall in the south of England in the 19th century. Then along came the spoilsports with their lighthouses and closer policing of the coast and the seaside people had to get by with honest trades, most of the time anyway. Just as the wreckers looked forward to stormy nights, some energy assets are looking interesting to investors who do not mind doing serious research and getting cold and wet. – Read More

*SEC Examining High-Yield Fund Holdings After Third Avenue Tumult – The Wall Street Journal

U.S. securities regulators are asking junk-bond funds for more information about their assets and shareholder requests to withdraw money following last month’s meltdown of a Third Avenue Management LLC high-yield fund, according to people familiar with the matter. Securities and Exchange Commission examiners have asked high-yield funds to provide greater details of their holdings as well as data on investor redemptions, these people said. It was unclear which firms the SEC is canvassing. –Read More

*Russia Mulls Budget Cuts, Privatizing Banks and Other Assets to Bridge its Budget Gap – Oil & Gas 360®

Russia is facing a slowing economy as the oil export-dependent country battles both slumping oil prices and Western sanctions. Russian Economy Minister Alexei Ulyukayev said Russia would have to adjust to a “new normal” of low prices for crude, which will last for a “very lengthy” period, reports The Wall Street Journal. The Russian government is considering a number of options in order to bridge the gap in the budget for the coming year. – Read More

*Top Analyst Says BOJ’s Negative Corporate Yield Adds Distortions – Bloomberg

The Bank of Japan’s purchase of corporate debt at negative yields for the first time adds to distortions in Japan’s bond markets and raises risks for investors and banks, according to Mana Nakazora, the chief credit analyst in Tokyo at BNP Paribas SA. The central bank bought corporate bonds in market operations at minus 0.03 percent on Wednesday, according to data from the central bank. While the BOJ has purchased company notes at zero interest in the past, it’s the first time for it to buy the debt at negative levels, according to data compiled by Bloomberg. – Read More

*A Federal Reserve Oblivious to Its Effect on Financial Markets – The Wall Street Journal

The sharp fall in share prices last week was a reminder of the vulnerabilities created by years of unconventional monetary policy. While chaos in the Chinese stock market may have been the triggering event, it was inevitable that the artificially high prices of U.S. stocks would eventually decline. Even after last week’s market fall, the S&P 500 stock index remains 30% above its historical average. There is no reason to think the correction is finished. – Read More

*Warren Buffett Stockpiles More Shares of Phillips 66 – Oil & Gas 360®

Don’t count Warren Buffett as a participant in the energy market selloff – the legendary investor has purchased nearly $5 billion of Phillips 66 (ticker: PSX) stock since August 2015. Berkshire Hathaway (ticker: BRK), a multinational holding company chaired by Buffett, now owns 13% of the refiner and has a value of about $5.3 billion overall. The company disclosed a huge stake in PSX in the summer of 2015 (about $4.5 billion), and held off on more purchases until this last week, culminating in an additional 6 million shares valued at more than $450 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.