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November 23, 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 $2 million to $51.2 billion. Dividend yields range from 3.2% to 58.0% in the E&P list, and 2.7% to 56.8% in the ‘Midstream & Other’ list.

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


*Canada’s Energy Audible: New Prime Minister Justin Trudeau Making his Mark on the Industry – Oil & Gas 360®

Justin Trudeau, the newly elected Prime Minister of Canada, has been in office for less than two weeks but is already making waves in the nation’s energy industry. In a mandate letter to the Minister of Transport, Trudeau outlined the first steps of his policy and called for a “renewed, nation-to-nation relationship with Indigenous Peoples, based on recognition of rights, respect, cooperation and partnership.” That includes a further collaboration with Canada’s energy policy, which oversees a sprawling network of pipelines and associated infrastructure to deliver the country’s chief export product to market. As evidenced by a recent pipeline conundrum, those infrastructure buildouts are not completed with a high degree of understanding between the industry and the community. – Read More

*Bullish Case For Investing in Master Limited Partnerships (MLPs) Now – Forbes

Master limited partnerships, which transport and store oil, crashed harder than energy producers this year even though they are toll-road type businesses that collect fees regardless of commodity prices. Investor fears of rising interest rates on top of freefalling oil prices pummeled shares. As producers scaled back production in response to falling prices, demand for transportation and storage plunged. Alerian MLP exchange-traded fund (AMLP), the largest of MLP ETF, plunged 33% over the past 12 months. The benchmark for oil and gas producers, Energy Select Sector SPDR ETF (XLE) lost only 22%. – Read More

*Investor Shift: Hate the Oil, Love the Big Oil Company – The Wall Street Journal

Investors remain downbeat on oil, but some are starting to buy the companies that pump it out of the ground. Since the beginning of October, Brent, the global oil benchmark, has fallen by 8% and few see it recovering much this or next year. But oil and gas stocks are up almost 8%, as measured by the S&P Global Oil Index. The renewed interest in this beleaguered sector has little to do with more optimistic views on crude. It reflects the industry’s attempts to adjust to the lower oil price by cutting expenditure, divesting businesses and squeezing suppliers for better deals. – Read More

*Energy Transfer Partners Completes Dropdown of Remaining Retail Business for $2.2 Billion – Oil & Gas 360®

Energy Transfer Partners (ticker: ETP) announced the dropdown of its remaining retail business to Sunoco LP (ticker: SUN) for total consideration of $2.226 billion. Energy Transfer Partners’ dropdown consisted of its remaining 68.42% interest in Sunoco, as well as its 100% interest in the legacy Sunoco retail business. This dropdown is the latest in a series of deals between ETP and SUN amounting to a total of $5.7 billion in just over a year. The transaction will be effective January 1, 2016, and is expected to close in February 2016. – Read More

*Aubrey McClendon’s $2 billion IPO attempt falls short; only $11.2 million was raised – News OK

American Energy Partner LP founder Aubrey McClendon’s bid to raise as much as $2 billion from investors to buy oil and gas assets has ended early, after raising about just $11.2 million. American Energy Capital Partners-Energy Recovery LP unitholders voted earlier this month to dissolve the company, which never acquired any oil and gas assets. Unitholders will be repaid the amount of their investment, but are still subject tax liabilities, according to regulatory filings. McClendon partnered with real estate investors Nicholas S. Schorsch and William M. Kahane in December 2013 to form American Energy Capital Partners LP. – Read More

*Noble Postpones IPO of Midstream MLP – Oil & Gas 360®

Houston-based Noble Energy (ticker: NBL) announced today that it will postpone an IPO of its wholly owned subsidiary Noble Midstream Partners, which the company planned to list on the New York Stock Exchange with the ticker NBLX. According to Noble, the company made the decision “as a result of unfavorable equity market conditions.” Noble said it would continue to evaluate timing for an IPO of Noble Midstream Partners, but gave no timeline on when it might pursue a second IPO. The IPO would have consisted of the company’s DJ Basin crude oil, natural gas and water-related midstream assets, according to the company.  – Read More

*Don’t Run Afoul Of Tax Rules With MLPs In Retirement Accounts – Forbes

Master limited partnership (MLPs) continue to be experience a painful year, due to various factors, but mostly due to declining oil prices. Despite their poor performance over the past year, fat yields and big tax breaks have maintained the popularity of MLPs. So what is a MLP? MLPs are publicly traded partnerships generally engaged in the transportation, storage, production, or mining of minerals and natural resources. An MLP is a hybrid between a partnership and a publicly traded company. Congress limited the use of MLPs to entities operating in certain sectors in 1987, including those operating businesses associated with natural resources. MLPs issue units, as opposed to shares, like companies do. – Read More

*Investors Are Taking the Air out of Some of the Hottest ‘Yield Plays’ in Markets – Bloomberg

Years of low interest rates have sparked an intense search for yield, with many investors seeking heftier returns in riskier corners of financial markets. So-called yield plays, including real estate investment trusts (Reits), master limited partnerships (MLPs), some initial public offerings, leveraged loans, and the bottom tier of the corporate credit market, have offered relief for the return-ravenous, rate-restrained investor. With an interest rate hike from the Federal Reserve now widely expected to take place next month, however, some of the air has been firmly kicked out of yield plays’ tires. – Read More

*ISIS: a Criminal/Terrorist Enterprise with a Business Acumen that has No Historical Precedent – Oil & Gas 360®

As the battle against ISIS continues, allied forces are increasingly targeting oil assets and the convoys of trucks being used to smuggle oil from ISIS-controlled oilfields. The idea is to cut off the major source of funding for the Islamic State’s barbaric terrorist activities. It is believed that ISIS earns $40 million to $50 million per month from the sale of oil on the black market, with the Islamic State’s Diwan al-Rakaaez – its version of a Finance Ministry – reporting April revenues of $46.7 million, reports Business Insider. That makes oil trading the Islamic State’s single largest source of continual income for funding its attacks. – Read More

*Federal Reserve leaves itself a little room — just in case – CNBC

While Wall Street talks up the near certainty of a December interest rate hike, the Federal Reserve has left itself some wiggle room for delay. A summary from the most recent Federal Open Market Committee meeting in October contained the expected nod toward raising the key funds rate in December so long as conditions warrant. But the minutes also showed a committee more divided, if in sentiment but not in actual voting, than it’s been since Janet Yellen chaired her first meeting in March 2014. Traders took down the possibility of a December rate hike after the release of the minutes, from a 74 percent chance to 68 percent. – Read More

*Euro Area’s Negative-Yielding Debt Tops $2 Trillion on Draghi – Bloomberg

Investor expectations that European Central Bank President Mario Draghi will expand monetary easing are pushing even more euro-area government-bond yields below zero. The total has risen to more than $2 trillion, or about one-third of the securities. Bonds across the region climbed last week when Draghi said the institution will do what’s necessary to rapidly accelerate inflation. The statement recalled the language of his 2012 pledge to do “whatever it takes” to preserve the euro and it solidified investor bets on further stimulus at the ECB’s Dec. 3 meeting. Two-year note yields of Germany, Austria and the Netherlands all dropped to records on Monday, while 10-year bond yields rose. – Read More

*Waning Coal Demand in Asia Pushes Global Trade Down for the First Time in 21 Years – Oil & Gas 360®

The global coal trade declined for the first time in 21 years in 2014, and likely contracted further this year as well, according to information from the Energy Information Administration (EIA). The global coal trade grew rapidly from 2008 to 2013 as demand in Asia picked up to support expanding economies in the region, particularly in China. Declines in China’s import demand have led to declines in total world coal trade in 2014 and, based on preliminary data, in 2015 as well. Nearly all of the 47% growth in total world coal trade between 2008 and 2013 was driven by rising coal import demands by countries in Asia, specifically China and India. Coal trade in the rest of the world declined over the same period. – 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.