January 4, 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 $53 billion. Dividend yields range from 5.7% to 71.2% in the E&P list, and 2.8% to 47.0% in the ‘Midstream & Other’ list.

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

*It’s 2015 and We’re Still Importing Crude Oil from OPEC. Why? – Oil & Gas 360®

It’s Thursday morning, December 31, 2015. I’m not going to sugar coat it – it’s been a tough year.  There have been family deaths, cancer scares, a heart attack, a huge Category 4 tornado that was too close for comfort, and a new granddaughter, but she’s going to need heart surgery in January to fix a heart valve.  Like I said, it’s been a tough year. So, let’s talk about something more light-hearted.  Like the price of a barrel of crude oil. – Read More

*Energy Companies Gird for Weaker Prices in 2016 – The Wall Street Journal

In a sign that U.S. energy producers think oil and gas prices will languish through next year, several are slashing their already slimmed-down budgets even more. Eight companies including ConocoPhillips Co. and Marathon Oil Corp. collectively will spend $21 billion less in 2016 than they did last year when oil traded over $100 a barrel. American crude has since plunged by 60% to roughly $38 a barrel. ConocoPhillips plans to cut spending next year by 55%, when compared with its 2014 budget, to $7.7 billion. Marathon’s 60% cut to a $2.2 billion budget for 2016 is even steeper. – Read More

*MLPs: Gut Play Or Slow Motion Train Wreck – Forbes

Paul Durand-Ruel was the dominant French art dealer of the late 19th century, but too often bordered on bankruptcy – too much unsaleable inventory. Durand-Ruel championed all the great Impressionists, but it wasn’t easy keeping alive Monet, Manet, Renoir et al., who gave away canvases to put bread on the table. Some 12,000 paintings passed through this dealer’s hands, but he had little to show for it. For 2 decades the Impressionists, a derogatory sobriquet, were maligned and uncollected. In 1883 only one banker agreed on a loan to Durand-Ruel. He evaluated the asset value of the frames, not his paintings. – Read More

*Are the Good Times Over for Saudi Arabia? – Oil & Gas 360®

Saudi Arabia knew there would be repercussions for its market-share-over-price strategy. The effects were apparent in its 2016 budget, released on December 28, 2015. In the first full year of sub-$50 oil prices in roughly a decade, Saudi posted a record deficit of approximately $98 billion (367 billion riyals) in 2015. The Kingdom does not expect the depressed commodity environment to improve, and trimmed its 2016 budget by about 14% to about $225 billion overall (840 billion riyals, down from 975 billion). Even with the adjustments, Saudi expects to post a 2016 deficit of about $87 billion (325 billion riyals). –Read More

*People who almost never ask about junk bonds are asking about junk bonds, so Citi thinks it’s time to buy – Business Insider

Credit strategists at Citi have a bold trade idea to start 2016: Buy junk. In a note to clients over the weekend, Stephen Antczak and the team at Citi recommended that clients looking for a “tactical trade” take a swing at what was one of the ugliest parts of the market last year. Behind this recommendation are basically two things. On the one hand you’ve got your standard contrarian outlook, which says that entering a new year you should buy the worst thing from the prior year — especially when, in Citi’s view, there’s a way to look at that terribly performing asset that doesn’t make it look quite as bad. – Read More

*Energy Market Upside: For Core Laboratories Shareholders, the Returns Keep Coming – Oil & Gas 360®

In spite of the dive in oil prices, some companies have positioned themselves well for capturing the upside through advantageous acquisitions, reliable takeaway capacity, attractive hedges and low-cost production. Or a combination of factors. Core Laboratories (ticker: CLB), a production enhancement and reservoir description company based in Houston, combines its leading services to provide consistent returns to its shareholders. Although many are taking a bearish approach into the new year, Core Lab and its management has maintained its stance on a V-shaped recovery ever since commodity prices went south. – Read More

*Record $475bn parked with Fed at year end – Financial Times

The Federal Reserve’s most important tool for setting interest rates absorbed a record $475bn of money from financial institutions in its last monetary operation of 2015, in another sign that one of the central bank’s main methods of draining liquidity from the financial system is working. The New York Fed said that the US central bank had awarded $474.59bn in one-day fixed-rate reverse repurchase agreements to 109 counterparties in an auction on Thursday, more than a third higher than the previous record set at the end of the second quarter in 2014. – Read More

*Year in Review: 2015 Was a Bad Year to Bet on IPOs – The Wall Street Journal

This was not a good year to bet on IPOs. Many of the companies that underwent U.S. initial public offerings in 2015 received a tepid welcome into the open market. The IPO market has struggled as stock-market volatility dampened investors’ appetite for risk and a number of high-profile offerings failed to live up to the hype. The market skittishness has weighed on IPO performance and led some companies, such as Neiman Marcus Group Inc. and grocery chain Albertsons Cos., to delay going public until sentiment improves. – Read More

*The Oil Industry’s Lumpy Year – Oil & Gas 360®

If you look at the number of jobs lost, company market value lost, and the growing numbers of oil patch bankruptcies, 2015’s continued commodities price fall led to a lot of bangs and bruises in the oil and gas industry. 2015 was also a year in which readers of Oil & Gas 360® kept up with industry developments, company news and geopolitical trends in record numbers. Our weekly readership in December is up by 79% compared to the pageviews per week in January of 2015. As the year unfurled, it’s interesting to see which topics attracted the majority of readers as time went forward throughout the year. – Read More

*Why Oil Prices Should Stay Low Despite Saudi-Iranian Tensions – TIME

There are many surprising (and disturbing) things happening in the markets right now, from the Chinese stock market plunge to the disappointing U.S. manufacturing numbers. But perhaps the most unusual thing is that, despite a major sectarian conflict between the Middle East powers of Saudi Arabia and Iran, oil prices have barely budged from their recent lows. This is a truly bizarre data point. Oil is typically amongst the most fear-driven commodities. – Read More

*U.S. oil ‘strippers’ maneuver to keep pumping amid crude slump – Reuters

U.S. “stripper well” operators, the nation’s smallest oil producers seen as most likely to succumb to the crude price slump, are hanging in tough, reducing the chances of near-term production cuts needed to rebalance the domestic oil market. The conventional wisdom is that “strippers” would be the first to fold in the face of oil’s slide below $40 given their tiny size – some may pump as little as few hundred dollars’ worth of oil a day – limited access to capital and high costs compared with bigger, more efficient shale producers. – Read More

*As ConocoPhillips Exits Russia, Tehran and Moscow Strengthen their Energy Ties – Oil & Gas 360®

Five years ago, U.S. oil major ConocoPhillips (ticker: COP) sold its single largest asset in Russia, a stake in Lukoil (ticker: LKOH), for $9.5 billion. Last week COP announced that it has sold its 50% stake in the Polar Lights joint venture with Russian state-owned oil company Rosneft (ticker: RNFTF), its last project in Russia. The recent sale ends ConocoPhillips’ quarter century stint in Russia. ConocoPhillips was one of the first Western companies to invest in Russia following the fall of the Soviet Union, with the registration for its Polar Lights JV made in 1992. – 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.

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