In 2014, a record 19 energy-related master limited partnerships (MLP) have completed their initial public offerings (IPO).
And another dozen prospective publicly traded partnerships having filed their S-1 and F-1 registration forms with the Securities and Exchange Commission (SEC), suggesting that the number of newly minted MLPs will easily eclipse 20.
We don’t expect this trend to abate anytime soon. Investors’ appetites for above-average yields and exposure to the shale oil and gas revolution remain robust, providing the energy sector with a ready source of low-cost capital at a time weakening oil prices could crunch balance sheets.
In this environment, upstream operators and private-equity funds will continue to churn out MLPs in an effort to raise capital and monetize earlier investments.
Many of these offerings will offer a visible pathway to distribution growth, usually through structured drop-down transactions; however, the best bets will have a viable long-term game plan to grow cash flow, build franchise value and diversify their asset and customer bases.
However, as the total returns generated by this year’s debutants attests, selectivity remains the key to outperformance.
In this issue, we review the latest batch of MLPs to go public and three-quarters of the prospective publicly traded partnerships that have filed their initial registration statements with the SEC.
Investors still flock to initial public offerings of master limited partnerships.
US propane exports have soared to a record high--and there's more upside to come.
With winter just around the corner, many investors and market observers wonder whether we’ll witness another spike in Midwest propane prices.
Whereas SeaDrill’s stock has tumbled by 15.2 percent over the past year, SeaDrill Partners’ units have delivered a total return of 15.6 percent.
We pounded the sand for Hi-Crush Partners LP in early 2013, when the stock was a high-yielding value play. Today, investors need to take their heads out of the sand and sell.
Unless we stand on the cusp of a new ice age, investors shouldn't expect a sustainable rally in US natural-gas prices.
SeaDrill has given up 36 percent of its value since the start of September, yet some uninformed market pundits continue to pound the table for the stock. These five myths about SeaDrill could cost you real money.
The stakes are high for the masters of midstream, particularly in the Northeast where surging output of natural gas has overwhelmed local demand and existing takeaway capacity, depressing the prices at Pennsylvania’s Leidy Hub relative to the Henry Hub in Louisiana.
Rather than regarding Kinder Morgan Inc.’s consolidation of its associated limited partnerships as a referendum on the MLP structure or the end of an era, investors should regard this move as a fresh start for the midstream giant--an opportunity to reshape itself to meet the demands of the marketplace and competitive environment.
Elliott and Roger on Dec. 1, 2014
Balanced portfolios of energy stocks for aggressive and conservative investors.
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.