The Pipeline Outlook Keeps Improving
SL Advisors Talks Markets
by SL Advisors, LLC
11h ago
The trend of positive assessments is continuing for the pipeline industry. Sell-side analysts are pressing the case for their favorite names. JPMorgan sees further upside for Targa Resources (TRGP) even though it’s returned 40% YTD. They have a $140 price target for the end of next year, up from ~$120 today. They cite a “fully ..read more
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Another Inflation Omission
SL Advisors Talks Markets
by SL Advisors, LLC
1d ago
The inflation statistics offer a rich trove of counterintuitive methods that often inspire this blogger. It’s an important issue because voters cite inflation, for which they blame Joe Biden, as one of their top concerns. Inflation reports show it’s coming down, although that doesn’t mean earlier price hikes are being reversed, simply that prices are ..read more
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Blue State Energy Policies
SL Advisors Talks Markets
by SL Advisors, LLC
1w ago
Oregon is typical of many liberal states in that it is reviewing the infrastructure plans of the utilities it regulates. The concern is that too much capital will be invested in new natural gas infrastructure that will subsequently result in “stranded assets” as renewables reduce natural gas demand. The fear is that poor capex decisions ..read more
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A Closer Look At Canada’s Newest Pipeline
SL Advisors Talks Markets
by SL Advisors, LLC
1w ago
I was perusing energy podcasts the other day. Disappointingly they all seemed to be about renewables – nothing about where over 80% of the world’s energy comes from today. Hopefully I started listening to one by Shell, but quickly realized it’s part of their PR campaign to convince people they’re fully committed to the energy ..read more
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Picking The Top Pipeline
SL Advisors Talks Markets
by SL Advisors, LLC
2w ago
Which is the best pipeline company? It depends on what you’re measuring. Income-seeking investors might focus on Distributable Cash Flow (DCF) yield or distribution (dividend) yield. Dividend coverage is usually important. Lowest leverage would provide comfort to those concerned about downside. Momentum investors will look at dividend growth – and few will ignore price performance ..read more
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Revising The Gas Outlook Higher
SL Advisors Talks Markets
by SL Advisors, LLC
2w ago
Natural gas prices have been recovering in the US following several months below $2 per Million BTUs (MMBTU). The techniques of horizontal drilling and hydraulic fracturing (“fracking”) have enjoyed steady improvement, allowing break-evens to fall. An additional factor has been associated gas from the Permian in west Texas. E&P companies want oil but they get ..read more
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What’s Next For NextDecade?
SL Advisors Talks Markets
by SL Advisors, LLC
3w ago
NextDecade (NEXT) has drawn plenty of investor questions over the past ten days. It began with their most recent 10Q, filed with the SEC on May 13th. The phrase, “... there is substantial doubt about the Company’s ability to continue as a going concern.” wasn’t pleasant reading for many. How can a company that reached ..read more
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The Inflationary Energy Transition
SL Advisors Talks Markets
by SL Advisors, LLC
3w ago
Ominously for President Biden, opinion polls consistently show voters are unhappy with his economic stewardship. The surge in inflation in 2022 didn’t help, but after believing it to be transitory the Fed responded and it’s now back down. Wednesday’s 3.4% CPI figure isn’t yet at the Fed’s 2% target but is close enough that the ..read more
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A Concentrated Bet On Renewables Stumbles
SL Advisors Talks Markets
by SL Advisors, LLC
1M ago
Costa Rica, a central American country of five million, has a proud history of strong environmental policies. Their electricity comes almost entirely from renewable sources. Hydro is 73%, with geothermal providing most of the rest. Solar and wind are minor. Over the past decade they have reduced oil from 12% to virtually zero. Costa Rica’s ..read more
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Pipeline Earnings Keep Climbing
SL Advisors Talks Markets
by SL Advisors, LLC
1M ago
Earnings season for midstream energy infrastructure has been wonderfully devoid of excitement for many quarters. These companies just keep churning out more cash, typically within a few percent of expectations. The exception is Cheniere (CEI), where earnings often come in substantially ahead of sell-side estimates. 1Q reported EBITDA beat by 12.5%. The company spent $1.2BN ..read more
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