profiting from america’s energy revolution – best investments for income and growth elliott h....
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Profiting from America’s Energy Revolution – Best Investments for Income and Growth
Elliott H. GueEnergyandIncomeAdvisor.com
1-888-960-2759
Oil Demand Story is Emerging Markets
China India USA Japan0
5
10
15
20
25
Oil Consumption per Capita
The Supply Side: Oseburg in Norway
• Discovered in 1979 and put into production in 1988• Currently produces 55,000
bbl/day down from around 200,000 at peak in the mid to late 1990s.• Produced with a pressure
maintenance strategy
Spending More, Producing Less
Not Peak Oil, The End of Easy Oil
Schlumberger (NYSE: SLB)
Master Limited Partnerships (MLPs)
• MLPs offer high yields – average MLP in the Alerian MLP Index yields roughly 6%• MLPs offer significant tax
deferral advantages• Most MLPs are involved in the
midstream energy business, offering low risk fee-based cash flow streams.
Focus on Yield AND Growth
Western Gas Equity Partners (WGP)
• Western Gas Partners (WES) owns natural gas gathering and processing assets in Rockies.
• Primarily fee-based and exposed to liquids-rich basins like Niobrara.
• Drop-downs from parent Anadarko (APC)
• WGP likely to grow its distributions at 33% annualized pace.
• 2 to 3 percent yield in 2013
Hydraulic Fracturing and Horizontal Drilling….Keys to Shale Production
Proppant Intensity
Hi-Crush Partners
• 8 percent yield, well above MLP average of 5.5% to 6%.
• Cost Leader in Northern White Sand production.
• Wisconsin mines have unit train capability
• D&I Silica acquisition boosts exposure to Marcellus and Utica Shale
• 10-12 percent annualized distribution growth going forward
• Avista is a strong sponsor company.
Shale Requires More Compression
Shale is the Game Changer
California is . . . . .Different
Pacific Coast Oil Trust (ROYT)
• 9.9% Yield with upside potential paid monthly
• 80% of net profits from developed properties – mature, well-understood formations.
• 7.5% royalty or 25% of profits in remaining properties including Diatomite
• 98% Crude oil• 70% Hedged through March 31, 2014• Diatomite Drilling is ahead of
expectations
Occidental Petroleum (OXY)
• Known as an enhanced oil recovery (EOR) firm focused on mature fields.
• Largest acreage holder in CA, 148k bbl/day in 2012 +10%.
• 61% domestic production, focused mainly on Permian Basin and CA
• Monterey Shale acreage holds long-term upside.
• Abu Dhabi gas onstream in 2014• Roughly 3% yield, growing at 15 to
20% annualized.
The Denver-Julesburg Basin
Niobrara Offers Solid Economics
Noble Energy (NBL)
• First wells in the DJ Basin in 2010, last year drilled 195 Wattenburg, 25 in CO
• By 2016 plans 500 wells/yr. in DJ Basin
• Liquids rich portion of Marcellus• Eastern Med. Tamar 9 tcf and
Leviathan 17 tcf in Israel, Cyprus-A 5 to 8 tcf
Shelf Life
Exploration and Production Stocks
EPL Oil & Gas (NYSE: EPL)
• Energy Partners filed for Chapter 11 bankruptcy protection in 2009.
• Reorganized, shifted from 60% gas to 80% oil.• Developed in the 50’s and 60’s but new seismic data identifies
new targets.• Targeting new oilfields located 20,000 feet beneath the
seafloor and announced results could be major upside catalyst.
Eni (NYSE: E)
• 16.81% stake in Kashagan in Caspian Sea first oil due middle 2013
• 100,000 boe/day in deepwater GOM• 700,000 in new projects over 4 years, 3
to 4% annualized• Mamba Complex Mozambique 30 tcf
gas• Barent’s Sea Norway and Russia• Disposing of non-core assets • PIIGS discount unwarranted.• Offers a 5.7% yield.
Profiting from America’s Energy Revolution – Best Investments for Income and Growth
Elliott H. GueEnergyandIncomeAdvisor.com
1-888-960-2759