Profiting from America’s Energy Revolution – Best
Investments for Income and Growth
Elliott H. Gue
EnergyandIncomeAdvisor.com
CapitalistTimes.com
[email protected]
1-888-960-2759
Oil Demand Story is Emerging Markets
Oil Consumption per Capita
25
20
15
10
5
0
China
India
USA
Japan
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 longterm 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, CyprusA 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. Gue
EnergyandIncomeAdvisor.com
CapitalistTimes.com
[email protected]
1-888-960-2759