#Targa Resources Gains

[trader-sg112]

Market Overview: Mixed Movements Amidst AI Concerns and Earnings Reports

In a turbulent day for U.S. stock markets, the Dow Jones Industrial Average declined by 234 points, or 0.60%, while the S&P 500 and NASDAQ Composite also faced setbacks, falling by 0.7% and 1%, respectively. The downturn was largely driven by mounting concerns over the slowing momentum in artificial intelligence (AI) technologies, which prompted a sell-off in semiconductor stocks.

AI Concerns Weigh on Chip Stocks

The tech sector, particularly chip stocks, experienced significant pressure. Leading the decline were NVIDIA Corporation (NASDAQ: NVDA), Broadcom Inc (NASDAQ: AVGO), and Wolfspeed Inc (NYSE: WOLF), all of which saw their share prices drop by approximately 2%. The apprehension surrounding AI's slowing progress has rattled investors, leading to a broader sell-off in the semiconductor industry.

Energy Sector Shows Resilience

Amidst the broader market decline, the energy sector displayed notable strength. Targa Resources Inc (NYSE: TRGP), Williams Companies Inc (NYSE: WMB), and Devon Energy Corporation (NYSE: DVN) were among the top gainers. Devon Energy, in particular, saw its stock rise following quarterly results that exceeded Wall Street's expectations. This positive performance highlights the sector's resilience despite the overall market volatility.

Major Stock Movements

Walt Disney (NYSE: DIS): Disney's stock fell sharply by 4%, reflecting ongoing concerns about the company’s performance and future prospects.

Shopify (NYSE: SHOP): Contrasting the general trend, Shopify's shares soared nearly 18%, driven by positive developments and investor optimism about its growth potential.

Airbnb (NASDAQ: ABNB): On the other end of the spectrum, Airbnb's stock dropped 13%, influenced by recent market challenges and potentially disappointing financial metrics.

S&P 500 Earnings Resilience

Despite the recent negative price action and growing recession fears, the earnings resilience of the S&P 500 remains a key highlight. The index's earnings have shown a level of robustness, which could offer some reassurance to investors amidst the current market volatility.

In summary, the market's recent performance underscores the complexity of current economic conditions. While AI concerns and specific sector movements have contributed to market declines, there are areas of strength and resilience, particularly in the energy sector and select stocks like Shopify. As always, investors should stay informed and consider these factors when making decisions.

[caplofan]

SteelPath April MLP Stock Update and News For 2020

SteelPath April MLP Stock Update and News For 2020

March MLP efficiency showed the extraordinary mix of abrupt and substantial petroleum need damage, due to quick efforts to include COVID-19 worldwide, and the hazard of rising petroleum supply from the unexpected Saudi-Russian crudeoil market share fight.

Amidst the weak point, midstream sector individuals haveAs soon as, taken proactive actions to safeguard their balance sheets in order to benefitthese double risks have actually passed.

MLP market introduction

Midstream MLPs, as determined by the Alerian MLP Index (AMZ),.ended March down 47.2% on a cost basis and after circulations were thought about.T

he AMZ Index underperformed the S&P 500 Index’’ s 12.4% overall return loss for. the month. The very best carrying out midstream subsector for March wasthe Propane. group, while the Gathering and Processing subsector underperformed, usually.

For the year through March, the AMZ is down 58.2% on a rate.basis, leading to a 57.2% overall return loss.

This compares to the S&P 500.Index’s 20.0% and 19.6 %rate and overall return losses, respectively.

The Propane.group has actually produced the very best typical overall return year-to-date, while the Gathering.and Processing subsector has actually lagged.

MLP yield spreads, as determined by the AMZ yield relative to.the 10-Year U.S. Treasury Bond, expanded by 922 basis points (bps) over the.month, leaving the duration at 1,980 bps.

This compares to the routing five-year.typical spread of 592 bps and the typical spread considering that 2000 of around 393.bps. The AMZ showed circulation yield at month-end was 20.5%.

Midstream Affiliates and mlps raised no brand-new marketed equity.( favored or typical, omitting at-the-market programs) and $1.7 billion of.marketed financial obligation throughout the month.

Affiliates and mlps revealed $100 countless.possession acquisitions over the month.

Spot West Texas Intermediate (WTI) petroleum left the.month at $20.48 per barrel, down 54.2% over the duration and 65.9% lower.year-over-year.

Area gas rates ended March at $1.71 per million.British thermal systems (MMbtu), down 4.5% over the month and 37.4% lower than March.2019. Gas liquids (NGL) rates at Mont Belvieu left the month at $9.65.per barrel, 43.2% lower than completion of February and 60.9% lower than the.year-ago duration.

News.

Industry taking proactive.actions to safeguard their balance sheets.

Many sector individuals in the.midstream energy market have actually revealed proactive strides to secure their.balance sheets in the middle of the continuous supply and need imbalance triggered by the.COVID-19 break out and petroleum market share fight in between Saudi Arabia and.Russia.

While a lot of capital investment budget plans were currently lower for 2020 than.2019, a lot of sector individuals have actually revealed additional decreases in prepared.

Due to the fact that of expectations for minimized upstream drilling activity, costs.Numerous sector individuals have actually revealed objectives to decrease.their money circulations to additional maintain money and secure balance sheets.

DCP.Midstream (NYSE: DCP) decreased its circulation by 50%, Enable Midstream (NYSE: ENBL).cut its circulation by 50%, EnLink Midstream (NYSE: ENLC) minimized its.circulation by another 50% after a 34% hairstyle in January, Golar LNG Partners.( NYSE: GMLP) reduced its dividend by 95%, Noble Midstream (NYSE: NBLX) decreased.its circulation by 73%, and Targa Resources (NYSE: TRGP) cut its dividend by.90%.

Delek still doing drops. Delek United States Holdings (NYSE: DK) and Delek Logistics Partners (NYSE: DKL) revealed an arrangement for the dropdown of the Big Spring event system to DKL for overall factor to consider of $100 million in money and 5.0 million DKL typical systems.

DKL means to fund the money part of the deal through money on hand and loanings on its revolving credit center.

The Big Spring Gathering System is an around 200-mile petroleum event system with about 350,000 barrels each day throughput capability situated in Howard, Borden and Martin Counties,

Texas. It links to the Delek United States terminal situated near Big Spring, Texas and to a third-party pipeline system.

Idea of the month.

Efforts to include the spread of COVID-19 have actually interfered with.worldwide need for petroleum items to an extraordinary degree.

Our company believe that up until infection containment efforts start to subside, petroleum costs are most likely.to be extremely unstable and might experience severe weak point as the physical.markets respond to the inequality in between need, which has suddenly and.drastically fallen, and supply, which continues to stream from existing wells.even as future drilling strategies have actually been postponed.

As an outcome, North.International and american manufacturers might experience short-term curtailments as.storage choices fill. Unrefined oil-focused midstream operators might experience a.decrease in volume transferred while storage properties end up being extremely used.

Further making complex the outlook for petroleum prices is.the disintegration of the OPEC+ alliance following Russian rejection to help OPEC.efforts to support unrefined rates throughout the virus-induced need weak point.

In.retaliation, Saudi Arabia revealed strategies to record Russia’’ s market share. through aggressive rates and production efforts. In the near-term, the OPEC+.drama fades in contrast to the COVID-19 need action however might function as a.medium-term cost headwind.

We think that as social and organisation activities resume.following the huge, worldwide infection containment efforts, need for petroleum.items will also recover.

The present cost environment.is unsustainably listed below international break-even rates for each significant oil basin as.well as the financial break-evens of every Petro state.

For context, unrefined rates likewise dipped listed below international.breakeven levels over the 2014-2016 petroleum rate collapse.

However United States tight oil.performance gains rapidly emerged enabling United States production to become the.just international basin to provide significant production development to assist balance out.decreases somewhere else.

Present rates, nevertheless, is leading to a near cessation.of North American manufacturer drilling strategies.

While United States breakeven levels might move.partially lower in action, a repeat of the significant enhancement in break-even.levels seen over the 2014-2016 duration is extremely not likely.

Even more, international.activity over the last a number of years does not appear adequate to support any.significant future supply development from tradition fields.

Appropriately, our company believe the.amount of time over which petroleum rates can stay listed below United States shale breakeven.levels of roughly $40 per barrel is restricted, when COVID-19 containment.efforts ease off.

For United States energy facilities, in the near term, capacity.requirements to cut petroleum production in the face of storage limitations and.the absence of need for transport fuels might affect the operating.efficiency of specific midstream operators with properties concentrated on these.items.

While storage requirements will likewise surge, and therefore supply.incremental earnings, our company believe the prospective loss of transport earnings.will be higher.

Even more, energy credit markets are presently in chaos and.the reward for management groups to stop credit worries is severe.

As an outcome,.a number of midstream operators have actually currently revealed substantial.distribution/dividend decreases and our company believe extra cuts are most likely.

However, as COVID-19 containment efforts ease off, our company believe the.effect on transport fuel motions will likewise diminish.

As an outcome, we.think the monetary effect of these near-term problems to eventually reverse.and, for that reason, most likely be marked down as ““ one-time ” in nature by equity market.individuals once the COVID-19-induced ““ crisis ” passes.

Puffed up crude and.item stock levels, in addition to unsolved OPEC+ production conflicts, may.continue to weigh on oil rates post the COVID-19 crisis also and,.

Might restrict a fast rebound in domestic drilling activity..the influence on volumes produced and transferred through unrefined oil-focused midstream.properties need to show modest and sluggish decreases in contrast to the sharp equity rate.decreases experienced in current weeks.

Additionally, we approximate roughly two-thirds of midstream.EBITDA is produced by possessions concentrated on gas production or improved.items (fuel, diesel, and so on) logistics which, post COVID-19, ought to be.little affected by unrefined directed drilling strategies.

Significantly, the longer petroleum.prices stays listed below $40 to $50 per barrel, the cost variety needed to.incentivize United States petroleum production development.

United States gas basins and the.midstream properties, which serve those fields, might be anticipated to benefit as.associated gas or gas produced from oil directed drilling will remain in.decrease and require to be changed by increased volumes from gas focused.fields.

All information sourced from Bloomberg L.P.since March 31, 2020 unless otherwise mentioned

  Original Source: blog.invesco.us.com

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[georgecmatthews]

SteelPath April MLP update and news

March MLP performance reflected the unprecedented combination of significant and abrupt crude oil demand destruction, due to rapid efforts to contain COVID-19 globally, and the threat of surging crude oil supply from the unanticipated Saudi-Russian crude oil market share battle. Amid the weakness, midstream sector participants have taken proactive steps to protect their balance sheets in order to benefit once these dual threats have passed.

MLP market overview

Midstream MLPs, as measured by the Alerian MLP Index (AMZ), ended March down 47.2% on a price basis and after distributions were considered. The AMZ Index underperformed the S&P 500 Index’s 12.4% total return loss for the month. The best performing midstream subsector for March was the Propane group, while the Gathering and Processing subsector underperformed, on average.

For the year through March, the AMZ is down 58.2% on a price basis, resulting in a 57.2% total return loss. This compares to the S&P 500 Index’s 20.0% and 19.6% price and total return losses, respectively. The Propane group has produced the best average total return year-to-date, while the Gathering and Processing subsector has lagged.

MLP yield spreads, as measured by the AMZ yield relative to the 10-Year U.S. Treasury Bond, widened by 922 basis points (bps) over the month, exiting the period at 1,980 bps. This compares to the trailing five-year average spread of 592 bps and the average spread since 2000 of approximately 393 bps. The AMZ indicated distribution yield at month-end was 20.5%.

Midstream MLPs and affiliates raised no new marketed equity (common or preferred, excluding at-the-market programs) and $1.7 billion of marketed debt during the month. MLPs and affiliates announced $100 million of asset acquisitions over the month.

Spot West Texas Intermediate (WTI) crude oil exited the month at $20.48 per barrel, down 54.2% over the period and 65.9% lower year-over-year. Spot natural gas prices ended March at $1.71 per million British thermal units (MMbtu), down 4.5% over the month and 37.4% lower than March 2019. Natural gas liquids (NGL) pricing at Mont Belvieu exited the month at $9.65 per barrel, 43.2% lower than the end of February and 60.9% lower than the year-ago period.

News

Industry taking proactive steps to protect their balance sheets. Most sector participants in the midstream energy industry have announced proactive strides to protect their balance sheets amidst the ongoing supply and demand imbalance caused by the COVID-19 outbreak and crude oil market share battle between Saudi Arabia and Russia. While most capital expenditure budgets were already lower for 2020 than 2019, most sector participants have announced further reductions in planned spending because of expectations for reduced upstream drilling activity. Furthermore, several sector participants have announced intentions to reduce their cash distributions to further preserve cash and protect balance sheets. DCP Midstream (NYSE: DCP) reduced its distribution by 50%, Enable Midstream (NYSE: ENBL) cut its distribution by 50%, EnLink Midstream (NYSE: ENLC) reduced its distribution by another 50% after a 34% haircut in January, Golar LNG Partners (NYSE: GMLP) lowered its dividend by 95%, Noble Midstream (NYSE: NBLX) reduced its distribution by 73%, and Targa Resources (NYSE: TRGP) cut its dividend by 90%.

Delek still doing drops. Delek US Holdings (NYSE: DK) and Delek Logistics Partners (NYSE: DKL) announced an agreement for the dropdown of the Big Spring gathering system to DKL for total consideration of $100 million in cash and 5.0 million DKL common units. DKL intends to finance the cash component of the transaction via cash on hand and borrowings on its revolving credit facility. The Big Spring Gathering System is an approximately 200-mile crude oil gathering system with about 350,000 barrels per day throughput capacity located in Howard, Borden and Martin Counties, Texas. It connects  to the Delek US terminal located near Big Spring, Texas and to a third-party pipeline system.

Thought of the month

Efforts to contain the spread of COVID-19 have disrupted global demand for petroleum products to an unprecedented degree. We believe that until virus containment efforts begin to wane, crude oil prices are likely to be highly volatile and may experience extreme weakness as the physical markets react to the mismatch between demand, which has abruptly and dramatically fallen, and supply, which continues to flow from existing wells even as future drilling plans have been put on hold. As a result, North American and international producers may experience short-term curtailments as storage options fill. Crude oil-focused midstream operators may experience a decline in volume transported while storage assets become highly utilized.

Further complicating the outlook for crude oil pricing is the disintegration of the OPEC+ alliance following Russian refusal to aid OPEC efforts to stabilize crude pricing during the virus-induced demand weakness. In retaliation, Saudi Arabia announced plans to capture Russia’s market share through aggressive pricing and production efforts. In the near-term, the OPEC+ drama pales in comparison to the COVID-19 demand response but could act as a medium-term price headwind.

We believe that as societal and business activities resume following the massive, global virus containment efforts, demand for petroleum products will likewise return to form. However, the current price environment is unsustainably below global break-even pricing for every major oil basin as well as the fiscal break-evens of every Petro state.

For context, crude pricing also dipped below global breakeven levels over the 2014-2016 crude oil price collapse, but US tight oil efficiency gains quickly materialized allowing US production to emerge as the only global basin to deliver meaningful production growth to help offset declines elsewhere. Current pricing, however, is resulting in a near cessation of North American producer drilling plans. While US breakeven levels may move marginally lower in response, a repeat of the dramatic improvement in break-even levels seen over the 2014-2016 period is highly unlikely. Further, global activity over the last several years does not appear sufficient to support any meaningful future supply growth from legacy fields. Accordingly, we believe the time frame over which crude oil pricing can remain below US shale breakeven levels of approximately $40 per barrel is limited, once COVID-19 containment efforts abate.

For US energy infrastructure, in the near term, potential requirements to curtail crude oil production in the face of storage limits and the lack of demand for transportation fuels may impact the operating performance of certain midstream operators with assets focused on these products. While storage requirements will also spike, and thus provide incremental revenues, we believe the potential loss of transportation income will be greater. Further, energy credit markets are currently in disarray and the incentive for management teams to quell credit fears is acute. As a result, several midstream operators have already announced significant distribution/dividend reductions and we believe additional cuts are likely.

However, as COVID-19 containment efforts abate, we believe the impact on transportation fuel movements will similarly subside. As a result, we believe the financial impact of these near-term setbacks to ultimately reverse and, therefore, likely be discounted as “one-time” in nature by equity market participants once the COVID-19-induced “crisis” passes. Bloated crude and product inventory levels, as well as unresolved OPEC+ production disputes, may continue to weigh on oil pricing post the COVID-19 crisis as well and, therefore, may limit a rapid rebound in domestic drilling activity. However, the impact on volumes produced and transported through crude oil-focused midstream assets should reflect slow and modest declines in contrast to the sharp equity price declines witnessed in recent weeks.

Additionally, we estimate approximately two-thirds of midstream EBITDA is generated by assets focused on natural gas production or refined products (gasoline, diesel, etc.) logistics which, post COVID-19, should be little impacted by crude directed drilling plans. Notably, the longer crude oil pricing remains below $40 to $50 per barrel, the price range required to incentivize US crude oil production growth, US natural gas basins and the midstream assets, which serve those fields, could be expected to benefit as associated gas or natural gas produced from oil directed drilling will be in decline and need to be replaced by increased volumes from natural gas focused fields.

All data sourced from Bloomberg L.P. as of March 31, 2020 unless otherwise stated

Important Information

Credit: MenzhiliyAnantoly / iStock

Before investing, investors should carefully read the prospectus and/or summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the fund(s), investors should ask their advisors for a prospectus/summary prospectus or visit invesco.com.

The opinions referenced above are those of the author as of April 11, 2020. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.

Energy infrastructure MLPs are subject to a variety of industry specific risk factors that may adversely affect their business or operations, including those due to commodity production, volumes, commodity prices, weather conditions, terrorist attacks, etc. They are also subject to significant federal, state and local government regulation.

The mention of specific companies, industries, sectors, or issuers does not constitute a recommendation by Invesco Distributors, Inc.

The mention of specific securities does not constitute a recommendation to buy/sell on behalf of the Funds or Invesco Distributors, Inc.

Certain Invesco funds may hold the securities of the companies mentioned. A list of the top 10 holdings of each fund can be found by visiting invesco.com.

The S&P 500 Index is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.

The Alerian MLP Index is a float-adjusted, capitalization-weighted index measuring master limited partnerships, whose constituents represent approximately 85% of total float-adjusted market capitalization. The S&P 500 Index is a broad-based measure of domestic stock market performance. Indices are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. Past performance does not guarantee future results.

Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Each fund’s investments are concentrated in the energy infrastructure industry with an emphasis on securities issued by MLPs, which may increase volatility. Energy infrastructure companies are subject to risks specific to the industry such as fluctuations in commodity prices, reduced volumes of natural gas or other energy commodities, environmental hazards, changes in the macroeconomic or the regulatory environment or extreme weather. MLPs may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling. Additional management fees and other expenses are associated with investing in MLP funds. Diversification does not guarantee profit or protect against loss.

The opinions expressed are those of Invesco SteelPath, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

from Expert Investment Views: Invesco Blog https://www.blog.invesco.us.com/steelpath-april-mlp-update-and-news/

[coryhayward20-blog]

Targa Resources - Company Profiles and SWOT Analysis

Targa Resources is a Fortune 500company established at 811 Louisiana, once in the past known as Two Shell Plaza, in Houston, Texas. Targa, a midstream vitality organization, is perhaps the biggest supplier of flammable gas and gaseous petrol fluids in the United States. Their tasks are based to a great extent, however not so much, on the Gulf Coast, especially in Louisiana and Texas. Joe Bob Perkins has been the CEO since 2012.

Read Full Description at: https://www.fortunecompanyprofile.com/details/targa-resources

Scope:

Detailed information on Targa Resources required for business and competitor intelligence needs;

Current and future internal and external factors affecting Targa Resources in the form of a SWOT analysis;

An in-depth view of the business model of Targa Resources with key business segments;

News about Targa Resources, such as business expansion, restructuring, and contract wins;

Large number of easy-to-grasp Targa Resources charts and graphs that present important data and key trends;

The key aim of this Targa Resources report is to provide updates and data relating to the Targa Resources profiles with trends and expansion methods. To begin with, the Targa Resources synopsis and offers SWOT definition and outline. The synopsis section comprises Targa Resources dynamics entailing restraints, drivers, trends, and opportunities by analysis and value chain analysis.

Reasons to buy:

Gain understanding of Targa Resources and the factors that influence its strategies;

Track strategic initiatives of the Targa Resources company and latest corporate news and actions;

Assess Targa Resources as a prospective partner, vendor or supplier;

Support sales activities by Targa Resources understanding your customers businesses better;

Stay up to date on Targa Resources business structure, strategy and prospects;

Buy Full Analysis Company Profile at: https://www.fortunecompanyprofile.com/checkout/targa-resources

[roshanrihanna-blog]

Targa Resources - Company Profiles and SWOT Analysis

Targa Resources is a Fortune 500company established at 811 Louisiana, once in the past known as Two Shell Plaza, in Houston, Texas. Targa, a midstream vitality organization, is perhaps the biggest supplier of flammable gas and gaseous petrol fluids in the United States. Their tasks are based to a great extent, however not so much, on the Gulf Coast, especially in Louisiana and Texas. Joe Bob Perkins has been the CEO since 2012.

Read Full Description at: https://www.fortunecompanyprofile.com/details/targa-resources

Scope:

Detailed information on Targa Resources required for business and competitor intelligence needs;

Current and future internal and external factors affecting Targa Resources in the form of a SWOT analysis;

An in-depth view of the business model of Targa Resources with key business segments;

News about Targa Resources, such as business expansion, restructuring, and contract wins;

Large number of easy-to-grasp Targa Resources charts and graphs that present important data and key trends;

The key aim of this Targa Resources report is to provide updates and data relating to the Targa Resources profiles with trends and expansion methods. To begin with, the Targa Resources synopsis and offers SWOT definition and outline. The synopsis section comprises Targa Resources dynamics entailing restraints, drivers, trends, and opportunities by analysis and value chain analysis.

Reasons to buy:

Gain understanding of Targa Resources and the factors that influence its strategies;

Track strategic initiatives of the Targa Resources company and latest corporate news and actions;

Assess Targa Resources as a prospective partner, vendor or supplier;

Support sales activities by Targa Resources understanding your customers businesses better;

Stay up to date on Targa Resources business structure, strategy and prospects;

Buy Full Analysis Company Profile at: https://www.fortunecompanyprofile.com/checkout/targa-resources

[georgecmatthews]

SteelPath January MLP update and news

The master limited partnership (MLP) sector saw a series of acquisitions take place in December, from Blackstone reaching an agreement with Tallgrass Energy to Energy Transfer closing on the SemGroup acquisition. The events marked a strong month for midstream equities which outperformed the broader market in December.

MLP market overview

Midstream MLPs, as measured by the Alerian MLP Index (AMZ), ended December up 8.5% on a price basis and total return basis. The AMZ’s results outperformed the S&P 500 Index’s 3.0% total return for the month. The best performing midstream subsector for December was the Gathering and Processing group, while the Propane subsector underperformed, on average.

For the year, the AMZ was down 2.0% on a price basis, resulting in a 6.3% total return gain once distributions are considered. This compares to the S&P 500 Index’s 28.9% and 31.5% price and total returns, respectively. The Compression group produced the best average total return for 2019, while the Gathering and Processing subsector was the weakest.

MLP yield spreads, as measured by the AMZ yield relative to the 10-Year U.S. Treasury Bond, narrowed by 101 basis points (bps) over the month, exiting the period at 726 basis points (bps). This compares to the trailing five-year average spread of 556 bps and the average spread since 2000 of approximately 383 bps. The AMZ indicated distribution yield at month-end was 9.2%.

Midstream MLPs and affiliates raised no new marketed equity (common or preferred, excluding at-the-market programs) and $500 million of marketed debt during the month. MLPs and affiliates announced no asset acquisitions over the month.

Spot West Texas Intermediate (WTI) crude oil exited the month at $61.06 per barrel, up 10.7% over the period and 34.5% higher year-over-year. Spot natural gas prices ended December at $2.09 per million British thermal units (MMbtu), down 15.0% over the month and 34.4% lower than December 2018. Natural gas liquids (NGL) pricing at Mont Belvieu exited the month at $20.76 per barrel, 13.0% lower than the end of November and 13.8% lower than the year-ago period.

News

Private equity keeps buying midstream. Blackstone (NYSE: BX) reached a formal agreement with Tallgrass Energy (NYSE: TGE) to acquire the remaining shares of TGE that it did not already own, which takes the company private at $22.45/unit or a 15% premium to the initial offer and a 22.75% premium to the closing price the day before the announcement. Additionally, private equity firms KKR and AIMCo acquired 65% of the Coastal GasLink Pipeline Project from TC Energy (NYSE: TRP) in exchange for reimbursement of a portion of project costs already incurred plus additional payments through the remainder of the project’s construction and operation.

Antero buys shares from Antero. Antero Midstream (NYSE: AM) announced an arrangement with its producer affiliate, Antero Resources (NYSE: AR), in which AM will repurchase and retire$100 million worth of AM shares held by AR. The arrangement is expected to reduce AM’s dividend burden in 2020 by close to $25 million. Additionally, AM and AR agreed on an incentive program whereby AM will provide AR rebates of certain midstream fees provided specified volume growth targets are achieved through 2023. And finally, AM announced a reduced 2020 capital expenditure budget of $300 million from $325 million thanks to a more efficient drilling plan at AR.

Energy Transfer closes SemGroup acquisition. Energy Transfer (NYSE: ET) closed the previously announced acquisition of SemGroup (NYSE: SEMG) for total consideration, including the assumption of approximately $5 billion of debt. The acquisition is expected to significantly strengthen ET’s crude oil transportation, terminalling, and export capabilities with the addition of SemGroup owned Houston Fuel Oil Terminal (HFOTCO), a crude oil terminal on the Houston Ship Channel with 18.2 million barrels of crude oil storage capacity, five deep-water ship docks, and seven barge docks. HFOTCO is supported by stable take-or-pay cash flows from diverse, primarily investment grade customers. To enhance this optionality, ET also announced plans to construct a new crude oil pipeline, the Ted Collins Pipeline, that will connect the HFOTCO to Energy Transfer’s Nederland Terminal. This acquisition also expands ET’s crude oil and NGL infrastructure by adding crude oil gathering assets in the DJ Basin in Colorado and the Anadarko Basin in Oklahoma and Kansas, as well as crude oil and natural gas liquids pipelines connecting the DJ Basin and Anadarko Basin with crude oil terminals in Cushing, Oklahoma.

Chart of the month

Over the last year, midstream management insiders invested approximately $283 million to acquire additional equity stakes in their companies. As midstream public market prices continued to decline during the fourth quarter of 2019, insiders purchased approximately $133 million of company stock, or 47% of the total monies invested over the year. Insider buying is often seen as a positive sign of a company’s business and financial prospects because management insiders hold the most intimate knowledge of the day-to-day operations.

Figure 1: Midstream insider buying (in $millions)

Name Ticker 1 year 3 month Kinder Morgan KMI 157.9 29.2 Enterprise Products Partners EPD 52.3 51.9 Energy Transfer LP ET 46.7 46.6 Equitrans Midstream Corp. ETRN 9.2 0.1 Western Midstream Partners LP WES 3.5 1.5 MPLX LP MPLX 3.2 0.0 Plains GP Holdings LP PAGP 2.4 2.4 Targa Resources Corp. TRGP 2.0 0.0 Williams Companies Inc. WMB 1.5 0.0 EnLink Midstream LLC ENLC 1.5 0.0 Phillips 66 Partners LP PSXP 0.6 0.0 Altus Midstream Company ALTM 0.6 0.1 Cheniere Energy Inc. LNG 0.5 0.5 ONEOK Inc. OKE 0.5 0.5 Magellan Midstream Partners LP MMP 0.3 0.0 DCP Midstream LP DCP 0.1 0.0 Blueknight Energy Partners LP BKEP 0.1 0.1 Shell Midstream Partners LP SHLX 0.1 0.0 Total 282.9 132.8

Source: Bloomberg, company filings.

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Footnotes

All data sourced from Bloomberg L.P. as of 12/31/2019 unless otherwise indicated

Important Information

Blog Header Image: Suriyapong Thongsawang / Getty

A yield spread is the difference in yields between debt instruments of varying maturities, credit ratings, and risk, calculated by deducting the yield of one instrument from another

The mention of specific companies, industries, sectors, or issuers does not constitute a recommendation by Invesco Distributors, Inc.

Certain Invesco funds may hold the securities of the companies mentioned. A list of the top 10 holdings of each fund can be found by visiting invesco.com.

The S&P 500 Index is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States.

The Alerian MLP Index is a float-adjusted, capitalization-weighted index measuring master limited partnerships, whose constituents represent approximately 85% of total float-adjusted market capitalization. The S&P 500 Index is a broad-based measure of domestic stock market performance. Indices are unmanaged and cannot be purchased directly by investors. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. Past performance does not guarantee future results.

Investing in MLPs involves additional risks as compared to the risks of investing in common stock, including risks related to cash flow, dilution and voting rights. Each fund’s investments are concentrated in the energy infrastructure industry with an emphasis on securities issued by MLPs, which may increase volatility. Energy infrastructure companies are subject to risks specific to the industry such as fluctuations in commodity prices, reduced volumes of natural gas or other energy commodities, environmental hazards, changes in the macroeconomic or the regulatory environment or extreme weather. MLPs may trade less frequently than larger companies due to their smaller capitalizations which may result in erratic price movement or difficulty in buying or selling. Additional management fees and other expenses are associated with investing in MLP funds. Diversification does not guarantee profit or protect against loss.

The opinions expressed are those of Invesco SteelPath, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.

Before investing, investors should carefully read the prospectus/summary prospectus and carefully consider the investment objectives, risks, charges and expenses. For this and more complete information about the funds call 800 983 0903 or visit invesco.com for prospectus/summary prospectus.

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from Expert Investment Views: Invesco Blog https://www.blog.invesco.us.com/steelpath-january-mlp-update-and-news/