Daniel Katzenberg, Executive Director and Senior Analyst for Oppenheimer & Co. Inc., Interviews with The Wall Street Transcript: Upstream MLPs Acquire Assets While the Midstream Grows Organically
67 WALL STREET, New York - March 22, 2013 - The Wall Street Transcript has just published its Oil & Gas: Master Limited Partnerships Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends
Companies include: SandRidge Energy, Inc. (SD), Plains All American Pipeline L (PAA), Breitburn Energy Partners LP (BBEP), Boardwalk Pipeline Partners, L (BWP), Enbridge Energy Partners LP (EEP), Kinder Morgan Energy Partners (KMP) and many more.
In the following excerpt from the Oil & Gas: Master Limited Partnerships Report, an expert analyst discusses the outlook for the sector for investors:
TWST: Were there any other themes or trends that stick out for you?
Mr. Katzenberg: The one other theme of note was the expansion of rail capacity. I know with MLPs most people think pipeline, but a lot of these MLPs have been building out rail capacity over the last couple of years.
Initially when this started, it was viewed as a short-term answer to the big increase in volumes that were coming on in all these shale plays. However, over this fourth-quarter conference call season, what stood out was that a lot of these companies are looking at rail as being a longer-term option, and something that we'll continue to see over the next 10 years.
That was a surprise to me and to a lot of the investors I've spoken with. The obvious reason for it is that instead of having to sign long-term contracts with a pipeline, the producers can enter into short-term contracts and move their crude to whatever regions are price advantaged. So we're seeing companies like Enbridge (EEP); Plains I mentioned made an acquisition recently; and Kinder (KMP) focus more on the upside from these rail projects.
TWST: You mentioned the large backlog of organic projects. How much M&A activity do you expect this year?
Mr. Katzenberg: With respect to the midstream companies, I really do not expect to see that much M&A. I think, because of the organic growth opportunities, there's not a need to go out and buy other companies, so I don't expect to see much on that side.