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Elliott Gue

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  • Refiners Fall Through The Cracks [View article]
    That's certainly one valid takeaway. US producers will benefit from higher realizations this year due to the closing WTI-Brent spread.

    While I think the spread will open up a bit heading into 2014, average spreads will be much less going forward than the extreme levels of late 2012.
    Aug 22 09:35 AM | 1 Like Like |Link to Comment
  • America To The Rescue: Saving The World From $200 Oil [View article]
    Yes, I still like PER. While there are some real and legitimate concerns about well results in SandRidge's Mississippian play I see no real evidence that the Permian wells are coming in below expectations. The production shortfall n Q4 appears to be related to the reduction in the number of rigs drilling in the region and a spike in the number of wells that have been drilled but have not yet been placed into production.
    Feb 7 03:08 PM | 1 Like Like |Link to Comment
  • Why Eni Is A Better Buy Than ExxonMobil Corp [View article]
    Yes, the pullback in Eni's shares is due to a weak showing from Saipem, an oil-related engineering and construction firm in which they own a 43% stake. I think the weakness at Saipem is temporary (due to contracts signed in a weak pricing environment). Eni also said that the company's dividend policy is based on their long-term cash flow outlook, which suggests this will have no impact on their payout. I still like Eni.

    I am long E
    Jan 30 08:32 AM | 1 Like Like |Link to Comment
  • SandRidge Permian Trust: What Every Investor Needs To Know [View article]
    My numbers are based on forecasts of future commodity prices so they're forecasts, not a deterministic value. But, I feel my numbers reflect conservative assumptions and build in a significant margin of error.
    Jan 9 11:00 PM | 1 Like Like |Link to Comment
  • MLP Investing Basics: Incentive Distribution Rights Explained [View article]
    I did not say that drop-downs are contingent upon IDRs. And it's certainly true that sponsors get paid partly due to their stake in the LP.

    But, you will find that the vast majority of MLPs set up to grow via drop downs are structured with IDRs. If you look at the industry over the past few years you'll find that many of the fastest growing MLPs share a similar trait: they began their growth spurts as newly listed MLPs that are still in the low tiers of their IDR structure but have a sponsor with MLP-able assets. As the sponsor drops down assets to the MLP, they can quickly move the MLP through the tiers and generate even more rapid growth in their IDRs.

    More broadly, understanding IDRs and how they're calculated is important. That's why I wrote this article on the topic. However, IDRs are not the only fundamental factor of importance when analyzing MLPs. If you had ignored all of the MLPs with an IDR structure over the past five years you would have passed up on several of the best-performing MLPs of all.
    Dec 29 03:16 PM | 1 Like Like |Link to Comment
  • MLP Investing Basics: Incentive Distribution Rights Explained [View article]
    Thanks for the kind comments.

    SBR, PBT and CRT are all US royalty trusts, not MLPs. While I haven't covered these three before, I have written about the group in general on Seeking Alpha in the November 2, 2012 piece "US Oil and Gas Royalty Trusts: Good Buys for Disciplined Investors." http://bit.ly/TvmkOo

    I'll be writing more about trusts early in the New Year.
    Dec 28 07:10 PM | 1 Like Like |Link to Comment
  • MLP Investing Basics: Incentive Distribution Rights Explained [View article]
    While it's true that some MLPs pay more than their cash flows and some have probably borrowed money to maintain their payout, that's definitely not true of most of the names in this group.

    One has to be very careful in defining and calculating what's meant by paying out more than they earn. I still see a lot of commentary out there that discusses earnings and earnings per share (EPS) with reference to MLPs and that's just plain wrong. Earnings measures include a host of non-cash charges like depreciation that must be eliminated before calculating a particular MLP's payout ratio.
    Dec 28 04:10 PM | 1 Like Like |Link to Comment
  • Profiting From A Second Golden Age For Refiners [View article]
    Thank you. PADD 2 (the Midwest) certainly benefits from the factors I outline here but I also think some of the benefit will expand into PADD 3 (the Gulf Coast) as additional pipeline capacity allows more oil to find its way from the inland to the coast.

    PADD 5 (the West Coast) appears to be the least attractive market for refiners here.
    Dec 28 03:57 PM | 1 Like Like |Link to Comment
  • Why Energy Transfer Partners Is Cheap: It's Complicated [View article]
    Thank you for the kind comments about my work and I look forward to welcoming you as a new subscriber.
    Oct 18 12:24 PM | 1 Like Like |Link to Comment
  • Under Pressure: Profit Margins On North American Hydraulic Fracturing [View article]
    We'll know more after the Q3 calls but it seems to me that the overcapacity continues to grow given the continued drop in drilling activity targeting deep shale gas.

    The rate of pricing deterioration may begin to lessen in Q3 but I'd rather see concrete signs of a turn before trying to call a bottom in these stocks. Earnings estimates for HAL and BHI continue to take a hit heading into their quarters.
    Oct 9 05:13 PM | 1 Like Like |Link to Comment
  • Under Pressure: Profit Margins On North American Hydraulic Fracturing [View article]
    It's tough to say for certain but I do think pricing will continue to deteriorate at least through the balance of 2012. The key catalyst for the pressure pumping levered stocks like $HAL and $BHI will be margins finding a bottom and I'll keep looking for signs of that as I listen to Q3 and future quarterly conference calls.

    For now, I like stocks in the oil services and equipment industries that are focused offshore and/or in international markets.
    Oct 9 01:30 PM | 1 Like Like |Link to Comment
  • My 2012 Midyear Outlook For Oil Demand [View article]
    Thanks for the comment. Yes, I do believe crude is bottoming. Crude oil corrected a lot more than the broader stock market and has already priced in a great deal of bad news about the global economy. Interestingly, the Treasury bond market has also priced in a lot more negative news than stocks.

    So while I think stocks could see some more downside this summer I think oil has limited downside from here. I believe the Fed will announce as much as $500 billion in QE in August or September and that also tends to be bullish for commodities.

    The opening of the Seaway pipeline from Cushing to the Gulf Coast will help to narrow the WTI-Brent discount to a degree but I think WTI will continue to trade at a sizeable discount to Brent due to the fact that the US production growth outlook is so much better than for any other non-OPEC country.
    Jul 13 10:21 AM | 1 Like Like |Link to Comment
  • Penn Virginia Resource Partners: Much To Like About This Low-Risk, 8 Percent Yielding LP [View article]
    Hi David--

    Thanks for the comment and for subscribing.

    I in no way interpreted your prior post as an insult. I value comments to my articles and the conversation here on SA.
    Mar 31 01:12 PM | 1 Like Like |Link to Comment
  • Penn Virginia Resource Partners: Much To Like About This Low-Risk, 8 Percent Yielding LP [View article]
    Thanks for the kind words, it's always appreciated.
    Mar 30 11:31 AM | 1 Like Like |Link to Comment
  • Penn Virginia Resource Partners: Much To Like About This Low-Risk, 8 Percent Yielding LP [View article]
    It seems to be reacting to the negative newsflow about natural gas prices in that ultra-low gas prices will tend to drive more gas use and less demand for coal.

    What I believe is way under-appreciated is the partnership's midstream energy business which is likely to be the source of nearer term distribution growth. If you look at a long-term chart of this name you will see that, like many MLPs, it does see these periodic bouts of extreme volatility. Often these have proved to be opportunities.

    I'm not changing my view on this one.

    Disclosure: Long PVR
    Mar 30 11:16 AM | 1 Like Like |Link to Comment
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