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  • Eagle Ford Shale: New Record Set For Price Per Acre [View article]
    Why would BHP, who must know the acreage best since they're the operator, and who I thought has made noises about wanting greater exposure to North American oil and natural gas, have passed on the opportunity to top DVN's $6 billion for the total 82,000 net acres for this moderate risk development project that's going to drive returns in the high-teens to low-twenty percent? I guess the answer must be that BHP has higher hurdle rates for E&P programs.
    Nov 21, 2013. 06:10 AM | 1 Like Like |Link to Comment
  • Kinder Morgan Partners (KMP) -2.4% premarket after its $380M sale of the Express-Platte pipeline system to Spectra Energy (SE). "There’s a whiff of desperation about this deal," 24/7's Paul Ausick writes. "The sale seems to be an admission that Kinder Morgan needs cash and this is an attractive property that it can easily convert into cash." [View news story]
    On one hand, since KMP/KMR's two other co-owners --- including the Ontario Teachers’ Pension Plan Board and Borealis Infrastructure, the infrastructure investment arm of the OMERS pension plan --- are selling out their one-third interests to Spectra as well, it suggests that all three owners are seeing the acquistion price as attractive. On the other hand, I wonder why it is that the management of relatively small $17.85 billion Spectra Energy can figure out something more profitable to do with the Express-Platte pipeline system that Kinder Morgan wasn't able to figure out. Spectra must have some additional pipeline assets in their network that make this acquisition more synergistic to them.
    Dec 12, 2012. 05:30 AM | 1 Like Like |Link to Comment
  • Kinder Morgan chairman denies skimping on maintenance [View news story]
    Is that a fact, or are you guessing, that Kaiser was not permitted to be on the call? I thought the Kinder Morgan team did a pretty thorough job of defusing Kaiser's most serious charges concerning sustaining and expansion capex. I do wish that Kinder Morgan was less levered. And I do wish that someone from outside Houston was on Kinder's Board of Directors. It'd be a fantasy come true to have Kinder take his wide moat pipelines and energy infrastructure company to Berkshire Hathaway --- assuming Warren could even figure out how to digest or unravel the Kinder Morgan / MLP corporate structure --- and would be willing to do so.
    Sep 18, 2013. 09:20 PM | Likes Like |Link to Comment
  • With companies looking to avoid paying taxes on their profits, 83 of the largest firms kept $1.46T overseas in 2012, up 14.4% from the previous year, Bloomberg calculates. GE (GE) again had the most with $108B held offshore, up from $102B in 2011; Pfizer was second with $73B, after which came Microsoft (MSFT), Merck (MRK), Johnson & Johnson (JNJ) and IBM (IBM). [View news story]
    The highest corporate tax rate on earth?! Whaaat?! JNJ's effective tax rate in 2012 was 21.2%. Coca-Cola's underlying effective tax rate is 24%. Tyco International's tax rate is ~17.7%. Master Limited Partnerships, like Kinder Morgan (KMP), pay no Federal income tax. What's best for the US is not as simple as a US Chamber of Commerce endorsed "tax holiday" for American corporations to repatriate cash, avoid paying US corporate taxes, and simply repurchase shares. The Administration is right to try to incent American companies to invest in PP&E here in the US and onshore jobs.
    Mar 11, 2013. 09:18 AM | Likes Like |Link to Comment
  • Johnson & Johnson's Pioneering Zytiga And Its Competitors [View article]
    Impressive research and commentary. Thanks. We all have to wonder how much it's going to cost to settle its ASR XL hip cup system liabilities. And Gorsky's moves to divest its $2 billion OCD (diagnostics) and slow-growth $1,625 million Consumer Women's Health (mostly intl Stayfree Carefree and ob brand tampons) seem smart and it'll be interesting to see how and where he redeploys the sales proceeds. And, hopefully, JNJ's Consumer businesses will be close to 100% back on the market by year-end.
    Feb 24, 2013. 05:10 PM | Likes Like |Link to Comment
  • Devon Energy (DVN -2.1%) shares slide for a second day after the company swung to a Q4 loss. “While acknowledging the potential for aggressive strategic change at [DVN], our outlook for the stock was checked by an underlying asset story that was likely to disappoint," Deutsche Bank says, adding that flat production and cash flow estimates for this year and mounting debt are worries[View news story]
    Mounting debt worries?! Isn't DVN nearly net debt free?
    Feb 21, 2013. 02:07 PM | Likes Like |Link to Comment
  • Berkshire Hathaway (BRK.B) remains bullish on housing, joining with Brookfield Asset Management (BAM) to create Berkshire Hathaway HomeServices. Brookfield's network operates under the better-known Prudential and Real Living Brands. "We have significant inventory shortage across the country," says the JV CEO Ron Peltier. "We see a housing market that will continue to improve." (PR[View news story]
    I wonder what exactly this transaction means. Are these two real estate brokerage networks simply going to operate under the Berkshire Hathaway Home Services moniker and refer clients to each other's respective markets. Why is HomeServices network of 26 brokerage firms more equal than BAM's seemingly larger affiliate networks of Prudential Real Estate and Real Living Real Estate? As of October 2012, BRKB's HomeServices was comprised of ~26+ brokerage firms in ~23 states: Alabama, Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Missouri, Minnesota, Nebraska, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, Washington, and Wisconsin.
    Nov 1, 2012. 02:33 AM | Likes Like |Link to Comment