Scarcity Value Rally In MLPs

Midstream stocks outpaced the S&P 500 and utilities this week in the face of falling oil prices and rising interest rates.

MLPs were the best performers within midstream.

Beaten-down producer sponsored names outperformed again this week; this time it was NBLX and EQM at the top.

Midstream stocks outpaced the S&P 500 and utilities this week in the face of falling oil prices and rising interest rates. MLPs were the best performers within midstream, benefiting from the "value rally" and also from Friday's MLP index re-balance announcement that essentially spreads around the same amount of capital across an increasingly scarce group of MLPs. Canadian midstream stocks lagged and held back the broader midstream index.

The Alerian MLP Index is up 6.2% over 12 trading days since bottoming on August 27, 2019. It was the best week for the MLP Index since mid-February this year, and the third best week of the year overall. The broader midstream index (AMNA) is up 5.5% since that same day. Its gains this week were less substantial than the AMZ, but AMNA has had more of those strong weeks so far this year. This was the 9th biggest week for AMNA this year and its biggest weekly gain since 2 weeks ago.

While things feel a little better in midstream this week, there were some news items that added to unease around the outlook for energy stocks generally, although the news out of Saudi Arabia this weekend may have rendered it all moot in the short term.

But for this week, those larger energy concerns took a back seat to optimism in value found within the midstream space. No major company-specific news proved to be good news for the group.

Beaten-down producer sponsored names outperformed again this week; this time it was NBLX and EQM at the top. SHLX ripped 6% Friday on the index re-balance news. Alerian announced removal of BPL, which is more than 6.5% weight in both the AMZ and AMZI indexes.

The BPL news was expected, but the removal of HEP from the AMZI (tracked by massive ETF AMLP) caught the market off guard and it was one of the weakest performers among MLPs Friday and the worst for the week overall.

NGL and EQM went from bottom 5 last week to top 5 this week. Gains this week put NGL back on top of the YTD leaderboard, and vaulted TGP into second place. EQM climbed one spot in the bottom 5 to third from the bottom.

It wasn't just MLPs that rallied, the broader market rally in value stocks seemed to help smaller midstream corporations, too. Median midstream corporation performance of 5.6% was well above index returns.

Smaller names dominated the top 5 performers, while YTD leaders like OKE and KMI were among the worst performers. TGE rallied through the bid price of $19.50, closing above $20/unit, on anticipation of a better offer to come.

ALTM repeated at the top of the group. ETRN, AM, ENLC, and SEMG went from bottom 5 last week to top 5 this week. On the YTD leaderboard, OKE remains the best-performing midstream corporation, but TRGP jumped over WMB and PAGP into third place. Each of the top 5 is above 15% total return YTD. No changes to the bottom 5.

Canadian midstream as a group underperformed MLPs and U.S. midstream stocks, but Enbridge (NYSE:ENB) continued its relative strength, leading the group with a nearly 2% gain, about 450 basis points ahead of TRP for the week, but has a long way to go to catch up. IPL sold off, recent reporting of M&A interest unable to hold the market's interest.

TRP was the worst performer in Canada for a second straight week but retains its spot atop the YTD leaderboard.

Legendary oil man, corporate activist investor, renewable energy pioneer, and major OSU donor T. Boone Pickens died at 91 years old this week. Without much sector news this week, I spent some time researching Pickens and the mark he left on energy sector during the first upstream MLP boom in the mid-1980s.

Pickens aggressively used the MLP structure in the 1980s to launch bids for several much larger companies. His famous 1985 bid for Unocal ended in a Delaware Supreme Court ruling that would apparently shape corporate securities takeover defense law.

After Unocal defended itself from the Mesa bid, it did end up spinning off an upstream MLP of its own (as was proposed by Pickens in his bid. That MLP was Union Exploration Partners (UXP), which was eventually converted into a corporation in 1990 (read about UXP origins here).

Pickens was extremely active in the 1980s, seeking to create value through M&A rather than development activities. After the failed Unocal bid in 1985, Pickens announced the conversion of his company Mesa Petroleum into a partnership, Mesa Limited Partnership (MLP), which you can read about here.

Pickens would use "MLP" to launch bids for many companies, back when takeover activity backed by junk bonds was rampant, well documented in the book Predator's Ball. If some of these bids had worked out differently, the midstream landscape would look much different today. A rough timeline of his notable bids and deals includes:

For even more on Pickens, see this 1987 C-Span interview with Pickens where he discusses at length his problems with corporate America when it comes to corporate management misalignment, and also takes calls on oil geopolitics and other deals of the day.

</p><h3>News of the (Midstream) World</h3><p>The rate grab continues, after $3.4bn of debt issuance last week, another $4.5bn in debt issuance this week across midstream. Refinancing or issuing fresh debt at rates this low should be a boon relative to expectations as recently as mid-July. Also, micro-MLP Blueknight that saw its takeout bid withdrawn and Alerian's index re-balance release seemed to move the market Friday, as noted above.</p><h3>Capital Markets</h3><ul><li> <p>Cheniere Energy Partners (NYSEMKT:<a href="https://www.futunn.com/quote/stock?m=us&amp;code=CQP" title="Cheniere Energy Partners, L.P.">CQP</a>) priced upsized offering of $1.5bn of 4.500% senior notes due 2029 at par (<a href="https://chenierepartners.gcs-web.com/news-releases/news-release-details/cheniere-partners-announces-upsize-and-pricing-15-billion-1">press release</a>)</p> <ul><li><p>Offering was originally $1bn</p></li></ul></li> <li><p>Plains All American (NYSE:<a href="https://www.futunn.com/quote/stock?m=us&amp;code=PAA" title="Plains All American Pipeline, L.P.">PAA</a>) priced offering of $1.0bn of 3.550% senior notes due 2029 at 99.801% of par (<a href="https://www.edgarexplorer.com/EFX_dll/EdgarPro.dll?FetchFilingHTML1?SessionID=Y_PfUKtuTEV1iwc&amp;ID=13634847">filing</a>)</p></li> <li> <p>Pembina (NYSE:<a href="https://www.futunn.com/quote/stock?m=us&amp;code=PBA" title="Pembina Pipeline Corporation">PBA</a>) (PPL-CA) closed offering of $1.5bn of senior unsecured notes which was completed in three tranches (<a href="http://www.pembina.com/media-centre/news-releases/news-details/?nid=135447">press release</a>)</p> <ul><li><p>$600mm of 2.56% notes due 2023</p></li> <li><p>$600mm of 3.31% notes due 2030</p></li> <li><p>$300mm of 4.54% notes due 2049</p></li> </ul></li> <li><p>Gibson Energy (<a href="https://www.futunn.com/quote/stock?m=us&amp;code=GBNXF" title="Gibson Energy Inc.">OTC:GBNXF</a>) (GEI-CA) announced offering of $500mm of 3.60% senior unsecured notes due 2029 (<a href="https://www.gibsonenergy.com/news/press-releases/2019/gibson-energy-announces-%24500-million-medium-term-note-offering/">press release</a>)</p></li> </ul><h3>Growth Projects/M&amp;A</h3><ul><li> <p>Blueknight Energy (NASDAQ:<a href="https://www.futunn.com/quote/stock?m=us&amp;code=BKEP" title="Blueknight Energy Partners, L.P.">BKEP</a>) holder Ergon withdrew its non-binding proposal to acquire all remaining BKEP common units not already owned (<a href="https://www.sec.gov/Archives/edgar/data/1143380/000119312519242453/d790271dsc13da.htm">filing</a>)</p> <ul><li><p>Ergon submitted its acquisition proposal on August 5 for $1.35 per common unit and $5.67 per Series A preferred unit</p></li> <li><p>Ergon was unable to reach an agreement with the Conflicts Committee resulting in the withdrawal</p></li> <li><p>BKEP was originally called Semgroup Energy (SGLP) and went public in July 2007 at $22/unit</p></li> </ul></li></ul><h3>Other</h3><ul><li> <p>Alerian announced the results of its September 2019 Index Review (<a href="https://www.alerian.com/wp-content/uploads/2019.09.13-Alerian-Index-Series-September-2019-Index-Review.pdf">press release</a>), with the following changes to be implemented as of the close of business on 9/20/19:</p> <ul><li><p>AMNA, AMUS, AMEI: Buckeye Partners will be removed</p></li> <li><p>AMZ: BPL and Sanchez Midstream (NYSEMKT:<a href="https://www.futunn.com/quote/stock?m=us&amp;code=SNMP" title="Sanchez Midstream Partners LP">SNMP</a>) will be removed</p></li> <li>AMZI: BPL and Holly Energy Partners will be removed</li> </ul></li></ul><p><em><strong>Editor's Note</strong>: The summary bullets for this article were chosen by Seeking Alpha editors.</em></p><h1> </h1> </div> <div class="inner" ng-show="showTrans" ng-cloak> <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd"><html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8"></head><body><h2>发明内容</h2><p></p>面对油价下跌和利率上升，本周中游股市的表现超过了标准普尔500指数和公用事业指数。<p></p>MLP是中游中表现最好的。<p></p>本周，备受打击的生产商赞助商再次表现出色；这一次是NBLX和EQM位居榜首。<br><p>面对油价下跌和利率上升，本周中游股市的表现超过了标准普尔500指数和公用事业指数。MLP是中游市场表现最好的股票，受益于“价值反弹”，也得益于上周五的MLP指数再平衡声明，该公告实质上是在越来越稀缺的MLP群体中围绕相同数量的资本进行利差。加拿大中游股市落后，拖累了更广泛的中游指数。</p><p></p><p>自2019年8月27日触底以来，Alerian MLP指数在12个交易日内上涨了6.2%。这是MLP指数自今年2月中旬以来表现最好的一周，也是今年整体表现第三好的一周。更广泛的中游指数(AMNA)自当天以来上涨了5.5%。本周的涨幅不及AMZ，但AMNA今年迄今表现强劲的几周更多。这是AMNA今年第9个最大的一周，也是自2周前以来的最大周涨幅。</p><h3>中游浮雕，忽略逆风</h3><p>虽然本周中途的情况略有好转，但也有一些新闻增加了对能源类股前景的担忧，尽管沙特上周末传出的消息可能在短期内让这一切变得毫无意义。</p><ul><li><p>EQT宣布在大约800名员工中裁员196人(观察家-记者)</p></li> <li><p>2017年老式SPAC Alta Mesa(纳斯达克股票代码：AMR)申请破产(Marketwatch)</p></li> <li><p>绿色和平组织在休斯顿船舶航道通过吊桥抗议石油出口</p></li> <li><p>欧佩克略微下调了2020年的需求前景，而欧佩克外部的供应增长预计将导致全球市场供过于求</p></li> <li><p>在地缘政治方面，约翰·博尔顿(John Bolton)离开了他在白宫的职位，由于在伊朗问题上的鹰派立场，这对石油市场产生了影响</p></li> <li><p>我的小马驹(MLP)被宣布为玩具名人堂的决赛选手(见这里的公告)</p></li> </ul><p>但在本周，这些更大的能源担忧让位于中游领域的价值乐观情绪。事实证明，没有哪个大公司的具体消息对该集团是个好消息。</p><h3>赢家和输家</h3><p>本周，备受打击的生产商赞助商再次表现出色；这一次是NBLX和EQM位居榜首。上周五，由于股指再平衡的消息，SHLX股价上涨了6%。Alerian宣布删除BPL，它在AMZ和AMZI指数中的权重均超过6.5%。</p><p>BPL的消息在意料之中，但Hep从AMZI(由大规模ETF AMLP追踪)的移除令市场措手不及，它是周五MLP中表现最差的之一，也是本周整体表现最差的一周。</p><p></p><p>NGL和EQM从上周的倒数5位上升到本周的前5位。本周的上涨使NGL重新登上YTD排行榜的榜首，并使TGP跃居第二位。EQM在倒数5名中攀升了一位，从倒数第三名开始。</p><p></p><h3>中游公司</h3><p>上涨的不仅仅是MLP，价值股更广泛的市场上涨似乎也帮助了规模较小的中游公司。中游公司业绩中值为5.6%，远高于指数回报率。</p><p>较小的名字在前5名中占主导地位，而像Oke和KMI这样的YTD领导者是表现最差的。由于预期会有更好的报价，TGE股价上涨至19.50美元，收于每台20美元以上。</p><p></p><p>Altm在组的顶部重复。ETRN，AM，ENLC和SEMG从上周的底部5位上升到本周的前5位。在YTD排行榜上，OKE仍然是表现最好的中游公司，但TRGP超过了WMB和PAGP，跃居第三位。前5名中的每一位都在15%以上的总回报率YTD。倒数5没有变化。</p><p></p><h3>加拿大中游</h3><p>加拿大中游作为一个集团表现不如MLP和美国中游股票，但Enbridge(NYSE：ENB)继续保持相对优势，带领集团上涨近2%，领先TRP一周约450个基点，但要迎头赶上还有很长的路要走。IPL抛售，最近报道的并购兴趣无法保住市场的兴趣。</p><p></p><p>TRP连续第二周成为加拿大表现最差的股票，但仍在YTD排行榜上名列前茅。</p><p></p><h3>纪念：皮肯斯MLP遗产</h3><p>传奇的石油人，企业维权投资者，可再生能源先驱，OSU的主要捐赠者T·布恩·皮肯斯本周逝世，享年91岁。本周没有太多行业新闻，我花了一些时间研究皮肯斯和他在20世纪80年代中期第一次上游MLP繁荣期间在能源行业留下的印记。</p><p>皮肯斯在20世纪80年代积极利用MLP结构对几家大得多的公司发起收购。他著名的1985年对优尼科(Unocal)的竞购以特拉华州最高法院的一项裁决结束，该裁决显然将塑造公司证券收购防御法。</p><p>在优尼科在梅萨竞标中为自己辩护后，它最终剥离出了自己的上游MLP(正如皮肯斯在他的竞标中提出的那样)。那个MLP就是Union explosion Partners(UXP)，它最终在1990年转变为一家公司(在这里阅读关于UXP起源的内容)。</p><p>皮肯斯在20世纪80年代非常活跃，他寻求通过并购而不是发展活动来创造价值。1985年优尼科竞标失败后，皮肯斯宣布将他的公司梅萨石油(Mesa Petroleum)转换为合伙企业梅萨有限合伙公司(Mesa Limited Partnership，MLP)，你可以在这里阅读。</p><p>皮肯斯将使用“MLP”对许多公司发起收购，当时垃圾债券支持的收购活动十分猖獗，在“捕食者的球”(Predator‘s Ball)一书中有详细记录。如果其中一些竞标结果不同，今天的中游景观看起来会有很大的不同。他值得注意的出价和交易的大致时间表包括：</p><ul><li><p>1969年：梅萨收购了Hugoton制片公司</p></li> <li> <p>1982年：梅萨石油公司(Mesa Petroleum Corp)竞购塔尔萨城市服务公司(Cities Service Company Of Tulsa)，并在白骑士海湾石油公司(White Knight Bay Oil)获胜时赚了3000万美元(尽管这笔海湾交易也会落空)</p> <ul><li><p>城市服务公司以其下游品牌Citgo而闻名</p></li></ul></li> <li><p>1983年：梅萨石油公司竞购通用美国石油公司，但被菲利普斯石油公司击败</p></li> <li><p>1983年：梅萨石油公司(Mesa Petroleum Corp.)投标收购管道和公用事业公司KN Energy</p></li> <li><p>1984年：在海湾石油公司建立了大量股份，但被他拒绝了，据报道，当海湾石油公司最终被SoCal Oil收购时，梅萨获得了超过7.5亿美元的利润</p></li> <li> <p>1986年：KN能源拒绝了梅萨石油公司(Mesa Petroleum Corp.)的第二次投标。</p> <ul><li><p>KN Energy将在1999年的反向并购中收购Kinder Morgan，并将成为Richard Kinder积累财富的工具</p></li></ul></li> <li> <p>1986年：钻石三叶草拒绝了梅萨石油公司20亿美元的报价。</p> <ul><li><p>Diamond Shamrock最终将催生MLP Shamrock物流，它后来成为Valero LP，然后是今天的NuStar Energy(纽约证券交易所代码：NS)</p></li></ul></li> <li><p>1986年：梅萨有限合伙公司(MLP)以8亿美元收购了先锋公司(NY Times)</p></li> <li><p>1987年：皮肯斯追杀石油行业以外的公司，包括Singer、波音(NYSE：BA)和纽蒙特矿业(Newmont Mining)</p></li> <li><p>1988年：作为向几家公司出售73亿美元油气资产的一部分，Tenneco同意以7.15亿美元的价格将中大陆资产出售给Mesa Limited Partnership(MLP)</p></li> <li><p>1991年：MLP重新转为公司</p></li> <li><p>1997年：梅萨石油公司最终与Parker&amp;Parsley石油公司合并，形成今天的先锋自然资源公司(NYSE：PXD)，它是当今最大的独立二叠系运营商之一</p></li> </ul><p>有关皮肯斯的更多信息，请参阅1987年皮肯斯对C-Span的采访，其中他详细讨论了他与美国企业在企业管理失调方面的问题，并接听了石油地缘政治和其他当代交易的电话。</p><p><iframe frameborder="0">

在上周发行了34亿美元的债券，本周整个中游地区又发行了45亿美元的债券后，利率抢夺仍在继续。相对于7月中旬的预期而言，以如此低的利率进行再融资或发行新的债券应该是一件好事。此外，Micro-MLP Blueknight的外卖报价撤回，Alerian的指数再平衡发布似乎影响了周五的市场，如上所述。