CFA Society of LA: SANTA BARBARA LUNCHEON SERIES:
"OIL, EASY MONEY AND THE REACH FOR YIELD"
Technological advances in the last 40 years have led to an increased supply of global oil and gas as well as a doubling of production in the US over the past decade. Growth in the demand for energy has been a large driver of the “Commodities Super Cycle”. The Federal Reserve’s easy money policy has also contributed to the increase in energy supply and this has had worldwide consequences.
Oil & Money 2015
Chair: Jan Prins - Independent Consultant Infrastructure and Energy Finance
Panel: Ian Catterall - Head, Natural Resources for EMEA Bank of Tokyo-Mitsubishi UFJ
Julian Mylchreest - Global Head, Energy & Power Bank of America Merrill Lynch
Mike Powell - Managing Director, Investment Banking Barclays
David Staples - Managing Director, EMEA Corporate Finance Moody’s Investors Service
Oil & Money 2015
Chair: Jan Prins - Independent Consultant Infrastructure and Energy Finance
Panel: Ian Catterall - Head, Natural Resources for EMEA Bank of Tokyo-Mitsubishi UFJ
Julian Mylchreest - Global Head, Energy & Power Bank of America Merrill Lynch
Mike Powell - Managing Director, Investment Banking Barclays
David Staples - Managing Director, EMEA Corporate Finance Moody’s Investors Service
Breakfast Forum: The Current State of the Capital Markets 2015BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included:
• Drew Kanaly, Kanaly Trust – Equity & the Public Markets
• Colt Luedde, GulfStar Group – Private Equity and M&A
• Brandon Annett, Texas Capital Bank – Commercial Banking & Real Estate Lending
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Post Brexit Implications For Your eCommerce BusinessLinnworks
World First Chief Economist joined Linnworks at Linn Academy 2016, to provide his insight into how retailers can future-proof their business from increased risk, in this post-Brexit British economy. To watch the full recording of the talk, visit https://youtu.be/L172n6p5Uts
BoyarMiller Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included:
- Drew Kanaly, Kanaly Trust – Equity & the Public Markets
- Cliff Atherton, GulfStar Group – Private Equity and M&A
- John Sarvadi, Texas Capital Bank – Commercial Banking & Real Estate Lending
Breakfast Forum: The Current State of the Capital Markets 2015BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included:
• Drew Kanaly, Kanaly Trust – Equity & the Public Markets
• Colt Luedde, GulfStar Group – Private Equity and M&A
• Brandon Annett, Texas Capital Bank – Commercial Banking & Real Estate Lending
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Post Brexit Implications For Your eCommerce BusinessLinnworks
World First Chief Economist joined Linnworks at Linn Academy 2016, to provide his insight into how retailers can future-proof their business from increased risk, in this post-Brexit British economy. To watch the full recording of the talk, visit https://youtu.be/L172n6p5Uts
BoyarMiller Forum: The Current State of the Capital Markets 2016BoyarMiller
As part of its ongoing Breakfast Forum series, BoyarMiller gathered industry experts for a panel discussion on the Current State of the Capital Markets. Speakers included:
- Drew Kanaly, Kanaly Trust – Equity & the Public Markets
- Cliff Atherton, GulfStar Group – Private Equity and M&A
- John Sarvadi, Texas Capital Bank – Commercial Banking & Real Estate Lending
Steering into the Storm: O&G Economic OutlookWorkforceNEXT
A proverbial 100-year storm has disrupted positive trend lines the O&G industry once took for granted. Understanding the storm’s characteristics and path is essential for survival. High level economic realities of the new O&G paradigm will be explored, with a focus on oil markets, oilfield activity, and workforce trends.
2016 Energy Outlook: Markets adapt amid volatile conditionsJLL
After several difficult years for worldwide energy markets, oil prices are finally beginning to stabilize as the road back to normalcy begins. Following the market shift, energy firms have slowly begun to expand budgets and grow headcount, but a quick turnaround in expansionary leasing activity isn’t necessarily right around the corner.
Here we explore five key themes at play across seven major North American markets:
* Macroeconomic factors influencing energy markets
* State of oil and gas companies
* The impact to upstream, midstream and downstream
* Regulations and legislation
* Trends in renewable energy
See more from JLL's 2016 Energy Outlook at http://bit.ly/2eMF7aq
Se Warehouse 2009.Bill Stankiewicz Phone 678.364.3475BillStankiewicz
Over view of Logistics by Southeastern Warehouse Association
Best Regards,
Bill Stankiewicz
Vice President and General Manager
Shippers Warehouse of Georgia
Office: 678-364-3475
Williams@shipperswarehouse.com
http://www.linkedin.com/in/billstankiewicz2006
http://www.slideshare.net/BillStankiewicz.
http://www.twitter.com/BillStankiewicz
Sustainable Consumer Packaged Goods member
CPG Branding and Forum Member
Please consider the environment before printing this e-mail
“Change doesn\'t start on the surface. It\'s generated from consciousness.”
Deepak Chopra
http://bill-stankiewicz.blogspot.com/2009/07/shippers-warehouse-in-top-70-food.html
Nicola Wealth CEO John Nicola provides an introduction to dental professionals on investment strategies that go beyond stocks and bonds, demonstrating the integrated possibilities of true wealth management.
Searching for daily Mcx trading trends and tips?? So you are at the right place we provide special reports to our traders and we also provide daily market trading tips to our traders on stock, Ncdx, Nifty, option and future market.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
+12349014282
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the what'sapp contact of my personal pi vendor
+12349014282
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the what'sapp number.
+12349014282
The WhatsPump Pseudonym Problem and the Hilarious Downfall of Artificial Enga...
Oil, easy money and the reach for yield presented on 5 26 2016 to CFA LA
1. Steve@AcmeAlpha.com
805 965 8820
Steve Worthington
“Oil, easy money and the reach for yield”
Presented by Steve Worthington
A Santa Barbara Group Sponsored Event
Thursday, May 26th 2016
Evolutionary technology advances in the last 60 years, much of it economically
perfected in the last 10 years have led to an increase in the supply of global oil
and gas as well as a doubling of oil production in the US over the past decade.
Growth in the demand for energy has been a large driver of the “Commodities
Super Cycle”. The Federal Reserve’s easy money policy has also contributed to
the increase in energy supply and this has had world wide consequences.
Some of these consequences have been good, such as US energy Independence;
the downside has been instability in many energy–exporting countries.
2. Legal Disclaimer
This presentation is not a solicitation or an offering; is for research purposes only.
The past performance information contained herein is not necessarily indicative
of future results and there can be no assurance that an investor will achieve
comparable results or will be able to implement any investment strategy indicated
herein.
The research information contained herein was obtained from public and third
party data sources which are believed to be reliable. There is no representation or
warranty as to the accuracy, completeness or reliability of such information.
This is neither an offer to sell nor a solicitation of any offer to buy any securities.
This research presentation is not an advertisement and is not intended for public
use or distribution.
Steve@AcmeAlpha.com
805 965 8820
Steve Worthington
3. “Oil, easy money
and the reach for
yield”
Steve Worthington Steve@AcmeAlpha.com
805 965 8820
4. Overview
• How Did We Get Here?
o Fed’s overly accommodative monetary stimulus.
o Aggressive Banking, Investors want to believe
o Oil Commodity Cycle
• Result?
o Excess debt: Defaults in HY Oil & Gas: 21% E&P. 26%
o Increased Risk—House of Cards Economy
o Low/No ROE
o US energy has already corrected: fall off in production
Steve Worthington Steve@AcmeAlpha.com
805 965 8820
5. 2008-Present:
Too easy for too long
Steve Worthington Source: St. Louis Fed
Steve@AcmeAlpha.com
805 965 8820
6. Fed Driven Asset Inflation
The link between equities and GDP has changed
Steve Worthington Source: WSJ, Jack Bogle Steve@AcmeAlpha.com
805 965 8820
7. US Monetary Base & SP500
Steve Worthington Source: Andrew Smithers, St Louis Fed & GMO Steve@AcmeAlpha.com
805 965 8820
9. Geopolitical Aspects of
Energy Supply
• Stop/Crush additional energy technology gains
& infrastructure build out. Keep US relatively
addicted.
• Slow Iran’s return to economic and regional
power; keep a lid on internal pressures.
• Dissuade Russia from aiding Syria; give Europe
alternative and secure oil and gas supplies.
• Short term nationalist behavior: A shortfall of
Forex- Russia, Iran and Iraq.
Steve Worthington Steve@AcmeAlpha.com
805 965 8820
10. Energy Supply Side Evolution
• “New” technologies in oil & gas exploration & production
• Directional Drilling, Fracking and 3D Seismic all evolved over decades
• 1934 Directional Drilling, 1985-91 Horizontal Drilling; Naval Facilities
Engineering Service Center (NFESC) at Port Hueneme
• 1949 Hydraulic Fracking; 1981-1997 George Mitchell Schumpeterian:
fracking cost reduction ca. 100x via slick water fracking - Barnett Shale
• 1973 3D Seismic; a matter of cost & computational horsepower
• In 2000, shale gas represented just 1% of American natural gas
supplies; by 2012 it was 30% and rising
• Similar tale for oil, but later: 2009-14 oil fracking: US oil output ~2X
from 5.5 million barrels per day to 9.6 million at a time when oil
frequently traded for more than $100 a barrel
Steve Worthington Source: EIA, NFESC, The Economist Steve@AcmeAlpha.com
805 965 8820
12. ECON 2 – Supply Side
Competitive response to lower prices:
Produce until marginal cost is equal to marginal revenue.
Steve Worthington Source: Schlumberger, EIA, Arthur Berman Steve@AcmeAlpha.com
805 965 8820
13. Lead times to bring production online have
fallen by an order of magnitude
• 1967 Prudhoe Bay discovered – full production 1981 14 years
• 1970: North Sea – full production 5+ years
• Saudis as swing producers delivered oil below full cost of ROW
• 2007 fall in worldwide demand f(super-cycle, financial recession)
• Technology solutions become economic: 3D seismic, fracking
and directional drilling
• Schumpeterian Economics: Fed, Fools and their Money
• Initially shale economics were unknown, questionable
• US shale oil & gas appear to be the new swing producer
Steve Worthington Steve@AcmeAlpha.com
805 965 8820
15. • Dividend Yield & Growth:
bankers offered up, investors bought it
Industry Debt Spree: OPM
Steve Worthington Source: FT Steve@AcmeAlpha.com
805 965 8820
16. KMI: The largest energy infrastructure Co in North America
Steve Worthington Source: KMI
Steve@AcmeAlpha.com
805 965 8820
17. KMI a brief history
• A merger/roll up of 4 segments natural gas, refined products & CO2
transport/storage Cos. (29 total). Orig. asset sale SFPL1997->KMI
• MLP to merged Common stock co 2014
• Capital markets idea of growth of divs.- funding dries up
• Management deal oriented; OPM capture.
• October, 2015: KMI issues 10% Conv. Pref.
• Dec 8, 2015: AMC, KMI cuts common div 75%
• Top priority: Maintain credit rating aligned with shareholders: 19 years
• Cash flows 5 categories: O&M, Capex, Debt Paydown & Divs, M&A
• No free lunch yield: hedged position needs a baby sitter & tradeoffs
• Debt covenant key to watch 6.5 x vs.
• Take or pay? Plenty of BKs; converts to pay now contract
Steve Worthington Source: KMI, SEC & Wikipedia Steve@AcmeAlpha.com
805 965 8820
18. Lots of choices: risk v. return
• Heavily regulated: FERC, CPUC, NEB, SEC, CFTC, Jones Act,
EPA
• Key variable: DCF distributable cash flow
• Hedges- Street has forgotten: 97% Take or Pay/Hedged.
o 2016, $1 WTI/bbl crude oil price =$6.5 million
o $0.10 per MMBtu natural gas = $0.6 million,
o 1% change NGL/bbl /WTI/bbl= $2.0 million.
o 100 basis point shift in interest rates = $100 m op income
o $11 of $41 billion of debt subject to variable interest rates
Steve Worthington Source: KMI, SEC Steve@AcmeAlpha.com
805 965 8820
20. KMI Positives
• Management owns 14% of common shares out. (V) R Kinder 11%
• 38% of all natural gas handled by KMI, 84,000 miles of pipelines and
approximately 180 terminals, 8 Jones Act tankers
• Near 100% capacity utilization vs. competition
• GM 71%, G&A 16%, EBDA 40%, 16% DDA, 14% Int. Exp. (2015)
• Stable DCF: 4.6 (2014), 4.7 (2015) 4.7 (2016 E)
• $3.6 B of Distributable Cash Flow (DCF) in excess of divs. for 2016E
• Prior Funding: 50 Debt/50 Equity, Now: 100% excess cashflow
• Oil was down 31% below budget, gas down 45% DCF: $1.233 1Q16
vs 1.242 1Q15: Very Hedged
• 10-15% Project by Project ROI (pre Co. overhead)
Steve Worthington Source: KMI Steve@AcmeAlpha.com
805 965 8820
21. KMI Long Com. vs. Long
Pref. Post Com. Div. Cut.
Steve Worthington Source: SunGard Data Steve@AcmeAlpha.com
805 965 8820
Please see page 2: Legal Disclaimer
22. KMI Return Scenarios
2 ½ year Equity Hedged T note: Conv. Pref. vs. Common –
Returns to date:
Steve Worthington Source: KMI, SEC, AA Research Steve@AcmeAlpha.com
805 965 8820
Please see page 2: Legal Disclaimer
23. THE END
Energy Economics
• What does this mean for investors? Pay attention to leverage,
ROEs & where cash is going: expl, prod, debt, share buybacks.
• Cyclical businesses don't become secular.
• Lifecycle economics important- geology & reservoir engineering.
• Oil is likely capped at ~$60 for the foreseeable future.
Steve Worthington Steve@AcmeAlpha.com
805 965 8820
24. The following eight slides
provide additional detail
regarding various aspects of
this presentation.
Steve@AcmeAlpha.com
805 965 8820
Steve Worthington
25. Never quite a free market
• Standard Oil Trust 1882-1911 (Sherman Anti Trust 1890)
• Achnacarry Agreement 1928 Three then Seven Sisters
• Texas Railroad Commission 1930s
• Venezuela, Aramco 1950 artificially low transfer pricing (50/50),
• Embargoes: 1967 Six Days War, Yom Kippur War 1973 25%
production cut, 1979 Iranian Revolution, then Iran/Iraq war.
• Saudi ownership Aramco: 1973 (25%), 1974 (60%), 1980 (100%)
• Later Political Motivation: Influence Russian gas & oil pipelines.
• Today, Political Proxy Wars: Dangerous Neighbors. Short term
nationalist behavior: A shortfall of Forex- Russia, Iran and Iraq.
Steve Worthington Steve@AcmeAlpha.com
805 965 8820