• While midstream equity performance remains stubbornly tied to concerns of partnership simplification, distribution stability and more recently the fallout from FERCs mid-March ruling, the U.S. energy industry is quietly posting some very important milestones.
  • Per the Department of Energy, weekly crude oil export volumes achieved an all-time high of 2.175 million barrels per day in the final week of March. Similarly, U.S. natural gas pipeline flows in March indicated LNG exports touched 3.8 billion cubic feet per day, another all time high.
  • For midstream companies providing the necessary transportation capacity linking sources of supply with points of export, export volume expansion continues to be an important tailwind to midstream company operating and financial results.
  • Widening demand from foreign consumers recognizing the attractiveness of abundant, low cost, reliable U.S. energy resource has always been a central theme in our investment process, with origins in the Pickens Plan laid out in 2008.
  • For us, evidence of increasing U.S. energy exports continues to provide encouraging signs of midstream sector growth potential, underpinning our enthusiasm for a sector that continues to trade at a material discount to historical trading multiples. The Alerian MLP Infrastructure Index is currently at 9.8x vs 11.8x, on a 10 year historical EV to Forward 12 month EBITDA multiple basis.

Disclaimer: This material is for informational purposes only and does not constitute an offer or a solicitation to buy, hold, or sell an interest in any investment or any other security, including any investment with BP Capital Fund Advisors, LLC (“BPCFA”) or any of its affiliates or any other related investment advisory services. This material is not designed to cover every aspect of the relevant markets, and is not intended to be used as a general guide to investing or as a source of any specific investment recommendation. This material does not constitute legal, tax, or investment advice, nor is it a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. In preparing this material BPCFA has relied upon data supplied by third parties. BPCFA does not undertake any obligation to update the information contained herein in light of later circumstances or events. BPCFA does not represent the information herein is accurate, true or complete, makes no warranty, express or implied, regarding the information herein, and shall not be liable for any losses, damages, costs or expenses relating to its adequacy, accuracy, truth, completeness or use. This material is subject to a more complete description and does not contain all of the information necessary to make any investment decision, including, but not limited to, the risks, fees and investment strategies of an investment.

Information related to the Pickens Plan can be found at http://pickensplan.com.