I'll have the privilege of attending EnerCom's The Oil and Gas Conference next week in Denver, and I can't wait. It's a head-spinning, non-stop magic carpet ride of energy information.
At the micro level, seven of the 10 names in my Mad Money portfolio and six of the 12 preferreds in my Portfolio Guru Model Portfolio will be represented. I will have private meetings with every single management team in our portfolio.
I am a firm believer in portfolio concentration, but when one has as much exposure to a single industry as my firm does, it is imperative to know the stories. And talking to management teams is invaluable in that process.
But, there are always macro elements to consider, and, in energy, the issues are clear:
Commodity pricing: My assumption has been that prices for both oil and natural gas would be very stable this year, and that really has been the case. There certainly haven't been any booms or busts in 2014 in this notoriously volatile industry, but I'll be asking the CEOs for their opinions about future pricing.
Midstream: Yes, anyone who reads a newspaper knows that oil-and-gas production in this country has increased markedly due to unconventional drilling techniques. But getting those hydrocarbons to where the demand is (and that includes exports) is key to the process. I'll be watching the pipeline companies for clues as to investment patterns.
Master Limited Partnerships (MLPs) have been all the rage in the energy industry. But just as nearly every management team I talk to muses about the benefits of MLP conversion, energy giant Kinder Morgan (KMI) announced that it is "de-MLPing". So, who's right? Was Richard Kinder's decision -- after years of the company's underperformance -- a sign that MLPs are not, in fact, all they are cracked up to be?
As far as the micro side goes, space limits my ability to do anything other than list my first question for each management team in our one-on-one conversations.
GreenHunter Resources (GRH) : With so many different projects occurring simultaneously, are you properly staffed to handle the robust growth that will certainly continue given the pace of drilling in the Utica shale?
Magnum Hunter Resources (MHR) : You paid a high price to acquire additional mineral rights under your existing Ormet properties -- at what point will skyrocketing land prices in the Utica area cause you to curtail leasing activity?
Arabella Exploration: What is the status of your transformation to a U.S.-listed, major-exchange-traded public company and has this added some much-needed liquidity to your stock?
Harvest Natural Resources (HNR) : Assuming the second stage of your Venezuelan divestiture closes, how will the cash be apportioned between return to shareholders and exploiting the Dussafu project off the shores of Gabon?
Miller Energy Resources (MILL) : Are you currently in discussions with potential joint venture partners regarding your Cook Inlet assets?
Torchlight Energy Resources (TRCH) : Now that your capital raising is virtually complete and 2014's exploration is covered, what are your plans for capital expenditures in 2015 and 2016?
BPZ Energy (BPZ) : Are the returns from your onshore Peruvian exploration sufficient to allocate capital away from your highly-productive offshore blocks?
Gastar Exploration (GST) : What is the status of the company-operated wells in the Hunton formation in OK...have you cracked the production code there?
PDC Energy (PDCE) : Now that Colorado has defeated efforts to limit drilling, is it still a more attractive place to allocate capital than your Ohio-based Utica shale assets?
HII Technologies (HIIT) : Are there enough barriers to entry to control competition in the historically "mom and pop" business of water delivery for hydraulic fracturing?
Victory Energy (VYEY) : Will you be expanding your cooperation in the Permian with Australian partner Target Energy?
