We will all be buzzing, correctly, about the huge Kinder Morgan (KMI) deal to buy El Paso (EP) and how it will make Kinder Morgan a gigantic colossus of pipe that will be able to move natural gas through much of the country.
It is a deal meant to insure the Kinder entities dominate the transport of the fuel. Of the three entities -- KMI, KMP, and KMR -- I like KMP best because it is a master limited partnership that gives you a high yield. KMP is the toll-road taker of the three, which are Kinder Morgan Inc, which owns and operates the pipelines, Kinder Morgan Management, a limited partner of Kinder Morgan Energy Partners which controls its business, and Kinder Morgan Energy Partners.
But save some mindshare for this electric Statoil (STO) deal for Brigham Exploration (BEXP), which is a crucial Bakken player, after my favorite, Continental Resources (CLR) and then the not-as-well-executing Whiting Pete (WLR). BEXP, which also owns some nat-gas assets, is one of the major independents in the North Dakota formation that could be as big if not bigger than Prudhoe bay and it is light sweet crude, which can be used by a lot of the refineries that currently import oil from Nigeria and Venezuela.
The Kinder deal is gigantic and a sign that Rich Kinder recognizes that our country is going to need much more natural gas as a bridge fuel until we get to renewables, with nat gas replacing heating oil, coal and, maybe, ultimately, diesel.
But the BEXP deal is a reminder that the foreigners want in here because of our crude findings, both in North Dakota and in Eagleford. I continue to believe that CLR and EOG (EOG) are the two best, the latter having terrific Bakken assets as well as a huge amount of oil in Eagleford.
I would buy KMP on any weakness and I would buy CLR and EOG only after they come down from the speculative high I expect to see at the opening.
