Category

Energy

Energy Stocks

How to Play by the Rules and Beat the Tax Man with MLPs

Paying taxes is about a pleasurable as a root canal. It's hard not to think about all that money going bye bye.

But it's inevitable and there's nothing we can really do about it, I guess.

However, tax day does bring to mind something quite a bit more positive: Like how to make money in the energy sector.

Actually, that's not as much of a stretch as you might think.  That's because the bridges are already in place between how taxes are paid and energy returns.

Right about now, some of you are probably thinking I will start talking about energy sources like renewables that survive on government tax concessions.

Nope.

Or perhaps you might think this is going to be a discussion of tax write offs for certain field projects that utilize public land.

Wrong again.

And unless you are prone to the more fanciful, your thoughts should not be wandering toward squirreling money away on a small island somewhere.  

Because there has been a much more practical approach that's been generating success for a while now.

This is how you play by the rules and still beat the taxman in Washington.

Natural Gas

Why I'm So Bullish About Natural Gas

I just arrived in Texas yesterday for my latest round of oil meetings.

The crude market continues to absorb accelerations in investment despite of some lateral price movements. That will be an important topic of discussion.

But my interest has moved in another direction.

Natural gas futures closed on the NYMEX on Thursday  $4.14 per 1,000 cubic feet (or million BTUs). We have not seen prices reach these levels in quite some time.  

Energy investing

Companies Race for Profits with Floating Liquefied Natural Gas (FLNG)

Recently two of the world's largest energy companies announced they were joining to develop a record-breaking liquefied natural gas (LNG) project – one that could deliver huge profits for the companies and investors.

Exxon Mobil Corp. (NYSE: XOM) and BHP Billiton (NYSE ADR: BHP) announced earlier this month they were forming a joint venture to build the biggest floating LNG, or FLNG, facility ever. It'll be located off the northwestern shore of Australia.

FLNG is the industry's answer to accessing supplying much needed LNG to energy-hungry Asia, but trying to avoid the increasing costs of onshore plants in Australia.

An increasingly number of companies plan to invest in FLNG over the next few years.

Energy research firm Douglas-Westwood recently reported that global spending on FLNG projects will reach $47.4 billion between 2013 and 2019. About $28 billion will go to FLNG liquefaction spending, and $19 billion on import terminals.

"For more than 30 years FLNG export has been an ambition of the offshore industry, but it is now well on the way to reality," said report author Murray Dormer.

Energy Investing

This Shifting Balance Will Have a Huge Impact on Energy Investors

I have written several times in Oil & Energy Investor about the shifting energy balance worldwide, stemming from the need to prioritize among both traditional and new sources.

This will have a huge impact on how you invest in the sector.

As the new balance emerges, we will see a realignment of global energy prices, and both the sourcing and use of energy will open up significant opportunities worldwide.

We are already beginning to see the revisions working themselves out among the world's most developed nations.

Yet this time around, the changes will have the most positive effect on those regions usually left out of the picture. These regions have the lowest economic diversification, relying largely on sporadic, inefficient, and ecologically damaging energy sources.

Because of high pricing considerations – prompted by collapsing power generation, rusting refineries, and deteriorating delivery infrastructures – people in developing countries are usually cut off from market expansion taking place elsewhere.

In spite of such problems, these countries will provide major demand increases going forward, resulting in significant changes to the international market landscape.

And a damaging cycle that's been churning for half a century will begin to break down…

Energy Markets

Why I Cancelled Everything in Germany and Took the Next Flight to Dubai

Something big unfolded on my trip to Frankfurt last week.

It began with meetings in Germany over natural gas prices, but morphed into an interesting sidebar on the impact government subsidies have on energy prices.

As I noted last week, a recent International Monetary Fund (IMF) staff report concluded that public-sector support largely created more harm than good.

Energy Investing

Why T. Boone Pickens Likes These Natural Gas Companies

Legendary investor T. Boone Pickens has been called the Warren Buffett of energy investing, and over the years he has built up quite a legacy.

From his days as a wildcatter drilling in unknown oilfields, Pickens went on to start his own oil company, Mesa Energy, take on the likes of Exxon Mobil Corp. (NYSE: XOM), and manage a hedge fund, BP Capital.

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Energy Investing

Why Britain is Looking to U.S. for 20 Years' Worth of LNG

With its domestic natural gas reserves nearly depleted, the U.K. is turning to a U.S. company to supply enough liquefied natural gas (LNG) to provide energy to nearly 2 million British homes for 20 years.

The $15.1 billion-plus deal between Houston-based Cheniere Energy Inc. (NYSE: LNG) and Centrica, a British energy firm, marks the first time Britain has ever imported natural gas from the U.S.

The deal has big implications for companies involved in the flourishing U.S. shale gas industry, in which gas is extracted through hydraulic fracturing, or fracking.

You see, fracking has led to an abundance of natural gas and will go a long way toward making the U.S. a net exporter of energy instead of a net importer in the coming years.

That, of course, will be a big boon to natural gas companies that export LNG.

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Energy Investing

What Germany's Energy Problems Can Teach Us About Our Own

Marina and I will soon board a plane for another trip to Europe.

We are off to Frankfurt, where I have meetings on European natural gas import costs; meanwhile, my better half gets to spoil our grandchildren, who live just outside the city.

My responsibility is to address the energy balance problems emerging for the continent. The focus may be on Germany and the rest of Western Europe, but these problems are emerging elsewhere around the world.

With Berlin opting to phase out nuclear power, the continent's largest economy now has a daunting task to assemble an energy mix that meets expected demand.

This started as a political tradeoff, but it is likely to become the major concern in the broader national strategy to stave off recession. A similar tradeoff is developing in the United States.

A much-ballyhooed German venture into solar and wind has hit a brick wall. There is now a played-down move to import additional nuclear-generated power from neighbors, but now the country is doing the unthinkable to meet its energy demands.

This environmentally conscious country, with one of the strongest green political movements in Europe, is now importing more coal than at any point in the past decade.

The options are limited, along with the time to decide on how to implement all of it. That is likely to result in a political tradeoff distasteful to just about every political party and interest group in Germany.

However, the problems do not end there.

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Natural Gas

The Best Way to Invest in the Natural Gas Rebound

On Saturday, I outlined why natural gas prices were moving up.

Today, let's talk about how investors can make some money off this.

As gas prices inch toward $4 per 1,000 cubic feet (or million BTUs) on the NYMEX futures market, we need to remember that this is not going to be either an accelerated rise or one that will be without volatility.

For reasons mentioned on Friday, gas prices will likely cap out in the mid-$4 range by the time we reach midsummer.  

That means there are not going to be any across-the-board influences raising the entire sector. This is going to require some patience and selective investing.

So how does one structure an approach to this?

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