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   Technology StocksKMI- a fallen high dividend yielder - for how long?

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To: E_K_S who wrote (107)10/6/2020 10:25:08 AM
From: robert b furman
1 Recommendation   of 159
Hi E_K_S,

Looks like natural gas is at the 5 year average, Capex cuts are beginning to show a possible boost in price.

ECONOMICS & MARKETSMorgan Stanley: $5 Henry Hub gas possibleRecord production declines combined with rebounding demand could create the tightest gas market of the past decade, with winter storage draws potentially eclipsing those of the 2013-14 polar vortex, according to Morgan Stanley.

OGJ editors

Oct 5th, 2020

Morgan Stanley.

Record production declines combined with rebounding demand could create the tightest gas market of the past decade, with winter storage draws potentially eclipsing those of the 2013-14 polar vortex, according to Morgan Stanley. The investment bank and financial services company increased its 2021 Henry Hub forecast to $3.25/MMbtu from $3.05/MMbtu and sees upside to $5/MMbtu with cold weather.

“2021 Henry Hub prices have rallied 10% in the third quarter on tighter inventories, though we see further upside from here. The collapse in oil prices removed a key overhang for the US natural gas market: the abundance of ‘free’ associated supply from oil wells. Now, record production declines from sharp reductions in E&P spending combined with rebounding demand, led by a recovery in LNG exports, is set to create the tightest gas market of the past decade, with winter storage draws potentially eclipsing those of the 2013-14 polar vortex—a $4.35/MMbtu gas year—and with a growing shortfall through the summer months,” Morgan Stanley said.

To address the impending supply-demand imbalance, Morgan Stanley sees the need for materially higher 2021 prices to incentivize much needed investment in additional supply and gas-to-coal switching. “We are updating our gas balance and increasing our Henry Hub forecast for 2021 from $3.05/MMbtu to $3.25/MMbtu, implying 13% upside from the current strip of $2.87/MMbtu. Our long-term $2.75 forecast is unchanged.”

US gas production is set to post a record 6 bcfd decline this year. Growth in "free" gas from oil production (associated gas) has been a key overhang for Henry Hub prices over the past few years. However, in response to low oil prices, exploration and production companies have now slashed 2020 capital spending by around 50% below 2019 budgets. Morgan Stanley expects associated gas production to fall by 3-4 bcfd exit to exit 2020.

“With WTI prices currently below the $40/bbl we estimate is needed to hold US volumes flat next year, these declines could continue into 2021. Declines are not isolated to the oil basins: in the Haynesville, rig counts have fallen from 50 to 35 year-to-date, with the Marcellus posting a with a similar 30% decline. Weak spot prices this summer, balance sheet stress and minimal access to external capital has left gas producers with production declines of their own, and limited ability to proactively increase capex in response to the upcoming market tightness.”

Despite declining supply, demand looks set for another year of strong gains. Global gas oversupply led to substantial cancellations of US LNG exports over the past summer. Peaking at 45 cargo cancellations in July, LNG feedgas demand fell to below 3 bcfd, well below capacity of 9.5 bcfd. Heading into the winter, Morgan Stanley anticipates negligible cargo cancellations as the global LNG market shifts back into balance. After averaging 6 bcfd in September, Morgan Stanley expects LNG feedgas to stabilize around 9-10 bcfd during the fourth quarter. In total, winter 2020-21 demand growth is forecast to be 5-6 bcfd year-over-year (assuming normal weather).

The combination of falling supply and rebounding demand leads to tight inventories. After ending October 2020 at 3.9 tcf, roughly in line with the 5-year normal, Morgan Stanley expects the combination of constrained supply and increasing demand to lead to one of the largest winter draws over the past decade. Assuming normal 10-year weather, Morgan Stanley expects tight end-March inventories of 1.2 tcf (35% below the 5-year normal of 1.8 tcf), with a mounting deficit thereafter. Colder than normal weather could lead to the lowest US gas inventory levels on record, and a material price rally to $5/MMbtu, or higher, and average in the mid-$4 range for full-year 2021.

Morgan Stanley.


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US onshore oil production set to gradually decline after August peak

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Fed Dallas Energy Survey: contraction continues, but moderated

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Refiners shifting toward renewable diesel

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Oil and gas project sanctioning set to exceed pre-COVID-19 levels from 2022

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API: US petroleum demand continued to increase in August

OGJ editors

They're hoping for a cold winter - which will also boost fuel oil. also

I flew in a plane for the first time in years last Friday. It was a full plane and both planes I flew in were refreshingly clean.

Their first hand out was an alcohol swab that cleaned all the surfaces, issued as one enters the plane.

In all it was a very improved service.

Air flight will slowly build into the future.

Patience will reward those who buy this out of favor and necessary sector.


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To: robert b furman who wrote (108)10/6/2020 11:49:57 AM
From: E_K_S
   of 159
Winter coming so demand for NG increases . .

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To: E_K_S who wrote (109)10/6/2020 1:26:55 PM
From: robert b furman
   of 159
Hi E_K_S,

Saw a report that indicates oil demand increses starting from September as well.

I suspect fuel oil is the difference.

Jet fuel will slowly recover and gas /diesel are doing well now vs 2019.

My account perks up with crude over 40.00.


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From: E_K_S10/22/2020 2:26:33 PM
   of 159
Kinder Morgan EPS beats by $0.01, beats on revenue
Oct. 21, 2020 4:06 PM ET|About: Kinder Morgan, Inc. (KMI)|By: Vandana Singh, SA News Editor

Kinder Morgan (NYSE: KMI): Q3 Non-GAAP EPS of $0.21 beats by $0.01; GAAP EPS of $0.20 misses by $0.01.

Revenue of $2.92B (-9.0% Y/Y) beats by $10M.

Adjusted EBITDA decreased 7% Y/Y to $1.7B and distributable cash flow is down 5% to $1.1B.

Press Release


Kinder Morgan swings to Q3 profit but sees full-year DCF below plan
Oct. 21, 2020 5:45 PM ET|About: Kinder Morgan, Inc. (KMI)|By: Carl Surran, SA News Editor

Kinder Morgan (NYSE: KMI) -1.2% after-hours as adjusted Q3 earnings edged estimates while revenues fell 9% Y/Y to $2.92B, as weaker natural gas prices due to the pandemic hurt production and transportation of fuel.

Kinder reports a $455M profit in Q3, 10% less than $506M in the year-ago quarter, but the results mark a turnaround from the $637M loss in Q2, when the company wrote down $1B in assets.

Q3 distributable cash flow fell 5% Y/Y to $1.08B, and for the full year, Kinder reiterates it expects DCF to be below the planned $5.1B by slightly more than 10% and adjusted EBITDA to come in below the $7.6B original plan by slightly more than 8%.

The company now expects its planned $2.4B of expansion projects and contributions to joint ventures for 2020 will come in $680M lower, or 30%; with the reduction, DCF less expansion capital expenditures is improved by ~$135M compared to the original budget.

Kinder says its $2B Permian Highway pipeline project is 97% completed and on schedule to begin service in early 2021.

Shareholders will receive a distribution of $0.2625/share for Q3, in-line with the previous payout.


Lower CapX as you expected

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From: E_K_S10/22/2020 2:27:44 PM
   of 159
Kinder Morgan declares $0.2625 dividend
Oct. 21, 2020 4:09 PM ET|About: Kinder Morgan, Inc. (KMI)|By: Vandana Singh, SA News Editor

Kinder Morgan (NYSE: KMI) declares $0.2625/share quarterly dividend, in line with previous.

Forward yield 8.37%

Payable Nov. 16; for shareholders of record Nov. 2; ex-div Oct. 30.

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To: E_K_S who wrote (112)10/22/2020 3:13:24 PM
From: robert b furman
3 Recommendations   of 159

I guess we need real time posting. LOL

Looks like their guidance on short falls is quite accurate.

The future demand for natural gas appears to be picking up. Price is trading above $3.00.

Here's a quick lesson on renewables:

Energy has a long runway into the future, and will make us a lot of money besides the dividend!


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From: E_K_S11/23/2020 1:55:15 PM
   of 159
Maybe KMI will come up w/ similar resolution

CHK resolution
Williams announces global resolution with Chesapeake ($20.34, 0.00)
Monday, November 23, 2020 12:20:15 PM (GMT)

  • Williams announced that it has reached a global resolution with Chesapeake as part of Chesapeake's Chapter 11 bankruptcy restructuring process.
  • Key highlights of the global resolution, currently pending bankruptcy court approval, include the following:
  • Chesapeake will pay all pre-petition and past due receivables related to midstream expenses, per the existing contracts.
  • Chesapeake will not attempt to reject Williams' gathering agreements in the Eagle Ford, Marcellus, or Mid-Con.
  • In the Haynesville, Williams has agreed to reduce its gathering fees in exchange for gaining ownership of a portion of Chesapeake's South Mansfield producing assets, which consist of approximately 50,000 net mineral acres. In addition, Chesapeake will enter into a long-term gas supply commitment of a minimum 100 Mdth/d and up to 150 Mdth/d for the Transco Regional Energy Access (REA) pipeline currently under development.
  • The reduced gathering fees are consistent with incentive rates that Williams has offered in the past to attract drilling capital and are therefore expected to promote additional drilling across Chesapeake's prolific Haynesville footprint.
  • The South Mansfield assets provide an opportunity for Williams to transition the acreage to a strong and well-capitalized operator that will grow production volumes, and drive growth in fee based cash flows on Williams' existing spare midstream capacity, while also enabling Williams to market significant gas volumes for future downstream opportunities.
  • The commitment to REA provides valuable incremental takeaway capacity for Chesapeake's Marcellus production and the associated Williams gathering systems, while adding a valuable capacity commitment to the Transco project.
  • Reference Links:
  • Williams Announces Global Resolution with Chesapeake

  • Industries: Oil & Gas Exploration & Production, Oil & Gas Operations
    Primary Identifiers: CHKAQ-US, WMB-US
    Related Identifiers: CHKAQ-US, WMB-US
    Subjects: Corporate Actions, Mergers and Acquisitions, M&A Other Announcements, Restructuring
    Related Stories:
  • U.S. Bankruptcy Court approves Chesapeake Energy motions seeking a variety of "first-day" relief; will operate in the ordinary course during the Chapter 11 process ($11.85, 0.00)
  • Chesapeake Energy files for Chapter 11 protection ($11.87, 0.00)

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    From: E_K_S12/8/2020 8:59:06 AM
       of 159
    Kinder Morgan sees 3% rise in 2021 dividend per share
    Dec. 08, 2020 8:47 AM ET Kinder Morgan, Inc. (KMI) By: Carl Surran, SA News Editor 1 Comment

    Kinder Morgan (NYSE: KMI) issues preliminary financial projections for 2021, including $1.08/share in dividends - a 3% Y/Y increase - and $1.2B in distributable cash flow in excess of discretionary capital spending and dividends.

    The company says it reduced 2020 expenses and sustaining capex by nearly $190M, and lowered its discretionary capital outlook for 2020 by $680M, or nearly 30%, resulting in a $160M improvement to DCF less discretionary capex compared to the original budget; net debt-to-adjusted EBITDA ratio at year-end 2020 should be ~4.6x.

    Kinder expects to generate $2.1B in attributable net income in 2021, $2B more than its 2020 forecast, due primarily to asset and goodwill impairments taken last year, and expects to generate $4.4B in DCF during 2021, 3% below its current 2020 forecast, affected by several factors including lower re-contracting rates on certain natural gas pipeline assets.

    The company expects DCF less discretionary capex and dividends of $1.2B in 2021, an improvement of more than $700M vs. the 2020 forecast.

    Kinder also says it plans to invest $800M in expansion projects in 2021.

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    To: E_K_S who wrote (114)12/8/2020 1:44:56 PM
    From: robert b furman
       of 159
    Hi E_K_S,

    It's not the hoped for 20 cents, but all increases in the dividend are graciously received. <smile>

    Compared to many, the 5%, and this 3 cents is a whole lot better than a cut.

    With normalcy and higher prices with bigger volumes, KMI will be one of the better to offer hefty dividend increases in the near future. IMO

    A solid yield based on cost!

    Thank for the prompt post!

    It will be interesting to see the revenue the big pipelines from the Permian produce in 2021,plus all of the liquefaction trains up and running . Should be good growth!


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    From: E_K_S1/18/2021 8:27:46 AM
       of 159
    Biden may cancel Keystone XL pipeline permit as soon as his first day in office: source

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