Seeking Alpha: ONEOK Partners Looks Undervalued, But There Are Reasons Why

A lot of things have gone wrong with ONEOK Partners, LP (NYSE:OKS), but not all of them are management's fault. Constructing a business model with meaningful commodity price risk was a choice (or gamble, depending upon your point of view) that looked better when NGL prices were stronger, but few were calling for the sharp decline in energy prices that occurred over the past year. A bigger concern now is whether ONEOK (NYSE:OKE) will offer any relief to the high incentive distribution rights that are depleting cash flow and distribution coverage, particularly as ONEOK Partners will almost certainly need to issue more units to fund its growth projects.

ONEOK Partners is basically a leveraged bet on natural gas, with a particular focus on the Williston Basin (the Bakken) and NGL prices. A sharp turnaround in gas prices and drilling activity in the Bakken would help ONEOK Partners more than most, but then there is the real risk that this MLP's distribution growth will lag its peers due to low coverage today and the need to fund additional growth projects. It's a more speculative call within MLPs and as is the case with Enbridge Energy Partners (NYSE:EEP), there are reasons why the yield stands out on the high side.

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ONEOK Partners Looks Undervalued, But There Are Reasons Why

Investopedia: Macquarie Infrastructure Looks Like A Tricky Play

Savvy investors know to love those toll-booth companies out there--companies that own hard-to-replicate assets that produce quality cash flow streams and require little short-term strategic support. These companies can take many forms, from timberland owners like Weyerhaeuser (NYSE:WY) to petroleum transport and storage companies like Enbridge Energy Partners (NYSE:EEP) to diversified investment holding companies like Brookfield Infrastructure (NYSE:BIP).

Macquarie Infrastructure Company LLC (NYSE:MIC) is a company worth exploring within that same theme. While there are cyclical and long-term structural issues with some of the company's operating assets, results have been getting better and the company's dividend paying ability seems to be getting stronger.

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http://stocks.investopedia.com/stock-analysis/2012/Macquarie-Infrastructure-Looks-Like-A-Tricky-Play-MIC-EEP-BIP-KMP0530.aspx

Seeking Alpha: Plains All American Almost Makes It Look Easy

With crude oil production increasing across North America and differentials going both wide and volatile, these are pretty interesting times to own pipeline, storage, and terminal facilities. As one of the best in the business, Plains All American (PAA) continues to reap the benefits of the network it already has, while also putting even more money into its expansion plans.

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Plains All American Almost Makes It Look Easy

Investopedia: Southern Union Now A Hot Property

The world of pipelines, gas gathering and midstream assets is usually a pretty sleepy place that offers a lot more in terms of income than in headlines and excitement. With at least two bidders now fighting for Southern Union (NYSE:SUG), though, this quiet patch of the income world has gotten a lot more interesting. (To learn more about he oil and gas industry, check out Oil And Gas Industry Primer.)



Williams Companies Brings the Cash
While Southern Union and Energy Transfer Equity (NYSE:ETE) had previously come together on a somewhat convoluted merger agreement, at $33 a share (for Southern Union), Williams Companies (NYSE:WMB) has shaken things up with an all-cash bid of its own that values Southern Union at $39 per share. Now let the squabbling via press release begin!

When Energy Transfer Equity made its original offer, it was a reasonable premium to the recent trading price of Southern Union, but still a rather good bargain for ETE. Making matters worse, it was a convoluted offering - Southern Union shareholders would receive Series B units that would yield at least 8.25%, but there was a somewhat complicated decision tree that could result in shareholders eventually getting cash, ETE common, Energy Transfer Partners (NYSE:ETP) common, or continuing to hold those Series B units. Some of these permutations would give SUG shareholders a tax-free acquisition premium.


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Can The U.S. Switch To Natural Gas?

There is nothing like a big oil spill (or several years of high gasoline prices) to get investors and some environmentalists talking about natural gas again. The arguments have been around for years and go something like this: Natural gas is relatively abundant in the United States, it can offer positive pollution trade-offs to oil and gasoline, and it is the only immediate option with a reasonable chance to supplant imported oil in powering vehicles. 

As another summer has rolled by, however, North America really does not seem all that much closer to the sort of natural gas-fueled future that people like T. Boone Pickens would recommend. Still, for those investors who believe in the possibility, there are a few investment plays to explore while the idea is still in its extended infancy.

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http://stocks.investopedia.com/stock-analysis/2010/Can-The-U.S.-Switch-To-Natural-Gas-UPL-CHK-KMP-CLNE-PTRY-GTLS-DRC-WPZ-PCG0827.aspx

Can Investors Capture Gains In Carbon Capture?

Carbon capture and storage (CCS) seems to be an inevitable emerging technology over the next few decades. CCS holds the promise of cutting CO2 emissions from power plants by up to 80-90%, while not imposing a crippling cost burden on energy producers and customers. As increased legislation aimed at controlling green house gas emissions seems like a done deal in the years to come, investors should look to see how they might position themselves to profit. 

Look to the Oil FieldsOne of the early adopters of CO2 capture and storage has been the oil and gas industry. Companies including Statoil (NYSE:STO), Kinder Morgan (NYSE:KMP), and Denbury Resources (NYSE:DNR) have been early movers in this field, which involves injecting CO2 far beneath the ground to stimulate better oil and gas production. Kinder Morgan operates CO2 pipelines and reported a few years ago that in the Permian Basin and Mississippi nearly 11 trillion cubic feet of CO2 had been used to generate and incremental 1.2 billion barrels of oil that might otherwise have remained in place.

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http://stocks.investopedia.com/stock-analysis/2010/Can-Investors-Capture-Gains-In-Carbon-Capture-STO-KMP-DNR-ALB-GRA0616.aspx