The Million Dollar Way (The Bakken Oil Blog): Energy -- January 8, 2023

Sunday, January 8, 2023

Energy -- January 8, 2023

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

I only see the world through oily-stained glasses so my views are extremely biased. Let me repeat:

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Two takeaways from the stories below:

energy is the story and the investing story of the 21st century
North America, and specifically, America is the energy story of the 21st century

For investors like me with a 30-year horizon, energy is the foundation of one's investment portfolio.

Among Big Oil, Chevron seems to be making all the headlines right now. It's a favorite of Warren Buffet's.

It's less expensive to "buy" a pipeline than "build" a pipeline.

Wind and solar get all the mainstream attention, but that's not where mom-and-pop investors are going to make money.

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Phillips 66 -- DCP Midstream

Phillips 66 acquires all of the publicly held common units representing DCP Midstream: $3.8 billion.

Oil & Gas Journal.

In combination with the 2022 realignment of Phillips 66’s economic and governance interests in DCP Midstream, the transaction is expected to generate an incremental $1 billion of adjusted EBITDA for Phillips 66, the company said (OGJ Online, Aug. 18, 2022). The company also expects to capture operational and commercial synergies of at least $300 million by integrating DCP Midstream into its existing midstream business.

Fitzsimmons:

PSX announced an agreement Friday to buy the remaining publicly held LP units in DCP Midstream for $41.75 each, raising Phillips 66's stake in DCP to 86.8%.
The remaining economic interests in DCP are held by Enbridge, which owns 13.2% of the MLP's General Partner.
PSX expects the acquisition will generate $1 billion of incremental adjusted EBITDA with an additional $300 million of synergies by integrating DCP's assets into PSX's Midstream Segment.
With a forward P/E of only 5.4x, a current yield of 3.7%, and prospects for another summer of tight refined product markets, PSX is significantly undervalued here.

InvestorPlace: DCP stock pops.

Still, it looks like a win-win situation. The deal with DCP Midstream is anticipated to generate an incremental $1 billion worth of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for Phillips 66. Moreover, it will help Phillips 66 delve deeper into the NGL industry.

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Chevron-Phillips Chem

Chevron-Phillips Chem -- QatarEnergy: to construct complex in Ras Laffan Industrial City, Qatar;

Orange, TX:

Meanwhile, last November, Chevron Phillips Chemical and Qatar energy
link here.
Orange, TX: wiki.

Chevron Phillips Chemical Company LLC and QatarEnergy announced today that they are proceeding with the construction of an $8.5 billion integrated polymers facility in Orange, Texas, expected to create more than 500 full-time jobs and approximately 4,500 construction jobs and generate an estimated $50 billion for the community in residual economic impacts.

The companies have made a positive final investment decision on the project and created a joint venture company, Golden Triangle Polymers Company LLC, named for the Golden Triangle region of Texas that includes the city of Orange. Chevron Phillips Chemical owns a 51% equity share in the joint venture and QatarEnergy owns 49%.
Orange is a city and the county seat of Orange County, Texas, United States.[5] As of the 2020 census, the city population was 19,324. It is the easternmost city in Texas, located on the Sabine River at the border with Louisiana, and is 113 miles (182 km) from Houston. Orange is part of the Beaumont−Port Arthur Metropolitan Statistical Area. Founded in 1836, it is a deep-water port to the Gulf of Mexico.