High Dividend-Yielding Canadian Pipeline Growth Expected to Continue for Years: Expert Analysts Share Their Top Picks for 2013 and Beyond

Wall Street Transcript

67 WALL STREET, New York - July 8, 2013 - The Wall Street Transcript has just published its 2013 Oil & Gas Review 2013. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends

Companies include: Keyera Corp. (KEY.TO), Pembina Pipeline (PBA), Alta Gas Limited (ALA.TO), and many others.

In the following excerpt from the 2013 Oil & Gas Review, two expert Canadian energy sector analysts discuss their investing methodology and top picks:

TWST: You mentioned the differential. Can you explain that for us?

Mr. Noseworthy: Canadian heavy crudes suffer from as many as three differentials resulting in as much as a $40/bbl discount to Brent. If you can visualize a map of North America, you have up in Canada the Edmonton Par and WCS. These are the benchmark crudes. Edmonton Par is a light oil and WCS is a heavy oil, and the difference between these benchmarks is a measure of the heavy-light differential. That's the first differential. Crude from Edmonton flows down to the mid-Continent or Cushing, and that's where WTI is priced. The difference between Edmonton Par and WTI is your second differential. The third differential occurs as you move down to the U.S. Gulf Coast. In the U.S. Gulf Coast, you have access to waterborne transportation and export, and there crude prices are tied to Brent. So there is a WTI-Brent differential. We have seen all three of these differentials widen in ways we haven't seen historically.

I believe the widening of the differential was largely due to the Bakken formation. The rapid crude production growth of the Bakken took almost everyone by surprise. Everyone understood the growth of the oil sands. It was anticipated by the industry. No one thought the Bakken was going to develop the way it did.

The Bakken created a huge amount of oil which flooded into the market, and all of a sudden, the energy infrastructure was overburdened creating wide crude differentials. That's an oversimplification, but I think it is an easy way to understand the situation.

TWST: As I mentioned, we are specifically looking at the high-yield companies in your coverage. In your opinion, Ms. MacNeill, what characteristics make a company a successful dividend-paying company, what do they have to do, what do they have to look like?

Ms. MacNeill: They have to have a significant growth profile and return on cash flow. Those would be the two things that I look for...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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