67 WALL STREET, New York - March 31, 2014 - The Wall Street Transcript has just published its Oil & Gas: Master Limited Partnerships Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. 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 - Outlook for Natural Gas Liquids - Oil and Gas Investing - Shale Production Growth
Companies include: Mid-Con Energy Partners, LP (MCEP) and many more.
In the following excerpt from the Oil & Gas: Master Limited Partnerships Report, the President, CFO and Director of Mid-Con Energy Partners, LP (MCEP) discusses company strategy and the outlook for this vital industry:
TWST: Let's start with a snapshot of Mid-Con Energy Partners, and its current operations and assets.
Mr. Olmstead: In terms of Mid-Con's assets, most of our assets are in Oklahoma at this point in time - over 90% for that matter. We have three core areas: southern Oklahoma, northeastern Oklahoma, and then what we call the Hugoton area, and that has assets in the Oklahoma Panhandle, in southeast Colorado and in the Texas Panhandle. Really, the Texas Panhandle and the southeast Colorado assets only make up about a couple of hundred barrels a day, so less than 10%; the rest of it is all in the state of Oklahoma. We recently closed a transaction, so this is a little different from our year end, but as of March 1, we have roughly 15.5 million barrels of oil equivalent proved reserves. Those are 99% oil. Over 90% - maybe it's at 99% - of the assets are under waterflood, which is a secondary form of oil recovery. For those people who are technical in nature or close to the oil business, they'll know what that means; for those who are on the periphery, that may need some explanation at times.
We are an MLP. We are one of just 11 or 12 upstream MLPs, which is a little different structure than our C-Corp peers. It has its advantages and disadvantages. I think mostly from an advantage as an investor, it's somewhat of a yield-based product. Our yield is just under 9% right now. On the flip side, you don't have the aggressive cash flow investments that you have in the C-Corps, that doubles and triples production every year. So it's a little different type of structure, and different types of assets fit in there.
One of the reasons we chose the MLP structure is we felt waterfloods, with their relatively low decline and low investment need after they mature, fit very well in the MLP structure. We do operate 99% of our assets. From a balance sheet standpoint, we're relatively low-levered. We think we're highly levered at 1.9 times cash flow - if you look at our peer group, that's less than 50% on a debt-to-cash-flow basis. That's more from a management strategy and management philosophy in terms of not using a lot of debt.
TWST: Tell us more about waterflooding. What does that mean, what technologies are involved, and why is that the company's focus?
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.