Billionaire T. Boone Pickens’ New Energy Stock Picks

Oil tycoon T. Boone Pickens said on CNBC’s “Squawk Box” on February 1 that oil prices will advance to at least $52 per barrel by the end of 2016, saying that U.S crude oil touched the bottom at $26 per barrel. Nonetheless, just a few days after his interview on “Squawk Box”, the founder of energy-focused BP Capital claimed in a separate interview on “Bloomberg Go” that he had sold out of all of his oil-related holdings and awaits better entry points. Specifically, Boone Pickens asserted that he would not pour cash into energy stocks until crude inventories begin to fall. “I will not re-enter, I’m sure, until we start to draw on inventories”, Pickens said in the latter interview. The oil tycoon also said that the oil market was oversupplied by only 1 million-to-1.5 million barrels per day, suggesting that the market could find a balance in the near future, which could push prices significantly higher. Although Boone Pickens recently asserted that he had cashed out of all of his oil holdings, he did submit a 13F filing revealing 55 new equity positions initiated during the fourth quarter, most of which comprised oil-related positions. That being said, the following article will discuss the most valuable energy-related positions of BP Capital as of the end of the December quarter.

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#5 RSP Permian Inc. (NYSE:RSPP)

– Shares Owned by BP Capital (as of December 31): 224,539

– Value of BP Capital’s Holding (as of December 31): $5.48 Million

Boone Pickens added a 224,539-share position in RSP Permian Inc. (NYSE:RSPP) to his energy-focused equity portfolio during the fourth quarter of 2015, which was valued at $5.48 million at the end of the year. The company focuses on the exploration and production of unconventional oil and related liquids-rich natural gas reserves in the Permian Basin of West Texas. Earlier this month, several news articles discussed the results of Goldman Sachs’ extreme stress test on all exploration and production companies, which assumed that crude oil prices would remain around $35.00 per barrel for three years. The results showed that RSP Permian was one of just four companies that received a passing grade from the stress test. The company could endure a prolonged decline in crude oil prices considering its long-term debt of only $698.6 million, cash and cash equivalents of $57.25 million, and unused commitments under its revolving credit facility. Just recently, Jefferies upgraded the stock to ‘Buy’ from ‘Hold’ and established a price target of $27 on it. The shares of RSP Permian are down by 27% over the past 12 months. Ken Griffin’s Citadel Advisors LLC reported owning 2.87 million shares of RSP Permian Inc. (NYSE:RSPP) through its 13F for the fourth quarter.

#4 Buckeye Partners L.P. (NYSE:BPL)

– Shares Owned by BP Capital (as of December 31): 83,650

– Value of BP Capital’s Holding (as of December 31): $5.52 million

The oil tycoon also acquired a new stake of 83,650 shares in Buckeye Partners L.P. (NYSE:BPL) during the final three months of 2015, which was worth $5.52 million and accounted for 3.02% of BP Capital’s equity portfolio at the end of the year. The master limited partnership (MLP) owns and operates a network of integrated assets providing midstream logistic solutions and is one the largest independent liquid petroleum products pipeline operators in the nation based on volumes. Just recently, analysts at Barclays cut their price target on the stock to $69 from $72 but reiterated their ‘Equal Weight’ rating on the stock after the company released stronger-than-expected financial results for the fourth quarter. Buckeye Partners L.P. (NYSE:BPL) posted income from continuing operations of $135.1 million for the quarter, up from $64.0 million reported for the same period of the prior year. Going back to the freshly-cut price target, Barclays ascribed the cut as being due to a higher MLP market risk premium. The stock is nearly 9% in the red year-to-date. Charles Davidson’s Wexford Capital trimmed its stake in Buckeye Partners L.P. (NYSE:BPL) by 56,658 shares during the December quarter, to 161,227 shares.

#3 Patterson-UTI Energy Inc. (NASDAQ:PTEN)

– Shares Owned by BP Capital (as of December 31): 366,703

– Value of BP Capital’s Holding (as of December 31): $5.53 million

BP Capital initiated a new position in Patterson-UTI Energy Inc. (NASDAQ:PTEN) during the October-to-December period, comprising 366,703 shares valued at $5.53 million. The company owns and operates one of the nation’s largest fleets of land-based drilling rigs, which consists of 221 marketable land-based drilling rigs. The company also owns a large fleet of pressure pumping equipment. Although crude oil prices are well above the multi-year lows reached earlier this year, Patterson-UTI Energy Inc. (NASDAQ:PTEN) is most likely facing a sustained decline in contract drilling and pressure pumping activity levels. The company reported 2015 operating revenue of $1.89 billion, down from $3.18 billion reported for 2014. Patterson-UTI had 80 drilling rigs operating in the United States at the end of 2015, sharply down from a peak of 214 rigs reached in October 2014. Nonetheless, Steven Cohen’s Point72 Asset Management upped its position in Patterson-UTI Energy Inc. (NASDAQ:PTEN) by 1.70 million shares during the December quarter, to 2.82 million units.

#2 Superior Energy Services Inc. (NYSE:SPN)

– Shares Owned by BP Capital (as of December 31): 412,045

– Value of BP Capital’s Holding (as of December 31): $5.55 Million

T. Boone Pickens purchased a 412,045-share stake in Superior Energy Services Inc. (NYSE:SPN) during the last quarter of 2015, which was valued at $5.55 million on December 31. The shares of the provider of oilfield services (OFS) and equipment to the oil and gas industry are down by a whopping 57% over the past 12 months. The demand and prices for the company’s services in the U.S land businesses have declined dramatically throughout 2015, especially in the Production Services and Onshore Completion and Workover Services segments. Of course, Superior Energy Services Inc. (NYSE:SPN)’s financial performance is highly dependent on the amount of spending by exploration and production companies, which is affected by crude oil prices. In December 2015, Credit Suisse upgraded the stock to ‘Outperform’ from ‘Neutral’, along with several other stocks focused on unconventional North American activity, saying that OFS stocks usually move up from early February through the middle of April. Richard S. Pzena’s Pzena Investment Management owns 5.13 million shares of Superior Energy Services Inc. (NYSE:SPN) as of December 31.

#1 Sunoco Logistics Partners L.P. (NYSE:SXL)

– Shares Owned by BP Capital (as of December 31): 271,365

– Value of BP Capital’s Holding (as of December 31): $6.97 Million

BP Capital’s largest equity holding at the end of December was represented by Sunoco Logistics Partners L.P. (NYSE:SXL). During the December quarter, the renowned “oilman” acquired a new stake of 271,365 shares in the limited partnership, which owns and operates a logistics business. That logistics business consists of crude oil, refined products and natural gas liquids pipelines, as well as terminalling and storage assets, and crude oil and other marketing assets. Earlier this year, Sunoco Logistics Partners L.P. (NYSE:SXL) announced that its general partner, Sunoco Partners LLC, declared a cash distribution of $0.479 per common unit for the fourth quarter of 2015, which marked an increase of 5% from the cash distribution of $0.458 per unit paid for the third quarter of 2015. Let’s not forget to mention that the shares of Sunoco Logistics have lost 53% over the last year. Jim Simons’ Renaissance Technologies LLC reduced its exposure to Sunoco Logistics Partners L.P. (NYSE:SXL) by nearly 459,000 shares during the fourth quarter of 2015, to 1.02 million shares.

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