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.
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#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.