- Over the last seven years, the majority of upstream MLPs have been unable to cover their investment and distribution costs through operating cash flows.
- Upstream MLPs seems to be indicative of the broader upstream oil and gas industry with respect to investing and distribution/dividend coverage.
- While some of the upstream majors appear to be fairly priced, high-quality independents tend to be over-capitalized, while under-capitalized firms tend to be of lower quality.
- The majority of economic value in the oil and gas industry is realized further downstream.
- Investors who insist on exposure to upstream oil and gas assets are likely better served by focusing on high-quality integrated majors.