After extensive research and analysis, we have come to the conclusion that the nation’s largest combined energy infrastructure company and oil producer – Kinder Morgan – is a house of cards, completely misunderstood and mispriced.
We will release a full report with our thesis and supporting evidence on Tuesday morning, 9/10/2013, to all Hedgeye Energy clients. At 11am EST that morning, we will host a brief call for clients to hit on the highlights of the report, and take Q&A.
Key topics that we will hit on:
- “Like a toll road” – except for that E&P segment that generates +20% of KMP’s segment DCF.
- Cut “Sustaining CapEx” to the bone… How does Kinder Morgan do it?
- How “Certain” are KMP’s “Certain Items”?
- KMP’s investor presentation “returns” vs. actual returns to the KMP unitholder.
- Dissecting the complex corporate structure: KMI, KMP, KMR, and EPB.
- The absurdity of the Incentive Distribution Right (IDR) and the incentives it really creates.
- $78 BILLION of combined market cap sitting on top of $1.6 BILLION of tangible equity? A complete valuation analysis.
We are convinced that the Kinder Morgan complex will eventually collapse. In our view, it is not a matter of if, it is a matter of when. We look forward to presenting our work, and the debate that is sure to follow.