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from Breakingviews:

Solvay pays up to tap into fracking market

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Solvay is paying up to tap into fracking. The $13 billion Belgian chemicals group is staking $1.3 billion on Chemlogics, a U.S. specialist in compounds for extracting oil and gas. The price looks high. But there should be tax savings, a sales boost, and a chance to ride the shale revolution.

The all-cash deal values the private company at 10.7 times trailing EBITDA. That is far higher than Solvay’s own 6.3 times multiple, Starmine shows. It also trumps the mean 8.7 times multiple for chemicals deals from 1990-2012, as calculated by Valence Group, a boutique M&A house.

One Equity Partners, the JPMorgan-backed buyout shop, bought 37 percent of Chemlogics in 2011, and has presumably made a good return. Same goes for the company’s founders, who will remain involved.

from Breakingviews:

Apollo’s energy IPO gives new life to quick flips

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Apollo’s latest sale gives new life to the quick flip. Leon Black’s shop is taking EP Energy public less than 18 months after leading a $7.2 billion takeover of the oil and gas company. That contrasts starkly with the trend of longer buyout holding times. The prospect of a twofold return shows that private equity can still dig into its old bag of tricks.

from Breakingviews:

Big Oil’s growth addiction is counterproductive

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Big Oil has a growth addiction. The industry pours billions of dollars into projects with marginal returns to keep production rising. But the oil majors’ huge size means even huge new fields barely move the needle. Petroleum bosses would do better to follow Royal Dutch Shell, and ditch output targets. The best option may be to plan for shrinkage.

from Breakingviews:

Middle East turmoil perpetuates OPEC charade

By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Turmoil in the Middle East and North Africa has been awful for the people of the region. The same cannot be said for OPEC, the oil cartel. The long list of crises – violence in Iraq, fear of sectarian spillover from the Syrian conflict, oil worker strikes in Libya and sanctions against Iran – has conspired to keep crude prices high.

from Breakingviews:

Fracking may change U.S. foreign policy for good

By Rob Cox and Christopher Swann
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

 

Fracking may be changing U.S. foreign policy. The abundant supply of hydrocarbons made accessible by hydraulic fracturing has nudged the United States the closest it’s been to energy independence in a generation and also creates a buffer for the global oil price. While all of this is relatively recent, the shift may give Uncle Sam new latitude in handling knotty affairs in Syria and throughout the Middle East.

from The Great Debate:

The Case Against Natural Gas Exports

President Barack Obama has made middle-class jobs and natural gas two of his top second-term policy objectives. Both could be undermined if his Department of Energy (DOE) continues to approve gas industry applications for exporting American gas.

There is already a move in Congress to remove DOE’s authority, so approvals can move even faster, and the oil and gas industry has thrown all its lobbying muscle behind this effort to steamroll through the permission process.

from Breakingviews:

Battered E.ON and RWE still far from bottom

By Olaf Storbeck

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Shareholders of German utilities have gone through three horrible years. Since April 2010, E.ON’s stock-market value has declined by 55 percent and RWE’s by 68 percent. The German stock market as a whole gained more than a third in the same period. But the battered shares probably have further to fall.

from Lipper Columns:

CTRL:ALT:INVEST: Corn could add “pop” to your portfolio

Teucrium Trading's Sal Gilbertie says that, while agricultural commodity prices will always be volatile, he sees investor interest in corn outpacing that in wheat or soybeans.

 

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from Breakingviews:

Shell faces reality: it’s not about the barrels

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Disappointing results at Royal Dutch Shell partly reflect an outdated way of thinking. Oil majors have long obsessed simultaneously about reserve replacement, production growth and profit. The Anglo-Dutch energy giant’s decision to ditch its production goals shows it’s wising up.

from Lipper Columns:

CTRL:ALT:INVEST: Don’t give up on solar energy yet!

Bill Lese, managing partner at VC firm Braemar Energy says there's still growth potential in the solar sector, and also likes early-stage investments in shale, coal and hydrocarbons.

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