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America's energy boom is in great danger of losing steam. A critical resource shortage has created a mad rush by drillers to lock up precious supplies. I've found two companies that control vast amounts of this material. Their fortunes are set to rise as the supplies dwindle. Gains of 1,019% are not out of the question. Here's how to profit right along with them.
| | | 11/12/2014 By David Dittman 
America's energy revolution is in danger of losing steam—and you'll never guess why. (Hint: It has nothing to do with oil prices.)
It's because a vital resource every fracker needs is in dangerously short supply, touching off a mad dash to secure as much of it as possible.
Ordinary Americans lucky enough to be sitting on supplies of this material could easily make in excess of $400,000 a year.
Folks like Barry Fuhrman of Mertzon, Texas.
He has enough of this resource to fill 20 or 30 trucks for frackers every day. At $60 a truckload, that's $36,000 a month.
"I could easily sell 100 truckloads a day if I was open to it," he says.
He's far from alone.
A Massive Scarcity Premium
There's such a shortage of what Barry loads onto trucks that energy explorers are paying 29 times market prices just to make sure they don't run out.
They're so desperate they'll even pay four times the market rate to buy this resource used.
Anadarko Petroleum recently did just that, inking a $9.5-million, five-year deal to lock up access to 2.4 billion used gallons of it.
I'll show you exactly what this resource is in just a minute.
I'll also reveal two companies happily selling it at outrageous premiums. Together, they'll easily give you the opportunity to turn every $1,000 you invest into $11,190 … starting tomorrow.
That's how acute this shortage is.
But first, I want to tell you precisely why demand for this vital liquid will only march higher in the years ahead.
A Boom Built on Quicksand
Unless you've been living under a rock for the past several years, you know about the billions of barrels of oil and trillions of cubic feet of gas being pulled out of shale rock formations here in the U.S.
It's all thanks to hydraulic fracturing—or fracking—a technology that has upended the balance of power in the energy world.
That's no exaggeration. The explosive growth frackers have enjoyed has handed investors gains of up to 4,400%. And the production surge is still in its early days, according to the ultra-conservative Energy Information Administration (EIA).
Consider the following: - Earlier this year, the U.S. passed Saudi Arabia to become the world's top crude producer. That's after we took the lead in natural gas in 2010.
- In October, U.S. oil production hit 8.97 million barrels a day, according to the EIA. That's forecast to rise to 9.5 million barrels in 2015—the most since 1970.
- By 2020, the U.S. will supply its own energy needs, according to Citigroup. It will then be poised to become a net energy exporter for the first time since 1949.
And it's all thanks to fracking.
But here's the bad news: the boom could be in serious jeopardy.
Fracking is a highly specialized, complicated process. And just like great chefs, all drillers go to great lengths to conceal the methods and "ingredients" they use.
But there's one substance they all need, and they use massive amounts of it.
And when I say massive, I'm not kidding. Each fracked well needs anywhere from 2 million to 8 million gallons of this fluid. Some use as much as 13 million gallons.
In all, the Environmental Protection Agency says frackers use 140 billion gallons of it every year.
And it bears repeating here: the boom in America's shale fields is just getting started.
So what is the vital material that lets folks like Barry Fuhrman—the farmer I introduced you to earlier—get rich selling it to frackers?
I'm talking about water.
I know what you're thinking: "David, there's no water shortage. Every time I turn on my faucet, it comes out. Every time I want to take a shower, it's there."
Of course, that's all true. But supply is only one part of the story.
"The Oil of the 21st Century"
Water covers 70% of the Earth, but 97% of it is salt water, which is useless to frackers. Their "secret formulations" need fresh water.
That leaves 3% of the world's water, but there's an even bigger problem with that 3%.
It's located far from where fracking takes place.
According to a study by the climate watchdog Ceres, 36% of America's fracked wells are in regions experiencing groundwater depletion.
It gets worse, though.
Nearly half of all fracked wells since 2011 are in high or extremely high water-stress areas—and 55% are in areas experiencing droughts.
That's a big problem for frackers, and it's already hitting their bottom lines.
Right now, the industry pays up to $8 million to develop a well, and water sourcing makes up 10% to 20% of those costs.
Total spending in Texas's exploding Eagle Ford shale is expected to reach $30 billion this year. That means water sourcing will cost them up to $6 billion.
And that's just one shale play. Water sourcing could cost frackers in the Texas Permian Basin another $4 billion.
Now multiply those costs across all the shale plays in North Dakota, Colorado, Pennsylvania, West Virginia and California, and you start to get the picture.
No wonder Bob Shaver, director of the water appropriations division for the North Dakota Water Commission, says, "To me, water is going to be the oil of the 21st century."
It's a monumental problem for the drillers.
But it's a massive profit opportunity for investors like you and me.
So without further ado, I want to show you…
How to Make the Frackers' Pain Your Gain
The desperate combination of water scarcity and skyrocketing demand has created a unique opportunity for the two companies I mentioned earlier, both of which have a stranglehold on the water that frackers need so badly.
Right now, there are over 26,000 private water companies that control 11% of America's water supply. But these two are the only publicly traded ones that sell water to the drillers.
I've put everything you need to know about them in a new special report called "How to Bank Massive Profits From Fracking's Most Precious Resource." Inside, you'll discover all the lucrative details, including ticker symbols and prices to pay for each.
This groundbreaking new report is yours free with a no-risk 90-day trial to my Utility Forecaster advisory.
One of these companies has already handed my subscribers gains of 1,019%. That's good enough to turn $1,000 into $11,190 … and $5,000 into a life-changing $55,950!
More importantly for you, though, it's perfectly capable of doing that again.
From portfolio-busting share-price growth to strong—and growing—dividends, this water company offers it all. It's a "must buy" for any investor.
I can't wait to tell you all about it and my other "stranglehold profit-maker" in this exclusive new report, which is just waiting for you to download it.
Click here to get the full story now.
Editor's note: If you're an income-seeker (and who isn't?), you'll love the high—and rising—yields these two dividend machines throw off.
Folks like Terry Phillips from Enid, Oklahoma, can attest to the power that rising dividends have on your finances. Just a month ago, he cashed a check for $9,180. And Sam Little banked a cool $13,709 during the same round of payouts.
Now you can join them with no risk and no obligation. Don't wait a moment longer.
Go here to get started right away. | | |
There's a problem brewing for frackers around the country. They're running out of a vital resource. Things are so desperate, some are paying over 29 times regular market prices to lock it up. For two companies that have a stranglehold on its supply, this situation has become an immense opportunity.
I'm forecasting gains of 1,019%. Here's how to get your share of the profits.
| | | 11/12/2014 By Chad Fraser 
Few companies can boast a dividend record like that of Canada's BCE Inc. (NYSE: BCE, TSX: BCE).
The company (or its predecessors) began paying dividends the year after it was founded, in 1881.
In the 133 years since, BCE has only suspended the payout once, in the second quarter of 2008, when a group led by the Ontario Teachers' Pension Plan attempted to take it private. The bid failed, and the company resumed payouts later that year.
Since then, BCE has more than made up for lost time, hiking its quarterly dividend 10 times, including a 6.0% increase last February. It currently pays C$2.47 annually, for a 4.8% yield ($1 Canadian = $0.88 U.S.). That's the highest yield of any of the three major Canadian telecom firms. Besides BCE, they include Telus Corp. (NYSE: TU, TSX: T) and Rogers Communications Inc. (NYSE: RCI, TSX: RCI.B).
BCE is a recommendation in our Utility Forecaster advisory's How They Rate universe, which gives you our specific investment guidance on more than 150 high-yielding utilities from the U.S. and around the globe.
(If you're already a Utility Forecaster subscriber, you can access How They Rate by clicking here. If not, see below to learn how you can take this one-of-a-kind advisory for a 90-day no-risk test run.)
Growing Beyond Telephones
BCE traces its roots back to 1880, just over a decade after Canada was formed, when the country's parliament granted it the right to construct telephone lines alongside all public rights-of-way. At the time, the company, known as the Bell Telephone Company of Canada, also made phones and related gear under a deal with U.S.-based America Bell Telephone Company.
Fast-forward to 1983, and the firm, its name shortened to Bell Canada, had grown to control more than 80 other businesses. That's when a corporate reorganization resulted in the emergence of new parent firm Bell Canada Enterprises, or BCE, with Bell Canada becoming one of its subsidiaries. BCE's common shares started trading on the Toronto exchange on April 28, 1983.
Today, BCE is Canada's largest telecom firm by revenue and market cap.
It operates through three main divisions: Bell Wireless (28% of 2013 revenue), which serves 7.9 million subscribers across Canada; Bell Wireline (47%), which includes land lines, high-speed Internet, satellite and Internet TV services; and Bell Media (13%), whose holdings include the CTV television network and specialty channels like the TSN and RDS sports networks.
Two Major Acquisitions in Just Over a Year
The remaining 12% of BCE's 2013 revenue came from Bell Aliant, a regional telecom serving Canada's easternmost provinces. On November 3, BCE closed its C$3.95-billion purchase of the 56% of Bell Aliant it didn't already own.
BCE expects the move to add about C$200 million to its annual free cash flow, after common dividends. It also expects to save about C$100 million a year (pre-tax) through efficiency improvements and eliminating duplication.
The purchase comes just over a year after the company closed its C$3.2-billion purchase of Quebec's Astral Media, which bolstered its media operations by adding 77 radio stations, two over-the-air TV channels and eight specialty channels.
At the same time, BCE has been making big network investments, to the tune of C$3.6 billion (or 17.5% of its revenue) in 2013.
The company continues to roll out its 4G LTE wireless network, which covered 84% of the Canadian population as of September 30. It expects that to hit 98% by the end of 2015, as coverage expands to more small towns, rural areas and the country's north.
Profiting From Canadians' Wireless Addiction
BCE's network upgrades are helping it take advantage of surging mobile device use in Canada: according recent figures from Cisco Systems (NYSE: CSCO), Canadian mobile data traffic will jump 800% between 2013 and 2018, as smartphones become more capable and web-enabled devices---everything from smartphones and tablets to home appliances---proliferate.
The country boasts one of the highest smartphone penetration rates in the world, at about 73%, according to J.D. Power and Associates, and its denizens are the globe's biggest social media users, with 82% of them tweeting, updating their statuses and checking their news feeds regularly.
BCE reported its latest quarterly results last week, and rising Canadian mobile data usage was a key growth driver.
In the third quarter, BCE's operating revenue rose 1.9% from a year ago, to C$5.2 billion, topping analysts' expectations of C$5.15 billion. Adjusted earnings gained 10.7%, to C$0.83 a share, also beating the consensus forecast of C$0.77. Free cash flow increased 11.6%, to C$834 million.
Wireless operating revenue rose 7.0%, to C$1.6 billion, with data revenue surging 23.9% on higher smartphone penetration and increased average rate plan pricing.
The company added 90,976 net new contract subscribers in the quarter. That was down from 102,714 a year ago, mainly due to higher pricing on new two-year contracts (down from three) resulting from the federal government's new Wireless Code of Conduct.
Seventy-five percent of the company's contract users now carry smartphones, up from 69% at the end of Q3 2013, and the average monthly bill rose 5.9% in Q3, to C$57.90---driven by higher data usage.
Elsewhere, wireline revenue decreased 0.7%, to C$2.5 billion. However, the company's Fibe TV fiber optic television service brought in 61,519 new subscribers in the quarter, boosting the total number to 642,162, up 53.2% from the same time last year.
Fibe TV's growth has brought along more high-speed Internet users; in Q3, the company added 49,555 high-speed Internet customers, up 39.1% from the 35,634 who signed up a year prior. Media revenue rose 0.2%, to $665 million.
New Wireless Competitor on the Way?
One challenge BCE could face is the arrival of a fourth major wireless carrier, something Canada's federal government has been actively encouraging to boost competition in the sector, which is currently 90% controlled by the big three carriers.
That new player could come in the form of Quebecor Inc. (TSX: QBR.B). The Montreal-based telecom and media company, which recently bought $233 million of wireless spectrum licenses in Quebec, Ontario, B.C. and Alberta, has expressed interest in becoming the country's fourth national wireless carrier.
But whether or not Quebecor or another new competitor comes knocking, BCE holds a significant advantage over its other two main rivals: diversification. At 28% of 2013 revenue, it's less dependent on wireless than Rogers, at 57%, or Telus, at 51%.
Moreover, the extra cash flow from Bell Aliant could be a plus if increased competition squeezes its profit margins.
"In terms of wireless competition, if you have a fourth provider that could get up and running next year, this deal makes even more sense," Desjardins Securities analyst Maher Yaghi said in a July 23 Financial Post article, after the move was first announced.
Steady Profit Growth Continues
Meantime, analysts continue to forecast ongoing steady earnings growth, with profits of US$3.16 a share this year, rising to US$3.30 in 2015. The shares currently trade at 13.9 times the 2015 estimate, on par with Rogers, at 13.9, and just below Telus, at 14.3.
The company's growing earnings and cash flow put it in position to announce another dividend hike---its 11th in six years---come February.
Your Roadmap to Global Wireless Profits
BCE is just one of the 18 global telecom stocks David Dittman, chief strategist at our Utility Forecaster advisory, keeps under continuous review in his exclusive How They Rate universe.
Get instant access to incredible guide---including our clear buy/sell advice and crucial buy-under targets on BCE and more than 150 other essential service stocks---when you take a no-risk trial to Utility Forecaster today.
Simply click here to start yours now. | | |
A critical resource shortage threatens to derail the energy revolution in Texas. Things are so bad, drillers are paying up to 29 times market prices to lock up this vital resource. I've found two companies that have a stranglehold on precious supplies and are happily selling it to frackers at outrageous premiums.
This situation could hand you gains of up to 1,019%. Just click here to find out how.
| | | 11/12/2014 By Robert Rapier 
Last week saw a flurry of new MLP IPO filings. Natural gas producer Rice Energy (NYSE: RICE), which had its own IPO in January, filed an initial registration statement with the Securities and Exchange Commission (SEC) to raise up to $425 million forRice Midstream Partners (TSX: RMP). Initial assets will consist of: -
A 2.8 million dekatherm per day (MMDth/d) high-pressure dry gas gathering system and associated compression in Washington County, Pennsylvania, with connections to the Dominion, TCO, EQT and TETCO interstate pipelines -
A 420 MDth/d high-pressure dry gas gathering system in Greene County, Pennsylvania, with connections to Dominion, TCO and NFGS interstate pipelines. Rice Midstream Partners has secured dedications from Rice Energy under a 15-year, fixed-fee contract for gathering and compression services in Washington and Greene counties in the Marcellus Shale and any future acreage it acquires within these counties, other than in select areas subject to pre-existing third-party dedications. The partnership has also secured dedications from third-party customers under fixed-fee contracts for gathering and compression services in Washington County, Pennsylvania with respect to approximately 21,000 acres, and any future acreage they may acquire within areas of mutual interest of approximately 66,000 acres. The partnership is expected to produce $55.7 million in earnings excluding items (EBITDA) over the next 12 months. Navios Maritime Midstream Partners (NYSE: NAP), a recently formed wholly-owned subsidiary of Navios Maritime Acquisition Corp (NYSE: NNA), an owner and operator of tanker vessels, filed for a $162 million IPO of 8.1 million common units representing limited partner interests in Navios Midstream. Initial assets consist of four very large crude carriers (VLCCs), which have an average remaining employment term of approximately 7.7 years. They are chartered to Cosco Dalian, which is wholly owned by the Chinese state-owned COSCO Group, and Formosa Petrochemical, a $23 billion company listed in Taiwan. Navios Maritime Acquisition owns 44 vessels, including 29 product tankers, 11 VLCCs and four chemical tankers. Navios Midstream will have the right to purchase seven additional VLCCs from Navios Maritime Acquisition. The IPO is expected to price between $19 and $21 per unit. For the 12 months ending September 30, 2015 the partnership is projected to have $34.6 million available for distribution, The projected yield at the midpoint of the offering is 8.5%, and as with most marine shipping partnerships, this one has elected to be treated as a corporation for U.S. federal income tax purposes, paying dividends reported on form 1099. Terryville Mineral & Royalty Partners (TRVL) was formed by Memorial Resource Development (NYSE: MRD) to own and acquire royalty interests and mineral interests from MRD and third parties. Memorial Resource is an independent natural gas and oil company with a majority of its activity in the Cotton Valley formation in North Louisiana. TRVL owns royalty interests in 44 of Memorial Resource's 46 existing horizontal producing wells as well as in the undeveloped acreage surrounding these 44 wells. TRVL filed with the SEC to raise up to $150 million in an IPO. The business model is similar to that of Viper Energy Partners (NASDAQ: VNOM), which we covered previously(and which is down nearly 37% since its debut). However, unlike VNOM, which has a variable distribution, TRVL will pay a minimum quarterly distribution. Finally, a more unconventional offering in Landmark Infrastructure Partners (LMRK), which was formed by Landmark Dividend to acquire, own and manage real property interests in the wireless communications, outdoor advertising and renewable power generation industries. These property interests include cellular towers, rooftop wireless sites, billboards and wind turbines. Approximately 88% of leased tenant sites are occupied by large, publicly traded companies (or their affiliates) with a national footprint. Tenants include AT&T Mobility, Sprint, T-Mobile and Verizon in the wireless carrier industry, American Tower, Crown Castle and SBA Communications in the cellular tower industry and CBS Outdoor, Clear Channel Outdoor and Lamar Advertising in the outdoor advertising industry. The IPO is for 3 million units expected to price between $19 and $21. At the midpoint that would raise $60 million. The partnership agreement provides for a minimum quarterly distribution of $0.2875 per unit for each whole quarter, or $1.15 per unit on an annualized basis, which equates to a 5.75% yield on an annualized basis at a unit price of $20. The amount of distributable cash flow required to support the payment of the minimum quarterly distribution for four quarters is approximately $9 million (or an average of approximately $2.3 million per quarter). Pro forma distributable cash flow generated during the twelve months ended September 30, 2014, and the year ended December 31, 2013, was approximately $10.6 million and $9.1 million, respectively. As a result, there would have been sufficient distributable cash flow to pay the full minimum quarterly distributions in both periods. This article originally appeared in the MLP Investing Insider column. Never miss an issue. Sign up to receive MLP Investing Insider by email. | | |
Every year frackers use 140 billion gallons of a surprising resource. But there's a problem. There's a critical supply shortage. And America's energy revolution is in danger of losing steam. Drillers across the country are paying up to 29 times market prices to lock up supplies.
This situation has set up an opportunity for you to see gains of up to 1,019% from two companies that control vast amounts of this material. Get their lucrative details here.
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