Energy Prospectus

The Obama administration appears to have taken the first step toward lifting the 40-year-old ban on oil exports. The move is a cautious one, designed to open the debate rather than bring about meaningful change, but it sets the stage for Congress to discuss energy policy in terms of America’s newfound abundance of oil and natural gas.

The Wall Street Journal reports that the Commerce Department gave permission to two Texas companies, Pioneer Natural Resources PXD +3.78%, a Dallas-based oil and gas producer, and Enterprise Products Partners of Houston, one of the country’s biggest pipeline operators, to export condensate, a type of light oil that can be refined into motor and jet fuel.

http://www.forbes.com/sites/lorensteffy ... r=yahootix

The administration’s approach allows Congress to move slowly on the issue. We need to ensure we’re not embracing short-sighted policies just to appease powerful corporate interests. But the days of the Arab oil embargo are long gone. The U.S. has an important role to play in the emerging global oil market of the future – not just as the biggest consumer but as one of the biggest producers. It’s time for members of Congress to begin defining that role by clearing the way for the U.S. to participate fully in the global market.

It seems this news has helped the whole sector, but do you think this benefits some companies more than others?

It will benefit the Eagle Ford and Permian Basin companies the most. The Eagle Ford wells produce a lot of condensate that will need very little processing before it can be exported AND they are close to export facilities on the Gulf Coast. A lot of NGLS are already being exported from the Texas and Louisiana ports.

Also, this should narrow the oil price differentials in South Texas and West Texas.

I think SM Energy (SM) got a lot of attention because of this today.

Sweet 16 that should benefit the most: SM, CRZO, CXO, XEC, DVN, EOG, GPOR (a lot of condensate production), MTDR, SN and UNT.

It may also help the midstream MLPs in our High Yield Income Portfolio.