Energy: A dynamic industry with a variety of challenges and ATM financing opportunities
Driven by the vagaries of oil and gas production, insufficient pipeline structures and a growing appetite for oil and gas, the MLP sector is extremely dynamic, with multiple factors affecting capital requirements and funding needs.
At-the-market offerings such as Brinson Patrick’s DOCS® (Dynamic Offering of Common Stock) ATM financing facility enable MLP companies ultimate flexibility to raise smaller amounts of cash opportunistically, as the demand for capital is driven by growth.
- Oil & Gas: Companies that produce and/or transport oil and gas frequently have capital needs driven by acquisition expenditures, and don’t always have a consistent and predictable cash flow growth. Similar to REITs, the master limited partnership (MLP) structures have been big adapters to at-the-market financing programs, given their inability to retain earnings.
- Utilities: Providing electricity and/or natural gas to meet customer needs, at times utilities need capital for acquisition or expansion of transmission lines and power generation facilities.
- Alternative Energy: From companies working to develop better sources of energy (e.g. more efficient batteries), to those producing renewable energy equipment (e.g. solar energy equipment), many are in the development stage, with the demand for capital that implies. For firms like these, at-the-market financing can be an extremely useful tool for alternative energy company CFOs to implement.
See CFO Magazine’s take on at-the-market financing for a variety of industries. »
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