IMPORTANT DISCLOSURES

Tudor, Pickering, Holt & Co. uses a Buy, Hold and Sell rating system.

Tudor, Pickering, Holt & Co. International, LLP Disclosures

Opinion Key
  • Buy – The stock should be purchased aggressively at current prices. The stock has among the best combination of risk/reward and positive company specific catalysts within the sector. Stock is expected to trade higher on an absolute basis and be a top performer relative to peer stocks over the next 12 months.
  • Hold – Do nothing with the stock at current prices. The stock has average risk/reward and is expected to perform in line with peer stocks over the next 12 months.
  • Sell – The stock should be sold aggressively at current prices. The stock’s risk/reward is skewed to the downside with possible negative company specific catalysts or excessive valuation. The stock is expected to trade lower on an absolute basis and be among the worst performers relative to peer stocks over the next 12 months.
  • Buy – The stock should be purchased aggressively at current prices. The stock has among the best combination of risk/reward and positive company specific catalysts within the sector. Stock is expected to trade higher on an absolute basis and be a top performer relative to peer stocks over the next 12 months.
  • Accumulate – The stock should be purchased consistently at current prices. The stock has above average risk/reward and is expected to outperform peer stocks over the next 12 months.
  • Hold – Do nothing with the stock at current prices. The stock has average risk/reward and is expected to perform in line with peer stocks over the next 12 months.
  • Trim – The stock should be sold consistently at current prices. The stock has below average risk/reward and is expected to under perform peer stocks over the next 12 months.
  • Sell – The stock should be sold aggressively at current prices. The stock’s risk/reward is skewed to the downside with possible negative company specific catalysts or excessive valuation. The stock is expected to trade lower on an absolute basis and be among the worst performers relative to peer stocks over the next 12 months.

 

Investment Rating Distribution: (as of December 31, 2016)
Coverage Universe
Stock Rating CategoryCountPercentage
Buy7151%
Hold6446%
Sell43%

Tudor, Pickering, Holt & Co. has received in the past 12 months or expects to receive within the next 3 months compensation for investment banking or other services from Bold Energy III, Centennial Resource Development, Cleco Corp, Concho Resources, Crestwood Midstream Partners, Delek US, Energen Corp, Enlink Midstream Partners, Felix Energy, Gastar Exploration, Harvest Natural Resources, Howard Energy Partners, Kaiser Francis, Musket Corp, Noble Energy, Plains All American Pipeline, Resource Environmental Solutions, Silverback Exploration, Stonepeak Infrastructure Partners, Summit Discovery Resources LLC, Top-Co, Veritas Energy, Viper Energy Partners, WPX Energy. We intend to seek compensation for investment banking services from the companies we follow in the next 3 months. A listing of the companies we follow may be found by clicking here. Tudor, Pickering, Holt & Co. has received compensation for non-investment banking securities-related services from Hess Corp., through its energy trading affiliate Hess Energy Trading Company, LLC, in the past 12 months.

Tudor, Pickering, Holt & Co. has managed or co-managed a public offering of securities in the past 12 months for Antero Resources, Callon Petroleum, Concho Resources, Diamondback Energy, EQT Corporation, Extraction Oil & Gas, Gulfport Energy, Jagged Peak Energy, Mammoth Energy Services, Oasis Petroleum Inc., Parsley Energy, RSP Permian, Sanchez Production Partners, SM Energy Company, Smart Sand Inc, Stone Energy Corporation, Synergy Resources, Viper Energy Partners, WildHorse Resource Development Corp.

Investment Rating Distribution of Investment Banking Clients: (as of December 31, 2016)
Coverage Universe
Stock Rating CategoryCountPercentage
Buy1169%
Hold531%
Sell00%
View Historical Price & Ratings Data
View All Tracked Companies

Historical price and ratings information for tracked companies is updated quarterly.

Price Target Methodology

TPH research ratings and prices targets are designed for those with a long-term investment horizon (“investor research”).  From time to time, TPH may provide a recommendation with a short-term investment horizon (“trading research”) which may lead to trading research containing different recommendations or ratings that could result in short-term price movements contrary to the recommendation in the firm’s investment research. Price targets are developed using either the stock’s forward price-to-earnings or EV/EBITDA ratio or a build-up of Net Asset Value. There is a risk that the stock will never reach the price target. These risks include market conditions and unforeseen events that may affect the company’s business.

For oilfield service companies, price targets are developed using the stock’s forward price-to-earnings ratio and forward enterprise value-to-EBITDA ratio as the primary valuation metrics. A range of P/E or EV/EBITDA multiples are used depending on the point of the energy cycle and specific business dynamics.

For mid-cycle, these multiples will tend to range from 5-8x EV/EBITDA and 10-15x P/E. Validation of our target is done by examining net asset values, and private market transactions.

For domestic E&P businesses, we value proved reserves by assessing the net present value of current production. For probable and possible reserves, we attempt basin-by basins analysis of the reserves, with the key variable being the timing of drilling. For international E&P companies, price targets are based on our risked net asset value of the company. Our risked 3P NAV consists of a bottom up cash flow model of the current reserves and resources with any appropriate risking as well as adding in a risk adjusted value for exploration prospects. Other businesses such as downstream or gas and power are generally valued on a DCF or multiple basis. We also adjust for items such as G&A, current net debt position and decommissioning liabilities where appropriate.

For integrated oil and gas companies, price targets are primarily based on a target EV/DACF multiple relative to the sector. We use a premium or discount to the sector target EV/DACF multiple to adjust for growth, riskiness of the assets, cash flow profiles and liquidity.

In valuing midstream companies, we use a variety of valuation methods to derive our price target, including sum-of-the-parts (SOTP) valuations based on comparable publicly traded companies, discounted cash flow (DCF) models and dividend discount models. We use dividend discount models to value more income-oriented vehicles, such as MLPs. Dividend discount rates can vary from 7% to 12% depending on our perception of business risk. We will typically use SOTP and DCF to value C-corporation structures. We will also use dividend discount models as a secondary methodology for valuing C-corporations, generally using lower dividend discount rates than we use for our MLP price targets, given C-corps’ lower payout ratios and lower reliance on outside capital markets.

For refining companies, price targets are developed using a sum-of-the-parts (SOTP) approach based typically on forward EV/EBITDA multiples for each business segment. We also adjust for cash and debt, as well as future midstream monetization where applicable. Validation of our target is done by examining net asset values, and private market transactions.

Our primary approach to valuing chemicals companies is to apply an EV/EBITDA multiple over a medium-term profitability outlook. We then adjust for cash, debt, and any other items that may impact the net equity value.

For diversified utilities, our price targets are established using a sum-of-the-parts (SOTP) analysis. Different methodologies are applied to each of the component regulated utility and competitive business segments. The regulated utility businesses are valued using P/E multiples with value per share derived from a multiple applied to our earnings per share estimate. The competitive Genco businesses are valued with a longer-term discounted cash flow model (DCF). We explicitly model five years of cash flows while using an EBITDA multiple to establish the DCF’s terminal value. The sum of these component values are then adjusted for other items such as hedge value and environmental capital spending obligations to arrive at the SOTP and target prices. Validation of our target is done by examining overall P/E and EBITDA multiples and dividend discount models.

For IPPs, price targets are developed using a discounted cash flow model. The net present value of a company’s projected cash flow is added to the present value of a terminal valuation to determine our target price. Terminal values are calculated on an asset by asset basis using assumptions derived from our market equilibrium model. The market equilibrium model assumes a balanced market from a supply/demand perspective. The model calculates, and then capitalizes each asset type’s cash flow under those conditions. Validation of our target is done by examining net asset values, private market transactions and EBITDA multiples.

Compensation Policy and Disclosure of Investment Banking Revenue

Analysts’ compensation is not based on investment banking revenue and the analysts are not compensated by the subject companies.

Beneficial Ownership Disclosure

An affiliate of TPH Securities holds more than 1% of the outstanding shares of OAS, and TCW CN.

Other Disclosures

John E. Lowe, Senior Executive Advisor, currently serves on the board of Phillips 66 and TransCanada and as non-executive vice chairman of Apache Corp. Hilary Foulkes, Chair – TPH Canada, currently serves on the boards of Enerplus Corp (Canada) and Parallel Energy Trust (Canada). Chansoo Joung, Managing Partner – Energy Co-Investment (TPH Asset Management LP), currently serves on the board of Apache Corp.

Business Continuity Plan
Executive Summary

As required by securities industry regulations, Tudor, Pickering, Holt & Co. wants to make you aware that we have developed a Business Continuity Plan on how we will respond to events that may disrupt our business. Since the timing and impact of disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur.

Our Business Continuity Plan – Significant business disruptions can vary from disrupting only our firm to the region in which we are located. Our Plan addresses various disruptions and is intended to mitigate reasonable risk so as to permit the continuation of key business operations. Our Business Continuity Plan addresses data back-up and recovery, mission critical systems, safeguarding our employees and property, financial and operational assessment, alternative communications with customers, employees and regulators, alternate physical location of employees, critical supplier and bank, and counterparty impact, regulatory reporting and assuring our customers prompt access to their funds and securities and allowing our customers to transact business.

Tudor, Pickering, Holt & Co. maintains redundant offsite archival storage facilities in a geographically separate area. Our clearing firm, the Broadcort Correspondent Clearing Division of Merrill Lynch, Pierce, Fenner & Smith Incorporated, also backs up certain of our sales and trading records for our Tudor, Pickering, Holt & Co. Securities, Inc. subsidiary. We have designated an alternate site to conduct key business operations until we are able to return to our offices. The firm’s goal is to recover its critical operations within minutes or hours after the disruption. In the event of a disaster, Tudor, Pickering, Holt & Co. Securities, Inc. will provide its customers prompt access to their funds and securities held at its clearing firm.

In the event of a business disruption Tudor, Pickering, Holt & Co. will provide important information to its employees and clients via call forwarding, e-mail and postings to the firm’s webpage located at www.tphco.com. Our address is:

Heritage Plaza
1111 Bagby, Suite 5100
Houston, TX 77002
713.333.2960

If you are a sales and trading client of Tudor, Pickering, Holt & Co. Securities, Inc. and you are unable to reach us during a business disruption, you may contact our clearing firm, the Broadcort Correspondent Clearing Division of Merrill Lynch, Pierce, Fenner & Smith Incorporated, for trade related information. Their contact information is as follows:

Broadcort Correspondent Clearing Division of Merrill Lynch, Pierce, Fenner & Smith Incorporated
101 Hudson Street
Jersey City, NJ 07302
201-557-0700

The plan is subject to modification, an updated summary will be promptly posted on our website, www.tphco.com. Customers may alternatively obtain updated summaries by requesting a written copy by mail. Please direct any such inquiries to the Compliance Department.

Tudor, Pickering, Holt & Co. North American Regulated Companies Covered by this Business Continuity Plan:

Tudor, Pickering, Holt & Co. Securities, Inc.*
Tudor Pickering Holt & Co Advisors LP
TPH Asset Management LP
TPH Partners Group LP (relying adviser of TPH Asset Management LP)

*Clearing firm services are only applicable to the business services of Tudor, Pickering, Holt & Co. Securities, Inc.

SEC Rule 606 Report Disclosure of Order Routing Information: For Quarter Ending December 2016

Tudor, Pickering, Holt & Co. has prepared this report pursuant to a U.S. Securities and Exchange Commission rule requiring all brokerage firms to make publicly available quarterly reports on their order routing practices. The report provides information on the routing of “non-directed orders” – any order that the customer has not specifically instructed to be routed to a particular venue for execution. For these non-directed orders, Tudor, Pickering, Holt & Co. has selected the execution venue on behalf of its customers.

The report is divided into four sections: one for securities listed on the New York Stock exchange, one for securities listed on The Nasdaq Stock Market, one for securities listed on the American Stock Exchange or regional exchanges, and one for exchange-listed options. For each section, this report identifies the venues most often selected by Tudor, Pickering, Holt & Co., sets forth the percentage of various types of orders routed to the venues, and discusses the material aspects of Tudor, Pickering, Holt & Co.’s relationship with the venues.

Privacy Policy

Tudor, Pickering, Holt & Co. considers your privacy our utmost concern. In order to provide you with individualized service, we collect certain nonpublic personal information about you from information you provide on applications or other forms (such as your address and social security number), and information about your account transactions with us (such as purchases, sales and account balances). We may also collect such information through your account inquiries by mail, email, or telephone.

We do not disclose any nonpublic personal information about you to anyone, except as permitted by law. Specifically, so that we may continue to offer you Tudor, Pickering, Holt & Co. products and services that best meet your investing needs, and to effect transactions that you request or authorize, we may disclose the information we collect, as described above, to companies that perform administrative or marketing services on our behalf, such as transfer agents, or printers and mailers that assist us in the distribution of investor materials. These companies will use this information only for the services for which we hired them, and are not permitted to use or share this information for any other purpose.

If you decide at any point either to close your accounts(s) or to become an inactive customer, we will continue to adhere to the privacy policies and practices described in this notice.

With regard to our internal security procedures, we restrict access to your personal and account information to those employees who need to know that information to service your account. We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information.

Information Sharing for Marketing Purposes

Federal law gives you the right to limit information sharing between affiliated entities for marketing purposes. Federal law also requires us to give you this notice to tell you about your choices to limit information sharing for marketing purposes.

The Tudor, Pickering Holt & Co. family of companies is providing this notice on behalf of Tudor, Pickering, Holt & Co. Securities, Inc., Tudor Pickering Holt & Co Advisors LP, TPH Asset Management LP and TPH Partners Group LP.

You may limit our affiliates from marketing products or services to you based on your personal information that they collect and share with one another. This information includes your contact information, account history.

To prohibit information sharing for marketing purposes, please contact the Compliance Department at info@tphco.com or call collect at 1-713-333-7100. Your instruction to limit marketing offers from our affiliates will remain in effect until you tell us to make a change.

Without prior written consent of Tudor, Pickering, Holt & Co., no person may reproduce any portion of the content on this website. “Content” refers to any materials, documents, images, graphics, logos, design, audio, video and any other information provided from or on our site.

Customer Identification Program Notice
Important Information About Procedures for Opening a New Account

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

What Does This Requirement Mean to You?

When you open an account, we will ask for your name, address, date of birth and identification number. The identification for a U.S. citizen would be a taxpayer identification number or social security number. For a non-U.S. citizen, the identification number would include a (i) taxpayer identification number, (ii) a passport number along with country of issuance, (iii) alien identification number, or (iv) a government-issued identification document indicating nationality, residence, as well as your photo. We may also ask to see or copy your driver’s license, passport or other identifying documents.

A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement or a trust agreement.

Questions? Comments?

If you should have any questions or comments about our Customer Identification Program, please contact our Compliance Department on 713-333-7100 or 713-333-2960. You may write to us at the following address:

Tudor, Pickering, Holt & Co. Securities, Inc.
Attn: Compliance Department
1111 Bagby, Suite 4800
Houston, Texas 77002

Tudor, Pickering, Holt & Co. Email Disclosure

Email is confidential and is intended only for the individual named. The information contained in an email may not be disclosed, copied or disseminated, in whole or in part, without the prior written permission of Tudor, Pickering, Holt & Co. Email communications are based on information which Tudor, Pickering, Holt & Co. believes is reliable. However, Tudor, Pickering, Holt & Co. does not represent or warrant its accuracy. Email messages should not be considered as an offer or solicitation to buy or sell any securities. Securities offered through Tudor, Pickering, Holt & Co. Securities, Inc., Member FINRA/SIPC. Tudor, Pickering, Holt & Co. is the global brand name utilized by Tudor, Pickering, Holt & Co. Securities, Inc., Tudor Pickering Holt & Co Advisors LP, TPH Asset Management LP and Tudor, Pickering, Holt & Co. International, LLP. Under FINRA Rule 2210, TPH email communications are deemed institutional sales material and are not meant for distribution to retail investors. Recipients should not forward TPH email communications to a retail investor.

Trade Name

Tudor, Pickering, Holt & Co. is the global brand name for Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) and its affiliates worldwide.

Legal Entities Disclosures

U.S.: TPHCSI and TPHA are members of FINRA and SIPC. U.K.: Tudor, Pickering, Holt & Co. International, LLP is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales No. OC349535. Registered office 5th Floor, 6 St. Andrew Street, London EC4A 3AE.

SEC Exchange Act Rule 13h-1 – Large Trader Rule

The Large Trader Rule requires large traders to register with the SEC and obtain a large trader ID (“LTID”). The Large Trader Rule defines a large trader as any person that:

  • Directly or indirectly, including through other persons controlled by such person, exercises investment discretion over one or more accounts and effects transactions for the purchase or sale of any NMS security for or on behalf of such accounts, by or through one or more registered broker-dealers, in an aggregate amount equal to or greater than:
  • During a calendar day, either two million shares or shares with a fair market value of $20 million; or
  • During a calendar month, either twenty million shares or shares with a fair market value of $200 million; or
  • Voluntarily registers as a large trader by filing electronically with the Commission on Form 13H. Please consult with your legal counsel to determine the applicability of the Larger Trader Rule to your activities.
Canada

The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein and any representation to the contrary is an offense.

SIPC Information

Tudor, Pickering, Holt & Co. Securities, Inc. (TPHCSI) is a member of the Securities Investor Protection Corporation (SIPC). Please be advised that you may obtain information about SIPC, including the SIPC brochure, by contacting SIPC at www.sipc.org or 202-371-8300.

BrokerCheck

FINRA Rule 2267 requires that member firms provide clients with the FINRA BrokerCheck Hotline Number (800-289-9999), FINRA web site address (www.finra.org) and a notification that a brochure describing BrokerCheck is available from FINRA by contacting FINRA through their web site.

Payment for Order-Flow Disclosure

TPHCSI does not engage in any formal arrangement for the payment for order flow from securities transactions. From time to time, when TPHCSI routes orders to a particular market center and is in a position to provide liquidity, a market center may provide TPHCSI with a rebate for that order flow.

Order Routing

Absent specific order routing instructions from customers, TPHCSI transmits orders to various market centers based on a number of factors. Such factors may include the following: the ability of a market center to execute the orders at or superior to the national best bid and offer (NBBO); the ability of a market center to provide price improvement opportunities; the speed of execution; the availability of efficient, automated transaction processing; liquidity enhancement opportunities; the speed of displaying better-priced limit orders; trading characteristics of the particular securities; and the extent to which different markets may be more suitable for different types of orders or different securities.

Questions or Complaints?

In the event you should have a question or complaint that you would like to register with the firm, please contact the Compliance Department at:

Tudor, Pickering, Holt & Co. Securities, Inc.
Attn: Compliance Department
1111 Bagby, Suite 4800
Houston, TX 77002 USA
(713) 333-7692

No Offers

This website is for informational purposes only and does not constitute an offer to sell or solicitation of an offer to buy any security which may be referenced on this website. Offers can only be made where lawful under applicable law.

Social Media Disclosures
Twitter

Tudor, Pickering, Holt & Co. and its affiliated companies (“TPH”) reserve the right to retain, monitor, and reproduce all electronic communications consistent with applicable law. Tudor, Pickering, Holt & Co. is the parent company of Tudor, Pickering, Holt & Co. Securities, Inc. and Tudor Pickering Holt & Co Advisors LP, Members FINRA & SIPC. Neither the information, nor any opinion, nor any other content on this site constitutes a solicitation or offer by TPH or its affiliates to buy or sell any securities, options, or other financial instruments or provide any investment advice or services. TPH will not accept purchase or sales orders via Twitter or any social media systems, and reminds all users not to disclose any personal financial information on Twitter. TPH is not responsible for third parties that may be linked to this page or to other Twitter pages, including but not limited to content posted by third parties, the privacy and security policies of Twitter or any other third-party sites, or for the products or services offered by any third party.

LinkedIn

Tudor, Pickering, Holt & Co. and its affiliated companies (“TPH”) reserve the right to retain, monitor, and reproduce all electronic communications consistent with applicable law. Tudor, Pickering, Holt & Co. is the parent company of Tudor, Pickering, Holt & Co. Securities, Inc. and Tudor Pickering Holt & Co Advisors LP, Members FINRA & SIPC. Neither the information, nor any opinion, nor any other content on this site constitutes a solicitation or offer by TPH or its affiliates to buy or sell any securities, options, or other financial instruments or provide any investment advice or services. TPH will not accept purchase or sales orders via LinkedIn or any social media messaging systems, and reminds all users not to disclose any personal financial information on LinkedIn. TPH is not responsible for third parties that may be linked to this page or to other LinkedIn pages, including but not limited to content posted by third parties, the privacy and security policies of LinkedIn or any other third-party sites, or for the products or services offered by any third party. All statements and messages are for U.S. residents only.

Facebook

Tudor, Pickering, Holt & Co. and its affiliated companies (“TPH”) reserve the right to retain, monitor, and reproduce all electronic communications consistent with applicable law. Tudor, Pickering, Holt & Co. is the parent company of Tudor, Pickering, Holt & Co. Securities, Inc. and Tudor Pickering Holt & Co Advisors LP, Members FINRA & SIPC. Neither the information, nor any opinion, nor any other content on this site constitutes a solicitation or offer by TPH or its affiliates to buy or sell any securities, options, or other financial instruments or provide any investment advice or services. TPH will not accept purchase or sales orders via Facebook or any electronic messaging systems, and reminds all users not to disclose any personal financial information on Facebook. TPH is not responsible for third parties that may be linked to this page or to other Facebook pages, including but not limited to content posted by third parties, the privacy and security policies of Facebook or any other third-party sites, or for the products or services offered by any third party. All statements and messages are for U.S. residents only.