Senate Warms Up To Pickens’ Push (HMC, CLNE, BP, APC, HAL, BHI, RIG, MMR)

by Owen Vater | July 29th

Filed in: Hedge Fund and Institutional News

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Billionaire hedge fund manager and former oilman T. Boone Pickens is an outspoken proponent of natural gas-powered vehicles, and according to Bloomberg, his plan to save America from foreign oil dependence is one step closer to fruition. Senate Democrats proposed a bill that could grant $3.8 billion in government rebates to buyers of natural gas-powered vehicles and those willing to convert existing cars and trucks to run on the fuel. While Pickens is said to drive a natural gas-powered Honda (HMC) Civic-GX, he’s aimed most of his lobbying at the trucking sector, where diesel-thirsty big rigs could be converted to run on “cleaner, cheaper American natural gas.”

A look at BP Capital Management’s top-15 U.S.-listed equity positions from the end of Q1 shows that Pickens and his investors have a lot riding on the energy sector. Since natural gas is a byproduct of oil drilling, exploration firms often maintain exposure to both segments, but Clean Energy Fuels (CLNE), where Pickens is a cofounder and major investor but his hedge fund is not invested, is a pure-play on natural gas vehicle proliferation.

Clean Energy Fuels could also be a direct recipient of taxpayer dollars should the Senate proposal be passed into legislation. According to Bloomberg, the bill would grant up to $50,000 to companies that open natural gas refueling stations between 2011 and 2015.

Pickens’ hedge fund saw a number of its largest end-of-Q1 holdings slide sharply in the wake of BP’s (BP) disaster in the Gulf of Mexico. However, Anadarko Petroleum (APC), Halliburton (HAL), and Baker Hughes (BHI) have all rebounded by 20% or more over the last month. Meanwhile, Transocean (RIG) and McMoRan Exploration (MMR), where Pickens was adding to positions in the first quarter, have both slipped farther into the red for the period.

It will be interesting to see where Pickens was making moves in the second quarter. Investors will be privy to BP Capital’s end-of-Q2 holdings next month, when the latest batch of 13F filings are due with the SEC. In the meantime, you can see where you stack up against Pickens, and view more stocks his hedge fund has invested in at tickerspy.com.

Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.

Tags: APC, BHI, BP, CLNE, HAL, HMC, MMR, RIG

One Response to “Senate Warms Up To Pickens’ Push (HMC, CLNE, BP, APC, HAL, BHI, RIG, MMR)”

Philippe Says:
July 30th, 2010 at 5:58 am
The O&G industry is at a cross road. The Oil side is slowly in a depletion mode. Oil has been the driving force. the back bone of the energy we use every day. XOM was founded on the oil not the gas.
For many years the NG was seen as a malediction. Not too long ago, a gas well off shore was shut in. The cost to bring the NG to market was none economical. Storage was difficult as well as transportation. But the principal draw back was the lack of users. No customer, no sales and no profit.
The environmental concern associated with oil has been profitable to the image of the NG industry. The power industry has embraced the NG with open arms. Hitting NG is not such a malediction any more.
The LNG, and more recently CNG Technology has given NG a new life. The new huge NG finds in the US, the so call “Shell Gas” is reversing the energy picture in the US. The Canadian government financed the trans Canada NG pipeline years ago. It was to flow the Canadian western NG to the urban area of Canada: Manitoba and Ontario particularly. It also branched off to the US North East.
These new finds in the US means that the Canadian NG import will no longer be necessary. There are serious considerations to export US NG to the Ontario market and even Manitoba. This would be done by reversing the existing pipeline. The western Canadian NG would be liquefied and sold in Asia, China is not too far. The Canadians are looking at liquefying their western NG in the Vancouver area. The two Alaskan pipeline on the boards are competing for the same market and in competition with the potential Shell Gas. The environmental concern about “Shell Gas” are potentially none void.
The buzz is that only one pipeline will be economically viable. The next 10 years will see a totally different picture in the North American energy market. The depletion of the Oil will be filled by NG in the form of LNG or CNG. This is the case in Asia, in Thailand most 18 wheelers are powered with LNG. Europe is going NG from Russia and Algeria. CNG is used to lower the diesel emissions. A large part of the Nigerian gas is exported as CNG for that purpose. In the US there is the beginning to have the transportation industry switch to LNG. Boon Pickens is behind this move and Senator Reid, the majority leader has talk about the trucking industry switch to LNG. The wheels for NG have started to move, and will not stop any time soon.
LNG and CNG are the next prominent forms of energy in the transportation industry. NG will replace the heating oil as well. The price differential between a depleting oil and an abundant NG will be the economical choice. Oil will still be used for the chemical side of the O&G industry. XOM must be looking at NG for the next chapter of the O&G industry. XOM should not be taken lightly, what is cheap today will be 10 time more expensive in 5 years. XTO was an opportunity not to pass.