HOUSTON, March 7, 2022 /PRNewswire/ -- Salient Midstream
& MLP Fund (the "Fund") (NYSE: SMM) provided today a summary of
unaudited statement of assets and liabilities and announced Net
Asset Value (NAV) as of February 28,
2022.
On February 28, 2022, the Fund's
total assets were $206.5 million and
the NAV per share was $8.65.
On February 28, 2022 the closing share price of the Fund was
$7.36, which was trading at a 14.9%
discount to the NAV.1 The Fund's NAV and
market price total returns for the month of February were 7.4% and
5.4%, respectively, compared to 4.6% for the Alerian Midstream
Energy Select Total Return Index
(AMEIX).2
February Market Commentary
The beginning of the month saw the energy infrastructure industry
drift higher with strong earnings results while the second half of
the month saw crude oil prices move meaningfully higher due to
Russian aggression on Ukraine. For
the remainder of 2022, we remain positive as 1) free cash flow
after dividends has the potential to increase year-over-year for
the energy infrastructure industry, 2) hydrocarbon volumes may grow
as drilling activity improves and 3) capital allocation remains
focused on reducing debt and returning excess cash to investors
through buybacks and potential dividend
increases.3
Crude oil as measured by the West Texas Intermediate (WTI)
benchmark was up 9.6% for the month of February and is up over 32%
year-to-date (YTD) through the end of
February.4 Crude oil prices have moved
sharply higher due to the war in Ukraine. Russia produces ~10 million barrels per day
(mmbbls/d) of crude oil, or about 10% of global supply and is the
second largest oil exporter after Saudi
Arabia.5 Markets are worried that
crude oil supplies can be disrupted which could lead to a spike in
crude oil prices well above current levels. While sanctions so far
have avoided Russian crude oil, sanctioning Russia's energy exports would likely lead to a
further spike in global crude oil and natural gas prices. Even if
crude oil sanctions are not implemented, we would expect a
geopolitical risk premium to remain in crude oil prices for the
near future. Should things with Russia and Ukraine normalize, we view crude oil prices in
the $70-$80 per barrel range as being positive for
long-term investment in the American energy industry. While the
Ukrainian war will have an unknown effect on crude oil supply,
fundamentals remain robust as the global economy continues to
reopen post COVID-19. Commodity analysts continue to see a tight
supply environment for both crude oil and natural gas in 2022 as
energy demand appears to be on trend to exceed peak pre-COVID-19
demand.6 We believe that current commodity
prices are sufficient to lead to U.S. hydrocarbon volume growth in
2022, with increases in production already showing up in recent
Energy Information Administration (EIA)
data.7
The Fund's Top 10
holdings as of February 28, 2022 are shown
below:8
|
|
|
|
|
|
|
No.
|
Symbol
|
Name
|
Country
|
Asset
Type
|
% of Gross
Assets
|
1
|
ET
|
Energy Transfer,
L.P.
|
United
States
|
MLP
|
9.2%
|
2
|
TRGP
|
Targa Resources
Corp.
|
United
States
|
C-Corp
|
7.5%
|
3
|
LNG
|
Cheniere Energy
Inc.
|
United
States
|
C-Corp
|
7.3%
|
4
|
-
|
EMG Utica | Offshore
Co-Investment LP
|
United
States
|
C-Corp
|
6.9%
|
5
|
ENB
|
Enbridge
Inc.
|
Canada
|
C-Corp
|
6.2%
|
6
|
MPLX
|
MPLX, L.P.
|
United
States
|
MLP
|
5.8%
|
7
|
PPL CN
|
Pembina Pipeline
Corp.
|
United
States
|
C-Corp
|
5.3%
|
8
|
OKE
|
ONEOK Inc.
|
United
States
|
C-Corp
|
4.9%
|
9
|
WMB
|
The Williams
Companies Inc.
|
United
States
|
C-Corp
|
4.8%
|
10
|
PAGP
|
Plains GP Holdings,
L.P.
|
Canada
|
C-Corp
|
4.5%
|
|
|
|
|
|
62.5%
|
For illustrative purposes only. Current and future holdings are
subject to change and risk. Figures are based on the Fund's gross
assets ex-cash. Source: Salient Capital Advisors, LLC, February 28, 2022.
The Fund's unaudited
balance sheet as of February 28, 2022 is shown below:
|
|
Salient Midstream
& MLP Fund
|
Balance
Sheet
|
February 28,
2022
|
(Unaudited)
|
|
|
Assets
|
(in
millions)
|
Investments
|
$205.1
|
Other
Assets
|
0.4
|
Cash and Cash
Equivalents
|
1.0
|
Total
Assets
|
$206.5
|
|
|
Liabilities
|
|
Line of Credit
Payable
|
$51.7
|
Other
Liabilities
|
1.6
|
Total
Liabilities
|
$53.3
|
Net
Assets
|
$153.2
|
|
|
The Fund had 17.7
million common shares outstanding as of February 28,
2022.
|
Past performance is
not indicative of future results.
|
Salient Midstream & MLP Fund is a Delaware statutory trust registered as a
non-diversified, closed-end management investment company under the
Investment Company Act of 1940, as amended. The Fund's investment
objective is to provide a high level of total return with an
emphasis on making quarterly cash distributions to its common
shareholders. The Fund seeks to achieve that objective by investing
at least 80% of its total assets in securities of MLPs and
midstream companies. There can be no assurance that the Fund will
achieve its investment objective.
This press release contains "forward-looking statements" as
defined under the U.S. federal securities laws. Generally, the
words "believe," "expect," "intend," "estimate," "anticipate,"
"project," "will," and similar expressions identify forward-looking
statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual future results to differ
significantly from the Fund's present expectations or projections
indicated in any forward-looking statements. These risks include,
but are not limited to, changes in economic and political
conditions; regulatory and legal changes; leverage risk; valuation
risk; interest rate risk; tax risk; the volume of sales and
purchase of shares; the continuation of investment advisory,
administration and other service arrangements; and other risks
discussed in the Fund's filings with the Securities and Exchange
Commission. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. The Fund
undertakes no obligation to publicly update or revise any
forward-looking statements made herein. There is no assurance that
the Fund's investment objective will be attained.
About Salient
Salient Partners, L.P. ("Salient") is a
real asset and alternative investment firm that offers a suite of
strategies focused on energy and infrastructure, real estate and
tactical alternative investments. Institutions and investment
advisors turn to Salient to build smarter, more efficient
portfolios. Strategies are offered in the form of open- and
closed-end funds and separately managed accounts. Salient was
founded in 2002 and has offices in Houston and San
Francisco. Learn more about Salient at
www.salientpartners.com.
1 Past performance is not
indicative of future results. Current performance may be higher or
lower than the data shown. The data shown are unaudited. Returns do
not reflect the deduction of taxes that shareholders may have to
pay on Fund distributions or upon the sale of Fund shares.
2 Source: Salient Capital Advisors,
LLC and Alerian, February 28, 2022.
"Alerian Midstream Energy Select Index," "Alerian Midstream Energy
Select Total Return Index," "AMEI" and "AMEIX" are trademarks of
Alerian and their use is granted under a license from Alerian. Past
performance is not indicative of how the index will perform in the
future. The index reflects the reinvestment of dividends and income
and does not reflect deductions for fees, expenses or taxes. The
index is unmanaged and is not available for direct investment.
Alerian Midstream Energy Select Total Return Index (AMEIX) is a
total return composite of North American midstream energy
infrastructure companies that are engaged in activities involving
energy commodities. The capped, float-adjusted,
capitalization-weighted index is disseminated in real time on a
price-return basis. Inception date of the AMEIX is
April 1, 2013.
3 Free cash flow after
dividends represents the cash a company generates after
accounting for cash outflows to support operations and maintain its
capital assets Hydrocarbon a compound of hydrogen and
carbon, such as any of those which are the chief components of
petroleum and natural gas. Share buybacks are when a company
buys its own outstanding shares to reduce the number of shares
available on the open market.
4 Source: Bloomberg, February 2022. West Texas Intermediate
(WTI) is a light, sweet crude oil that serves as one of the
main global oil benchmarks. Past performance is not indicative of
future results.
5 Source: International Energy Agency,
February 2022.
6 Source: Piper Sandler, March
2022.
7 The U.S. Energy Information
Administration (EIA) is a principal agency of the U.S. Federal
Statistical System responsible for collecting, analyzing, and
disseminating energy information to promote sound policymaking,
efficient markets, and public understanding of energy and its
interaction with the economy and the environment.
8 Fund shares do not represent a
deposit or obligation of, and are not guaranteed or endorsed by,
any bank or other insured depository institution, and are not
federally insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other government agency. Data are
based on total market value of Fund investments unless otherwise
indicated. The data provided are for informational purposes only
and are not intended for trading purposes.
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SOURCE Salient Partners, L.P.