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ENERGY QUARTERLY NEWSLETTER

Corporate Finance & Capital MarketsEnergy Quarterly Newsletter

3Q 2019


+3.15%-4.75%

7590

105120135

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19

YTD 2019 Stock Performance

Utilities Oil & Gas Midstream Energy Services S&P 500

+18.59%

$2 $2 $10 $3 $25

$2

$72

$13 $24

$2 $27

$7 $10 $1 $5 $1 $0

$50

$100

Q4 2018 Q1 2019 Q2 2019 Q3 2019

Volu

me

($bn

)

U.S. M&A Activity

Electric + Gas Utilities Oil & Gas Midstream Energy Services

$40.6

$11.5 $8.6 $3.2 $0

$20$40$60

Investment Grade High Yield Common Equity Follow-On Convert Debt

3Q 2019 U.S. Energy Capital Markets Activity

Utilities Oil & Gas Midstream Energy Services

1.20%1.70%2.20%2.70%3.20%3.70%

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

205590

125160

Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-192.00

3.00

4.00

40.0050.0060.0070.0080.00

Jan-19 Apr-19 Jul-19 Oct-19 2022E

Treasury yields trended downward during 3Q 2019 as investors grew uneasy with the weak economic data from Europe, which exacerbated concerns of wide-spread recession. Furthermore, the September 14th attack on Saudi Arabia’s oil infrastructure was a reminder of the tight balance between global demand and supply, which swung WTI and Brent crudes prices by 14.68% and 14.61%,respectively. The incident resulted in temporary supply loss of 5.7 million barrels of oil per day; however, faster than expected production recovery helped commodity prices trade to previous levels. Among the energy sectors, Oil & Gas and Energy Services stocks continue to trade lower, weighted down by fears of an economic downturn which dampened demand outlook, coupled with shareholder pressure to improve cash flow and dividends. YTD 2019, the Oil & Gas and Energy Services indexes are down 4.75% and 10.36%, respectively, while the Utility and Midstream indexes are up by 24.49% and 3.15%. The S&P 500 is up by 18.59%.

Sources: Bloomberg, EIA, Baker Hughes, Siebert Cisneros Shank. Data as of 9/30/2019.Note: Stock prices are indexed to 1/2/2019. Utilities index includes: AEE, AEP, AES, AWK, CMS, CNP, D, DTE, DUK, ED, EIX, ES, ETR, EVRG, EXC, FE, LNT, NEE, NI, NRG, PCG, PEG, PNW, PPL, SCG, SO, SRE, WEC & XEL. Oil & Gas index includes: APA, APC, COG, COP, CXO, DVN, EOG, EQT, HES, MRO, NBL, NFX, PXD & XEC. Midstream index includes: AM, ANDX, APU, ARLP, BPL, BPMP, CEQP, CQP, CVRR, DCP, DM, EEP, ENBL, ENLK, EPD, EQM, ETP, GEL, GLOP, GMLP, HCLP, HEP, MMP, MPLX, NBLX, NGL, NS, PAA, PSXP, SEP, SHLX, SMLP, SPH, SUN, TCP, TGE, TGP, USAC, VLP, VNOM, WES, WPZ. Energy Services index includes: BHGE, FTI, HAL, HP, NOV, SLB.(1) Represents transactions with U.S. target, acquirer, or seller that falls within the respective industries, including those with undisclosed values.(2) ERCOT has two recordings of irregular pricing (Aug. 18th and Sept. 8th) that are illustrated in the chart.

2

# of Deals: 13 40 16 32 12 26 12 18 11 31 11 22

(1)

+24.49%

-10.36%

Energy Market Review

ICE Brent WTI NYM Natural Gas

$60.78$54.33

$/bb

l

$/MM

Btu

2019E

$62.50

$50.81

$2.73

YTD 2019 Commodity Prices

Major ISOs: Average of PJM, NYISO, NEPOOL, Midwest, WECC, ERCOT

$27.67 $33.76

2020E 2021E Q419E 2020E

($ B

n)

$/m

Wh

$2.33

- - - Forward - - - Forward - - - Forward - - - Forward

YTD 2019 U.S. Treasury Yields

5YR Actual 10YR Actual 30YR Actual- - - Projected - - - Projected - - - Projected

1.665%

2.112%

1.60%

2.21%1.75%

Q4 2019 Q1 2020

1.540%

2022E2021E

11 31 12 21

(2)


Deal Transaction

Ann. Date Buyer Target Type Value ($mil)

Power and Utilities

9/12/19 Duke Energy Renewables Recurrent Energy Asset N/A

7/31/19 Antin Infrastructure Partners Veolia Energy N.A. (District Energy Assets)

Corp $1,250

7/22/19 TerraForm Power Inc 320MW Platform/US Asset $720

Oil & Gas

9/3/19 N/A Uinta Basin asset & Certain southeast Saskatchewan

Asset $525

9/3/19 Spur Energy Partners Conocho's New Mexico Shelf Assets

Asset $925

8/27/19 Hilcorp Energy Co BP Exploration Alaska Inc Corp $5,600

8/26/19 PDC Energy Inc SRC Energy Inc Corp $1,739

7/15/19 Callon Petroleum Co Carrizo Oil & Gas Inc Corp $2,964

Midstream

9/30/19 NextEra Energy Partners, LP Central Penn Line Corp $1,280

9/16/19 Energy Transfer LP SemGroup Corp Corp $3,700

8/21/19 Pembina Pipeline Corp Kinder Morgan Cochin LLC Corp $1,500

7/2/19 UGI Corp Columbia Midstream Group LLC Corp $1,275

7/2/19 UGI Corp UGI Appalachia LLC Corp $1,300

Energy Services

7/17/19 Strategic Value Partners LLC Dolphin Drilling ASA Asset $1,342

U.S. Energy M&A Activity

3

US M&A activity across Energy eased to its slowest pace so far this year. Renewable, natural gas midstream and non-core oil and gas asset sales have driven most of the activity during the quarter. As utility companies and infrastructure investors search for growth and scale, we believe the number of renewable and midstream transactions will increase in the coming quarters. According to the U.S. Energy Information Administration (EIA) September 2019 report on short-term energy outlook, the share of US total utility-scale electricity generation from natural gas-fired plants is expected to increase from 34% in 2018 to 37% in 2019 and 38% in 2020. Wind, solar and non-hydrogen renewables are estimated to provide 10% of electricity generation in 2019 and expected to increase to 12% in 2020. Additionally, substantial public and private equity capital have flowed into renewable and midstream sectors which will continue to support M&A activity.

2Q 2019 Selected Transactions(1)

NextEra Energy Partners, LP will acquire a stake in Central Penn Line On September 30, 2019, NextEra Energy Partners, LP signed a definitive

agreement to acquire a 39.2% stake in Central Penn Line from Cabot Oil & Gas Corporation, WGL Midstream, Inc. and EIF Vega Midstream for $1.28 billion

As part of the transaction, Cabot Oil & Gas, WGL Midstream and EIF Vega will sell 20%, 55% and 25% interests in Meade Pipeline Co LLC, the holding company which owns the 39.2% stake in Central Penn Line, respectively

⁻ The initial purchase price is expected to be primarily financed with approximately $820 million in partially amortizing project finance debt, which includes $760 million related to the operating project and a roughly $60 million draw of the expansion project debt facility

The deal is expected to close prior to December 1, 2019

(1) Announced M&A includes pending and completed transactions greater than $500mm in value in which the acquirer, target, or seller is incorporated in the U.S.Source: Bloomberg. CapIQ

Deal Spotlight

Duke Energy Renewables acquired 200MW Solar Project On September 12, 2019, it was announced that Duke Energy Renewables would

acquire 200 MW Rambler solar project from Recurrent Energy, a wholly-owned subsidiary of Canadian Solar. The project will be located in Tom Green County, Texas and is expected to achieve commercial operation in mid-2020

The Rambler solar project is the fifth acquisition by Duke Energy Renewables this year, and will be the company's fourth solar generation facility in Texas

⁻ The Rambler project also represents one of seven large-scale projects in Recurrent Energy's development portfolio within the state

The deal closed September 12, 2019

National Grid and Washington State Investment Board acquired Solar and Wind Projects from Geronimo Energy On March 7, 2019, it was announced that National Grid plc and Washington

State Investment Board (WSIB) would acquire 378 MW of solar and wind generation projects from Geronimo Energy- National Grid will hold a 51% stake for a consideration of $125 million

while WSIB will hold the remaining stake in the projects- Once finalized, the joint venture between National Grid and WSIB will have

the right of first offer on future projects developed by Geronimo Energy Concurrently, National Grid entered into an agreement to acquire Geronimo

Energy for $100 million The deal closed July 15, 2019


General Corporate Purposes

84%

M&A16%

AA+, 2%

AA, 2%

AA-, 4%

A+, 10%

A, 20%

A-, 17%

BBB+, 16%

BBB, 16%

BBB-, 12%

$394

$327 $351

$264

$346 $344

$286

$196

$328 $275

$331

Q1 Q2 Q3 Q4

2017A 2018A 2019A

$5,510

$8,730 $8,125

$4,127 $2,600

$4,400

2016 2017 2018 Q1 2019 Q2 2019 Q3 2019

Consumer Financials Energy Utilities Technology Industrials Health Care

$38.7 $51.4

$9.7 $11.8 $22.9

2017 2018 Q1 2019 Q2 2019 Q3 2019Financial Healthcare Consumer Energy

Communications Technology Utilities Industrials

$163.1 $163.6

$35.3 $39.1 $39.0

2017 2018 Q1 2019 Q2 2019 Q3 2019

Financial Healthcare Consumer EnergyCommunications Technology Utilities Industrials

U.S. Capital Markets

4

Common Equity Follow-On Activity ($BN)

Investment Grade Debt New Issue Activity ($BN)

Use of Proceeds Rating1

YTD 2019 Activity1Volumes exclude covered bonds and cumulative preferred

Common equity issuances include only priced transactions. Data as of 9/30/2019. Sources: Bloomberg, Informa Global Markets. (1) EIA: Short-Term Energy Outlook September 2019 Report

Convertible Bond and Preferred Activity ($BN)

Corporate Green Bond Activity ($MM)

Third Quarter 2019 investment grade debt issuances, ex-SSA, included 262 deals and 428 tranches totaling $330.5 billion, up 20% from Q2 2019. Energy, Services, Utilities, and Midstream issuances represented 12% of the issuances during 3Q 2019.

The US green bond market totaled $4.4 billion for 3Q 2019, which increased by 69% from previous quarter volumes.


$2.3 billion

Co-ManagerMarch 2019

32.5 million sharesInitial Public Offering

$1.0 billion


5.75% Series A Cumulative Redeemable

Perpetual Preferred Stock

$609 million

Co-ManagerJuly 2019

$1.2 billion

Co-ManagerSeptember 2019

Recent Corporate Transactions

5

$2.0 billion

Co-ManagerAugust 2019

2.75% Notes due 2024 3.40% Notes due 20294.45% Notes due 2049

$400 million


$450 million


2.50% Notes due 2024 3.20% Notes due 2049

$1.0 billion

4.875% Series B Cumulative Redeemable

Perpetual Preferred Stock


$1.0 billion


Variable Rate SOFR Note due 2021


$993 million

Selling GroupJuly 2019

Connecticut AvenueSecurities (CAS)

2019-R05

$1.2 billion

Co-ManagerAugust 2019



$800 million

Co-ManagerJuly 2019

3.15% Notes due 2029

$2.25 billion

Co-ManagerJuly 2019

5.00% Perpetual NC5 F-T-F SOFR linked

$5.5 billion

2.30% Notes due 20212.70% Notes due 20272.95% Notes due 20303.25% Notes due 2035

Co-ManagerJuly 2019

$2.0 billion

Co-ManagerJune 2019

$1.0 billion

Selling GroupJune 2019


2019-R04

$500 million

Co-ManagerJune 2019

2YR 1.875% due 20215.50% Perpetual NC5

$2.0 billion

Co-ManagerJuly 2019


$350 million

Co-managerMay 2019


$1.2 billion

Co-ManagerJune 2019

3.40% Notes due 20294.20% Notes due 2049

$1.0 billion

Co-ManagerMay 2019

2NC1 SOFR-linked FRN

$750 million


Co-ManagerMay 2019

$20.0 billion

8-Part Debt Offering2-year to 30-year Notes

Co-ManagerMay 2019

$4.0 billion

Co-ManagerMay 2019

2.95% Notes due 20243.20% Notes due 20263.45% Notes due 20294.00% Notes due 20394.00% Notes due 2049

$1.3 billion

Co-ManagerMay 2019

2.75% Notes due 20243.70% Notes due 20283.80% Notes due 2049

$8.1 billion

Co-ManagerMay 2019

180 million sharesInitial Public Offering

$1.0 billion

Co-ManagerApril 2019


$2.75 billion


6NC5 Fixed-to-Floating Rate Notes due 2025

$1.5 billion


3.964%Fixed-to-Floating Rate

Notes due 2048

$857 million

Selling GroupApril 2019


2019-R03

$800 million



$1.25 billion

Selling GroupApril 2019

5.113% Notes due 2029

$2.7 billion


2.90% Notes due 20223.15% Notes due 20243.25% Notes due 20263.50% Notes due 2029

$293 million

16.5 million sharesFollow On


$500 million


Class AA and Class A Pass-Through

Certificates

$600 million



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Contact Us

Important Notice

6

Please note, all statistical references or rankings information was obtained from Securities Data Corporation (“SDC”)

All information and opinions expressed in this document were obtained from sources believed to be reliable and in good faith but no representation or warranty, express or implied, is made as to its accuracy or completeness. All information and opinions as well as any prices indicated are current only as of the date of this report, and are subject to change without notice. Any estimations or projections as to events that may occur in the future (including projections of market performance) are based upon the best judgment of Siebert Cisneros Shank & Co., L.L.C. ("SCS") from publicly available information as of the date of this report. There is no guarantee that any of these estimates or projections will be achieved.

SCS is providing the information contained in this document for discussion purposes only. SCS is not acting as a financial advisor or fiduciary to any issuer or any other person or entity. The information provided is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934. To the extent deemed appropriate, any issuer of securities should always consult with its own financial, legal, accounting, tax and other advisors, as applicable.

Member FINRA, MSRB and SIPC

John RheaPresident [email protected]

Eloner HabtezghiManaging [email protected]

East & West Coast Headquarters New York100 Wall Street, Fl. 18New York, NY 10005646-775-4850

Oakland1999 Harrison St., Suite 2720Oakland, CA 94615510-645-2245

About usSiebert Cisneros Shank & Co., L.L.C. (“SCS”) is a nationally ranked full service investment banking firm. SCS delivers a comprehensive, value-added platform across all its product offerings – corporates, share repurchase, tax-exempts, and advisory. The SCS team is highly successful in collaborating across its firm-wide banking platform, enabling it to provide clients with multiple product offerings. Founded in 1996, SCS has managed more than $1.4 trillion in municipal securities and has participated in more than $1.2 trillion of corporate bond and equity transactions since 2004.* SCS employs ~80 professionals across 19 offices and is certified as both a Women-owned Business Enterprise and Minority-owned Business Enterprise by various public and private certifying agencies.*The Capital Markets team joined SCS in 2014.

mailto:[email protected]

mailto:[email protected]

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