| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.8% | 1.0% | 6.1% |
| 2025 | 2024 |
|---|---|
| 2.6% | 2.9% |
Miller/Howard's North American Energy portfolio delivered 0.99% net returns in Q4 2025, bringing full-year performance to 6.07%. The fund maintains its core thesis that low-cost North American oil and gas will unlock new use cases, with energy trading at wide discounts despite improving fundamentals. Natural gas prices rallied sharply on winter demand and LNG exports, while oil prices drifted to mid-$50s on supply gluts. The portfolio actively repositioned during the quarter, trimming Chevron after its Hess acquisition due to Russian pipeline exposure, reducing natural gas exposure by selling EQT Corp, and increasing refining exposure through Valero and Phillips 66. Data centers emerged as a key growth driver, with Liberty Energy announcing a 1GW power generation project. The portfolio offers a 3.2% indicated yield supported down to $45/bbl oil. Despite near-term headwinds, management sees a clearly improving long-term outlook for energy equities as long-duration assets that should reflect more constructive fundamentals.
Low-cost North American oil and gas will unlock new use cases for legacy industries, with the biggest winners not always being the obvious participants, while energy trades at a wide discount despite improving long-term fundamentals.
While near-term headlines may remain dour, we see a clearly improving long-term outlook taking shape. As long-duration assets, we believe energy equities should begin to reflect this more constructive backdrop.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 24 2026 | 2025 Q4 | CHRD, CNQ, CVE, CVX, EQT, GPOR, HES, LBRT, MPC, OKE, OXY, PBA, PSX, RRC, SM, SU, VLO, XOM | Data centers, dividends, energy, Natural Gas, North America, oil, Refiners | - | Pressure pumpers are seeing growing interest in supplying power to data centers under long-term contractual arrangements. Mobile generation equipment can be deployed within weeks at competitive efficiency levels. Liberty Energy announced a positive 1GW data center power generation project by year-end 2027. Natural gas prices rallied sharply amid a cold start to winter in the US, supported by strong LNG exports and rising data center power demand. The portfolio reduced natural gas price exposure by selling EQT Corp and trimming Range Resources Corp. Oil prices drifted lower on a near-term supply glut and closed the quarter in the mid-$50/bbl range. Adjusted for inflation, prices are near century lows. At current prices, E&Ps are expected to further rein in production with US supply likely to decline in 2026. The portfolio increased Valero and Phillips 66 on strong refinery dynamics. Marathon Petroleum had a rare refinery earnings miss on operational items believed to be one-time, with favorable 2026 capex guidance. The portfolio currently offers an indicated yield of 3.2% that is well supported down to roughly $45/bbl oil, with potential for significantly larger variable capital returns at higher commodity prices. Suncor Energy raised its dividend 5.3% amid strong buybacks. |
| Oct 19 2025 | 2025 Q3 | - | energy, Esg, oil, Refiners, Shale | - | Energy equities strengthened as oil prices stabilized and refiners posted record margins. The fund sees U.S. shale production declining as rig counts fall, tightening global supply. ESG integration remains part of portfolio management as companies focus on sustainable production and water management solutions. |
| Jul 22 2025 | 2025 Q2 | - | Capital discipline, commodities, energy, geopolitics, Natural Gas | - | The letter frames North American energy equities as attractively positioned despite short-term commodity volatility and geopolitical disruptions. Management argues that long-term supply constraints and fiscal breakeven realities for oil-producing nations support higher prices over time. Natural gas demand, capital discipline, and shareholder returns underpin the bullish outlook. |
| Mar 31 2025 | 2025 Q1 | COP | - | - | |
| Dec 31 2024 | 2024 Q4 | - | - | - | |
| Sep 30 2024 | 2024 Q3 | AESI, WTTR | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
Data CentersSupply constraints curtailing infrastructure buildout rate, but compute capacity is being used immediately upon coming online. This differs from dot-com bubble when dark fiber was installed ahead of need. Labor, power and land shortages creating bottlenecks. |
Supply Constraints Utilization Bottlenecks Infrastructure |
DividendsJapanese companies paid record dividends of ¥18 trillion for fiscal year ending March 2025, a 13.8% year-over-year increase. Many major firms have adopted progressive dividend policies guaranteeing dividends will never be cut, only maintained or increased. |
Progressive Dividend Record Payouts Shareholder Returns Yield Growth | |
Natural GasNorth American gas showed strength on cold weather despite bearish sentiment. Production growth concentrated in Permian Basin while other shales declined. Supply growth expected to plateau as Permian oil production slows, setting stage for higher prices as LNG demand expands. |
Shale Permian LNG Weather | |
OilOil markets disrupted by closure of Straits of Hormuz affecting 20% of global production. Prices surged from $70 to $119.50 before retreating to $90. Market may be tighter than commonly believed despite IEA projections of surplus. Oil represents cheapest major asset class globally, trading at near-record lows relative to gold. |
Crude Brent WTI Hormuz Supply | |
RefinersThe portfolio increased Valero and Phillips 66 on strong refinery dynamics. Marathon Petroleum had a rare refinery earnings miss on operational items believed to be one-time, with favorable 2026 capex guidance. |
Dynamics Earnings Operations Capex Performance | |
| 2025 Q3 |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure |
ESG |
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Shale |
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| 2025 Q2 |
EnergyBHE operates regulated utilities serving 5.4 million customers and natural gas pipelines. The business faces significant investment needs driven by AI computing demand and wildfire risk mitigation, particularly in the Western U.S. |
Regulated Utilities Natural Gas Renewable Energy Grid Infrastructure |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| CHRD | we increased oil producers Occidental (OXY) and Chord (CHRD) on price weakness. |
| CNQ | Canadian Natural Resources: Continued execution led to earnings beat. Increased Canadian egress enabled 20% Y/Y production growth. |
| CVE | In November, we sold Canadian producer Cenovus (CVE), reinvesting proceeds in US midstream company ONEOK (OKE), which has underperformed recently. While we remain bullish on Canada, should Venezuelan supply return, it is a type of crude that directly competes with Canadian production. |
| CVX | In October, we trimmed Chevron (CVX) following the close of its Hess (HES) acquisition. Chevron now derives significant earnings from a Kazakhstani oilfield whose sole link to the market is a 1,000 mile pipeline through Russia—not a risk we want in this portfolio. |
| EQT | We sold EQT Corp (EQT) and trimmed Range Resources Corp (RRC) to reduce natural gas price exposure. EQT Corp: Shares weak as company digests acquisitions, and a competitor announced expansion into key territory. |
| GPOR | Gulfport Energy: Refreshed management assessment of remaining drilling inventory allayed key bear case against the stock. |
| HES | In October, we trimmed Chevron (CVX) following the close of its Hess (HES) acquisition. |
| LBRT | Liberty Energy: Weak pressure pumping results were overshadowed by the positive announcement for a 1GW data center power generation project (by year-end 2027). |
| MPC | Rare refinery earnings miss on operational items that we believe to be one-time in nature. Favorable 2026 capex guidance. |
| OKE | In November, we sold Canadian producer Cenovus (CVE), reinvesting proceeds in US midstream company ONEOK (OKE), which has underperformed recently. |
| OXY | We also hold equity method investments, principally Kraft Heinz and Occidental. We recorded a pre-tax impairment loss of approximately $5.7 billion on our investment in Occidental common stock in the fourth quarter of 2025. |
| PBA | Pembina Pipeline: Issued disappointing 2026 earnings guidance on volume-driven headwinds and longer-term re-contracting risk. |
| PSX | increasing Valero (VLO) and Phillips 66 (PSX) on strong refinery dynamics. |
| RRC | We sold EQT Corp (EQT) and trimmed Range Resources Corp (RRC) to reduce natural gas price exposure. |
| SM | sold SM Energy (SM) following a confusing diversifying acquisition. SM Energy: Announced merger with CIVI that adds unnecessary complexity to business. We sold shares on the news. |
| SU | Suncor Energy: Reported another positive operations and earnings update and raised its dividend 5.3% amid strong buybacks. |
| VLO | increasing Valero (VLO) and Phillips 66 (PSX) on strong refinery dynamics. |
| XOM | BAC, JNJ, JPM, and XOM were held in Miller/Howard portfolios as of December 31, 2025. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
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