When all is said and done, you have exactly what you had before the split. Double the number of units each paying half the distribution. Nothing has changed. Nothing! EPD was a solid investment before the split, and it's still a solid investment today. People on the MMP message board are lobbying for a split just because EPD split. I own very substantial amounts of both MMP (8000) and EPD (6000), and splits mean absolutely nothing to me.
You're right! There were several calls for a split, and I repeatedly argued that splits are generally useless. The distribution has remained exactly the same except for the split adjustment. EPD continues to perform exactly in line with forecasts, and I don't see that changing. It's a very predictable business with set-price contracts. As long as crude and products flow, they make money. My only concern is that there has been a tremendous proliferation of MLPs, and the group has been attracting more and more investor interest. I came late to the party, but I'm confident that MLPs will continue to thrive as long as domestic oil production continues to increase at the present pace. If a sudden drop in energy usage/demand creates a surplus in midstream capacity, the whole group will likely collapse with a sickening thud. The U.S. energy boom seems to have a long way to go as long as the economy stays reasonably robust. The housing boom of the last decade should have taught everyone that overbuilding eventually leads to disaster. Overbuiding of midstream capacity would be equally disastrous. I keep being reminded of the broadband debacle we now know as ENRON!
No i still own 500 with the split . Not selling! this is one of my core holdings along with kmp and kmi. thinking of adding 100 at 35 if we get there. Good luck
portugal - Agree except the dividend is not going to recover. It was not cut but simply adjusted to be exactly the same as before. You do not have more money to reinvest except the "regular increase that happens each quarter. You have .005 per share additional $$ on twice as many shares.
Where we will export is propane, LNG, and some light distallates. Aruba refinery being restarted to handle just the distallates. For the US it is not about exporting oil but rahter NGLs IMO. If we get oil exported it will work but only to limited markets. The Saudis simply have a budget that requires X number of dollars to balance. Their driving down prices IMO is partially to hurt Russia.
So you believe with less production and less product available.... lower prices.... US hydrocarbons will be competitive with the Saudis who are selling product at about par to WTI including transport with a far better export infrastructure in place
I don't see it and export of US product was the topic.... we agree that producers are gonna get killed.... I believe that will have an impact on the mid stream players....
another point of agreement might be as I originally said was the need to get past the election... it wouldn't be the first time an administration engaged in policies that reduced the cost of energy in an attempt to get an edge at the polls... and I really don't want to get into the politics of it
Export of US product will certainly not be a robust money maker in the current environment.. it will be a costly endeavor when going head to head with the Saudis who produce at about $25 bbl and currently are showing a willingness to undercut all others...
The Saudis motivations have been the subject more articles than I can count on Bloomberg over the past 2 months.... yes all of it speculation... but something is motivating them in their current policies... and its those policies that are the root of the current energy meltdown which affects all energy related companies
Already answered you - Tar sands, canada heavy and in the USA the Bakken and alaska. Those fields that are farthest away from usage and face transport issues will see less drilling. Others that are hurt are Venezuela and others outside the US. Short term - under a year or two - production increases even down to about $60. Too many wells either in process or awaiting connection. About 1/2 of wells in marcellus for MHR - for example - drilled in 2014 still awaiting connection as of October 1! Saudis trying to cripple US frackers - balderdash.
I get it with the E&P guys - but again the market is a big pendulum. It always swings too far one way before swinging back. About $10 of current price decline is a direct result of options and bad bets. Let us get past the election and into 2015 and if prices then are below $70 then I will agree to production falling off in late 2016. In stock market time that is forever.
The point is which fields reduce production with $70 oil... how will that drop in production affect supply available for export?
What will the demand be on the world mkt for US exports IF the Saudi's continue to sell oil at a discount to Brent? That's the status of the mkt today... they are selling at about $3 below Brent including transportation to port.... How would WTI be competitive after transportation costs are added on
The producer stocks will see further slaughter @ $70 WTI.... profit will evaporate.....IT will impact the frackers ability to finance their wells and when interest rates go up the equation is compromised further.... the pipes are not going to go dry but IF a fracker goes belly up those contracted dollars for capacity will disappear along with the domestic product
So long as the Saudis and OPEC flood the market with cheap oil all energy companies will suffer... mid stream MLPs are not immune
The stories in the media that suggest the administration is in cahoots with the Saudis to hurt the Russians and Iran would indicate a very myopic administration who's actions will hurt the US economy as much as the Russian economy... Then there are the stories that say the Saudis are motivated by their desire to cripple the US frackers..... what ever it is the frackers are feeling the pain..... Energy is a very large % of US GDP and a huge chunk of that is in jeopardy along with a massive amount of jobs
Im not commenting on EPD... Im concerned about how the BIG picture is bound to affect EPD
I know ya'll think I'm insane but just take a look at LINE and how that has reacted over the last 30-45 days
What benefit would there be for EPD to go LLC? Kinder did it to eliminate 3 MLPs and the GP drag. EPD already got rid of 2 MLPs (years ago) and bought out its GP. Nothing to gain for EPD. As for other MLPs - if Kimnder buys them out the tax consequences for the acquired companies could be ugly and that would require extra compensation. Kinder forced the merger down the LP owners by putting in a $311 fee if the merger is voted down. The reason I have never owned KMP.
Actually no. Eagleford acreage is mostly profitable at $60, Marcellus at about $65-70. only the Bakken gets really hit below $80. Agree some producers might go out but stronger ones are just fine. BTE is producing oil at under $50 in TX and so are others.
why are they angry and arrogant?
When Dan Duncan was alive,he will listen to the analyst questions and realise they dont really know the business,so he will urge his lieutenants to explain in a different way so these guys can understand.
weird post. I did not hear one person requesting a split in EPD. Who exactly is everybody? You're right though, splits (normal or reverse) are all pretty useless.
Energy export from the US may be going the way of the Dodo before the first Dodo is hatched.... If the Saudis keep their present stance not only will they be undercutting US energy producers on price.... fracking and the product available to export will be in decline.... not quite going the way of the Dodo but it will fell like it to some of the producers
Condensate only exists in great quantity due to fracking.... oil goes to $70 and we will see a good deal less US production
Major implications for the economy... producers and yes the mid stream companies because when producers that have contracts on pipe to ship go belly up.... those contracts/revenue will disappear
Lets hope oil rebounds towards $90 after the election
I too am a long term investor in EPD. Owned some since 2003 and will own it until death do us part, then my wife will own it. I`ve held on this long because it always delivers, ALWAYS. It doesn`t yield as much as some of the other MLPs but in my opinion its the most stable of them all. I had to train my brain not to worry about the numbers or the press releases and look extremely long term. As far as them being SMUG I have noticed that also over the years and I must say that SMUG looks good on no one. The organic growth is what sets EPD apart from the rest. It will have ups and dopwns like any other company but in twelve years my cost basis is Zero and i`ll add a few shares now and again. Good luck with EPD and know that you have held this stock for years for a reason.
Was same a last quarter. I am long and have been for 7 years but these guys are smug with their answers. True you don't tip your hand but the tone of their answers are just angry and arrogant. I do hope they can deliver on their recent purchase and exporting of condensate. That part of the presentation seemed promising.