If you take the most obvious case and reduce the distribution by the shortfall in DCF (32%) you arrive at $.48 per unit. That is approximately an 8.5% yield, something that is not inconsistent with other MLP yields at the current time.
If you consider a further reduction to provide excess coverage, then the yield would be marginally lower, perhaps 7.5%.
Both are consistent with current market yields for non-growth MLPs.
Therefore the current price is not out of line. I do not expect a sustained selloff from this point. Maybe a kneejerk reaction.
I am short 34 February puts at $1.10 and will look to exit them on any runup in the next week. If not, I am happy to own NRGY at a net cost of $21.40.
So, we get our .70 this time with a forecast of lower dividends to come. It will be interesting to see what happens to the PPS with this mixed bag of news. Its impossible to foresee developments in energy prices in this world we live in now. I need to see $29 to break even and I doubt if that happens anytime soon. Win some, lose some I guess.