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Inergy, L.P. Message Board

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  • adesteve adesteve Jan 29, 2012 8:43 AM Flag

    Owner bought 75K shares @ $23+

    Is there any possibility that the distribution would go up again?

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    • I believe the dividend can grow from the reduced rate in the future.
      Core propane operations have become intensely competitive. Every operator is feeling it.
      Consumers are hard pressed and conserving. The winter was warm.
      The natural gas transmission and storage assets are under strain from the collapsing price of gas. Natural gas drilling is pretty much stopping leaving only associated production from liquid and oil.
      These earnings really should reflect trough earning capacity from the record low labor participation rates and a warm winter. Natural gas is so low that drilling is slowing down fast.
      The one wild card is that propane is priced relative to oil. The record spread between oil (propane) and natural gas at 30 to 1 rather than the energy equivalent of 6 to 1 is a huge incentive to go ng. But is producers could export market prices around the world are at 6 to 1 and sometimes even better.
      We will have to see on the call. I imagine management will want to retrench and focus of efficiency and further strengthen the balance sheet in the short term.