The MLP sector has been going to the market heavily the past couple of months. QRE just did a secondary and is getting hammered. Yes, the price is down and the market does not seem to have any interest in driving ARP price upward..I think this will take time. The market has to absorb a huge secondary and once the distribution increases start showing up, it will help them stabilize. The fiscal cliff issues are clearly not helping.
What will be interesting to see is if ARP slowly nudges up the distribution each Q or if they go all in. I am in favor of slow steady increases.
Would love to see something along the order of $.47, $.51, $.55, $.59...
Agreed. Picked some up a little higher than current price. I think they are going after Pionner's and/or Quicksilver's Barnett assets. They already have done business with Pioneer on the APL side. Just like they did business with DTE years ago when they bought the Antrim business from DTE.
The drilling partnership business brings in $40-$50 million via up front mark up fees, administrative fees, working interests and acreage sales. The real beauty of ARP relative to many of the other E&P MLPs is they are getting a carried interest in the $300 million a year that they raise in private funds.
They also are buying gas assets at very attractive prices which should give them a lot of upside. Being able to buy assets that are low in the PDP range gives them an advantage over other MLPs that seek high PDP. ARP can sell off that acreage to the partnerships and prove it up.
Is this one going to double...no, not likely any time soon...but I do expect a slow and steady recovery back into the high $20's over the next year as the distribution gets bumped upwards.