Here are the results of my study of nat gas prices on RNF earnings projected for 2014.
2012 revenues were 261 million with the 23% expansion at illinois projected revenue for 2014 would be 321 million. in 2012 they used 10.6 million mmbtu of nat gas at a cost of 3.57. projected for 2014 would be 13 million mmbtu and i used $5 for nat gas prices to use the worst case basis. cost of sales with 5.00 nat gas would increase roughly 38 million to 170 million. i also added in 15 million for the new interest on the 293 million in debt they have added and came to a net income for 2014 of 116 million or 3.02 per unit. This would still be 8.6% growth even at $5 nat gas. This assumes that Amonia and UAN prices hold steady.
During the conference call they said 2014 distribution will be well north of $4. There is no way NG prices will be $5 in 2014. Over $4 NG, there will be a lot of gas to coal switching be electric utilities and there will be a additional gas released into the market by drillers that have capped wells. At a distribution of $4.25, the yield would be 12.4% based on today's price.