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Linn Energy, LLC (LINE) Message Board

  • norrishappy norrishappy Jan 12, 2012 4:02 PM Flag

    EPD Presentation Critical Background Data

    http://cc.talkpoint.com/well001/120611a_hr/?entity=27_R47FG7T

    http://cc.talkpoint.com/well001/120611a_hr/content/27_R47FG7T/27_R47FG7T.pdf

    Please see slide 25 for the answer to the GP ignorance offered on the board.

    Page 17 has THE reason ethane demand will increase. Why America will take market share. Why American ethylene producers will enjoy wide margins. Why the American investment boom will continue.

    Ethane was down to a record low supply when this presentation was done and now prices are falling on additional supply. This is stunning as our producers are taking share in world markets and pocketing big margins.

    Also in the comments is the fact EPD is the largest propane exporter from America. Dry natural gas would not be a challenge for them.

    What does Obama waste borrowing from China on? Solar, offshore windfarms, spinning gyros and a Volt no one wants.

    I believe every one should have a few units of EPD. Certainly better than richly priced regular utilities paying 4% with 5% growth.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • You dont like my D,,,,,,,,,,,,,,dominion.

    • FYI Ethane production for Dec was 994,000 Bpd at 94.3% capacity. EPD is building an extension to its Houston export terminal to be completed second half of 2012 (EPD news release March 11-Zacks March 30)It will allow epd to fill multiple ships and fill them at rate of 10,000 barrels per hour of propane or NGLS. EPD is the gorilla in the gulf. NGLS is second and DPM. Their pipeline from marcellus will supply ethane to the gulf. Blocking the export of NG and propane id the DEMOCRAT Mursa, Ma. Natural resource chairman. Time this group knows who is blocking this industry .

    • Well MWE is playing catch up to some degree BUT distribution growth in the last year was on the order of 13%. EPD has an adjusted coverage ratio of 1.3 - 1.4 compared to 1.46 for MWE.

      It is also difficult to directly compare EPD at a market cap 8 to 9 times larger than MWE. Between the two, a billion of new investment by MWE at current project ROIs is going to move the needle far more than at EPD. Given their M assets they have more than enough to keep them busy.

      MWE balance sheet is improving but they cannot borrow at EPD rates. At least not yet. Nor is the asset asset diversification or just mass of foot print remotely comparable.

      True the wild run up in MWE unit price is deserved in my opinion. That has greatly reduced their equity cost of capital. But please do not fool yourself. Comparable valuation on many metrics to EPD because it is expected to grow faster. To get a real cost of capital you need to use forward estimates, not trailing. MWE is priced for faster growth and a higher assumed rate of return on capital.

      My one bang on LINE management.

    • Norris..we need more slides..

    • Agree 100% again.

      But great investments as long as Obama does not completely shut in fracturing. Possible. If he wins, he is proven willful and arrogant enough to attempt it and some measure of it is in the prices. Chu really believed he would have a new alternative reality in three years and that is what Obama told our great American Mr. Hamm.

      But the government just getting out of the way would be a huge plus! Just let it run is good enough.

      I really feel for all the real union guys in petro manufacturing and pipe fitting. Heck construction. They would need to get new members with all the investment which should be done based on simple economics.

      You know if Mr. Hamm ever sees; against all odds, all the great stuff about him and how I happily repeat it HE SHOULD GIVE me a ride in his truck to see the crews and production!

    • "Certainly better than richly priced regular utilities paying 4% with 5% growth."

      And certainly better than Linn

      • 1 Reply to msnapp82
      • I am not so sure at the curent price. You should take a deep breath and wait to see what the news is out of GW before making sweeping statements.

        Line like many domestic energy producers has a huge risk premium or cost of capital assigned by the analysts. Fortunately with managements prescient move into oil and liquids they have avoided the Chesapeake sink hole. I b4lieve they have enough oil and liquids to keep them busy until all the American investment in manufacturing capacity brings up the price of natural gas. I also believe we retire Obama and natural gas and ng cars are a reality. It is not a question of developing technology but simply building the car.

        I will give you that EPD looks exceptionally cheap relative to other pipes and don't think a few units at the new higher price will hurt any one. But that does not mean LINE is a bad investment. Actually I like LINE a great deal at $36.

 
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