I have no idea why the OLB is targeting you except perhaps association with me.
I am sure you will not allow all the mindless chattering to bother you. You provide exceptionally valuable current information.
No I did not miss the point.
Buying in the GP IDR interests must be done at a premium like EPD or MWE.
The problem of cost of capital due to IDR is not necessarily resolvable. Look at KMP. The market price of KMI is so great that the dilution to current cash would require a cut in the distribution.
So the while simplifying the capital structure lowers cost of capital going forward the dilution of a premium price paid for the GP IDRs does not go away for the common owners.
A WACC 'expert' like you would know better than to attempt this silliness.
Uninformed Opinions put me on ignore to protect his tender emotions. Only so he canbe free to snipe at other posters.
So he attack the poster on the board who is always bringing in new information and therefore actively learning as hostile to education?
Notice the do you still beat your mother nature around education level? Isolate.
Sand has what as John Wayne used to say in those wonderful movies Sand. Character.
Americans used to understand this is the only measure of a person before the dawn of the boomer tyraProgressuars.
You missed the point. I wasn't advocating the IDRs.
I've owned wonderful performing MLPs with GPs and I've owned MLPs without GPs(I'll throw in LLCs because I know some anal person will comment about how actually such and such is an LLC). I've owned some that started off with GPs and then eliminated them including (BPL, MMP, MWE, PVR, EPD, GEL).
I've had good performance out of both especially in the early years of the IDRs.
The point is, you cannot take the same company like Kinder Morgan and really know if Rich Kinder would have grown KMP into what it is today if it were a GPless MLP. Can't replicate the same assets, situations and management team.
It is all academic on the comparison.
No one likes the GP structure (unless you own the GP!) but it exists for many MLPs. If you can't stomach the promote, don't invest in it...otherwise, you will have people coming in saying, well EVEP has outpeformed LINE and EVEP has a GP so the argument must be false...and I don't think anyone wants that debate opened up again..
Probably did not get past Junior year in college.
Sand you are starting to sound more and more like glenn.
Do you have a problem with people who don't have a college degree? If you do, you have just showed a serious flaw towards all of those whom didn't finish or start college as being not up to par with the rsst of society. More slaps in the face, to those that you believe aren't up to anyones speed, with a college degree.
Wake up man the world doesn't revolve around college anymore. All this bickering for a question i asked. This is what i mean about you, norris and glenn. You just keep hammering away till you finaly say something that is fundamentaly ridiculous.
"If the GP exists, the IDRs are a promote. If the GP does not exist, management may not be as incentivized."
"It doesn't matter because neither side can really prove it"
So you are willing to pay 50% of all new business when there is no proof this generates superior results?
The fractured finance guy doesn’t quite understand no matter what you do a 50% IDR is at a huge cost of capital disadvantage to simpler capital structures? Does not matter because you cannot prove it?
Another basic mistake on your part. First edge was not enough?
Stupid is as stupid does.
They most certainly will want and need the seismic data and production logs, especially if they choose to become more active. Besides, Linn will want to know where their money is being spent, what the potential looks like and to compare it to other productive wells. You can't really believe that Linn is letting another operator take them on a ride without looking over their shoulder's to make sure the basics are being handled correctly? Even if the participation in the well is less than 10%, collectively when you have 65+ wells and more on the way, it adds up to significant money. You appear to be reaching now, trying to argue every point, just for the sake of arguing. You know good and well Linn is taking advantage of these low working interest situations to get a glimpse of the seismic, the production logs, frac technique etc since this is another of the hottest and highest returning basins in the country. Everyone in management should be fired if they aren't looking at this data.
As for the numbers, I walked through them on one of the messages. I told you how to calculate accretion. Same for the E Texas deal. What are you trying to prove anyway? I know how to do the math, do you want me to walk you through it? I can't help but think you are hung up on this for some reason. Go back and find a deal from a year ago and give me the relevant info and I'll tell you what the approximate accretion per unit is (I'll need unit count and yield for that time period though..)
As for schooling, the only BS I have is a Bachelor of Science.
Where are those actual numbers that you just said you have that you do not have?
oh....like the dog ate the homework?
" Right now it doesn't matter because they are getting a peak at the seismic data, production logs etc and very cost effectively and getting a little production as well."
They do not need it...they are a non-operator there.
This is not true:
"You guys that are dyed in the wool, don't like it when people are critical of one of your investments"
And, I am not bothered by your post.
And, I think you are good enough at BS-ing your way to get you by in most situations, but some people see right through it.
Probably did not get past Junior year in college.
Even a good BS-er only gets you so far.
I did the math and was within 2 cents on the Hugoton deal. I did the math on numerous deals, not the last 10 because Linn doesn't always report all of the data, especially when the other party requests for it not to be made public, such as a couple of the Permian deals and certainly not the last 50 (rolling my eyes on this one..). I'm not really sure what you are trying to prove anyway on this tirade about the accretion. Even the analysts have shown the Hugoton deal will add about $.21/unit. Who cares if it is actually $.20/unit or $.22/unit. I came up with a number in the ballpark. They could have an unexpected outage at the gas plant and have to curtail production for a week or two, and that would impact cash flow and the numbers might be low. You guys are ridiculous if you expect even Linn to give you 3 decimal place accuracy.
Yes, 65 wells in the Bakken, but all with very low participation (i.e. fractional interests). The Bakken isn't derisked enough yet to be going wide open, so it is very good to be spreading their capital around with other operators. Some wells will be fantastic and some will suck. The fields will be delineated and derisked and Linn will be able to pour much more capital into the field in a year or two. Right now it doesn't matter because they are getting a peak at the seismic data, production logs etc and very cost effectively and getting a little production as well.
Not sure why you are bringing up Liz and Jack's discussions on MLPs and conflicts of interest. Nearly every investor knows the GP's have a conflict of interest. The point Liz was making was that many investors have done quite well investing in MLPs with a GP. Jack argued that they would have done better had the IDRs not existed. It doesn't matter because neither side can really prove it. If the GP exists, the IDRs are a promote. If the GP does not exist, management may not be as incentivized.
Do you always whine this much?
Why post about CHK on the CHK board, when I can post it here since it was part of my message and you commented on it. Go back and see if PXP archives their conference calls and listen to them. Flores called their gas business a bust. Their gas business consists heavily of Haynesville that they acquired via Chesapeake. I guess to his credit, Aubrey was telling the truth about how productive the wells are, but glossing over how uneconomic they are with low prices. Of course, how many E&P guys 5 yrs ago would have thought a well that IP'd at 20,000 mcf/d would be uneconomic!
I know plenty about Linn. If I didn't, I wouldn't be posting. I think it bothers you that I do understand the business well enough to raise these uncomfortable questions.
You guys that are dyed in the wool, don't like it when people are critical of one of your investments. It is only human nature but items like hedges expiring are important.
Other posters on this board have echoed that sentiment. Why don't you call Clay and ask him why they have no '16/'17 hedges if their strategy is to go out 5 years?
Does it concern you at all that Linn's current natural gas margins are greater than the spot price? Aren't you even slightly concerned that if gas prices aren't $5.50/mcf in '16/'17 that Linn will see materially lower margins on what currently is close to half of their production?