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QR Energy, LP Message Board

  • eatmorestock eatmorestock Nov 8, 2012 4:11 PM Flag

    conf call update

    I listened to the conf call. They had a solid qtr despite the mgt fee taken. they even absorbed several hundred barrels day disruption which is now fixed and managed 1.1 coverage ratio. all solid. the G&A update is as expected, higher, as they absorb more of corp overhead of parent and the acquisitions they doing super accretive and oily so they sounded very solid on 1.2 coverage ratio "long term". bottom line, solid if you are long term holder and realize they have great accretive deals to do. no real speed bumps other than stock mkt and short term G&A which is now known $ amount offset by accretive cash flow.

    10% yield i like it

    Sentiment: Buy

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    • on the other hand--no distribution growth for quite some time. Certainly not next year; 2014? later than that? "Accretive" deals will be needed to maintain current distribution while absorbing higher GA expenses; incentive payments to parent; $2 million+ in higher interest / qtr; dilution for preferred shareholders. Today's selloff -- in contrast to the rally following the most recent acquisition -- is because the benefits of these acquisitions evidently won't accrue to current shareholders, but to parent and related insiders. (I'm sure Quantum insiders and associates are collecting the 9.25% bond payments.) I'm sure no one expected a distribution increase in 2012, but hopefully in 2013 they might have resumed, I'm sure there's the disappointment.

      That said, $1.95 annually is still worth at least $18, if it continues to drop certainly worth buying and hanging on to.

 

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