I think this is ahead of itself, and my plan was sell this now, buy EROC because of how much it's undervalued compared to the pending deal securities, then sell EROC after the deal and buy back into this, hopefully as it's sliding down from a lack of news and cash flow.
But frigging EROC took off and is pushing $6, and I'd get "known" from the rear in taxes, in a biblical sense, by selling this. And what's to guarantee this will fall back? Eh, it seems the logical solution now is just to hold on. I wouldn't commit new money here, not at this price at this time, but I can't see selling either.
The whole market's like that right now, too freaking high to buy. Seems to me it's time for a correction, at least.
Unless, XTEX is completely averse to a sale someday, I expect the company to sell out to a bigger MLP down the road. There is a lot of leverage for earnings in a debt refinance at investment grade interest rates. I am not sure just how much they now have to refinance, but if it's 900 million, then a 3% reduction in rate can save 27 million dollars a year in interest expense. That's a little over .50/share just from a refinance. You don't have to do anything but utilize the borrowing power of a more established MLP.
I do expect management to work on things before that might happen down the road. And, they just might not be interested.
Let's say the stock price goes up to $15 in the 2d QTR, for any sale of the company to be taken seriously, the company wanting to buy XTEX would have to offer at least $20 a share or a stock swap equal to whatever their stock is selling for divided into $20 a share.
Well, just about all the MLP's would seem ripe at this point, but XTEX is one that is selling cheap to potential. BBEP's all tied up in litigation, and EROC is muddled up in a restructuring. But, it would seem the big boys are after production, not processing.