I thought the implied message on the distribution going forward was pretty clear from the conference call. Given that management expects Q4 results to be similar to Q3 and their desire to reduce leverage, and that they started the distribution a quarter earlier than originally stated, the Q4 distribution will remain at $.25. They didn't say this specifically but that was the message I got.
Looking forward management stated as part of the discussion on distriution guidance that they expected a significant increase in net income from new projects coming on line at the end of the first quarter. I took this to mean that we can expect a distribution increase for 2011 but maybe not in Q1.
The bottom line is if you are a patient investor XTEX is a great place to be.
That's exactly what I got. The increase will come, but not in Q4. I suspect that uncertainties in the Haynesville and a lag in income from the Gulf situation is responsible. But, it is temporary. I am surprised and impressed with their operations in the Barnett. That is working out better than I thought it would.
Joe and JDB...label me dumb or deaf, but toward the end of the presentation by the company officials what I thought I heard was that distributions might be cut if the forward looking projections of expected earnings did not pan out to meet what the company thought they would be. What I did get out of the CC that I was looking for most was the EBITDA which I believe they said was 4.2 and they hoped to have it to 4 to 1 by sometime next year. I hope that I heard wrong about the distribution cut possibility was wrong and I am more than open to "being straightened out" between what I thought I heard vs. what was actually said. And I am hoping that it is not until this time next year that we see another distribution increase...because the pps will hover around $13+ and I will be able to buy more shares.
Although not specific in what they were talking about insofar as future opportunities, I do know that our family has a ranch and we have the mineral rights and it sits right on top of the Eagle Ford formation where southwest Madison County Texas, Brazos and Grimes counties all come together. From all of the google research I have done, it has been said this area may be more rich in oil and gas than both the Barnett and Haynesville plays. Over the past month, according to a young lady I know in the Madison County clerk's office, there has been a conga line of landmen doing lease research on this area.