I went to Crosstex's web site to look at the info from the XTEX presentation made to the Wells Fargo people. In that PPT presentation, there is a high end .30 distribution built in for 2010, but no low end (XTXI is .10 high end for 2010 and no low end).
I wonder how they got the high end figures for 2010 if the distribution was already announced for this year. There was no low end in PPT given to Wells Fargo on distributions. What is going on? Maybe another nickel in distributions before the end of the year? Can someone explain why they had a high end .30 distribution for 2010 after a .25 distribution had already been announced? And why would this be part of the 2010 figures?
Geo: The number one thing I have gotten from listening to the financial talk is keeping costs down while improving revenue. However, there was an article in Seekingalpha that if Crosstex wanted to increase the distributions to the LP, they should get rid of the general partners holdings and the distribution they are being paid, which I don't see happening (or have read anything that would lead me to believe such a thing would happen). Suppose, XTEX decided to do such a thing, which I don't think would be all that smart at this time particularly with their goals for not spending any more money than what they had to keep things going. But, if they did, I have looked and looked for the number of outstanding XTXI shares (not held back in the company treasury) trying to figure out what it would cost. Do you know how many XTXI shares are in the hands of the general public and institutional investors and what the probable cost would have to be for a buyback put GP unit? I cannot find this information.
Thanks... and go to SeekingAlpha and do a search on Crosstex buyout of general partners (or some close boolean operator to that argument).
Remember,"I sold some XTEX and bought ITMN, which was up .86 as XTEX was down .02. I intend to ride this as far as possible and then come back to XTEX and something else with the change." From just a few days ago, ITMN up $14.71, now I come back, I have XTEX plus my profit.
XTXI has 46.89M shares outstanding, according to Yahoo Key Statistics, with 21.74% held by insiders and 52.2% held by institutions leaving 26% in the hands of individual investors. I don't think XTXI has anything like treasury shares. My guess would be that XTEX would have to exchange 0.7 or 0.8 units of XTEX for each share of XTXI. This would give XTXI share owners a 20% price premium and a tripling of their dividend. Buying out XTXI would result in a near term dilution of XTEX units but would allow them to grow distributions more in the long term. Right now XTEX hits the high IDR split of 48% for distributions above $.375 per quarter. Personally, I like MLP's w/o IDR's such as MWE, EPD, MMP and BPL. I don't expect XTEX to buy out XTXI, but I could easily be surprised. When I bought my small position in XTEX it was with the assumption that the distribution would not exceed $.375 in the near term.
Good question. I went back and listened to the webcast associated with the presentation. My interpretation is that the slide is an old slide. The point Mr. Davis was making is that XTEX has accomplished what they promised earlier in the year. They are going to finish the year near the high end of guidance, with an EBITDA of $190MM and a distribution of $.25. Their low end of guidance was $160MM EBITDA and no distribution, so they obviously finished the year much closer to the high end than the low end. If you have not listened to the presentation, it is very good with many positive comments. They are trying to get more value out of their underutilized south Louisiana assets, which were constructed to handle much higher levels of Gulf production. Hopefully the partial restart of the Eunice fractionator will lead to a full restart of that facility backed by some long term commitments. It will also be interesting to see if they are successful in creating another core position in another shale play.