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  • papadop007 papadop007 Apr 9, 2011 10:13 AM Flag

    The Secret-Utica Oil Shale in Ohio

    Hey nice post. Your good at what you write. and only your 2nd day. But your pitching to some newbies and retirees who can't afford to lose more money in the stock market. My advice is sell/hold but do not buy at these levels. In fact I just sold my long position and now I hold some naked 45 and 50 calls in June. Writing covered calls is the right thing to do if you can't find another place to park your capital. This pump job is almost over and people will realize all Shale is the same, plentiful but not much profitable than the rest. EVEP unit holders will be lucky to get a 1 penny increase this year like they always do.

    And last but not least for the newbies, this is an MLP. 5% yield is not worth the tax hassles (I was cursing MLPs on my last tax return), go check out a regular stock with better dividends and lower/easier tax rates. The time to get into MLPs was 2009, the time to get out is looking like 2011 and 2012 before capital gains taxes rise again.

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    • I respect you opinion however, I do like the 5% distribution and the fact that some of it is sheltered because of the flow thru entity that allows deducts and improves the overall yield on an after tax basis. I dont understand your comment on how difficult it is on your tax return because all of the information comes directly from a simple K-1.

      Also your comment on shales is incorrect. Due to new technology ie. horizontal drilling and the utilization of high volume, high rates associated with low sand concentration fracing, the EUR's (Economic Ultimate Recovery) have improved significantly. I will agree within a shale basin/trend there will be certain areas that will prove out to be sweet spots and there will be areas that are poor and uneconomic. The game changer has been the new technology associated with higher oil prices. As for gas, the technology has found many years of supply however the gas industry has gotten blistered because gas prices have dropped to $4.00 per mcf which caused most gas plays to become uneconomic. In reality its all about the price, even if you find large quantities of reserves.

      I am very bullish on EVEP however I will be the first to admit noone has a crystal ball. Time will tell.

      • 2 Replies to openflow
      • And remember, a portion of the play in the Utica is oil, not gas. That makes a world of difference.

      • Well, I'm glad to see we have such bullish confidence. It tells me what I want to confirm about the markets in general. I beleive the markets want us to believe everything is hunky dory until June 30th and then let's see what happens next. I take the view, things will go off track before June and probably in the next few weeks during earnings. Inflation is not temporary and it is not small. We are not Japan. We are US of A and world bond markets are about to blow a fuse. Just my opinion, but Bill Gross seems to be hinting something is rotten in denmark also. I'm short CMG, CRM, and NFLX also but don't crowd my trade. My only regret is not owning physical gold and silver. I enjoyed the ride with EVEP but I got off and will watch this train ride away into June. I remember the last time FED said not to worry.

    • Dude...You mean to tell us you're SHORTING EVEP??


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