By complex I mean a 1031 exchange. You will have multiple parties in this transaction. Some with cash others will producing assets. All of it must be done correctly or the tax free exchange will fail the IRS test. Sometimes the best intentions of management cant be met on a timely basis. I'm a unitholder with an economic interest I can wait.
This is going to be a complex deal and could have significant impact on EVEP's future transactions in the Utica. I would rather see that the deal is done to the most benefit of unitholders. Not done fast to meet some arbitrary calendar date!
2 quick reply comments -- (1) The date isn't arbitrary -- at least I hope it isn't. This is the date management chose. To the extent that management has been repeatedly telling the shareholders that 12/31/12 is their goal, I think it would behoove them to also tell us when the goal changes. (2) You say this is a complex deal but hundreds of these buy and sell deals have been done in the last few years. In addition, management dedicated several months to a data room and set up a bidding procedure. The only complexity is that management wants to do a buy and a sell relatively contemporaneously. But management had all the time while the data room was open to scout out asset purchases and to initiate negotiations on them, This is not a complex deal.
A few comments:
(1) It is uncertain what tax rates (and capital gain rates) will be in 2013 and how MLPs will be impacted. We know the answer for 2012. Some of us had hoped for a pop on the announcement and to sell part of our holdings to get 2012 tax rates.
(2) The longer we have no deal, the longer we live with significant risk. It is possible (although not likely) that the EPA could start rulemaking to eliminate (or at least significantly increase the cost of) fracking. In that case, if this transaction has not yet been completed, it is likely the buyer would walk.
(3) For shareholders, the time delay is a small issue. For option buyers, the time delay can be significant.
(4) It is always disappointing to see management not keep their word.
The down side would be all the hooting and clapping of the naysayers & bashers if it didn't happen. Also, don't forget EVEP's position in the EagleFord.
Bloomberg News: October crude production from South Texas' EagleFord formation up 76 % YOY. Longs are sitting on a winner here. Relax and wait it out, this year, next year, when ever. It will happen. As for me, I have been quietly buying on the dips