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EV Energy Partners LP Message Board

  • statesrip statesrip Mar 10, 2013 3:01 PM Flag

    Potential Utica sale price

    I get amused/frustrated by analysts and others who publish estimates on the potential per acre sales price for EVEP's Utica acreage, often using examples of previous Utica sales as a basis for their predictions. The vast majority of Utica sales to date have been in the dry and wet gas windows. 70%+ of the 103,000 acres currently for sale by EVEP are in the oil window and @ 36,000 of those acres are in Stark County, "the best rock in the Utica" as per John Walker.
    Folks, there is no paradigm for what EVEP has for sale, so sit back, relax and let it happen (whenever that may be) and don't get hung up on assinine analyst predictions that have little intellectual underpinning.

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    • I concur that investors need to relax and focus on the value creation going forward. Below is an excerpt from a recent interview that I believe illustrates the attributes of successful investors (and yes I am a friend of Sinclair). You can substitute gold or the Washington Post with any relevant investment , for instance EVEP.

      Today legendary trader Jim Sinclair told King World News that when it comes to gold, “... the crowd has an opinion, the crowd is bearish, and the crowd is never right.” Sinclair also stated that the crowded short position in the gold market is going to get mauled.

      Eric King: “Jim, the situation that’s going on right now in the gold sector, it really reminds me of when Warren Buffett purchased a large stake in the Washington Post in the 1970s. The press ended up going to him after about 18 months because he was down 40% on his investment in the Post, and they asked him, ‘What are you going to do now?’ If I remember correctly Buffett said, ‘Nothing.’ It turned out to be one of his greatest investments of his life. Buffett’s gain at one point in the Washington Post was a staggering 15,336%. I wanted to ask you today how Buffett’s experience relates to what is happening in the gold market?”

      Sinclair: “It’s a mirror image. Buffett knew what the true value was. He knew what the long-term prospects were, and he knew without a doubt that he was going to do extremely well on that investment. This is especially true of a man who is holding a long position and says something like that in response to a question from the press. And of course Buffett knew what he was talking about....

      Sentiment: Strong Buy

      • 1 Reply to ottoblockhead
      • Otto: That's great advice...on a macro level. A company is it's managment team. Do they under promise and over deliver? Or do they promise the moon and deliver excuses? How many years since EVEP raised it's distribution? EVEP used to have the industry's best hedge book. How did we benefit from it? EVEP supposedly has the best minds in the business. They promised that they would close on a deal by year end. The market was skeptical. Analysts were skeptical. Reepeatedly Walker and Houser were pressed that it didn't seem possible. Simple land deal we were told repeatedly. Then they sneak in a delay announcement on Christmas Eve and we never heard from them again for over 2 months. Over promise. Under deliver. Time and again. Remember last year'stalk of 50% increase in distribution over the next year? (with whispers of 100%). We're coming up on the 1 year anniversary of that call. 0% distribution increase since then. Over promise and under deliver.

        Since then, how much has Walker and Houser made in Salary from EVEP? Salary from Enervest? Salary from EV Management co? How much stock has been granted to them for free? It's been nearly a full year since they made an open market purchase of EVEP stock. While that was dearly appreciated back then....A year is a long time when the promises have never been fulfilled.

        Patience was back in November. The deal was supposed to have been done then. This is Mid March.

        The last conference call SOUNDED NICE. But what has EVEP actually done for unitholders in the past 12 months? I can't name a single significant accomplishment in the past 12 months. So how is it that they all got bonuses?

        Doesn't that at all bother you? I'm all for showering them with money when they succeed at something. But 2012 was a dismal failure. Flat distribution. More debt. Unit price down nearly 30%.

    • I have been thinking about a conservative, net base valuation of the company:
      Please comment on your analysis.

      Base Value $35
      Utica (all) $15
      ORRI (2015) $10
      Mid-stream (2015) $10
      = $70
      Distribution (2015) $5

3.49+0.06(+1.75%)Nov 30 4:00 PMEST