Someone mentioned this earlier but it didn't get much notice.
The midstream project is projected to cost $250MM and they are going to need that money soon.
The more the unit price falls, the more units they are going to have to issue to fund it, unless they do a bond offer. As it stands now, they will need to issue 5.5 million units to fund it.
If management knew earlier in the year that the Utica sales weren't going to occur, I think they should have gone ahead and issued the units when the price was in the $55 range.
Can u go over that part about how the unit price falls n they will have to issue more...maybe some examples
The first part of the facility is forecast to cost $250 million ($350 million is the total cost over 18 months), and is due before June 30th.
If they issue the units next week, they could get approximately $45 , so they would have to issue 250,000,000/45, or 5.56 million new units.
If they had financed it a month ago, when the units were selling for $55, they would only have had to issue 250,000,000/53, or 4.7 million.
If they wait and it goes down to $40, then they'll have to issue 250,000,000/40, or 6.25 million.
That assumes a fact not in evidence- that EVEP management is competent. I think they have amply proved that they are not