First of a Merry Christmas and Happy Holidays to everyone on the MWE Board! I appreciate all the information that is volunteered here, the diverse opinions, and thoughtful commentary that have taught me a lot. 2012 should be really good for our MWE Board Team,too. That said, I still remain unclear just why MWE is putting $1.8Billion into buying the 49% EMG share of the Marcellus. Clearly, that kind of money would allow higher yielding ROIs on bolt ons in the Granite Wash and the Woodford Shale, and probably the previously discussed 200 MMcuft/day cryo unit in the Haynesville. MWE could even do the Utica alone betting on a river of NGLs in that zone. EMG certainly provided capital for Liberty at a tough time for MWE, but clearly has been richly rewarded for its' investment. So why is MWE doing this deal? One thought I have is that the terms of the Utica JV may be different than those negotiated for Liberty. I like to think that paying off EMG for Liberty and including it in the Utica JV is due to charging EMG a higher $cost for the Utica participation. MWE buyout terms for the Utica JV may be changed as well. I just feel that something is missing in the explanation so far. Sure, we'll learn more in the early January press briefing on the Utica JV, but thinking about it now is Holiday Fun! Best Wishes to You and Yours..and to Buy and Win a special "Get Well Completely!" We need you at the MWE Annual Meeting to protect us!!
On my original post in December, I asked about the possibility of NGLs becoming oversupplied. Most of you thought that wouldn't happen or would only happen in the far future. Well, it's happened already. Prices are down rather sharply from the first of the year. MWE's unit price is down about 20% from its high. Any comments on where we go from here?
This is directed to the nucleus of this MB who have contributed mostly to the analysis, understanding and projections and conjecture of the fundementals and thesis of MWE . Happy Holidays and thank you Marv( who lives in Fl but still has a NY mentality.)
Thanks for your kind personal wishes and let me echo your Christmas and Holiday thoughts to everyone out there who have made this board a valuable and profitable place to share your thoughts on a regular basis. I realize I might have been somewhat over enthusiastic about MWE in the past, but I am happy to report that so far I have been correct in my assessment of MWE and I hope I find reasons to continue to do so in the future.
>>>We need you at the MWE Annual Meeting to protect us!!<<<
Not really. You have Mr Semple,Mrs Beuse, John Mollenkoph, and Randy Nickerson leading this company forward with John Fox overseeing the whole team in the background.
I still think that many people here are looking for answers to questions as to why management makes certain decisions and do so without the info that management has at their disposal when they made that decision.
I believe Mr Semple is buying out Liberty for $1.8 Billion because he knows
1) He knows it is worth at least double that, right now
2)It will continue to be a growing asset in the future
3) It is a critical step in gaining bulk for the company.
4) MWE has been prepared for this for months by building up over $1 Billion in cash, and pre funding their 2012 cap ex needs.
5) This will bring them up to at least a $1B growth per annum not counting Utica.
UTICA thats a whole new ballgame for MWE. I believe Utica will be at least as big as Marcellus and probably much more. I believe Mr Semple was right in joining with EMG in the Utica BECAUSE HE HAS AN IDEA AS TO HOW MUCH INFRASTRUCTURE WILL BE NEEDED AND HOW QUICKLY and we don't. We are thinking it will be like the Marcellus -Start with $200M each. What makes one think the prtoducing companies are willing to go at that slow pace. I believe there is a lot of oil in the area in addition to wet gas. If Mr Semple can be THE FIRST MOVER like in the Marcellus he could be able to get a foothold and carve out a territorial advantage.
I believe we are past the $200M to $500M cap ex days. Buying the 49% Liberty puts us over the $1B cap-ex per annum. Maybe over $2B. Don't forget MWE still has the Granite Wash and the Woodford Shale, and the Haynesville. And don't be surprised if someone, one day wakes up and finds there might be something in Michigan that will become a growth area for MWE. Then there is Javelina-and Mariner-East and west.
And everyone is falling all over themselves selling millions of shares at these prices.
I'm so impressed with the quality of this board. Thanks to the really great posters.
I find myself wondering about the market for NGLs. With the advent of so much wet gas in the Marcellus and others, just what is the potential market for so much additional supply of NGLs? Is that market in danger of becoming oversupplied? We can all see what is happening to NG prices as a result of the major new discoveries that have been made. Could this happen to NGLs also? If so, wouldn't that have a rather serious impact on the cash flow of MWE and other MLPs in that business?