It's a combination of mostly two factors. Money is cheap now and likely to get more expensive as time goes forward. Second, they see cheap properties out there an an opportunity to snap them up. You are likely to see purchases of producing Oil and Gas properties in the near future. This will increase total revenues but, the real problem here is the dilution of ownership by creating a preferred class of stock. The preferred will pay a lower rate compared to the yield we're getting on our common stock. But they are guaranteed - that's why it's preferred. The total debt is what has me worried. Higher revenues will create a better ability to service debt but now you'll have more investors feeding at the trough and distracting management.
I am building a position in VNR because I like the oversize distributions especially when they are paid monthly I am investing here because I believe management knows what they are doing and wants to increase the value of the outstanding units. for the unitholders..
We currently don't know what the raising of all the liquidity is for, but at this time we have to believe that management knows what they are doing and use this opportunity for adding to our positions at these depressed levels. If we don't believe the current management moves are in our best interest than we should close our positions. At this point in time I am in favor of management's position, and I have been adding units at these prices.
vnr management is very intelligent. I like the strategic so's related to the distributions, weeding out the players. vnr is for the serious investor with serious rewards. we are always rewarded with more assets. they make sure their deals are made whether announcing before or following the executions.