All should read the conf call transcript or better might want to listen to it. Sounds like growth is on the way at ARP and APL. Below is an excerpt re APL, $50 million in distributions is almost $2 per unit plus if you just assume APL stays flat, unlikely after you listen to their prospects, that 60 cents, $2.60 vs 96 cents currently. $2.60 at a 5% yield is $50+. And that's before growth at ARP.
They mention 16 Marcellus wells to be connected, the first 8 tested 50 million. Would be 100 million for all and ARP has 30% interest, that's 30mmcf/d vs current production of 35mmcf/d. And they say they have another 30 locations. Even with lousy gas $, a lot of growth. Plus, they say they will raise "at least" $250 million from drill partnerships. And no debt. Reviewing a $billion of deals, sounds like a buyers market for conventional reserves. Still think ATLS will pay over $3 per unit by '14, $60 per unit.
As set forth by APL’s CFO in APL’s conference call last Wednesday, APL anticipates adjusted EBITDA in 2013, and now I quote, of up to $300 million using 2011 average commodity prices, potentially more than a 65% increase to 2011 distributable cash flow, end quote. Such an increase would provide ATLS in turn with about $50 million of distributions as against $16.5 million, which we were quite happy about for 2011, and only $2.5 million for 2010. And no debt, with low debt at APL.
EVEP is finding that the institutional investors are resisting getting rid of properties at these low gas prices. ATLS can make smaller properties work I would imagine. It would be very easy for ATLS to do an acreative deal then funding infill drilling through the partnerships. I think it would be a better business plan then Lynn Energy's as far as cashflow on properties. jim
it is good to note that a competitor in the partnership biz has been taken over as well around the same time as the Chevron deal. NGAS is now owned by MHR which does not do drilling partnerships. I think there is real pent up demand for drill partnerships too.