Our CEO is an amazing promoter of the ATLS story. My thinking on ATLS has changed since the spin-off of ARP. I thought this was a APL story for ATLS in 2012/13 and ARP was interesting but not the main driver. I now think ARP is the main driver and APL is the 2013/14 story. Perhaps APL represents the bond portion of ATLS and ARP represents the equity component. The change has been the drop in Nat Gas prices. Interestingly and somewhat perversely, ARP creates value by purchasing more property per dollar invested and creates an interesting arbitrage or spread business. It comes down to buying as much as you can as soon as you can. The syndication business just becomes the entity that draws down the inventory of property purchased. Great business model. The more I read about the Mississippian Lime play the more I like. This could become a North Dakota like opportunity and we are well positioned. I'm long and strong ATLS and looking for a $80 unit price over next couple years. Just bought more in $30 -31 range, most of my position purchased at $16-18.
Thanks for the heads-up about the Enercom conference presentation by ATLS.
I think ARP is producing 2/3 of the cash flow now and APL 1/3, at least that is what I remember from my last quick look at the numbers.
I enjoyed Cohen's anecdote about the dinner with the no. 2 exec at Chevron in San Ramon after the Marcellus deal. And of course the Philly accent is always a hoot especially with all the Texans floating around in the oil patch.
I agree with your analogy of APL being the bond portion and ARP the equity. I have been selling puts on APL as the market warrants and otherwise I am content with my 50k slug with an average cost of $4.5.
If I come across a more brilliant business model than this I will let everyone here know about it. The anticipated growth is just breathtaking. Btw, folks may want to listen to the Halcon presentation at Enercon from yesterday. Floyd Wilson is quite a character.
Ed was great, it was fun to hear him. Rips on all kinds of topics but importantly he gives some more details on the Titan deal. He stresses the good people that came with the deal and those stats don't show up in the price per BCF.
I am coming around on the deal esp since he is looking at getting more Barnett assets and they work well for the drilling partnerships.