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Atlas Energy Group, LLC Message Board

  • jrp1324 jrp1324 May 20, 2013 1:33 PM Flag

    ATLS vs APL

    APL bumping up to $39. End of year yield maybe 7% if the distribution rate is 70 cents per Q. 2014 $3 a share or a little higher distribution yield 7.6%.
    ATLS recent $52 with an end of year 2014 or early 2015 over $3 per share distribution when APL turns the preferred shares into common shares.
    ATLS distribution growth rate is easily double APL's with the ARP portion and the share count difference at that time between ATLS 52 million to APL 90 million.
    Yield ATLS 5 1/2 % with double the distribution growth vs APL 7 1/2 %
    I think a trade is in order again. I sold APL in mid 30's and bought ATLS in low 30's.
    I have kept APL in my parents account as they need cash flow.
    We are getting too close to ATLS pushing out significant cash to not consider the trade.
    Both stocks will do well IMO, but if there is underlying growth in APL then ATLS is the better buy.
    Permian will provide enough growth for both companies regardless of the rest of the properties.
    PXD has indicated that the southern joint venture 200,000 acres will need a new 200 million a day plant every 3 years for a decade.
    The northern 500,000 acres will be even better according to recent presentations and conference calls.
    APL will get the majority of the processing.
    ATLS will get all the benefits and none of the capital cost.
    Cash machine for the next 50 years in the Permian.
    I hope theTeak purchase is at least 1/2 as good as advertised.

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    • Both APL and Atls are way ahead of themselves as far as price. If the market corrects they will correct in a big way. APL has not on average been yielded 6.1%, and ATLS is trading as if yielding 5% with higher NG prices. How can we hedge because we have gotten ahead of ourselves?

    • Jim,
      Although I hold some APL, ATLS is the play as has been argued on this board for a few years. The Spraberry/ Wolfcamp according to Pioneer is the second largest oil field in the world after Ghawar, Saudi Arabia. Surprisingly this contention by Pioneer is met with a yawn by most investors. The "Scoop" in the Ardmore is another play that will soon become better known. APL will be there to benefit.
      I seem to recall that Pioneer stated they will need a new plant every 18 months in the Wolfcamp. I will have to go back to a post I made on the topic to check. In 2014 a new 200 MCF plant will be needed according to the latest presentation of May 15 from Pioneer.

      P.S. I was overseas over the last month and was unable to comment on the recent threads during the run-up but of course the DCF growth estimates are gratifying.

      • 1 Reply to bigearljr54
      • PXD comment I remember was a new plant every 3 years just for the JV area. For the entire Wolfcamp every 18 months sounds about right. Only so much capital can be put to use at a time or it may turn out to be even higher.
        I have held out on switching my parents account as my 80+ year old parents need the cash income.
        I am going to have to do it anyway.
        They are healthy enough to see the benefits of the growth I believe.
        I know I am.
        If not my kids will have a ball spending the money.
        I hope you had a great trip big Earl.
        I recently sold some of my Atlas holdings.
        That sale has allowed me to retire this August.
        APL, ARP, ATLS and the old Atlas have made it possible to retire 5 years ahead of schedule.
        I still have too much but cannot find another investment that I am as confident in.

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