Devon will merge with Crosstex, have owned XTXI for a couple of years, this should heat up the prospect of consolidation in midstream. ATLS should be at valuable asset in that trend, still think e and p will dilute the multiples for ATLS. Not sure they will be able to grow ARP dist as much.
I remember in March 2009 XTEX was trading for a buck - thought about buying 5000 units that day but for some reason I didn't. (figured that if everything was going to collapse I might want a little cash to hit the local Walmart the night it all went down!).
I don't remember what XTXI was trading at but I assume it was something similar.
Its an interesting transaction (I own a little XTEX). I hope it truly is a tax-free transaction, and it will be nice to get a $2/unit cash payout.
I'm not sure it will have a big impact on APL though. I suspect the transaction was about two things - one being the geography and two being getting Barry as the CEO of Devon's new midstream. Devon will be the largest customer for the new entity - which I guess has its plusses and minuses.
"Its an interesting transaction (I own a little XTEX). I hope it truly is a tax-free transaction, and it will be nice to get a $2/unit cash payout."
The $2/unit payout is for holders of XTXI not XTEX.
They haven't stated details of what happens to unitholders in XTEX although since the combined entity remains an MLP, I would expect it to be a tax free transaction. They probably will ditch the name Crosstex and change tickers although not specified yet.
I bought most of the XTXI for around $12 about a year+ ago. It has had a nice run but this was the hoped payout, a buyout. Great co to partner with, in DVN, haven't really looked at the details, but sounds like XTXI will be merged into a GP MLP, it's a C corp now. I kind of think SEMG will go the same way, and ATLS also, just not sure how long it takes. Will probably see less players each year for the next several.
Listened to a report from Midland on the Permian, interviewed CEO of Pioneer. APL has built in growth for years. A comment that the stacked pays, you have several Bakkens to exploit. He has made the comment in the past that the basin could have 100 billion barrels of recoverable reserves. The value in ATLS will come from the midstream in the long term. And the mid continent, same phenom there, stacked pays in the Miss Lime play, more zones, and the Woodford shale has maybe as much potential as the upper Miss. Hope the ARP piece doesn't lessen value.