Structured a little different. Presents a more positive picture. Opportunities. With liquids being nearly half of their production need to change presentation to BOE/d instead of MMCF/D. Also need to show proforma ebida results at various oil and gas prices on vertical/horizontal scales and ebitda sensitivity in the middle for each crossing point within the chart
in the last two days I have added Eroc to my portfolio as it has a good dividend and looks as it has a promising future. I have read a number of your posts here and elsewhere and you seem to have a better understanding of the oil gas MLP than most, do you share my opinion or is this priced equitably.
Hi rl. Have not seen you much since you sold out of BBEP. Hope your development well investments are still doing good.
My EROC investment is not significant but it is still $$.
-EROC's G&P position in the Texas Panhandle area, particularly with the recent BP acquisition. It does not look the BP acquisition will generate distributable cash flow until 2014.
-Good potential in their G&P position in the growth area of the eaglebine/woodbine group
-I think they are trying to be too many things .They have some good, but smaller acreage, E&P assets in their central Ok scoop/golden trend area and some longer term potential in the north Texas panhandle undeveloped acreage in the Cleveland formation and western Ok; but it also presents a weakness in that their E&P assets are not large enough to be a game changer and in some ways may distract by tying up capital and manpower, where there G&P assets can be grown quickly and with more predictability.
-Their balance sheet is not as strong as one would like.
The opportunity they have is to monetize their E&P acreage in a 1031 complex exchange which, in particular, should be attractive to those with larger acreage positions in the Scoop/golden trend areas andthose wanting to enter this area and those seeking Cleveland formation acreage along with some of their other western Ok acreage. They could use the freed up capital not going to E&P to improve their balance sheet by not having to go to equity for future capital and along with the freed up people to acquire/build out G&P assets faster in the eaglebine/woodbine area or a whole new growth area like XTEX has recently done in the Utica oil. If I remember my A&D days (and the following may be totally wrong), this could "possibly" (not for sure) be accomplished with a 1031 trade of the E&P assets thru a third party constructed deal that on the in bound side could bring in the G&P assets to minimize taxes to the unit holder by not going thru a direct sale. (This third party route is complex if I recall its structure properly and takes some time, but could be accomplished if still available and the right parties with g&p assets and wanting E&P assets is found such as a bbep who has some G&P assets in Mi/Ind/Kt or a clr that is building out some G&P assets I think in bakken).