➤ The Capital IQ consensus estimate is for rev- enues of $1.256 billion in 2013, compared to $984 million in 2012. For 2014, the consensus in- dicates revenue growth of 6.2%, to $1.333 bil- lion, based on EROC's Texas Panhandle Mid- stream acquisition from BP in October 2012. Consensus EBITDA estimates are $252.5 million for 2013 and $286.6 million for 2014, compared to $245.8 million in 2012.
➤ The partnership has indicated that it is focused on drilling at the South Central Oklahoma Oil Province (SCOOP) region, which should support earnings growth at its Upstream business. We are positive on EROC's aim to focus its drilling activities at the liquids-rich Cana Shale. EROC allocated $208 million for capital expenditures in 2013, compared to $310.7 million in 2012.
➤ Before special items, Capital IQ consensus EPS estimates are $0.01 for 2013 and $0.24 for 2014. EROC declared a quarterly cash distribution of $0.22 per unit, unchanged from a y
Well, if they're correct, and there's $36M in additional EBITDA in 2014, and if we assume that all falls to DCF, that's roughly 37 cents per unit. At the current rate they're flowing 88 cents times .65 = 57 cents, so that would be 94 cents, slightly over-square coverage (which would certainly be a welcome change), but no buck, so the 88 is the best you could hope for. If they're correct. Maybe you could start buying this at $6, I'd prefer 75 cents or even a buck lower, but it bears watching. Now, anyone trust these anal-ysts? To be correct about anything except by pure chance?
The S&P-Capital IQ analysts are pure analysts, so if any analysts can be trusted, it should be them. Their company isn't an investment bank or a brokerage -- i.e., it doesn't have a stake in whether a stock goes up or down. They have won a lot of industry awards for accuracy in recent years.