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EV Energy Partners LP Message Board

  • lexpress56 lexpress56 Aug 27, 2009 2:50 PM Flag

    EVEP vs LINE; Request for input

    I am trying to review the relative benefits of investing in EVEP vs LINE other than the dividend. Do any of the regular posters on this board have a (1) ready summary of EVEP's hedges at what price, and (2) the approximate breakdown of EVEPs production? I am trying to ascertain EVEP's figures to compare to the following figures for LINE. Thanks in advance for your help.


    Linn's production is 51% gas and 49% oil/NGLs. It has production completely hedged through 2011:

    Oil - 2009 $102.21
    Oil - 2010 $ 99.68
    Oil - 2011 $ 77.00

    Gas - 2009 $ 8.32
    Gas - 2010 $ 8.05
    Gas - 2011 $ 8.06

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    • Here is the most recent Citigroup research from 08/06/09:

      Citigroup - Equity Research 6 August 2009
      Oil & Gas Exploration & Production (GICS) | Oil & Gas Royalty Trusts/Partnerships (Citi)

      Company - 16 pp.
      Linn Energy, LLC (LINE) Buy/High Risk (1H)

      Acquisition & Re-Hedging Enhances Distribution Safety; BUY

      Richard Roy

      Ben Hopkins

      * Buy Into an Improving Story-"LINE" - Though continued unit price
      volatility should be expected, we urge investors to use weakness in unit
      prices to strategically add/build positions. This viewpoint suggests that
      the investment proposition remains strong (i.e. over time expect growth
      through acquisitions), investors are buying into an improving storyline
      and due to the company's risk management program generally believe that
      the risks to the distribution to unitholders are manageable in 2009, 2010
      and 2011.

      * Announces $118M Acquisition; NOT Expecting Distribution Increase - LINE
      announced that it has entered into two definitive acquisition agreements
      for properties in the Permian Basin. It is important to note that we do
      NOT expect a distribution increase related to this acquisition. Rather,
      we expect management to use the excess cash flows to repay debt and/or
      enhance the sustainability of the distribution.

      * Improved Distributable Cash Flow Profile - Through the re-positioning of
      its hedge portfolio in 2010 and 2011 combined with the acquisition, LINE
      has significantly improved its cash flow profile. As such, we generally
      believe that the risks to the distribution to unitholders are largely
      mitigated through 2011.

      * Raising 12-month Target Price to $23.50/Unit - The change to our target
      price reflects our expectation of higher cash flows based on the recently
      announced Permian Basin acquisitions and the re-positioning of the out
      year hedges. Our current target price assumes applying a 7.5x EV/EBITDA
      multiple to our adjusted EBITDA forecast of $607 million (i.e. next
      twelve months).

    • I dont mean to be overly direct, but macsmile's notes about holding MLPs in an IRA are simply wrong. Indeed it is advantageous to holding them in an IRA, the only issue being net UBTI which becomes taxable to the extent it exceeds $1000, the chances of which for EVEP, LINE, and ENP are almost nil unless (1)their business models change, and (2) you own many thousands of shares. If you want education on the topic, go to the Line board and review the posts done around tax time by several VERY knowledgeable posters including PCShore (I think that is it).

    • I sold LINE when it moved up over $22. Took the money and bought ENP which was a better relative value at the time. $20 is my buy back in price for LINE. ENP is a much better buy than LINE based on closing prices 8/28. When ENP goes under $15 I buy more.

    • Insiders have been selling LINE as recently as August 2009.

      EVEP has been insider buy/sale nuetral with no transactions in 2009. Insiders bought EVEP in Fall 2008.

    • Historically Linn has been 100% hedged for four years, but has recently monetized the hedges after 2011, betting that prices will rise by then. EVEP has had a lower percentage of production hedged than Linn, but at higher prices, which can give the same level of safety. EVEP has not sold any of its hedges and in fact has recently added more for 2013 and 2014.

      • 1 Reply to birdluck1
      • I own both.
        EVEP is much more gassy
        Linn has more production hedged. I also thought its hedges were at a higher price, but EVEPs are more of a mystery to me. Anybody have the latest hedge #s?
        EVEP has a 2% higher distribution. 13.86 vs 11.60
        These are the only 2 mlps in my portfolio.
        I also hold CSC (Crescent Point - with its new symbol) and Peyto (gassy to the max).
        I'm still hoping for the push to cng vehicles.

    • I own both and really couldn't pick between the two. They are both very good companies.

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