At mid-point, the units are yielding 5.4%. The group average for GP's is about 3.6%. If we were so lucky to trade back to this level our upside would be $61 this year. A 4% yield gets you to $55. My target is somewhere in the the middle this year of $55-$60. Given the miss at APL, ATLS should trade at a discount to the group. APL needs to get back on track and hit and exceed some targets. APL could buy the Chevron pipe which could be upside. ARP will always be on the acquisition hunt which is also upside. I'm keen to learn when will Atlas Growth Partners be formally disclosed more broadly. In December, they modified their Form D SEC filing to increase the amount expected to be raised for AGP from $300 MM to $500 MM.
Any way you look at ATLS the GP, there are multiple forms of upside to this story especially over the next few years. I still think you see these units priced north of $100 in 3-5 years with distributions of $5 or more.....
Well I think we are selling the pipeline along with CVX - its a good thing IMO - I can't see how CVX could get top dollar without APL selling their share - not too many buyers want to end up with an asset that has joint decisions even though they supposedly own 80%. And with CVX exiting volumes would become more risky over time.
I'll be thrilled if we saw $5 distributions by 2017. But I really don't see that type of growth. Keep in mind that a year ago projections were in the $4-$5 range for 2015-2016. The Cardinal assets might (hopefully not) end up being dilutive to unit holders. With $50 million already written off, we've got a lot of work to do.
I expect $2-$3 in distributions over the next couple of years. APL has taken on a lot of organizational change - obviously there are some things not going as well as initially anticipated - that needs to get fixed and we could really use stronger NGL pricing - and obviously see some increased demand for ethane.