We're finding out right now that they are not very different at all. The dividend cut will be coming very soon. They other options are 1). selling the assets which nobody will anything for right now or 2). it'll be bankruptcy.
The smart money is betting this baby goes down.
Don't do that. There's a buyout offer at $70+ just around the corner and oil going to $100/barrel real soon.
You're just on the wrong side of the table. You should've been betting on APA going down.
The answer is zero and I'll tell why.
First look at the dividend. KMI (another pipeline company in a similar financial position)) lowered their dividend by 75% a few days ago. They have a pile of debt and a payout ratio of 350%. That means their dividend payments were 3 1/2 times more than their cash flow. The only to make the dividend payments is to borrow more money. Rating agency threaten to lower their credit rating which would have resulted in higher payments on their debt. KMI was stuck with basically selling assets or reducing their dividend. They reduced their dividend.
Now the bad news. ETP's payout ratio is 750%. A whole worse than KMI's. ETP will have to reduce their dividend very soon and it'll be more like by 80-90% or outright suspension.
Even without the dividend payment they are moving closer to not having enough cash flow to make the interest payments on their debt. If that happens ETP could go to zero or likely bought by some VC for pennies. BTW, interests rates may up next week which adds more pressure.
Denial of the facts will only get you ina deeper hole.
Most people I know that do well investing are really happy and positive people. You on the other hand are really, really angry at everybody and must be taking a beating. Maybe you should find something else to do.
Have you ever taken any Anger Management classes. You're an excellent candidate.
Taking on more debt to do it shows how fragile the E & P are.
Closed my position Friday shortly before the close. 63% for a day work. Sure made the beer taste a little better yesterday watching football. Time to move on and find the next opportunity. Good luck.
Good for you. I bought calls yesterday as well. Currently up just over 50%, but I'm going to let mine ride for awhile. No guts no glory.
GRMN is a perfect take-over target. No debt. Cash in the pocket. Has a variety of established products. It may have a questionable marketing strategy and management team. The stock price has been beaten up. This looks like something a big fish with its prowess could swallow and do something with.
A couple weeks ago when ETP was at $40 Cramer said to wait until it drops another 10% before buying ETP. Now at $46 after it goes up 15% he wants you to buy it. Don't have to be a brain surgeon to see what's on Cramer's mind.
SLB and HAL is pulling out all the stops to keep those highly leveraged and unprofitable E & P drilling companies to keep drilling.
Two big problems with this: 1). All that extra supply will keep coming to the market moving the energy costs even lower and prolonging any recovery. 2). In the end it won't work and SLB and HAL will themselves find themselves in the same boat as they'll have a lot of debt owed to them and nobody will be around to pay it.
HOUSTON (Reuters) - Business is so tough for oilfield giants Schlumberger NV and Halliburton Co that they have come up with a new sales pitch for crude producers halting work in the worst downturn in years. It amounts to this: "frack now and pay later."
The moves by the world's No. 1 and No. 2 oil services companies show how they are scrambling to book sales of new technologies to customers short of cash after a 60 percent slide in crude to $45 a barrel.
In some cases, they are willing to take on the role of traditional lenders, like banks, which have grown reluctant to lend since the price drop that began last summer, or act like producers by taking what are essentially stakes in wells.
At Halliburton, some of the capital to finance the sales will come from $500 million in backing from asset manager BlackRock, part of a wave of alternative finance pouring into the energy industry that one Houston lawyer said on Thursday allows companies to "keep the engine running."
Well let's see... CHK has $11+ Billion in debt. Projected future earnings are negative which means they'll burning cash for the foreseeable future. If I where the bank where CHK had that $4B line of credit I'd be more than a little nervous. I'd likely cut that off. And wouldn't surprise me if that's exactly what happened. And that might explain the suspension of the dividend. Hint: APA is in a very similair position. The fact is a lot a small to medium E & P companines are in the same position and the banks have to be getting nervous. Once the banks they cut-off the the free money tap.... these companies go straight to bankruptcy. That's the way it is. Just watch.
to get investors interested. Otherwise, it has no appeal.
Don't trust them and wouldn't partner with them.