Hello everyone, and specially hello to Davis.
I have been out of RAS for 2 years, but it seems now is a good entry point. Should I?
Davis, whats your thoughts on the reason for RAS been declining for 2 years?
RSO has fallen a lot, to the point where dividend now stands at 20%. I am expecting RAS to reach that point too... I don't see why RAS should be any better than RSO... Actually I think RSO has a better book value, and not a cooked one.
what are the sponsors getting for their $175 million? Are they getting units or what?
I read both press releases and I can´t understand what the sponsors are getting in return for their investment. Are they getting units? What means "Equity commitment"?
I am feeling good that I bought thusands of shares average $3.14 per share, when a couple years ago those same shares where sold for $20.
MLP's normal practice is to distribute 90% of the cash earned in the quarter. If no covenants are stropping them from doing that, they will just continue paying the $0.40.
If you go to the company's website, they write they are an MLP. They said they would generate 23 million is cash flow, so if there is nothing to prevent them from distributing this, they will, because that's what MLP's do.
SXE generates money from the natural resources industry. So, they qualify.
"Because of the stringent provisions on MLPs and the nature of the quarterly required distributions, the vast majority of MLPs are pipeline businesses, which earn very stable income from the transport of oil, gasoline or natural gas."
I agree, there is no requirement... From their SEC-fillng:
Our partnership agreement requires us to distribute all of our available cash quarterly. Our cash distribution policy reflects our belief that our unitholders will be better served if we distribute, rather than retain, our available cash. Generally, our available cash is the sum of our (i) cash on hand at the end of a quarter after the payment of our expenses and the establishment of cash reserves and (ii) cash on hand resulting from working capital borrowings made after the end of the quarter. Because we are not subject to an entity-level federal income tax, we have more cash to distribute to our unitholders than would be the case were we subject to federal income tax.
Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy
There is no guarantee that our unitholders will receive quarterly distributions from us. We do not have a legal obligation to pay the minimum quarterly distribution or any other distribution except as provided in our partnership agreement. Our cash distribution policy may be changed at any time and is subject to certain restrictions, including the following:
Our cash distribution policy may be subject to restrictions on distributions under our new credit facility or other debt agreements entered into in the future. Our new credit facility will contain financial tests and covenants that we must satisfy. These financial tests and covenants are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Credit Facility." Should we be unable to satisfy these restrictions or if we are otherwise in default under our new credit facility, we will be prohibited from making cash distributions to you notwithstanding our stated cash distribution policy.
Our general partner will have the authority to establish reserves for the prudent conduct of our business and for future
I think the same... I have all eggs in one basket with this stock and I will not sell for less than $9... Worst case scenario, distributions get temporarily cut to $0.80, in which case still a good value.
Sentiment: Strong Buy
reason it is stored is because consumption varies during the year. Having storage let producers have a constant production during the year... Also storage is used as reserves, just like oil.