Investor Village is much better. There have been a number of posts there already, though not many lately.
Main advantage for using IV is that one can link sources of news etc. plus folks can send Private Messages to others, without cluttering up the whole board.
Time to go to the IV board for SXE
Interesting yes, and odd too. As low as the daily volume now is, yes that 2100 unit buy order would have caused a stir - but why do that in PM trading. Why the rush - there were plenty of opportunities to buy during normal trading - at a lower cost.
With the changes made by Yahoo, making it more difficult to find the old MB for our SXE, it is time to move to another site.
The main advantage that IV has - is that a poster can link the source of his/her comment
Agreed, the silence is deafening. Plus, keep in mind that SXE will not provide forward guidance for awhile - per the last CC - due to uncertainties of WTI pricing.
Dave, it would appear that this is another area that you do not understand about the markets. The only important issue is whether the trade initiating party is a seller or a buyer. Second, if you are going to put other people's comments in quotes, you'd be well advised to learn how to copy paste as SXE is traded in units and not shares. But I digress.
So, let's look at the numbers. Here is a list of all the trades that occurred in SXE between 2 PM and 3 PM. There were a total of six - yes just six trades.
Time Price Volume
14:50:56 $ 2.04 100
14:48:49 $ 2.0214 2,010
14:44:35 $ 2.04 27,079
14:44:35 $ 2.0399 2,500
14:29:05 $ 2.015 150
14:10:00 $ 2.0001 151
If your logic is valid, then that party holding 30,000 unit and decided to sell, he/she would be looking at a bid/ask situation as it traded just before and we can see that the very few trades before very thin and much lower. There is no way possible that a selling initiator would get a higher price than the prior price. In your thinking, that one seller at exactly 2:44:35 PM, he/she was able to find a buyer who wanted to pay much more than the ask. That dog won't hunt.
OTOH, if the initiating party were the buyer, which it clearly was, then said party would recognize that because of the large block trade of buying interest then he/she would have to offer at a price much higher than the prior trades, which the data clearly shows. Thus, once the large buyer entered with the 30k trade, he/she was able to find many sellers who sold at a price much higher than the prior ask.
As to your contention of there being a buyer and seller for every transaction, though that is true but not relevant at all.
The last few weeks have shown that SXE is primarily traded by day traders - low volume, small trades - but occassionally one or few big trades.
For instance, yesterday we saw a buyer jump in at $ 2.04 for about 30,000 units at 3:44 PM. Then it was back to the day traders.
We'll have to put up with this for at least another two weeks until we get to see the Q2-2016 numbers from some of the major G&P players that operate in the Eagle Ford, such as DPM and TRGP.
Yes, and since you are on the Yahoo Finance site for SXE, check the link for historical prices, then you will see that daily volumes were at this level and less back in October 2015
Classic example is South Texas Units 3 & 4 , which NRG planned to build, they were first in line to get a permit and get $ 1 Billion from the US DOE incentive for any work interference by anti-nukes. But at the end of the day, they dropped out. Southern Company, SO, got the # 1 spot to get the $ 1 Billion.
Here is what we know of the business in MS.
The largest intrastate pipeline network in Mississippi, Southcross Energy Partners’ 626-mile network boasts a nameplate capacity of 345 million cubic feet of natural gas per day and delivers the fuel to utility, industrial and power-generation customers, as well as third-party pipelines. Throughput on this system averaged 77 million cubic feet per day in the first six months of 2012 and has declined modestly in recent years. All volumes transported on Southcross Energy Partners’ Mississippi assets earn transportation fees and fixed margins.
Bottom line; the Tres Amigos do not need to add capacity in the AL and MS piping systems, they need to add more throughput contracts.
The main problem is that the throughput capacity of the pipe line system in AL and MS is significantly higher than their current utilization of that capacity. In AL that is mostly due to the continuing decline of coal bed methane gas coming from the Black Warrior basin in west and central Alabama. The more coal mining production is reduced the more coal bed methane production is reduced. The gas pipe lines in Alabama need to change to transporting regular natural gas.
When SXE bought the AL business from Enterprise Products - yeah the giant MLP - in September 2011, the MLP’s Alabama system comprises 519 miles of pipelines that can transport a maximum of 375 million cubic feet of natural gas per day. This network sources the majority from west-central Alabama’s Black Warrior basin, one of the longest-running coal-bed methane developments in the US. Throughput on these pipelines averaged 114 million cubic feet per day in the first six months of 2012, with volumes attributable to the Black Warrior declining at an average annual rate of about 6.5 percent. About 83 percent of the volumes on this system are covered by fixed-fee contracts.
Our closest MLP competitor is DPM, mostly an NGL play - and in the EF. DPM's debt leverate is 4x - so the Tres Amigos have a very long long way to go to be truly competive. For now, SXE's cost of capital is way higher as compared to DPM and TRGP, though technically TRGP is now a C-Corp, so other key metrics apply for TRGP. Thus, let us concentrate on DPM.
Bottom line; SXE needs to reduce debt and not seek a covenant waiver. The best way to reduce debt is to sell non-core assets, which the AL and MS business at 8% of EBITDA certainly are. Even better if they can sell it to the final end customer such as Southern Company and one that treat the pipe line business as investment capital for which they can earn up to 12.5% as allowed by the various state public commissions. That arrangement will allow SXE to sell these assets at a nice multiple.
The problem with Bret Allan's response is that SXE has its primary business in the Eagle Ford at about 92% of EBITDA and there are only two pipeline systems, AL and MS, resulting in " some diversity " which is quite a stretch but granted not a singularity.
The point that I was making is that it is known now that SO is on the hunt for more aquisitions in particular gas pipe lines. SXE blew its chances on the topic of " diversity " when they went deep deep deep into debt to buy TexStar Midstream in 2014. So much debt in fact that we were on the verge of going ch11. So, for now it is disingenous to bring up diversity not to mention too late. Their main objective should be to reduce debt.
We should see in about 4 weeks, how Q2-2016 did, in particular what the Tres Amigos have accomplished to reduce debt and increase EBITDA. The recent sale of the 21-mile pipeline in Calhoun County to Northstar is a major step in the right direction.
Next, we should here more about the " deal " that they supposedly worked out for the AL and MS pipelines. The synergies are so glaringly obvious for the AL and MS pipelines to be sold to Southern Company - that would be Alabama Power and Mississippi Power. From a recent interview on Bloomberg, the SO CEO made it clear that they are in the hunt for gas pipelines.
Equally obvious is that the AL and MS business contribute only 8% of the total annual EBITDA. It is high time for the Tres Amigos to concentrate of the high calorie business, that is the Eagle Ford where we are getting 92% of our EBITDA. Plus, of course we need to reduce debt. Thus, the sale of the AL and MS business to SO, simply makes a lot of sense.
On June 29, 2016, the CEO Tom Fanning was interviewed by Bloomberg News.
Suggest you do a search for this head line - Southern Co. Looking at Interstate Gas Pipelines: CEO
Then listen to a 6-minute interview.
The key takeaway is this:
SO is in the final stages of buying out AGL Resources, a massive natural gas distribution and storage company. SO, just so happens to be the largest electric utilities in AL and in MS, where they have been busy building nat gas power plants and converting coal to nat gas.
Bottom line; the Tres Amigos need to sell the AL and MS pipeline businesses to SO. SO would be the ultimate buyer as they are the final consumer plus they have great access to investment capital, plus being a regulated utility, they get a guaranteed ROR on invested capital.
The nuts will have to do their thing.
All we can do for now is sit back and wait for the Q2-2016 report. One thing is for sure now, this intense heat in the South and Southwest has everyone's AC system running full speed. Although there is a lot of wind power capacity in West Texas, during these blistering days there is very little wind blowing, meaning that the natural gas power plants with gas engines and or turbines are running flat out. We should see much higher nat gas flow in this year's Q2 as compared to last year.
Higher natural gas flow should be good for our little SXE.
Good news for the EF wells.
It is odd though, what idiot would give this factual news story a thumbs down?
Rest assured that Souki does not have a spare $ 8 Billion to blow on any of his special ventures. He will have to get investors to put up the $ 8 Billion, which is not likely - but arguably possible as there is always a sucker somewhere.
Your logic is faulty. If your logic were to be correct, then future potential investors would want to wait till the price got down to 1 penny or less. Why limit at 25c, it is simply non-sense.