Coverage at 0.89 would be 42% less or another words WPZ would be bankrupt if not for merger...i just cant believe these guys are getting away with this......unreal
And to remind all VNR has a $400M equity line granted by bankers yet dopes at ARP cant get a 11% preferred done? I'll take the 8.5% yield over 14% cause at least VNR is demonstrating it can do M&A as deals increase and grow while ARP
who over a 3 year period will grow faster VNR who has a cost of capital of 8.5% or ARP who as 14% plus another 7% for IDRs as divy rises? This is madness how shareholders are tolerating this. But Cohens are not at an end as markets wont fund there baloney any more.....that last preferred round proved it as it came up way short of what they attempted to raise...capital mkts are closed yet mgt still does realize shareholders wont tolerate this structure any more. And Cooperman is a worth millions?
Prob $4 ngas in 2017/18 once exports rise, coal switching and marcellus ramp wans. But i agree the GP is the flaw and mgt refuses to address it PERIOD! Ngas hedges are best in grp by the way. They has been told numerous times with bs answers leading me to think they are using it to prop up ATLS so as to use for AGP and they dont give a darn what happens short term. New ceo sees it no diff vs cohen so no chgs there. The GP conflict and existance is why no partnership deal has been struck and others have done so. This is the arrogance here by not seeking investor advice....new ceo better start listening. Like yield here and its safe only if they can access capital which they cant as per preferred disaster. Growth thru acq forget.
Simply put the Cohens think they can compete with $50B in Private Equity raised vs there millions and that somehow they can grow ATLS on own backed by their fund raising for AGP which simply isnt in same league as others like Blackrock. They actually think thats a strategy.
and Mgt has known this cost of capital issue for a year now as yield combined with splits with GP yet what have they done? Run their mouths make promises and do nothing. They still think you the shareholders are the dumb ones as shares are "mis-price"..LOL. These excuses by mgt on ceasing to buy range from black out periods to APL transaction or perhaps the mythical partnership potential (which has had its own setup excuses for not getting done). Worst in class 14% yield and this mgt stays the course on its strategy liek nothing is wrong and we are the stupid ones.
Look the main way an MLP grows is thru acquisition....we all know that....but with ARP having the highest cost of capital and mgt asleep here by not addressing it given its stupid structured GP the divy may be good but growth isnt. This mgt simply is off on its won not listening to shareholders nor the sell side for that matter. Cohens are running this think like they own it not shareholders. Mgt isnt listening plain and simple as they collect huge salaries and shares underperform grp.
Just shows you how idiotic market is...combine with 8.5% yield thats a 15.5% total return in a year assuming no further price appreciation......dumb as......
And to reiterate its those with liquidity that should be looked to as investments and mgts who demonstrated they know how to hedge.....MEMP at 13% yield you will see compress to 10% upon executing an accretive deal.
Look MEMP has $700M in liquidity and does need to fill a whole by 2017 if prices remain in 70's via an acquisition but a small one. Adding $30M or so in EBITDA with that much liquidity should be a problem.....prob will acq something in Permian or Eagleford in my view.
NRF the BIG difference is BBEP bought HIGH vs VNR buying LOW......I look at the 10k for LRE and the Lime Rock expenses are in G&A so expect $8M in savings as per mgt comments from there alone. Im sure they can squeeze a few million more from acct/public cos fees and refiing debt too as well as from scale.
well LRE is trading at over a 5% discount to the conversion of shares so im buying LRE despite my belief VNR will have sub 1 coverage for 1Q.....2Q will be a different story with coverage over 1.1X as will 2016 so i think getting thru credit redeter and 1Q results will act as catalysts to focus on better coverage going forward. Oh an NGAS has fallen 15% since it was near that $18 price so that may explain why its not here now.
On 28M in units converted to VNR shrs would be about $21M in CF need to cover the $1.40 distribution which is factored in above so the extra $10 is on top of this as LRE CF would cover the distribution and then some....
Well right off bat they said $2M can be spent to operate LRE in G&A vs $10M being spent now so there is at least $8M in savings right there. The impact of the service agreement with Lime being eliminated maybe on top of that as is accounting/public cos saving which im sure are significant too. On top of this is refi the debt which will add to this. So adding $10M to distributed CF of $130M VNR alone isnt peanuts and will boost coverage by 5-10% in my view......
And dont forget valuations are so stretched tied to private equity raising billions in C Corp space that LGCY without a real GP is a pushing it to acquiring quality assets that are accretive. MEMP or VNR has the luxury of cherry picking cause of hedging and cost structure, coverage etc so keep that in mind. LGCY MUST buy something and soon or 2016 is no way seeing $1.40 in divy
true but this is a high risk gamble hoping for $70 oil next year or higher else it does work......dont u think they owe investors that much honesty? They know full well what bet they are making cause they simply have no other choice. They should have cut the divy to $1.00 like the street expected to be safe and leave more room. It just shows you the poor judgement here.
I will add the borrowing base even if asset prices recover will decline in 2016 by some 10% so with inflated asset prices of E&O cos running at a premium to LGCY own at over 8X EV/EBITDA making an acq is even more difficult that would be accretive. Further there available liquidity in 2016 would be only $200M leaving little rm to operate so an acq may not be even possible at that size.
With Liquidity down to $570M and updated hedges in 2016 little changed i dont see $1.40 being maintained at all in 2016.....even with a $300M acq coverage wont be adequate. Mgt isnt being honest at all here by cutting distrinbutions to $1.40 only to inevitable cut again even if prices recover to $65 and $3.70...there is no way its sustainable and this irresponsible temporary cut to me is desperation to keep unit price up. All these idiots see to be doing is HOPING prices rise back into 70s as thats their only card left......