Trump will not IMO cut Mexico off...he will exact tolls on trucks car s etc to build the wall....that said, let's recognize that the EagleFord shale extends across the Rio Grande into Mexico..and where better for Mexico to pipe the oil and natural gas liquids than Corpus Christi where MMP is starting to build a bunch of facilities including five ship berths presumably for exports and shipments to domestic refineries in Louisiana etc..this shift to maritime related facilities is going to be a real moneymaker for MMP think I.
German Finance Ministry is predicting a budget surplus in the next year..and they expect a doubling in asylum seekers to 800,000 thereby pressuring housing availability...in the face of this action, housing prices will firm...and Germany will be a big supplier to Iran...so business will be fine...
You speak for me,too. I've been adding to PAA,MMP,and EPD as well...the three are IMO well situated for whatever the future brings...and their assets are well positioned...trying to duplicate the crude distribution network MMP has assembled in Houston would be really tough,for example. I've also been adding in GEL as it seems to be establishing the same sort of position in Louisiana that MMP is building in Houston. Another factor is that with Mexico beginning to open up there should be a lot of opportunity for PAA,EPD, and MMP in the South Texas/Mexico interface. I note that MMP is shifting into maritime action,too. MMP and PAA are JV partners on both BridgeTex and Saddlehorn Pipelines,too, and EPD is big in South Texas NGL action,too.
The sale of offshore NG/Oil pipelines in the GOM to GEL brought in $1.5Billion which combined with the excess DCF totals roughly the $2Billion you are talking about...I see no reason for a big secondary in the 2H of 2015.
Nice review of the issues here...in this case I think a reverse split is excellent..the reason is that there are institutions that frown on stocks under $5/share...at least RSO will look more respectable IMO. However, RSO still has two problems. The first is that it is externally managed by REXI...there is no way an external mgr puts the interests of RSO holders in front of filling the REXI rice bowl. The second problem is that the Cohen family takes care of family first...think RAS, think the Atlas group of companies, etc...and you can think of Betsy Cohen as Chair of RAS bailing out son Dan at the expense of RAS holders.....Jonathan is just a chip off the Cohen block. Erasing REXI and getting a new chair would help RSO lots more than reverse splits.
It would seem to be a good time to merge TRGP with NGLS eliminating both the outmoded mgmt structure and the IDRs....Afterall, MMP,EPD,GEL,MWE, etc have done this nicely, and I own sizable positions in all four. I also have a few units in CMLP and CEQP which are going to go through a simplification merger in a couple of months to do the same.
The points catching my attn were 1. Stock buy-back is a good one...there are institutions on principle refusing to buy shares under $5/unit 2. The thought that Cohen should erase REXI..you can't tell me that having an "external mgr" benefits RSO ..The problem here is that RSO gets micro managed to keep the REXI rice bowl filled...3. This Puerto Rico mess should have been exited years ago before PR went into default..everyone knew several years ago PR was going over the cliff...getting out then even at 25 cents on the buck would have saved lots of mgmt time,too...but at least it is gone..and RSO will benefit from the tax loss when taken...I would suggest bouncing a few REXI folks for letting this one stay on the books...but,hey, I ,too, sense a change coming and bought a few thousand more shares right after the CC...maybe the light I see in the tunnel really is "T he Promised Land" instead of an oncoming train on the same track!
Very good comment..it is amazing to see the Saudis sucking up a $50/barrel hit trying to maintain share..at ten million barrels/day they and the Russians are each leaving $500Million/DAY on the table..a little bit of reason and a modest cut like you say and everyone benefits...even the USA in that higher Prices for gas encourages fuel savings and meets Team Obama's lower emissions goal...were I running the USA I would be buying crude at a million barrels/day for the strategic reserve!
Hi,B&W...IMO what is happening here is 1. The Marcellus/Utica etc opportunity is getting much bigger that Semple or anyone else at MarkWest ever imagined and 2. At 63 Semple isn't going to be around much longer to build MarkWest..So, who is going to lead MarkWest forward? Randy Nickerson, the Chief Commercial announced his retirement already. At age 53 is Randy leaving because of the discussions with Marathon or because he knew he would not become CEO replacing Semple? I sure don't know the answer. This leaves Nancy Buese,Finance, and John Molenkoph of Operations..Obviously, neither was Semple's pick for the future MarkWest CEO. .So, I'm guessing that Semple decided to put the future of MarkWest in the hands of bigger money/organization and picked Marathon over ETP,ETE,EPD, or Team Kinder. The Fox family and other big holders obviously agree with this choice..I would prefer that MarkWest stay independent, but without Semple I think MarkWest is vulnerable to takeover anyway...all that said I am most appreciative of the money MarkWest made for me and the family....I will keep some invested here, and I will redeploy the rest in other opportunities such as GEL and beaten down Plains and Targa. Best of Luck to you, B&W,too. You encouragement and analyses kept me investing in MarkWest in the dark, "Under $10/unit days" and I am most grateful to you. Meeting you at the MWE Investor Day in NYC was for me a real honor...Best Regards
Hi,Dreiser! Good to see you here...our GEL really doing OK these days. And yes, I am assuming that in any MMP/GEL merger, MMP would be the directing force..bigger, better entrenched etc. But both outfits are well managed. And scoring..re ETP or ETE have no preference...both are very large and likely to be survivors scooping up my holdings in Targa,GEL, DPM perhaps,and maybe MMP. With Marathon grabbing MWE, we'll have EPD,Team Kinder,ETE,ETP has the big hitters..have no idea where PAA will go..it's in several JVs with MMP..so we'll see. BPL would probably fit nicely with GEL,too, given marine interests..GEL buying Martin Midstream would be a good fit,too.,,,my sense is that in another two years we'll be moving upward in oil/NG pricing somewhat, and opportunities will expand...GEL gaining a few more customers to fill Gulf pipelines would be a big difference as well! Fun!
This deal also positions GEL beautifully IMO to merge with MMP to form one of the better MLP combinations available. Between the crude pipelines on land and the Gulf, MMP's marine terminals and GEL's marine shipping, crude/refined products by rail,truck,pipeline etc and MMP's storage and Houston crude distribution system this would be an amazing fit. Also, no IDRs or GPs to worry about ...
With GEL 1) taking over EPD's Gulf of Mexico crude oil and natural gas pipelines and becoming the lead pipeline operator bringing these products to Texas and Louisiana 2) ramping up in offshore and inland marine shipping and 3) having quite a position in crude/refined products by truck and rail it seems to me that matching GEL with Magellans marine terminals and on land crude/refined products pipelines etc would be a wonderful combination...particularly since bigger is better these days...and GEL like MMPL has no GP or IDRs to sweat....I have sizable positions in both ready to vote "Yes"!!
I suspect that an EPD aqusition of Targa would run afoul of the Feds' anti-trust folks...the combined fractionation/NGLs export position too dominant..at this moment LPG export market share of the combination probably above 90% . As far as GEL goes, a better combination would be GEL and Martin Midstream (MMLP)...the match particularly in the marine and sulphur areas would be perfect.
Good Question. My immediate thought on Iran is that the impact on GEL is inconsequential. The reason is that is that a lot of oil producers like Russia,Venezuela,Canada etc have high priced crude gathering expenses..lower priced Iranian crude will hurt those countries but improve margins at the USA refineries where GEL does a lot of business..low cost shale producers in the USA will be OK so GELs crude by rail activities should be fine. The offshore pipelines will be OK because this is a long term business with very big corporations. Today's announcement of GEL buying Enterprise's Gulf business just emphasizes that point. Also, Iran may be big in crude oil production, but it is small in refineries. Has to import gasoline BIG time. Any economic boom in Iran will send gasoline demand soaring...so, again USA refineries will export more. The USA since 2011 exports more refined products in $s than it pays for crude imports..and as this business expands, GEL will score more..Bottom line, despite Iran I think GEL is OK going forward.
For all you folks going into hysteria over the PAA oil spill have a beer to celebrate the reopening of the Santa Barbara beaches..this was a chicken feed spill..and the noise trying to equate this mishap with the Prudhoe Bay spill or the BP Gulf disaster is just spinning. The facts are that the oil reaching the ocean was 500 barrels, less than one railroad tankcar load. The dead fish/birds estimate is 300...want to guess what one fishing boat nets per day? the total length of the pipeline to the offshore platforms is ten miles..small potatoes. Oil flow was 30,000 barrels/day..again small..cleanup costs to date are around $100 million, with insurance covering a bunch of it..the only lawsuit I've seen so far lists as plaintiffs a couple of part timers earning $500/month getting seafood off the reefs..this corrosion caused spill is not going to impact multi billion $ PAA very much..and have I bought more PAA units at the reduced price? You betcha..not going to get rich on PAA...but it is IMO a solid "widows and orphans" MLP for the family.....
Come in out of the hot sun...total spill was like a rail car load...small potatoes...lsomething like a mere 200 fish/birds killed..not even one day's catch for a small fishing boat..and even if the entire pipeline has to be replaced it is only eight miles of pipeline able to handle 30,000 barrels/day of crude...an eight inch diameter pipe should be fine..and if the claims multiply PAA will simply go to the appeals court..this is simply noise you are dumping....
Happy Father's Day,B&W! There's nothing really precise about my projections. I simply added one new 200M cuft/day Cryo plant/q for five years and added two years to make sure I would be over 10Billion cuft/year...with the SW starting to move, the Permian a possibility, Kentucky a tantalizing prospect, and the Marcellus/Utica still boiling four new Cryo plants/year should be reasonable...and the USA starts exporting LNG this year and is ramping up exports of NG to Mexico substantially. I also note that America's school busses are switching to propane as are a lot of trucks..and next year starts a whole wave of crackers switching from Naptha to ethane for ethylene production. Add in the PDH plants going online using propane to produce propylene next year,too, and MWE will be running flat out.
When a.)MWE opted for the third fractionation unit at Hopedale b.) Mariner East 2 started talking about laying two pipelines totaling 450,000 barrels/day heading to Marcus Hook and c.) DPM pushing its Hampton Roads Butane export facility using MWE produced butane I decided that MWE/UMTP was a non starter..why send Y grade to the Gulf when you have plenty of action elsewhere? And if NOVA builds a second cracker in Sarnia and a cracker or two get built in Appalachia got plenty of ethane action,too. MWE is emerging as the "EPD Beast of the East".. The principle difference is that instead of having one big site like EPD's Mont Belvieu our MWE has lots of sites blanketing the Marcellus/Utica and whatever layers are found in future drilling. The way MWE is going it will be processing above 10 Billion cuft/day in 2022.