Unloading the Cohens and moving control to much more business friendly Texas is terrific IMO. Dallas is full of construction cranes, new house developments, etc etc..RSO is obviously being taken over as a vehicle for growth, and is finally worth holding on to.
Try "Frac Spread" instead of "Crack Cocaine" Spread..."Frac" as in the Fractionation process separating the natural gas liquids from the natural gas...and "yes" the Frac spread this quarter should be up 20+ % on average compared to Q1...that plus the 30+ % rise in the price of crude oil should give SXE a good chance to score a lot better in Q2 and the rest of the year.
This is a great example of "Crony Capitalism". The CEO picks the board arranging for them to get nice $s and perks/bennies. In turn the BOD lavishes lotsa $s on the CEO... Using a quote from "LoveAmerican Style": "The CEO got the uranium mine; the shareholders got the shaft". TCAP sucks.
SXE's business is gathering "wet" natural gas and fractionating it to separate out the ethane,propane,butanes,and natural gasoline..next year the demand for ethane will soar due to some 20 plants on the Gulf Coast using it to produce ethylene...each plant will require 40,000 barrels/day of ethane..in addition, EPD starts exporting ethane this Fall from the Houston Ship Channel..exports of propane by Targa and EPD will exceed 200 million barrels this year...and none of these natural gas liquids are dependent on oil...also, fracked wells decline rapidly and have to be replaced..since the number of drilling rigs is down significantly you can count on a big rise in natural gas prices late this year and an increase in SXE's business as the Eagle Ford area ramps up.
Starting in 2017 the first big ethane based crackers producing ethylene start production on the Gulf Coast..there will be 20 of them taking over 800.000 barrels of ethane/PER DAY. Some 90% of the USA produced ethylene will be from ethane on the Gulf Coast. To supply this ethane EPD is constructing a big ethane pipeline header extending from Corpus Christi to the Mississippi River expandable to 425,000 barrels/day. EPD already has customer commitments for 200,000 barrels/day. From a SXE perspective it will be able to sell as much ethane as it can possibly produce, and with exploding propane exports by EPD and Targa Mourn SXE will be able to sell as much propane as it fractionates,too..So, the bottom line is that getting SXE in shape financially is Job One..After next year the task will be meeting tremendous demand.
At this point I think DPM can maintain the distribution without being fiscally irresponsible...oil today is at $40 and financially devastated OPEC members and Russia are meeting in Doha next month to try and get price relief...think $50/barrel and later this year demand for ethane and propane go up significantly because of exports..as noted in the CC ethane demand jumps 500,000 barrels/day next year because of crackers switching from naptha to ethane.. Add in either a wet summer requiring lots of propane to dry grains or a normal winter or both, and DPM's projections will be met and perhaps exceeded. And when your unit price is as distressed as DPM's you need confidence not distress at this point. And if DPM cuts the distribution and plunges back into the teens you think that Spectra and Philips are going to like explaining the loss of confidence in DPM? I don't think so. Net sult IMO is that the distribution will be held constant for the next two years at least. After that I expect it to rise.....