It's time for you to ask yourselves why we're the most despised publically traded MLP E&P.
The next question is 'what can we do to lift the unit price so as to facilitate a dropdown or 3rd party purchase which will in turn make the preferred conversion palatable for ourselves and the investing public.'
It appears you fancy yourselves quite smart petroleum engineers & geophysicists....but it seems you don't understand that it doesn't matter if you're the smartest guys in the room, if you have to pay out the wazoo for growth due to a substandard unit price.
Oh, I almost forgot, Merry Christmas.
Today, @ the Wells Fargo conference, the CFO said the coverage ratio would be 1, if the preferreds were converted, and I remember you calculating it to be ~ .95.
I think 2 of the many underlying reasons for said dislocation is the small market cap of mREITS & MLPs, and the 'forces' know they are mostly held by retail, thus scared money. Add to that the bias of higher long rates in the future, well, it's going to be difficult sailing.
It seems a rough rule of thumb is that a 1% rise in interest rates will cause a 10% drop in book value. So if a mreit is selling at a 20% discount to book, so, it has priced in a 2% rise in mortgage rates....to say 6.4%.
I realize this is entirely too simplistic, given all the moving parts.....but still, couldn't a rise in rates already be priced in for many mreits?
Talk to me.
It appears that it's not only the preferred conversion, but also the fear of continued excessive dilution by the GP, putting a damper on the unit price. IOW, investors feel that QR doesn't have their best interests in mind, sort of like a Tom Ward situation?
I'm awaiting the annual downdraft of PHK to a mere 25% premium.
I guess I'm the only person who is not happy with a big refiner taking control of NTI. NTI is a unique refiner, as their feedstock is among the cheapest in the world. Why would I want to have Western drop their high-cost terds into my punchbowl? I view Western as a lower-class mouth-breathing slob now married to the virginal Blake Lively(NTI), and he can't wait to get his hands on her.
That is all.
Okay, I lied....that is not all. I would probably buy back if they hit the high teens, on the chance that Western leaves this little gem alone. hahaha
IWB - wouldn't it be wise to wait until the 'taper is fully priced in' to buy the mREITS?
Yesterday, Dennis 'it's good to be seen' Gartman was shrieking about shorting long term bonds. Today, his projection of the 10-yr was 3.25% at the end of 2014.
I was happy Ethan Bellamy told them what the market thinks. Smith was mealy-mouthed in his response, saying their interests are aligned with ours. I only wish he had pressed them further. Still, well done Ethan.
Sometimes, my mind wanders............
Indeed. I was 99% sure that WMC got rid of Steve because of his agency leanings and the Q2 bv decline. I was wrong and he really did simply retire. haha
He was always enjoyable to listen to during the cc's....he kept it light even though the subject matter was difficult.
Avatar - Be careful w/ EVEP. Any price over $30 is based on sales of Utica property, which has unfolded as less oilier than previously hoped. PPS was in the high 60s during 2012.
Careful out there.