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EV Energy Partners LP Message Board

artist_formerly_known_as_pooch 57 posts  |  Last Activity: 14 hours ago Member since: Jul 14, 2000
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  • Reply to

    Acq small & expensive

    by lbrecken 15 hours ago
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch 14 hours ago Flag

    The $25 million pent on the distribution would be nice to have right now. I sold 3/4 of my position in the past 2 weeks. They may survive this. But we aren't seeing double digits for another year and we'll likely see the distribution cut in half at least. Maybe cut entirely. If they cut in it half last quarter, they't be $12 million in better shape right now. This acquisition does nothing. A buy from Enervest is fair market value by definition as they aren't going to hose their own investors. EVEP needs to buy from a distressed seller to move the ball forward. disappointed

  • Reply to

    Don't overpay for Williams!

    by polygeo200 Aug 31, 2015 11:45 PM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Sep 1, 2015 11:08 AM Flag

    the deal was for just under 1 for 1 pre split, 2 for 1 post split. The price of the units going down doen't matte much, it's the value of the underlying assets that matters. WMB and WPZ have good assets and will be a good fit for ETE. a 2 for 1 bid for WMB then or now makes sense and is good for both companies. WMB would benefit from having competent management. ETE benefits by getting some assets that fit very well into this family. Plus we get a new stock to trade ETC that will open ETE up to those individuals and institutions unable to hold MLP's in their accounts.

    The deal will be done. Kelcy wants it. and it is a good deal for us too

  • artist_formerly_known_as_pooch by artist_formerly_known_as_pooch Aug 26, 2015 12:13 PM Flag

    ETE is showing relative weakness to WMB today. ETE has an active buyback program which has been supporting the price and Kelcy himself has been a buyer. Today's action relative to WMB suggests that buyback has been turned off. BIDS were due the last week of August and it isn't likely there were many if any that topped ETE. We could know come Tuesday morning

  • artist_formerly_known_as_pooch by artist_formerly_known_as_pooch Aug 26, 2015 12:05 PM Flag

    ETE has an active buyback program and Kelcy himself has been an active buyer too. ETE showing relative weakness in the market as if any buyback has been turned off. that might point to a deal being finalized this weekend. Bids were to have been in by the last week of August" Here we are. Not likely ETE was topped. Tue morning we should know.

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 24, 2015 4:58 PM Flag

    MHR is going belly up if it doesn't sell assets soon. It's a firesale and ETE is one of the few that can easily afford it and it would fit in with ETE/WMB assets.

  • Reply to

    WMB Acquisition

    by plutus1964 Aug 20, 2015 6:28 PM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 21, 2015 8:18 PM Flag

    No one offered $64 per share. the offer was .93 shrs of ETE pre split. 1.87 shrs post split. There is no cash bidder and cash is immediately taxable, but a stock deal is not. Regardless, people will be sadly disappointed if they are expecting $64 which was the reference value weeks before the bid was announced. Since then ETE and WMB have been trading in lock step. It's clear that the market expects ETE to prevail. ETE has an active stock buyback program and a CEO who just bought $60 million of ETE stock to support the price. If ETE raises it to 1:1 pre split 2:1 post split, that would be a great offer. But current price of $55.
    Got to stop thinking in terms of $64. it never existed and is not forthcoming in the next few months

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 13, 2015 3:07 PM Flag

    strange coincidence then that amidst all this carnage in energy, ETE and WMB are both green, up in proportional amounts. They've traded together since the offer.

    Approx $8 risk premium on the deal. Expect in September a an accepted offer of 2 (or very slightly under 2) ETE shares for each WMB share. It will likely come some Monday morning. They usually need the weekend to get everyone in the same room to finalize.

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 13, 2015 11:52 AM Flag

    That's my point, if they did cut the distribution in half, they would have a reasonably healthy company yielding 10%. Big deal they have enough cash for 9 months worth of distributions. Then after 9 months, they are out of cash and only covering 50% of the distribution according to yesterday's Credit Suisse report. EVEP is mis managing their most valuable asset

  • Reply to

    Wow am I reding this right?

    by brownvinohead Aug 11, 2015 3:44 PM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 11, 2015 4:08 PM Flag

    $5 per share of those "earnings" are from a unit they no longer own. That means the remaining busines EVEP still does own lost $2 per share.

    Quote: " $250.4 million in income from discontinued operations, which includes $246.7 million of gain related to the sale of our interests in Utica East Ohio (UEO);"

  • Reply to

    Stil too early here to buy

    by lbrecken Aug 11, 2015 9:50 AM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 11, 2015 10:50 AM Flag

    And what was interesting about the MS report was their analysis that if EVEP cut the distribution to a 10% rate, the money saved would plug the cash flow deficit. EVEP would be operating cash flow neutral as opposed greatly cash flow negative right now. EVEP would be a healthy E&P MLP living within it's means while everyone around them implodes.

    That's what I want. And 2 years from now everyone will be talking about what geniuses Mercer and Walker were. That they had the balz to do what was needed to do to survive and come out the other side on offense

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 10, 2015 12:49 PM Flag

    Thank you. Simply put, we are giving them $8 to invest in producing properties. I'm not much interested in them immediately giving me 50 cents of it back and three months later giving me another 50 cents back. If there are bargains to be had out there, I want them to buy property, borrow against it and buy more. They can't leverage what they pay me. But as they said on the call, each acquisition helps INCREASE the borrowing base.

    But Walker also stated something very true and very clear to his motivation: that the distribution is very important to him personally. Because of the amount of units he owns, it's a large part of his income besides his Enervest income.

    I dont think cutting the distribution would impact the unit price very much, if at all, so I hardly think that the "shorts" are advocating that. At some point they will need to do secondaries again, and when they do, it will become very clear how much those $25 million distributions hurt.

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 10, 2015 8:59 AM Flag

    Oh come on now. They can't do a $500 million deal without a secondary and their cost of equity capital right now is north of 20%. they announced hedges for 2 years at $3.18 which keeps them alive but will not keep them cash flow positive. And under no circumstance will any $500 million acquisition cause distribution coverage to approach your 2.0x projection. They will not cover the distribution under any scenario in 2015 or 2106.

    Quote "A 500 million deal at 20% ROI which is pretty standard and achievable after interest servicing cost, on net would bring dist coverage ratio to approx 2x.... "

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 10, 2015 8:33 AM Flag

    1.05x is deceiving. That's not all from "continuing operations" A significant chunk represented "gains from discontinued operations": the sale of UEO. I agree they are in better shape than some of their E&P peers, but flushing $25 million out the door on a distribution that provides no benefit to the company makes no sense. If they do that agains next quarter, that would represent 40% of their remaining cash. We've been waiting 3 years for this magical accretive acquisition. Not saying it won't come, but they need to stop spending money until it does come.

    At some point they will do a secondary, presumably in conjuction with a larger acquisition, They'll be paying 15-20% distribution on that. That is a huge cost of capital. My point is, they have $25 million now, that they are just going to flush out the door. That's $25 million that will cost them big bucks on to raise again.

  • artist_formerly_known_as_pooch by artist_formerly_known_as_pooch Aug 10, 2015 8:17 AM Flag

    $60 million. $0 drawn on the revolver. Certainly a lot better than some. But not in a position to be stupid with cash.

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 10, 2015 8:12 AM Flag

    Revenue for 3 months was down almost 50% to $41 million. Spending $25 million to pay a distribution to shareholders is idiotic in this environment More than half of every dollar coming in the door is immediately going out the door to pay us 50 cents per unit. That's the problem. Sure they have some money left over from the UEO sale. But I'd rather have them maintaining the business than giving me 50 cents

  • Reply to

    credit redeterminatiin key

    by lbrecken Aug 9, 2015 9:37 PM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 10, 2015 8:04 AM Flag

    The company already disclosed that it will be reduced somewhat because of a smaller assetbase: the sale of UEO. But they are almost completely undrawn on the revolver. Redetermination will be a negative, but a much smaller negative that most of it's peers. In that regard they are doing reasonably ok.

  • Reply to

    Insider Purchases Recently, alot....

    by keving1001 Aug 7, 2015 11:39 AM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 8, 2015 9:07 AM Flag

    Last one was 4 months ago. John Walker. He also was a buyer in the 50's. he's not a very bright guy. Turned down a multi Billion dollar sale of land in the Utica while the stock was in the 70's. Pounded his fist on a conference call that 39 days was ample time to sell the Utica land. Still waiting 3 years later.

  • artist_formerly_known_as_pooch by artist_formerly_known_as_pooch Aug 7, 2015 4:22 PM Flag

    Last quarter ETE raised the distribution. They covered the distribution 1.2x. They bought back stock. They guided for further distribution raises. They are healthy and WMB is a great asset fit. It's a good fit for both companies. Take the time this weekend to look at the ETE WMB buyout presentation on the ETE website. The two companies combined are really exciting and profitable

  • Reply to


    by joebo246 Jul 8, 2015 9:21 AM
    artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 7, 2015 3:33 PM Flag

    WPZ will trade better on the ETE offer as the WMB offer entails a tax hit for WPZ unitholders becasue WMB is a C-corp buying the MLP WPZ. Also, if ETE prevails in the WMB deal, WPZ will receive a $410 million breakup fee from ETE/WPZ. Thirdly, WPZ would likely eventually be bought by ETE's other MLP, ETP. That transaction would be a tax free like kind exchange
    Recent example of why WPZ unitholders do not want to be bought by WMB is the KMI buyout of KMP, KMR, EPB. KMP and EPB unitholders got hammered by taxes. KMR, a c-corp did not.

  • artist_formerly_known_as_pooch artist_formerly_known_as_pooch Aug 7, 2015 3:28 PM Flag

    ETE buying WMB is more likely, that's why the two of them are trading in lockstep with about a $3 risk premium.

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